Keralal Udochand vs Amarnath

Chaturvedi, J.—This is plaintiffs second appeal. Their suit for damages for breach of contract of lease has been dismissed by the trial Court and that decree has been upheld by the Additional District Judge, Damoh.

The facts, briefly, are that respondent No. 3 Jagannath and Ranchoreshankar were brothers. Ranchoreshankar was the father of respondent No. 1, Amarnath, and husband of respondent No. 2 Shantibai. On 8th October 1946 this Ranchoreshankar executed a patta in favour of the plaintiffs, leasing fields named Talaiya Bandhan and Baram Deo Gohari of 3� Manis acreage for a consideration of 3 Manis grain which, as recited in the document, was received in advance. The lease was to be for the year. Samvat 2004 (1947-48). In that year the plaintiffs were not put in possession of the fields leased, and these fields were cultivated in that year by Ranchoreshankar. The plaintiffs, therefore, claimed damages for breach of the contract.

According to the respondents, Ranchoreshankar had borrowed 2 Manis grain from the plaintiffs to which one Mani as Badhi was added and this grain was to be repaid by Ranchoreshankar. It was stated that the lease-deed (Exhibit P-3), which is on page 50 of the paper-book, was executed by Ranchoreshankar merely by way of security for repayment of the loan and that there was an agreement that it would not be acted upon. It was mentioned that Ranchoreshankar and his brother Jagannath were not joint; that there was a partition between them and the field khasra No. 369/5, Talaiya Bandhan, had fallen to the share of Jagannath, respondent No. 3, at partition between him and Ranchoreshankar and that the latter had no right to lease it. Both the Courts below found this defence to be correct and, therefore, dismissed the suit. As these are findings of facts, the learned counsel for the appellants, rightly did not challenge their, and the only point urged in this second appeal is that it was not open to the respondents to show by oral evidence that the lease-deed, which had been executed, was not meant to be acted upon. The learned counsel placed his reliance on the provisions embodied in sections 91 and 92 of the Indian Evidence Act.

After hearing the arguments on this point, 1 have come to the conclusion that, looking to the wording of proviso (3) to section 92, there is no substance in the contention raised; and the question is also covered by several decisions, including a decision by the Privy Council in AIR 1936 70 (Privy Council) In that case a document had been executed on December 28, 1912, by the plaintiff and by her husband''s brother affirming the undivided status of the family and purporting to make provision for the plaintiff''s maintenance. It was distinctly understood that this document was not to be the final contract for the plaintiffs maintenance, but was solely intended as a voucher establishing the joint undivided nature of the family, it being agreed that the plaintiff''s claim for maintenance on a scale commensurate with the position and status of the family was to be left over for future settlement. Consequently, the provision for maintenance in the deed was never given effect to, or acted on by the parties. It was held by the Courts below, in that case, that there was no agreement and therefore no contract. The appeal was taken to the Privy Council on the sole point, whether under the provisions of sections 91 and 92 of the Indian Evidence Act oral evidence was admissible to establish that it had been agreed that the provisions for the plaintiff''s maintenance were not to be acted upon, and that the document was only intended to create evidence of the undivided status of the family. Their Lordships discussed the provisions of these sections of the Evidence Act and observed that there is no proviso in either section making oral evidence to show that there was no agreement, and therefore no contract, inadmissible. It was held that section 92 only excludes oral evidence to vary the terms of the written contract, and has no reference to the question whether the parties bad agreed to contract on the terms set forth in the document. It was, therefore, observed that the objection must be based on section 91, which only excludes oral evidence as to the terms of a written contract, and it was held that, under that section, a defendant sued upon a written contract purporting to be signed by him, cannot be precluded in disproof of such agreement from giving oral evidence; that his signature was a forgery. Their Lordships referred to Pym vs. Cambbell (1856) E & B 370, and other cases, both Indian and English, and held that there is nothing in either section to exclude oral evidence that (notwithstanding a written instrument which purports to embody a contract) there was no agreement between the parties and therefore no contract. It was also held that the oral evidence showing that the document, though signed by the party impugning it, was not intended to be acted upon, but was intended to be used solely for another purpose, was rightly admitted.

This case has been followed in many other cases and it has been held that it is permissible to adduce evidence of a contemporaneous oral agreement under which the parties to the written contract agree that until the happening of a certain event no obligation whatever under the written agreement should attach, or, in other words that until the condition precedent has been fulfilled, the written agreement should be and remain inoperative and of no effect. See the observations of Justice Page in Walter Mitchell Vs. A.K. Tennent, and of Justice Sale in Ramjibun Serongy Vs. Oghore Nath Chatterjee, 25 Cal. 401 . In AIR 1938 198 (Privy Council) their Lordships observed that it was necessary in such cases to distinguish a collateral agreement which alters the legal effect of the instrument from an agreement that the instrument should not be an effective instrument until some condition is fulfilled, or, to put it in another form, it is necessary to distinguish an agreement in defeasance of the contract from an agreement suspending the coming into force of the contract contained in the promissory note.

In Umrao Singh Vs. Raunak Singh, , it was held by Justice Dhavle that in a suit on a promissory note where the defence was that the note was executed by the defendant as agent of his principal for consideration which was earnest money of another transaction by which the plaintiff had agreed to purchase certain properties of the latter and the note was to be acted upon In case of failure of the principal to complete the transaction, the defendant was entitled to adduce oral evidence in support of his plea.

On the basis of these rulings I have no doubt that the defendants could adduce oral evidence to prove an agreement suspending the coming into force of the contract contained in the lease-deed (Exhibit P-3), or to prove that it was to impose no obligation at all until the happening of a certain event. I am, therefore, of opinion that the oral evidence to prove the contemporaneous oral agreement that the lease-deed was only as a voucher or security for the loan and was not to be acted upon, was rightly admitted by the Courts below. The plaintiff himself did not take possession of the suit fields, and there was ample evidence to the effect that the contract in the lease-deed was not to be acted upon. Consequently, the view taken by the Courts below seems to me to be correct.

It was, however, urged by the learned counsel for the appellants that a decree for the loan may be passed; but I do not think In a suit for damages for the breach of a contract, a decree for the loan can be passed without amendment of the plaint for which no application had been made.

The result is that this appeal will be dismissed with costs.