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Judgment
These two miscellaneous appeals were analogous and were heard together, and the second appeal arose out of the same matter and came up for admission with the hearing of the miscellaneous appeals, and we have been able to admit and to hear it along with the miscellaneous appeals with the consent of the parties. All three appeals arise out of a series of claims made by the Zamindar of Dharakote against the opposite parties who were mustagirs. The zamindar brought a land suit, No. 1 of 1929, against the opposite parties and obtained a decree for as. 3282 and started execution proceedings (No. 243 of 1934) to enforce that decree. In 1936 he brought another land suit against the same parties (No. 121 of 1936) which was decreed on compromise on 9th April 1938. That compromise included not only the amount claimed in L.S. No. 121 of 1936 but also the previous amount comprised in execution proceedings No. 245 of 1934 and other claims of a similar nature between the zamindar and the opposite parties which were not the subject-matter of any proceedings. The decree was in the terms of the compromise petition which were as follows:
The total claim relating to this suit including interest and costs is Rs. 904-1-0. The arrear relating to Rugumu (village) appertaining to Faslis 1346 and 1347--Rs. 733-0-4 pies, and Mustagiri arrear of village Saypur appertaining to years Faslis 1342, 1343, 1344--Rs. 1050-2-9, arrear relating to E.P. No. 245/34 and L.S. No. 1 of 1929--Rs. 3992. The total on these four counts being Rs. 6679-4-1 were due to the plaintiff from the defendants. Out of this the defendants have paid up to date, 21st February 1938--Rs. 400 towards E.P. and Rs. 800 towards the other items aforesaid. Deducting that, the balance (is)--Rs. 5479-4-1 made up of Rs. 3592 towards E.P. and Rs. 904-1-0 towards the claim in present suit and Rs. 983-3-10 pies towards the other. Out of this total sum of Rs. 1729-4-1 pies made up of Rs. 746-1-0 relating to E.P. and Rs. 983-3-1 relating to the other item is remitted. Deducting this, the balance of Rs. 3750 out of which Rs. 300 is to be paid on 1st March 1938 and Rs. 400 to he paid on 30th June 1938 and the balance Rs. 3050 within the period ending on 1st September 1939, if the sums are not paid in the manner stated above at the aforesaid dates (i.e., in default) whatever total sum remains outstanding by the time and the sum of Rs. 1729-4-1 which had been remitted as above, both together, with interest at 12 per cent, per annum from to-day will have to be paid. We agree that a decree be passed in accordance with the terms herein stated.
The terms of that compromise were not complied with and the Court of Wards on behalf of the zamindar took proceedings to enforce it. They were perhaps in some difficulty in the circumstances as to what proceedings should be taken, and the course they eventually adopted was, in our view, somewhat unfortunate. They endeavoured to split the compromise decree into its component parts and they started three proceedings which have resulted in the three appeals now before us. The first was E.P. No. 189 of 1940 by which they sought to re-open E.P. No. 245 of 1934 and the, Revenue Divisional Officer dismissed the petition on the ground that it was satisfied by the compromise, but on appeal the District Judge directed it to be sent back to him for consideration on merits. His decision is the subject-matter of Miscellaneous Appeal No. 2 of 1942. They also started E.P. No. 190 of 1940 by which they sought to execute so much of the amount comprised in the compromise decree as was the original subject-matter of L.S. No. 121 of 1936 and both the Revenue Divisional Officer and the learned District Judge of Gaujam. Pari passed decrees in favour of the zamindar. The decree of the District Judge is the subject-matter of Miscellaneous Appeal No. 3 of 1941. They also started O.S. No. 89 of 1940 asking for a decree in respect of those parts of the compromise decree which had previously been the subject-matter of a suit. The learned Munsif dismissed that suit, but the learned District Judge passed a decree in favour of the zamindar in part, and from that decree second Appeal No. 19 of 1943 is brought.
It appears that in the original suit the opposite parties contended that the suit would not lie but that the remedy of the zamindar was to execute the compromise decree, and we accordingly suggested that E.P. No. 104 of 1941 should be formally amended to include the whole subject-matter of the compromise including, that is to say, the sums claimed in all these sets of proceedings. We do not think it necessary to determine what strictly would have been the proper course. No serious objection has been made by the opposite parties to such amendment which is clearly calculated to save them from being harassed by a multiplicity of proceedings and they cannot be prejudiced in any way because in the circumstances of this case Section 14, Limitation Act, would prevent any question of limitation arising.
