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Gopal Udayar Vs. Mangala Udayar and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1962)1MLJ337
AppellantGopal Udayar
RespondentMangala Udayar and anr.
Cases ReferredVeranna Kona v. Kattupuliambalam
Excerpt:
.....that this special enactment which replaces the contract between the parties and provides for instalment payment in the manner specified gives rise to a cause of action in favour of the plaintiff-creditor in respect of each instalment, that is to say, the creditor would have a period of three years within which to file a suit in respect of that particular instalment which the debtor had failed to pay on the due date. this sub-section is not very clearly worded but it certainly does appear to place the suing creditor at a considerable disadvantage in respect of his costs in so far as he purports to sue for the entirety of the amount against the terms of section 4 which provides for instalment payment of these debts. though it is not open to the parties to plead that the debt is..........that article 74 of the limitation act does not apply in this case.3. article 74 provides that the period of limitation for a suit on a promissory note or bond payable by instalments is three years and the time from which the period begins to run is the expiration of the first term of payment as to the part then payable; and for the other parts the expiration of the respective terms, of payment. the learned district munsif is right when he says that the promissory note was not one which was expressed to be payable in instalments. he has not however considered the question whether when by the operation of law a party becomes entitled to pay the amount in instalments and the other party is also prevented from demanding payment of anything more than the instalment then due, the principles.....
Judgment:

Srinivasan, J.

1. The plaintiff is the petitioner. The suit promissory note was assigned to him by the original payee. This promissory note had been executed on 3rd August, 1950 and there were two endorsements of payment dated 16th November, 1952 and 1st July, 1955. The question that was considered by the learned District Munsif was whether the suit was in time. This question had necessarily to be considered in the light of the provisions of Act I of 1955. The learned District Munsif thought that Article 74 of the Limitation Act could not cover the plaintiff's claim since the promissory note itself did not provide for payment of the amount in instalments. On this short ground the claim was dismissed.

2. The question that I have now to consider is whether by reason of the special provisions in Act I of 1955 the plaintiff is entitled to sue in respect of the instalments which have fallen due and which have not been paid by the defendant-respondents. Under Act I of 1955 which came into force on 1st March, 1955, there was a clear bar of suit for the recovery of a debt before the expiry of four months from the commencement of the Act. Section 4 of the Act (in so far as it is material) also provided that notwithstanding any law, custom, contract or decree of Court to the contrary an agriculturist shall be entitled to pay the amount due in four equal instalments, the first instalment within 4 months of the commencement of the Act, and the remaining instalments on or before the 1 st of July of each of the succeeding three years. What happened in this case was that by operation of this provision the debtor became entitled to pay the amount only in such instalments as provided. It obviously follows that the creditor could not claim to be paid contrary to this provision. It is conceded by the plaintiff that on the suit as laid by him the first instalment which was payable on 1st July, 1955, had become barred by time, and that it is only the three subsequent instalments that would be within time. In putting forward this argument the learned Counsel for the petitioner claims that this special enactment which replaces the contract between the parties and provides for instalment payment in the manner specified gives rise to a cause of action in favour of the plaintiff-creditor in respect of each instalment, that is to say, the creditor would have a period of three years within which to file a suit in respect of that particular instalment which the debtor had failed to pay on the due date. If that contention is accepted there is no doubt that the suit must be held to be within time. Before I deal with that point I may refer to the other argument that Article 74 of the Limitation Act does not apply in this case.

