Skip to content


Kesarmal Indajishet Vs. Narayan Vidyadhar Vankde - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMumbai
Decided On
Case NumberSecond Appeal No. 856 of 1940
Judge
Reported in(1942)44BOMLR426
AppellantKesarmal Indajishet
RespondentNarayan Vidyadhar Vankde
DispositionAppeal allowed
Excerpt:
.....is endorsed, does not amount to an acknowledgment of any further liability on the promissory note. a payment made merely in respect of the amount due on the promissory note on which the payment is endorsed may be a final payment, earlier payments not having been evidenced by endorsement, so that a mere endorsement of a payment in respect of the note does not involve by itself an admission of further liability on the note.;ganesh narhar v. dattatraya pandurang (1922) i.l.r. 47 bom. 632 : s.c. 25 bom. l.r. 144, doubted. ;if the acknowledgment is an acknowledgment of a part payment of the amount due on the promissory note, then that does imply a liability to pay something more under the promissory note, and is therefore an acknowledgment of the right of the creditor to recover..........the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, then that starts a fresh period of limitation. the question is whether the document of april 10, 1935, amounts to an acknowledgment of the right of the plaintiff to recover what is due on the khata of april 2, 1933. in the privy council case the debt sued on was a debt on a promissory note, and the part payment relied upon was evidenced by an endorsement on the note. ' paid rs. 100 to-day in this pro-note (signed) lal chand.' it was not argued before the privy council that that document amounted to an acknowledgment within.....
Judgment:

Beaumont, C.J.

1. This is a second appeal which has been referred to a bench because it raises the question how far a recent decision of the Privy Council on Section 20 of the Indian Limitation Act has affected Indian decisions on Section 19 of the Act.

2. The facts are not in dispute. There was a loan made by the plaintiff to the defendant on April 2, 1933, of Rs. 1,120, which was entered in the khata of the plaintiff, and the entry was signed by the defendant. A suit on the khata was filed on December 14, 1937, more than three years after the date of the loan, and therefore prima facie it would be barred under Article 73 of the Indian Limitation Act. But on April 10, 1935, that is to say within three years of the loan and of the suit, an entry was made in the khata! in these terms : 'Credited Rs. 30-10-0 on December 15, 1934, as the price of paddy': This was signed by the defendant. Then the entry continues 'This has been credited this day the date April 10, 1935, towards the above amount.' That again is signed by the defendant. The payment was not made in respect of interest, and therefore was not a payment of interest as such within the first paragraph of Section 20 of the Indian Limitation Act. But the creditor appropriated the amount towards interest, and consequently it was not a part payment of principal within the second paragraph of Section 20, and having regard to the recent decision of the Privy Council in Rama Shah v. Lal Chand (1940) L.R. 67 IndAp 160, it is quite clear that the payment does not operate to save limitation by virtue of Section 20 of the Act, it being neither a payment of interest as such, nor a part payment of capital. But there are authorities of the High Courts in India that Section 19 and Section 20 are quite independent of each other. Section 20 deals with the effect of part payment on limitation. Section 19 provides that where before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, then that starts a fresh period of limitation. The question is whether the document of April 10, 1935, amounts to an acknowledgment of the right of the plaintiff to recover what is due on the khata of April 2, 1933. In the Privy Council case the debt sued on was a debt on a promissory note, and the part payment relied upon was evidenced by an endorsement on the note. ' Paid Rs. 100 to-day in this pro-note (Signed) Lal Chand.' It was not argued before the Privy Council that that document amounted to an acknowledgment within Section 19, and the whole of the judgment of the Privy Council is directed1 to the question whether the payment was a part payment within Section 20. But it is of course clear that Section 19 was not overlooked ; indeed the section is mentioned in the judgment though merely to observe that an acknowledgment of right under Section 19 need not amount to a promise to pay. The decision of the Privy Council, in my opinion, does amount to an authority for the proposition that an acknowledgment of a payment made in (meaning 'in respect of') the promissory note on which the acknowledgment is endorsed, does not amount to an acknowledgment of any further liability on the promissory note, and if I may say so, I entirely agree with that view. A payment made merely in respect of the amount due on the promissory note on which the payment is endorsed may be a final payment, earlier payments not having been evidenced by endorsement, so that a mere endorsement of a payment in respect of the note does not involve by itself an admission of further liability on the note, I think the decision of this Court in Ganesh Narahar v. Dattatraya Pandurang (1922) I.L.R. 47 Bom. 632 where it was held that an endorsement on a promissory note of three payments involved an admission of liability to pay the difference between the amount of the pro-note and the amount of the payments endorsed, cannot be reconciled with the Privy Council decision. But on the other hand, it seems to me that if the acknowledgment is an acknowledgment of a part payment of the amount due on the note, then that does imply a liability to pay something more under the promissory note, and is therefore an acknowledgment of the right of the creditor to recover something more on the promissory note in question.

