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Naranbhai Chhaganbhai Vs. Motibhai Ishwarbhai - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtMumbai High Court
Decided On
Case NumberFirst Appeal No. 609 of 1950
Judge
Reported inAIR1955Bom406; (1955)57BOMLR509
ActsLimitation Act, 1859; Limitation Act, 1871; Limitation Act, 1877 - Sections 2; Limitation Act, 1908 - Sections 28 - Schedule - Article 64; Baroda Limitation Act, 1887 - Schedule - Articles 47, 54 and 63; General Clauses Act, 1897 - Sections 6 and 6(1); Baroda Limitation (Amendment) Act, 1934; Baroda Limitation (Amendment) Act, 1936; Baroda Limitation (Amendment) Act, 1939; Interpretation Act - Sections 39; Baroda General Clauses Act - Sections 11; Baroda, Samanya Kalvano Nibandh of Corresponding Act, 1951 - Sections 11
AppellantNaranbhai Chhaganbhai
RespondentMotibhai Ishwarbhai
Appellant AdvocateY.M. Thakkar, Adv. for ;M.N. Thakkar, Adv.
Respondent AdvocateK.T. Pathak, Adv.
Excerpt:
.....of limitation, extended after date of note but before date of acknowledgment--claim on note barred on date of acknowledgment--subsequent enlargement of period whether revives claim on note--indian limitation act (xv of 1877), section 2--general clauses act (x of 1897), section 6.;the plaintiff sued in the baroda state court on october 19, 1946, on a promissory note dated december 15, 193. on october 22, 1940, a grandson of one of executants of the promissory note made a part payment which was in his own handwriting on the note. the limitation act of baroda at first prescribed a period of three years for a suit on the promissory note. it was amended on may 25, 1939, by act xxi of 1939 (baroda), which prescribed a period of six years for such suits. the defendants pleaded the..........in the articles enumerated in section 6(1). the barocla limitation act was, however, amended from time to time. it was amended for the first time by act no. 47 of 1934, which came into force on 8-11-1934. it was amended a second time by act no. 3 of 1936, which came into force on 30-1-1936.it is not in dispute, however, that article 63 of the act was not included among the articles enumerated in section 6(1) by either of these amendments. it was included among those articles by act no. 21 of 1939, which came into force on 25-5-1939. it is the contention of the defendants that before this act came into force, the period of limitation for suits upon promissory notes was three years, with the result that there being no acknowledgment before 25-5-1939, when the act no. 21 of 1939 came into.....
Judgment:

1. The present appeal arises from a suit filed by the plaintiff for recovery of a sum of Rs. 7,000 due upon a 'khata' dated I5-12-1934, for Rs. 9,000 signed by two persons Motibhai Ishwar-bhai and Jiwabliai Javerbhai. Both the executants specifically say in the 'khata' that they would pay the amount of Rs. 9,000 on demand. The 'khata' obviously, therefore, is a promissory note. It is not necessary to state all the defences which were taken on behalf of the representatives of Motibhai Ishwar-bhai and Jiwabhai Javerbhai, for the reason that the only question in this appeal is one of limitation. It is contended on behalf of the defendants that the suit was barred by limitation,

The suit was upon a promissory note dated 15-12-1934, and was actually filed on 19-10-1946. In order to bring the suit within limitation, the plaintiff relied upon a part payment dated 22-10-1940, acknowledged in the handwriting of Kantilal Vilhal-bhai, the grandson of Jiwabhai. The part payment is endorsed upon the promissory note itself in the hand of Kantilal Vithalbhai. The defendants disputed this endorsement, but the learned trial Judge has found the endorsement proved. The defendants contended even so that this endorsement did not serve to save limitation, because the plaintiff's suit upon the promissory note was barred by limitation before the endorsement was made by Kantilal Vithalbhai.

