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1964 Supreme(Cal) 141

HIGH COURT OF CALCUTTA
A. N. Ray
SHYAMNAGAR TIN FACTORY PRIVATE LTD. - Appellant
Versus
SNOW WHITE FOOD PRODUCT CO. LTD. - Respondent
Suit 197  Of  1964
Decided On : JUNE 22, 1964

Advocates Appeared:
NIREN DEV, R.C.DE, Sachin Sinha, SANJIB DUTTA, SOMNATH CHATTERJEE

The acceptance of a cheque for a smaller amount than the amount claimed by the creditor does not preclude the creditor from suing for the balance of the claim, unless the debtor has made it a condition of the payment that it be accepted in full and final discharge of the debt.

Headnote:

APPROPRIATION OF PAYMENT - Plaintiff's right to appropriate payment without prejudice to claim for balance - Defendant's contention that payment was made on condition of full and final settlement - Whether payment was conditional or unconditional - Interpretation of correspondence between parties - Legal principles governing accord and satisfaction.

Fact of the Case:

Plaintiff filed a suit for recovery of Rs. 21,778.98 np. Defendant paid Rs. 50,000/- in part liquidation of liability. On November 5, 1963, defendant paid Rs. 26,306.86 np and Rs. 257.04 np after deducting Rs. 18,791.64 np. Plaintiff appropriated Rs. 26,563.90 np without prejudice to claim for balance. Defendant contended payment was in full and final settlement and plaintiff accepted it as such.

Finding of the Court:

Court held that there was no accord and satisfaction. Defendant failed to prove that payment was made on condition of full and final settlement. Plaintiff's appropriation of payment without prejudice to claim for balance was valid. Plaintiff entitled to recover balance of amount.

Issues: 1. Whether plaintiff was entitled to appropriate Rs. 26,563.90 np paid by defendant without prejudice to plaintiff's rights to recover the balance as alleged in paragraph 12 of the plaint? 2 (a). Did the defendant pay Rs. 26,563.90 np on the understanding and/or arrangement and on condition that the same would be accepted by the plaintiff in full and final settlement of the plaintiff's dues under the several bills and did the plaintiff accept the said sum pursuant to the understanding and/or arrangement and on the condition as alleged in paragraph 12 of the written statement? 2 (b). Did the plaintiff waive right to recover balance amount of the bills as alleged in paragraph 12 of the written statement? 3. Did the plaintiff accept Rs. 26,306.86 np and Rs. 257.04 np in full and final settlement as alleged in paragraph 11 of the written statement? 4. Is the plaintiff entitled to interest as alleged in paragraph 14 of the plaint? 5. To what relief is the plaintiff entitled?

Ratio Decidendi: 1. The mere fact that a creditor retains and cashes a cheque sent by the debtor for a smaller amount than the amount claimed by the creditor does not amount to an accord and satisfaction or a discharge of the entire debt. 2. The question of whether a payment is conditional or unconditional is a question of fact to be determined based on the surrounding circumstances and the intention of the parties. 3. The acceptance of a cheque for a smaller amount than the amount claimed by the creditor does not preclude the creditor from suing for the balance of the claim, unless the debtor has made it a condition of the payment that it be accepted in full and final discharge of the debt.

Final Decision: Decree for the plaintiff for Rs. 21,778.08 np with interest at 6% and costs.

A. N. RAY, J.

( 1 ) THE plaintiff filed this unit for the recovery of Rs. 21,778. 98 np. The plaintiffs case, in short, is that the plaintiff and the defendant had transactions whereby the plaintiff sold and delivered to the defendant tin containers of divers sizes upon terms that the price would be payable within 30 days from the date of presentation of the bills. The aggregate of the bills for the goods supplied by the plaintiff to the defendant is set out in paragraph 3 of the plaint. In paragraph 6 of the plaint it is alleged that the defendant paid the plaintiff a sum of Rs. 50,000/- in part liquidation of the defendant's liability to the plaintiff under the several bills. Certain bills were returned by the defendant to the plaintiff and the plaintiff issued credit notes to the defendant.

( 2 ) ON November 5, 1963 the defendant paid the plaintiff two several sums of Rupees 26,306. 86 np and Rs. 257. 04 np after deducting Rs. 18,791. 64 np. In paragraph 11 of the plaint it is alleged that the deduction was wrongful and that the deduction was in respect of the defendant's alleged claim for damages.

( 3 ) IN paragraph 12 of the plaint the plaintiff alleges that the plaintiff duly appropriated the sum of Rs. 26,563. 90 np to the plaintiff's claim under the several bills without prejudice to the plaintiff's rights to recover the balance due under the bills.

( 4 ) THE defendant in the written statement alleged in paragraph 11 following that the defendant sent sums of Rs. 26,306. 86 np and Rs. 257. 04 np to the plaintiff in full and final settlement of the plaintiff's all outstanding bills after deducting the sum of Rs. 18,791. 64 np being the loss and damages suffered by the defendant and further that the plaintiff accepted the said cheques in full and final settlement. The other contention in the written statement is denial by the defendant that the plaintiff was entitled to appropriate the sum of Rs. 26,563. 90 np without prejudice to the plaintiff's right. It is further alleged in the written statement that the sum was paid on the understanding and/or arrangement and on the condition that the sum would be accepted by the plaintiff in full and final settlement of the dues under the bills and the plaintiff had no right to appropriate the sum without the condition on which payment was made. The further allegation is that the plaintiff accepted the said sum pursuant to the understanding and/or arrangement and on the condition in full and final settlement of dues in respect of the bills and that the plaintiff waived right to recover the balance amount of the bills.

( 5 ) THE following Issues were framed at the trial:1. Was the plaintiff entitled to appropriate Rs. 26,563. 90 np paid by the defendant to the plaintiff without prejudice to the plaintiff's rights to recover the balance as alleged in paragraph 12 of the plaint? 2 (a ). Did the defendant pay Rs. 26,563. 90 np on the understanding and/or arrangement and on condition that the same would be accepted by the plaintiff in full and final settlement of the plaintiff's dues under the several bills and did the plaintiff accept the said sum pursuant to the understanding and/or arrangement and on the condition as alleged in paragraph 12 of the written statement? 2 (b ). Did the plaintiff waive right to recover balance amount of the bills as alleged in paragraph 12 of the written statement? 3. Did the plaintiff accept Rs. 26,306. 86 np and Rs. 257. 04 np in full and final settlement as alleged in paragraph 11 of the written statement? 4. Is the plaintiff entitled to interest as alleged in paragraph 14 of the plaint? 5. To what relief is the plaintiff entitled?

( 6 ) THE onus of proof of Issues Nos. 2 (a), 2 (b) and 3 is on the defendant. The onus of proof of Issue No. 1 as well as Issue No. 4 is on the plaintiff. There was no oral evidence adduced either by the plaintiff or by the defendant. The Brier of Documents was tendered and marked as Ex. A. Counsel made their submission























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