3. Article 74 provides that the period of limitation for a suit on a promissory note or bond payable by instalments is three years and the time from which the period begins to run is the expiration of the first term of payment as to the part then payable; and for the other parts the expiration of the respective terms, of payment. The learned District Munsif is right when he says that the promissory note was not one which was expressed to be payable in instalments. He has not however considered the question whether when by the operation of law a party becomes entitled to pay the amount in instalments and the other party is also prevented from demanding payment of anything more than the instalment then due, the principles underlying the period of limitation prescribed for a debt payable in instalments would not equally apply. This argument is countered by the contention that Act I of 1955 does not in terms bar the filing of a suit. It seems to me however that when Section 4 in effect lays down the rights and obligations between the parties in respect of a transaction in variation of the contract which they had entered into, the logical result must be presumed to have been intended by the legislature. That apart, Section 3, besides barring the laying of a suit within a period of four months from the commencement of the Act, provides by Sub-section (2) that where a creditor files a suit during the period when the debtor is entitled to pay in instalments, the creditor is deprived of his costs and made to pay costs of the debtor. This sub-section is not very clearly worded but it certainly does appear to place the suing creditor at a considerable disadvantage in respect of his costs in so far as he purports to sue for the entirety of the amount against the terms of Section 4 which provides for instalment payment of these debts. It is to be noticed that Sub-section (3) to Section 4 provides in the case of a suit filed after the commencement of the Act, that the Court shall pass a decree for the immediate payment of only such of those instalments as have become payable under the provisions of Sub-section (1) and that a decree could be passed providing for the payment of future instalments as on the dates when they would fall due. Reading this along with Section 3, Sub-section (2), it certainly does appear that the plaintiff-creditor becomes disentitled to his costs, and becomes liable for the defendant's costs if he sues for the entirety of the debt. The result of these provisions would appear to be that where the law provides that a debt shall be payable in a particular manner and fixes a date for such instalment, each instalment furnishes a cause of action for the plaintiff and he is entitled to sue only for that instalment. The learned Counsel for the respondent urges that this being a provision intended for the relief of indebted agriculturists, it is not reasonable to infer that the legislature would have permitted the filing of more than one suit for the recovery of the debt due. I am unable however to agree that the mere fact that a provision for instalment payments resulting in the plaintiff-creditor becoming entitled to sue for each instalment separately places any onerous burden on the debtor. I can find no prohibition in the Act against the filing of a suit in respect of each instalment.

4. In Sambayya v. Pedda Subbayya : AIR1938Mad19 , the question arose whether the period of limitation should stand extended by the period that intervened between the adjudication and the subsequent instalment. It was held that this period could be deducted, the principal basis for the decision being that the statute of limitation must be read side by side with the other enactments which affect the period of limitation. Except for the broad principle that the law of limitation does not stand by itself, it is not necessary to refer to this decision any further.

5. In Savada Gounder v. Veerappa Gounder (1959) 1 M.L.J. 312, Ramachandra Iyer, J. considered the effect of Act V of 1954 and Act I of 1955 upon the Limitation Act. He observed that if a Provincial Act makes it obligatory on the Courts to exclude the period when computing the period of limitation, Courts have to exclude that period and if after excluding that period the suit or application could be filed by a certain date, any acknowledgment or payment made in accordance with the provisions of Sections 19 and 20 after the original period of limitation had expired but within the extended period should be deemed to be an acknowledgment of payment within the period prescribed for the filing of the suit or application. This decision also is in support of the position that the Limitation Act does not stand alone and any inroads made upon its provisions by other Provincial Acts must be taken into account in computing the period of limitation.

6. On behalf of the respondent the decision of Ganapatia Pillai, J. in Ganapatia Pillai v. Ekambara Moopan : (1959)2MLJ413 , has been brought to my notice. In this case the learned Judge was called upon to consider whether Article 74 of the Limitation Act is attracted by reason of Section 4 of Madras Act I of 1955. The gist of the decision was that the fact that the debt due by an agriculturist has been made payable by instalments by the legislature would not convert the promissory note or bond into one payable by instalments within the meaning of Article 74. He concluded:

The further argument of the learned Counsel that if it applied the suit would have been in time in respect of the instalments subsequent to the first instalment does not call for any notice.

It is clear from this observation that the only point that was urged before the learned Judge was whether Article 74 would in terms apply and save limitation. It does not appear to have been specifically contended that by reason of Section 4 of the Act, the provision for payment in instalments would itself give rise to a separate cause of action in respect of each instalment. Though it is not open to the parties to plead that the debt is divisible unless the contract stipulates therefor, when the statute brings about that result by special provisions it is not unreasonable to hold that the debt itself has been split up and the failure to pay each instalment as it falls due gives rise to a cause of action. In my view that particular aspect of the matter was not before Ganapatia Pillai, J. and that decision does not hold to the contrary.

7. Nor does Veranna Kona v. Kattupuliambalam (1960) 73 L.W. 686, decided by Jagadisan, J. have any relevance to the point at issue here. That was a case where in addition to the period of 1 year 6 months and 36 days which a creditor would be entitled to exclude from the period of limitation, the creditor claimed to be entitled to add another period of three years, part of the normal period of three years having expired previously. The learned Judge held that that could, not be done. This decision is not of much help in dealing with the present question.

8. I am accordingly of opinion that the learned District Munsif was in error in holding that the suit was barred by limitation. As I have said earlier, in so for as the first instalment was concerned, the suit was admittedly not in time. The Judgment and Decree of the learned District Munsif will be set aside and there will be a decree instead for the three instalments payable in accordance with the provisions of Act I of 1955 with subsequent interest and with proportionate costs. There will however be no order as to costs in this Revision Petition.


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