It appears that when Act No. 1 of 1987 Section Y. (Mudat Nibandh No. 1 of 1987) of the former Baroda State was enacted, the rule of limitation in regard to promissory notes was contained in Article 63, and the period was, as in what was formerly British India, three years. The Act contained a section at that time, No. 6, Sub-section (1) of which provided an enlarged period of limitation of six years, where the suit was filed upon a writing or a document and was a suit to which certain articles, including Article 47, which was for a suit for money lent, applied, but at that time Article 63 was not included in the articles enumerated in Section 6(1). The Barocla Limitation Act was, however, amended from time to time. It was amended for the first time by Act No. 47 of 1934, which came into force on 8-11-1934. It was amended a second time by Act No. 3 of 1936, which came into force on 30-1-1936.

It is not in dispute, however, that Article 63 of the Act was not included among the articles enumerated in Section 6(1) by either of these amendments. It was included among those articles by Act No. 21 of 1939, which came into force on 25-5-1939. It is the contention of the defendants that before this Act came into force, the period of limitation for suits upon promissory notes was three years, with the result that there being no acknowledgment before 25-5-1939, when the Act No. 21 of 1939 came into force, the plaintiff's suit upon Ex. 39 regarded as a promissory note was barred by time, and his remedy was not revived by that Act which was not retrospective.

2. On the other hand, it is the contention of the plaintiff that the plaintiff's suit is not a suit upon a promissory note. The plaintiff's suit is a suit for money lent, which will be governed by Article 47, or a suit on an account stated, which would be governed by Article 54. Now, Article 54 also was not included among the articles enumerated in Section 6(1) when the Act came into force originally. It was included among those articles for the first time by Act No. 3 of 1936 which came into force on 30-1-1936.

It is contended on behalf of the plaintiff that the plaintiff's suit was not barred by time on that date if it is a suit on an account stated. So in any case the period of limitation for the plaintiff's suit, regarded as a suit for an account stated, was six years, and inasmuch as on 22-10-1940, Kantilal Vithalbhai, the grandson of Jiwabhai made payment of a sum of Rs. 3,000 before the period of limitation was over, a fresh starting point of limitation was provided by the payment by Kantilal on that date, and the plaintiff's suit was consequently within time.

3. In the alternative, it is contended that even if the plaintiff's suit must be regarded as a suit upon a promissory note, the Limitation Act which applies to the suit is the Act as it was amended by Act No. 21 of 1939. The period of limitation for such a suit is consequently six years. If within a period of six years from the execution of the promissory note there happens to be executed an endorsement of a part payment, it serves to save the limitation and affords a fresh period of limitation, and it does not make any difference if upon the date upon which Act No. 21 of 1939 came into force the plaintiff's suit regarded as a suit upon a promissory note was barred by time.

4. It would be convenient to take up first the question whether the plaintiff's suit is a suit upon a promissory note, or a suit for money lent or a suit upon an account stated. Now, it is not possible to regard the suit as a suit for money lent. If the suit was a suit for money lent, then the cause of action arose when the money was actually lent. The plaintiff has not stated in so many words that the plaintiff's, suit was a suit for money lent. The cause of action is stated as having arisen on 15-12-1934. That was the date upon which Ex, 34 was executed, and the date has nothing whatever to do with the lending of the money. It may be, of course, that it was open to the plaintiff to frame his suit as if it was a suit for money lent and rely upon Ex. 34 as an acknowledgment; but the plaintiff has not framed it that way, and the suit cannot possibly be, therefore, said to be a suit for money lent.

5. Coming next to the question as to whether' the suit is a suit on an account stated, it does appear that, the plaintiff's case was that accounts were made and then Motibhai and Jiwabhai signed Ex. 34 on 15-12-1934. That was what the plaintiff stated in his deposition when he went into the witness box. But in order to find out what the plaintiff's suit is, one --must necessarily have recourse to the plaint. The plaint calls the suit as a suit upon a 'khata', and the 'khata' being a promissory note, as I have already mentioned, the frame of the suit is that of a suit upon a promissory note.

