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Kartick Chandra Mondal v. Sm. Anila Bala Devi And Anr.
Factual and Procedural Background
These two appeals arise from two applications filed under section 47 of the Code of Civil Procedure by Kartick Chandra Mondal, the lessee, seeking extension of time to pay the second instalment under compromise decrees passed in two rent suits. The original tenants, who were judgment-debtors, had granted permanent leases of the properties to the appellant before the second instalment became due. The first instalment was paid, but neither the original judgment-debtors nor the lessee paid the second instalment by the stipulated dates. Applications were filed for extension of time and permission to deposit the overdue instalments with interest. The trial court allowed the extension and permitted deposit with interest by a specified date, contingent on dismissal of execution cases upon full satisfaction. The decree-holder appealed, and the Subordinate Judge set aside the trial court’s orders, directing the execution cases to proceed. The lessee then preferred these appeals.
Legal Issues Presented
- Whether the Court has jurisdiction to extend time for payment of an instalment fixed in a consent decree, particularly when a penal clause in the nature of forfeiture is involved.
- Whether equitable jurisdiction to relieve forfeiture by extension of time is available when the right affected by the penal clause was not created by the compromise decree but is a pre-existing right.
Arguments of the Parties
Appellant's Arguments
- The Court has jurisdiction to extend time for payment of an instalment fixed in a decree if there is a penal clause amounting to forfeiture.
- It is competent for the Court to relieve forfeiture by granting extension of time even when the decree is based on a compromise.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Printing Company v. Sampson | Recognition of the paramount public policy of freedom of contract with noted exceptions. | Supported the principle that courts generally do not interfere with contracts but exceptions exist. |
| Wentworth v. Bullen | Time not being of the essence preserves court jurisdiction to extend time despite a consent decree. | Confirmed that the contract remains subject to equitable incidents even when incorporated in a decree. |
| Kandarpa Nag v. Banwarilal Nag | Court’s jurisdiction to grant relief against forfeiture in cases involving compromise decrees with penal clauses. | Allowed equitable relief by extending time where a sale or penal stipulation was part of the compromise decree. |
| Krishna Bai v. Hari Gobind | Equitable jurisdiction to relieve forfeiture by extension of time despite incorporation in a consent decree. | Held that such jurisdiction is not ousted if time is not expressly of the essence. |
| Surendra Nath Banerjee v. Secretary of State for India | Extension of time allowed where a lease was created and time was not of the essence, despite a decree. | Applied the equitable jurisdiction to extend time in landlord-tenant relationships created by decree. |
| Balambhat Bin Ravjibhat v. Vinayak Ganpatrav Patvardhau | Extension of time and relief against forfeiture in landlord-tenant relationships created by decree. | Supported the principle of equitable relief in penal clauses within decrees creating tenancy. |
| Mohiuddin v. Kashmero Bibi | Relief against forfeiture relating to rights granted under a decree subject to penal conditions. | Recognized equitable jurisdiction to extend time where forfeiture affects rights created by decree. |
| Lachiram v. Janayesa | Limitations on court jurisdiction to extend time fixed in a compromise decree when no title or tenancy relationship is created by the decree. | Held that equitable jurisdiction does not extend to pre-existing rights not created by the decree. |
Court's Reasoning and Analysis
The Court examined the principle that courts generally uphold freedom of contract and do not vary terms of a compromise decree without parties' consent. However, equitable jurisdiction exists to relieve forfeiture by extending time when a penal clause is involved, provided time is not expressly of the essence and the right affected is created by the decree itself. The Court reviewed precedents where such relief was granted in cases involving sales or landlord-tenant relationships established by the decree. Conversely, the Court noted the limitation that equitable jurisdiction does not extend to penal clauses affecting pre-existing rights not created by the decree. In the present appeals, since the rights subject to forfeiture were pre-existing and not created by the compromise decrees, the Court found it impermissible to grant extension of time. Thus, the Subordinate Judge’s decision disallowing the extension was upheld.
Holding and Implications
The appeals are dismissed with costs.
The direct effect of this decision is that the lessee-appellant is not entitled to an extension of time to pay the second instalments under the compromise decrees, and the execution proceedings may continue. No new precedent is established beyond reaffirming the limitation on equitable jurisdiction to extend time where the right affected by penal clauses is not created by the decree itself.
The Judgment of the Court was as follows:
1. These two appeals are on behalf of a lessee from a tenant judgment-debtor and arise out of two applications filed under sec. 47 of the Code of Civil Procedure by the said lessee for extension of time.
