Raja Shiba Prasad Singh vs Tincouri Banerji and Another

Chatterji, J.—This appeal arises out of a suit on a handnote executed on 22nd February 1934 by the defendant, appellant in favour of late Kedar Nath Banerji, father of the plaintiffs-respondents, for Rs. 2,90,000 carrying interest at Re. 1 per thousand per annum. The circumstances according to the plaintiffs, under which the handnote was executed are as follows: Raja Durga Prasad Singh, late proprietor of the impartible Jharia Raj, died in March 1916, leaving three widows: Rani Prayag Kumari Debi, Rani Subhadra Kumari Debi (since deceased) and Rani Hem Kumari Debi, and several agnatic relations including the defendant. According to the rule of lineal primogeniture by which the succession to the estate was governed the defendant succeeded Raja Durga Prasad Singh. On 6th March 1919, the three Ranis aforesaid filed a suit (Title Suit No. 48 of 1919) in the Court of the Subordinate Judge of Alipore against the defendant claiming the Jharia Estate and other properties left by their husband with mesne profits. The plaintiffs'' father, late Kedar Nath Banerji, looked after that litigation in its various stages on behalf of the Ranis. The trial Court decreed the suit in part and both parties appealed to the High Court at Calcutta. The appeals were disposed of by the High Court on 17th August 1925 and the suit was remanded to the trial Court. Against the decision of the High Court both parties preferred appeals to the Privy Council which were disposed of in April 1932. The suit was remitted to the High Court on certain matters and was finally disposed of by its decree dated the 11th August 1933. Under this decree, the defendant was liable to pay to the Ranis Rs. 20,04,526.5.0 for mesne profits etc. Both the parties then applied for leave to appeal to the Privy Council.

In the meantime, the Ranis applied to the Alipore Court for transfer of the decree for Rs. 20,04,526.5.0 to the Subordinate Judge''s Court at Dhanbad for execution. The parties however entered into compromise on 22nd February 1934 which terminated the litigation. In the course of that litigation the plaintiffs'' father Kedar advanced to the Ranis various sums, from time to time, for litigation expenses for which they executed a mortgage bond in his favour on 5th June 1929 for three lacs of rupees. By the terms of the aforesaid compromise it was agreed between the two surviving widows Rani Prayag Kumari and Rani Hem Kumari on the one hand and the defendant on the other that the latter would pay to the former, in full satisfaction of their claims, eighteen lacs of rupees out of which he undertook to pay Rs. 4,40,000 to some of their creditors including Kedar who was entitled to get Rs. 2,90,000 from them under the said mortgage. In the compromise petition, the Ranis gave credit to the defendant for the said sum of Rs. 4,40,000 and for the remaining Rs. 13,60,000 payable by the defendant directly to the Ranis, provisions were made for payment by instalments. Accordingly, the defendant, in consideration of credit having been given to him by the Ranis in the compromise petition, executed in favour of Kedar the handnote in question for Rs. 2,90,000.

The defendant is said to have paid on repeated demands Rs. 7,100 only in several instalments towards the dues on the handnote. The claim has been laid at Rupees 2,83,550. The defendant contested the suit on the grounds inter alia that the hand, note in suit was without consideration and obtained by undue influence. It is alleged that it was at the instigation of Kedar that the Ranis brought the Title Suit No. 48 of 1919, that the Ranis who were pardanashin ladies were completely under the influence of Kedar, that he had never advanced any money to them for the litigation expenses, that the mortgage bond executed by them in his favour on 5th June 1929 was without consideration and was obtained by undue influence, that at the time of the compromise the defendant had to agree to have the names of Kedar and two others entered as creditors as they created a situation in which the negotiations for the compromise would have fallen through, if their names were not so entered, and the amounts of their dues were not so entered, and the amounts of their dues were mentioned in the compromise on their mere allegation which the defendant was compelled to accept for the time being as correct and that the defendant in order to persuade Kedar not to dissuade the Ranis from entering into compromise had also to pay him Rs. 60,000 in cash at the time of the compromise.

The learned Subordinate Judge who heard the suit has decreed it, overruling the various defences raised. Hence this appeal by the defendant. Mr. P. R. Das, the learned Counsel for the appellant, has urged the following points: (1) That the handnote was executed under undue influence exercised by Kedar. (2) That the handnote was without consideration. (3) That the suit as framed being based on a novated contract, the plaintiff must establish, firstly, that the original debt in fact existed, or in other words that the mortgage bond dated 5th June 1929 executed by the Ranis in favour of Kedar was for consideration, and Rupees 2,90,000 was due on that mortgage at the time of the novation; and secondly, that Kedar extinguished that debt. (4) That the novated contract, having been entered into after breach of the terms of the original contract, was bad in law and is therefore unenforceable. I shall deal with these points in the order in which they have been mentioned.

Point No. (1).--Undue influence has been defined in Section 16, Contract Act, as follows:

A contract is said to be induced by undue influence where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

The onus of proving that the handnote in suit (Ex. 1) was executed under undue influence undoubtedly lay upon the defendant. He must therefore establish that his case comes within the purview of Section 16 just quoted. Here I should do well to reproduce the handnote (Ex. 1) which runs as follows:

On demand I, Shiba Prasad Singha of Jharia, District Manbhum, promise to pay to Babu Kedar Nath Banerjee of Jharia or order the sum of rupees two lacs ninety thousand (Rs. 2,90,000) only with) interest thereon at Re. 1 (one rupee) per one thousand per annum for value received as per memo below:

Rupees 2,90,OOO being the amount due to the said Babu Kedar Nath Banerjee from Rani Prayag Kumari Debi and Rani Hem Kumari Debi of Jharia which upon my undertaking to pay off has been credited by them in the decree obtained by them against me in T. S No. 48 of 1919 in the First Court of Subordinate Judge at Alipore, as per compromise petition of even date filed in the said Court.

