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The Official Assignee of Madras Representing the Estate of R. Kasi Visvanadha Mudaliar Vs. V.A. Kuppuswami Naidu and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1936Mad785; 165Ind.Cas.301; (1936)71MLJ250
AppellantThe Official Assignee of Madras Representing the Estate of R. Kasi Visvanadha Mudaliar
RespondentV.A. Kuppuswami Naidu and ors.
Cases ReferredSevugan Chetty v. Krishna Aiyangar
Excerpt:
.....1929, rightly failed, with regard to the other part of the arrangement, namely, that the debt was to be paid by weekly instalments of rs. it is of course well-settled that where all the facts of the original loan and all its terms are set out in the plaint but the plaint is based on an insufficiently stamped promissory-note or it may also be added a promissory-note barred by limitation the plaintiff is entitled to succeed alternatively on the original loan although there is no such prayer; held was clearly false and the defendants succeeded merely because, through inadvertence it may be, the promissory-note alone was relied upon......to the contention of the plaintiff that the plaint sufficiently alleges a cause of action on the original debt, such contention was negatived by the learned trial judge. in paragraph 6of the plaint that debt is set out as being made up of rs. 2,450 and certain sums due on accounts amounting to rs. 3,923-13-10. nothing more is said thereafter about that debt except that in his prayer the plaintiff asks for a decree for the balance due. the promissory note and its origin are set out in paragraph 7 and throughout it is the one cause of action to which reference is made, and in paragraph 22 it is stated that the cause of action in this suit arose on the date on which the promissory-note was executed. apart therefore, from the mention of the original debt, there is no further mention of it.....
Judgment:

1. One Visvanadha Mudaliar, now deceased, a dealer in tobacco and the 1st defendant who is also doing business in tobacco purchased goods from him and eventually on account of such dealings and of a promissory note for Rs. 2450 on the 20th September, 1928 there was a sum of Rs. 6323-13-10 owing to Visvanadha Mudaliar on a balance of accounts. According to the account books of Visvanadha Mudaliar there was on the 20th September 1928 a settlement of accounts and a promissory note for the before-mentioned amount was executed by the 1st defendant in favour of Visvanadha Mudaliar payable on demand. It is necessary to mention also that the 2nd and 3rd defendants were trustees appointed by Visvanadha Mudaliar under a deed of trust dated 23rd August, 1928, under which Visvanadha Mudaliar himself and the 2nd and 3rd defendants were to be trustees of this business for the purpose of realising the assets and outstand-ings of it. After this deed of trust the 2nd and 3rd defendants enterted into possession of Visvanadha Mudaliar's estate and amongst the assets there was the debt due by the 1st defendant to Visvanatha Mudaliar of Rs. 2450 on the promissory note and certain sums were also due amounting to Rs. 3923-13-10. The 1st defendant paid to the trustees small sums of Rule 50 Rs. 30 and Rs. 20 and giving credit for those amounts the balance of Rs. 6323-13-10 became the amount due on the 20th September, 1928, as is shown in Visvanadha Mudaliar's account-book. After the execution of the promissory note the first defendant continued to pay towards the amount due by him instalments of Rs. 10. These payments are credited in Visvanadha Mudaliar's account-book and although some of the payments were of Rs. 20 instead of Rs. 10 and some were not made weekly in the majority of cases weekly payments were made. The last instalment paid, according to the account-book, is dated 29th June, 1929. These instalments amounted in the aggregate to Rs. 340 leaving therefore a balance due by the 1st defendant to Visvanadha Mudaliar of Rs. 5983-13-10 on the 29th June, 1929. On the 3rd April, 1929 an insolvency petition was presented against Visvanadha Mudaliar and on it he was adjudicated an insolvent on the 22nd July, 1929. Thereafter his estate vested in the Official Assignee who on the 14th May, 1932 filed the suit under appeal claiming the sum of Rs. 5983-13-10 the balance due from the 1st defendant to the insolvent.

