Indran Ramaswami Pandia Thalavar v. Anthappa Chettiar And Ors.

1. Upon the finding that the promissory note sued on was executed by, the first defendant on the date it bears, viz., the 6th of July 1898, and therefore, after he had ceased to be a ward of the Court of Wards, and had attained his majority, the question for determination is whether the claim of the plaintiff is sustainable in law. With reference to the decision of this question, the only facts relied on and proved are, the advance by the plaintiff to the 1st defendant of Rs. 2,500 on the 29th September 1895, when the 1st defendant was a minor, the execution by him of the promissory note bearing that date for the amount with interest at one per cent per mensem, and the execution, as aforesaid, after the first defendant had ceased to be a minor, of the plaint note, in settlement of the earlier one.

2. On behalf of the plaintiff, it was urged that the said advance being within the words of Section 2, Clause (d) of the Indian Contract Act, "an act done at the desire of the promisor" the 1st defendant's promise under the present note was supported thereby and that the invalidity of the earlier promise did not prevent the advance so operating as consideration for the latter.

3. On behalf of the 1st defendant, a laboured attempt was made to show that, notwithstanding the plaintiff parted with his money at the request of the defendant, the payment was no consideration within the meaning of the said definition. I confess I could not altogether follow the argument.

4. It seemed to amount to saying that the words "at the desire of the promisor" in the definition contemplate a promisor who at the time possesses contractual capacity. But consideration and contractual capacity being co-ordinate constituents of a contract, to import the latter element into the definition of the former is a mode of construction vicious on the face of it. It must undoubtedly be conceded that the advance in question did form at the time it was made a consideration within the meaning of the definition relied oh. Nevertheless, there remains the question whether that could in law be treated as consideration for the present note. Now the term 'consideration' in the law of contracts necessarily implies a promise with reference to which it is a consideration. This correlation involves, as a consequence, that what is a consideration operates as such bat once. The very phrase "consideration moves or passes" constantly used by lawyers, affords in ray judgment proof of this. What has once passed or moved cannot be taken as passing or moving backwards and forwards again and again. Were it otherwise, it would follow "once a consideration always a consideration" and the self-same thing which was good or valuable consideration for one promise would operate as consideration for any number of promises made time after time without any necessary connection between each other and forming entirely distinct transactions. This is virtually the overthrow completely of the doctrine of consideration. It would be unnecessary to pursue this further, but for Mr. Sundara Aiyar having earnestly maintained the contrary. Take the case of an obligor discharging the loan contracted by him under a bond and suppose he executes a second bond for the amount originally advanced and repaid, reciting the original advance as the consideration and without any other consideration. Or, take another case, the lender dispensing with the repayment of money due to him and returning the bond cancelled and at some subsequent time the borrower passing a second bond for the advance without any fresh consideration. It would be impossible to argue in either case that the second promise was other than a nudum factum. These show obviously that the advance once made had no operation as consideration except with reference to the original promise which followed it. Logically, therefore, a different view cannot be urged with reference to a case like the present and the advance made by the plaintiff to the defendant in September 1895 should be held to have spent its force as a consideration as soon as the promissory note of that date was executed, unless such a conclusion is obviated by the fact that that note was void on account of the absence of contractual capacity on the part of the defendant, in other words, unless a consideration passing from a pomisee to a promisor should in cases where the latter's promise is of no legal effect and is inoperative, be treated as retaining sufficient validity until a valid promise with reference to it takes place. Of course there is nothing as a matter of abstract reasoning to prevent such a rule being adopted. It was done in Flight v. Read 1 H. & C. 703 where the majority held that an advance made while the statute of Anne against usury was in force was consideration for a bill of exchange given after the repeal of the statute for the amount thereof in renewal of a bill which had been given when the statute was in force, though the latter was under the express terms of the statute void, the statute having made loans contrary to its terms illegal and punishable. But the opinions of able text writers as to this decision are not unanimous. Anson seems disposed to treat the decision as sound on the ground that the party receiving the benefit may waive any objection that existed to' the enforcement of the original promise (Contracts, 9th edition page 109). Langdell supports the decision on a different ground by treating the second bill as a payment of the prior though void bill. (Summary of the Law of Contracts, Section 76). Pollock questions the decision altogether. He points out that as a decision under the English law it was wrong inasmuch as the advance was a past act which under that law is not good consideration. He further observes that the true view of the facts in such a case should be that the consideration for a second bill is the giving up of the prior bill, and as the latter was void, the second bill was without consideration (Pollock's Contracts, 7th edition, page 676). But the authority of Flight v. Read 1 H. & C. 703 what it may in England, the view of the majority might be followed here if it were consistent with the provisions of the Indian Contract Act; but that does not seem to be so. From the passages in Anson on Contracts referring to that case, it will be seen that the learned author treats instances of illegal transactions, such as the one in question in that case, agreements by persons wanting in contractual capacity, agreements by bankrupts after they had obtained final discharge to pay their debts and promises to pay time-barred debts, as all standing on the same footing. Now one of these, i.e., the last, is expressly provided for by Section 25, Clause (3) of our Act; and the section necessarily implies that such a promise is one without consideration which it could not be, if in the view of the framer of the Act, the consideration for the barred debt was to be taken as revived having regard to the operation of the Statute of Limitation with reference to that-debt. The illustration (e) to Section 25 also strongly supports this since the promise to pay Rs. 500 is therein referred to the debt and not to the original advance of Rs. 1,000. This section is of course exhaustive and the other instances mentioned by Anson must be held not intended to be made contracts under the Indian Law. Considering that as regards agreement by infants the framers of the Contract Act departed from the English Law as it stood at the date of the passing of that Act and made them void and not merely voidable they were but consistent in not clothing renewals of such agreements after the infants ceased to be such with enforceability. No doubt, acts done in fulfilment of an imperfect obligation, i.e., one which is an exception to the rule that ubi jus ibi remedium est are valid and may be the foundation of new rights and liabilities by way of consideration for a new contract or otherwise. A debt barred by the Statute of Limitation falls under such a category as shown by Pollock's Contracts, 7th edition, page 642. But infant's promise under the Indian Law does not give rise to an imperfect obligation, and it is, therefore, consistent with principle to hold that a renewal of such a promise creates no right. This would seem to account for Section 25 excluding such a case among others.

5. In my opinion, therefore, it follows that the promissory note sued on was without consideration because the earlier promise which the later purports to be in settlement of, was void, and as regards the advance, its force as consideration had become exhausted when it was followed by the promise to repay it made by the minor simultaneously with it.

6. The decree of the lower appellate Court must, therefore, be reversed and the suit dismissed. Each party should bear his own costs throughout.

Moore, J.

7. I concur.