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P.M.A. Valliappa Chetty Vs. S.N. Subramanian Chetty - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Reported in(1914)26MLJ494
AppellantP.M.A. Valliappa Chetty
RespondentS.N. Subramanian Chetty
Cases Referred and Walton v. Maseall
Excerpt:
.....37 and 38. on this ground it is argued that the omission in section 22 of words saving the contracts of parties implies that the legislature deliberately precluded parties from entering into contracts against the provisions of section 22. the report of the select committee on the negotiable instruments bill shows that an endeavour was made to omit all reference to days of grace in the act itself, but that failed. i am not prepared to accede to the contention that the failure to save the rights of parties in section 22 was a deliberate departure from the english law. the learned judge observes 'we think therefore the well-known principles of equity on which the defence set up is based are not applicable to a case of this description. the suit is therefore barred by limitation on that..........to contract that the bill shall come to maturity on the date fixed in it without the addition of days of grace i think that the promissory note governed by the negotiable instruments act cannot dispense with the days of grace. as regards the case of the east indian company v. oditchurn paul (1849) 7 m p.c. 85 : 13 e.r. 811 it is of course binding on me but it seems to me that it is rather against the defendant ; lord campbell's words at page 112 are 'there might be an agreement that in consideration of an inquiry into the merits of a disputed claim, advantage should not be taken of the statute of limitations and an action might be brought for breach of such an agreement ' (that is, as i take it, for damages for breach of such agreement); his lordship however proceeds to say ' but if to.....
Judgment:

Sadasiva Aiyar, J.

1. I have the great advantage of having read the Judgment prepared in this case by my learned brother.

2. It is often a difficult question to decide whether a statutory provision has been made solely for the benefit and protection of the individual in his private capacity or whether some public right and public policy is also involved in it. I am inclined not to go behind the plain words of a statute. Section 22 of the Negotiable Instruments Act clearly says that ' every promissory note which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed to be payable.' In the Contract Act, in the Transfer of Property Act, in the Negotiable Instruments Act and several other Acts there are numerous provisions made solely for the benefit and protection of the individual in his private capacity ; and yet the legislature has thought it necessary whenever it wanted to indicate that the parties can waive the benefit of such provisions to begin such sections, with the words ' in the absence of a contract to the contrary' or similar words. As Section 22 of the Negotiable Instruments Act omits in a marked manner the provision in Section 14 of the English Bills of Exchange Act allowing the parties to contract that the bill shall come to maturity on the date fixed in it without the addition of days of grace I think that the promissory note governed by the Negotiable Instruments Act cannot dispense with the days of grace. As regards the case of The East Indian Company v. Oditchurn Paul (1849) 7 M P.C. 85 : 13 E.R. 811 it is of course binding on me but it seems to me that it is rather against the defendant ; Lord Campbell's words at page 112 are 'There might be an agreement that in consideration of an inquiry into the merits of a disputed claim, advantage should not be taken of the Statute of Limitations and an action might be brought for breach of such an agreement ' (that is, as I take it, for damages for breach of such agreement); His Lordship however proceeds to say ' but if to an action for the original cause of action, the Statute of Limitations is pleaded upon which issue is joined...the defendant notwithstanding any agreement is entitled to the verdict.' This rather shows that the Statute law could not be evaded by agreement of parties though such an agreement might form the basis of an independent action. I need not say that I put forward this conclusion of mine with some diffidence in view of the arguments which have been put forward by my learned brother to uphold the contrary view.

3. I entirely agree however with my learned brother on the 2nd point discussed in his judgment. I do not believe that the 2nd plaintiff had the authority of the 1st plaintiff to present or to sign the plaint on behalf of the 1st plaintiff when the 2nd plaintiff so signed and presented it.

4. I am also satisfied that there was no ratification by the 1st plaintiff of the 2nd plaintiffs said act before the period of limitation was over and any ratification after the expiry of the period of limitation cannot be allowed to the prejudice of the defendant I therefore agree that these Civil Revision Petitions should be dismissed with costs.

Seshagiri Aiyar, J.

5. The suit is brought on a hundi executed on the 18th of May 1908, which runs as follows:

180 days after the date (without grace) I promise to pay etc.

