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Firm Ratanji Bhagwanji and Co. Vs. Prem Shanker - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1938All619
AppellantFirm Ratanji Bhagwanji and Co.
RespondentPrem Shanker
Excerpt:
- .....to recover rupees 1600 including interest from the defendant-appellant on the allegation that one jata shanker, the working partner of the defendant firm, had borrowed from the plaintiff a sum of rs. 1000 on 19th january 1932, and another sum of rs. 100 on 3rd february 1932. the suit was filed on 11th november 1935, more than three years after these two loans were taken, but the plaintiff sought to save limitation by an acknowledgment in writing said to have been made by jata shanker on 30th november 1932. the defence in the case was that jata shanker had embezzled the money of the defendant firm and was removed from partnership in november 1932, and that jata shanker had no authority to borrow money on behalf of the defendant firm or to give an acknowledgment. it was also alleged that.....
Judgment:

Misra, J.

1. This is a second appeal by the defendant from the decision of the Sessions and Subordinate Judge of Cawnpore, dismissing an appeal against the decision of the Munsif of Oawnpore in a case for recovery of a certain sum of money. The plaintiff Prem Shanker sued to recover Rupees 1600 including interest from the defendant-appellant on the allegation that one Jata Shanker, the working partner of the defendant firm, had borrowed from the plaintiff a sum of Rs. 1000 on 19th January 1932, and another sum of Rs. 100 on 3rd February 1932. The suit was filed on 11th November 1935, more than three years after these two loans were taken, but the plaintiff sought to save limitation by an acknowledgment in writing said to have been made by Jata Shanker on 30th November 1932. The defence in the case was that Jata Shanker had embezzled the money of the defendant firm and was removed from partnership in November 1932, and that Jata Shanker had no authority to borrow money on behalf of the defendant firm or to give an acknowledgment. It was also alleged that Jata Shanker is the uncle of the plaintiff and the alleged loans were fictitious.

2. The trial Court of the Munsif found that the two items of loan were taken by Jata Shanker, that he was the working partner of the defendant firm and that he had authority to borrow the money. As to the acknowledgment embodied in the document Ex. 1, dated 30th November 1932, the Munsif held that, although this document is a promissory note and not duly stamped as such, it is admissible in evidence for saving limitation, because it also contains an acknowledgment. He relied on the case reported in Ambalan v. Ambalan : AIR1930Mad485 . In the result the claim was decreed for the principal sum of Rs. 1100 only on the ground that the portion of the promissory note relating to interest was not admissible in evidence. In appeal the lower Appellate Court upheld the decision of the learned Munsif and made the following observations in its judgment:

The learned Munsif held that although the said document was not admissible in evidence as a pro-note, yet it could be relied upon as an acknowledgment. This view of the learned Munsif is challenged by the appellant. On behalf of the respondent it is urged that in view of Section 36, Stamp Act, this Court is precluded from questioning the admissibility of a document which has already been admitted by a Court. I have grave doubts about this latter argument of the respondent, but I find that there is a ruling of the Lahore High Court, Rupchand v. Baili Ram (1933) A.I.R 1933 in which the trial Court had admitted in evidence a document as acknowledgment which was not properly stamped as a pronote. On appeal the District Judge dismissed the claim on the ground of inadmissibility of the document but the Hon'ble High Court held that when once a document was admitted by a Court, though wrongly, the Appellate Court was debarred under Section 36 of the Act from interfering in the matter. I think it is not permissible for me to enter into the question of admissibility of the document when once it has been admitted by the learned Munsif.

3. As to Jata Shanker's authority to borrow money and make an acknowledgment the lower Appellate Court observed that though Jata Shanker was made to leave the partnership on or about the time when the acknowledgment was executed, there was nothing definite to show that the acknowledgment was executed after he had been made to sever his connexion with the firm. In second appeal learned Counsel for the defendant-appellant has contended before me (1) that the document of 30th November was not admissible in evidence and could not be relied upon as an acknowledgment and (2) that the burden of proving that Jata Shanker had executed the document of acknowledgment after he had severed his connexion with the defendant firm was not on the defendant but on the plaintiff, and it was not proved that when Jata Shanker executed this document he was a partner of the defendant firm. The document of acknowledgment, dated 30th November 1932, is in these terms:

I have taken from you Rs. 1000 on 19th January 1932, and Rs. 100 on 3rd February 1932, total Rs. 1100. Whenever you ask for it I have to pay it together with interest.

