Rajagopala Padayachi vs Varadaraja Padayachi

Jackson, J.—Appeal against the decree of the Subordinate Judge of Cuddalore in A.S. No. 79 of 1921 (O.S. No. 249 of 1920, District

Munsif''s Court, Mannargudi).

The appellant was one of three brothers and at the time of partition it was agreed that instead of taking his share of the land, he should receive

an annuity in moieties from his two brothers, and if either defaulted, he should resume that portion of his share which had gone to the defaulter. In

Schedule D, of the partition deed, Ex. C, the two halves which make up his share are shewn as severally added to the shares of each of the other

brothers. The respondent made default and appellant sued for arrears of annuity, and for the resumption of his half share from the defaulter. The

original Court decreed his suit, but the Subordinate Judge on appeal while decreeing the arrears, relieved respondent against the resumption of the

half share holding that it was by way of penalty. Hence this appeal. It is contended on behalf of respondent that when once the lower. Courts have

found that a stipulation is by way of penalty, it is a decision on a question of fact which cannot be traversed on Second Appeal. The question is

whether the, stipulation can legally be said to be within the purview of Section 74, Indian Contract Act, and the frequency with which this point has

been raised on Second Appeal is in itself a guarantee that it is a question of law. However, it has always been conceded that there is no absolute

rule of law which determines the matter, but each case has to be considered according to its particular circumstances. The exact wording and

frame of Ex. C are therefore important. The appellant refrained from taking his share of the land because as set forth in the document he was. a

bachelor. Besides the land, there were certain debts and outstandings which were divided between the two other brothers, and each agreed to give

the appellant Rs. 100 who also got a manai and right of way. Then there is the arrangement mentioned above in regard to the annuity and

resumption of Schedule D lands in default of its payment. It was argued that because respondent and his brother got appellant''s share of the land

they relieved appellant of the full burden of family debt, but I find no warrant for any such assumption in the document. Apparently it was reckoned

that on a balance the debts and outstandings were worth Rs. 200 and that amount was paid in cash to the appellant. If his brothers lost by taking

over these transactions presumably there would have been no cash payment. I think it must be taken that the document does what it sets forth to

do, and make a fair division between the three brothers. The lands are equally divided in Schedules A, B, D and the D ''Schedule share is equitably

commuted to an annuity because so long as he got an annuity the appellant did not want the land. The question then for determination is whether

the provision that appellant resumes his share, of the land on default of payment is by way of penalty. In most cases in which this question arises

there is a primary contract, and then a secondary contract by which the promisor binds himself to give something over and above his original

liability to, the promisee if he should commit laches in regard to the primary contract. u/s 74 a Court must consider what reasonable amount of

damages on account of such laches is due to the promisee and to find accordingly. See Wallis, C.J., in Avathani Muthukrishnier Vs. Sankaralingam

Pillai, . See also Sundara Aiyar, J., at page 265, ""The Court will carry out the primary contract but not necessarily the subsidiary contract to come

into operation if the primary contract is broken."" In the present case what is the subsidiary contract? The appellant, is not to receive anything extra

by way of damages, and the respondent is not to be mulcted on account of his failure to pay the annuity. The arrangement as regards the annuity

having broken down, the appellant is to resume his normal position as third member of the divided family enjoying a third share of the property.

The contrary view can only be maintained on the assumption that the partition was unfair, and the arrangement that he was to be paid an annuity

gave the appellant less than he would have got if he took the land : an assumption for which there is no warrant. If the contracting parties are

merely remitted to their original position there can be no question of penalty Cf. Pasupaleti Achyamma v. Pabbamidi Papamma 2 IndCas 850 and

even assuming that appellant gave more than he needed when he entered into this arrangement, the mere withdrawal of a privilege is no penalty. Cf.

Davis v. Thomas 1 Russel and Mylne, 506. This view has prevailed where a lower rate of interest was allowed as a matter of grace if payment was

punctual, Kulada Prasad Chowdhury v. Ramananda Pattnaick ILR (1921) C 1036.

In the case cited by the learned Subordinate Judge, Tharyammalachi v. Sevu Rajali (1911) 2 M.W.N. 327 there was relief against forfeiture. I

do not think that the present case can be described as forfeiture. A return to the status quo at the time when the agreement was entered into does

not vest the property in the respondent. So he cannot be said to forfeit what at that time was not his. Nor do I think anything is to be gained by

Way of analogy by describing respondent as a transferee of property with a contingent interest, or as a tenant. What the Court has to enforce is an

agreement of partition. The brother does not say ""you shall hold my land at such and such a rent, but my share shall be satisfied in such and such a

way."" We should, as Napier, J., observes in Krishna Shetti v. Gilbert Pinto ILR (1918) M 654 : 36 MLJ 367 be very careful in applying statutory

provisions that are not in pari materia. I do not find the stipulation that appellant shall resume the land in Schedule D on default of payment of his

annuity to be penal, and therefore I restore the decree of the Original Court. This appeal is allowed with costs in this and the lower Appellate

Court and as provided in the original decree.