Execution of promissory notes for arrears of rent.

This is a Civil Revision Petition by a cultivating tenant as defined under Madras Act XXV of 1955, who has been directed to be evicted by the Assistant Collector, Dindigul, at the instance of his landlord.

The facts are quite simple. The petitioner is a lessee holding agricultural lands, under the respondent, the owner of the properties, agreeing to pay rent at a stipulated rate. It is not disputed that the petitioner has been the lessee for the past six years commencing from the year 1956. He failed to pay the rent and executed a promissory note Exhibit A-2 for a sum of Rs. 1,100 in favour of the respondent. He also executed another promissory note Exhibit A-3 for a sum of Rs. 450 for further arrears of rent due by him. The amounts covered by these two promissory notes represented arrears of rent due till the end of fasli year 1958-59. The petitioner failed to discharge these promissory notes, and, of course, did not pay any rent to the respondent The latter, therefore, filed an application for eviction in C.T.P.A. No. 28 of 196o on the file of the Assistant Collector, Dindigul, charging the petitioner with default in the matter of payment of rent. The respondent claimed that another sum of Rs 300 was also due by the petitioner for improvements effected on the lands by installation of a pump-set, in respect of which it was alleged that the petitioner agreed to bear the expenses. The petitioner admitted the execution of the two promissory notes and also the non-payment of rent by him but he claimed to have incurred expenses for fencing the cocoanut trees on the land, for constructing a bund and for other improvements alleged to have been effected by him on the land. The dispute between the parties raised the question as to what was the state of account between them regarding the improvements on the lands. But the undisputed fact remained, viz. that as a cultivating tenant, the petitioner was due to pay arrears of rent and that the promissory notes were not discharged. The Assistant Collector of Dindigul held that the settlement of accounts between the parties regarding the improvements and other incidental things, which arose out of the tenancy relationship, might be settled in a civil Court, but that the petitioner, being admittedly a defaulter in the matter of payment of the stipulated rent, was liable to be evicted. The contention raised on behalf of the petitioner before him that the execution of the promissory notes operated as a discharge of his obligation as a tenant was repelled.

Before me, the only question that is argued by learned counsel for the petitioner is that the two promissory notes brought about the extinction of the petitionees obligations to pay rent, and that if that be the position, the finding of the Court below that he is in arrears of rent, cannot be supported. Now what is the effect of taking a bill of exchange or a promissory note on account of a pre-existing-debt ? Does it operate as an absolute discharge of the debt or only as a conditional payment, keeping the debt in suspended animation till it is dishonoured by nonpayments. The answer is that it all depends upon the intention of the parties. The intention need not be expressed on the instrument itself, but can be gathered from the circumstances attending the transaction. Lord Esher, M. R. enunciated the proposition of law in these terms in In re Romer and Heslam1:

“ It is perfectly well known law, which is acted upon in every form of mercantile business that the giving of a negotiable security by a debtor to his creditor operates as a conditional payment only -and not as a satisfaction of the debt, unless the parties agree so to treat it.”

It is open to a person to take a bill or note from his debtor in discharge and in satisfaction of the debt. In such an event, the rights and obligations of the parties would be governed by the negotiable instrument and the creditor can only sue upon the instrument and cannot fall back on the debt that