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Lalam Sambayya Vs. Pattam Shemsherkhan - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. No. 1604 of 1959
Judge
Reported inAIR1963AP337
ActsIndian Contract Act, 1872 - Sections 25(3)
AppellantLalam Sambayya
RespondentPattam Shemsherkhan
Appellant AdvocateA. Gangadhara Rao, Adv.
Respondent AdvocateN. Venkataraju, Adv.
DispositionRevision allowed
Excerpt:
.....and acceptance' with the consciousness of me purpose for which the contract is being entered into have to be clearly brought out. 6. it is well settled that in determining whether a particular statement is an acknowledgment or promise the language of the document has to be considered in every ease......an acknowledgment implies a promise to pay. to accept an implied promise as the equivalent of a 'promise in writing' would made section 19, limitation act, otiose because the same result by way of an acknowledgment would be reached irrespective of whether it was taken during the period of limitation or outside it.'5. the ruling has no direct application and helps onlyto bring out that while a mere acknowledgment was sufficientfor the purpose of section 19, limitation act, a promiseto pay in writing was required to attract the provisions ofsection 25(3) of the contract act. a careful perusal ofthe abovementioned provisions which have the effect of saving limitation, clearly makes out the essential differencesbetween the two sections. under section 19 of the limitation act an.....
Judgment:

Sharfuddin Ahmed, J.

1. The question that falls for determination in this revision petition is whether a statement made by a witness in the court admitting a time-barred debt fulfils the requirements of Section 25(3) of the Contract Act. The relevant facts to appreciate the arguments may briefly be stated. The petitioner herein borrowed a sum of Rs. 200/-from the plaintiff-respondent and Executed a promissory note in his favour on 16-7-1951 agreeing to pay interest at the rate of 6 per cent per annum. On 15-6-1954 he paid a sum of Rs. 5/- and made an endorsement on the pronote. There were no subsequent payments and the claim became time-barred. On 18-8-1958 he was examined as a witness in the case in which the respondent herein was the 1st defendant (O.S. No. 30 of 1958). During the course of cross-examination he stated as under:

'I executed a pronote for Rs. 200/- in favour of the1st defendant and I am prepared to pay off the debteven now.'

On that basis, the respondent issued notices and thereafter filed a suit for the recovery of the amount to the tune of Rs. 277-154. The petitioner contended that the pronote was without consideration and that the claim had become time-barred, the statement made by him being not sufficient in save the statutory time limit. The District Munsif-Magistrate Narasapatnam formulated two points for consideration :

(i) Whether the pronote was supported by consideration;and

(ii) Whether the suit was in time. In regard to the first point he held in favour of the plaintiff with which we are not concerned. As to the question of limitation by referring to the analogous provisions of Section 19 of Limitation Act he found that the statementmade by the petitioner as a witness in the course of his examination in O.S. No. 30 of 1958 amounted to a fresh contract within the meaning of Section 25(3) of the Contract Act and saved limitation. The revision petition is directed against this finding.

2. It is common ground that at the time when the statement referred to above was made by the petitioner the debt was not subsisting, so that the provisions of Section 19 of the Limitation Act were not available and it is only the provisions of Section 25(3) of the Contract Act, if applicable, could save the claim from being time-barred. The learned Munsif with reference to Section 19 of the Limitation Act held that when a deposition of a witness can be taken into consideration under Section 19 it can also be validly taken into account under Section 25(3) of the Indian Contract Act. Section 19 of the Limitation Act lays down that:

'(i) 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 properly or right has been made in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.'

3. The section refers to an acknowledgment of liability in respect of a subsisting debt it has been held that a deposition of the debtor was sufficient for this purpose, but the question is whether a deposition of this nature could be held sufficient for the purpose of attracting the provisions of Section 25(3) of the Contract Act. In other words, can an 'acknowledgment' be equated to a fresh promise to pay a debt barred by limitation. The relevant provisions of Section 25(3) of the Contract Act are as under:

'25. An agreement made without consideration is void, unless - (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law far the limitation of suits.'

