Case: Lala Kapurchand Godha &amp; Others Vs. Mir Nawab Himayatalikhan Azamjah

effectual only if authorised or ratified by the debtor. In India, however, the words of S. 41 of the Contract Act leave no room for doubt, and when the appellants have accepted performance of the promise from a third person, they cannot afterwards enforce it against the promisor, namely, the respondent.9. When a statute clearly covers a case, it is hardly necessary to refer to decisions. In deference, however, to the arguments advanced on behalf of the appellants, we refer to the two decisions on which learned Counsel for the appellants has relied. One is the decision in Day v. Melea, (1889) 22 QBD 610. In that case the plaintiffs made a claim against the defendants for a sum of money as damages for breach of contract; the defendants sent a cheque for a less amount stating that it was in full payment of all demands. The plaintiffs kept the cheque stating they did so on account and brought an action for the balance of their claim. It was held that keeping the cheque was not as a matter of law conclusive that there was an accord and satisfaction of the claim; but that it was a question of fact on what terms the cheque was kept. We do not think that that decision is of any help to the appellants. As Lord Justice Bowen said in (1889) 22 QBD 610."If a person sends a sum of money on the terms that it is to be taken, if at all, in satisfaction of a larger claim; and if the money is kept it is a question of fact as to the terms upon which it is so kept. Accord and satisfaction imply an agreement to take the money in satisfaction of the claim in respect of which it is sent. If accord is a question of agreement, there must be either two minds agreeing or one of the two persons acting in such a way as to induce the other to think that the money is taken in satisfaction of the claim, and to cause him to act upon that view. In either case it is a question of fact." (p. 613)We have already referred to the facts which are clearly established by the evidence in this case. Those facts clearly established that the appellants took the second instalment in full satisfaction of their claim. The second decision relied on behalf of the appellants Neuchatel Asphalte Co. Ltd. v. Barnett, (1957) 1 All ER 362 also proceeded on a similar ground. In that case the claim of the plaintiff company amounted to ?259 but the defendant raised some minor queries which might reduce it by ? 14 or ? 15. The defendant then sent a cheque for ? 125 and stated in a covering letter that this sum was "on account" pending the receipt of the plaintiffs reply to outstanding queries in connection with the work done. Some time later the defendant enclosed a further cheque for? 75 and on the back of the cheque was endorsed in full and final settlement of the account." The cheque was accepted by the plaintiff company, which later sued for the balance of the amount of the claim. It was held that having regard to the correspondence and the surrounding circumstances, there was no intention on the part of the plaintiff company to accept the cheque for ? 75 in full satisfaction of the plaintiffs claim, because the words "in full and final settlement of the account" typed on the back of the cheque were inconsistent with the main object and intention of the transaction particulars since (a) the covering letter sent by the defendants plainly imported that the cheque was sent only on account and not in full and final settlement, and (b) it could not reasonably be supposed that in the circumstances, the plaintiff company had agreed to a reduction of the amount claimed. The facts of the case before us are entirely different. The appellants were clearly and unambiguously told that unless they gave a full satisfaction of their claim, they would not be paid the amount. The appellants were left in no doubt as to the condition on which payment would be made to them. The appellants clearly accepted the condition and recorded full satisfaction on all the promissory notes. It is now impossible to accept the position that the appellants reserved their right to sue the respondent for the balance of the amount. In Hirachand Punamchand v. Temple, (1911) 2 KB 330 the father of a debtor wrote to the creditor offering an amount less than that of the debt in full settlement of the debt end enclosing a draft for that amount. The creditor cashed and retained the proceeds of the draft and afterwards brought an action against the debtor for the balance of the debt. It was held that the creditor must be taken to have accepted the amount received by him on the terms upon which it was offered and therefore he could not maintain the action. The case was considered under the English law and it was observed that assuming that there was no accord and satisfaction in the strict sense of the law in England, it could still be held that the creditor had ceased really to be holder of the negotiable instrument on which he sued. With the niceties of English law in the matter of accord and satisfaction we are not concerned. The position in the present case is that the appellants must have known that they could receive the second instalment and retain the first instalment by accepting the condition on which the sum of Rs. 20 lacs was offered to them, namely, that they must record a full satisfaction of their claim. They accepted the money on the condition on which it was offered and it is not now open to them to say, either in fact or in law, that they accepted the money but not the condition.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 0

Reasoning from the judgment:
