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P. Subbiah Vs. A. Shanmugham - Court Judgment

LegalCrystal Citation
SubjectCommercial;Limitation
CourtChennai High Court
Decided On
Case NumberAppeal No. 524/1969
Judge
Reported inAIR1975Mad63
ActsLimitation Act, 1963 - Sections 3
AppellantP. Subbiah
RespondentA. Shanmugham
Appellant AdvocateA.V. Raghavan, Adv.
Respondent AdvocateR. Mohan and ;V.R. Nagarajan, Advs.
DispositionAppeal partly allowed
Excerpt:
.....such property in writing signed by party against whom such property or right is claimed is made - fresh period of limitation computed from time when acknowledgment signed - borrower paid on account of debt certain sum before expiration of prescribed period of limitation for recovery of debt - suit not barred by limitation - in view of payment made by defendant cause of action to lay action on promissory note not barred - interest at 12% on simple money debt granted cannot be considered to be excessive having regard to market rate of interest at or about time when suit filed. - .....to the petition to adjudicate the defendant as insolvent, the defendant stated, in so far as the suit promissory note was concerned, no amount was paid to the plaintiff for principal or interest and added that he paid a sum of rs. 600/- in march, 1965, towards the promissory note and another sum of rs. 1,500/- in march, 1966. towards the interest on the promissory note to the father of the plaintiff. he would also take up the plea that the promissory note was benami for the plaintiff's father. on the basis of these allegations in ex. a-2 in the above insolvency proceedings, the plaintiff sought to get over the plea of limitation and file an action for the recovery of the suit amount with costs.2. the defendant reiterated in the written statement filed in the present action that the.....
Judgment:

Ramaprasada Rao, J.

1. The plaintiff in O. S, No. 277 of 1968. on the file of the Subordinate Judge of Tiruchirapalli, is the appellant. The suit was for recovery of a sum of Rs. 15,400/- on the fact of a promissory note executed by the defendant in favour of the plaintiff on 23-11-1964 under Ex. A-1. In the plaint, the bar as to limitation is got over by reference to Ex. A-2, which is a counter-affidavit filed by the defendant in the insolvency proceedings in I. P No. 6 of 1967, on the file of the Subordinate Judge's Court, Tiruchirapalli. The plaintiff himself was the petitioning creditor in the above insolvency petition. In answer to the petition to adjudicate the defendant as insolvent, the defendant stated, in so far as the suit promissory note was concerned, no amount was paid to the plaintiff for principal or interest and added that he paid a sum of Rs. 600/- in March, 1965, towards the promissory note and another sum of Rs. 1,500/- in March, 1966. towards the interest on the promissory note to the father of the plaintiff. He would also take up the plea that the promissory note was benami for the plaintiff's father. On the basis of these allegations in Ex. A-2 in the above insolvency proceedings, the plaintiff sought to get over the plea of limitation and file an action for the recovery of the suit amount with costs.

2. The defendant reiterated in the written statement filed in the present action that the suit was barred by limitation as there was no acknowledgment of liability within the meaning of law to save the bar of limitation. He would say that the allegations on which the plaintiff based his claim to circumvent the plea of limitation and particularly those extracted by him in the plaint, as conttained in the counter-affidavit in I. P. No. 6 of 1967, did not save limitation. He again admitted that he paid a sum of Rs. 600/- and Rs. 1,500/- towards the suit promissory note to the father of the plaintiff in March, 1965 and March, 1966 and in the end he would state that no decree could be passed as there was no acknowledgment of liability. He also took up the plea that he was an agriculturist entitled to the benefits of Act IV of 1938. He stated that the rate of interest was exorbitant and usurious.

The following issues were framed:--

1. Whether the promissory note is benami as contended by the defendant ?

2. Whether the plaintiff has no means to advance the amount ?

3. Whether the discharge pleaded is true?

4. Whether the interest claimed is high and if so to what interest is the plaintiff entitled to ?

5. Whether the suit is barred by limitation ?

6. To what relief is the plaintiff entitled ?.

On Issues 1 and 2, the learned Subordinate Judge held that, as there was no evidence let in by the defendant, who set up the plea of benami, the contention of his that the plaintiff could not lay an action on it, though the negotiable instrument was in his favour, was not sustain-able. In those circumstances, he found Issues 1 and 2 against the defendant. On Issue 3, there was no evidence by the defendant as to the plea of discharge, and in those circumstances, that issue was found against the defendant. But on Issue 5, which is the principal issue canvassed before us also, the learned Subordinate Judge was of the view that there was no acknowledgment of liability as is contemplated under the provisions of law and that the paragraph in the counter-affidavit of the defendant, relied upon by the plaintiff, in the insolvency proceedings, would not save limitation. Against this dismissal of the suit on the ground that the suit is barred by limitation, the plaintiff has come up to this Court.

3. The only essential point which is urged before us for our consideration is whether the suit is barred by limitation and whether the plaintiff is entitled to the relief asked for. The plea of limitation, if taken by a litigant has to be examined with reference to all the available statutory provisions, and not necessarily in the. perspective of one provision, even if the said provision was the only provision relied upon, of examined by the trial Court to come to a conclusion whether the case is barred by limitation or not. If the Court is able to find from the statute of limitation any other provision of law. which would not bar the claim and would take it out of the clutches of the bar. then it is open to the Court, particularly to do justice to the parties, to invoke such a provision and adjudicate the issue, on such examination.