3. Whether in any particular case the document relied upon amounts to an acknowledgment must depend on the language of that document. There are, however, certain cases in this country which are of assistance in determining the question before us. In the first place, there is Venkatakrishniah v. Subbarayudu (1916) I.L.R. 40 Mad. 695, which lays down the proposition that a document may be an acknowledgment within Section 19, although it does not evidence part payment within Section 20. There is nothing in the Privy Council case to controvert that principle, which in my opinion is plainly correct. In that case the endorsement on the note was 'Rs. 378 paid towards this document' and it was held that that amounted to an acknowledgment of the right of the plaintiff to recover on the document, that is to say that it amounted to an acknowledgment of part payment implying liability to pay something more. In Tayerali v. Garabad (1938) 41 Bom. L.R. 455, which was a case which came before me in second appeal, I followed the principle laid down in Venkatakrishniah v. Subbarayudu. The document with which I had to deal was an endorsement on the promissory note admitting that the defendant had given certain Bajri of the value of Rs. 54 towards 'vasul' which means towards part payment, and I held that that amounted to an acknowledgment of a right to recover on the promissory note. Then there is a decision Isri Prasad Tewari v. Chandrabhan Prasad Tewari [1939] All. 200 in which the Court had to construe an endorsement on a promissory note stating that Rs. 25 were 'paid in respect to, or relating to the promissory note,' and the Court held that not to amount to an acknowledgment of further liability under the promissory note, so as to bring Section 19 into play. The decision wa9 before the case in the Privy Council, but I think the wording of the endorsements in the two cases is almost similar. But the learned Judges of the Allahabad High Court distinguished the case before them from a previous decision of the Allahabad High Court in which it had been held that payment towards the amount due on a document amounted to an admission of liability, and therefore to an acknowledgment of the right of the creditor under Section 19. So that the Court drew a distinction between a payment in respect to or relating to a promissory note and a payment in part payment of or towards the amount due on a promissory note. The distinction in actual phraseology may be slight, but the distinction in principle is clear. In the one case a statement that something has been paid 'in respect to a promissory note' does not involve any admission that something more remains due on the promissory note. On the other hand, a payment made in part payment or towards payment of the amount due on a promissory note does involve an admission that there is something more due, and is thus an acknowledgment of the right of the creditor to sue on the note. In this case we have got practically the same phrase as occurred in Venkatakrishniah v. Subbarayudu, and in the earlier case of the Allahabad High Court which was followed in Isri Prasad Tewari V. Chandrabhan Prasad Tewari, that is to say, it is a payment ' towards the above amount', which clearly means ' towards the amount specified on the other side of the khata' as due on the loan. In my opinion therefore the endorsement of April 10, 1935, did amount to an acknowledgment within Section 19 of the Indian Limitation Act, and prevented the suit from being barred by limitation. The decisions of both the lower Courts that the plaintiff's claim was barred were therefore wrong.

4. We allow the appeal, set aside the decree of the lower appellate Court and pass a decree in favour of the plaintiff for Rs. 929-10-0 with interest at six per cent from the date of suit on Rs. 464-13-0. The appellant will get his costs in the trial Court. As the question arising under Section 19 of the Indian Limitation Act was not taken in the lower Courts, there will be no order as to costs in the lower appellate Court, or in the High Court. Instalments will be settled in execution.

N.J. Wadia, J.

I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //