(1) The plaintiff's case was that she had advanced a loan of Rs. 320 to defendants 1 and 2, and that she subsequently on the same day obtained from them Ex. A. 1, which purported to be a promissory note for that amount. Ex. A. 1, however, could not be relied upon as a promissory note and admitted in evidence as such, because it was insufficiently stamped. The plaintiff therefore laid the suit on the original cause of action, the debt itself, independent of the promissory note. There were, however, endorsements of payment on Ex. A. 1, which were marked as Exs. A 2, A. 3 and A. 4. The plaintiff relied on these endorsements of payment to save the claim based on the original cause of action, from being barred by limitation.
(2) The learned Subordinate Judge accepted the plaintiff's evidence, that the promissory note in question, Ex. A. 1, was executed as security for the debt subsequently on the date on which the advance of loan was made, and the learned Subordinate Judge upheld the plaintiff's contention, that the suit was maintainable on the original cause of action, the debt, even though Ex. A. 1 was inadmissible in evidence as a promissory note. The learned Judge however, was of the view that the endorsement. Exs. A. 2 to A. 4 on which the plaintiff relied, could not save the claim to recover the debt itself from being barred by the law of limitation, as, in the opinion of the learned Judge, Exs. A. 2 to A. 4 did not purport to acknowledge the debt itself. The plaintiff's suit was dismissed. The plaintiff seeks to have that judgment set aside in revision.
(3) Learned counsel for the respondents contended that the finding of the learned Subordinate Judge that, the suit itself was maintainable on the original debt, should not be allowed to prevail. He referred to the decision of the Full Bench of this Court in Perumal Chettiar v. Kamakshi Ammal, ILR 1938 Mad 933: (AIR 1938 Mad 785) (FB) and tried to bring the present case within the class of cases enumerated at p. 943 (of ILR Mad): (at p. 787 of AIR):
"If the promissory note is itself the consideration for the loan or if it is accepted as an accord and satisfaction of the original debt, the lender is restricted to his rights under the instrument."
I have already pointed out that the learned Judge accepted the plaintiff's oral testimony in this case, that the promissory note was taken out in satisfaction of the debt advanced earlier that day but merely as security for the re-payment of the debt. In view of that finding, with which I cannot interfere in exercise of the revisional jurisdiction, the contention of the learned counsel for the respondents has to be rejected. Therefore, the finding of the learned Sub-ordinate Judge that the suit based upon the original cause of action, the debt itself, is maintainable, stands.
(4) The next question is whether the learned Subordinate Judge's view on the question of limitation was correct. No doubt Exs. A. 2, A. 3 and A. 4 specifically referred to the promissory note, and there was no express reference to the debt independent of the promissory note. The learned Judge purported to rely on Ghulam Murtaza v. Mt. Fasiunnissa, AIR 1935 All 129. But I am unable to see any real scope for extending to the facts of this case the principle laid down there. The learned Subordinate Judge held that in the absence of any evidence of the terms of the endorsement that had to be considered, the principle laid down in Kondamma v. Venkatarayadu, 1938-2 Mad LJ 846: (AIR 1939 Mad 34), could not apply. In Kondamma's case, 1938-2 Mad LJ 846: AIR 1939 Mad 34), Madhavan Nair J. applied the principle laid down earlier by a Division Bench of this Court in Chokkalingam v. Annamalai, 34 Ind Cas 417: (AIR 1917 Mad 460). Apparently, the learned Subordinate Judge did not refer to Chockalingam's case. 34 Ind Cas 417: (AIR 1917 Mad 460), though it was specifically referred to in Kondamma's case 1938-2 Mad LJ 846: (AIR 1939 Mad 340). In 34 Ind Cas 417: AIR 1917 Mad 460 at p. 464, Srinivasa Aiyangar J. in construing the scope of the acknowledgment relied upon, endorsed in an admissible document, observed:
"When it is said that payments were made on account of the chit, it means that payments were made on account of the debt evidenced by the note."
Therefore, in this case when the defendant made payments towards the promissory note, it is obvious that what was paid was towards the debt evidenced by the promissory note, and what was acknowledged successively in Exs. A. 2, A. 3 and A. 4 was the subsistence of the debt itself, which the parties then believed at the time was evidenced by Ex. A-1 in the sense, that Ex. A-1 would be admissible in evidence to prove the existence of the debt itself.
(5) The view taken by the learned Subordinate Judge that Exs. A. 2, A. 3 and A. 4 did not operate as acknowledgments of the debt itself, is in my view, erroneous; they did operate as acknowledgments of the debt, to recover which the plaintiff laid the suit. The suit was therefore not barred by limitation.
(6) The next question is what is the decree to which the plaintiff is entitled. Learned counsel for the respondents pointed out that the rate of interest specified in Ex. A. 1 nine per cent per annum could not be allowed to prevail, because independent of Ex. A. 1 there was nothing to show the terms on which the advance was made. Though the plaintiff claimed that nine per cent per annum was the contract rate of interest and the defendants also admitted it, obviously they referred to the rate specified in the contract Ex. A. 1, which itself is inadmissible in evidence. When the terms of the contract have been reduced to writing it may not be permissible to take parole evidence referring the 9 per cent interest to an antecedent oral contract on the basis of which the loan was advanced.
To be permitted to sue on the basis of the original cause of action, the debt, is something different from proving the terms of the contract under which that debt was advanced. Parole evidence to prove the terms on which interest has to be paid being inadmissible, the contention of the learned counsel for the respondents is wellfounded, that it is independent of the contract that the liability of the defendants to pay interest will have to be decided. It was a loan. Even if the terms of the contract providing for the rate of interest be inadmissible in evidence, the defendants were certainly liable to pay interest under the Interest Act, and the plaintiff should be held entitled at least to six per cent interest from the date of the loan.
(7) The plaintiff will therefore be entitled to a decree for the recovery of the principal amount with interest thereon at six per cent per annum, after giving credit to the payments endorsed. The plaintiff will be entitled to proportionate costs in the suit. She will also be entitled to the costs of the proceedings in revision.
(8) Revision allowed.