Madras High Court
Cental Bank Of India vs V. Guruviah Naidu And Sons (Leather) ... on 16 August, 1991
Equivalent citations: AIR1992MAD139, AIR 1992 MADRAS 139, (1993) 1 BANKLJ 403 (1992) 1 BANKCLR 603, (1992) 1 BANKCLR 603
JUDGMENT
1. Suit is to recover a sum of Rs. 12,54,724.37 with interest at the rate of 21.5% per annum with quarterly rests from the defendants herein and the costs of the suit, that in default of the payment of the same, directing the sale of plaint 'A' Schedule property and applied the sale proceeds towards the payment of decretal amount and that in case, the sale proceeds are not sufficient for the payment of the decretal amount in full, to recover the balance from the defendants with interest at 18% per annum till date of realization and for a charge over the plaint 'B' Schedule property and so on.
2. The substratum of the plaintiffs case as gathered from the plaint is as follows : --
The plaintiff is a nationalised banking institution carrying on the banking at No. 11, Second Line Beach Road, Madras and that the first defendant is a private limited liability company incorported under the Indian Companies Act having its registered office at Madras and that to which the second defendant is the Managing Director and the defen-dants-3 to 5 are the Directors of the first defendant company and that at the request of the first defendant, the plaintiff granted an open loan facility to the tune of Rs. 10,00,000/- on 15-1-1970 for which the second and third defendant who are partners at that time, executed a promissory note in favour of the plaintiff on 15-1-1970 for the said amount and the hypothecation of the stock-in-trade which are more fully described in the plaint 'B' schedule and that subsequently, the defendants-1 to 3 along with one Mr. V. G. Muniraj, the then partner executed a fresh promissory note in favour of the plaintiff on 17-11-1972 for a sum of Rs. 10,00,000/- along with an agreement of hypothecation on the same date over the plaint 'B' schedule property, followed by the execution of the fresh promissory note for the said amount by defendants-1 to 3 and the said Mr. V. G. Muniraj on 17-11-1975 along with an Hypothecation agreement over the plaint 'B' schedule property and that again on 1-12-1975, all the defendants herein, executed a fresh promissory note in favour of the plaintiff for the said amount of Rs. 10,00,000/- followed by the execution of a Hypothecation agreement over the plaint 'B' schedule property on 1-12-1975. Subsequently, on 6-10-1978 the first defendant company was converted into a private limited liability company and thereby it was agreed to repay the above referred loan by passing a letter to the said effect as well as passing a resolution on 8-11-1978 and thereby agreed to repay the entire loan above referred. Apart from the cash credit open loan facility, the first defendant had availed of packing credit facility to the extent of Rs. 40,00,000/- and that for which, a consolidated promissory note in favour of the plaintiff for a sum of Rs. 60,00,000/- was executed by them on 22-3-1979 along with a hypothecation agreement over the plaint 'B' schedule property on the same date followed by the execution of a promissory note on 10-4-1980 for the above-said sum of Rs. 60,00,000/- agreeing to repay the same with interest at 18% per annum with quarterly rests and also executed a hypothecation agreement for Rs. 10,00,000/- over the plaint 'B' schedule property along with a continuing guarantee executed in favour of the plaintiff on the same date. Thus, the plaintiff is entitled to charge the interest at such rate as the Reserve Bank of India directs or as p.er directives from its central office with usual penal rate of interest, in the event of any breach of any of the terms and conditions as accepted by the defendants herein.
3. Besides, the first defendant deposited the title deeds of its property more fully described in the plaint 'A' schedule by the plaintiff with intent to secure the repayment of loan and thereby created an equitable mortgage in favour of the plaintiff on 6-5-1982 over the plaint 'A' schedule property, which entitled the plaintiff to sell the hypothecated goods directly by public auction.
4. During the course of the said transaction, as per the statement of account filed along with the plaint, on the date of filing the suit, viz., 23-6-1982, the defendants owed to the plaintiff, a sum of Rs. 12,54,724.37 inclusive of the interest at the agreed rate of 21.5% per annum with quarterly rests as they had failed and neglected to pay ihe said amount in spite of demands including telegraphic notice dated 17-6-1988. Hence, the plaintiff was constrained to file the above suit.
