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Manekchand Mohanlal Poonawala Vs. Shah Bhimji Kundanmal and Company - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case Number Civil Revision Application No. 915 of 1967
Judge
Reported in(1969)71BOMLR370; 1969MhLJ698
AppellantManekchand Mohanlal Poonawala
RespondentShah Bhimji Kundanmal and Company
Excerpt:
.....pete (i.e. 'on account') receipts ordinarily executed by debtors in favour of lenders contain an implied promise to repay the money mentioned in such receipts and these obligations to repay arise on a written contract on which a summary suit can be filed.;ramji v. dharma (1882) i.l.r. 6 bom. 683, chowksi himutlal harivulubhdas v. chowksi achrutlal harivulubhdas (1888) i.l.r. 8 bom. 194 and maganlal harjibhai v. amichand gulabji (1928) i.l.r. 52 bom. 521. s.c. 30 bom. referred to. - - such implied obligations',if they create a liability to pay debt or liquidated demand in money, can be enforced by instituting- a summary suit having regard to the language of the amended rule 2. in my view, it is not correct that implied obligations to pay debt or liquidated demand in money when they..........contract which contains an express promise to pay the debt or the liquidated demand in money. an implied contract or obligation for payment of such debt or money even if it arises on a written contract would not justify institution of a suit as a summary suit. in justification of that argument he has referred to rule 2 as existing before the same was last amended. the relevant part of the rule as previously existing ran as follows:. and all suits in which the plaintiff seeks only to recover a debt or liquidated demand in money ... arising on contract, express or implied ....mr. karanee emphasises that the word 'implied' has been removed from the now existing rule 2. he further argues that the present writing does not include any express or implied promise and is merely an.....
Judgment:

K.K. Desai, J.

1. In this revisional application Mr. Karanee on behalf of the original defendants has contended that the trial Court was wrong in not granting unconditional leave to defend, inasmuch as the trial Court should have accepted the defendant's contention that the plaintiffs' suit was not on a written contract. The writing relied upon by the plaintiffs as constituting the cause of action for the claim in suit did not contain any promise to pay and was merely an entry in the Sahi book and/or an acknowledgement. The trial Court should have, therefore, held that the plaintiffs' suit was not maintainable as a summary suit and should not have directed the defendants to deposit Rs. 7,000 and should have granted unconditional leave to defend.

2. A translation of the writing on which the plaintiffs relied is annexed as exh. A to the plaint. A part of the translation is not entirely correct. The writing, when translated, runs ass follows:

Rs. 13,000/- Shah Bhimaji Kundanmal and Company.(Sd/-) Manekchand Mohanlal Poonawala. Rs. 18,000/- cash-full Khata Pete Jama (received on Sarafi account and so credited). Interest 14 annas (fourteen annas).S.Y. 2023 Posh Vad. 12. Monday 6-2-67.(Sd/-) Mota Visraj.

3. Mr. Karanee contends that the above writing is merely an entry in the Sahi book of the plaintiffs. This writing does not disclose any express promise or any promise at all to make payment. The promise, if any, for payment was previous and oral. In the result, the amount mentioned in the writing is not debt or liquidated demand in money arising on a written contract as necessary for institution of a suit as summary suit. In support of his contentions he has relied upon the decisions in Ramji v. Dharma I.L.R. (1882) 6 Bom. 688, Chowksi Himutlal Harivulubhdas v. Chowksi Achrutlal Harivulubhdas I.L.R. (1888) 8 Bom. 194 and Maganlal Harjibhai v. Amichand Gulabji I.L.R. (1928) 52 Bom. 521 30 Bom. L.R. 783 and Rule 2 of Order XXXVII of the Code of Civil Procedure as amended by this High Court.

4. The relevant part of Rule 2 runs as follows:. and all suits in which the plaintiff seeks only to recover a debt or liquidated demand in money ... arising on a written contract.

In the submission of Mr. Karanee the debt or liquidated demand in money claimed in a summary suit must arise on a written contract which contains an express promise to pay the debt or the liquidated demand in money. An implied contract or obligation for payment of such debt or money even if it arises on a written contract would not justify institution of a suit as a summary suit. In justification of that argument he has referred to Rule 2 as existing before the same was last amended. The relevant part of the Rule as previously existing ran as follows:. and all suits in which the plaintiff seeks only to recover a debt or liquidated demand in money ... arising on contract, express or implied ....

