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Km. Kr. Kr. Ramanathan Chettiar by Partner Km. Kr. Kr. Lakshmanan Chettiar (Died) Vs. N.M. Kandappa Goundan (Died) and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 432 of 1947
Judge
Reported inAIR1951Mad314; (1950)2MLJ624
ActsLimitation Act, 1908; General Clauses Act, 1897 - Sections 6
AppellantKm. Kr. Kr. Ramanathan Chettiar by Partner Km. Kr. Kr. Lakshmanan Chettiar (Died)
RespondentN.M. Kandappa Goundan (Died) and ors.
Appellant AdvocateN. Sivaramakrishna Iyer and ;A. Balasubramania Iyer, Advs.
Respondent AdvocateRamaswami Iyer, Adv.
DispositionAppeal dismissed
Cases Referred and Moheshlal v. Busunt Kumaree
Excerpt:
.....act then in force on the date of the coming into force of a later enactment, then such a barred right is not revived by the application of the new enactment. but if the defendants are able to show that the right of action had become barred under the act of 1859 then the title that they had acquired could not be defeated by the subsequent limitation acts. a barred debt is a good foundation for a written promise to pay signed by the party liable to be charged therewith. in such cases there is a negative as well as a positive aspect. an examination of the facts of the case clearly show that the decision therein cannot be of any possible assistance to the appellant in this case. was not very happy about his prior judgment. but he observed :if it had been necessary in my judgment to..........judges, we desire to point out that the law of limitation as such only deals with remedies to enforce rights in a court of law. if therefore the remedy was gone when the amending act came into force, there is no principle on which it could be held that the remedy again became available. 10. an earlier decision of the calcutta high court in mahesh lal v. basant kumari, 6 cal. 340 : 7 c. l. r. 121 does certainly support the appellant's contention based upon the distinction between remedy and right. but this case has been adversely criticised by mitra in his commentaries on limitation act (1911 edn. vol. 1 at pp. 291 and 892) and does not appear to have been followed on this point. 11. mr. sivaramakrishna aiyar also relied on two early cases of our court. the first of these is vaha.....
Judgment:

Rajamannar, C.J.

1. The facts necessary for appreciating the question of law which arises in this appeal may be briefly stated. The appellant field a suit to recover amounts due for principal and interest under three promissory notes dated 21-8-1929, 28-8-1929 and 4-9-1929. The suit was filed on 9-8-1944. The appellant relied upon four endorsements of payment to save the claim from the bar of limitation. The last of such endorsements was made on 9-8-1941. It has been found by both the Courts below that these endorsements are of 'open payments' which would not save the claim from the bar of limitation under Section 20, Limitation Act, as it stood before the Amending Act XVI [16] of 1943. The appeal was argued on that assumption. The contention on behalf of the appellant was that the Amending Act applied to the suit and the endorsements would be sufficient within the meaning of Section 20 as amended by it. Both the Courts held that the appellant could not rely upon the Amending Act, because the claim to recover the amounts due under the suit promissory notes became barred by limitation prior to the coming into force of the Amending Act and dismissed the suit as barred by limitation.

2. The case is directly covered by the decision of Viswanatha Sastri J. in Mangapathi Naidu v. Krishnaswami Naidu, : AIR1950Mad762 . An unreported decision of Somasundaram J. in Hanumayamma v. Venkatanarasimharao, C. R. P. 148 of 1947, dated 11-11-1949 is to the same effect. Satyanarayana Rao J. before whom the appeal came on originally for hearing, however, thought that as the question raised was of sufficient importance and of frequent occurrence there should be an authoritative decision by a Division Bench.

3. We agree with Mr. N. Sivaramakrishna Aiyar, the learned advocate for the appellant, that the law of limitation applicable to a suit or proceedings is the law in force at the date of the institution of the suit or proceeding unless there is a distinct provision to the contrary. It is also well settled that the law of limitation being procedural law, its provisions operate retrospectively in the sense that they apply to causes of action which arose before their enactment. But on an examination of the authorities on the point, we find it equally well established that if a right to sue had become barred by the provisions of the Limitation Act then in force on the date of the coming into force of a later enactment, then such a barred right is not revived by the application of the new enactment.

4. Section 2, Limitation Act, 1877, expressly provided as follows:

'A reference to the Limitation Act, 1871, shall be read as if made to this Act, and nothing herein 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.'