The defendants-2 to 5 who had guaranteed for the payment of the suit amount are to pay the suit claim jointly and severally to the plaintiff.
5. The suit was resisted by the first defendant, filing a written statement with the following main contentions.
6. This defendant has not traversed the entire allegations made in the plaint in view of the fact that subsequent to the filing of the suit, a compromise was arrived at between the plaintiff and the defendants and that as such, it should not be taken that the defendants had accepted any of the allegations contained in the plaint as the same were quite unnecessary and that since during the pendency of an application filed by the plaintiff for the appointment of a Commissioner to sell the hypothecated goods, viz., the 'B' schedule property, the defendant had paid a sum of Rs. 1,90,0007- to the plaintiff and that subsequently in furtherance of the negotiations held between the plaintiff and the defendant with regard to the suit claim, it was agreed that if a sum of Rs. 10,00,000/- was paid in addition to the sum of Rs. 1,19,000/- paid already, the plaintiff should report the suit as settled. It was contended that in pursuance of the said compromise, the entire agreed amount of Rs. 10,00,000/- has been paid in the following mode :
1) By means of a draft drawn in favour of the plaintiff for a sum of Rs. 1,00,000/- paid on 25-10-1989 along with a covering letter dated 22-10-1989 sent by the counsel for defendants to the counsel for plaintiff;
2) By means of a cheque drawn in favour of of the plaintiff for a sum of Rs. 1,00,000/- on 25-10-1989 along with a covering letter dated 22-10-1989 sent by the defendant's counsel to the counsel for plaintiff;
3) By means of a pay order drawn in favour of the plaintiff for Rs. 50,000/- paid on 3-11-1989 along with the covering letter dated 2-11-1989 sent by the counsel for defendants to the counsel for plaintiff;
4) By means of a cheque drawn in favour of the plaintiff for Rs. 1,00,000/- paid on 6-11-1989 along with the covering letter dated 6-11-1989 sent by the counsel for defendants to the counsel for plaintiff;
5) means of a pay order drawn in favour of the plaintiff for a sum of Rs. 1,50,000/-paid on 13-11-1989 along with a covering letter dated 12-11-1989 sent by the counsel for the defendant to the counsel for the plaintiff;
6) means of a cheque drawn in favour of the plaintiff for a sum of Rs. 2,00,000/- paid on 23-11-1989 with the covering letter dated 23-11-1989 by the counsel for defendant to the counsel for the plaintiff;
7) means of a cheque in fvour of the plaintiff for Rs..1,00,000/- paid on 30-11-1989 sent by the counsel for the defendant to the counsel for the plaintiff;
8) means of a cheque drawn in favour of the plaintiff for a sum of Rs. 1,00,000/- paid on 18-12-1989 along with the covering letter dated 18-12-1989 sent by the counsel for defendants to the counsel for plaintiff;
9) means of a cheque drawn in favour of the plaintiff for Rs.40,000/- paid on 13-2-1990 along with the covering letter dated 12-2-1990 sent by the counsel for defendants to the counsel for plaintiff;
10) means of a demand draft drawn in favour of the plaintiff for Rs. 20,000/- paid on 20-2-1990 along with the covering letter dated 19-2-1990 sent by the counsel for defendants to the counsel for plaintiff;
11) By means of a demand draft drawn in favour of the plaintiff for a sum of Rs. 35,000/- paid on 13-3-1990 along with the covering letter dated 12-3-1990 sent by the counsel for the defendants to the counsel for plaintiff; and
12) By means of a cheque drawn in favour of the plaintiff for Rs. 5.000/- paid on 20-3-1990 along with the covering letter dated 19-3-1990 sent by the counsel for defendants to the counsel for plaintiff.
