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Rao and Sons and ors. Vs. Bijayalaxmi Das and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtOrissa High Court
Decided On
Case NumberCivil Revn. No. 3 of 1968
Judge
Reported inAIR1969Ori301a
ActsContract Act, 1872 - Sections 2 and 25(3)
AppellantRao and Sons and ors.
RespondentBijayalaxmi Das and anr.
Appellant AdvocateR.N. Misra and ;A.K. Rao, Advs.
Respondent AdvocateB. Rath, Adv.
DispositionRevision allowed
Cases ReferredSriram Arjundas v. Governor General
Excerpt:
.....orissa 130 overruled]. - 1/a on 6-3-42. even if the handnote was executed on 2-1-40, it was not barred by limitation by 6-2-42. the payments are definitely endorsed on ext 1. judged from this aspect, it is immaterial whether the handnote was executed on 2-1-40 or 2-1-41 as its execution and passing of consideration thereunder are not disputed. in the absence of very strong evidence it is difficult to ac-cept the defence story that a blank paper was used by mr. i am satisfied that p. it was held not to have laid down good law. air 1963 andh pra 337 did not make reference to any of these calcutta and madras decisions and does not lay down good law. i am clearly of opinion that a barred debt is a valid consideration for a promise to pay under section 25(3) even if the promisor did not..........plaintiff's suit was for recovery of rs. 690/- on the basis of apromissory note ext. 1 executed by late kasinath das, an advocate, on 2-1-41 for rs. 660/-. he paid rs. 630/- in six instalments, the last payment being rs. 30 on 14-2-57. on 13-2-60 the executant wrote the letter ext. 3 acknowledging the loan payable under ext. 1. the defendants are the heirs of late kasinath das. their defence is that the. handnote ext. 1 was executed on 2-1-40, and not on 2-1-41. the payment made on 14-2-57 towards the suit handnote is challenged and it is asserted that this payment was made towards the dues of a loan incurred by late gopinath das in which kasinath das was his surety. ext. 3 is said to be not genuine. it is alleged that late kasinath das was appearing as a junior with late m. s. rao in.....
Judgment:
ORDER

G.K. Misra, J.

1. The plaintiff's suit was for recovery of Rs. 690/- on the basis of apromissory note Ext. 1 executed by late Kasinath Das, an advocate, on 2-1-41 for Rs. 660/-. He paid Rs. 630/- in six instalments, the last payment being Rs. 30 on 14-2-57. On 13-2-60 the executant wrote the letter Ext. 3 acknowledging the loan payable under Ext. 1. The defendants are the heirs of late Kasinath Das. Their defence is that the. handnote Ext. 1 was executed on 2-1-40, and not on 2-1-41. The payment made on 14-2-57 towards the suit handnote is challenged and it is asserted that this payment was made towards the dues of a loan incurred by late Gopinath Das in which Kasinath Das was his surety. Ext. 3 is said to be not genuine. It is alleged that late Kasinath Das was appearing as a junior with late M. S. Rao in many cases. He used to send blank papers with signatures authorising late M. S. Rao to appear on his behalf. One such paper containing the signature of late Kasinath Das has been used for fabrication of Ext. 3. There was no acknowledgment and the suit was barred by limitation.

2. To have a clear picture, it would be profitable to note the various pay-ments with dates.

(1)2-1-41Kasinath Das borrowedExt. 1 Rs. 660/- from late M. S. Rao (2)6-3-42 Rs. 500/- paidExt. 1/a(3)27-2-45 Rs. 25/- paidExt. 1/b(4)22-2-48 Rs. 25/- paidExt. 1/c(5)19-2-51 Rs. 25/- paidExt. 1/d(6)14-2-54 Rs. 25/- paidExt. 1/e(7)14-2-57 Rs. 30/- paidExt. 2 (8)13-2-60Acknowledgment by letterExt. 3

The learned trial court held that Rs. 660/- was borrowed by late Kasinath Das under Ext. 1 on 2-1-41, and not on 2-1-40 and that the payment of Rs. 30/- on 14-2-57 did not relate to the suit handnote, but related to the handnoteunder which Gopinath Das incurred the loan. He further held that the letter Ext. 3 dated 13-2-60 sent by Kasinath Das acknowledging the loan was genuine. Having held that the suit handnote was barred by limitation as the payment on 14-2-57 did not relate to it, he dismissedthe suit. He also held that Ext. 3 did not constitute a fresh agreement within the scope of Section 25(3) of the Contract Act.

The learned lower appellate court recorded the following findings :--

(i) The handnote Ext. 1 was executed on 2-1-40 and not on 2-1-41.

(ii) The payment made on 14-2-57 did not relate to the suit handnote.

(iii) The letter Ext. 3 is not genuine.

(iv) Ext. 3, even if genuine is not an agreement within the meaning of section 25(3) of the Contract Act.