It is true that a suit on an account stated may also be described as a suit on a 'khata', but the plaint nowhere alleges that any accounts were made. If at all any accounts were made, they must be of Ex. 33, another promissory note dated 19-12-1931, for the same amount as Ex. 34, namely, Rs. 9,000. Exhibit 33 does not show that there were any payments made towards it. Two payments purport to be endorsed on Ex. 34, one for Rs. 30,000 on 15-10-1940, and t!ic other for another sum of Rs. 3,000 on 22-10-1940. The latter is relied upon on behalf of the plaintiff for bringing the suit in time. But there are no endorsements upon Ex. 33, and Ex. 34 has been taken for the same amount as Ex. 34.

Now, -- there are conflicting views upon the question as to whether for an account stated it was necessary that there should be mutual dealings between the parties of which an account must be made. But it does not seem permissible to accept the view that there must be such mutual dealings, because in - 'Bishun Chand Firm v. Girdhari Lal, (A), their Lordships of the Privy Council observed (p. 151):

'...it is also clear that in that great class of cases where the whole dealings between the parties are financial, the items of account can only be in terms of money and can only consist of payments of one to the other and vice versa. It seems that the rule adopted by the Court in the decision appealed from would exclude from the category of legally valid 'accounts stated all such financial accounts. Nor can it be material; as it seems, in determining whether there can be an account staled, whether the balance of indebtedness is throughout as it must be at the end, in favour of one side. Equally it seems irrelevant whether the debt in favour of the final creditor was created at the outset by one large payment or consisted of several sums of principal and several sums of interest; nor can it matter, in this connection, whether the only payments made on the other side were simply payments in reduction of such indebtedness or were payments made in respect or other dealings. In any event, items must in the same way be ascertained and agreed on each side before the balance can be struck and settled.'

Even though, therefore, there need not be between the parties mutual or independent dealings, nor is it necessary that there should be on the credit side against the party who ultimately became a debtor payments other than those made by him in reduction of the original debt, in order that there should be an account stated, there must be, in the first instance, accounts made, that is, there must be amounts on both the sides. It was, pointed out in - 'Ramprasad v. Anatidi', AIR 1938 Nag 180 (B), that before a document can be used as an account stated, it must be shown that there were items on both sides of the account of which an account was made, balance was struck and acknowledged by the party against whom the balance was. It may be, of course, that sometimes upon taking accounts what may be found is that the same amount is due from the party who signs the accounts stated as a debtor as was due from him when he signed an earlier account. That would not come in the way of there being a slated account between the parties. But there must be items on both sides, and there must he evidence with regard to the existence of such items, when alone an account can be and will be required to be made.

In the absence of any statement in the plaint itself that an account was made and Motibhai and Jiwabhai signed Ex. 34 as an account stated, the suit which was filed by the plaintiff cannot be said to be a suit for an account stated. It may be, of course, that there is some evidence upon the point because the plaintiff deposed that accounts were made. It has been pointed out that there was no cross-examination on this question. But the suit as framed was obviously a suit upon a promissory note. There was no reason then why the defendants should have cross-examined the plaintiff upon a statement which at that moment was immaterial whether it was true or not.

I find that there is nothing in the judgment of the learned trial Judge which would show that any contention was made before him that the plaintiff's suit was a suit upon an account stated. The learned trial Judge held that the suit was a suit upon a promissory note governed by Article 63 of the Baroda Act and was barred by limitation. No point has been made in the appeal memo that the trial Judge was in error there and the suit was really speaking not a suit upon a promissory note, but a suit on an account stated. In these circumstances, it is obvious that it is not possible to regard the suit which has been filed by the plaintiff as a suit which would be governed by Article 54 of the Baroda Act.

6. Coming next to the question as to whether the suit would not be in time because of the endorsement of the part payment in the hand of Kanlilal, grandson of Jiwabhai in Ex. 34, it is quite true that the period of limitation for a suit upon 3 promissory note is after 25-5-1939, six years. It is also true that it makes no difference that Act No. 1 of 1987 prescribed only a period of three years. The Limitation Acts arc procedural laws, and therefore upon the question whether the suit is or is not barred by time, the Act applicable would be the Act which was in force at the time when the suit was filed. There can be no doubt whatever, therefore, that the period of limitation applicable to the present suit is the period of six years.