Accordingly we direct that E.P. No. 104 of 1941 be amended and we propose to treat the whole matter before us in Miscellaneous Appeal No. 3 of 1989. E.P. No. 189 of 1940 will be dismissed as will O.S No. 89 of 1940. We will deal with the costs of these proceedings at the conclusion of this judgment. With regard to the main appeal which is now based on a claim to enforce the compromise decree, the facts are that the first two instalments of us. 300 and Rs. 400 respectively were paid not on the due dates but within a reasonable time thereafter. The third and substantial instalment of Rs. 3050 to be paid before 1st September 1939, has not been paid and in those circumstances the zamindar is seeking to recover that sum of Rs. 3050 together with the remitted sum of Rs. 1729 with interest at 12 per cent, from 9th April 1938, until payment. It is admitted that he cannot, in fact, claim interest at a higher rate than six per cent, and it is also not disputed that he is entitled to recover Rs. 3050 with interest as claimed. The dispute between the parties turns on whether or not he is also entitled to recover the sum of Rs. 1729 remitted in the compromise.
The Advocate-General for the opposite parties, appellants, contended that that sum was a penalty and could not be recovered. But Mr. R.K. Ratho for the zamindar said that in the circumstances of this case where there was an original contract for the payment of a larger sum with a concession enabling a smaller sum to be paid in a particular way in full satisfaction the decree-holder was entitled to insist on the letter of the agreement, and he referred us to authorities in support of that proposition--in particular, the case in Burjorji Shapurji Sheth Vs. Madhavlal Jesingbhai, a decision of a Division Bench presided over by the Chief Justice (Sir John Beaumont) and other cases. It cannot be questioned that if the sum claimed is a penalty the claim cannot be enforced and the question that we have to determine is whether on a true construction of that agreement the sum is a penalty. The law is admirably expressed by Sir John Beaumont at p. 617 in the case referred to:
The law on the subject is not, I think, open to any serious question. If there is an agreement to pay a sum of money by a particular date with a condition that if the money is not paid on that date a larger sum shall be paid, that condition is in the nature of a penalty against which a Court of equity can grant relief and award to the party seeking payment only such damage as he has suffered by the nonperformance of the contract. But if, on the other hand, there is an agreement to pay a particular sum followed by a condition allowing to the debtor a concession, for example, the payment of a lesser sum, or payment by instalments, by a particular date or dates, then the party seeking to take advantage of that concession must carry out strictly the conditions on which it was granted, and there is no power in the Court to relieve him from the obligation of so doing.
Where the legal principles are not open to doubt, it is of no assistance to refer to other cases which turn on the particular terms of other documents. The question is, what is the meaning of this document, and in our opinion, it is clearly a contract by which the zamindar undertook if a smaller sum was paid in a certain way to accept that sum in full satisfaction of a larger debt and, therefore, he is entitled to insist on the letter of this bargain.
It was then contended by the Advocate-General that as the zamindar had not insisted on the first two small instalments being paid strictly on the due date he was disentitled to insist on his rights when default was made in payment of the larger amount. We do not think that a creditor, who has shown a little forbearance to his debtor in regard to some instalments is thereby deprived of this rights as to the others and we should be reluctant to so hold. Even if the contract were to be construed as requiring payment on the due dates or within a reasonable time thereafter which is the most charitable construction that, could be placed upon it for the opposite parties, they have clearly made default in payment of the larger (smaller?) sum within the stipulated period or a reasonable time thereafter. There is, therefore, no reason why the zamindar should not be entitled now to insist upon his full rights. We accordingly decree that the zamindar is entitled to get in execution of his decree in L.S. No. 121 of 1936 a sum of Rs. 8050 and Rs. 1729 making together Rupees 4779 together with interest thereon at the rate of six per cent, from 9th March 1938 until payment. Having regard to the fact that the course adopted by the zamindar has been unnecessarily harassing to the opposite parties we consider that notwithstanding he has succeeded, each party should bear its costs of all the proceedings and appeals down to the date of this decree.