The appeal was accordingly dismissed. Against the confirming judgment dismissing the plaintiff's suit, this Civil Revision has been filed.

3. The following questions arise for consideration on the basis of arguments advanced by the learned counsel for the parties:--

(1) Was Ext. 1 executed on 2-1-40 or on 2-1-41?

(2) Does the payment of Rs. 30/- on 14-2-57 under Ext. 2 relate to the suit handnote?

(3) Is Ext 3 genuine?

(4) If it is genuine, does it furnish a fresh cause of action under Section 25(3) of the Indian Contract Act?

4. The first question whether the suit handnote was executed on 2-1-40 or 2-1-41 is wholly academic. There is no dispute that the payments made under Exts. 1/a to 1/e relate to the suit handnote. Rs. 500/- was paid under Ext. 1/a on 6-3-42. Even if the handnote was executed on 2-1-40, it was not barred by limitation by 6-2-42. The payments are definitely endorsed on Ext 1. Judged from this aspect, it is immaterial whether the handnote was executed on 2-1-40 or 2-1-41 as its execution and passing of consideration thereunder are not disputed.

Going into the merits of the case, the learned trial court reached the correct conclusion in Holding that the handnote was executed on 2-1-41. Obviously by mistake late Kasinath Das had given the date '2-1-40'. The year 1940 had come to an end, but the habit of noting the past year does not sometimes cease. This is evidenced by the fact that there is a clear endorsement in the handwriting of late M. S. Rao made on 2-1-41 itself. Some of the subsequent endorsements are in the handwriting of Kashinath Das himself. The learned lower appellate court indulged in surmises and speculation without any materials that Kasinath Das made the endorsement, without seeing the noting of late M. S. Rao that Rs. 660/- was advanced on 2-1-41. Late Kasinath Das was an advocate of eminence. The learned trial court reached the correct conclusion in holding that the date of the handnote is 2-1-41 and not 2-1-40.

5. It is conceded by Mr. R. N. Misra for the plaintiff that the payment of Rs. 30/- on 14-2-57 does not relate to the suit handnote. On this concession, the handnote would be barred by limitation unless the letter Ext. 3 sent on 13-2-60 furnishes a fresh cause of action under Section 25(3) of the Contract Act. Even. if this letter constitutes an acknowledgment under Section 19 of the Limitation. Act, it will not save limitation, as by then the handnote was not saved by any payment.

6. The further question for consideration therefore is whether Ext. 3 is genuine, and if so, whether it comes within; the scope of Section 25(3) of the Contract Act. Ext. 3 bears the signature o late Kasinath Das and it comes from the custody of the plaintiff. It is written on a paper containing the letter-head of Kasinath Das. It runs thus:--

'With reference to handnote for Rs. 660 dated 2-1-41, as yet I have not been able to repay your dues in full. Please allow me time till the end of March 1960 for repaying in full.

Yours faithfully, K. N. Das, Advocate.'

Admittedly the body of the letter is not in the handwriting of Kasinath Das. Mr. Kartik Rao (Advocate, Plaintiff and P. W. 1) states on oath that a relation of Kasinath Das, whom he cannot subsequently trace out, wrote the letter to the dictation of late Kasinath Das and the latter signed the same. The counter evidence is given by the widow of late Kasinath Das that P. W. 1 never came to the office of Kasinath Das and no such letter was dictated by Kasinath Das. The evidence of the widow, though she is a respectable lady, cannot be given much importance. She is not likely to come to the office of her husband and was not in a position to know any transaction in between Kasinath Das and P, W. 1. Her denial therefore does not carry any value. P. W. 1 is an advocate of some standing and is a respectable-person. It is not the case of either party that Kasinath Das was unconscious while the signature was given on the letter. He was an advocate of eminence and it is a matter of common sense that he could not have put his signature to such a letter without going through it.

The case of the defendants that late Kasinath Das used to send blank papers for use in court does not carry much conviction. P. W. 1 denies the fact of any such blank paper being handed over to late M. S. Rao by late Kasinath Das. Mr. M. S. Rao was a top ranking senior advocate of this Bar. In the absence of very strong evidence it is difficult to ac-cept the defence story that a blank paper was used by Mr. M. S. Rao or Mr. Kartik Rao to fabricate Ext. 3. Doubtless the onus of proving the genuineness of Ext. 3 is on the plaintiff. Even if the scribe is not examined and the scribe is not known to the plaintiff, the execution can be proved on the basis of the evidence that a relation of Mr. Kasinath Das scribed the letter to the dictation of Mr. Kasinath Das, after which the latter signed it. Such cases are somewhat unusual. But the evidence given by P. W. 1 in the aforesaid strain cannot be rejected as not being admissible in evidence. I am satisfied that P. W. 1 is a witness of truth and the letter Ext. 3 is genuine and was written to the dictation of late Kasinath Das.