But it is contended on behalf of the respondents, relying upon a large number of cases of both the Privy Council and High Courts; including this Court, that when a new Act of Limitation provides a longer period, that period cannot be availed of by the plaintiff, whose suit is barred under the law of limitation in force before the new law came into effect-On the other hand, it is argued on behalf of the plaintiff that the Limitation Act of 1877, in repealing the earlier enactments, provided that if the remedy of a plaintiff was barred under the Limitation Acts, which were repealed by that Act, then, nothing in the Act will be taken as reviving those remedies. There is no such section in the Act of 1908. There is also no such provision in Act No. 21 of 1939 of the former Baroda State.

On the date when the amendment of 1939 came into force, the position, therefore, was that the plaintiff's right, namely the right to recover the amount due was not extinguished; his remedy was barred before the Act of 1939 came into force; but inasmuch as there is no provision in the Act of 1939 which prevents the revival of the remedy, it is no argument to contend that the plaintiff's suit was barred before the Act of 1939 came into force.

6a. Now, it is quite true that in the Act of 1877 it was provided by Section 2 that nothing contained in the Acts of 1871 and 1877 should be taken to revive arty right to sue barred, under the Act of 1871 or under any enactment repealed by the Act of 1871. Acts of 1859 and 1877 appear to have made express provision, in the case of suits which were filed after the coming into operation of the Acts upto a certain period. On the other hand, under the Act of 1908 there was no provision made as in the Act of 1877, but that is obviously because in the meanwhile the General Clauses Act of 1897 had been enacted. In Section 6 of that Act provision was made in order that the repeal of any former Act by a later Act should hot affect certain matters.

It is quite true that it must be shown that Section 6 of the General Clauses Act is as effective as the provisions in Section 2 of Act of 1877 for preventing the revival of the rights to sue barred by the previous Acts, but that Section 6 is effective for this purpose has been established by a number of cases. In the first instance, it is necessary to observe that the plaintiff concedes that where the right of the plaintiff is extinguished, for example, by operation of a provision like that in Section 28 of the Limitation Act, its repeal would not revive the right unless the repealing Act so provides expressly or by necessary implication. I shall, therefore, specifically refer hereafter to cases in which it has been held that there was really speaking no revival of the right to sue, or, as the plaintiff calls it, remedy.

7. The first case upon the point is the case of 'Vinayak Govind v. Babaji', 4 Bom 230. In that case, the plaintiff sued upon a document which was regarded as a promissory note. Under the Act of 1859, the period of limitation for a suit based upon a promissory note payable on demand was three years from the date of the promissory note and not from the date of the demand. The plaintiff's suit was filed actually in April 1877 when Act of 1859 had been repealed and Act of 1871 was in force. Under the latter Act limitation began to run only when a demand was made. It was held that the suit regarded as a suit upon a promissory note was barred by time.

It is true that the Act of 1871 was in force when the suit was filed, and it was that Act which had to be applied when considering the question whethe the suit was barred or not. But inasmuch as the plaintiff's suit was barred by time before the Act of 1871 came into force, the Act of 1871 could not revive the plaintiff's suit which was barred. It has got to be remembered that the Act of 1877 did contain a provision that nothing in that Act shall revive the remedy barred under the Act of 1859 or 1871, but there was no such provision in the Act of 1871 which was in force when the suit was filed.

8. The second case is the case of - 'Mahomed Mehdi v. Sakinabai', 37 Bom 393. In that case the plaintiff was suing his wife, who had left him. He had sent a notice on 11-7-1906, demanding restitution of conjugal rights. The demand was refused by the defendant on 19-7-1906 but the plaintiff took no further action for more than two years, and eventually on 20-7-1911, filed a suit for restitution, but such a suit would have been barred by Act No. 15 of 1877. It was contended on behalf of the plaintiff, however, that the Act which applied was Act No. 9 of 1908, but it was held that the plaintiff's remedy by way of restitution of conjugal rights had become barred under Article 85 of the Act of 1877, and having become so barred, it could not be revived by the passing of the new Limitation Act in 1908.