(Sd.) Shiba Prasad Singha. 22-2-34.

The handnote thus specifically refers to the compromise petition (Ex. 2) of the same date, that is 22nd February 1934. The petition was filed in Court on 25th February. The compromise was duly recorded by the Court and admittedly it has been acted upon. The arguments addressed by Mr. Das on the question of undue influence may be summarized as follows. Kedar was the Private Secretary of the previous Raja Durga Prasad Singh and after his death became the Private Secretary of the defendant. While he was in the defendant''s service in that capacity he, with selfish motives of his own, instigated the Ranis to bring the Title suit of 1919 against the defendant. It was a frivolous suit because the defendant had succeeded to the estate and came into possession of it in 1916 without any opposition from the Ranis. Kedar was dismissed from the defendant''s service in or about August 1919 and then he openly took the side of the Ranis and carried on the litigation on their behalf.

Throughout the course of that litigation the defendant was always anxious to meet the Ranis face to face with a view to bring about a settlement. The Ranis were then living in Calcutta and Kedar, who had complete control over them, persistently thwarted all attempts at compromise and did not allow the defendant even a chance of meeting the Ranis. The suit was eventually dismissed so far as the claim to the impartible Jharia Raj was concerned; but it was decreed with regard to some other properties including some moveables which were found to be the separate acquisitions of the deceased Raja. While the appeals to the High Court were pending, the Ranis executed the trial Court''s decree and got possession of the properties decreed. After the decision of the Privy Council by which the decrees of the trial Court and the High Court were varied in some respects the defendant applied in the Alipore Court for restitution claiming by way of mesne profits about four lacs of rupees. On the other hand the Ranis'' claim for mesne profits in the original suit itself having been decreed for Rs. 20,04,526-5.0 by the High Court on 11th August 1933 after remand from the Privy Council, both parties applied for leave again to appeal to the Privy Council.

In the meantime the Ranis applied to the Alipore Court for transfer of the decree for Rs. 20,04,526.5.0 for execution to the Subordinate Judge''s Court at Dhanbad. When the defendant''s application for restitution and the Ranis'' application for transfer of the decree were pending in the Alipore Court and also the application for leave to appeal to the Privy Council with regard to mesne profits were pending the defendant was obliged to agree to a compromise on the terms dictated by Kedar. The defendant apprehended that if the Ranis'' decree for over twenty lacs of rupees was transfer, red to Dhanbad and was executed there his whole estate was likely to be sold up. So then on the evening of 21st February 1934 it was proposed on behalf of Kedar who was then lying ill in Calcutta that the defendant would have to pay Rupees 60,000 in cash immediately and would have to execute a handnote for Rs. 2,90,000 in favour of Kedar failing which there could be no possibility of any compromise; the defendant had to agree to the proposal. Accordingly he paid Rs. 60,000 in cash on the night of 21st February 1934 and on the following day he executed the handnote (Ex. 1) in favour of Kedar and also signed the compromise petition (Ex. 2). If the defendant could be allowed to meet the Ranis he could have obtained far more favourable terms. By virtue of the position which Kedar acquired in relation to the Ranis he was in a position to dominate the will of the defendant and by using that position he obtained from the defendant not only the handnote in suit but also Rs. 60,000 in cash. As regards the handnote, the consideration of Rs. 2,90,000 was no doubt credited by the Ranis; but if this sum of Rs. 2,90,000 had to be paid directly to the Ranis it would have formed part of the stipulated instalments and in that case, would have been payable after a long time. The facts involved in these arguments refer partly to the period before the final decree in the suit was passed by the High Court on 11th August 1933 and partly to the period following that date and ending with 22nd February 1934 when the handnote in suit was executed. In this suit we are concerned with the latter period and particularly with the events that immediately preceded the execution of the handnote in question.

In support of his argument that the Ranis were entirely under the influence of Kedar, Mr. Das has referred mainly to a series of letters (Ex. C series) written by Kedar between 20th July 1919 and 29th August 1921 to his elder brother Ramkalpa Mahatha, now dead. To have an idea of these letters it will suffice to refer to two of them, namely Ex. C and Ex. C (3). Ex. C which is dated 20th July 1919 contains the following passage:

Please tender my blessings to Baneswar and showing this letter to him please tell him that he will not only get expenses for a year but besides that in case the case succeeds he will get one hundred bighas of coal land. If he loses his service, we shall pay him his wages. I am responsible for this.

Baneswar referred to herein was the Raja''s record keeper. Ex. C (3) which is dated 9th April 1920 runs as follows :

Respects,

I have received your letters by post and through Mohan Singh and the telegrams as well and submitted the same to the Rani Sahebas. Raman has come here, but he has not been able to do anything. Day before yesterday the Raja was standing before the door of the lodge of the Ranis from 7-30 to 8-80 P. M. and tried his best to enter inside. None of the sepoys allowed him to go and the Rani Sahebas did not at all take any information. Srikantha Babu wanted to see him. But the Ranis having forbidden him he too could not come down-stairs or see him (Raja). As I was not well I was not in the house of the Ranis at that time. But already I have made all the arrangements... Raja was insulted in such a manner that feelings are estranged to the extreme. Now God is the only hope. I shall inform from Court the result of the case tomorrow. I hear that some people have given some hope that the Raja will try once more. Let me see what happens....