2. The facts necessary for the determination of the points arising in this appeal may be shortly stated.
3. Compromise decrees were passed in two rent suits (R.S 1025 of 1942 in respect of a jama of Rs. 47 and R.S 1026 of 1942 in respect of a jama of Rs. 114-15-0). The amount found due in each of these suits was to be paid in two instalments, the first of such instalments being payable by Sraban, 1349, and the second by Falgun following. In default, the landlord decree-holder was to obtain khas possession of the holdings in suit. The first intalment was duly paid but before the instalment became due, the two tenants' judgment-debtors granted on receipt of a heavy premium on the 19th Falgun, 1349, permanent leases of the two jamas to one Kartick Chandra Mondal, who is the Appellant in this Court. Neither the original judgment-debtor nor the lessee Kartick Chandra Mondal did pay up the second instalment as stipulated in the consent decrees. On April 21, 1943, applications purporting to be under sec. 47 of the Code of Civil Procedure and sec. 66 (3) of the Bengal Tenancy Act were filed by Kartick Chandra Mondal the lessee for extension of time and for permission to deposit the second instalment which ought to have been paid by February-March, 1943.
4. The learned Munsif allowed extension of time and permitted the lessee applicant to deposit the last instalment due under each of the two decrees in question with interest at 10 per cent. per annum, from the date on which each instalment fell due up to the date of deposit, such deposit to be made within June 7, 1943. He further directed that if the deposits were made within the said date, the execution cases would be dismissed on full satisfaction. Two appeals in the two cases were preferred by the decree-holder and the learned Subordinate Judge set aside the orders passed by the trial Court dismissing the Misc. cases. The execution cases were directed to proceed. The present appeals have been preferred by the lessee Kartick Chandra Mondal.
5. It is urged on behalf of the Appellant that the Court has jurisdiction to extend time for the payment of an instalment, even if such an instalment had been fixed in a decree but only if there be a penal clause in the agreement and if that penal clause be in the nature of a forfeiture. It is argued that it is competent for the Court to relieve forfeiture by extension of time even though a consent decree had been passed on compromise.
6. As expressed by Jessel, M.R “You have this paramount public policy to consider that you are not likely to interfere with…. freedom of contract” [Printing Company v. Sampson(1)]. But there are exceptions. Further, the ordinary rule is that when a compromise is brought into existence by act of parties, which is ultimately incorporated in the decree, no term in such a decree can be varied without the consent of the parties concerned. It is also well settled that unless time is of the essence of the contract, the jurisdiction of the Court to extend time is not taken away in such particular cases where the Court can interfere inspite of the contract only because a decree has been passed on a contract. The contract of the parties is not the less a contract and subject to the incidents of a contract though there is superadded the command of a Judge” [Parke B. in Wentworth v. Bullen(2)]. The Court has jurisdiction to grant relief against forfeiture and such jurisdiction is not ousted by the circumstance that the agreement has been followed by a consent decree only if the nature of the agreement is such as entitles the Court to grant relief against forfeiture on equitable grounds [Kandarpa Nag v. Banwarilal Nag(3)]. Such exception to the general rule is made by Courts of Equity when in a compromise a penal clause in the nature of a forfeiture is included and though the same fact has been incorporated in a decree it has been held [Krishna Bai v. Hari Gobind(4)] not to stand in the way of the Court exercising its equitable jurisdiction to relieve forfeiture by extension of time, provided always time is not in terms of the agreement of an essence of the contract. In Surendra Nath Banerjee v. Secretary of State for India(4a) a lease was created by an agreement and on non-fulfilment of a term an ejectment was to be made and as time was not of the essence of the contract the Court could and did extend the time fixed, though on the compromise a decree had been passed.
7. It will, however, be noticed that in this line of cases the jurisdiction of the Court in extending time was exercised where by the compromise decree either a sale had taken place, subject to certain conditions and penal stipulations [Kandarpa Nag v. Banwarilal Nag] or when a relationship of landlord and tenant was created by the decree itself subject to certain penal reservations [Surendra Nath Banerjee v. Secretary of State for India] and Balambhat Bin Ravjibhat v. Vinayak Ganpatrav Patvardhau(5)] or where the for feiture relates to some other rights given under the decree itself subject to such penal conditions [Mohiuddin v. Kashmero Bibi(6)]. This principle of extending time by relieving forfeiture does not appear to have been extended in the case of a compromise decree by which the right, which is meant to be affected by the application of a penal clause of forfeiture, is not created in favour of one of the parties by the compromise decree itself. It was on the other hand definitely held by Scott, C.J, in Lachiram v. Janayesa(7) that the jurisdiction of the Court to extend time, fixed in a compromise decree, cannot be involved where neither the title nor the relationship of landlord and tenant is created by the decree itself. This limitation to the exercise of the equitable jurisdiction in such cases to relieve forfeiture is noticed by Mookerjee, J., in Surendra Nath Banerjee v. Secretary of State for India and by Jenkins, C.J, in Krishna Bai v. Harigobinda.
8. In the cases now before me the right which is meant to be destroyed on the application of the penal clause was a right not created by the compromise decrees themselves but were pre-existing ones. In view of the limitation to the exercise of equitable jurisdiction to extend time as stated above it is not permissible for the Court to allow the prayer for extension of time. The right itself being one not created by the agreement which was followed by the compromise decree but being a pre-existing right the penal clause cannot be avoided by the Court exercising equitable jurisdiction and extending time there-by.
9. The learned Subordinate Judge was accordingly correct in disallowing the extension of time prayed for.
10. These appeals must accordingly be dismissed with costs.
N.D.R
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