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CALCUTTA HIGH COURT
Pal, J., B.K. Mukherjea, J.
Jitendra Chandra Roy Chowdhury & Anr. - Appellant
Versus
S.N. Banerjee, Barrister-at-Law - Respondent
Decided On : 05-08-1942
Interest - Hand-note - Contract Act, Section 63 - The court found that there was a subsequent remission of the interest due on the hand-note by Kumar Jamini Ballav, the promisee, which absolved the defendants from paying interest. The court held that the remission of interest was a unilateral act of grace on the part of the promisee and did not require any consideration. The defendants were entitled to remit a portion of the obligation under Section 63 of the Contract Act, even though the obligation on the part of the promisor to perform the unremitted part still continued. The court allowed the appeal in part and dismissed the cross-objection, giving the plaintiff a decree for the principal amount due on the hand-note.
Fact of the Case:
The plaintiff, as receiver to the estate of Gopiballav Sen and others, filed a suit to recover money due on a hand-note executed by the defendants. The defendants claimed that the promisee had remitted the interest due on the hand-note, and therefore, they were not liable to pay interest. The court had to determine whether the plaintiff was entitled to claim interest on the hand-note.
Finding of the Court:
The court found that there was a subsequent remission of the interest due on the hand-note by the promisee, which absolved the defendants from paying interest. The court held that the remission of interest was a unilateral act of grace on the part of the promisee and did not require any consideration. The defendants were entitled to remit a portion of the obligation under Section 63 of the Contract Act, even though the obligation on the part of the promisor to perform the unremitted part still continued. The court allowed the appeal in part and dismissed the cross-objection, giving the plaintiff a decree for the principal amount due on the hand-note.
Issues: The court considered whether the plaintiff was entitled to claim interest on the hand-note, and whether the remission of interest by the promisee was enforceable.
Ratio Decidendi: The court held that the remission of interest by the promisee was a unilateral act of grace and did not require any consideration. The defendants were entitled to remit a portion of the obligation under Section 63 of the Contract Act, even though the obligation on the part of the promisor to perform the unremitted part still continued.
Final Decision: The court allowed the appeal in part and dismissed the cross-objection, giving the plaintiff a decree for the principal amount due on the hand-note.
JUDGMENT
B.K. Mukherjea, J. - This appeal is on behalf of the defendants and it arises out of a suit commenced by the plaintiff as receiver to the estate of Gopiballav Sen and others to recover from the defendants money due on a hand-note. The plaintiff's case was that the two defendants jointly took a loan of Rs. 3000 only from the late Kumar Jamini Ballav Sen of Dimla, upon executing in favour of the latter, a hand-note for the said amount on 25th Jaistha 1332 B.S. corresponding to 8th June 1925. On the death of Kumar Jamini Ballav, his estate devolved upon his four sons, named Gopi Ballav, Jyotish Chandra, Rukmini Ballav and Manmatha. Their estate is now under the management of Mr. S.N. Banerji, Barrister-at-Law, who was appointed a receiver, by the original side of this Court in Extraordinary suit No. 4 of 1935, and it was the receiver who under authority of the Court instituted the present suit. The defendants, according to the plaintiff, had paid in all Rs. 581 in different instalments towards the principal of the said loan, but nothing was paid by them by way of interest. The total amount of interest due at the date of the suit was Rupees 3939 annas odd. As under the law the borrowers cannot be made liable to pay interest exceeding the principal, the plaintiff prayed for recovery of a sum of Rs. 3000 only as interest, the total claim being laid at Rs. 5419.
2. The defendants in their written statement did not dispute that they borrowed this money from Kumar Jamini Ballav or executed a hand-note in his favour. Their main defence was that the stipulation for payment of interest in the promissory note was not acted upon and it was subsequently rescinded by an express oral agreement arrived at between them and Kumar Jamini Ballav. It was further averred that the promisee had agreed to appropriate certain yearly allowances which were payable by him to the defendants under the terms of a usufructuary mortgage bond dated 12th June 1922 towards the satisfaction of the dues on the promissory note; and as the amounts payable by the plaintiff's estate on this account since the date of the execution of the hand-note were in excess of the amount borrowed by the defendants, the entire debt, according to the defendants, was satisfied.
3. In order to appreciate the contentions of the respective parties, it will be necessary to state here certain relevant facts. It is admitted on both sides that the family of Kumar Jamini Ballav and that of the defendants were on terms of great friendship and amity since the time of their ancestors and Monish Chandra Chowdhury the father of the defendants, was an intimate personal friend of Jamini Ballav himself. The defendants as well as their joint cosharer, one Bhaba Sundari Debi, came to be involved in considerable financial difficulties, and on 29th Jaistha 1329 B.S., corresponding to 12th June 1922 Kumar Jamini Ballav as an act of friendship and charity advanced to these three persons a sum of Rs. 37,000 for which no interest was to be paid by the borrowers. On that date the two defendants along with Bhaba Sundari executed a usufructuary mortgage bond in favour of Jamini Ballav by which the maliki and ijara rights of the mortgagors in an eight anna share of certain revenue paying properties were given as security for the money advanced. This document is Ex. 2 in the suit. In these mortgaged properties the two defendants had proprietary right to the extent of 2 annas 8 gandas share and another 2 annas 8 gandas share was owned in the limited interest of a Hindu widow by Bhaba Sundari Debi, the other mortgagor. The remaining 2 annas 8 gandas share belonged to another cosharer of the defendants named Sashi Prova and she too had the restricted rights of a Hindu widow, which was let out in ijara to these two defendants. The entire 8 annas share was held in putni and istemrari right by two persons named Manindra and Surendra, and the lease reserved an annual rent of Rs. 6106-8-0.
4. Under the terms of the le
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