Even if Ext. 3 is genuine and constitutes an acknowledgment under Section 19 of the Limitation Act, the suit cannot be decreed on its basis as by then any suit on the basis of the handnote would be barred by limitation, there being no payment in between 14-2-54 and 13-2-60. It is therefore necessary to examine if Ext. 3 can be a valid agreement within the meaning of Section 25(3)of the Contract Act.

7. Section 25, Sub-section (3) of the Contract Act runs thus:--

'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 for the limitation of suits.'

In any of these cases, such an agreement is a contract.'

The juristic theory behind this subsection is that the right of a lender to receive payment and the obligation of the borrower to repay never dies by lapse of time. The sub-section merely resuscitates the remedy to enforce payment by suit (See AIR 1947 Cal 267, Suresh Chandra v. Benoy Kumar). The letter Ext. 3 prima facie satisfies all the elements required under this section. There is a clear reference to the handnote under which the loan had been incurred. Late Kasinath Das made a clear admission that the dues had not been repaid in full. In express terms he asked for time to make payment in full by March 1960. There was thus a promise made in writing signed by Kasinath Das to pay the dues under the handnote which had been barred by limitation.

8. Mr. Rath however contends that the section has no application as Ext. 3 does not indicate that Kasinath Das wasconscious that the debt had been barred by limitation. The letter Ext. 3 does not indicate his awareness that the debt had been barred by limitation and his preparedness to repay the debt, even though it had been barred by limitation. He further contends that Ext. 3 is not a promise within the meaning of Section 2(b) of the Contract Act. Both these contentions require careful examination.

9. In support of his contention that the debtor must be conscious of the debt being barred by limitation before a promise is made, reliance is placed by Mr. Rath on (1910) 20 Mad LJ 656, Rama-swami Pillai v. Kuppuswami Pillai and AIR 1963 Andh Pra 337, Sambayya v. Shemsherkhan. Both these cases are single Judge decisions and support the contention of Mr. Rath. In (1910) 20 Mad LJ 656 his Lordship observed that there was nothing to show that the debtor recognised that the debt was irrecoverable and still promised to pay it, and the promise to which Section 25 refers seems to be a promise to pay despite the consciousness that the debt is barred. This case came up for consideration in (1913) 18 Cal LJ 269, Mati Sheikh v. Baikantha Nath and was dissented from. It was held not to have laid down good law. Their Lordships observed that the legislature did not insist on the consciousness of the debtor about the debt. being barred by limitation before promise was made. Such words cannot be imported into the section which are not to be found there. The identical view waa taken also in (1913) 18 Cal LJ 329, Bhowani Misser v. Peari Jha. Sir Asu-tosh Mookerjee was a party to both these Division Bench decisions. In AIR 1915 Mad 242. Mrs C. Simon v. Arogia-sami Pillai and AIR 1951 Mad 903, Mu-thayee Achi v. Sabbiah Chettiar similar views were taken by two Division Benches of the Madras High Court. (1910) 20 Mad LJ 656 thus stands overruled even in Madras. AIR 1963 Andh Pra 337 did not make reference to any of these Calcutta and Madras decisions and does not lay down good law.

I am clearly of opinion that a barred debt is a valid consideration for a promise to pay under Section 25(3) even if the promisor did not know it to be bar-red on the date of the promise. The first contention of Mr. Rath is accordingly rejected.

10. The next contention of Mr. Rath is that Ext. 3 is merely a proposal given by late Kasinath Das, and there is no material to show that the plaintiff accepted the proposal. There is therefore no promise within the meaning of Section 2(b). Reliance is placed on AIR 1952 Cal 443, Sriram Arjundas v. Governor General in Council wherein his Lordship observed thus:--

'It seems to me that Section 25 requires that before the writing is made and signed there must be an agreement by the acceptance of a proposal and that agreement is to be recorded in writing and signed in accordance with the requirements of the section.'

Mr. Rath contends that there are no materials on record to show that Ext. 3 was accepted by the plaintiff before it was put into writing. The law laid down in the Calcutta case cannot be construed to mean that acceptance cannot be inferred from the facts and circumstances of a case. Section 2(b) of the Contract Act runs thus:--

'2. In this Act the following words and expressions are used in the following senses unless a contrary intention appears from the context.

* * * *

(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. Aproposal, when accepted becomes a promise.'

In this case the evidence of P. W. 1 is that the letter was signed by Kasinath Das after going through the contents and was given to the plaintiff. Obviously the plaintiff accepted it, kept it with him and has used it. The circumstances are clear that the plaintiff accepted the proposal made by late Kasinath Das, as a result of which the promise given in Ext. 3 came into existence. That the proposal was accepted ultimately culminating in the promise embodied in Ext. 3 can be reasonably inferred from the facts and circumstances of this case. The second contention has accordingly no force.

11. In the result, the plaintiff's suitmust succeed. The judgments of thecourts below are set aside and the CivilRevision is allowed. In the circumstances, parties to bear their own coststhroughout.


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