No doubt a similar provision is not found in the Limitation Act, 1908, but this is probably because of Section 6(a), General Clauses Act, 1897, which embodies a similar provision. Apart from decided cases, it appears to follow on principle that the right of action barred by limitation at the time when a new Act or amendment comes into force cannot be revived by the subsequent change in the law brought about by the new Act or amendment.

5. The preponderance of decided cases also leads us to the same conclusion. There is a long catena of Privy Council rulings in which we find the same principle enunciated. One of the earliest of such cases is Appaswami Odayar v. Subramania, 12 Mad. 26; 15 I. A. 167 The point is dealt with thus:

'By Section 1, Clause 13 of Act XIV [14] of 1859, a suit for a share of the family property not brought within twelve years from the date of the last participation in the profits of it would be barred. This Act continued in force until 1-8-1871, when Act IX [9] of 1871 came into force. 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.'

In Mohesh Narain v. Taruak Nath, 20 Cal. 487: 20 I. A. 30 , their Lordships refer to the case in Appasami Odayar v. Subramania Odayar, 12 Mad. 26: 15 I. A. 167 and dismiss the contention that the question of limitation should be determined with reference to the provisions of the later statute of 1877, though the right was barred by the earlier statute of 1871 thus:

'It is clear that on 1-4-1873, the plaintiff's suit was barred by limitation under the Act of 1871, and the Act of 1877 could not revive the plaintiff's right so barred, a point which was indeed decided in regard to the Limitation Act of 1859 and 1871, in the case of Appasami Odayar v. Subramania Odayar, 12 Mad. 26: 15 I. A. 167 .'

In Khunnilal v. Gobind Krishnanarain, 33 ALL, 386: 38 I. A. 87 dealing with a similar point, their Lordships said:

'No suit could be brought, even if the enactments referred to above had permitted it, to enforce the right after the lapse of 12 years from the time the cause of action arose' (Section 1, Clause 12 of Act XIV [14] of 1859). Nothing in Article 142 of Act IX [9] of 1871 or in Article 141 of Act XV [15] of 1877 could lead to the revival of a right that had already become barred.'

In Sachindra Nath v. Maharaj Bahadur Singh, 49 Oal. 203: A. I. R. 1922 187 One of the questions to be considered was which of the two Limitation Acts, that of 1877 or that of 1908, applied to the case to ascertain whether certain decrees were enforceable. It appeared to their Lordships that this question must be determined 'by the condition in which the decrees stood when the latter Act came into force on 1-1-1909'. The date of the original decrees was 26-8-1905. They became unenforceable by proceedings commenced after 26-8-1908 according to the law as it stood before Act 1 [1] of 1908. A certain amount was paid on 2-2-1910, one year and three mouths after the statutory period had elapsed and over 13 months after 1-1-1909, when the latter Act had come into operation. Their Lordships in dealing with the effect of the latter Act observed:

'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.'

The latest case of the Privy Council in which this point is dealt with is Ramayya v. Lakshmayya, I. L. R. (1943) Mad. 1: A. I. R. 1942 . It is sufficient to extract the following passage at p. 10:

'The next point to consider on this part of the case is whether the plaintiff's suit is barred under Section 1, Clause 12, Limitation Act, XIV [14] of 1859. Ordinarily, the suit would be governed by the Limitation Act, IX [9] of 1908, which is the law in force when the suit was instituted; but if the defendants are able to show that the right of action had become barred under the Act of 1859 then the title that they had acquired could not be defeated by the subsequent Limitation Acts.'

6. Mr. Sivaramakrishna Aiyar, the learned counsel for the appellant attempted to get over these decisions of the Judicial Committee by relying upon a distinction between cases in which rights to immoveable property were concerned in respect of which after the lapse of the statutory period there will be an extinguishment of title in one and the acquisition of title by the other and cases in which there is no such extinguishment and acquisition of rights in property. In the latter cases, he contended that though the remedy at law may be unavailable, nevertheless the right is not lost. There is certainly authority for the position that though a debt cannot be recovered by action if the debtor pleads the statute it remains an existing debt and can be made available for certain purposes, as for example, when the creditor may settle it up without resorting to an action. Instances of the application of this doctrine are to be found in its application to several branches of the law. A barred debt is a good foundation for a written promise to pay signed by the party liable to be charged therewith. Even if the claim against the principal debtor is barred, the surety is not discharged on that account only. An executor or administrator may deduct time-barred debts against the legatees. They can even pay time-barred debts except when they have been adjudicated upon in Courts. A father can validly alienate joint family property to pay his barred debt, The fundamental principle underlying all these instances is that though remedies are barred, rights are not extinguished. But it does not follow that be cause, rights are not extinguished, such rights can be deemed to be enforceable in a Court of law. In respect of claims to eights to or interests in immoveable property, besides the law of limitation, there is also the law of extinctive prescription which comes into operation. In such cases there is a negative as well as a positive aspect. By the lapse of time, one person loses his right to enforce his claim to such property. This is the negative aspect. At the end of the period the other person acquires a title. This is thepositive aspect. The right which one has lost the other has acquired. There is in effect a statutory transfer of title. But in the cage of debts, obviously this doctrine is totally inapplicable. The fact that the creditor cannot enforce his right to re-cover his debt does not help the debtor to acquire any right to the debt. The debt remains a debt; only it cannot be recovered by the creditor in a Court of law. What is significant to notice is that their Lordships of the Judicial Committee in none of the cases above referred deal with the question as one of acquisitive prescription. They deal with the point as one of limitation and remedial procedure.