6. The 180 days ended with the 14th of November 1908. The suit was instituted on the 15th November 1911. The question for decision is whether under Section 22 of the Negotiable Instruments Act the plaintiff can claim that limitation commenced to run against him only on the 17th of November when the 3 days of grace allowed by that section expired although the contract of the parties excludes the days of grace. Under the English Law, the Bills of Exchange Act of 1882, Section 14 which corresponds to Section 22 of the Indian Act provides that the days of grace shall be included only when the bill itself does not otherwise provide. The Indian Act does not contain a similar provision. Moreover, there are provisions in the Act which protect rights of parties under contracts notwithstanding anything to the contrary in the sections of the Act. See Sections 32, 35, 37 and 38. On this ground it is argued that the omission in Section 22 of words saving the contracts of parties implies that the legislature deliberately precluded parties from entering into contracts against the provisions of Section 22. The Report of the Select Committee on the Negotiable Instruments Bill shows that an endeavour was made to omit all reference to days of grace in the Act itself, but that failed. I am not prepared to accede to the contention that the failure to save the rights of parties in Section 22 was a deliberate departure from the English Law. It is a case of accidental omission. There was no intention to enact a separate rule of law in this country on the question of days of grace. I may also point out that the provision that a note shall be payable only after the days of grace is frima facie for the benefit of the maker of the note; and if he chooses to give up his privilege, the promisee cannot insist upon his taking advantage of the rule. As pointed out in Halsbury's Laws of England, Vol. II, note to Section 806, 'In all the continental countries provision for days of grace has been abolished.' It can therefore be safely assumed that no question of public policy is involved in the inclusion or omission of provisions for days of grace. In 7, Moore's Privy Council Cases, page 85, Lord Campbell in delivering the judgment of the Judicial Committee points out that it was open to the parties to stipulate that the ordinary rules of limitation shall not bind them with reference to particular contracts, the reason of the rule being that the non-observance of the statute affects only private rights and private individuals and does not offend against public policy. In Mac Allister v. Bishop of Rochester (1880) 5 C.P. 191 Lindley J, held that private rights can be waived or renounced by parties to a contract; but, if one of the contracting parties happens to occupy a fiduciary position, it was not open to him to give up rights which inhere in the general body of the public and not in him in his private capacity. The learned Judge observes 'we think therefore the well-known principles of equity on which the defence set up is based are not applicable to a case of this description.' This observation was made in answer to the argument of counsel that public policy is not opposed to parties waiving private rights. In Maxwell's 'Interpretation of Statutes 4th Edition the general law is thus summarised at page 580. 'Another maxim which sanctions the non-observance of a statutory provision is that 'Cuilibet licet renuntiare juri pre so introducte.' Every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity and which may be dispensed with without infringing on any public right or public policy.' The cases Markham v. Stanford (1863) 14 C.B.N.S. 376 and Walton v. Maseall (1814) 13 Mad. W. 458 are illustrations of this rule. The American Law on this point is very clear. In 7, Cyclopaedia of Law and Procedure, page 871, it is stated, ' Although the law-merchant allows days of grace, the parties may stipulate that they shall not be allowed, and if the instrument shows an intention, it will be given effect to. In some states the statute in terms allows grace only where the instrument contains no provision or stipulation to the contrary. The mere fact that an instrument or a memorandum therein states that it is due or payable on a certain day does not exclude grace. Even where there is no stipulation excluding days of grace, the right of grace may be waived by the party bound, as where a tender of payment is made on the day of maturity without grace and is refused on other grounds.' The above authorities show that where the giving up of a benefit secured by law does not offend against public policy, or is not renounced by a person who holds a representative character, the courts will enforce the contract. In this case the parties have chosen to expressly stipulate that the days of grace shall not be counted in reckoning the due date ; and the individual for whose benefit the provision of law was intended has agreed to abide by the terms of the contract. I have therefore come to the conclusion that it is open to the parties to enter into a contract that the provisions of Section 28. relating to days of grace shall not apply to them ; and it is not open to the promisee to insist that the defendant should be compelled to take advantage of the days of grace in order that the starting point of limitation for him may commence on their expiry. My decision is that the suit is barred by limitation.

7. The decree of the Subordinate Judge can be supported on another ground also. The suit was instituted by two plaintiffs but the plaint was signed only by the 2nd. The 2nd plaintiff claims to be the agent of the 1st. The court returned the plaint on the ground that the 1st plaintiff had not signed it; it was not represented until after the period of limitation was over. The affidavit filed to show that the 2nd plaintiff had authority to file plaints does not give particulars regarding the authorisation. I am unable to hold that the 2nd plaintiff had authority prior to the institution of the suit to file the plaint on behalf of the 1st plaintiff. The suit is therefore barred by limitation on that ground as well.

8. I dismiss the petition with costs.


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