Prahladrai Khaitan vs Atlas Works Ltd.

Bijayesh Mukherji, J.—Is the execution, levied by Prahladrai Khaitan as assignee decree-holder of the consent decree dated March 6, 1958, in suit No. 1573 of 1953, premature? That is the only question debated before me.

In this proceeding in chambers, I reserved judgment, because it seemed to me to be one of difficulty and certainly not an easy going for the assignee decree-holder. Not that it raises a new point of law. But it does present an interesting aspect of what at law, constitutes default and payment of the money due, when payment is made by cheque. It also raises the question of the effect of a consent decree.

To facts first. In suit No. 1573 of 1953, one Ali Ashgar Shirazee was the Plaintiff and Atlas Works Ltd., a company incorporated under the Companies Act, the Defendant. A suit for possession of part of 53, Free School Street and other allied reliefs, it culminated, on March 6, 1958, in a consent decree for just that: vacant possession of part of ''53'', on certain terms, two of which call attention. One, the decree shall not be executed for 11 years from March 6, 1958, should the Defendant pay the Plaintiff mesne profits of Rs. 800 a month by the 15th day of each succeeding month. Two, if however the Defendant suffers such mesne profits to be in arrears for 3 consecutive months, the bar on execution will be lifted.

By a conveyance dated October 8, 1964, the decree holder Shirazee transferred the decree and the subject-matter thereof: part of ''53'', amongst others, to Prahladrai Khaitan, the Petitioner assignee decree-holder before me, for a consideration of Rs. 2,00,000, omitting the other detail thereof not material for the present purpose.

Eleven years from March 6, 1958, will be March 5, 1969, which is yet to come. This is February 1967. But, it is said, mesne profits are in arrears for three consecutive months of February to April 1966. Hence the execution.

Defence of the judgment-debtor company:

Failure there has been on our part to pay mesne profits for February to April, 1966. But it has been aided and abetted by the assignee decree-holder''s collecting sarkar, calling on us all along for collection, having not called so, any time for collecting the mesne profits from February onwards. Thus, no default can be spelt out. More, the assignee decree-holder accepted, without objection, for these very months the 3 cheques of Rs. 800 each we had sent him by registered post on May 23, 1966. They were returned no doubt, but some 29 days later, to wit, on June 21, 1966. Ergo, default, if any, has been waived.

Reply by the assignee decree-holder:

No obligation I had to send anyone for collecting mesne profits. But, true it is, I did send darwans in or about the second week of every month and thereafter when asked for by the judgment-debtor company, during the whole of the period from November 1964 to April 1966, for collecting mesne profits from October 8, 1964, the date of my purchase. Even in or about the 3rd week of April 1966 the judgment-debtor company did not pay mesne profits for February and March previous. Thereupon my darwan Umashankar Chowbey was instructed to tell the judgment-debtor company that he would call no more to collect mesne profits which were to be reached at my place at 34 Baranasi Ghosh Street. Darwan Chowbey did tell the judgment-debtor company''s cashier so.

Upon these facts I have gleaned from the affidavit-evidence of both the parties, one common admission stands out prominently: that darwans were deputed every month, right from November 1964, to collect mesne profits from the judgment-debtor company''s office which is part of ''53'', the premises in suit.

But only because it is so, the inference does not follow that there was an agreed arrangement in terms of which darwans had to be deputed every month. I may need money badly. And with a view to having an early payment, I send my darwan to get the money due. That and absence of an agreed arrangement, may stand together. It is, therefore, for decision, upon materials I have had put before me, whether or no there was an agreed arrangement, as contended for by the judgment-debtor company.

