L.H. Jenkins, K.C.I.E., C.J.

1. The plaintiff Municipality has brought this suit to recover a sum of Rs. 10,853-5-6 from the defendants, alleging that this sum is due from defendant 1 as the person to whom the right of levying and collecting certain tolls and taxes had been granted, and that defendant 2 was a surety for defendant 1.

2. The defence is that the Municipality had by a meeting on the 17th June, 1897 passed a resolution, subsequently communicated to defendant 1, which had the effect of dispensing with, or remitting the performance by him of so much of his obligations as give rise to the present suit, and the surety relies on the provisions of Chapter VIII of the Indian Contract Act as entitling him to a discharge from liability. The case was heard by the First Class Subordinate Judge at Nasik with the result that he passed a decree for the plaintiff Municipality for Rs. 7,900. It came on appeal to this Court, and as it was by no means clear that the constitution of the meeting of the 17th of June 1897, had been properly and thoroughly investigated, the following issues were sent down:--

(1) Had notice been given to the members of Municipality of the business to be transacted at the meeting of the Special General Committee of 17th June, 1897, and did the proposed remission of Rs. 7,000 form part of such business

(2) Was the meeting of the Special General Committee of 17th June, 1897, a properly constituted meeting

(3) Had that meeting authority to pass the resolution for remitting Rs. 7,000

(4) Was this resolution communicated to the defendant 1, and, if it was, when

3. The finding on the 1st, 2nd and 3rd issues was in the affirmative; the finding on the 4th was that the resolution was communicated to defendant 1 on or about the 24th June, 1897; i.e., about a week after it was passed.

4. With those findings the case has now come back to us.

5. Now from the facts which have been elicited it is clear, and indeed it is conceded on both sides, that the meeting of the 17th of June was an adjourned meeting, and a continuation of that called for the 12th June, so that if the meeting of the 12th Juno was not properly convened, then that of the 17th is equally defective. The mode of calling meetings is prescribed by Bombay Act II of 1884, which in sub-section (2) of section 27 provides that "the President may, whenever he thinks fit, and shall, upon the written request of not less than one-fourth of the Commissioners, call a Special General Meeting."

6. The first question, therefore, that we have to ask ourselves is this: Was the meeting called by the President We are clearly of opinion that it was not; and however anxious we may be to overlook technicalities, it seems to us impossible for us to treat this meeting as one called by the President within the meaning of that section. But then it is argued by the Advocate General that even if that be so, still the defect is cured by sub-section 17; but we think that is not so; in the circumstances of this case the omission is not one that can be thus got over. But oven were this not so, the defence, it is contended, must fail, as there had been no remission or dispensation within the meaning of section 63 of the Contract Act, first because there was no communication of the resolution and, secondly, because the provision of section 30 of Bombay Act II of 1884 has not been observed. In the view that we take of the case, it is unnecessary to consider whether there was a communication of the resolution, and we will at once proceed to the other objection. Now section 30 provides that "the President of a Municipality may, on behalf of the Municipality, enter into any contract or agreement in such manner and form as, according to the law for the time being in force, would bind him, if such contract or agreement were on his own behalf: provided that the amount or value of such contractor agreement shall not exceed five hundred rupees." Then it goes on to' provide (and it is with this part of the section that we are concerned, and with this part alone) that "every other contract or agreement on behalf of a Municipality shall be in writing, and shall be signed by the President and by two other Commissioners and shall be sealed with the common seal of the Municipality." Therefore we have to ask ourselves whether a dispensation or remission under section 63 is a contract or agreement.

7. Now we must first turn to section 2 of the Contract Act, which provides how certain terms are to be interpreted. We are told in clause (a), what amounts to a "proposal" and a "promise." According to clause (b), "when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise." Then in clause (f) it is provided that "promises which form the consideration or part of the consideration for each other are called reciprocal promises."

8. Clause, (e) says that "every promise and every set of promises, forming the consideration for each, is an agreement." It is only by means of a promise that there can be a dispensation or remission within the meaning of section 63; there must be a proposal of the dispensation or remission, which is accepted. But a promise as we read clause (e) is an agreement; for the words "forming consideration for each other" in clause (e) cannot qualify the words "every promise"; they relate to the words "every set of promises." Moreover, we think, it involves no straining of language to speak of a promise as an agreement; for an agreement does not necessarily (as was argued) imply consideration.