Respectfully yours, (Sd.) Kedar.

Raman Babaji is trying his utmost but he won''t be able to do anything. You rest assured that I have already made arrangements regarding it. I have written a letter to Ashu Babaji. What will Raman do with demi papers? In the long run he will be imprisoned for forgery. The signature of a pardanashin lady is nothing. After I finished this letter I received your letter of yesterday. Maharani has not come. Raman has come no doubt. But seeing the attitude of (torn) Srikanta Babu and the Ranis he is unable to join him.

A perusal of all the letters no doubt leaves an impression that Kedar who was admittedly looking after the litigation on behalf of the Ranis at least since after he left the defendant''s service, had great influence over the Ranis and wanted to frustrate all attempts on the part of the defendant to bring about a compromise. On the question whether Kedar actually instigated the suit these letters throw no light. On this point, Mr. Das however relied upon the evidence of Harakali Bose (D. W. 6) which is said to be supported by the accounts (Ex. P series). The learned Subordinate Judge has not accepted Harakali''s evidence and we do not find any sufficient reasons to take a different view. But even assuming that what Harakali Bose said is true, namely that Kedar went to him and asked for his help in the Jharia succession suit, to be filed by the Ranis, all that can be said is that Kedar was helping the Ranis from the very commencement of the suit. It does not follow that Kedar actually instigated that suit.

But to my mind the questions whether Kedar instigated the institution of the suit and whether he exerted his influence over the Ranis so as to prevent any compromise between them and the defendant before the decree dated 11th August 1933 are not at all relevant for the purpose of this suit. Let us consider how matters stood when the handnote in suit was executed. At that time the Ranis'' application for transfer of the decree for over twenty lacs of rupees was pending in the Alipore Court. This application had been filed on 30th October 1933 (vide Ex. 3c). In November 1933 there was a talk of compromise and the terms were practically settled and embodied in a draft petition (Ex. F) which was approved by the defendant''s pleader, Mr. H. K. Banerji, on 29th November 1933. But this compromise fell through as the defendant backed out under the advice of his Calcutta counsel, as he says. Under the draft compromise (Ex. F) the defendant was to pay to the Ranis nineteen lacs of rupees and the terms, as set forth therein, were more onerous than those of the subsequent compromise dated 22nd February 1934. He was also to give some coal lands to Kedar as a condition of the compromise under Ex. P. The defendant says in his evidence that one and half month after that compromise fell through talks were revived. He further says:

Kedar''s demand was Rs. 60,000 and a handnote for Rs. three lacs as due from Ranis...The Rants were to get Rs. eighteen lacs. When so told, I said I would consider ; 20-25 days after, Arabica Babu sent word that Jagat had come and that I should go with Rs. 60,000; I then came with this sum to Ambica''s house.

Again he says:

I was considering the terms myself, so did not seek legal advice in Calcutta; the matter I consider to be important; for 10-18 days I was seriously thinking over the matter; I concluded that it would be good if compromise could be effected on terms offered to me.

He also says:

On 21-2, Jagat and later (Ambica) told me so ; i.e., about the 3 handnote moneys being so credited ; I agreed ; I did not object to execute hand-note in suit; nor that I was executing it, in days before the lawyers; none forted me to do so; I willingly (khusite) executed it. Jagat read over the compromise; I willingly executed it; Ranis are being regularly paid under it; I am ready to act under it in its entirety.

It should be noted here that Jagat referred to in the evidence was the Ranis pleader and also represented Kedar who was then lying in Calcutta, and Ambica was the pleader of the defendant at Dhanbad. This Ambica Babu has been examined as D. W. 4. He says:

At that time he (defendant) was under no influence or compulsion, i.e. at execution of the hand-note and the compromise. Raja agreed to pay Rs. eighteen lacs to the Ranis.

He further says:

Draft was being prepared by his pleaders of their own accord; between 2 to 9 days after information to Raja (defendant)...the draft formed basis of Ex. 2, with additions and alterations.

Exhibit 2, it should be remembered, is the compromise petition dated 22nd February 1934. From all these statements, it is obvious that the defendant was anxious for a compromise and when the terms were offered to him he was considering them himself and also took the advice of his legal advisers in regard to them. He rejected the terms of the draft compromise (Ex. F) and when he was offered better terms he accepted them and ultimately agreed to the compromise as embodied in the petition (Ex. 2). This petition was signed by three of his pleaders at Dhanbad, namely Hrishikesh Banerji, Ambica Charan Mullick and Charu Chandra Biswas. It was also signed by Jatindra Nath Mullick, pleader, and Gunendra Nath Roy, advocate, both of Dhanbad. In these circumstances, I fail to see how Kedar could be said to be in a position to dominate the will of the defendant. The parties, viz. Kedar on the one hand, and the defendant on the other, were at arms'' length. Kedar offered certain terms which were considered by the defendant and accepted by him. Mr. Das has argued with great vehemence that the defendant accepted the terms as he had no other option. If this be the test, then almost every compromise in a litigation is liable to be attacked as vitiated by undue influence. The defendant being his own master thought over the matter seriously for 10-15 days and then decided to accept the terms offered. Mr. Das had laid much stress upon the fact that the, defendant had to pay Rs. 60,000 in cash to Kedar for effecting the compromise. But this Rs. 60,000 is outside the terms of the compromise petition (Ex. 2). Ambica Babu (D. W. 4) himself says that Rs. 60,000 was not mentioned in Ex. 2 as it had no concern with it. We must consider the compromise petition with reference to its own terms.