On May 23, 1966, the judgment-debtor company wrote to the assignee decree-holder, saying that they were expecting his collecting sarkar to collect the cheques ''for the last three months'', complaining that he had not turned up, the reason of which they were ''at a loss to know'' and enclosing the 3 cheques. It was answered by the assignee decree holder''s Advocate''s letter of June 21, 1966, wherein it was denied that they were expecting his collecting sarkar to collect the cheques for the last three months and that the collecting sarkar had to turn up at all, the plain meaning of which is that the collecting sarkar did not call and had not to call either for collection of the cheques. But only a little less than three months later, to be exact, on September 17, 1966, through an affidavit of Nathmull, he admitted having sent darwans month in month out and in the second week of every month, right from November 1964 to April 1966, for collecting mesne profits from October 8, 1964, against the grant of proper receipts. Why send darwans so, every month with punctiliousness, unless there be a firm arrangement, as the judgment-debtor company contends? Without more, an agreed arrangement looks so probable.

But there is a little more yet. And this little produces a result so big. Let it be assumed that there was no agreed arrangement by which mesne profits were to be collected from the judgment-debtor''s end. Three consecutive months of February to April 1966 rolled by, one after another. The 15th day of May 1966 rolled by too. Still no payment: Only eight days later, namely, on May 23, 1966, three cheques of Rs. 800 each in payment of mesne profits for these three months greeted the assignee decree-holder. And what did he do? He did not return them then and there. He sat over them for 29 days and then returned them through his Advocate to the judgment-debtor company. What does such conduct indicate? It indicates the assignee decree-holder of having been conscious of having not deputed any darwan to collect mesne profits from February onwards and having, therefore, made no noise over the receipt on May 23, 1966, of the 3 cheques of Rs. 800 each for mesne profits of February to April 1966. Surely, he would have made a lot of noise then and there, instead of having waited for 29 days, were there no such arrangement. And to the judgment debtor company, the cheques would have been returned by return of post with an ultimatum to quit forthwith in terms of the consent decree.

The explanation for the delay of 29 days, as stated in the Advocate''s letter of June 21, 1966, has not been overlooked. The assignee decree-holder, it is said, had handed over to him, in the last week of May 1966, the three cheques which were however misplaced in the Advocate''s house. But so serious a finding in so important a matter: delay of a total period of 29 days, each day of which counts, needs further and better evidence than what I see before me. The least the Court can insist on, in such a matter, is the evidence of the Advocate in whose house the misplacing of the cheques is said to have occurred. Such evidence is not forthcoming in any form. The Advocate''s letter simpliciter, forming an annexure to the affidavit dated September 26, 1966, on behalf of the judgment-debtor company, for a certain limited purpose, is not such evidence. Nor is it made evidence by the affidavit dated September 17, 1966, of the assignee decree-holder''s constituted attorney Nathmull who glibly affirms about the correctness of the statements in the Advocate''s letter of June 21, 1966, as being true to his know ledge. But the cheques having been misplaced in the Advocate''s house san be true to the knowledge only of the Advocate whose house it is. Nathmull''s knowledge could be, at best, true to the information he had had, if at all, from the Advocate concerned. So the explanation for the delay explains little save absence of any explanation receivable in evidence.

Consider alongside this another disputed fact: did the assignee decree-holder depute his darwans, as he was doing so long, right from November 1964, to collect mesne profits for February 1966 onwards? The judgment-debtor company says: ''No; he did not''.: vide the affidavit dated August 26, 1966, of Girija Saran Bhattacharjee. The assignee decree-holder says: ''Yes; I did up to the 2nd week of April 1966 and even beyond that: the 3rd week of April 1966, but vain. No payment was made, with the result that darwan Chowbey, as instructed by my constituted attorney Nathmull, gave out that he would call no more for payments which were to be reached at 34 Baranasi Ghosh Street.'': vide the two affidavits dated September 17, 1966, one by Nathmull and another by darwan Chowbey.

