Venkatasubramany Iyer vs Koran Kunnan Ammad and Others

Charles Arnold White, C.J.—As regards the question of the construction of the bond (Exhibit A), the District Munsif hold that the only

remedy open to the plaintiff on default by the defendants was to apply for the execution of the decree mentioned in the bond. The District Judge

apparently took the same view. It seems to me clear that, on the true construction of the bond, the document purports to give a two-fold remedy

to the plaintiff on failure by the defendants to pay the instalments mentioned in the bond, firls, a right to sue for the balance of Rs. 7,500, secondly,

a right to recover the balance by executing the decree. This appears to be the true construction of the document whether the words in default of

this are read as meaning in default of payment of the instalments or in default of payments of the lump sum. There is an express agreement to pay

the lump sum on failure to pay the instalments and an express agreement that the decree shall be kept alive and the rights of the plaintiff in execution

of the decree preserved.

It has been contended on behalf of the defendants that inasmuch sis under the terms of the bond the relation of judgment-creditor and judgment-

debtor still subsists the bond is an agreement to give time for the satisfaction of a judgment-debt, and the sanction of the court not having been

obtained, Sction 257-A of the CPC renders the agreement void.

Section 257-A might, no doubt, be construed as having the effect of rendering the agreement void only in so far as it purported to give time so

that, notwithstanding the agreement, the judgment-debtor would not be entitled to set up the agreement as a bar to the judgment-creditor''s rights in

execution, whilst the judgment-creditor, on the other hand, would be entitled to enforce an independent contract to pay the judgment-debt which

was supported by consideration. But it seems to me that so to construe the section would be to defence the object of the legislature, viz., the

protection of judgment-debtors. I assume in the present case that the contract to pay is supported by a real consideration. Still it is a contract to

pay the amount of the judgment-debt with a stipulation that it shall not be payable at the time when, under the decree, it became payable. The

relation of judgment-creditor and judgment-debtor still exists by the express agreement of the parties. The debt is still enforceable as a judgment-

debt. This being so, I feel it impossible to construe the bond in question otherwise than as an agreement to give time for the satisfaction of judgment

debt. The sanction of the court not having been obtained, I think the bond is invalid. If, as in Tukaram v. Anantbhat ILR 25 B. 252 the effect of the

mortgage bond had been to extinguish the rights of the judgment-creditor under the decree and to substitute therefor the rights given him by the

mortgage bond, the agreement clearly would not be an agreement to give time for the satisfaction of a judgment-debt because, the effect of the

agreement would be to put an end to the judgment-debt. In the present case, there is an express agreement to preserve the judgment-creditor''s

rights in execution and thus keep the judgment-debt alive. With all respect to the learned judges who decided the case reported in Juji Kamti v.

Annai Bhatta ILR 17 M. 382, although I think it was rightly held in that case that the contract to pay by instalments was not void, I confess I

cannot follow the reasoning on which the conclusion appears to be based. The judges observe that the scheme of the CPC suggests that the

intention of Section 257-A, was to render an agreement to pay the amount of the judgment-debt by installments void only in so Car as it affects the

right to execute the decree. But in that case the consideration for the new promise to pay was the surrender by the judgment-creditor of his right in

execution of the decree. The decree was extinguished by agreement between the parties, and being so, I fail to see how any question as to how the

section affected the rights of the execution creditor in execution of the decree was material.

If a judgment-creditor is willing that his judgment-debt should be extinguished, and that his right as judgment-creditor should be given up and the

judgment-debtor is willing to give and the judgment creditor to accept other rights in substitution, I do not see how an agreement which carries out

this intention is contrary to public policy or to the express words of Section 257-A. The parties are dealing at arms length, which would not be the

case it the new-contract was entered into upon the footing that the creditor''s rights under the decree were to be kept alive and held in terrorem

over the head of his debtor.

If a judgment-creditor wants to keep his judgment-debt alive and at the same time is willing to give time for the satisfaction thereof to the

judgment-debtor, the law says that an agreement carryin out such intention shall be void unless sanctioned by the court. In Hukum Chand Oswal v.

Taharunnessa Bihi ILR 16 C. 504 there was no agreement by the judgment-creditor to surrender his rights under his decree, and that being so, I

cannot help thinking the case was wrongly decided, The judges there observe, it seems to us that it is in the event of an application being made to

enforce the agreement entered into between the parties under the bond in the course of the execution of the decree that an objection like that, now

raised (i.e., that the agreement was void u/s 257-A) could have been successfully made."" This means that if the judgment-creditor applies to

execute his decree and the judgment-debtor sets up the agreement to give time, the judgment-creditor can successfully object that the agreement is

void u/s 257-A, while there is nothing to prevent him enforcing the fresh contract the effect of which is to give the judgment-debtor time for the

satisfaction of the judgment-debt. This, as I have said, seems to me to defeat the object of the legislature.

I think the real test is that adopted by the Bombay High Court in the case reported in ILR 25 B. 252. If the parties agree that the judgment-debt

qua judgment-debt shall be put an end to, Section 257-A does not render void the new contract. The new contract does not give time for the

satisfaction of a judgment debt, since this judgment-debt no longer exists, if the judgment-debt is still alive, a new contract like that contained in the

bond in the present case to pay the judgment-debt appears to me, although it may be supported by fresh consideration, to be an agreement to give

time, for the satisfaction of the judgment-debt and therefore void u/s 257-A. I need only add that, in my opinion, the agreement in the present case

is none the loss void because a party, who appears to be the legal representative of one of the judgment-debtors, became a party to the mortgage

bond, though lie was not a party to the suit in which the decree was obtained.

I think the appeal should be dismissed and I think the respondents are entitled to their costs throughout.

Benson, J.

I concur.