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Sakharam Manchand Gujar Vs. Keval Padamsi Gujar - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case Number Second Appeal No. 441 of 1918
Judge
Reported in(1920)22BOMLR313
AppellantSakharam Manchand Gujar
RespondentKeval Padamsi Gujar
Excerpt:
.....under which the inference must necessarily arise that they were made in part-payment of the debt in question. on the other hand on behalf of the respondent it is urged that the requirements of section 20 of the indian limitation act have not been satisfied, as the writing in question does not show in terms that the payments were in respect of the debt in question, and that the payments were intended to be only part-payments, even if they were otherwise referable to the debt in question. the state of the accounts and the terms of the letter clearly show that the defendant was either aware or made aware at the time of these payments of the existing state of the accounts which would include the debt in question, and further that he made the payments not intending that they were to be..........under which the inference must necessarily arise that they were made in part-payment of the debt in question. on the other hand on behalf of the respondent it is urged that the requirements of section 20 of the indian limitation act have not been satisfied, as the writing in question does not show in terms that the payments were in respect of the debt in question, and that the payments were intended to be only part-payments, even if they were otherwise referable to the debt in question. it is contended that the debtor may have intended to make the payments in full satisfaction of the claim, that at least there is an ambiguity on the point and that an ambiguous writing of that character cannot serve the purpose of the plaintiff.4. it is necessary at the outset to state that the.....
Judgment:

Shah, J.

1. The plaintiff in this case sued to recover the price of certain goods sold to the defendant on the 10th of September 1912 with interest up to date of suit; and deducting therefrom the amount received he claimed in all Rs. 1,197 at the date of the suit. The suit was filed on the 14th of October 1915. It was filed more than three years after the date on which the goods in question were supplied. But the plaintiff relied upon part-payments in respect of the debt made in two sums in July 191.3, one of Rs. 198-8-0 forming part of the cash payment of Rs. 500 and the other of Rs. 235 by a Hundi received from the defendant, and upon the fact of the payments appearing in a letter written by the debtor on the 2nd of July 1913.

2. In the trial Court the defendant denied the claim on the merits and pleaded limitation. It was, however, found that the goods in question were sold by the plaintiff to the defendant and that the price of the goods was Rs. 1,350 with certain incidental charges in respect, of the transaction. The trial Court however found that the part-payments in question did not satisfy the requirements of Section 20 of the Indian Limitation Act and that the claim was time-barred. Accordingly the plaintiff's suit was dismissed. The plaintiff appealed to the District Court and the First Class Subordinate Judge with Appellate Powers upheld the plea of limitation and dismissed the appeal.

3. In the appeal to this Court by the plaintiff -the same question of limitation has been raised. It is urged on behalf of the appellant that the requirements of Section 20 of the Indian Limitation Act are satisfied in this case, that the two payments appear in the handwriting of the defendant and that they were made in respect of an account under circumstances under which the inference must necessarily arise that they were made in part-payment of the debt in question. On the other hand on behalf of the respondent it is urged that the requirements of Section 20 of the Indian Limitation Act have not been satisfied, as the writing in question does not show in terms that the payments were in respect of the debt in question, and that the payments were intended to be only part-payments, even if they were otherwise referable to the debt in question. It is contended that the debtor may have intended to make the payments in full satisfaction of the claim, that at least there is an ambiguity on the point and that an ambiguous writing of that character cannot serve the purpose of the plaintiff.

4. It is necessary at the outset to state that the account between the plaintiff and the defendant at the date of these two payments showed only a balance of about Rs. 301 apart from the debt in suit. There is no dispute in the present case about the correctness of this account. Over and above this balance at the date there was the debt of about Rs. 1,350 relating to the transaction in question. Thus the total amount due at the date of the two payments was a little over RS. 1,650. When on the 4th and 5th of July 1913 the debtor paid two sums of Rs. 500 and Rs. 235, he necessarily paid a part of the debt in question. There is no other account between the parties and there is no other debt due by the defendant to the plaintiff than that appearing in the account. When he made these two payments, the defendant wrote a letter to the plaintiff as follows : 'The reason for writing the letter is that your letter is received. I have sent currency notes of Rs. 500 and a Hundi for Rs. 235, in all Rs. 735. Credit them.' It is true that this letter does not in terms contain any reference to the debt in question, nor does it state in terms that the sums were to be treated as part-payments of the debt in question. But the letter itself refers to a letter received by the defendant from the plaintiff. The letter which would be in the possession of the defendant has not been produced, and there is no evidence of the contents of that letter. The account shows that the debt in question was ascertained some time before the payments. The state of the accounts and the terms of the letter clearly show that the defendant was either aware or made aware at the time of these payments of the existing state of the accounts which would include the debt in question, and further that he made the payments not intending that they were to be treated as payments in full satisfaction of the amount then due, but in the ordinary course intending thereby satisfaction of the amount due on the .account to the extent of the payments.