I prefer the affidavit of Girija Saran to the affidavits of Nathmull and Chowbey. But before I record why I do so, I owe it to Mr. Subrata Roy Chowdhury, the learned Counsel for the assignee decree-holder, to notice his contention that the affidavit by Girija Saran, a nobody in the judgment-debtor company (as Mr. Roy Chowdhury says), infracts Order XXIX, Rule 1, of the Procedure Code and is, therefore, beneath notice in a Court of law. But, as pointed out by Mr. Dipak Basu, the learned Counsel for the judgment-debtor company, the very premises, upon which Mr. Roy Chowdhury rests his contention, appears to be wrong. Look at the warrant of authority or "warrant of power and appearance", as it is called, see Aswini Kumar Ghose v. Arabinda Bose (1952) S.C.A. 683, filed by the judgment-debtor company on August 26, 1966. Girija Saran Bhattacharjee subscribes himself there as under:

Atlas Works Private Ltd. By the pen of Girija Saran Bhattacharjee Secretary and Principal Officer.

More, it is accompanied by Girija Saran''s affidavit, also dated August 26, 1966, where the refrain is:

I am the Secretary and Principal Officer of the Defendant company abovenamed.

What more, I ask, is required to make Girija Saran a somebody even within Order 29, Rule 1? The secretary and principal officer of the judgment-debtor company, he is within his rights to swear the affidavit he has sworn. Mr. Roy Chowdhury''s contention appears, therefore, to be destitute of merit and cannot receive effect.

Now, to the reasons why I go by Girija Saran''s affidavit in preference to Nathmull''s and Chowbey''s. One, Nathmull''s affidavit of September 17, 1966, makes a sorry reading. In one breath he says, darwans were sent, in fact, from November 1964 to April 1966 in the 2nd week of every month and thereafter when asked for, to collect mesne profits from October 8, 1964: para. 8(b); in the next breath, he denies that the judgment-debtor waited or could wait for any collecting sarkar as alleged or at all: para. 8(c), or that

mesne profits used to be paid to the darwan as and when he called at the office of the judgment-debtor as alleged or at all:

the concluding portion of para. 8(b). If you are so good as to send your darwan in the second week of every month regularly, why should not the judgment-debtor wait for him to call? And why should not the mesne profits be paid to him? Surely, the darwan was not being deputed so every month to have a talk on weather with the judgment-debtor company. Again, Nathmull bona fide and reasonably believes that mesne profits for February and March 1966 were not paid "because of the paucity of the funds": para. 8(c) again an averment which, however, is affirmed as true to his knowledge: para. 16. A certain amount of levity is seen here. What you bona fide and reasonably believe cannot be true to your knowledge. Two, Nathmull cannot have personal knowledge of what Chowbey is supposed to have told the judgment-debtor''s cashier at the other end. Chowbey can have. But what he says in his affidavit evidence has produced disbelief in my mind. I confess, it draws largely on my belief that in these days of house famine the judgment debtor company would not pay mesne profits, which they have been paying all along, without the assignee decree-holder having made any noise so long too, in spite of Chowbey having called on them for just that. The more so, as they were well aware of what non payment for three successive months meant: eviction forthwith from ''53''. Three, paucity of funds towards the end of April does not look as obvious, when towards the end of May next three cheques of Rs. 800 each could be passed on to the assignee decree-holder, there being nothing to show that the cheques were not met or incapable of being met. Four, the affidavit of Girija Saran tells. The darwans cease coming from March when mesne profits for February previous fall due. They wait and wait till they lose sight of it. I see in such averment commendable candour. I see in such averment the marks of probability and natural human conduct which does not mean an ideal, immaculate conduct, but a conduct subject to this human foible and that. And who, amongst us the type of ordinary people we see around us, not those few who are far above the average would not be lulled into inaction, as the human elements of the judgment-debtor company were, by the regular practice of deputing darwans having been abandoned without notice? In the circumstances, the rut of inertia in the camp of the judgment-debtor, a juristic person, managed by a variety of natural persons, becomes inevitable, fed and fostered by the assignee decree-holder''s omission to do what he was doing for months on end, on his own admission. Five, the same consideration again. Were there no such arrangement of deputing darwans, agreed to and acted upon, the assignee decree-holder would have swooped down upon the judgment-debtor even on May 16, 1966, when defaults of three successive months'' mesne profits were complete. But what I see is that he waited and waited even after the receipt of the three cheques on or about May 23, 1966. and could bring himself to make his Advocate return the cheques and threaten execution of the consent decree, only on June 21, 1966. Presumably, he had had some inspiration then to do so. But it was too late. Every day from May 16, 1966, must be reckoned against him, in the background of all I see here. In the circumstances, it matters little that the judgment debtor company''s cashier does not swear an affidavit, a feature Mr. Roy Chowdhury makes a point of, nothing to say of the fact that affidavits to and fro cannot he interminable.

I, therefore, find as a fact that there was a firm arrangement, agreed to by and between the parties and acted upon too, by which the judgment debtor company would pay mesne profits in terms of the consent decree to the assignee decree holder at ''53'' where his darwans would have to call. So soon as that is found, the common law rule that the debtor is to seek out the creditor cannot avail the assignee judgment-creditor here. What avails instead the judgment-debtor is the agreed place of payment being ''53'' where the judgment-creditor''s darwans did call every month up to February 1966 and were to call in the subsequent months too which however they did not do and for which no payment was made or received either for three months. So considered, default does not show its head here.

Stretching to the breaking point, be it assumed argue do that there is a default, as contended for by the assignee decree-holder. On this assumption, take a clear look at the following facts, including the ones which the assignee decree-holder would have me believe: May 16 is reached when default for three successive months of February to April is complete. Not only complete; tired of being put oft again, again and again, darwan Chowbey announces that he will call no more for mesne profits which are to be reached in his master''s place at 34 Baranasi Ghosh Street. That is sometime in the 3rd week of April. Still the assignee decree-holder rests on his oars. Comes May 23. The three cheques for February to April greet him. Still he takes things easily. June 13 and the cheque for May previous greets him too. Only eight days later, he returns all the four cheques through his Advocate. To catalogue these facts is to be convinced that the assignee decree-holder agreed, by such conduct, not to assert his right in terms of the consent decree. That constitutes waiver. I cannot equate either delay or inaction with waiver. I do not either. All I say is that the inaction I see, in all circumstances here, for some 29 days, evidences waiver. All I say is that such conduct of the assignee decree-holder, in full knowledge of his right in terms of the consent decree and also of facts which enable him to take an effectual action for enforcement of such right, does evidence an intentional relinquishment on his part of his right. And it is a right so well-known to him not only by the consent decree, of which he is the assignee, but also by the judgment debtor''s inability to pay (as he says) in spite of his darwan Chowbey having called again and again for such payments, followed by the darwan''s ultimatum that he shall call no more for payments which have thenceforth to be reached at his master''s place. So, waiver is right here. The fact that the assignee decree-holder changes his mind later is another matter. Once he has waived ''his right, it is not for him to undo what he has waived and to get back to what obtained before.

Mr. Roy Chowdhury sees in the default of three successive months for February to April the commencement of trespass by the judgment-debtor company (must be from May 16) and asks: can trespass be waived? My answer is: ''Yes, even trespass can be waived''. That indeed is clear, definite and settled law. In Murulidhar Agarwalla and Others Vs. Rupendra Mitter and Another, , P.N. Mookerjee, J. had before him a second appeal arising out of a suit claiming damages for use and occupation of a certain property purchased by the Plaintiffs. The contention on behalf of the Defendants as Appellants was that the Plaintiffs, having been out of possession at the date of the suit, could not maintain a suit for damages without a suit for recovery of possession. His Lordship repelled such contention in the manner following, amongst others:

There is another aspect of the matter. On the authority of the cases of Samiulla Vs. Nil Mamud, and Surnomoyee v. Deenunath Gir-Sunnyasee I.L.R.(1883) Cal 908 , the Plaintiffs may be said to have waived the trespass and sued for damages.

Thus, it is seen that trespass can be waived, assuming that there is trespass here, though there being no default, there is nothing like it.

Again, Mr. Roy Chowdhury sees in the three cheques of Rs. 800 each, sent to the assignee decree-holder on May 23, 1966, no payment. Such an approach is good as far as it goes. But it does not go far enough. Nobody denies that the rule of conditional payment applies to a cheque which is but a negotiable instrument. It will not perhaps be out of place to quote the following from Benjamin on Sale, 8th ed., at p. 787:

In the absence of any agreement, express or implied, to the contrary, a payment of this kind is always understood to be conditional, the seller''s right to the price reviving on non-payment of the security.

Just so here. The assignee decree-holder''s right to the mesne profits for February to April 1966 will revive on non-payment by the judgment-debtor company''s bank against which the cheques were drawn. But you did not present the cheques there for being cashed. Or take Kedar Nath Mitter v. Denobandhu Shaha AIR 1916 Cal. 580, Prafulla Chandra Nag v. Jatindra Nath Kar (1938) 42 C.W.N. 548, Chintaman Dhundiraj Vs. Sadguru Narayan Maharaj Datta Sansthan and Others, and cases of that class, the ratio of these decisions being: when a cheque is not met, it constitutes no payment, as indeed is plain common sense; whereas when a cheque is met, the date of payment is the date of delivery of the cheque, the payment relating back to the date when the cheque is delivered. I had an occasion to deal with this aspect of the law in Basanta Lal Jalan v. Syed Mahammad Hakim Unreported decision of Bijayesh Mukherji, J. dated December 16, 1963, in suit No. 170 of 1956, if I may refer to my own decision without any impropriety on my part.

Re Hone (a bankrupt). Ex parte The Trustee v. Kensington Borough Council (1950) 2 A.E.R. 716, Mr. Roy Chowdhury relies upon, does not reach the case in hand. The very facts of this decision by Harman J. in a motion by the trustee in bankruptcy will show that it has no bearing on the question before me. On November 3, 1949, a Mrs. Hone signed a cheque for �55-5-0 d. payable to the rating authority, Kensington Borough Council, for rates due. On the same day (November 3) the rating authority received the cheque and gave her a receipt for the money. Next day, November 4, at 11 a.m. the cheque was paid into the authority''s bank. On the same day (November 4), during the afternoon, Mrs. Hone filed her petition in bankruptcy. At 3 p.m. or thereabouts, on the same day again, a receiving order was made against her and she was adjudicated bankrupt. But the cheque she had signed and paid on November 3 was honoured by Mrs. Hone''s bank on November 8, 1949. In such facts and circumstances, one of the points mooted before Harman J. is that, under the general law, payment by cheque of a debt is made when the cheque is handed to the payee and not on the date when the money is collected (just the general law here too) and therefore, payment within Section 45 of the Bankruptcy Act, 1914 ''took place'' on November 3, 1949, before the date of the receiving order: November 4, 1949. His Lordship rejects such contention and says:

To say that payment takes place (just the language in Section 45) is to use a vile phrase but I must make the best of it. Did this payment ''take place'' before the date of the receiving order? On the face of it, it clearly did not. It took place on Nov. 8, when, for the first time, the Kensington Borough Council got the money into its coffers. It was not paid before that date.

I am not dealing with a bankrupt here in the context of a special statute. I am dealing with a matter between debtor and creditor, where the law in England does not appear to be different from the law in India I have summarised in the preceding paragraph. To quote but one authority out of many Harman J. cites, here is Byrne J.''s decision in Felix Hadley if Co. v. Hadley (1898) 2 Ch. 680:

...the giving of a cheque for a debt is a payment conditional on the cheque being met, that is, subject to a condition subsequent and if the cheque is met it is an actual payment ab initio and not a conditional one.

upon which Harman J. observes:

I cannot take that view as between the trustee in bankruptcy and the bankrupt. It may be that, as between debtor and creditor, in certain circumstances that might be so.

It is, therefore, clear that the case Mr. Roy Chowdhury cites can have possibly no application here.