If we find that the defendant willingly agreed to the terms of the compromise, as set forth in the petition (Ex. 2), it does not matter whether willingly or unwillingly he agreed to pay Rs. 60,000 to Kedar or whether that payment was legal or illegal. We are informed that the defendant has already instituted a separate suit against the plaintiffs for refund of this sum of Rs. 60,000, and we must therefore, refrain from expressing any opinion with regard to the payment of that sum which may prejudice the trial of that suit. It will suffice for our present purpose to say that, so far as the terms of the compromise as embodied in the petition (Ex. 2) are concerned, the defendant voluntarily accepted them and he also voluntarily executed the handnote in suit (Ex. 11). As regards the compromise, the defendant himself admits that he is ready to act under it in its entirety. It has been contended by Mr. Das that the defendant might have voluntarily accepted the compromise and signed the petition (Ex. 2), but he did not voluntarily execute the handnote in suit. This is a distinction which I am utterly unable to appreciate. The handnote forms a part of the compromise and is specifically referred to in the petition (Ex. 2) and the amount of its consideration was credited against the total amount of 18 lacs of rupees which was payable by the defendant to the Ranis under the compromise.

Further, the matter is clinched by the defendant''s own admission that he willingly (khusite) executed a handnote. The vernacular word khusite is very expressive and excludes the idea of any outside influence. To explain away this admission, Mr. Das has very ingenuously argued that when on the evening of 21st February 1934 the defendant was told by way of an ultimatum that compromise was possible only if he immediately paid Rs. 60,000 to Kedar, his will was overcome and he had to accept the terms in a state of utter helplessness and once having done so, his freedom of consent was gone and therefore, when on 22nd February 1934, he signed the compromise petition and executed the hand-note, he did so while he was still under the stupor of the influence already caused and not as a free consenting party, though he voluntarily set his hand on those documents. But, it must be remembered that the compromise which was concluded on 22nd February 1934 was preceded by negotiations which were going on since the previous January and terms had already been offered by Kedar which were being considered by the defendant. In this connexion I may refer to the following statements of Ambica Babu, (D. W. 4):

The negotiations of 1983 November fell through as defendant''s counsel advised him, not to accept the terms... Talks were revived in January 1931, Jagat came again and spoke to me of compromise; I saw Raja about it; in result, I went to Calcutta and saw Kedar at end of January or beginning of February; I knew that unless he agreed to the terms, no compromise was possible, he had absolute control over the litigation; Jagat was there, when I talked with Kedar; Jagat opened the subject of compromise. Kedar said it was no use, as his terms were not accepted, i. e. of November 1933; after discussions, he agreed to compromise, if Baja paid him Rs. one lac, in place of proposed lands, finally he agreed at Rs. 60,000, he spoke about his dues under a mortgage, from Ranis and also of claims of Jagat and Nagen, i. e. if Raja paid up dues of these three persons, he would see that Raja got credit for the same. He said that if Raja refused to pay these three lacs, Rs. 50,000 and Rs. 100,000 were stated to be dues of other two respectively; I said that I would inform Raja... I came away and informed defendant, of the terms. Raja said that he would consider, some drafts were being prepared, meanwhile; on 21st February Jagat came to my house, while I was talking over the compromise with Beni Tewari, between 6 and 7 P.M. Jagat wanted the matter to be finished, just then, if not, compromise would never be effected; he said that Rs. 60,000 must have to be deposited that very night and that as cash payment was not possible, the Baja must execute handnotes in favour of said three creditors, by the next day, before the compromise was signed; he also said that Ranis were to be paid rupees eighteen lacs minus these three sums; and that unless these terms were immediately accepted, there would be no compromise.

16.Thus, it appears that the terms including the payment of Rs. 60,000 that were offered to the defendant on the evening of 21st February 1934 were hot at all new to him and he had already sufficient time to consider them. Under the terms of the draft compromise (Ex. E) of 1933, the defendant was to pay nineteen lacs of rupees to the Ranis. Under the present compromise the amount was reduced to eighteen lacs, payable in more easy instalments, out of which credit was to be given to the defendant to the extent of the sums which he was required to pay to Kedar, Nagen and Jagat as demanded by Kedar. As it was not possible for the defendant to pay the sums to these three persons in cash which were settled at Rs. 4,40,000 he was given the option to execute three handnotes in favour of those persons. As against the additional sum of Rs. 60,000, which had to be paid to Kedar for effecting the compromise his original demand at the time of the previous negotiations in November 1933 was 100 bighas of coal lands. In January 1934, when negotiations were revived, Kedar had first wanted one lac of rupees and eventually he came down to Rs. 60,000. The defendant had sufficient time to think over the matter and when on the evening of 21st February 1934 he found that the terms that were offered to him were more favourable to him he readily agreed to them. A draft of the compromise petition had already been made, and it was completed and executed on 22nd February 1934, and at the same time the handnote in suit was executed. Under these circum. stances I find it extremely difficult to hold that the defendant executed the handnote in suit under undue influence.

