Harnath Rai Binjraj and Another vs Hirdyanarain Kumar and Others

Ray, J.—The question involved in this appeal is whether a tender of payment made by the judgment-debtors in fulfillment of one of the instalments due under decree is a valid one so as to operate to invalidate immediate execution of the decree without waiting for further instalments.

The facts giving rise to this case are that the decree-holder obtained a compromise decree for recovery of Rs. 32,989-15-3 in original suit No. 371 of 1936 in the High Court of Judicature at Calcutta in its original side on 27-2-1939, and it provided that the decree-holder would, after some remission, be entitled to recover a sum of Rs. 26,246 only plus costs of the suit allocated by the Taxing Officer of the Court with interest at 6 per cent. per annum from the date of the decree till realization, in the event of judgment-debtor''s compliance with certain terms as agreed upon by the parties and incorporated in the decree. The terms were, (1) that Rs. 500 on account of part payment of costs would be paid on or before 30th Falgun 1316 F.S., (2) that the balance of the taxed costs would be paid on or before 30th Srawan 1346 F.S. or within one month of service of the allocatur of taxed costs on the attorneys of the adult defendants whichever date is later, (3) that Rs. 1000 towards decretal amount would be paid on or before 30th Srawan 1346 F.S., and (4) that the rest of the decretal amount of Rs. 26,246 only will be payable in 10 annual instalments of Rs. 2000 each payable on 30th Srawan of every year from 1347 to 1356 F.S. The default of observance of any of the aforesaid terms (NOS. 1 to 3) was, pursuant to the agreement between the parties, to attract the penalty that the judgment-debtor would forfeit the remission and the decree-holder will be entitled to recover his entire decree for the larger amount and the decree would be executable forthwith without waiting for later instalments to fall due. With regard to the payment of the decretal amount in 10 annual instalments, that is, condition No. 1, the default was to be deemed to have occurred only in case the judgment-debtors failed to pay two consecutive instalments.

It is admitted that the first term requiring payment of Rs. 500 on account of costs on or before 30th Falgun 1346 F.S. had been complied with, but, it is said, that there was no compliance with the second and third conditions of the compromise, namely, that of payment of the balance of taxed costs and of Rs. 1000 towards decretal amount on the dates specified in that behalf. On these allegations the decree-holder wanted to put the decree to execution for the entire amount of Rs. 32,989-15-3.

The judgment-debtors resisted, contending (1) that there had been no service of allocatur of taxed costs on them and hence, they could not, nor were required to make payment of the taxed costs, if any, and (2) that they had tendered the sum of Rs. 1000 to the decree-holder as provided in Clause (c) of para. 4 which was payable on or before 30th Srawan 1346 F.S. to the decree-holder firm at their gaddi in Bhagalpur on 25-8-1939, but the decree-holder refused to accept the money and referred the judgment-debtors to their attorney at Calcutta; the judgment-debtors offered the same on 28-8-1939, to one Mr. P.D. Himatsinghka, their attorney, who too refused to accept. Thereupon the judgment-debtors again offered the said sum of money through their own attorney to the attorney of the decree-holder, but the latter again refused to accept. In the circumstances as above, they contend, that having done all in their power to comply with the terms of the decree, they were not to be penalised in the manner insisted upon by the decree-holder. The learned lower Court accepts the plea of tender as a bar to the execution.

The only point urged in the appeal was whether the alleged, tender was a valid one. The validity was impugned on two grounds: (1) that it was sought to be made after due date and (2) that the tender was not followed by deposit in Court.

With regard to the due date, the controversy centres round the dispute that the due date must be the 30th of first srawan of 1346 and not the 30th of the second Srawan. In this connexion the learned Subordinate Judge observes:

It is an undisputed fact that in the year 1346 F.S. there were 2 months by the name of Sawan and the last day of Sawan in that year corresponded to 29-8-1939. The Chronological Table which is published by the Local Government shows that in that year the second Sawan was of 29 days while the first was of 30 days. The learned advocate for the decree-holder therefore contended that the date 30th Sawan given in the decree therefore clearly refers to the first Sawan of 1346 F.S. which expired on 31-7-1939. This does not appear to me to be a correct interpretation. The same Chronological Table shows that in the years 1347 and 1350 F.S. the month of Sawan was also of 29 days but in the agreement the instalments of those years have been made payable on the 30th day of Sawan of those years. In my opinion the date given in the compromise clearly signifies the agreement between the parties that instalment every year would be payable by the last day of Sawan of each year irrespective of the fact whether in one year there were 2 Sawans or one Sawan. I therefore hold that according to the terms in the decree the judgment-debtor was to pay the said sum of Rs. 1000 by the last date of Sawan 1346 F.S. which expired on 29-8-1939, and not after the expiry of the first month of Sawan which expired on 31-7-1939. I therefore hold that the judgment-debtors were perfectly justified in making the tender of the sum of Rs. 1000 to the plaintiff firm on 25-8-1939, and that the decree-holder was not at all justified in refusing to accept it.