7. Mr. Sivaramakrishna Aiyar cited, in support of his contention that the amending Act of 1912 would apply even though on the date of its commencement the right to enforce the claim was barred by time according to the original Act, certain decisions of the Courts in India. Before dealing with them we should refer to the Privy Council ruling in Soniram v. Kanhayalal, 35 ALL. 227 : 40 I. A 74 which was also relied on. An examination of the facts of the case clearly show that the decision therein cannot be of any possible assistance to the appellant in this case. A suit was brought on 4-4-1907 for redemption of a mortgage dated 9-3-1813. At the time of the institution of the suit under Article 148 of Schedule II, Limitation Act of 1877, the period of limitation was 60 years from the time when the right to redeem accrued. To get over the bar of limitation two acknowledgments of 1866 and 1867 made by two limited owners of the property were relied on. These acknowledgments could not be effective against the defendants (mortgagors), because they were not signed by the party against whom such right was claimed or by persons through whom they claimed title. But the acknowledgments would have been valid under the provisions of Act XIV [14] of 1859. Their Lordships held that Act XIV [14] of 1859 did not apply to the suit and that the Act which applied is Act XV [15] of 1877 and as the acknowledgments made by the two limited owners were not proper acknowledgments within the meaning of Section 19 of Act XV [16] of 1877, they could not give any new period of limitation, From this statement of facts, it will be seen that no question there arose of reviving a barred claim. The claim to enforce the mortgage was quite alive when the new Act came into force and, therefore, it was the new Act which was applied.

8. There are two decisions of the Patna High Court which undoubtedly support the appellant's contention, but when the reasoning is analyse, it will be apparent that they cannot be considered as useful precedents. Baleswar v.Latafat, 24 Pat. 249 : A. I. R. 1915 pat. 368, is the earlier of the two. The learned Judges did not really meet the point raised on behalf of the respondent before them that the right of the plaintiff to institute a suit on the handnote was extinguished before the amending Act had come into force, Manohar Lall J., who delivered the judgment of Bench said :

''Now here the right of the plaintiff to recover the debt had not become barred when Act XVI [16] of 1942 was passed.'

It is difficult to follow this statement. But if this were so then of course the new Act would apply. Apparently, what the learned Judge meant was that though the debt had become barred, it had not ceased to exist We have already held that this doctrine does not have any bearing on the question of limitation. In the later decision in Jagadish v. Saligram, 24 Pat. 391 : : AIR1946Pat60 , Manohar Lall J. was not very happy about his prior judgment. When his attention was drawn to cases in which it had been decided that a new amending Act could not have the effect of reviving a claim barred according to the previous law of limitation he observed :

'But unfortunately . . . the matter hag been decided expressly by a Division Bench of this Court, of which I was a member in Baleswar v. Latafat, 21 Pat, 249 : : AIR1945Pat368 , in which we held that the provisions of the Limitation Act applicable to such a suit are the provisions which existed on the date when the suit was instituted, and the provisions of Section 20, Limitation Act, as amended by Act XVI [16] of 1942 must operate to decide the question of limitation ... I desire to observe that when we gave our decision in Baleswar v. Latafat, 24 Pat. 249 : : AIR1945Pat368 our attention was not drawn to the authorities by Mr. N.K. Prasad No. 1 which at the first sight may appear to present some difficulty, but I am not prepared to differ from the decision which we gave on that date.'

Das J., the other learned Judge of the Division Bench expressed his own opinion thus :

'Had the matter not been settled by a decision of this Court, I would probably have come to the conclusion that the amending Act (Act XV[ [16] of 1942) cannot operate so as to revive and make effective a barred debt.'

