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Pearey Lal and ors. Vs. Solu Gir - Court Judgment

LegalCrystal Citation
SubjectCivil ;Limitation
CourtAllahabad
Decided On
Reported inAIR1946All58
AppellantPearey Lal and ors.
RespondentSolu Gir
Excerpt:
..... - 10 dated 3rd july 1937 it was clearly stated that the payment was towards interest. the point before me is that if the limitation act is amended and even if the amendment is not made retrospective, can a claim which had become time-barred under the old act be revived and a suit filed after the amendment which would have failed, if filed when the old act was in force, on the ground that it was time-barred?.....execution was filed more than twelve years after the passing of the decree the suit was held to be time-barred. the same view was expressed by their lordships of the judicial committee in soni ram v. kanhaiya lal ('13) 35 all. 227. as has been said in some cases no one has a vested right in a period of limitation and the law of limitation applicable to a proceeding is generally the law prevailing on the date when the proceeding is started. but this general proposition has some exceptions and the point that has arisen in this case did not arise in either of the two cases mentioned above. the point before me is that if the limitation act is amended and even if the amendment is not made retrospective, can a claim which had become time-barred under the old act be revived and a suit filed.....
Judgment:
ORDER

Malik, J.

1. The plaintiffs filed a suit for recovery of Rs. 261-5-0 on the basis of a bond dated 30th July 1931. According to the plaintiffs, the defendant had borrowed a sum of Rs. 165 and had agreed to pay the amount in three instalments of Rs. 55 each. The first instalment was to be paid on 25th January 1932. The bond provided that in default of payment of any instalment the whole amount, then remaining due, would become payable. No instalment was paid. The defendant had paid a sum of Rs. 10 on 24th July 1934 and another sum of Rs. 10 on 3rd July 1937. The first payment of Rs. 10 was entered on the back of the bond and it bore the defendant's thumb impression. The entry was as follows: 'To-day the 24th July 1934, received Rs. 10 towards the bond.'

2. The defendant did not appear but the Court below held that the plaintiffs' suit was barred by limitation as the cause of action to file the suit arose on 25th January 1932, the date of the first default, and the payment dated 24th July 1934 not being payment of interest as such, it could not saw limitation. On the said finding the lower Court dismissed the suit. The plaintiffs have come up in revision to this Court and have argued that their suit was within time and have further urged that they were entitled to the benefit of the Amending Act (XVI [16] of 1942). The defendant was unrepresented also in this Court, but at my request Mr. Ambika Prasad Pandy agreed to act as amicus curiae. Learned Counsel appearing for the plaintiffs has argued two points. He has urged that the payment of Rs. 10 on 24th July 1934 must be deemed to be a payment towards principal and therefore a fresh, period of limitation should be computed from the time when the payment was made. In the Court below plaintiffs case was that this payment was towards interest as such and one of the plaintiff's went into the witness-box and gave evidence to that effect. The Court below, however, disbelieved that evidence and held that the payment was 'towards the bond' and was not payment of 'interest as such.' On a question of fact, I do not think it is open to the plaintiffs to change their case and urge before me that this sum of Rs. 10 was not paid towards interest but was paid towards principal. The further ground, on which they have urged this point, is that the bond dated 30th July 1931 did not provide for payment of any interest if the instalments were paid in time and the clause that in case of default of payment of any instalment interest at 2 per cent, per mensem would run on the whole amount from the date of the bond was a penal clause. Learned Counsel has argued that this clause was invalid under Section 74, Contract Act, and was not enforceable.

3. It may be that if the plaintiffs had claimed interest at the rate provided for in. the bond relying on the clause referred to above, the Court may have held that the clause being penal the plaintiffs were not entitled to claim interest at 2 per cent, but if the defendant believed that he was liable to pay both principal and interest and paid, the sum of Rs. 10 towards the bond it could, not be argued that it was payment towards the principal. In the endorsement of the second payment of Rs. 10 dated 3rd July 1937 it was clearly stated that the payment was towards interest. It is not possible, therefore, for learned Counsel to argue that, as a matter of fact, the defendant, when he made the first payment, did not pay towards the bond but paid towards the principal.