I am in full agreement with the reason given by the learned Subordinate Judge for his finding. No serious objection has been taken to this finding in course of argument at the Bar. This disposes of the contention relating to ''due debt.''

With regard to the actual tender of Rupees 1000 at Bhagalpur the probability is in favour of the judgment-debtor. The decree-holder''s witness 2, Lakhi Prasad, deposed in his cross-examination:

Because the objectors did not make the payment in the 1st Srawan of 1346 F.S., so I took it that they had defaulted. It was on the 30th day of the 1st month of Srawan 1346 F.S. that I considered for the first time that the objectors had really defaulted. My Moharrir or Gumsashta having placed before me the necessary papers on that day that I came to know that the objectors had defaulted.

This statement makes it obvious that having taken that ''wrong'' view as to the due date of the instalment, the decree-holder naturally declined to accept payment, if any, tendered on 25-8-1939, they having been conceived that they had, by that time, acquired the right to execute the decree for the entire sum and all at once without waiting for the further instalments due. This makes the judgment-debtor''s story of tender, and refusal more probable. Besides, there are witnesses examined by the judgment-debtors to prove, that the judgment-debtors tendered Rs. 1000 to Lakhi Prasad, the manager of the decree-holder firm at the gaddi at Bhagalpur. The learned Subordinate Judge who recorded the statement of the witnesses and saw them in the witness-box, observed: "The evidence adduced by the judgment-debtors to the aforesaid effect appears to me to be quite convincing and true." He further finds that the judgment-debtor''s story gains corroboration from admissions made by the decree-holder''s witnesses in cross-examination who admit that the judgment-debtor''s men had been to the gaddi for the purpose of making enquiry if the decree-holder would accept the payment of Rs. 1000, and to that enquiry they (the decree-holder firm) replied in the negative and insisted upon having the entire decretal amount, all at once, including the amount that had been remitted under the compromise. The judgment-debtor''s readiness with the money for the purpose of tender at Bhagalpur is further borne out by the fact that their men had been to Calcutta and filed an application before the High Court seeking permission to deposit the amount to the credit of the decree-holder on or before the due date. The circumstances under which the offer of deposit was formally rejected by the High Court at Calcutta are not material at this stage and will be dealt with hereafter as the occasion requires. The clear position, therefore, is that the judgment-debtors made a tender of Rs. 1000 at Bhagalpur before the last date fixed by compromise, and that they had tendered the amount to the decree-holder''s attorney twice and that they had sought the permission of the Court that passed the decree to make the deposit, but they failed to deposit the money with their own attorney as ordered to do by Amir Ali J. of the Calcutta High Court under circumstances not material for the purpose of this appeal. The question, therefore, arises whether upon the facts as found, the tender is a valid one.

The law as to tender in India is laid down either in Section 85, T.P. Act, or Section 58, Contract Act, according as the case may be one of mortgage or of an ordinary contract. The present is the case of an ordinary contract and so Section 38 would apply. Section 38 reads:

Where a promisor has made an offer of performance to the promisee, and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he thereby lose his rights under the contract.

Every such offer must fulfil the following conditions:

(1) it must be unconditional:

(2) it must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do:

(3) if the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver.

An offer to one of several joint promisees has the same legal consequences as an offer to all of them.

According to this section, the tender should be open, unconditional and should be made under circumstances giving the promisee opportunity to know that the tender is real and bona fide. It has been urged by the learned Counsel, Mr. P.R. Das, appearing for the appellant, that the tender in order to be valid must be followed by deposit in Court. In this view of the law, ho argues that in the present case the respondent was unable to make the deposit in the Calcutta High Court when he was asked to do so by Amir Ali J. with his own attorney, and, therefore, the plea of tender cannot be taken notice of. In support of his argument he relies upon a passage in Leake on Contract, 8th Edn. p. 663, which reads:

Without acceptance on the part of him who is to receive, the act of him who is to deliver or pay can amount only to a tender. But the law considers a party who has entered into a contract to deliver goods or pay money to another as having substantially performed it, if he has tendered the goods or money to the party to whom the delivery or payment was to be made'': Rolfe, B. Startup v. Macdonald (1843) 12 L.J.C.P. 477. Accordingly, the principle of the plea of tender is, that the defendant has been always ready (toujours prist) to perform entirely the contract on which the action is founded; and that he did perform it, as far, as he was able, by tendering the requisite money; the plaintiff himself precluding a complete performance, by refusing to receive it. And as, in ordinary cases, the debt is not discharged by such tender and refusal, the plea must not only go on to allege that the defendant is still ready (uncore prist) but must be accompanied by a profert in curiam of the money tendered,'' or according to the present practice, by payment into Court--(per cur. [Dixon v. Clark]--Dixon v. Clark (1847) 16 L.J.C.P. 237: 136 ER 919.