4. The actual words are : jab mango tab biyaj sahit deneka hai. Below this is affixed a one anna stamp and on the stamp appears the signature of Jata Shanker on behalf of the firm. Although in its judgment the learned Munsif held that this document is a promissory note, the endorsement on the back of it in the handwriting of the learned Munsif himself is as follows : 'This is an acknowledgment and need not be impounded.' This endorsement is dated 14th December 1935, the date on which the judgment in the case was pronounced. The endorsement was made in consequence of a report by the office that the document was a promissory note and should have borne a stamp of four annas, but as it bore a stamp of only one anna it was liable to be impounded. The lower Appellate Court does not appear to have considered whether this document is a promissory note or a mere acknowledgment. In my opinion it is not a promissory note because it does not contain an unconditional undertaking to pay. It only acknowledges that the two items of money mentioned therein have been borrowed and that the executant has to repay them on demand. There is no promise to pay, but only an admission of liability to pay. I translate the words denaka hai as I have to pay or I am liable to pay' and not as 'I promise to pay'.

5. In this view of the matter no further question arises about the non-admissibility of the document. It is properly stamped and saves limitation. If however the document is treated as a promissory note, the question arises whether it was open to the learned Munsif to split it up in two parts, the first part containing an admission of liability and the second part containing an undertaking to pay. There is clear authority of this Court that the document cannot be so split up, vide the case in Mt. Bibbo v. Gokaran Singh : AIR1937All101 , where it was held that the; document must be considered as a whole, and if it is an instrument insufficiently stamped as required by the Stamp Act, then it should not be admitted in evidence for any purpose. It may be observed that the Madras case in Ambalan v. Ambalan : AIR1930Mad485 relied upon by the learned Munsif was expressly dissented from by a Bench of this Court. If therefore the document in question is a promissory note and cannot be split up, the learned Munsif was obviously wrong in admitting it in evidence and relying on only a portion of it as an acknowledgment to save limitation.

6. The next question that falls to be considered is whether the learned Munsif having admitted the document in evidence, the lower Appellate Court was precluded from questioning the admissibility of the document. On behalf of the respondent I have been referred to Section 36, Stamp Act, and the rulings reported in Ratan Singh v. Pirbhu Dayal : AIR1931All302 , Rupchand v. Bailli Ram (1933) 20 A.I.R. Lah. 240 and Bhupati Nath v. Basanta Kumari Devi : AIR1936Cal556 . The law is clear that where an instrument has been admitted in evidence the admission of it cannot be called in question at any stage in the same suit or proceeding on the ground that the instrument has not been properly stamped : see Section 36, Stamp Act. In none of the rulings just referred to was there any question of a part of a document having been admitted. The document had been admitted in its entirety. The case nearest to the one under appeal is the Lahore ease in which a promissory note which was inadmissible in evidence as such was nevertheless admitted as a validly stamped acknowledgment. It was held by a single Judge of the Lahore High Court that even though the document had been wrongly admitted the Appellate Court was debarred under Section 36, Stamp Act, from interfering in the matter. Even in that case however the document had been admitted in its entirety. In the present case it is not quite clear whether the learned Munsif admitted the whole document but relied only on a portion of it as an acknowledgment or whether he admitted only a portion of the document and did not admit the rest. From the endorsement on the back of the document it appears that he admitted the document in its entirety, and in his judgment there is nothing to show that he meant to admit only a part of the document, though he certainly relied on only one part of it and observed that the other part which was a part of the promissory note was not admissible in evidence. If he admitted only a part of the document, then the rulings cited above would not apply and in my opinion the Appellate Court would not be precluded from holding that part of the document is not admissible and the whole document should be excluded from consideration as being inadmissible. But, if, as appears, the learned Munsif admitted the document in its entirety but relied only on a portion of it to save limitation, the Appellate Court would be precluded from questioning the admissibility of the document even though it had been wrongly admitted by the learned Munsif. The matter need not however be pursued further, for on my finding that the document under discussion is a deed of acknowledgment and not a promissory note, the question discussed above becomes purely one of academicals interest.

7. As to the question whether Jata Shanker had authority to borrow the money there is the concurrent finding of fact of the two lower Courts that he was a working partner and had such authority, and the only question which I am called upon to decide in second appeal is whether when Jata Shanker executed the document of acknowledgment he had authority to do so. The finding of the lower Appellate Court is that it was in some time in November 1932 that Jata Shanker ceased to be a partner in the defendant firm. The date on which this happened is not stated in the judgment of the lower Appellate Court and does not appear from the evidence led in the trial Court. But even assuming that Jata Shanker's connexion with the firm ceased before the date of the acknowledgment, the defendant firm would continue to be bound by the transactions of Jata Shanker made with third parties until public notice of the severance was given : vide Section 32, Clause (3) and Section 33, Clause (2) and Section 45, Clause (1), Partnership Act. It is not alleged on behalf of the appellant that any such notice was given or that the plaintiff-respondent was aware on 30th November 1932, when the document of acknowledgment was executed by Jata Shanker that the latter had ceased to be a partner in the defendant firm. For the reasons set forth above, the appeal fails and is dismissed with costs. Leave to file a Letters Patent appeal is refused.


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