2. At the trial the 1st defendant admitted the execution of the promissory note and pleaded that he had discharged the promissory note by payment of the amount due to Visvanadha Mudaliar shortly after the execution of the promissory note. Thus there was no denial of the debt but a plea that it had been fully discharged. He also pleaded that the suit on the promissory note was barred by limitation; and taking the date of it, the suit on the promissory note clearly was barred. But in order to save limitation the plaintiff in his plaint set up an arrangement between Visvanadha Mudaliar and the 1st defendant whereby the promissory note amount was to be repaid by weekly payments and that the note was only to be enforced if there was -a default in such payments and that such payments had been made up to June 1929 and he also pleaded that a letter written by the 1st defendant's lawyer dated the 18th February, 1931 asking to be allowed to look into the accounts amounted to an acknowledgment of the claim by the 1st defendant, a plea which is obviously unsustainable. The plaintiff also pleaded that he was entitled to exclude the period between January, 1931 during which he was kept out of possession of the promissory note by the 1st defendant, that this was done fraudulently and that as a result for nearly ten months he was unable to file the suit. There is also a claim for negligence or breach of trust against the 2nd and 3rd defendants trustees, another claim which is clearly unsustainable.

3. The learned trial Judge felt that he had no alternative but to dismiss the suit and that he was unable to hold that the plaint contained sufficient allegations to found a claim on the balance of account due irrespective of the promissory note and also that he would not allow the plaint to be amended to raise such a claim and whilst apparently - although this is not quite clear - agreeing that there was an arrangement for the payment of the debt of weekly instalments of Rs. 10 negatived the plaintiff's contention that the promissory note was only to become enforceable if and when there should be a default in the payment of the instalments. With regard to the latter arrangement we are satisfied that the learned trial Judge took the right view. There is no evidence at all supporting it. The promissory note itself does not set it out; on the contrary its terms contradict such an agreement because it is payable on demand. Therefore, the plaintiff's contention that the bar of limitation was saved by reason of such an arrrange-ment and that the period of limitation started to run only from the date of default, namely, June, 1929, rightly failed, With regard to the other part of the arrangement, namely, that the debt was to be paid by weekly instalments of Rs. 10 the learned trial Judge holds as a fact that such payments were being made by the first defendant under his liability to pay the balance of account and further says : 'The balance of account was payable by instalments or at any rate was being paid by instalments'. He does not definitely record a finding that there was such an arrangement although, in our view he may have intended to so find. There is, however, ample evidence on the record before us to enable us to give a definite opinion. The account book, as before stated, shows a large number of payments of Rs. 10 a week and in some cases Rs. 20 in a fortnight and there is also oral evidence with regard to this. In our view these payments were being made as a result of an agreement to do so. With regard to the contention of the plaintiff that the plaint sufficiently alleges a cause of action on the original debt, such contention was negatived by the learned trial Judge. In paragraph 6of the plaint that debt is set out as being made up of Rs. 2,450 and certain sums due on accounts amounting to Rs. 3,923-13-10. Nothing more is said thereafter about that debt except that in his prayer the plaintiff asks for a decree for the balance due. The promissory note and its origin are set out in paragraph 7 and throughout it is the one cause of action to which reference is made, and in paragraph 22 it is stated that the cause of action in this suit arose on the date on which the promissory-note was executed. Apart therefore, from the mention of the original debt, there is no further mention of it in the plaint except so far as it is included in the promissory-note amount. In our view, the plaint does not contain sufficient material upon which to found a claim upon any debt irrespective of that evidenced by the promissory-note. But this does not conclude the matter because we have still to consider whether the learned trial Judge was right in not allowing the plaint to be amended in order to raise such a claim. Before us a-number of cases were cited in support of the appellant's contention that an amendment ought to have been granted. The first of these was The E.B. Commercial Bank Ltd. v. Surendra Narayan Saha 39 C.W.N. 1235. In that case the claim in the plaint was based upon an insufficiently stamped promissory-note alone and a prayer for amendment so as to introduce a claim on the loan being refused and the suit dismissed, the High Court in First Appeal, allowed the amendment to be made and on such amendment decreed the claim, although at the date the amendment was prayed for in the trial Court the claim was already time-barred. This was done in accordance with the rule that in such circumstances amendment may be allowed in special cases were the defendant is not prejudiced, the defence in that case being a total |denial of the loan. In dealing with the question of the amendment, Derbyshire, C.J., says referring to Order 6, Rule 17, Civil Procedure Code:

The difficulty lies in applying this rule where, as here, the defendant claims a time-bar under the Statute of Limitations. In Weldon v. Neal (1887) 19 Q.B.D. 394 Lord Esher said : 'We must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments.... Under very peculiar circumstances the Court might perhaps have power to allow such an amendment, but certainly as a general rule it will not do so.