In a decision in the case in Dixon v. Clark (1847) 16 L.J.C.P. 237 he relies on the passage which reads as follows:

In actions of debt and assumpsit, the principle of the plea of tender, in our apprehension, is, that the defendant has been always ready (toujours prist) to perform entirely the contract on which the action is founded; and that he did perform it, as far as he was able, by tendering the requisite money; the plaintiff himself precluded a complete performance, by refusing to receive it. And, as, in ordinary cases, the debt is not discharged by such tender and refusal, the plea must not only go on to allege that the defendant is still ready (uncore prist), but must be accompanied by a profert in curiam of the money tendered. If the defendant can maintain this plea, although he will not thereby bar the debt (for that would be inconsistent with uncore prist and profert in curiam) yet he will answer the action, in the sense that he will recover judgment for his costs of defence against the plaintiff in which respect the plea of tender is essentially different from that of payment of money into Court. And, as the plea is thus to constitute an answer to the action, it must, we conceive, be deficient in none of the requisite qualities of a good plea in bar.

He also relies upon the case in Haji Abdul Rahman v. Haji Noor Mahomed (92) 16 Bom. 141. There it is said:

There is, however, another objection urged to the tender of the defendant being given effect to; and that is that such tender has not been followed up by a payment into Court in this suit. The passage in Leake on Contracts already cited, was relied on as an authority for this argument also. The form of the plea as given in Bullen and Leake, p. 340, also affords support to it, and according to Order 22, Rule 3, under the Judicature Act, a plea of tender before action must be accompanied by a payment into Court after action. And-this was the old rule as laid down in Chapman v. Hicks (1834) 2 C & M 633; see also per Wilde C.J. in Dixon v. Clark (1847) 16 L.J.C.P. 237. It appears to me that this rule applies in the present case, and that I must hold the tender to be ineffectual.... An expression of willingness to pay does not constitute even a legal tender, and a fortiori it cannot be held equivalent to a payment into Court.

He further relies upon the case of Sabapathi Pillay v. Vanmahalinga Pillai (15) 23 I.C. 581 In this report at p. 586 it has been observed:

Taking the first head of the objection, the reply of the defendants 2 and 3 is, as I said before, that they had made an offer to fulfil the third condition and as the plaintiff did not accept that offer, the defendants are in as good a position as if they had fulfilled the third condition. It seems to me that in execution of a decree which gives a particular relief to the defendants 2 and 3 only if a condition is fulfilled, they cannot get that relief unless they fulfil that condition or unless the fulfillment of that condition has been made impossible by the plaintiff. I also think (a) that the offer to fulfil that condition should be kept always open and (b) that the offer relied upon ought to be an unconditional offer.

and again at p. 587 it is said:

As Shephard J. says in his Contract Act: ''A sufficient tender of money is not made if the money is locked up in a box, nor of goods if they are enclosed in a cask which the other party is not allowed to open.'' Following that analogy, a mere offer by posted letter that defendant 3 is ready to execute a release without having a document of release ready to be delivered is not a proper offer. Again as said in Haji Abdul Rahman v. Haji Noor Mahomed (92) 16 Bom. 141 and Behari Lal v. Ram Ghulam (02) 24 All. 461, the plea of tender is incomplete as an answer to an action (and, by analogy, as an answer to a defence) unless accompanied by a tender in Court.

If the authorities cited above were the last words on the subject, they would no doubt seem to lay down that the plea of tender as distinguished from tender itself, is not valid unless the plea set up as a bar to the action is accompanied by a tender in Court. In this view of the matter, the episode in the Calcutta High Court seems to be quite irrelevant. The Court at that time had no cognizance of any such action either in the shape of an execution for enforcement of the decree or in any other shape in which the validity of the plea of tender was to be gone into. The tender, if at all, had been completed by that time.

A complete answer to the argument advanced as above is given by the dictum of their Lordships of the Judicial Committee in the case of Chalikani Venkatrayanim Garu v. Zamindar of Tuni AIR 1923 P.C. 26 where it is observed:

Before reading this reply it is well to bear in mind what has been stated by Wigram V.C. in the case in Hunter v. Daniel (1844) 4 Har 420, as to the true position in such a case. He there says: ''The practice of the Courts is not to require a party to make a formal tender, where from the facts stated in the bill or from the evidence it appears the tender would have been a mere form and that the party to whom it was made would "have refused to accept the money.'' Their Lordships think that that is a true and accurate expression of the law.

