1. The promissory note on which the petitioner sued was dated 10th May, 1930. There was an endorsement of payment on 8th May, 1933, which gave a fresh period of limitation; and so the suit had to be filed on or before 8th May, 1936. On that date however, the Courts were closed for the summer recess. On the reopening day, 1st June, 1936, the payee under the promissory note assigned his rights in the promissory note to the present petitioner, and on the very same day the petitioner filed the suit. The District Munsif of Puthur, in whose Court the suit was filed, held that the suit was barred by limitation. He relied on the observation of the Chief Justice in the Full Bench decision of this Court in Fatma Bi v. Nagoorkhan (1931) 62 M.L.J. 256 : I.L.R. 55 Mad. 630 , to the effect that Section 4 did not extend the period of limitation. He was of opinion that as at the time when the assignment was made the suit was barred, no rights passed to the assignee under the assignment. He therefore, although finding all the other points raised in favour of the petitioner, dismissed the suit.
2. All that happens after the lapse of three years after the creation of a debt is that the debt cannot be enforced in a Court of Law. The debt does not cease to exist; nor does the relationship of creditor and debtor. As Beasley, C.J., said in Fatma Bi v. Nagoorkhan (1931) 62 M.L.J. 256 : I.L.R. 55 Mad. 630 there was on the date of the reopening of the Court an enforceable debt. The question that arose in that appeal was whether a person who could have filed the suit on the reopening of the Court but was unable to do so because the debtor was adjudged an insolvent, could prove in insolvency; and Section 46 of the Presidency Towns Insolvency Act came up for consideration. That section says that all debts to which the debtor is subject when he is adjudged an insolvent shall be deemed to be debts provable in insolvency; and the Full Bench held that on the date of the insolvency, which was the day when the Court reopened that is, more than three years after the debt had been incurred, the debtor was still subject to the debt. If on the date of the assignment there was a debt, then there was nothing to prevent the creditor assigning it to some other person. A debtor might well pay his debt even though it were barred by limitation and one would expect an honourable debtor to do so. The lower Court is therefore clearly wrong in saying that on the date of the assignment there was no interest that could be assigned.
3. A decision of Beaman, J., in Visram Vasudeo Thakoor v. Tabaji Balaji Wagh (1912) 15 Bom. L.R. 348 has been referred to by the learned advocate for the petitioner in support of his contention that the petitioner was entitled to sue; but that learned Judge, differing from a Bench decision of his own Court in Bai Hemkore v. Masamalli I.L.R. (1902) Bom. 782, adopted a reasoning which has since been held to be erroneous both in his own Court and in other Courts. As to the actual point that is raised here, Beaman, J., had very little to say. He argued on an analogy from a case where an acknowledgment took place during the Court recess after the period of limitation had expired. A decision on which some reliance has been placed by the other side is one of King, J., in Chidambaram Chettiar v. Venkatasubba Naik : AIR1937Mad367 . That was a case where an acknowledgment took place beyond the period of limitation but during the recess. Section 19, which saves limitation in the case of certain acknowledgments made within the period of limitation prescribed, says that
Where before the expiration of the period prescribed for a suit...in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing...a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
4. The wording of Section 3 of the Limitation Act indicates that Section 4 does not lengthen the period of limitation prescribed; for it says
Subject to the provisions contained in Sections 4 to 25 (inclusive), every suit instituted...after the period of limitation, prescribed therefor...shall be dismissed.
5. So that suits to which Section 4 can be applied are therefore clearly not suits instituted during the period of limitation prescribed. Section 4 deals with one of the exceptions to the general rule that a suit filed after the period of limitation prescribed shall be dismissed.
6. Whether, on the date of the reopening of the Court the petitioner could maintain the suit against the respondent would depend on the wording of Section 4, which permits of a suit being filed on the reopening of the Court beyond the period of limitation. Section 4 runs
Where the period of limitation prescribed for any suit...expires on a day when the Court is closed, the suit...may be instituted...on the day that the Court reopens.
7. The period of limitation prescribed for the filing of the suit with which we are now concerned expired while the Court was closed; and Section 4 says that when that is the case, the suit may be instituted on the date when the Court reopens. Section 4 therefore directly applies to the present case and the suit was therefore maintainable, and should have been decreed in the petitioner's favour.
8. The petition is accordingly allowed and the suit decreed with costs.
9. The respondent has filed an application under Section 8 of the Madras Agriculturists' Relief Act for scaling down the debt. That application will be transferred to the lower Court for disposal; and the decree passed by this Court will be subject to the result of that application.