4. He then refers to Charan Das v. Amir Khan (1920) 39 M.L.J. 195 : L.R. 47 IndAp 255 : I.L.R. 48 C. 110 in the Privy Council where Lord Buckmaster said:

Though the power of a Court to amend the plaint should not as a rule be exercised where its effect is to take away from a defendant a legal right which has accrued to him by lapse of time, yet there are cases : see for example Mohummud Tahir Ali v. Rutta Koer (1867) 11 M.I.A. 468 where such considerations are outweighed by the special circumstances of the case.

5. Derbyshire, C.J. was of the opinion in the appeal before the Court that the claim on the loan itself was not raised, through some blundering on a lawyer's part, and thereby the plaintiff's clear rights were jeopardised and that the defendants would not be and never were prejudiced in their defence which was a total denial of the whole transaction. The amendment was therefore allowed. The same question arose in Maung Po Chein v. C.R.V.V.V. Chettiyar A.I.R. 1935 Rang. 282. There the suit was on a promissory-note insufficiently stamped. But all the facts of the original loan and all the terms thereof, were set out in the plaint and the only real defect in the plaint was that in the prayer the plaintiff had omitted to pray for a decree based on the original contract of loan alternatively with a prayer for a decree based on the promissory-note. Subsequently the plaintiff put in an application to amend the plaint by including such prayer. It was held that even on his original plaint the plaintiff was entitled to succeed as on the original contract of loan, that strictly an amendment of the plaint was unnecessary although it would simplify matters if it were amended and that the suit should be treated after the amendment as one for amount due on the original contract of loan; and a previous decision of the Rangoon High Court was relied upon. It is of course well-settled that where all the facts of the original loan and all its terms are set out in the plaint but the plaint is based on an insufficiently stamped promissory-note or it may also be added a promissory-note barred by limitation the plaintiff is entitled to succeed alternatively on the original loan although there is no such prayer; but this case is useful for its treatment of the party's right to amend assuming that such aft amendment is necessary. In that case the only defence open to the defendant was a denial of the loan and in his written statement he did actually deny receipt of the consideration of the promissory-note and under those circumstances the Court held that the amendment ought to be allowed. Reference was also made to the decision of this High Court in Sevugan Chetty v. Krishna Aiyangar (1911) 22 M.L.J. 139 : I.L.R. 36 Mad. 378 where it was held that a petition for an amendment of the plaint based on no new facts and asking for a further relief, namely, recovery of money, may be allowed even though it be barred by limitation between the date of the plaint and the date of the petition if the same is put in before any evidence is let in and there is no injustice to the defendants.

6. In the case before us, the original debt was never disputed but the-plea of discharge was set up, which Stone, J. held was clearly false and the defendants succeeded merely because, through inadvertence it may be, the promissory-note alone was relied upon. We are unable to see how the defendants are prejudiced in their defence by allowing an amendment of the plaint except that it deprives them of the plea of limitation as regards the promissory-note. The original debt was there and could have been sued upon irrespective of the promissory-note and it does not appear to us that the defendants could have any possible defence to that claim save the one set up, namely, discharge which has been negatived. We invited the learned Counsel for the respondents to suggest what defence his clients would be able to set up to the claim other than that already pleaded and he was unable to suggest any. No new facts were needed to support the claim and the question of the agreement to pay the debt by instalments was gone into in the evidence at the trial and we ourselves are able to discover such an arrangement. In addition to these reasons the first defendant deliberately withheld the pro-note which he had in his hands from the plaintiff, until it had become time-barred. In our opinion, the amendment of the plaint ought to have been allowed and it follows from this that the plaintiff's cause of action arose on the date of the last payment of the weekly instalments of Rs. 10. That date is the 29th June, 1929 and as the plaint was filed on 14th May, 1932, the claim on the original debt was not barred. Upon this point therefore, the appeal as against defendant 1 succeeds and must be allowed with costs. The trial Court's decree is set aside and there will be a decree in favour of the plaintiff against the first defendant for the amount claimed without costs. The appeal against the defendants 2 and 3 is dismissed with costs.


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