0[ds]We may here state that no plea was raised by the appellants to the effect that the endorsements on the promissory notes had been obtained by coercion, and no issue was struck between the parties as to the endorsements on the promissory notes having been obtained by coercion. That being the position, what is the effect of Madhava Raos evidence? The clear effect is that the authorities who were paying the money in discharge of the debt of the respondent made it clear that they would pay the money only if a full satisfaction of the claim was given by the appellants. The appellants after some initial protests agreed and duly discharged all the promissory notes by endorsing thereon full payment and satisfaction. The question of coercion was introduced as and by way of after-thought. Two facts seem to be clearly established by the evidence of Madhava Rao. One is that the authorities refused to pay the second instalment unless full satisfaction of the claim was endorsed in accordance with the recommendation of the Committee; the second is that the appellants did record full payment in satisfaction of the promissory notes before they received the money. In our opinion, these two facts clearly established the case of the respondent that the appellants had given a full discharge when they received the second instalment. Indeed, the evidence of Madhava Rao is supported by the evidence of Kapurchand Godha. Kapurchand Godha said that when he presented the receipt Ex. C to Madhava Rao the latter said that he would not accept the receipt in that form. Madhava Rao then took Kapurchand to the Accountant-General. Kapurchand was asked to produce the promissory notes and was told that unless the promissory notes were endorsed with full satisfaction no payment would beevidence is in accord with the evidence of Madhava Rao and again establishes that the appellants when they received the second and the last instalment of Rs. 8,75,000/- gave a full discharge of their claim and the plea of coercion was later introduced as and by way of an afterthought.7. There was some difference of evidence is to whether Ex. C. bore the signature of Kapurchand when it was first presented to Madhava Rao or whether the signature was later put on it. With that difference we are not now concerned. Nor are we concerned with certain minor discrepancies between the evidence of the two witnesses referred to above. The substantial result of the evidence of the two witnesses to whom we have referred is that whatever reluctance Kapurchand might have had in accepting Rs. 20 lacs in full satisfaction of the claim of the appellants, he ultimately agreed to do so. Not only did he agree, but he actually endorsed full satisfaction and payment on all the promissory notes and thereafter he received payment of the second instalment of Rs. 8,75,000/- which along with the first instalment of Rs. 11,25,000/- made up the sum of Rs. 20 lacs. On these facts which are established by the evidence given on behalf of the appellants themselves, the only conclusion is that there was full satisfaction of the claim ofseems to us that this case is completely covered by S. 63 and illustration (C) thereof. The appellants having accepted payment in full satisfaction of their claim are not now entitled to sue the respondent for the balance. A reference may also be made in this connection to S. 41 of the Contract Act under which when a promise accepts performance of the promise from a third person, he cannot afterwards enforce it against the promiser. There is some English authority to the effect that discharge of a contract by a third person is effectual only if authorised or ratified by the debtor. In India, however, the words of S. 41 of the Contract Act leave no room for doubt, and when the appellants have accepted performance of the promise from a third person, they cannot afterwards enforce it against the promisor, namely, the respondent.9. When a statute clearly covers a case, it is hardly necessary to refer to decisions. In deference, however, to the arguments advanced on behalf of the appellants, we refer to the two decisions on which learned Counsel for the appellants has relied. One is the decision in Dayv. Melea, (1889) 22 QBD610. In that case the plaintiffs made a claim against the defendants for a sum of money as damages for breach of contract; the defendants sent a cheque for a less amount stating that it was in full payment of all demands. The plaintiffs kept the cheque stating they did so on account and brought an action for the balance of their claim. It was held that keeping the cheque was not as a matter of law conclusive that there was an accord and satisfaction of the claim; but that it was a question of fact on what terms the cheque was kept. We do not think that that decision is of any help to thefacts of the case before us are entirely different. The appellants were clearly and unambiguously told that unless they gave a full satisfaction of their claim, they would not be paid the amount. The appellants were left in no doubt as to the condition on which payment would be made to them. The appellants clearly accepted the condition and recorded full satisfaction on all the promissory notes. It is now impossible to accept the position that the appellants reserved their right to sue the respondent for the balance of the amount. In Hirachand Punamchand v. Temple, (1911) 2 KB 330 the father of a debtor wrote to the creditor offering an amount less than that of the debt in full settlement of the debt end enclosing a draft for that amount. The creditor cashed and retained the proceeds of the draft and afterwards brought an action against the debtor for the balance of the debt. It was held that the creditor must be taken to have accepted the amount received by him on the terms upon which it was offered and therefore he could not maintain the action. The case was considered under the English law and it was observed that assuming that there was no accord and satisfaction in the strict sense of the law in England, it could still be held that the creditor had ceased really to be holder of the negotiable instrument on which he sued. With the niceties of English law in the matter of accord and satisfaction we are not concerned. The position in the present case is that the appellants must have known that they could receive the second instalment and retain the first instalment by accepting the condition on which the sum of Rs. 20 lacs was offered to them, namely, that they must record a full satisfaction of their claim. They accepted the money on the condition on which it was offered and it is not now open to them to say, either in fact or in law, that they accepted the money but not the condition.