JUDGMENT

Nanavutty, J - This is and application Tinder Section 25, Provincial Small Cause Courts Act, against a judgment and decree passed by the Judge of the Small Cause Court, Lucknow, decreeing the plaintiffs suit in full. The facts out of which this application arises are briefly as follows:

The plaintiff is a firm of cloth dealers at Cawnpore. The defendant, Dargahi Lal, has been sued as the managing proprietor of the firm of Mehdi Lal Dargahi Lal, who are also cloth dealers in Lucknow. The suit was for a sum of Rs. 333-12-9, as principal, and Rupees 261-15-3 for interest, in all Rs. 595-12-0. The defendant alleged there was loss in his business and that he had closed down and entered into a composition with all his creditors, includiug the plaintiff firm, whereby it was agreed that the defendant would only pay six annas in the rupee out of the principal sum due to the creditors and they would relinquish the rest, both principal and interest. The defendant further alleged that the sum due to the plaintiff was only Rs. 316-13-9, and that according to the composition the plaintiff firm should get only Rs. 116-8-0, which amount the defendant was willing to pay. Upon the pleadings of the parties the learned Judge of the Small Cause Court framed the following issues:

1. (a) Did the plaintiff firm agree to take only six annas in the rupee out of the principal amount due to it and give up the interest altogether as alleged? (b) If so, how does it affect the position of the plaintiff? 2. To what relief is the plaintiff entitled?

2. The finding of the trial Court on issue 1 was that the alleged agreement was proved, and that the plaintiff firm had agreed to accept only six annas in the rupee out of the principal sum due and to give up the interest altogether, and that the defendant offered to pay the sum of Rs. 116-8-0 to Lallo Mal, the general agent of the plaintiff firm, but the latter refused to take it because he believed that the defendant was con-cealing some property and was able to pay the full amount of his debt. It was further held in view of the rulings reported in Maung Pu v. Mating Po Thant, AIR 1928 Rang 144 and M. Satyanarayana Murti v. Lakshmayya, AIR 1929 Mad 79 that a bare agreement that a creditor would take, at a future time, a smaller sum than what was due to him was not; binding upon him and did not come within the purview of Section 63, Contract Act, and therefore the plaintiff's suit for Rs. 316-13-9 as claimed in the pleadings was decteed with proportionate costs. The only question of law argued before me in this application was, whether the learned trial Judge was right in holding that Section 63, Contract Act, did not apply to the agreement to remit a part of the debt, Section 63, Contract Act runs as follows:

Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks.

3. Illustration (e) to Section 63 runs as follows:

A owes B Rs. 2,000 and is also indebted to other creditors. A makes an arrangement with his creditors, including B, to pay them a composition of eight annas in the rupee upon their respective demands. Payment to B of Rs. 1,000 is a discharge of B'S demand.

4. This illustration fully covers the present case. Here too, upon the facts found by the learned trial Judge, the defendant made an arrangement with his creditors, including the plaintiff, to pay them a composition of six annas in the rupee upon their respective demands. The defendant is further held to have offered the amount due to the plaintiff firm upon this arrangement, which Lalloo Mal, the general agent of the plaintiff firm, refused to accept believing that the defendant had some other property which he was concealing. It is also proved that 23 other creditors of the defendant were paid according to this settlement. The plaintiff firm therefore cannot now be allowed to resile fr