A. N. Grover ( 1 ) THIS is a petition for revision under Section 75 of the Provincial Insolvency Act. The facts briefly are that Messrs Kishan Chand Megh Raj were adjudged insolvents. The petitioner Bank prewired a claim before the Official Reciver in the sum of Rs. 720. 00 The goods, which had been pledged with it, v. ere stated to be of the value of Rs 22,000. 00. They were sold for Rs. 21. 000. 00 but the Official Receiver allowed a sum of Rs. 15, 345. 48 only. He directed that the Bank should refund the balance amount of Rs. 5. 654. 52 with interest at 31/2 percent per annum from the date of the sale of the goods. The petitioner Bank, however, claimed that a large amount was still due from "the insolvents. The question, that has now urisen, and on which the Controversy centres, relatts to a degree obtained by the petitioner Bank from the Bombay High Court. A cheque fild been drawn by Messrs Lakhmi Chand Lal Chand in favour of the insolvents in the sum of Rs. 40,000. 00. The insolvents made it over to the petilioner Bank for collection and drew against it a sum of Rs. 40,000. 00 from their cash and eredit account with the Bank. The payment of the cheque was stopped by Messrs Lakhmi Chand Lal Chand. The petitier Bank instituted a suit in the Bombay High Court to recover Rs. 40,000. 00 with interest from Messrs Lakhmi Chand Lal Chand and Messrs Kishan Chand Megh Raj. This suit was filed under the provisions of Order XXXVII of the Code of Civil Procedure. Messrs Kishan Chand Megh Raj did not apply for leave to defend and on 24th April 1959 a decree for a sum of Rs. 40,000. 00 together with costs and interest was passed against them in favour of the petitioner Bank. Messrs Lakhmi Chand Lal Chand sought leave and on obtaining the same contested the suit but a decree was passed against them on 23rd July, 1959 in the sum of Rs. 40,000. 00 together with costs and interest. 40,000. 00 together with costs and interest was passed against them in favour of the petitioner Bank. Messrs Lakhmi Chand Lal Chand sought leave and on obtaining the same contested the suit but a decree was passed against them on 23rd July, 1959 in the sum of Rs. 40,000. 00 together with costs and interest. The following portion of the decree dated 24th April, 1959 deserves to be reproduced- " * This court doth further order that the plaintiffs do enter satisfaction upon this decree for any amount that may be realised from the first defendant in respect of the claim of the plaintiffs "herein. "it may be mentioned that Messrs Lakhmi Chand Lal Chand were the first defendant and Messrs Kishan Chand Megh Raj were the second defendant. In the second decree dated 23rd July, 1959 it was stated in almost similar terms that "full satisfaction be entered upon this decree for any amount that may be realised from the second defendant in respect of the claim of the plaintiffs herein. " The case of the petitioner Bank was that after protracted negotiations through its solicitors at Bombay, a settlement was effected with Messrs Lakhmi Chand Lal Chand and a sum of Rs. 7,500. 00 was accepted in full settlement oi the decretal claim against them and this was without prejudice to the claim against the other co-judgment- debtors, namely, Messrs Kishan Chand Megh Raj. This position was contested before the Ufficial Receiver and it was said that the settlement which was entered into with Messrs Lakhmi Chand Lal Ghand operated to wipe out the liability of Messrs Kishan Chand Megh Raj and, therefore, the petitioner Bank was not entitled to maintain any claim against the aforesaid insolvents. The Official Receiver having accepted that position, the Bank approached the Insolvency Judge under section 68 of the Provincial Insolvency Act for an adjlidication on the point. The Insolvency Judge held that the payment having been received from Messrs Lakhmi Chand Lal Chand in lull and final settlement of the decretal amount, the insolvents who were the co-judgment-debtors were absolved from all liabilities. The learned Additional District Judge, in appeal, came to the same conclusion after admitting the copy of the decree against Messrs Lakhmi Chand Lal Chand in additional evidence. The learned Additional District Judge, in appeal, came to the same conclusion after admitting the copy of the decree against Messrs Lakhmi Chand Lal Chand in additional evidence. In coming to that conclusion the learned Judge relied largely on a letter produced by the Manager of the Bank which had been received from the Bombay office in which it was stated that the Bank had received Rs. 7. 