4. There does not seem to be any direct authority on this point though a number of cases have been cited before me to emphasize the difference between the two sections. In Tulsiram v. Zaboo, AIR 1949 Nag 229, it has been pointed out that:

'There is a vital difference between an acknowledgment under Section 19, Limitation Act and a fresh promise under Section 25(3), Contract Act. An unconditional acknowledgment is sufficient for the purpose of Section 19, Limitation Act because such an acknowledgment implies a promise to pay. To accept an implied promise as the equivalent of a 'promise in writing' would made Section 19, Limitation Act, otiose because the same result by way of an acknowledgment would be reached irrespective of whether it was taken during the period of limitation or outside it.'

5. The ruling has no direct application and helps onlyto bring out that while a mere acknowledgment was sufficientfor the purpose of Section 19, Limitation Act, a promiseto pay in writing was required to attract the provisions ofSection 25(3) of the Contract Act. A careful perusal ofthe abovementioned provisions which have the effect of saving limitation, clearly makes out the essential differencesbetween the two sections. Under Section 19 of the Limitation Act an acknowledgment of a subsisting debt addressed to a person other than the person entitled to the property or fight is sufficient -- vide the Explanation I. -- But Section 25(3) of the Contract Act contemplates a promise made in writing to pay a debt of which the creditor might have enforced payment but for the law for the limitation of suits. Under the Limitation Act an acknowledgment made in writing signed by the party and addressed to a person other than the person entitled to the property or right would save a subsisting debt, but Section 25(3) of the Contract Act contemplates a promise made in writing and signed by the person in favour of the creditor. The latter postulates a novation of the contract while the former provides for mere acknowledgment. In order to bring a deposition within the meaning of a fresh contract, the necessary ingredients of 'proposal and acceptance' with the consciousness of me purpose for which the contract is being entered into have to be clearly brought out.

6. It is well settled that in determining whether a particular statement is an acknowledgment or promise the language of the document has to be considered in every ease. If it amounts to an acknowledgment the writing would not be useful for the plaintiff under Section 25(3) of the Contract Act. The statement attributed to the petitioner and reproduced in the preceding paras appears to be nothing more than an acknowledgment. It is to be borne in mind that the said statement was made in the course of the cross-examination obviously with the intention of showing the motive which had led the petitioner to appear as a witness against the respondent. In other words, it was elicited to damage and destroy the evidentiary value of his deposition. A statement made in those circumstances cannot be placed on the same pedestal as a fresh contract, which to my mind involves a deliberate undertaking to renew a time-barred claim. Further, if the statement is to be taken on its face value it is no more than a proposal or an offer. Admittedly, it has not been made to the respondent and there is nothing on record to show that the respondent has accepted this offer so as to bring it within the definition of a contract. It cannot be urged from the subsequent notices that passed between the parties that the offer has been accepted nor could if be said that the advocate who was representing the respondent in the suit was an agent of the respondent and was competent to accept the offer on his behalf. On a consideration of these facts, I am not inclined to agree with the lower Court that the statement made by the petitioner came within the purview of Section 25(3) of the Contract Act.

7. The next point urged by the learned counsel for the respondent is that notwithstanding the fact that the provisions of Section 25(3) of the Contract Act were not applicable, the order did not call for interference as nothing has been done, which is manifestly opposed to the principles of natural justice. Under Section 25(3)of the Provincial Small Cause Courts Act the High Court is competent to revise the decision of the Small Cause Court when it is based on an incorrect appreciation of the law. Where the plaintiff has deliberately allowed his claim to lapse without offering any explanation for the laches on his part, 1 find it difficult to sustain the order of the lower Court merely on the ground of equity.

8. The revision is accordingly allowed dismissing thesuit of the respondent-plaintiff. No costs.


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