7. Thus the counsel for the plaintiff by their letter dated 6-11-1989, 7-11-1989 and 13-11-1989 had transmitted the said amounts to the plaintiff with the covering letters and thereby advised the plaintiff to receive the said amount without prejudice to their rights, and the copy of the said letters were marked to the counsel for the defendants. Thus, the plaintiff had received without any demur and the defend ants had paid the entire agreed sum of Rs. 10,00,000/- as they sent the last payment of Rs. 5,000/- on 19-3-1990 along with the covering letter stating that it was the last instalment of the agreed amount of Rs. 10,00,000/- and that thereby requested the plaintiff to record, full, final and complete settlement of the suit claim and that the plaintiff had been acknowledging all the payments without any demur. Therefore, the defendants were under the bona fide impression that they have paid the entire agreed amount due to the plaintiff under the compromise and that the plaintiff would be withdrawing the suit by reporting the suit as settled out of court. While that being so, the defendants came to know that the plaintiff had sent a letter on 21-6-1980 to their counsel that because of the delayed payment, the plaintiff was not agreeable for waiver of the overdue interest which comes to the extent of Rs. 69,571.20 and thereby demanded the payment of the said sum, for reporing settlement as a condition precedent which was followed by a letter dated 2-7-1990 written by the plaintiffs counsel to the defendant's counsel enclosing a copy of the letter dated 27-6-1990 from the plaintiff calling upon them to pay the interest of Rs. 69,571.20, for which the defendants had caused a reply through their counsel on 4-7-1990 and thereby repudiated the unreasonable demand of the plaintiff for the overdue interest now claimed and that thereupon the counsel for the plaintiff sent a letter on 9-8-1990 stating that the central office of the plaintiff bank had given substantial amount of waiver and that therefore, question of waiver on interest further does not arise and that as such, it was demanded to pay the interest for the delayed period which was followed by another letter dated 11-2-1990 by the plaintiff addresed to the defendant's counsel to the abovesaid effect and expressed their inability to accept the waiver of the further interest.
8. Under the circumstances, it was contended that there was no agreement to pay interest for any delayed pyment and all that was agreed among the parties herein was that the defendants should pay the sum of Rs. 10,00,000/- in full, final and complete settlement of the suit claim and consequently, the plaintiff had accepted the offer when the defendants had paid in full and that having accepted all the payments made by the defendants without any demur and without insisting for any interest, the plaintiff now cannot demand interest and insist that they would withdraw the suit only if the interest amount of Rs. 69,571.20 is paid. Yet another contention made by this defendant was that since all the payments made by the defendants were accepted by the plaintiff without prejudice to their claim for interest, nor returned the drafts, cheques or pay orders and having accepted the same without any condition, it is not open to the plaintiff now to come forward with the claim for interest after receiving the full amount as agreed. As the entire amount agreed in furtherance of the compromise effected was paid in full as final and complete satisfication of the suit claim, the plaintiff is bound to withdraw the above suit and that in fact, the application filed by this defendant for recording the compromise is pending and that in view of the plaintiff is not withdrawing the suit, this defendant is obliged to file a written statement and that at no point of time, either prior to the compromise, or at the time of compromise that there was any indication that if the payment is delayed, the defendants are liable to pay interest and that as such, the refusal to withdraw the suit by the plaintiff is quite unjustified. With the above pleadings, this defendant prays that the plaintiff is to be non-suited.
9. The defendants-2 to 5 have filed their separate written statement and thereby they are adopting the written statement filed on behalf of the first defendant.
10. Upon the above pleadings, the following issues were formulated for trial on 30-1-1991.
1) Whether the plaintiff is not entitled to the relief claimed in the suit by receipt of Rs. 10,00,000/- by the subsequent agreement to receive Rs. 10,00,000/- in full and final settlement of the suit claim?
2) Whether the plaintiff is entitled to interest in view of the alleged delay in payment of Rs. 10,00,000/- accepted and received in full and final settlement as claimed by them?
3) To what relief, if any, the plaintiff is entitled?