500. 00 from Messrs Lakhmi Chand Lal Chand in full and final settlement. It was also observed that under the terms of the decree against Messrs Kishan Chand Megh Raj the payment made by Messrs Lakhmi Chand Lal Ghand was to be entered upon the decree and because the Bank accepted Rs. 7,500. 00 from Messrs Lakhmi Chand Lal Chand in full settlement of the decretal claim that payment must be taken to have been made in full settlement of the amount due under the decree. ( 2 ) MR. D. K. Kapur, who appears for the petitioner Bank says that the decision of the Courts below is not in accordance with law and that not only there has been misconstruction of the decree but also there has been mis-reading of the evidence and wrong application of the well-established principles of law. My attention has been invited to both the decrees, the relevant part of which has been set out before. According to Mr. Kapur, the legal effect of both the decrees was that a sum of Rs. 40,000. 00 together with interest and costs stood decreed against Messrs Lakhmi Chand Lal Chand and Messrs Kishan Chand Megh Raj jointly and severally. In other words, their liabilities under the two decrees was joint and several and that is why it was stated in both that any amount that may be realised from one defendant or the other be entered in the decree. The Bank s Manager, S. Kartar Singh, appeared as a witness and in his statement before the Official Receiver dated 2nd January, 1963 said that the Bank had realised Rs. 7,500. 00 from Messrs Lakhmi Chand Lal Chand in satisfaction of the decree passed against the insolvents and the other party. He was asked whether there was any settlement between the Bank and Messrs Lakhmi Chand Lal Chand regarding the decretal amount. He replied that he had received a letter from the Bombay Office that Rs. 7. 500. 7,500. 00 from Messrs Lakhmi Chand Lal Chand in satisfaction of the decree passed against the insolvents and the other party. He was asked whether there was any settlement between the Bank and Messrs Lakhmi Chand Lal Chand regarding the decretal amount. He replied that he had received a letter from the Bombay Office that Rs. 7. 500. 00 were accepted from Messrs Lakhmi Chand Lal Chand in full and final settlement. This letter had been received on 14th Feburary, 1961. This letter was. however, not traced apparently because it could not be found on the file. He produced a letter dated 27th July, 1962 in which it was stated that Rs. 7,5001. 00 had been accounted for as having been realised from Messrs Lakhmi Chand Lal Chand. Mr. Kapur has pointed to another letter which is at page 119 of the record dated 16th February 196 and which is addressed by the Bombay office of the Bank to its Delhi office in which it is stated as follows :- "we have to advise that a sum of Rs. 7,500. 00 has been received by us from Messrs Lakhmi Chand Lal Chand in full and final settlement of the decree against them. As this amount relates to the cheque of Rs. 40,000. 00 lodged by the above named firm which subsequently returned unpaid, we would request you to kindly reduce the amount of claim filed with the OfficialReceiver by Rs. 7,500. 00"mr. Hans Raj Sawhney, who appears for the Official Receiver, did not "particularly object to the authenticity or genuineness of this letter but it is somewhat unfortunate that it was not properly proved or exhibited in the Court below. Mr. Kapur has also. placed a large number of other letters which passed between the Bank and their solicitors in Bombay from which it can he gathered without any doubt that the settlement with Messrs Lakhmi Chand Lal Chaud was without prejudice to the claim against the insolvents. Those letters were neither produced nor proved in the lower Court. ( 3 ) SECTION 44 of the Contract Act provides that where two or more persons have made a joint promise, a release of one of such joint promisors by the promisee does not discharge the other joint promisor or joint promisors; neither does it free the joint promisors so released from responsibility to the other joint promisor or joint promisors. In Mool Chand v. P. Alwar Chetty it was held that a release by a decree-holder of some of the