On these findings of fact no question of law arises, but, in deference to the argument of Mr. Das, I should here deal with a case cited and most strongly relied upon by him, viz. Chidambara Chetty v. Renga Krishna Muthuvira Puchaiya Naickar (1873) 1 I.A. 241. According to his contention this case lays down certain principles which may appropriately be applied to the present case. The facts of that case were briefly these. The zamindar of an estate called Marungapuri, died leaving three childless widows and a minor undivided half-brother. Immediately upon his death his brother was recognized by the authorities as zamindar in September 1864 and the Collector took charge of the zamindari under the Court of Wards Act, the widows accepting some allowance from the Collector for their maintenance. In the year 1866 however, they discontinued their receipt of maintenance and set up a claim to the zamindari on the ground that the half-brother was of illegitimate birth, and that they were entitled to it by inheritance; and, on 21st December 1866, notwithstanding a prohibition of dealings with them issued by the Collector under the Court of Wards Regulation, 1804, they entered into an agreement with a certain banker who was to finance them in the intended litigation and also to meet their maintenance expenses. On 6th May 1867 the widows executed in favour of that banker, a bond for Rs. 20,000 payable with interest at one per cent. per annum.

In September 1868, the banker instituted a suit in the name of Lekhamani, the senior widow, against the Collector as the agent of the Court of Wards and representative of the minor zamindari''s estate, for the recovery of the zamindari and other properties. The zamindar, who had then just come, of age, was put in possession of the zamindari by the Collector on 23rd July 1869. Lekhamani immediately, on 28th July 1869, applied to the Court to make the zamindar a party to the suit, and he was made a defendant on 2nd August 1869. On the application of Lekhamani commission was issued to take the evidence of the three widows and the late zamindar''s sister in their palace. The Commissioners arrived at Marungapuri on 11th August 1869. Immediately after the arrival of the Commissioners, Lekhamani proposed to the defendant that the suit should be settled, whereupon he executed a razeenamah by which he assigned certain villages to the widows for their maintenance, and he also at the instance of the banker, executed in his favour a bond for Rs. 67,000 the material part of which was as follows:

With reference to the dealings which you had heretofore held with Lekhamani and others, widows of my elder brother Tirumalai Poochai Naiker, the late zamindar, on account of their maintenance and Court costs, as per a loan bond for Rs. 20,000, and an agreement for Rs. 1,00,000, the accounts being adjusted up to date, the sum which was found due by them, and which alone was assigned to be paid by me is Rs. 67,000. As I have undertaken to pay you the same, I hereby bind myself to pay you the said sum of Rs. 67,000 within 80th September of the current year, and get back this bond, and the bond and agreement above referred to on failure to pay the money within the above prescribed time, I bind myself to pay you on demand the said sum of Rs. 67,000 with interest at one-half per cent. per mensem, and receive back this and the aforesaid bonds.

The razeenamah was presented to the Court, but on the objection of the counsel, who had at first appeared for the Collector acting as guardian and then for the zamindar (defendant), it was rejected by the Court and the litigation proceeded through all the usual stages irrespective of the razeenamah. The banker then sued the zamindar to enforce the bond for Rs. 67,000.

The latter resisted the suit on the ground that the bond had been obtained from him by threats and fraud and without consideration, just upon his attaining majority, and in the absence of any legal advice. The trial Judge dismissed the suit holding that the bond was obtained from defendant under undue influence and threats and was without consideration. There was an appeal to the High Court which was dismissed and a further appeal to the Privy Council was also dismissed. The following passages, from the judgment of their Lordships of the Judicial Committee, were relied upon by Mr. Das:

What was really the position of the parties? Here was a man who had originally nothing at all to do with this family. All the members of the family appear at first to have been agreed that this young boy was the true heir to the zamindari. The widows afterwards, then, either of their own mere motion, or at the instigation of the plaintiff or his agents, determined to dispute that title. They next deprived themselves of all freedom of action with respect to the suit which they thought fit to bring, by giving the interest and the powers which are given by the agreement B to the plain, tiff... It is sufficient for them to say that they are dealing with a person who had got up, or at all events intervened, in a suit with which he had no necessary concern; who had made himself dominus litis in that suit, and had acquired over the plaintiffs in it the power of preventing them from doing what they felt to be right and just; and from interested and corrupt motives was exercising that power. The zamindar must be taken to have been the legitimate heir; and even if the widows had bona fide entered into the litigation to dispute that legitimacy, it is perfectly clear that at the time when this transaction took place they had come to a better mind, and had satisfied themselves that the right thing as regarded the boy and as regarded the family was to acquiesce in his title, to admit his legitimacy, and to allow him to remain zamindar.

Their Lordships think it would be contrary to every sound principle of justice and of policy to permit a person who had acquired this sort of irregular interest in a suit, and a power which cannot be safely conceded to any speculator, to make his power of preventing a family arrangement so just and proper from being carried into effect, the means of extorting a large sum of money from the person whose title had been unjustly challenged. The case however does not rest here. The transaction was not one entered into between two persons each of whom was capable of taking care of himself. Here was a boy of eighteen without proper counsel or assistance, for such of his servants as gave him any advice thought with him, that he should do nothing until he could see the Collector; and his vakeel, who is represented as his legal adviser in the matter, disowns having given him any counsel, and has been treated as having failed in his duty in refusing that counsel. There is moreover clear evidence that he was threatened with the consequences of not immediately acquiescing in the plaintiff''s demand; that these threats were addressed by a powerful man to a boy, and were therefore likely to disturb his mind and render him incapable of acting as a free agent. Whoever has had to do with litigation in India must know that such threats are of far greater weight there than they Would be in this country. This suit was one in which the legitimacy of the respondent was called in question; and the person threatening was a person conversant with law-suits, a person of great wealth and great power; and we all know how easy it is in India, upon such an issue as that, to get up any amount of false evidence, and that it is not because a man has a true case that he is sure to bring it to a successful issue. Their Lordships think the Judges of the High Court have rather understated the case when they treated the threats as threats only of consequences perfectly legal; for (putting aside the threat as to suing on the note for Rupees 62,000, which is not so satisfactorily proved as the others) they think that the threats proved may well be taken to be threats of carrying on the litigation against the respondent per fas aut nefas. In any case they were threats which overcame his free will, and induced him, contrary to his own judgment and his own sense of right, and without any evidence that any such sum as was claimed was due, to execute the bond extorted from him.