11. By consent, Exs. P. 1 to P. 27 were marked on behalf of the plaintiff which are the following documents.
12. Ex. P. 1 dated 27-7-1989 is the copy of letter from the plaintiffs counsel to one R. Srinivasan, Bharath Skin Corportion, Madras; Ex. P. 2 dated 29-12-1988 is the letter from the first and second defendants addressed to the plaintiff; Ex. P. 3 dated 30-6-1989 is the letter written by the defendants-1 and 2 to the counsel for the plaintiff; Ex. P. 4 dated: 22-10-1989 is the copy of letter from the defendant's counsel to the plaintiffs counsel; Ex. P. 5 dated 2-11-1989 is the copy of letter from the defendant's counsel to the plaintiffs counsel; Ex. P. 6 dated 6-11-1989 is the letter from the plaintiffs counsel to the plaintiff with a copy to the defendant's counsel; Ex. P. 7 dated 6-11-1989 is the tetter from the defendant's counsel to the plaintiffs counsel; Ex. P. 8 is the copy of letter from the plaintiffs counsel the plaintiff and defendant's counsel; Ex.P. 9 dated 6-11-1989 is the letter from the plaintiff's counsel to the plaintiff and defendant's counsel; Ex. P. 10 dated 12-11-1989 is the copy of letter from the defendant's counsel to the plaintiffs counsel; Ex. P. II dated 13-11-1989 is the letter from the plaintiff's counsel to the plaintiff and defendant's counsel; Ex. P. 12 dated 23-11-1989 is the copy of letter from the defendant's counsel to the plaintiffs counsel Ex. P. 13 dated 18-12-1989 is the letter from the defendant's counsel to the plaintiff's counsel;
13. Ex. P. 14 dated 12-2-1990 is the copy of letter from the defendant's counsel to the plaintiffs counsel; Ex. P. 15 dated 19-2-1990 is the copy of letter from the fendant's counsel to the plaintiffs counsel; Ex. P. 16 dated 12-3-1990 is the copy of letter from the defendant's counsel to the plaintiffs counsel; Ex.P. 17dated 19-3-1990 is the copy of letter from the defendant's counsel to the plaintiff's counsel; Ex. P. 18 dated 21-3-90 is the tetter from the plaintiff's counsel to the plaintiff; Ex. P. 19 dated 16-5-1990 is the copy of letter from the plaintiff's counsel to the defendant's counsel with a copy marked to the defendant :
14. Ex. P. 20 dated 21-6-1990 is the letter from the plaintiff's counsel to the defendant's counsel; Ex. P. 21 dated 27-6-1990 is the letter from the plaintiff to the plaintiff's counsel; Ex. P. 22 dated 2-7-1990 is the letter from the plaintiffs counsel to the defendant's counsel with a copy to the plaintiff; Ex. P. 23 dated 4-7-1990 is the letter from the defendant's counsel to the plaintiffs counsel; Ex. P. 24 dated 9-8-1990 is the copy of letter from the plaintiff's counsel to the defendants' counsel; Ex. P. 25 dated 3-11-1990 is the letter from the plaintiff to the plaintiffs counsel; Ex. P. 26 dated 11-12-1990 is the letter from the plaintiffs counsel to the defendants' counsel and Ex P. 27 is the statement for the calculation of interest on delayed payment of compromise amount of Rs. 10,00,000/- due on 30-6-1989.
15. No documents were produced and marked on behalf of the defendants. No oral evidence was adduced on behalf of the parties herein and to the said effect, the learned counsel for the respective parties have made their endorsement in the plaint on 13-3-1991.
16. Findings on Issues Nos. 1 and 2 :
It may be noted that the open loan cash facility and packing credit facility availed of by the defendants, followed by the execution of promissory notes then and there on several occasions, by hypothecating stock-in-trade, detailed in the plaint 'B' schedule property by means of executing hypothecation agreement on several dates and by creating an equitable mortgage by deposting the title deeds over the 'A' schedule property as claimed throughout the plaint in detail, there was no dispute or controversy made on behalf of the defendants, though they have filed their written statement and resisted the passing of the decree as claimed in the suit. It appears from the plaint that it was filed into the court on 23-6-1982 and that along with the plaint, an application for the appointment of a commissioner was also filed and that during the pendency of the said application, the defendants claimed that a sum of Rs. 1,90,000/- has been paid in cash to the plaintiff and for this payment, in para-3 of the written statement, there was no denial or dispute made on behalf of the plaintiff. It appears that long after the filing of the suit, viz., on 21-1-1991, all the defendants have filed their written statement to the suit followed by the commencement of the trial.