4. The question of such payments on account when both principal and interest were due on a bond came up for consideration before a Full Bench in Udeyyal Singh v. Lakshmi Chand : AIR1935All946 . Thom and Bajpai JJ. were of the opinion that if a creditor could prove by an endorsement in the handwriting of the debtor a payment either towards capital or interest then from the date of that payment a fresh period of limitation would run. But this view was not accepted by the majority, and the Pull Bench drew a distinction between a payment towards interest as such, a payment which was referable to the principal and payment on account towards a bond without any specification as to whether it was towards the principal or towards the interest. The minority view, that when an amount paid was less than the amount of interest which was duo on that date it must be deemed to be a payment of interest as such and would save limitation, was not accepted by the majority. The majority view has now been affirmed by their Lordships of the Privy Council in Rama Shah v. Lal Chand . In the case before me the defendant believed that principal and interest were both payable. He paid the first sum of Rs. 10 merely on account. It cannot, therefore, save limitation. The Court below has found that the payment was not towards interest as such. I cannot in revision interfere with that finding. Moreover, before me the learned Counsel did not try to challenge that finding but accepted the finding and argued that it was really a payment towards principal and not towards interest. When the defendant believed that interest was due from him and paid the next sum of Rs. 10 as interest it is difficult to believe that the first sum of Rs. 10 was paid towards the principal. It being, however, the plaintiffs' case in the Court below that it was a payment of interest as such there is no evidence on the record to prove that the payment was really towards the principal. This point, therefore, has no force. The next point urged is that in cases which are not covered by Section 28, Limitation Act, the right is not extinguished but it is the remedy alone that is barred. Plaintiffs' right to get the money still subsisted and if the defendant had paid the amount or had entered into another agreement, in consideration of the sum due under the bond dated 80th July 1931, it could not be urged that such payment or the new agreement was without consideration. Section 20, Limitation Act (IX [9] of 1908) before its amendment by Act XVI [16] of 1942, read as follows:

Where interest on a debt...before the expiration of the prescribed period paid as such by the person liable to pay the debtor where part of the principal of a debt is, before the expiration of the period, paid by the debtor as such...a fresh period of limitation shall be computed from the time when the payment was made.

5. There is a proviso to this sub-section which after its amendment by Act I [1] of 1927, reads as follows:

Provided that, save in the case of a payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.

6. It may be that by reason of the decision of their Lordships of the Judicial Committee in Rama Shah v. Lal Chand , Sub-section (1) of Section 20, was amended by the Amending Act (XVI [16] of 1942) which received the assent of the Governor-General on 30th March 1942, and was published in the Government of India Gazette on 4th April 1942. After the amendment the relevant portion of Sub-section (1) of Section 20 reads as follows:

Effect of payment on account of debt. - Where payment on account of a debt...is made before the expiration of the prescribed period, by the person liable to pay the debt...a fresh period of limitation shall be computed from the time when the payment was made:

The proviso, however, remains as before. Learned Counsel has agreed that the law of limitation applicable to the case is the law prevailing on the date of the suit. In support of that proposition he has cited before me several cases, the first case cited is Mt. Begam Sultan v. Sarvi Bagam : AIR1926All93 . It was held in that case that an application for execution was barred under Section 48, Civil P.C. At the time when the decree was passed the old Code of Procedure was in force but at the time when the application for execution was made the new Code of 1908 had come into existence. It was observed by Sulaiman J. that the law of procedure and limitation applicable to an application for execution would be the law actually in force at the time when the application was made and as the application for execution was filed more than twelve years after the passing of the decree the suit was held to be time-barred. The same view was expressed by their Lordships of the Judicial Committee in Soni Ram v. Kanhaiya Lal ('13) 35 All. 227. As has been said in some cases no one has a vested right in a period of limitation and the law of limitation applicable to a proceeding is generally the law prevailing on the date when the proceeding is started. But this general proposition has some exceptions and the point that has arisen in this case did not arise in either of the two cases mentioned above. The point before me is that if the Limitation Act is amended and even if the amendment is not made retrospective, can a claim which had become time-barred under the old Act be revived and a suit filed after the amendment which would have failed, if filed when the old Act was in force, on the ground that it was time-barred? In the Limitation Act (XV [15] of 1877) there was a second section which provided as follows:

All reference to the Limitation Act, 1871, shall be read as if made to this Act, and nothing herein or in that Act contained shall be deemed to affect any title acquired, or to revive any right to sue barred, under that Act or under any enactment thereby repealed....

