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Ramanatha Ayyar (Seshan Pattar's son) Vs. G.G. Narayanaswami Ayyar (16.11.1936 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1937Mad364
AppellantRamanatha Ayyar (Seshan Pattar's son)
RespondentG.G. Narayanaswami Ayyar
Cases ReferredRaghavan Pattar v. Arumugham
Excerpt:
- - that decision is not only binding upon me, but i think is a correct one as well. it is true that it is a promise to pay at a future date instead of on demand, but it is nevertheless a promise to pay and is in my opinion clearly provided for by section 35, stamp act. arumugham air 1935 mad 385. in the present case the lower court reverses the position unsuccessfully put forward in that case and treats the subscriber as the lender and the stake-holder as the borrower. i do not agree as i quite fail to see how it can possibly be said that this is in any sense a contract entered into by a subscriber to lend money to the stake-holder. the result is that the suit must fail on the question of limitation and this civil revision petition dismissed with costs......against the latter as being one to enforce a contract entered into by him to lend rs. 500 to the stakeholder on the date of the second instalment. it is very difficult to see how this can possibly be a contract whereby the subscriber is to lend a certain sum of money to the stake-holder. it has been held in a case of a similar auction chit where it was contended that the chit subscriber was a borrower from the fund that he was not a borrower, but he was merely the purchaser of a sum of money: vide raghavan pattar v. arumugham air 1935 mad 385. in the present case the lower court reverses the position unsuccessfully put forward in that case and treats the subscriber as the lender and the stake-holder as the borrower. i do not agree as i quite fail to see how it can possibly be said that.....
Judgment:
ORDER

Beasley, C.J.

1. In my view, this Civil Revision Petition must be dismissed with costs although that result is reached by coming to a different decision upon the point of limitation to that reached by the learned Subordinate Judge. It seems to have been conceded in the lower Court that the promissory note, Ex. B, was insufficiently stamped and the suit was not brought upon the promissory note at all. The only use to which it was put at the trial was as an acknowledgment of his debt to remove the bar of limitation which otherwise was obviously in the way of the claim, the amount sued for having been due on 30th November 1929 and the suit filed on 10th March 1934. The learned trial Judge held that although the note should not be used as a promissory note, it could nevertheless be used as an acknowledgment of the defendant's liability for the debt sued upon and he relied upon the decisions in Vancheswara v. Narayana : AIR1933Mad251 and Rakkappan v. Suppiah : AIR1930Mad485 .

2. The learned Subordinate Judge had not got before him the unreported decision of a Bench of this Court to which I myself was a party in Section A. No. K.M. Subbayyar and Sons v. P.M. Lakshmana Iyer, Second Appeal No. 124 of 1930 in which judgment was given on 6th September 1934. There the Bench took a view contrary to that expressed in the two decisions of Krishnan Pandalai, J. sitting alone to which I have just made reference. It was held that a promissory note which was insufficiently stamped could not be used for the purpose of proving an acknowledgment by the maker of it of his indebtedness. That decision is not only binding upon me, but I think is a correct one as well. The learned Subordinate Judge has quite rightly taken this to be a document which comes within Section 35, Stamp Act. It is true that it is a promise to pay at a future date instead of on demand, but it is nevertheless a promise to pay and is in my opinion clearly provided for by Section 35, Stamp Act. Therefore the learned Subordinate Judge should have held that the suit was barred by limitation as insufficiently stamped note could not be used in evidence for any purpose and it is not necessary for me to deal with the other questions raised before him. But I think it necessary to say this that the suit was brought by the assignee from the receiver appointed in a partition suit in the stake-holder's family which at the time of the starting of the kuri or chit was an undivided family. This was an auction chit and there were to be 14 auctions.

3. There were 15 subscribers each of them subscribing Rs. 500 for 15 instalments. Except with regard to the second instalment out of which the suit arose, the same procedure was adopted with regard to the others, The fifteen subscribers subscribed each Rs. 500 making a total of Rs. 7,500. This sum of money was immediately put up in auction and sold to the subsrciber or bidder who was prepared to give the largest discount. He then got the sum of money less the discount offered by himself. This discount at the first auction was divided up amongst all the subscribers except the successful bidder. The second instalment differed considerably from all the others in that the whole of the subscriptions of the fifteen subscribers amounting to Rs. 7,500 went to the stake-holder It was in fact his prize and thereafter at all the other auctions the discount offered by the successful bidder was divided up amongst those subscribers who had not been successful at the previous auctions and excluding the stake-holder. The defendant paid his subscription in respect of the first instalment and also the third and the fourth when my information which I get from Mr. K. Rajah Ayyar is that the chit stopped. The whole of the trouble arises in this case in respect of the second instalment. The defendant did not subscribe his Rs. 500 as he ought to have done. Instead a promissory note payable in three years time was taken from him and, as he did not pay the amount, the suit was filed against him as I have already stated not on the promissory note because it was not sufficiently stamped, but upon the original debt, viz. Rs. 500.

4. The learned trial Judge having found in favour of the plaintiff on the point of limitation then proceeded to deal with the claim upon the original debt. He dismissed the suit because he held that it was really a suit claiming specific performance of a contract to lend. This means that he regarded the stake-holder as the borrower and the subscriber as the lender and the suit against the latter as being one to enforce a contract entered into by him to lend Rs. 500 to the stakeholder on the date of the second instalment. It is very difficult to see how this can possibly be a contract whereby the subscriber is to lend a certain sum of money to the stake-holder. It has been held in a case of a similar auction chit where it was contended that the chit subscriber was a borrower from the fund that he was not a borrower, but he was merely the purchaser of a sum of money: vide Raghavan Pattar v. Arumugham AIR 1935 Mad 385. In the present case the lower Court reverses the position unsuccessfully put forward in that case and treats the subscriber as the lender and the stake-holder as the borrower. I do not agree as I quite fail to see how it can possibly be said that this is in any sense a contract entered into by a subscriber to lend money to the stake-holder. It seems to foe to be more in the nature of a contract on the part of the subscriber to pay a certain sum of money to the stakeholder under the rules of the chit fund and when he has broken his contract there is nothing at all to prevent the stake-holder from suing him for the money which he has contracted to pay. However, I have not heard any argument from Mr. Rajah Ayyar on behalf of the respondent on this point and I therefore do not decide it. I merely express the opinion I have come to without hearing any such argument. The result is that the suit must fail on the question of limitation and this Civil Revision Petition dismissed with costs.


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