17. For nearly over 81/2 years, the written statements of the defendants were not filed. Then, it was the contention of all the defendants that subsequent to the filing of the suit, pursuant to the negotiations made among the parties herein, a compromise was effected between them and by which it was agreed that besides the payment already made to the extent of Rs. 1,90,000/-, on the payment of a sum of Rs. 10,00,000/- on the whole by the defendants, the plaintiff should withdraw the suit as settled out of the court and that the payment of the said Rs. 10,00,000/- was to be recorded as full, final and complete settlement of the suit claim reached out of the court among the parties herein and that in pursuance of the same, it was claimed that various payments on various dates numbering in twelve as detailed in the written statement of the first defendant were made to the plaintiff by the defendants and that the entire amount of Rs. 10,00,000/-, as agreed in the said compromise, has been paid and that the said payments were received and accepted by the plaintiff without any demur and objection, and that, therefore, the plaintiff ought to have reported settlement which was reached out of court in full and final discharge of the suit claim and that was the reason why no statement on behalf of the defendant was filed. It was the further case of the parties herein that the payment of Rs. 10,00,000/-, the outcome of the compromise effected was to be completed within a certain period, but what is that period, on what date it started and on what date it expired are yet to be known by the parties herein and no pleadings has been made to the said effect either in the plaint or in the written statement. Admittedly, the compromise reached among themselves was out of court and it was not reduced into writing. The twelve payments on various dates made by the defendants through the plaintiff's counsel to the plaintiff by sending covering letters to the counsel for the plaintiff, started on 25-10-1989 and completed on 20-3-1990 covering various dates. In this context, it has to be noted that the dates with the quantum of money and the mode of payment involving in these twelve payments detailed in para-4 of the written statement to "the extent of Rs. 10,00,000/- agreed to be paid to the plaintiff, pursuant to the compromise effected outside the court have not been disputed or controverted on behalf of the plaintiff.
18. If that was so, considering the mode of payment claimed in the written statement made by the defendants through their counsel for the defendant and the acceptance of the plaintiff in the context of the specific plea taken by the defendants in the written statement, I am fully satisfied to hold that subsequent to the filing of the suit, the plaintiff and the defendants had entered into an agreement of compromise and by which, it was agreed that the plaintiff should withdraw the suit by accepting the payment of a total sum of Rs. 10,00,000/- by the defendants as full and final settlement of the suit claim and that in pursuance of which, the defendants had been making the payments as claimed in the written statement. It has to be noted that the total sum of Rs. 10,00,000/- has been paid to the plaintiff.
19. On a careful analysis of the letter correspondence between the plaintiff and the defendants through their respective counsel, from 27-7-1989 till 19-3-1990, Exs. P. 1 to P. 17 marked in this case, clearly fortify my conclusion that the parties herein have agreed to withdraw the suit on the payment of the consolidated amount of Rs. 10,00,000/- to the plaintiff by the defendants out of court as full and final settlement of the suit claim and that the said conclusion is inescapable under the established context. The very wordings of the letter dated 19-3-1990 addressed to the learned counsel for the plaintiff clinches the fact that the total agreed amount among themselves was Rs. 10,00,000/- and that the last payment of Rs. 5,000/- has been 'sent to the plaintiff by means of a cheque No. 296985 on 15-3-1990 drawn on the Tamil Nadu State Co-operative Bank Limited in favour of the plaintiff and that by referring so, it was requested to acknowledge the receipt of the said cheque and record the same as full, final and complete settlement of the suit claim. A careful reading of the subsequent letters clearly demonstrate the fact that the plaintiff had accepted the payments made to the extent of Rs. 10,00,000/-; but it was the contention of the plaintiff that since the payments of the said agreed amount of Rs. 10,00,000/- were made with delay, a demand was made to the defendants to pay overdue interest to the extent of Rs. 69,571.20. It was also the claim of the plaintiff that unless the defendants pay the overdue interest, they will not report the full settlement of the suit claim, since the agreed compromise amount was paid on several, occasions with considerable delay. This extent of the contention of the plaintiff was not made either in the pleadings or by means of any reply statement, controverting the pleas set out in the written statement, but it is gathered from the contents of the letters exchanged among the parties herein through their respective counsel.
20. Having regard to the respective contentions, and the established circumstances, I have no hesitation to hold that subsequent to the filing of the suit, the plaintiff and the defendants have entered into an agreement and that by which they have agreed to the payment of the consolidated amount of Rs. 10,00,000/- on the whole by way of instalments, the plaintiff should withdraw the suit as settled out of court and that the said payment of Rs. 10,00,000/- has to be deemed as final and full settlement of the discharge of the entire suit claim and that only in pursuance of which, the defendants had paid the same as detailed in para 4 of the written statement.
