The principle of novation cannot be applied to deny a party the benefits of an earlier agreement if the subsequent agreement could not be enforced due to the default committed by the other party.

Plaintiff is the appellant in A.S.84 of 1981 and defendant is the appellant in A.S.132 of 1981. Plaintiff filed the suit for recovery of Rs.13,000/ being the owelty amount the defendant agreed to pay to him and also for accounting. The Sub Judge disallowed the owelty claim but the defendant was directed to render accounts to the plaintiff regarding the income and expenditure in the estate during 1-4-1972 to 31-3-1976.

2. Plaintiff is the owner of plaint B schedule properties, he having obtained it by a registered partition deed in 1960. He was allotted D schedule in the said partition.

Defendant was allotted C schedule properties. At the Jims of partition it was agreed that the defendant should pay Rs.13, 000/- to the plaintiff towards owelty. In 1964 plaintiff and defendant executed an agreement agreeing to mutually exchange specific portions of their respective shares in lieu of the payment of Rs.13, 000/- by the defendant. It is specifically stipulated in the agreement that only on defendant's execution of the exchange deed the liability of payment of Rs.13, 000/- will be discharged. Plaintiff sent lawyer notice to the defendant calling upon him to execute the exchange deed or else to pay Rs.13, 000/- as agreed. There was no favorable response. The learned Sub Judge held that in view of the subsequent agreement plaintiff couldn't claim the amount. v

3. There is no dispute that plaintiff is entitled to Rs.13, 000/- by way of owelty. The question to be considered is as to whether in view of the later agreement plaintiff has lost his right to claim owelty. The Court below held that plaintiff cannot claim the owelty amount in view of Ext.A34 agreement. But the Court obviously overlooked the fact that nothing was done by the defendant pursuant to that agreement. The specific stipulation in the agreement that only on defendant's execution of the exchange deed the liability of payment of Rs.13, 000/- will be discharged was not considered by the Court below. As the defendant failed to fulfil his obligation under Ext.A34, the right of the plaintiff to get the owelty amount cannot be denied. As admittedly nothing was done pursuant to Ext.A34 by the defendant, he cannot contend that his liability to pay the owelty amount is no longer in existence.

4. S.62 of the Contract Act provides that if the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. But there cannot be any novation of contract, if the subsequent agreement was never acted upon as intended by the parties. In a case where the subsequent agreement could not be enforced due to the default committed by the defendant or due to, any reason traced to him plaintiff cannot suffer on the ground that the parties entered into a subsequent agreement. In such a case the principle of novation cannot be applied so as to deny the plaintiff of the benefits of the earlier agreement. In Chhogalal v. Kanayalal (AIR 1958 Rajasthan 303) the Court held:

"Where parties enter into a contract, which, if valid, would have the effect, by implication, of rescinding a former contract, and it turns out that the second transaction cannot operate as the parties intended, it does not have the effect, by implication of affecting their rights in respect to the former transaction. It is only when the second transaction operates as the parties intended that the first transaction can be wiped out".

In order to operate, as a novation the subsequent contract must be such that if superseded or extinguished the liability of the earlier contract. There is hardly any evidence to hold that the subsequent agreement has superseded the earlier agreement. Hence it cannot be said that plaintiff is not entitled to claim the owelty amount due to him.

5. It is the case of the plaintiff that defendant continued to be in management of theestatefrom31-3-1972til! 31-3-1976 and that he was not paid any share of the profits. The Court below hel