To my mind, the facts of the above case are easily distinguishable from those of the present. There the razeenamah was repudiated by the defendant and was not accepted by the Court and all the Courts found as a fact that the defendant was a boy of eighteen and the bond in question was extorted from him by threats which over, came his free will. In the present case, as I have already pointed out, the defendant was his own master and exercised his own judgment in considering the propriety or otherwise of the terms of the compromise that were offered to him by or on behalf of Kedar. The compromise was recorded by the Court and the defendant frankly admits that he is ready to act under it.

Point No. (2).--It has been contended by Mr. Das that the real consideration for execution of the promissory note in question was the satisfaction of the debt of Rs. 2,90,000 said to be due by the Ranis to Kedar and therefore it was for the plain, tiffs to establish that this alleged debt of Rs. 2,90,000 was actually due from the Ranis to Kedar. On the other hand, it has been argued by Sir Sultan Ahmad that u/s 118, Negotiable Instruments Act, (Act 26 of 1881) the promissory note must be presumed to have been executed for consideration, unless the contrary is proved, and that the fact that the defendant got credit for Rupees 2,90,000 from the Ranis under the compromise (Ex. 2) was sufficient consideration for the promissory note. The execution of the promissory note being admitted, Section 118, Negotiable Instruments Act, undoubtedly raises a presumption that it was for consideration and it was for the defendant to prove that it was not so. The promissory note itself recites that Rupees 2,90,000 was due to Kedar from the Ranis and this recital is also supported by the compromise (Ex. 2) by which the Ranis themselves admitted that that amount was due from them to Kedar under the registered mortgage bond dated 5th June 1929 (this date being the date of registration). The compromise, as I have already stated, was recorded by the Court and it was never challenged by the Ranis. We must there, fore for the purpose of this case, take it for granted that the Ranis did in fact owe Rs. 2,90,000 to Kedar. Admittedly, by the terms of the compromise (Ex. 2) the Ranis gave credit to the defendant for Rs. 2,90,000 and it was really in consideration of this credit having been given that the defendant executed the promissory note in question in favour of Kedar. Consideration has been denned in Section 2, Clause (d), Contract Act, as follows:

When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, pr does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.

It is therefore clear that the consideration for a promise need not necessarily move from the promisee but may move from a third party. In the present case, the consideration for which the defendant executed the promissory note moved from the Ranis inasmuch as they gave credit to him for Rs. 2,90,000. It has however been argued by Mr. Das that the definition requires that the consideration must have moved "at the desire of the promisor." This element, it is said, is wholly absent in the present case, because the evidence on the record shows that the defendant never had any talk with the Ranis and it was far from his desire to execute the promissory note in favour of Kedar who was his enemy and ruined him, as he thought. It is to be remembered that the compromise was effected at Pargha, the residence of the Ranis, but even assuming that the defendant never met the Ranis and that the negotiations were carried on entirely through Kedar as representing the Ranis, we must consider the whole transaction in its broad aspect. The facts which are clearly established are that the defendant was most anxious for a compromise in order to save his Raj from a threatened execution sale, and that Kedar on behalf of the Ranis had offered certain terms which were accepted by the defendant. One of the terms was that the defendant should pay Rupees 2,90,000 to Kedar ; but as he had no cash in hand to pay it, he executed the promissory note in question. Considering all these facts together, there is hardly any room for the contention that it was not at the desire of the defendant that the Ranis gave credit for Rs. 2,90,000 in consideration of which he executed the promissory note in favour of Kedar.

The promissory note also clearly recites that it was upon the defendant''s undertaking to pay off the debt of Rupees 2,90,000 due to Kedar from the Ranis that the latter gave credit to the defendant for that amount. This suggests that the credit was given by the Ranis not gratuitously or voluntarily but at the desire of the defendant who undertook to pay off their debt to Kedar. To my mind, the conditions laid down in the definition of consideration in Section 2, Clause (d), Contract Act, are satisfied and it must be held that the promissory note (Ex. 1) was for consideration. On the question of consideration however the main argument advanced by Mr. Das is that the promissory note being a novated contract, the case comes directly u/s 62 of that Act under which the discharge of the old debt is the consideration. This forms the subject of the next point which I shall now deal with.

Point No. (3).--Mr. Das''s argument on this point is based on the following allegations in paras. 11 and 12 of the plaint:

The plaintiff''s father, the late Kedar Nath Banerjee was, as one of the said creditors, entitled to Rs. 2,90,000 from the widows and the defendant with the mutual consent of the said widows and the plaintiff''s father agreed to repay the same as stated in the said petition of compromise whereby he was given credit for the said sum of Rupees 4,40,000 being the amount of debts including the said debt due to the plaintiff''s father which the defendant undertook to repay. 12. Accordingly, on 22nd February 1934 the defendant in consideration of credit having been given to him as stated in the said petition of compromise executed in favour of plaintiff''s father, Kedar Nath Banerjee, since deceased, a promissory note for Rs. 2,90,000 agreeing to pay the same on demand with interest at the rate of Re. 1 per thousand per annum. The said promissory note is filed herewith.