21. Then the question remains to be considered is that as to whether the defendants had effected the delayed payments entitled the plaintiff to claim the overdue interest to the extent of Rs. 69,571.20. In this context, it has become necessary to advert to a letter dated 30-6-1989 written by the first and second defendant to the counsel for the plaintiff which has been marked as Ex. P. 3 and that wherein it lias been stated that the defend ants came to know that the plaintiff had accepted their offer of Rs. 10,00,000 in settlement of the full claim and that as such, since the said acceptance has been conveyed to the defendants only a fortnight back, it was requested to grant three months' lime for making the payment of the said compromise amount of Rs. 10,00,000/-. Before the abovesaid letter, a letter dated 29-12-1988 was written by the defendants-1 and 2 to the plaintiff bank. Then comes Ex. P. 19, a letter dated 16-5-1990 written by the counsel for the plaintiff to the counsel for the defendant and that in which it has been staled that because of the delayed payment, his client, viz., the plaintiff was not agreeable for waiver of the overdue interest which comes to Rs. 69,571.20 which was followed by Ex. P. 20 dated 21-6-1990, Ex. P. 21 dated 27-6-1990, Ex. P. 22 dated 2-7-1990, Ex. P. 23, the reply letter dated 4-7-1990 written by the counsel for the defendants-2 to the plaintiff's counsel reiterating the stand made in the written statement and Ex. P. 24, repudiating the same and demanding the payment of overdue interest and so on. Then, it is pertinent to note that Ex. P. 25, a letter written by the plaintiff bank on 3-11-1990 to his counsel wherein il was found that the compromise offer of Rs. 10,00,000/- was ac-cepied by the plaintiff bank and that again at the request of the defendant, the Central Office of the plaintiff had agreed to allow further time limit to pay the abovesaid amount from 30-6-1989 provided by charging interest at 161/2% per annum. A similar letter dated 11-12-1990 with the copy of letter addressed by the plaintiff's Chief Manager also provides the same contentions and it was marked under Ex. P. 26. A careful perusal of all the relevanl documents hereinbefore referred clinches the fact that the defendants asked for extension of time for the payment of the compromise amount of Rs. 10,00,000/- and that it was gran ted from 30-6-1989 as evidenced under Ex, P. 24; but the extension of time was given to the defendant upto what time and uplo what period the time was exlended and from what date onwards, the delayed pay-ments been made by the defendants herein and so on have not been specifically placed or referred to anywhere in any of the lelters and that with regard to the same, there was no iota of evidence tendered before this court on behalf of both parties herein. But, it has to be seen that the defendants had been making payments in instalments as detailed in para-4 of the written statement and the last one was under Ex. P. 17 dalcd 19-3-1990, but all were accepled wilhout any demur or objection whatsoever by the plainliff totalling lo Rs. 10,00,000/-. But, significantly, the letters marked under Ex. P. 24, P. 25 and P. 27 clinches the fact that the plaintiffs are making demands for the overdue interest to the extenl of Rs. 69,571.20 from the defendants for reporting settlement of the suit claim. As I have already adverted to despile the consis-lenl plea of the defendants herein, the plaintif was not contented with the paymenls made duly by the defendants which had been accepted in view of the extension of lime granted for making the said payments provided the same is to be paid with the overdue interest as claimed. Besides, to substanliate the claim of the overdue interest and to claim the same from the defendanls on the ground of delayed payments, no details of the extension of time granted and the date on which the said extension expires and that how many payments were made after the expiry of the said dales so as to bring them all within the delayed payments had not been spelled out either by pleadings or in the letter correspondence. In this context, it was the plaintiff who is insisting the payment of the overdue interest after having received the compromise amount of Rs. 10,00,000/-instead of the suit claim from the defendants. Therefore, the burden is heavily upon the plaintiff to prove that the agreement entered into between him and the defendants subsequent to the filing of the suit for the payment of Rs. 10,00,000/-towards the full discharge of the entire suit claim also includes the payment of the overdue interest in case of any delayed payments made therein and that the said burden has not been discharged by him so far. Even so, since it was not the case of either parties, that the subsequent agreement includes the agreement for the payment of overdue interest in case of any delayed payments and that in the context of the defendants denying the same stoutly and that alt the payments made by the plaintiffs on several occasions till March 1990, under Ex. P.17 has been accepted by the plaintiff without any demur or objection, I am inclined to hold that the plaintiff is not entitled to claim any amount by way of overdue interest for the agreed compromise amount of Rs. 10,00,000 in full discharge of the suit claim.