This point came for consideration by a Pull Bench of the Madras High Court in the case in Donda Bhagavantulayya Dhora and Others Vs. Adapa Venkandhora and Others, . The learned Judges in that case laid down two principles one of which as the learned Judges put it, is deducible from what has been laid down in Chalikani Venkatrayanim Garu v. Zamindar of Tuni AIR 1923 P.C. 26 and it is defined by them in the following words:

The first principle is that where there has been an unequivocal refusal to accept a tender the law does not require a tender to be made.

The second principle that was laid down in that case was that "where there is a specific objection to a tender, it is an implied waiver of any other objection there may be." For this proposition they relied upon the case in Polglass v. Oliver (1831) Cri. LJ. 15 where Bayley, J. said:

To make a tender good, it should be made in the coin of the realm, and the money ought to be produced; but the party to whom the tender is made, may make good what would otherwise be insufficient, by relying on a different objection. If he claims a larger amount, and give that as a reason for not accepting the money, he cannot afterwards object that the money was not produced nor can be object that it was offered in paper. If he object to accept the sum tendered because it is in paper, which he is not bound to receive, he gives the party tendering an opportunity to make his tender in coin; but if he puts his refusal upon a different ground, he waives the objection as to the quality of the tender.

Reliance is also placed by the learned Counsel for the respondent on the decision in the case in Joti Lal Sah Vs. Fateh Bahadur Shah and Others, . The principle laid down in that case is to the effect that where there is refusal by the person to receive the amount, validity of the tender in the sense whether there was in fact money with the tender or that he did not deposit in Court does not arise for consideration.

I have forgotten to mention that on behalf of the appellant reliance was also placed upon the case in Pana Ana Rana Arunachallam Pillai Vs. Govindaswami Naicker and Another, of which the headnote is:

In the case of ordinary money claims not based on mortgage a tender before suit of the amount due though improperly refused is ineffective to stop the running of interest where the debtor does not deposit the amount in Court when sued for it.

In that ease, however, while considering the necessity of depositing money in Court in order to make the tender good, the learned Judges have observed:

We may add that it was the debtor who applied to have the award made a decree of Court and that therefore there was no proceeding or suit by the creditor in answer to which the debtor could have paid the money into Court to keep the tender good.

As I have stated already, the failure to comply with the order of Amir Ali J., of the Calcutta High Court is of no effect on the question before us. The observation of the learned Judges of the Madras High Court, quoted above and underlined (here italicised) also supports this view.

The passages from Leake on Contracts and from the decision of the Court in the case in Dixon v. Clark (1847) 16 L.J.C.P. 237 if properly analysed make it clear that tender as such is valid and complete as soon as the party, who has entered into a contract to pay money to another, tenders the same to the party to whom the payment is to be made, but while speaking as to the plea of tender in an action for recovery of the debt or for enforcement of the contract, it is said that pursuant to the practice prevalent in accordance with the English common law, the plea of tender must be accompanied with deposit in Court. There is no authority for such practice in India. The law of tender in India is contained in Section 38, Contract Act, quoted above. There is no room for importing into that section anything like the requirement of depositing the amount in Court, along with the plea of tender put forthwith as a bar in an action for recovery. But the section requires that the tender in order to be effective must be made in due time, at proper place and in a manner so as to make it to the person who has to receive easily ascertainable that the tender is real and sufficient. This condition is sufficiently fulfilled, in this ease, in view of the finding of the lower Court with which we entirely agree that the money was actually tendered to the decree-holder in due time.

Any further tender or deposit in Court should be held to be a mere matter of form as laid down by their Lordships of the Privy Council in Chalikani Venkatrayanim Garu v. Zamindar of Tuni AIR 1923 P.C. 26, cited above, and other cases following it and Court should not insist upon it.

Conceding for the sake of argument that the plea of tender in order to be valid should have been followed by a deposit in Court, it would be in the Court in which the plea of tender is advanced, that is, in the present case it would be the Court of the Subordinate Judge before whom the execution was filed. But the objection of the appellant is not directed against any failure on the part of the judgment-debtors to accompany their objection to the decree-holder''s execution with a deposit in Court. If such an objection were maintainable, it should be deemed to have been waived in view of the principle laid down in the Full Bench case of the Madras High Court Donda Bhagavantulayya Dhora and Others Vs. Adapa Venkandhora and Others, already referred to. The learned Judges of the Madras High Court in that case laid down this proposition relying upon the English case in Polglass v. Oliver (1831) 2 Cri. & J. 15, which I have already mentioned in the earlier part of my judgment.

In the result, I hold that there was a valid tender by the judgment-debtor to the decree-holder who cannot be allowed to take advantage of his own refusal. The order of the learned Subordinate Judge is perfectly correct and must be upheld. The appeal fails and is dismissed with costs.

Fazl Ali C.J.

I agree.