Bhikhari Mahto vs Bansropan Ram and Another

Harries, C.J.—This is a Letters Patent appeal against a decision of Agarwala J., in second appeal reversing the decrees of the Courts below and dismissing the plaintiff''s claim. The facts of the case can be shortly stated as follows: The plaintiff mortgaged certain lands in favour of defendant 1 by a mortgage dated 11th September, 1929. The consideration for the mortgage was Rs. 500 and a sum of Rs. 272 out of the sum of Rs. 500 was left with defendant 1 to pay off certain moneys due from the plaintiff to defendant 2 on hand-notes. The Courts below have found that defendant 1 paid the money as directed; but unfortunately for the plaintiff, defendant 2 brought a suit against him in that Small; Cause Court, for what he alleged was due on the hand-notes, and recovered by means of a decree of that Court a sum of Rs. 316-7-0. It may be observed that in the present case defendant 2 tried to argue that his suit in the Small Cause Court referred to, sums other than dues on these particular hand-notes; but the Courts below have found that this suit related to the very hand-notes which had been discharged by the payment made by defendant 1 at the plaintiff''s direction to defendant 2. The suit, as originally framed) was brought against defendant 1 and in, the plaint it was alleged that he had not paid defendant 2 as agreed in the mortgage deed. Defendant 1 pleaded that he had paid defendant 2, whereupon the plaintiff obtained leave to amend his plaint and add defendant 2. As I have stated, both the Courts below have come to the conclusion that defendant 1 paid defendant 2 before the latter brought the suit on the hand-notes, and before Agarwala J., it was admitted that this payment had been made, and that no point could be made against defendant 1.

The learned Munsif and the learned Sub-ordinate Judge came to the conclusion that.

the plaintiff was entitled to recover as against defendant 2 the sum which he had been compelled to pay twice over in discharge of the hand-notes. Both the Courts however were of opinion that the plaintiff had no claim whatsoever against defendant 1 who had paid the sum of Rs. 272 to defendant 2 as directed. In second appeal Agarwala J., held that the plaintiff could not recover in this suit as against defendant 2. He held that though the plaintiff had unfortunately been compelled by a decree of the Court to pay the sum due a second time, yet such could not be recovered by a subsequent suit.

It has been argued before us that the plaintiff must be entitled to recover what he has paid twice over from defendant 1 or from defendant 2. "With regard to defendant 1, it is to be observed that the plaintiff has not appealed against the decree which was in favour of defendant 1. Both the Courts below, as I have said, dismissed the claim as against defendant 1. In any event, it is perfectly clear that the plaintiff can have no claim whatsoever against defendant 1, because he discharged his obligation and paid to defendant 2 the sum of Rs. 272 as he was directed to do by the terms of the mortgage deed.

In my view the plaintiff cannot recover this sum from defendant 2. What has happened in this case is that plaintiff discharged his debt under the hand-notes by the payment of Rs. 272 by defendant 1 to defendant 2. Unfortunately for the plaintiff however defendant 2 brought a subsequent suit upon these very hand-notes and that suit was decreed against the plaintiff and the decree realized by execution. What the plaintiff is now seeking to do is to recover money back which he was compelled to pay as a result of the decree which defendant 2 obtained against him.

It seems clear that defendant 2 had no justification for the suit which he brought. The findings of the lower Courts are clear and are to the effect that defendant 2 had been paid all that was due to him by the plaintiff upon the hand-notes when he brought the suit. However that suit succeeded, and defendant 2 obtained a decree against the plaintiff, which the latter was compelled to satisfy by payment.

In those circumstances, can the plaintiff now sue to recover what he was compelled to pay by suit on the ground that the money had been previously paid to defendant 2 and that the latter had no right whatsoever to recover the money again by the Small Cause Court suit which he brought? In my view this case is completely covered by the old English case in Marriot v. Hampton (1797) 7 TR 269 (Smith''s Leading Cases, Edn. 13, Vol. 2, page 386). In that case the defendant had previously brought a suit against the plaintiff for goods sold, for which the plaintiff had actually paid and obtained the defendant''s receipt. Unfortunately for the plaintiff he mislaid the receipt, when the defendant sued him for the price of the goods.

