Introduction

According to Section 63, “every promisee may dispense with or remit, wholly or in part, the
performance of the promise made to him, or may extend the time for such performance, or
may accept instead of it any satisfaction which he thinks fit.”1

This implies that the section provides two ways of discharging the contract to the promisee:
“remission” and “waiver”. Remission means approval of a “lesser performance” than what
was excepted as per the contract. He can also “extend the time” of such performance or
“approve instead it of any satisfaction which he thinks is fit”. A promise to do so will be
binding even though there is no consideration for it.

A contract may be exculpated by agreement between the parties to waive their rights come to
light from the contract. Thus, in case of a waiver, the person who is entitled to any right
under the contract. Extension of time for performance of the contract is merely a waiver to
the extent of substituting the extended time for the original time and not utter destruction of
the essential character of time.2

Scope of the Section

This segment makes a gaping deviation from Common Law. In England, to reiterate an
authentic illustration, “it is competent for both parties to an executory contract by mutual
agreement, without any satisfaction, to discharge the obligation of that contract”; in other
words, as reciprocal promises are ample consideration for each other, so are reciprocal
damages.3 "But an executed contract cannot be discharged except by release under seal, or by
a performance of the obligation, as by payment where the obligation is to be performed by
payment"; but, by the law merchant, the responsibility of a “negotiable instrument” may be
dismissed by a simple waiver4. The aim of this section to modify the rule of the Common
Law is transparent and has been acknowledged in several Indian cases.5

In Manohur Koyal v Thakur Das Naskul6, it was initially held that, under Section 62 of ICA,
the plaintiff was not entitled to his rights under the old contract, even though the defendant
had not carried out his part of the new contract. However, the judgment was revised and

1
The Indian Contract Act, 1872.
2
Kamal Krishna Kundu Chowdhary v. Chhattoorbhuj Dassa & Ors [1924] 78 AC 962.
3
Dinshaw Fardunji Mulla, The Indian Contract And Specific Relief Acts by Pollock & Mulla (14th edition,
LexisNexis 2019).
4
Foster v. Dawber [1851] 6 Ex. 839.
5
Davis v. Cundasami Mudali [1896] 19 Mad 938; Naoroji v. Kazi Sidik [1896] 20 Bom 636, 644.
6
[1888] 15 Cal 319, 326.
brought under Section 63 of the ICA, wherein it was held that the amount later promised by
the defendant was accepted by the plaintiff in mere satisfaction of what was due to him and
not as a naked promise. Since the defendant has not paid the satisfaction, the plaintiff is
entitled to his rights in the old contract.

Therefore, Section 62 and Section 63 must not be interpreted in a way wherein they overlap
each other. The differentiation can be illustrated by understanding that in Section 62, the
rights of both parties are affected under the discharge of the contract, however, in Section 62,
the rights of only one party are affected. When an agreement to discharge affects only party’s
rights that the consideration might be inadequate, and that is when the Indian Law departs
from the English Law by forming a clause for every such case in Section 63.7

Remission of Performance

When the words of the section are interpreted as per their innate meaning, it is inferred that a
promisee can discharge the promisor not only without consideration but without a new
agreement.8

A discharge is valid when the promisee remits a part of the debt and upon receiving the same,
gives a discharge for the complete debt. The section intends to allow the promisee to
exculpate a debt at the instance of a third party and allow the promisor to benefit from the
discharge.9 Therefore, in Karampalli v. Thekku Vitil10, when the lessor accepts a smaller
amount than the amount due as rent after an oral agreement, and subsequently passes a
receipt in full discharge of the original amount due, the discharge is valid in nature
independently of the oral agreement.11 So, also where the money is accepted in full
satisfaction of the claim, it is a discharge of the whole debt.12

An exemption or remission under this section is contingent on the occurrence of an event in

7
Mudali (n 5).
8
Phoenix Mills Ltd. v. M.H. Dinshaw & Co. [1946] 48 Bom LR 313; Sabaldas v. Sobokhan [1947] Kar 182;
Citibank NA v. Standard Chartered Bank [2004] 1 SCC12, 36.
9
In re Industrial Bank of Western India [1930] 32 Bom LR 1656.
10
[1902] 26 Mad 195.
11
ibid.
12
Ishaq v. Madanlal [1965] All AIR 34.
13
Dinshaw Fardunji Mulla, The Indian Contract And Specific Relief Acts by Pollock & Mulla (14th edition,
LexisNexis 2019).
to make no claim “if the…lodge building which has been burnt down is resuscitated.” After
the lodge is reconstructed, he cannot sue based on the note.14

Waiver

A waiver may be indicated by behavior at odds with the protraction of the rights waived. 15
Acceptance of something in place of the performance of a contract cannot be prevented by
anything in law,16 or for loss of breach of contract, the means of redress for violation of the
contract is integrated with the established debt and the former cause of action cannot be
resuscitated on the neglect of paying the amount due on the pro-note.17

In Jagad Bandhu Chatterjee18 case, the SC held:

“In India, the general principle with regard to waiver of contractual obligation is to be found
in Section 63 of The Indian Contract Act. Under that section it is open to a promisee to
dispense with or remit, wholly or in part, the performance of the promise made to him or he
can accept instead of it any satisfaction which he thinks fit. Under the Indian law neither
consideration nor an agreement would be necessary to constitute waiver. This Court has
already laid down in Waman Shriniwas19 that waiver is the abandonment of a right which
normally everybody is at liberty to waive. ‘A waiver is nothing unless it amounts to a release.
It signifies nothing more than an intention not to insist upon the right.”

In P. Dasa Muni Reddy20 case, the SC held:

“Waiver is an intentional relinquishment of a known right or advantage, benefit, claim or

14
[1910] 34 Mad 156.
15
The Indian Contract Act 1872, s 63 8.
16
Kawadji v. Gangaram 64 IC 461.
17
Sakarchand v. Ismail [1931] 131 IC 510.
18
Jagad Bandhu v. Nilima Rani [1969] 3 SCC 445.
19
Waman Shrinivas v. Ratilal Bhagwandas & Co. [1959] AIR SC 689.
20
P. Dasa Muni Reddy v. P. Appa Rao [1974] 2 SCC 725.
It is clear that when a waiver is spoken of in the realm of contract, Section 63 of the Indian
Contract Act governs. But it is important to note that waiver is an intentional relinquishment
of a known right, and that, therefore, unless there is a clear intention to relinquish a right that
is fully known to a party, a party cannot be said to waive it.