The decision was based specifically upon Section 6 of the General Clauses Act, Clause (a), which provided that unless a different intention appeared, a repeal shall not revive anything not in force or existing at the time at which the repeal took effect. This view has also been taken by their Lordships of the Privy Council and the other High Courts, and only a few of the cases in which the principle has been affirmed need be mentioned. A very recent case is that of the Madras High Court in - 'Ramanathan v. Kandappa', : AIR1951Mad314 .

In that case the plaintiff relied upon endorsements of payments, the last of them on 9-8-1941, of saving limitation for a suit on three promissory notes. These endorsements were not capable of saving limitation before the amending Act of 1942, No. 16 of 1942. It was held following certain Privy Council Anr. other cases that the plaintiff could not rely upon the amending Act as his suit was barred by time before, the amending Act came into force. Two of the Privy Council cases relied upon, viz. - 'Appasami Odayar v. Subramanya Odayar', 12 Mad 20, and - 'Khunni Lal v. Gobind Krishna Narain', 33 All 356, could perhaps be exlained by the right itself having been extinguished, but this cannot be averred of Sachindra Nath v. Maharaj Bahadur Singh' AIR 1922 PC 187.

In that case the plaintiff-appellants, who were suing under an indemnity bond executed in their favour by their mortgagee, had made payments to a person with whom the mortgagee had effected a sub-mortgage by deposit of title deeds, after the mortgagee had obtained decrees for sale. The question in appeal was whether at the date when the payment was made the mortgagors were bound to make the payments; that in its turn raised a question whether at the date of the payment the decrees would have been barred, The Act in force at the date of the decrees was Act of 1877, and the enforcement of the decrees would have been barred before the Act of 1908 came into force.

It was held that the Act applicable to the case was that of 1877 and not of 1908, because the date of the decrees being 26-8-1905, they became unenforceable by proceedings commenced after 26-8-1908, under the Act of 1877. The payment to the representative of the equitable mortgagee was made on 2-2-1910, one year and three months after the statutory period had elapsed, and over thirteen months after 1-1-1909, when the Act of 1908 had come into operation. Then they observed (p. 191):

'.....There is no provision in this latter Act so retrospective in its effect as to revive and make effective a judgment or decree which before that dale had become unenforceable by lapse of time.'

9. It has got to be remembered that in none if these cases is there any reference to Section 6(a) of the General Clauses Act, and their Lordships of the Privy Council were probably acting upon the Common law principle which was enacted in Section 39 of the Interpretation Act upon which Section 6, General Clauses Act, is based. But that docs not seem to make any difference. The Act of 1908 does not contain any section corresponding to Section 2 of the Act of 1877, & even so their Lordships held that a judgment or decree which before the Act of 1908 had become unenforceable by lapse of time could not be made effective by the Act. It seems to me that this-is upon the principle which has been embodied in Clause (a) of Section 6, General Clauses Act.

10. It is quite true that there is always a difference between a right being extinguished and the remedy being barred. But when therefore we consider the effect of a repeat, it is not as if the repeal does not affect only vested rights. To hold so would be to ignore Section 6 Clause (a). Vested rights are not to be interefered with as provided in Clause (c) of Section 6. But the words of Clause (a) are perfectly general; it does not say what will not be revived would be a right much less that the right should be one which should have been acquired. It says specifically that the repeal shall not revive anything not in force or existing at the time when the Act came to an end.