22. Consequent to my finding that subsequent to the filing of.thc suit, the plaintiff and the defendants had since entered into a separate agreement and thereby the offer to pay the sum of Rs. 10,00,000/- towards the full discharge of the suit claim was accepted by the plaintiff and that accordingly, it has been paid in full on twelve occasions pursuant to the agreement entered into and that inasmuch as the said agreement of compromise has been admitted and not controverted as referred to in the letters written by the plaintiff under Ex. P. 24 and P. 25, I have no hesitation to hold that the parties herein has entered into a second agreement to supersede the liability and the entitlement formulated through the suit transaction and that under the circumstances, admittedly, the said subsequent agreement squarely comes within the ambit of Section 62 of the Indian Contract Act which read as follows :
"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."
If that was the position, then this matter squarely comes within the mischief of S. 63 of the Indian Contract Act. This Section provides as follows :
"Every promisee may dispense with or may 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 fit."
Illustrations, 'B' and 'C' to this Section are also very relevant to be taken note of in the context of the facts of the present case. It follows that to bring the facts of the present case, the following elements are to be extracted from the facts of the present case :
Accord and satisfaction is the purchase of a release from an obligation whether arising under contract or tort by means of any valuable consideration not being the actual performance of the obligation itself. The accord is the agreement by which the obligation is discharged and that for it, there must be two minds ad idem. The real emphasis provided in this section is not on the acceptance of a smaller sum, but on the debtors' condition that if the tendered money be at all accepted, it must be in discharge of the entire debt. The creditor cannot then claim his entire claim.
Therefore, it follows that the accord and satisfaction simply mean, a method of discharge of a contract and that will not obliterate the contract, hut only makes the contract arising from it unenforceable, implying an agreement to take the money in satisfaction of the claim in respect of which it has been sent. Under these circumstances, to make it more clear, I may observe that where there has been a true accord under which the creditor agrees to accept a lesser sum, in satisfaction of the debtor and acting upon that accord by paying the lesser sum and the creditor accepts it, then, it is inequitable for the creditor to insist afterwards for the balance or so. Keeping in view of this ratio contemplated under Section 63 of the Indian Contract Act, under the principle of Promissory Estoppel; and applying the same to the facts of the present case, I am fully satisfied with the accord reached between the plaintiff and the defendants herein to accept the sum of Rs. 10,00,000/-towards the full discharge of the suit claim arrived already among themselves and that accordingly, the same has been paid by the defendants in full on 20-3-1990 and that all the payments were accepted by the plaintiff in full discharge of the entire suit claim and that having received the said compromise amount, it is not open for the plaintiff to claim the overdue interest to the extent of Rs. 69,571.20 for which there was no agreement and that under the circumstances, the claim, if any, made by the plaintiff has been directly hit by the S. 63 of the Indian Contract Act.
23. Having considered the entire pleadings, rival contentions, established facts and the documents in detail, I am inclined to hold that the plaintiff and the defendants had (SIC)alidly entered into a subsequent agreement among themselves after the filing of the suit and that in pursuance of the same, a sum of Rs. 10,00,000/- has been paid on twelve occasions which were all accepted by the plaintiff without any objection whatsoever and that inasmuch no proof is available to show the liability of the payment of overdue interest, the plaintiff is not entitled to claim overdue interest to the extent of Rs. 69,571.20 in view of the above referred legal position and that therefore, the entire suit claim is deemed to be discharged by the defendants herein. Therefore, I answer both the Issue Nos. 1 and 2 against the plaintiff and in favour of the defendants.
24. In the result, the suit of the plaintiff against the defendants, is hereby dismissed, but there will be no order as to costs, under the circumstances.
25. Suit dismissed.