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1980 DIGILAW 94 (ALL)

Salmi Uddin v. Shiam Lal

1980-01-18

S.D.AGARWAL

body1980
JUDGMENT S.D. Agarwal, J. -This is a plaintiffs second appeal arising out of a suit filed by the appellant for ejectment of the defendant respondent as also for recovery of Rs. 129/25 as arrears of rent. The case of the appellant was that the defendant respondent was a tenant of the house in suit at the rate of Rs. 2/- per mensem of Babu Lal, Lakshman Prasad and Smt. Sharda Devi. On 27th June, 1966 by a registered sale deed the house was sold in favour of the plaintiff appellant Salim Uddin. It was further alleged that the defendant respondent w.as in arrears of rent. The transferees had filed a suit against him for arrears of rent and ejectment. In that suit a compromise was arrived at between the parties and the respondents paid part of the arrears of rent and for the remaining Rs. 50/- he executed a promissory note and a receipt in favour of Babu Lal on 25-11-1963. On 20th August 1966 the plaintiff appellant also purchased the promissory note executed by the respondent in favour of Babu Lal. The suit was, therefore, filed for ejectment on the ground of default treating the sum of Rs. 50/-, which was the subject matter of promissory note as also arrears of rent. The respondent con- tested the suit on the ground that the sum of Rs. 50/-, for which a promissory note had been executed, ceased to bear the character of arrears of rent and it was in fact a fresh novation of contract and as such the respondents could not be treated as defaulter for non-payment of the sum of Rs. 50/-. 2. The trial court decreed the suit holding the respondent defaulter. Aggrieved the defendant respondent filed an appeal. The lower appellate court held that the amount of Rs. 50/- for which the promissory note was executed, had lost its character as arrears of rent and as such for non-payment of the same the respondent could not be held to be a defaulter. In view of this finding the decree of the trial court was set aside in part and the appeal was allowed and the relied for ejectment sought by the plaintiff appellant was not granted. The judgment of the appellate court is dated 31st March 1969. Against the said judgment the present appeal has been filed in this Court. 3. In view of this finding the decree of the trial court was set aside in part and the appeal was allowed and the relied for ejectment sought by the plaintiff appellant was not granted. The judgment of the appellate court is dated 31st March 1969. Against the said judgment the present appeal has been filed in this Court. 3. Learned counsel for the appellant has urged that the respondent was a defaulter in the eye of law as by the mere execution of the promissory note the original character of the debt, namely, arrears of rent, did not change and the promissory note was simply a collateral security for the payment of the amount. 4. I have heard learned counsel for the parties. Learned counsel in support of his argument has relied on Nazir Khan v. Ram Mohan Lal, AIR 1931 All 183, The question which was referred to the Full Bench in that case was as follows:- "Whether it is open to the party who has lent money on terms recorded in promissory note, which turns out to be inadmissible in evidence for want of proper stamp duty, to recover his money by proving orally the terms of the contract in the teeth of the provisions of Section 91, Evidence Act." 5. The question was answered in the negative by the Full Bench but in the body of the judgment it was accepted that if prior to the execution of a promissory note there is already a completed cause of action and the promissory note has been executed as a collateral security then even if the promissory note is inadmissible in evidence the suit will lie on the original cause of action. A case where the lending of the money and the execution of the promissory note are part and parcel of the same transaction the above principle would not apply. 6. A case where the lending of the money and the execution of the promissory note are part and parcel of the same transaction the above principle would not apply. 6. In the instant case in view of the compromise the arrears of rent were paid by means of a receipt and a promissory note was executed in order that Babu Lal may be able to recover the amount in case the amount is not paid on demand The execution of the receipt wiped out the arrears of rent and only a debt remained in existence evidenced by the promissory note and as such the principle laid down in the case of Nazir Khan (supra) would not apply as the promissory note was not executed as a collateral security. 7. Learned counsel has further relied on Jyoti Prasad v. Jahor Lal, AIR 1945 Cal 268. This case is also distinguishable on the same ground on which the Full Bench decision of this Court in Nazir Khan (supra) has been distinguished. 8. Sri G. P. Bhargava, learned counsel for the respondent, has relied on a recent decision of the Supreme Court in Ram Deo v. Umrao Singh, 1979 All WC 737. In this case the Supreme Court held that when there is an agreement in respect of arrears of rent the original character of the arrears of rent was lost and the amount thereafter became a debt which was payable in accordance with the terms of agreement. The principle laid down in the case of Ram Deo (supra) fully applies to the present case. In the instant case the suit was filed for recovery of arrears of rent and ejectment. A compromise was arrived at between the landlord and the tenant. Under that compromise a part of the arrears were paid in cash and for the rest of the arrears a receipt was issued by the landlord in favour of the tenant which wiped out the arrears of rent and a promissory note was thereafter executed by the tenant in favour of the landlord creating a fresh debt which could be realised by Babu Lal, the then landlord, by means of enforcing the promissory note. In view of the fresh contract between the parties the view taken by tire lower appellate court that the character of arrears of rent had changed and a fresh contract had been arrived at is correct in law. In the result the respondents could not have been held to be a defaulter in the eye of law. In this view of the matter the submission made by the learned counsel does not have any substance. 9. In the result the appeal fails and is dismissed but in the circumstances parties are directed to bear their own costs.