4. In the instant case, the learned trial Judge and we are constrained to say, even the counsel for the plaintiff in the Lower Court and before us, paid attention only to Section 18 of the Limitation Act and examined the situation whether the statement made by the defendant in the counter-affidavit in the insolvency' proceedings would amount to an acknowledgment in writing within the meaning of Section 18 of the Limitation Act of 1963. Undoubtedly, Section 18 is the provision, if the only question which arises for decision is whether a particular writing made by a borrower in relation to a debt of his is an acknowledgment of liability creating a fresh cause of action in favour of the creditor. This is the essence and substance of Section 18(1) of the Limitation Act which provides that, where before the expiration of the prescribed period for a suit, an acknowledgment of liability in respect of such property in writing signed by the party against whom such property or right is claimed is made, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. In the view that we are taking, it is unnecessary for us to go into the vexed question whether the text of the writing as reflected in the counter-affidavit in the insolvency proceedings would amount to an acknowledgment in writing within the meaning of Section 18(1) of the Act so as to give the plaintiff a fresh cause of action. As we said, possibly, attention was paid only to this aspect of the case when in the pleadings and even in the circumstances which preceded the action, the borower did according to him, pay on account of the debt a certain sum before the expiration of the prescribed period of limitation for the recovery of such a debt.

5. In the counter-affidavit filed and marked as Ex. A-2 which was long before the institution of the action, the material plea taken by the defendant in answer to the right of the plaintiff to have him adjudicated under the bankruptcy law was that the promissory note was benami and that the father of the plaintiff was the real owner thereof. In addition to the said plea, presumably as an alternative one, he alleged that no amount was paid to the plaintiff towards principal or interest. He however concluded by saying that he paid to his father but towards the promissory note a sum of Rs. 600/- in March 1965 and another sum of Rs. 1,500/- in March 1966. towards interest. These payments, which the defendant swears, that he, made, in the counter-affidavit filed as above, are no doubt formally denied by the plaintiff in the plaint when he came up with this action for the recovery of the amount due on the promissory note. The reasons for the denial of such payments ace not far to seek. Obviously the plaintiff was interested in keeping the entirety of the principal and interest of the promissory note without giving credit to these payments which were obviously not evidenced by receipts or by any other acceptable evidence. Possibly, in those circumstances, the plaintiff wanted to rely on Section 18 of the Limitation Act and urge before the Court that the writing in Paragraph 3 of the counter-affidavit (Ex. A-2) amounted to an acknowledgment in writing. When the plaintiff was insistent that there was such an acknowledgment in writing, whereunder the defendant admitted unconditionally in writing the debt as subsisting, the defendant's case on the contrary even in this action was that he did pay a sum of Rs. 600/- in March, 1965 and a sum of Rs. 1,500/- in March, 1966, towards the note. In those circumstances, we accept the statement made by the defendant in the present action that he did pay towards the promissory note the sum mentioned by him on the dates referred to by him. The only question therefore is whether such payments were made by him before the original debt became barred. It is not in dispute that in March 1965, When the sum of Rs. 600/- was paid and in March 1966 when a sum of Rupees 1,500/- was paid, the suit promissory note was not barred by the law of limitation. If that were so, Section 19 of the Limitation Act would in terms apply to the case. Section 19 provides that where payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay the debt, a fresh period of limitation shall be computed from the time when the payment was made. The statutory provision directly applies and is invokable having regard to the facts of the instant case. The payments made by the defendant in March, 1965 and March 1966 do save the bar of limitation under Section 19 of the Limitation Act. We therefore find that the suit is not barred by limitation. The learned subordinate Judge, as we said, fell into an error and obviously was made to fall into an error, by the contention of the learned counsel who apparently concentrated his attention on Section 18, and was of the view the text in Ex. A-2 should be the sole criterion for judging whether the suit was barred by limitation or not in the light of the statutory provision of Section 18(1). It is unnecessary to decide this issue whether Section 18(1) is at all applicable or invokable in the instant case. We however hold that under Section 19 and in view of the payment made by the defendant in March 1965 and in March 1966, the cause of action to lay the action on the promissory note Ex. A-1 is not barred. The question is, what amount the plaintiff would be entitled to. The plaintiff has not given credit to the above two amounts paid by the defendant in 1965 and 1966. On this basis, we asked the learned Counsel for the plaintiff to file a memo of calculation giving credit to the amounts paid by the defendant as also the counter interest thereon. He has filed before us a memo of calculation which shows that, as on the date of plaint, and after giving credit to the aforesaid payments made by the defendant and admitted by him a sum of Rs. 11,561/- would be due.

6. The learned Counsel for the defendant however would state that interest at the rate of 12 per cent, granted by the Court below, though the contract rate was 15 per cent, is still excessive. We do not agree. Interest at 12 per cent on a simple money debt, which is granted by the Court below, probably in its discretion, can never be considered to be excessive, having regard to the market rate of interest at or about the time when the suit was filed. We are not however inclined to disturb the rate of interest. But certainly we would not accede to the request of the learned Counsel for the respondent to reduce the rate of interest still further from 12 per cent, to 6 per cent.

7. On the fact whether the defendant is an agriculturist entitled to the benefits of Act IV of 1938, the learned Subordinate Judge has held that he is not so entitled and we agree with him as there is no evidence contra shown to us to dislodge that finding of fact.

8. In this view, the appeal is partly allowed with costs.


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