The plaintiff'' failed to Satisfy the Court that he had paid, and the defendant obtained a judgment for the sum due which was eventually realized. Later the plaintiff found the receipt and brought a suit to recover the money which he had been compelled to pay to the defendant as a result of the earlier suit. It was held that the plaintiff could not recover this money as money had and received, because it was money which had been obtained as the result of a litigation culminating in a judgment. The case in Marriot v. Hampton (1797) 7 TR 269 has been considered on a number of occasions by their Lordships of the Judicial Committee, and the principle laid down has been followed in this country.

In my view the facts of the present case cannot be distinguished from those in Marriot v. Hampton (1797) 7 TR 269. In the present case defendant 2 was paid his dues on the hand-note by defendant 1 on behalf of the plaintiff. That was in substance and in fact a payment by the plaintiff of what he owed under the hand-notes. In spite of that payment, defendant 2 brought a suit against the plaintiff, and in that suit he obtained a decree under-which he recovered for the. second time the amount due under the hand-notes. Defendant 2 in this case did precisely what the defendant did in Marriot v. Hampton (1797) 7 TR 269; and it appears to me that the plaintiff in this case cannot recover for the same reason as the plaintiff failed to recover in Marriot v. Hampton (1797) 7 TR 269. This is money which had been paid to the defendant under the compulsion of legal process, and as such cannot be recovered in a subsequent suit.

It has been argued before us that the principle laid down in Marriot v. Hampton (1797) 7 TR 269 is only applicable where the defendant was not guilty of fraud, dishonesty or sharp practice. It is said that if there is bona, fides on the part of the defendant, then the money is irrecoverable; but, on the other hand, if there is mala fides, then the money is recoverable. Our attention has been drawn to the case in Ward & Co. v. Wallis (1900) 1 QB 675 where Kennedy J., held, that in certain circumstances money obtained under legal compulsion was recoverable. In that case no judgment of the Court was pronounced, and the money was not obtained as a result of the decree. The plaintiff had sued the defendant and had by mistake given the defendant credit for a sum of �75. The defendant realizing that this credit had been given to him by mistake paid the balance and obtained from the plaintiff a receipt for the full amount including the sum of �75, for which credit had been wrongly given.

Subsequently the plaintiff realized that this sum of �75 had not been paid and brought a suit to recover that amount Kennedy J., held that he was entitled to recover on the ground that though the defendant had obtained a benefit as a result of legal process, yet as he had acted dishonestly he could not retain such a benefit. It is to be observed that in that case there was no decree, but rather it was a case which was settled between the parties without a fight on the merits of a decree.

Counsel for the appellant has also cited the case in Cadaval v. Collins (1836) 4 A & E 858. In that case a Spanish Duke was arrested by one Collins, an insolvent, for a fictitious debt of �10,000 upon a writ which was afterwards set aside. The Duke, who was ignorant of the English language, in order to obtain his release, agreed to pay �500 and gave bail for the remainder of the sum; and the �500 was accordingly paid. An action having been brought by the Duke to recover this sum, it was held that he was entitled to succeed, and the Court later discharged the rule for a new trial.

In delivering judgment, Lord Denman said:

It is, asserted that the principle of decision in Marriot v. Hampton (1797) 7 TR 269 has not been adhered to in this case. But that case does not warrant the argument drawn from it. It does not decide that money obtained under the compulsion of legal process can never be recovered back; but only that, after the defence in an action has failed, and money has been recovered in, the action, it cannot be recovered back in another action. This is the ground upon which the decision is put by Lord Kenyon.

The English law is clear that if money has been obtained as the result of a decree between the parties if such be not a compromise decree, then a subsequent suit to recover back that money cannot succeed. Different considerations would arise if the parties had compromised and the compromise had been induced by the fraud of the person who obtained the benefit under the compromise. In such a case the compromise could be set aside as also the decree based upon it. Such was the decision in Raghavachariar v. Thiruvenkatasami Iyengar (1907) 17 MLJ 82. In that case it was found that the defendant inveigled the; plaintiff into a compromise fraudulently, and; accordingly Marriot v. Hampton (1797) 7 TR 269 had no application to such a case. In the present case there was no compromise, but a decree was passed against the plaintiff who apparently put up no defence. The money now sought to be recovered is money which the plaintiff was compelled to pay as the result of such decree. Such, in my view, cannot be recovered in a subsequent suit. Agarwala J. allowed the appeal upon these grounds, and in my view his decision was right and must be affirmed. I would therefore dismiss this appeal with costs. There will be one set of costs in this Letters Patent appeal.

Fazl Ali J.

I agree.