9. In support of the contention that consideration is an essential element of an agreement, we were referred to section 10 of the Contract Act; but the section does not (in our opinion) suggest that inference, for it is there provided that "all agreements are contracts if" (among other things) "they are for a lawful consideration." But when we turn to section 25 of the Act, it is made clear beyond doubt that consideration is not an essential part of an agreement, because we have a provision that "an agreement made without consideration is void" except in the cases there indicated. We think that the word "agreement" was selected in the interpretation clause as a compendious mode of referring both to "a promise" and "a set of promises forming the consideration for each other," in the Act. Therefore we hold that assuming there was a legal resolution, and that it was communicated as alleged, still inasmuch as a dispensation or remission under section 63 requires an agreement or contract, the resolution was of no legal effect since the provisions of section 30 of Bombay Act II of 1884 have not been observed.

10. This discussion leads us to consider a point, which was raised before us for the first time; and then only as a result of investigations made in the course of the hearing before us. It appears that the contract under which defendant 1 became entitled to levy and collect the tolls was not under seat, and so failed to comply with section 30 to which I have already alluded. The Advocate General, relying for this purpose on section 23 of the Indian Contract Act, has asked us to hold that there was no contract at all under which the plaintiff Municipality can claim. Apart from the fact that this is travelling outside the pleadings of the parties, we think, there is another reason why we cannot give effect to the contention. It is well recognized law in England that though a contract by a corporation must ordinarily be under seal, still where there is that which is known as an executed consideration, an action will lie though this formality has not been observed. Notwithstanding section 23 of the Indian Contract Act, we see no reason for not adopting the same view of the law here. For we think when, regard is had to the principle on which the English Courts have proceeded, it is clear we do not run contrary to any provision of section 23 of the Contract Act in holding that in this country too, as in England, where there is an executed consideration, a suit will lie even in the absence of a sealed contract. And on the facts of this case we hold that there has been an executed consideration. It is, however, at the same time manifest that the doctrine we have here applied would on the facts in no way assist the defendant's contention that the performance of his promise has been legally dispensed with or remitted.

11. It now only remains for us to consider the position of the defendant 2, who pleads that he, as a surety, is discharged from liability on the ground that either there has been a variation of the contract within the meaning of section 133 of the Indian Contract Act or there has been a contract between the creditor and the principal debtor within the meaning of section 135. But the answer appears to us to be a very short one. There has been no variation and no contract. A variation, in the circumstances with which we have to deal, implies a contract: and there has been no contract binding on the Municipality for the reason that provisions of section 30 of the Bombay District Municipal Act II of 1884 have not been, observed, nor to this phase of the case has the doctrine of executed consideration any application.

12. For these reasons we think the decree of the lower Court must be confirmed with costs.

(1) Sections 27(2), (17) and 39 of the District Municipal Act (Bom. Act II of 1884) : 27. The following provisions shall be observed with respect to the proceedings of a Municipality.

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(2) The President may, whenever he thinks fit, and shall, upon the written request of not less than one-fourth of the Commissioners, cull a Special General Meeting.

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(17) No act of a Municipality, or of any Committee, or of any person acting as a Commissioner, or as a President, Vice-President, or Chairman, shall be deemed to be invalid by reason only of some defect in the appointment of such Municipality, Committee, President, Vice-President, Chairman or Commissioner, or on the ground that they, or any of them, were disqualified for the office of Commissioner, or that format notice of the intention to hold a meeting of a Municipality, or of a Committee, was not duly given, or for any other such mare informality.

30. The President of a Municipality may, on behalf of the Municipality, enter into any contract or agreement in such manner and form as, according to the law for the time being in force, would bind him if such contract or agreement were on his own behalf: provided that the amount or value of such contract or agreement shall not exceed five hundred rupees.

Every other contract or agreement on behalf of a Municipality shall be in writing and shall be signed by the President and by two other Commissioners and shall be sealed with the common seal of the Municipality.

No contract or agreement not executed as in this section provided shall be binding on a Municipality.