It has been argued that the plaintiff''s case, as thus made out in the plaint, is that there was a tripartite agreement between Kedar, the Ranis and the defendant, as a result of which the promissory note (Ex. 11) was executed by the defendant in favour of Kedar as a novated contract whereby the previous contract, namely the mortgage in favour of Kedar was discharged, the mortgage being specifically referred to in para. 9 of the plaint. It has then been argued that the plaintiff, having thus sued upon a novated contract, must establish, firstly, that the previous mortgage debt in fact existed and, secondly, that Kedar extinguished that debt. To accede to this argument will be, to my mind, putting a narrow construction upon the plaint. The suit is based purely on a promissory note and sets out the circumstances which led to its execution.

The consideration for its execution however is clearly stated to be that the Ranis gave credit to the defendant for the sum of Rs. 2,90,000 under the terms of the compromise. This consideration is also recited in the promissory note. The execution of the promissory note being admitted the only relevant question for determination, apart from the plea of undue influence already discussed, is whether there was consideration for it. The necessary considerations relating to a novated contract do not therefore properly arise in this case. However, as the matter has been argued at some length, I propose to deal with it. Mr. Das, in support of his contention that in a suit based on a novated contract the plaintiff must prove: (1) the existence of liability under the original contract and (2) the extinguishment of that liability by the novated contract, referred among other cases to Cuxon v. James Chadly (1824) 3 B & C 591 and Scarf v. Jardine (1882) 7 A.C. 345 .

This proposition need not be disputed and is also recognized in Section 62, Contract Act. To appreciate Mr. Das''s argument, it is necessary to mention certain facts. The previous mortgage bond (Ex. 12) was executed on 29th May 1929 by the three Ranis in favour of Kedar for three lacs of rupees. The mortgage bond recites that Kedar had advanced large sums to the Ranis from time to time in the course of the litigation which was started by them in 1919, that after taking account it was found that Rs. 2,24,719 was the total amount advanced from 1921 up to the end of 1927, that the interest on this amount after remission came to Rs. 75,281 and that thus the total amount of principal and interest came up to three lacs of rupees for which the mortgage, was executed. The sum of Rs. 2,24,719 had been previously acknowledged on 25th July 1928 by the eldest Rani, Srimati Prayag Kumari Debi, in the account book of Kedar which she signed, Ex. 17 (a). The amount said to have been advanced by Kedar to the Ranis and the expenses incurred in the litigation were entered in two account books, one containing Exs. 16 and 16 (a) and the other containing Exhibits 17 and 17 (a). These account books were produced in Court on behalf of the Ranis on being summoned by the plaintiffs. With reference to these accounts, Mr. Das attempted to show that the Ranis were in possession of sufficient funds and no money was ever actually advanced to them by Kedar and that the acknowledgment, Ex. 17(a) and the mortgage bond, Ex. 12 were wholly without consideration and were obtained by Kedar from the Ranis who were pardanashin ladies under his absolute control. Admittedly Kedar was looking after the litigation on behalf of the Ranis and he was undoubtedly accountable to them for the moneys which he received or spent on their behalf in that litigation. But that is a matter between him and the Ranis. In this suit in which the Ranis are no parties nor have come forward to repudiate the transactions it seems unnecessary to undertake the examination of the accounts, Exs. 16-16 (a) and 17-17 (a). The fact remains that the Ranis did execute the mortgage bond Ex. 12 for three lacs of rupees and they (the surviving two of them) admitted their liability under that mortgage to the extent of Rs. 2,90,000 in their compromise (Ex. 2) which was recorded by the Court. So long as that compromise stands it must be treated as binding on the parties. That being so, it is futile for the defendant to contend that the mortgage was without consideration or that nothing was due on it.

Mr. Das has argued that the Ranis being pardanashin ladies completely under Kedar''s control it was for the plaintiffs, who wanted to rely upon the mortgage executed by the Ranis, to establish that they fully knew and understood the contents thereof and had independent advice. This argument might have been perfectly valid if the suit had been brought to enforce the mortgage against the Ranis. The protection afforded by the Courts to pardanashin ladies in respect of transactions entered into by them is their personal privilege which can be claimed only by them or persons claiming through them title to any property affected by the transaction. Upon the facts of the present case, it is a matter of no concern to the defendant whether the Ranis owed any money to Kedar on the mortgage. The defendant was to pay eighteen lacs of rupees to the Ranis and out of that amount they gave him a credit for Rs. 2,90,000 on his undertaking to pay that amount to Kedar which but for the arrangement would have gone to them. Whether in fact Rs. 2,90,000 was due to Kedar on the mortgage was a matter which could arise only between him and the Ranis. The defendant is not at all affected by the mortgage transaction and it does not lie in his mouth to challenge the passing of its consideration. Mr. Das has referred to certain decisions in which it has been held that it is open to a third party to impugn a mortgage which is sought to be enforced against him. Those decisions have no application because in the first place this is not a suit to enforce the mortgage and in the second place the defendant is not affected by the mortgage. In my view, it must be assumed for the purpose of the present suit that the Ranis owed Rs. 2,90,000 to Kedar at the time of the compromise (Ex. 2).