7. This provision has now been taken out of the Limitation Act and it is now contained in Section 6, General Clauses Act (X [10] of 1897) which reads as follows:

Where this Act, or any Act of the Governor General in Council or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then unless a different intention appears, the repeal shall not-

(a) revive anything not in force or existing at the time at which the repeal takes effect, or

(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder, or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed, or

(d) ....

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid,

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced....as if the Repealing Act or Regulation had not been passed.

8. It follows from this that the right of action which is barred by limitation at the time when the new Act or amendment came into force cannot be revived by the subsequent change in the law. Learned Counsel has argued that this provision only applies to repeals and not to amendments, I can see no difference in principle between the repealing of an Act in its entirety and its amendment by repealing certain provisions and replacing them by new provisions. The point, to my mind, is covered by several decisions of their Lordships of the Judicial Committee. In Appasami Odayar v. Subramanya Odayar ('88) 12 Mad. 26 a suit to recover a share of joint family property not brought within twelve years from the date of the last participation in the profits of it was held barred by Section 1, Clause (13) of Act XIV [14] of 1859. The suit, however, was instituted after Act XIV [14] of 1859 had been repealed by Act IX [9] of 1871. It was argued that the suit, though it may have been barred if it had been filed when Act XIV [14] of 1859 was in force, was no longer barred as there was no such provision in Act IX [9] of 1871 which could bar the suit on the date when it was filed. Their Lordships at p. 169 observed:

Consequently, if there was no participation of profits between 1837 and 1871, the suit would be barred, and the later Acts for limitation of suits need not be referred to. If they altered the law they would not revive the right of suit.

9. To the same effect is the decision in Mohesh Narain v. Taruck Nath ('93) 20 Cal. 487. In Sachindra Nath Roy v. Maharaj Bahadur Singh ('22) 9 A.I.R. 1922 P.C. 187 a decree was passed on 26th August 1905 when the Limitation Act (XV [15] of 1877) was in force and under Schedule 2, Article 179 of that Act time ran from the date of the decree and not from the date of the decision of the appeal, nor from the expiration of the six months allowed for the payment of the decree. The application for execution was, however, made when the Act of 1908 was in force and under Article 182 of Schedule 1 of that Act the period of limitation for execution ran from the date of decision of the appeal. Dealing with the question as to which of the two Limitation Acts, that of 1877 or that of 1908, applied to the case, their Lordships observed that this point could be determined by the condition in which the decrees stood when the latter Act came into force on 1st January 1909. Their Lordships held:

The date of the decrees being 26th August 1905, they became unenforceable by proceedings commenced after 26th August 1908. Bray was paid the amount due upon 2nd February 1910, one year and three months after the statutory period had elapsed and over thirteen months after 1st January 1909, when the latter Act had come into operation. 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 date had become unenforceable by lapse of time.

10. It is clear, therefore, that in the absence of anything to the contrary, if a claim is within limitation according to the old Act on the date when the new Act comes into force and a proceeding is commenced after the coming into force of the new Act it is the new Act which would govern all decisions on the point of limitation. If, however, the right to sue or the right to apply had already been barred by the provisions of the Limitation Act then in force, then unless there was something in the latter Act which could be deemed to apply retrospectively to revive claims which had already become barred, the new Act could not be availed of 'or the purpose of saving limitation. Learned Counsel has relied on certain passages from a decision of the Full Bench reported in Ram Karan Singh v. Ram Das Singh : AIR1931All635 . Sulaiman A.C.J. at page 1022 observed:

But a right to sue in one Court rather than another, a right to wait for a particular period o time before suing is not a substantive right. The selection of forum and the period of limitatian are ordinarily matters of procedure only.

At page 1023 he again observed:

All that I can say is that when a question of limitation is raised it ought to be decided in accordance with the law of limitation in force at the time of the institution of the suit and not that in force at the time of the cause of action unless there be any express provision to the contrary in the Act itself.

11. The law was, more or less, stated to be the same by Bajpai J. at page 1035. The point that has arisen before me, however, did not arise in that case and their Lordships were not called upon to consider whether a claim which had already been barred under the Limitation Act then in force could be revived by the passing of a new Act when that Act was not expressly retrospective in its effect. To my mind, therefore, the decision of the Court below was right and the suit was rightly dismissed. I dismiss this application.


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