5. The question is whether, on these facts, the payments made satisfy the requirements of Section 20 of the Indian Limitation Act. That section provides that where part of the principal of a debt is, before the expiration of the prescribed period, paid by the debtor, a fresh period of limitation shall be computed from the time when the payment was made, subject to the proviso that in the case of part-payment of the principal of the debt the fact of the payment appears in the handwriting of the person making the same. In the present case there can be no doubt about the fact of a part of the debt having been paid by the debtor on the state of the accounts. There is no doubt also that the fact of the payment appears in the handwriting of the person making the same. It is urged, however, that the proviso is not satisfied, as the fact that the payment was made in part satisfaction of the debt in question does not appear in the handwriting of the person making it. I do not think that the proviso requires that to be clone in terms. It seems to me on the words of the proviso that if the fact of the payment appears in the handwriting of the person making the same and if it appears on the evidence in the case that the payment was in part satisfaction of the principal of a debt the requirements of the section would be satisfied. The argument urged on behalf of the respondent requires the reading of words in the proviso, which are not there. The words in the proviso refer to the fact of payment and not to the fact of the payment being a part-payment of the principal. It is not without significance that the words 'as such' used with reference to the payment of interest are not used with reference to the part-payment of the principal. The view I take is consistent with the decision in Ankamma v. Rama ilr (1883) Mad. 281 and the observations in Kedar Nath Mitra v. Dinabandhu Saha ilr (1915) Cal 1043. In the present case the lower appellate Court seems to me to have proceeded upon an erroneous view as to the meaning of the proviso. The decision in Ranchordas v. Pestonji : (1907)9BOMLR1329 relied upon by the lower appellate Court does not seem to me to conflict with the view which I take of the proviso; on the contrary some of the observations in the judgment seem to support that view. All that is necessary, in my opinion, for the creditor to prove in such a case is that the fact of the payment appears in the handwriting of the person making the same and further that the payment is really in part satisfaction of the principal of a debt. If these two facts are established, the creditor is entitled to have the benefit of the saving provisions of Section 20 on the question of limitation. In the present case both the facts are proved. The payments appear in the letter written by the debtor; and the same letter taken along with the undisputed facts as to the state of the accounts between the parties clearly shows that the payments were in part satisfaction, of the debt in question.

6. I would, therefore, allow this appeal, set aside the decree of the lower appellate Court, and allow the plaintiff's claim for Rs, 1197 with interest at 6 per cent, from the date of the suit to the date of payment with costs throughout on the defendant.

Hayward, J.

7. I agree. The account in the books of the plaintiff showed that there was a sum of about Es. 300 due besides the debt of Rs. 1,350 sought in this litigation to be recovered from the defendant. The defendant made two payments, one of Rs. 500 and the other of Rs. 235 in response to a letter received by him, but which he has not produced. The first payment was sufficient to wipe off the Rs. 300 odd due besides and to leave a balance of some Rs. 200 which together with the other payment of Rs. 235 would be available against the debt of Rs. 1,350 odd demanded in this litigation from the defendant. It seems to me that the inference naturally to be drawn from these facts would be that this balance of Rs. 435 was intended as a part-payment of the principal sum of Rs. 1,350 odd which must have been included, in the demand which was no doubt made in the letter which has not been produced by the defendant. This inference would seem to me to be justified on the principles laid down in the cases of Evans v. Davics (1836) 4 A & E. 840 and Friend v. Young [1897] 2 Ch. 421. It was however held at the trial that that would not be enough and that it would be necessary to show not only that such part-payment was noted in the handwriting of the defendant, but also that the principal sum towards which it was paid should also be noted in the handwriting of the defendant under the proviso to Section 20 of the Indian Limitation Act. . It seems to me however that that was an error. It was not required by the express words of the proviso that anything but the payment should be noted in the handwriting of the person making it. It was not expressly provided that the principal debt to which the payment was made should also be noted in the handwriting of the person making it and that was pointed out by Sir Lawrence Jenkins in the case of Kedar Nath Mitra v. Dinabandhu Saha ILR (1915) Cal. 1043. There a cheque drawn in favour of the payee was the document which noted the part-payment and there would not be in such a document any mention of a principal debt towards which the payment was made. It would appear to me therefore that it was sufficient to prove that the payment was noted in the handwriting of the defendant and it was not necessary to prove besides anything more than that the payment was intended to be a part-payment of the principal sum demanded from the defendant. It was not necessary, that is to say, to have a description of the principal debt also noted in the handwriting of the defendant. The demand therefore for the balance due upon this -debt of Rs. 1,350 odd was, in my opinion, saved from the bar of limitation by the provisions of Section 20 of the Indian Limitation Act.

8. There ought, therefore, in my opinion, to be a decree in favour of the payee as proposed for Rs. 1,197 principal with interest at 6 per cent, from the date of suit till payment with costs from the defendant in all Courts.


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