On the question whether Kedar extinguished the mortgage debt, Mr. Das''s contention is that there is no proof of this having been done. Admittedly no endorsement of satisfaction was made on the back of the mortgage bond. The plaintiffs however have adduced evidence to show that the mortgage bond was returned to the Ranis after the execution of the promissory note (Ex. 1). This evidence is no doubt open to criticism as pointed out by Mr. Das, because, in the circumstances, it was not likely for a shrewd man like Kedar to part with the mortgage bond which would be regarded as good evidence in support of the compromise in so far as it related to his dues in case it was ever challenged by the Ranis on the ground of fraud or undue influence practised by him. But the fact that neither the bond was returned nor an endorsement of satisfaction was made is hardly of any consequence because the promissory note taken along with the compromise petition (Ex. 2) leaves no room for doubt that the arrangement between Kedar, the Ranis and the defendant was that Kedar would accept the promissory note in satisfaction of his mortgage dues from the Ranis. In this connexion para. 2 of the compromise petition (Ex. 2) is relevant; it is as follows:

That out of the said eighteen lacs of rupees the defendant has paid this day to the plaintiffs, rupees two lacs (Rs. 2,00,000) in cash, and hereby the plaintiffs acknowledge receipt of the said two lacs of rupees. Besides this, out of the personal debt of the plaintiffs, the defendant has settled only four lacs forty thousand rupees (Rs. 4,40,000) confronting the creditors, described in Schedule (ka) below, and taken upon himself the liability there for to them; and the creditors too having got a deed (handnote) from the defendant have absolved the plaintiffs from the liability and the debt of the said amount. Therefore, the plaintiffs have received from the defendant the aforesaid four lacs forty thousand rupees and hereby acknowledge to have received the said amount from the defendant. Hence out of the said eighteen lacs of rupees (Rs. 18,00,000), the plaintiffs have received rupees six; lacs forty thousand and the sum of rupees eleven lacs and sixty thousand remain due to the plaintiffs from the defendant.

There is thus a definite recital in the compromise petition that the Ranis'' creditors, one of them being Kedar, had absloved the Ranis from their liability to them. It has however been argued by Mr. Das that the compromise petition which was signed on 22nd February 1934 must have been written some time earlier and was not actually filed in Court till 25th February 1934 and that therefore the recital that "the creditors too having got a deed (hand-note) from the defendant have absolved the plaintiffs from the liability and the debt of the said amount" means nothing more than that the creditors had agreed to absolve. In support of this contention, reference was made to Morgan�s Patent Anchor Co. Ltd. v. Morgan (1877) 35 L.T. 811 in which the question for consideration was whether when in a deed of conveyance there was a recital that the consideration money was paid though in fact it was not paid, a covenant for payment of the consideration would be implied. This question has no bearing on the pre-sent case. It has also been argued by Mr. Das that Kedar was not a party to the compromise and that when the terms were settled at Dhanbad on the evening of 21st February 1934 he was lying ill in Calcutta and therefore he cannot be said to be a party to the arrangement. This argument loses sight of the fact that the negotiations for the compromise were already being carried on with Kedar and the terms had to be settled with his consent. Indeed, he was not physically present at the time when the final settlement took place on the evening of 21st February 1934; but he was represented by Jagat at the time. The compromise petition was signed as a witness by Kedar''s eldest son Tincori, plaintiff 1 in this suit. In the promissory note there is a specific reference to the compromise and Kedar by accepting the note must have accepted the compromise. Besides, the plaintiffs by filing this suit have accepted the position that the mortgage debt was extinguished by the execution of the promissory note. It is therefore now idle to contend that the mortgage was not discharged.

Point No. (4).--The contention''s that when the period for payment of the mortgage money stipulated in the mortgage bond (Ex. 12) expired in Chait 1336 Fs. (April 1929) there was a breach of the terms of the mortgage and the promissory note (Ex. 1) which was executed long after the breach could not be regarded as a validly novated contract. There is no substance in this contention. The effect of non-payment of the mortgage money within the stipulated period was merely to furnish a cause of action to the mortgagee to sue on the mortgage: the mortgage remained in force so long as it was not discharged and until this was done it could be substituted by a new contract.

Thus, all the contentions raised by the appellant fail and the appeal is liable to be dismissed. It appears that after the presentation of this appeal, the defendant on 31st March 1938 obtained from this Court an order directing the execution of the decree under appeal to be stayed. The material portion of the order runs as follows:

Having regard to the circumstances of the case and to the fact that the decretal amount is a large one we direct that the execution of the decree be stayed on the following terms:

The appellant shall pay into the Court of the Subordinate Judge a sum of Rs. 50,000 on or before 1st June 1938 ; another sum of Rs. 25,000 on or before 30th September 1938 and a further sum of Rs. 25,000 on or before 30th November 1938. The respondent will be allowed to withdraw these sums on furnishing security to the satisfaction of the Subordinate Judge. If there is default in the payment of any of these sums by the dates specified above, the respondent will be at liberty to pro. ceed with the execution.

The appellant agrees that in the event of his appeal being dismissed he shall pay interest pendente lite at the rate of six per cent. per annum on the amount decreed by the learned Subordinate Judge except on such money as may be deposited from time to time as specified above.

It is conceded on behalf of the appellant that by virtue of the agreement recorded in Clause (2) of the above order he is liable to pay interest for the period between 31st March 1938, the date of the order, and the date of the decree of this Court at six per cent. per annum on such amount as has remained unpaid. The decree of the Court below should be varied accordingly, and subject to this variation the appeal must be dismissed with costs.

Fazl Ali J.

I agree.