Though he was personally inclined to hold otherwise, he refused to go back upon the prior decisions of the Court. In our opinion, the subsequent decision in Jagadish v. Saligram, 24 pat. 391: : AIR1946Pat60 has considerably shaken the authority of the earlier decision in Baleswar v. Latafat, 24 pat. 249 : A. I. R. 1945 pat. 363 and neither case can furnish proper assistance in the determination of the question before us.

9. Our attention was also drawn to a recent decision of the Orissa High Court in Pitambar v. Lakshmidhar, A. I. R. 1949 Orissa 64 :I.L.R. 1 Cal. 281 in which it was held that in the case of a debt to which Section 28, Limitation Act, does not apply, even & barred debt is for all purposes an existing debt and no question of revival of an extinguished right arises, in applying the amending Act of 1942 and therefore it would apply even though the remedy to recover the debt might have been barred by time when the amending Act came into force. With great respect to the learned Judges, we desire to point out that the law of limitation as such only deals with remedies to enforce rights in a Court of law. If therefore the remedy was gone when the amending Act came into force, there is no principle on which it could be held that the remedy again became available.

10. An earlier decision of the Calcutta High Court in Mahesh Lal v. Basant Kumari, 6 Cal. 340 : 7 C. L. R. 121 does certainly support the appellant's contention based upon the distinction between remedy and right. But this case has been adversely criticised by Mitra in his Commentaries on Limitation Act (1911 Edn. Vol. 1 at pp. 291 and 892) and does not appear to have been followed on this point.

11. Mr. Sivaramakrishna Aiyar also relied on two early cases of our Court. The first of these is Vaha Thamturatti v. Vira Rayan, 1 Mad. 228, of the two Judges who decided that case, Morgan C. J. did not think that any question of limitation arose as the lender of the money was constituted a trustee. But he observed :

'If it had been necessary in my judgment to consider the operation of the new Limitation Act, I should have hesitated to hold that it allowed a suit to be brought in any case where the right of suit bad already ceased to exist under the old law. When the appointed period of limitation is by the law for the time being in force, complete, the remedy by suit is for ever gone unless the legislature thinks fit to make the old tight again actionable.'

In the other case in the same volume in Teagaraya Mudali v. Mariappa Pillai, 1 Mad. 264 it was held that the exception of payment of interest contained in Section 81 of the Act, IX [9] of 1871, was not confined to payments made after that Act came into force, but applied also to payments made before that date. But an examination of the facts discloses that on the date of the commencement of the new Act of 1871 the claim on the registered promissory note of 1867 was still alive. Undoubtedly in such a case the new Act would apply.

12. In Pearylal v. Solu Gir : AIR1946All58 , Malik J. (as he then was) took the same view as Viswa-natha Sastri J. in Mangapathi Naidu v. Krishnaswami Naidu, : AIR1950Mad762 . He summarised the law on the point thus :

'It is clear, therefore, that, in the absence of anything to the contrary, if a claim is within limitationaccording 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 oould not be availed of for the purpose of saving limitation.'

We respectfully agree with this statement of the law. We are compelled to dissent from the decisions which express a contrary view, namely Baleswar v. Latafat, 24 pat. 249 : : AIR1945Pat368 , Jagadish v. Saligram, 24 Pat, 391 : : AIR1946Pat60 , Pitambar v. Lakshmidar, A.I.R. 1949 orissa 64 : I.L.R. 1949-1 Cut. 281 and Moheshlal v. Busunt Kumaree, 6 Cal 340 : 7 C.L.R. 121.

13. Mr. Sivaramakrishna Aiyar raised two other contentions, but we consider that there is no substance in either of them. He argued that the proviso to Section 20 Sub-section (1) was allowed to remain as it was before even after the amending Act of 1942, and, therefore, it must be presumed that legislature contemplated the application of the new amendment to transactions prior to the date of the commencement of the amending Act. This may be so, but we fail to see how this has any bearing on the question to be decided by us. The other contention of his was that as by the amending Act Section 20 (1) a new section was substituted for the old sub-section, the new provision must be deemed to be retrospective in operation. No authority was cited for this extraordinary position. If it was the intention of the Legislature to say that not only that the law should be in future as embodied in the amendment but that the law should be deemed to have always been as laid down by the amendment, then appropriate language would have been used as in other statutes in which such an intention is apparent, e. g. the recent amendment to Section 28, Provincial Insolvency Act.

14. The Courts below were right in holdingthat the suit was barred by limitation. Thesecond appeal fails and is dismissed with costs.


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