It seems to me in the first instance that the word anything is sufficiently wide to include both a right as well as a remedy. In the second instance, assuming that the word anything' only includes a right and does not include a remedy, a remedy is only another word for a right of action, and when a remedy is barred, the right of action is gone and it cannot be revived by the coming into force of a new Act of Limitation. It is true that the case of -- 'Appasami Odayar v. Subramanya Odayar', (F), and -- 'Khunni Lal-v. Gobind Krishna Narain', (G), could have been put upon the ground that the right itself was extinguished, but their Lordships did not base their decision upon that ground. It seems to me, looking to the language used, that they based their decision upon the broad principle they enunciated in -- 'Hurrinath Chatterji v. Mothoor Mohun Goswami', 20 Ind App 183 at p. 192 (I).

'.....The intention of the law of limitation is, not to give a right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right.'

and reiterated by them in - 'Khunni Lal v. Gobind Krishna Narain', (G). In that case, it is obvious that if the words of CIause (a) are wide enough to include a right of action, if that right of action was taken away by the operation of the previous Limitation Act, it cannot be revived because of a subsequent enactment which repeals that right.

11. It is contended, however, that there can be no question of the application of Section 6 of the General Clauses Act or the corresponding Act o( Baroda, Samanya Kalvano Nibandh of 1951 S. Y. in this case. It is not in dispute that Section 11 of the latter Act is exactly the same as Section 6 of the General Clauses Act. It is said however that the Baroda. Act does not contain any definition of the word 'kaida' by which it translates the English word 'enactment' in Section 6. But it is obvious that it must be taken in the sense not only of an Act but also any provision contained in any Act. It is contended secondly that the principle of Section 6, General Clauses Act, or Section 11 of the Baroda General Clauses Act must be confined to cases in which there has been an express repeal.

When the Act of 1939 came into froce, there was no express repeal of any particular section or article of the original Limitation Act. All that happened was that Article 63 was included in the articles enumerated in Section 6. There was consequently no express repeal. It is contended besides that there was no implied repeal either, and in any case Section 6, General Clauses Act, or Section 11, Baroda General Clauses Act, do not apply to implied repeals. Now, it is quite true that there is no express repeal by the amendment of 1939 of any provision of the ori-final Limitation Act.

It is obvious, however, that whereas formerly the period of limitation for suits upon a promissory note was a period of three years, it was changed by the amendment effected in 1939 to six years. There was obviously, therefore an implied repeal, and the only question is whether Section 6, General Clauses Act and the corresponding provision of the Baroda Act do apply to implied repeals.

Now, considering the principle underlying theseenactments, in the first instance, there is no reason whatever why Section 6 should not apply to impliedrepeals. The rule is really of interpretation. Thereis nothing to prevent the Legislature, if it is sominded, in spite of the provision which has beenenacted in Section 6, General Clauses Act, from specifically directing that notwithstanding anything contained in the General Clauses Act the repeal shallaffect what Section 6 provides it does not affect excepton such legislative action.

Section 6 only provides that unless the Legislature so provides either specifically or by necessary implication, vested rights will not be affected and things which were not in force or in existence at the time when the new Act came into force will not be affected by the repeal. The principle ought logically to apply to both express repeals and implied repeals. There is authority also to be found for the principle that even where a new period of limitation is prescribed by an amending Act, it does not revive the remedies in respect of causes of action already barred before the amendment came into force.

In the case of -- 'Md. Taqi v. Raja Ram', : AIR1936All820 (J), the plaintiff relied upon an acknowledgment signed by a widow who was not competent to give an acknowledgment which would bind the reversioners until the coming into force in 1927 of the amendment embodied in Clause (3) of Section 6 of the Act of 1908 which rendered such an acknowledgment binding. There was, of course, no express repeal and it was held that the right of suit which was barred under the law in existence at the time the amendment came into force could not be revived because of the amendment. Regarded as A suit upon a promissory note, consequently the plaintiff's suit was barred by time.

Mr. Thakkar, who appears for the plaintiff, wants however a fortnight s time to make an application for amending his plaint so as to make the plaint a plaint in a suit for money lent or an account stated. A fortnight's time is granted to him to make the amendment application.

12. Order accordingly.


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