Mr. Karanee emphasises that the word 'implied' has been removed from the now existing Rule 2. He further argues that the present writing does not include any express or implied promise and is merely an acknowledgement by the defendants for having received the sum mentioned in the writing.

5. In connection with the three authorities cited by Mr. Karanee, it may at once be stated that in all the three cases the Court was concerned to decide the question as to whether the writing relied upon on behalf of the plaintiffs was sufficient to constitute a cause of action for a suit in respect of an already time-barred debt. The question was whether the writings relied upon were promises made in writing and signed by the persons to be charged with the debts within the meaning of Sub-section (3) of Section 25 of the Indian Contract Act. In dealing with the question it was observed that acknowledgements and/or Rufus made might revive the old debts and even so might not contain promises made in writing by the persons to be charged with the claims and/or liabilities for payment of time-barred debts. The ratio of the decisions in those cases was that mere accounts stated or mere writings of acknowledgements which did not contain express promise for making payments were insufficient to complete a cause of action for a suit on the basis of the provisions of Sub-section (5) of Section 25. Apparently, the ratio of these decisions is that a promise to revive a time-barred debt must be an express promise in writing for payment of the same. That was the condition required to be fulfilled having regard to the provisions of Sub-section (3) of Section 25. Some observations in these cases are relied upon by Mr. Karanee in connection with the true construction to be given to the writing annexed to the plaint. It is not necessary to refer to facts of these cases in that connection.

6. Now, the writing relied upon on behalf of the plaintiffs, in my view, is what is ordinarily known as a 'Khata Pete receipt'. This kind of writing has been known and understood to constitute not only an. acknowledgement for receipt of the money but to contain an implied promise that the money having been received 'Khata Pete' i.e. 'on account' would be repaid by the debtor signing the writing.

7. The question is as to whether the Khata Pete receipt in this case is not a written contract within the meaning of Rule 2 cited above. In this connection it may at once be noticed that the writing does not contain express promise to repay the sum of Rs. 13,000 mentioned in the writing. Even so it is apparent that the writing contains an implied promise to repay the sum of Bs. 13,000 mentioned therein. This is so because the writing is made in lender's book by the debtor and the debtor states that the amount is received on Sarafi account and is credited to the account of the creditor in the ledger of the debtor. The rate of interest is also mentioned. The writing relates to a fresh loan and has no reference to adjustment or otherwise of accounts of previous dealings. It bears a 4-anna revenue stamp. It is quite clear that the parties did not intend the writing to be and it is not merely a receipt. The Writing was executed to create an obligation and promise to repay the amount mentioned therein.

8. Now, it is true that prior to the amendment of Rule 2, a summary suit could be instituted in all cases where a debt or liquidated demand in money arose on contract, express or implied. It is quite clear that previously a written contract was not a necessary condition for institution of a summary suit to recover debt or liquidated demand in money. Where express or implied obligation to pay debt or liquidated demand in money arose, even on an oral contract, a summary suit could be instituted. Under the amended Rule, summary suits cannot be instituted when such debt or demand in money arises on oral contracts. Mr. Karanee, however, is not right in his submission that the deletion of the phrase 'express or implied' from amended Rule 2 indicates that when implied obligation to pay debt or liquidated demand in money arises on a written contract, a summary suit cannot be filed. Obligations arising on a written contract can in some parts be express and in other parts be implied by law or otherwise. Such implied obligations', if they create a liability to pay debt or liquidated demand in money, can be enforced by instituting- a summary suit having regard to the language of the amended Rule 2. In my view, it is not correct that implied obligations to pay debt or liquidated demand in money when they arise on a written contract cannot be good causes of action for institution of summary suits.

9. As I have already stated, the Khata Pete receipts ordinarily executed by debtors in favour of lenders must be held to contain an implied promise to repay the money mentioned in such receipts. These obligations to repay must be held to arise on a written contract. Under the circumstances, the contentions made by Mr. Karanee are rejected.

10. Rule discharged with costs. The time to make deposit as directed by the trial Court is extended to November 20, 1968. No further time should be granted.


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