joint judgment-debtors from liability under the decree did not operate as a release of the other judgment- debtors from their liability. This was because of the rule embodied in section 44 of the Contract Act which is different from the rule of English Law which is not applicable to this country. In Chand Mall Babu v. Ban Behari Bose Mookerjee and Rankin JJ. held that joint liability implied joint and several liability and a creditor was entitled to a decree for the entire amount against anyone of the debtors and that the release of one of the several joint judgment-debtors did not affect the right of the decree holder to proceed against the other judgment-debtors. To the same effect is the law laid down in Daulat Ram v. Punjab National Bank Ltd That being the rule Mr Kapur says it was for the Official decerver to establish in the present case that by accepting a sum of Rs. 7,500. 00 from Messrs Lakhmi Chand Lal Chand and releasing them from liability, the liability of the insolvents under the decree was also wiped out. It is pointed out that the learned Additional Distirict Judge drew an adverse inference against the petitioner Bank lor not producing copies of the proceedings before the Court where the settlement was arrived at between the Bank and Messrs Lakhmi Chand Lai Chand and raised presumption against it. Secondly, the learned Judge ignored the provisions of section 44 of the Contract Act and by a curious process of reasoning which is given in the last but one paragraph of the judgment, came to the conclusion that because the Bank accepted Rs. 7,500. 00 from Messrs Lakhmi Chand Lai Chand in full satisfaction of the decretal claim the said payment should be taken as the payment of the full amount due under the decree against both Messrs Lakhmi Chand Lal Chand and the insolvents. ( 4 ) AFTER giving a pood deal of consideration to the entire matter, I am of the opinion that the approach of the Courts below was erroneous and that there is substance in the submissions of Mr. Kapur. ( 4 ) AFTER giving a pood deal of consideration to the entire matter, I am of the opinion that the approach of the Courts below was erroneous and that there is substance in the submissions of Mr. Kapur. The statement of the Manager as also the letter produced by the Manager have to be read in their context and it is not possible to infer that the settlement with Messrs Lakhmi Chand Lal Chand was intended to release the insolvents also from their liability under the decree. At any rate, it can well be said that it was for the Official Receiver to establish that the settlement which was made with Messrs Lakhmi Chand Lai Chand in respect of l. heir liability was intended or meant to satisfy the decree against the insolvents also. No such evidence was produced and, therefore, the ordinary rule incorporated in section 44 of the Contract Act would be applicable. ( 5 ) MR. Hans Raj Sawhney for the Official Receiver sought to support the judgment of the Court below on the ground that the maker of the cheque for Rs. 40,000. 00 was the firm of Lakhmi Chand Lai Chand and the Bank was a holder, the endorserbeing the insolvent firm and,therefore, under section 37 of the Negatioble Instruments Act it was the firm of Lakhmi Chand Lal Chand which was the principal debtor and the liability of the insolvent firm was only that of a surety. Under section 134 of the Contract Act as soon as Firm Lakhmi Chand Lal Chand came to be absolved from liability by acceptance of an amount of R. S. 7,500. 00 by the Bank, the insolvent firm stood aulomaucally released from liability. Mr. Kapur points out that the Bank was only a collector and in the circumstances it acted merely as an agent for the insolvent-firm vide in the matter of the Indian Companies Act and of the New Bank of Limited. He further says that no such pleas were taken up in the Court of first instance and all the necessary facts have not been investigated and that the sections relied upon by Mr. Sawhney can be of no avail to him after the two decrees passed, by the Bombay High Court. It seems that Mr. Kapur is right and it is not possible to entertain the afore" said contention of Mr. Sawhney can be of no avail to him after the two decrees passed, by the Bombay High Court. It seems that Mr. Kapur is right and it is not possible to entertain the afore" said contention of Mr. Sawhney at this stage.