V. Venkatasami Chetty vs D. Panchakshara Reddy and Others

Kuppuswami Ayyar, J.—The only point for decision in these appeals is whether the remission of the entire amount due except Rs. 1,500

granted by the agreement evidenced by Ex. D-3 is invalid and cannot be claimed u/s 63 of the Contract Act unless the balance of the amount

payable had also been paid and the contract itself had been wiped out. These two appeals arise out of two suits on two promissory notes. The

plaintiff in both is the same. The defendants are different. The promissory notes were executed for money due under prior dealings. Interest was

payable under the promissory notes. The defendants'' case is that on the 16th June, 1942, accounts were taken and it was agreed then that a

certain amount should be paid and that the balance payable was only Rs. 1,500 and that it should be paid on 30th June, 1942. The question was

whether the amount cited as having been remitted in Ex. D-3 was not validly remitted and whether the plaintiff was entitled to eschew that

remission and claim the entire amount. The question was considered with reference to Section 63 of the Contract Act. The first Court held that

since the entire debt was not discharged but there was a promise to remit and a promise to remit cannot be valid and the entire amount was

therefore decreed. On appeal the District Judge of Chittoor held that there was a valid remission and that u/s 63 there could be a remission of the

entire debt, that in this case there had been a valid remission to that extent and that the plaintiff is not entitled to claim the amount already remitted.

It is urged before me that this is only a case of a promise to remit and not a case of actual remission and that therefore on the principle of the

decision in Ramaswami v. Rudrappa AIR 1939 Mad. 688 the remission is not valid. I have sent for the records in the suit in which that ruling was

given and it is clear from the records that what was pleaded there was not an actual remission, but an agreement to remit. The decision in

Balasundara Naicker v. Ranganadha Aiyar (1929) 58 M.L.J. 503 : ILR 53 Mad. 127 applied to the facts of that case as it was a case of an

agreement to remit. In Jitendra Chandra Roy Chowdhuri v. S.N. Banerjee ILR (1943) 1 Cal. 101 which is relied upon by the District Judge is the

case which applies to the facts of this case. Where there is a remission, whether the remission is in whole or in part, and is not a mere promise to

remit in the future, if it is in prasenti, then it will be valid and does not require consideration. The decision in Ramaswami v. Rudrappa AIR 1939

Mad. 688 cannot govern this case, because on the facts of that case there was only an agreement to remit in the future. But in this case in Ex. D-3,

it is definitely stated:

The balance due is Rs. 5,309-2-11, out of which the amount excused out of grace is Rs. 3,809-2-11,. the balance of Rs. 1,500 (Rupees one

thousand and five hundred) shall be paid by 30th June, 1942 and the two bonds executed and delivered on 15th May, 1941, shall be taken back

after getting the endorsement of payment made thereon.

The language clearly indicates that to the extent to which there was a remission out of grace it was a remission in praesenti. The word used was

in the past tense ""the amount excused is so and so"" and u/s 63 of the Contract Act there could be a remission in part as well. If as contended for

the appellant a remission like this must be followed by payment of the balance and the extinguishing of the debt to that extent, there could be no

remission at all in prasenti at the time when the remission is made and I do not think it could be said that the language of Section 63 warrants this

construction. I therefore find that the learned District Judge was justified in finding that there was a remission in praesenti at the time of Ex. D-3 and

therefore it was valid even though it was not supported by consideration by reason of Section 63 of the Contract Act.

The appeals accordingly fail and are dismissed with costs.