Such being the law on what constitutes payment by cheque, it is not for the assignee decree-holder to raise the question of nonpayment on the foot of the three crucial cheques which were never presented for payment and all the more so since it appears from Nathmull''s affidavit of September 17, 1966: para. 8(b), for example, that the manner of payment was by cheques, though Nathmull is making a grievance here that the cheques for March and September, 1965, were dishonoured a feature which is not germane to the present discussion. Indeed, were not the law so, nothing could have been easier for an unscrupulous payee, interested in non-payment, to keep the cheque concealed in his safe or to tear it to pieces and then to take the plea of having received no payment. It is not a case where the agreement is: nothing short of cash down will be accepted. Were that so, different considerations would have prevailed.

The only contention of Mr. Roy Chowdhury that remains to be noticed is that it is a consent decree which has been put to execution in terms thereof and that it can be varied only by the consent of both. He has taken the trouble of citing Lachiram Dagduram Marwadi v. Jana Yesu Mang (1914) 16 B.L.R. 668, in support of this contention. That is a case of a consent decree providing for payment of Rs. 80 in annual instalments of Rs. 16, the first instalment being payable by March 1, 1908 and on failure to pay any two instalments in proper time fixed by the decree, enabling the Plaintiff to take into his possession the property in suit. In spite of the breach of the terms of the decree, the Courts below, ''in equity'', refused to complete the Plaintiff''s possession. A division of the Bombay High Court upset that and in doing so, observed that a consent decree could only be varied by consent. Under the present Code, Order 20, Rule 11 provides for as much. Sub-rule (1) thereof provides that a decree for payment of money may direct payment by instalments. Sub-rule (2) thereof permits modification of such instalment decree "on the application of the judgment-debtor and with the consent of the decree-holder."

But to state, as Mr. Roy Chowdhury does, that in no case can a consent decree by varied save by consent is to state the proposition too broadly. As observed by Sir Asutosh Mookerjee in Budhu Ahir Vs. Emperor, , sitting with Fletcher, J. and citing various decisions, such as Hudderfield Banking Co. Ltd. v. Henry Lister if Soil Ltd. (1895) 2 Ch. 273, Wentworth v. Bullen (1829) 9 B.& C. 840 : 109 E.R. 313, a consent decree cannot have greater validity than the compromise itself. The real truth of the matter is that a consent decree is a mere creature of the agreement and if greater sanctity were attributed to it than to the original agreement itself, it would be to give the branch an existence which is independent of the tree. The contract of the parties is not the less a contract, because there is superadded the command of the Judge. See also Gopal Krishn Nath Vs. Hari Nath Kapurth, . Then a dichotomy is made of consent decree which oust; the jurisdiction of the Court to grant reliefs and which do not, without consent. It is hardly necessary for me to enter into it, because I am not varying the consent decree a whit. I am keeping it instead as it is. Only I do not see default. And I see waiver, if there is a default. I do not lay my hands on the consent decree.

Having regard to the foregoing considerations, the conclusion I have come to is that the instant execution is a premature one and cannot be proceeded with.

Mr. Roy Chowdhury however prays that the assignment of the decree be recorded. The statements made in the application for execution are not what they should have been. For example, it is stated that the Applicant, "being purchaser of the suit premises", is an assignee of the decree. But Order 21, Rule 16, of the CPC contemplates a decree being transferred by assignment. So does Section 49 when it speaks of "every transferee of a decree". At the same time, by purchase of the suit property, the Applicant becomes the decree-holder''s representative within the meaning of Section 47. and at all events, the original decree-holder has had notice of the application, as his signature in the return of the service of the notice testifies; the sale-deed dated October 8, 1964, shows purchase of the decree as well; and last but by no means least, the judgment-debtor company recognises the Applicant as assignee of the decree by paying rents to him for months on end. So, this prayer of Mr. Roy Chowdhury must be acceded to.

In the result, I order that the assignment dated October 8, 1964, in favour of the Applicant Prahladrai Khaitan, of the consent decree, dated March 6, 1958, be recorded and that the application for execution be dismissed as premature.

Each party do pay and bear its costs. Certified for counsel.