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S.S. Srinivasa Raghavan Vs. R. Jayaraman and anr. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1975)1MLJ414
AppellantS.S. Srinivasa Raghavan
RespondentR. Jayaraman and anr.
Cases ReferredRama Pattar v. Viswanalha Pattar
Excerpt:
- .....there was no reference in the promissory note to the barred debt. this court held that, though the suit promissory note simply referred to a promise to pay a certain sum of money, it was open to the plaintiff to say that the actual consideration was something different from that recited, in the document itself and that effect must be given to the real consideration. this was the settled view of this court in vasudeva v. narasamma i.l.r. (1882) mad. 6 and kumara v. srinivasa i.l.r. (1888) mad. 213. if the recitals in the document are not themselves conclusive and do not preclude the courts from ascertaining and giving effect to the real intention of the parties, the plaintiff can prove, in evidence, that the real consideration under the promissory note was a barred debt, and the document.....
Judgment:

V. Ramaswami, J.

1. The plaintiff is the appellant. He filed the suit for the recovery of a sum of Rs. 3,165 due from the respondents under two promissory notes, dated 28th April, 1951 which was for a sum of Rs. 250 and 28th June, 1951 which was for a sum of Rs. 750 and also a handloom of Rs. 150 taken on 21st August, 1951. A decree has been granted in so far as the hand-loan is concerned, with interest thereon, amounting to Rs. 415. But, so far as the promissory notes are concerned, the suit was dismissed by the Courts below on the ground that the suit was barred by limitation. In the plaint it is stated that the suit is not barred by limitation, as the defendants have acknowledged their liabilities for the amounts by their letters, dated 12th April, 1954, 9th June, 1954, 17th August, 1954, 7th June, 1957, 1st July, 1960 and 29th June, 1963. The suit itself was filed on 28th June, 1966. The Courts below held that the letters, dated 1st July, 1960 and 29th June, 1963 could not save the promissory notes from the bar of limitation, as by that time the suit was already barred, and that therefore these acknowledgments could not save the suit under Section 18 of the Limitation Act, 1963.

2. The learned Counsel for the appellant submitted that, though these letters might not save the suit from the bar of limitation, the letter, dated 29th June, 1963, which has been marked as Exhibit A-10 in this case, and another letter, dated 24th June,. 1966, which has been marked as Exhibit A-14 would amount to a fresh promise to. pay and that, under Section 25 (3) of the : Contract Act, he was entitled to get a decree on the basis of these two letters. Exhibit A-14 had not been specifically referred to in the plaint, either as a statement of fact or as giving rise to a cause of action. Only Exhibit A-10 was referred, to both in the statement of facts and in the cause of action. Exhibit A-14 only came by way of evidence at the time of the trial, and as such it is not open to the plaintiff to rely on this letter either for the purpose of Section 25 (3) of the Contract Act or as saving the suit or as giving a cause of action. Exhibit A-10, which is the only relevant document, reads as follows:

With reference to the money due by us to you under the pronote for Rs. 250-dated 28th April, 1951 and the pronote for Rs. 1,000 dated 28th June, 1951, and our letter to you, dated 21st August,, 1951 we very much regret the delay in paying the money due to you. We request you for some forbearance. We will pay you the amount due within three months.

This letter was written by the second defendant, who is the son of the first defendant, to the plaintiff.

3. The question for consideration is whether the plaintiff is entitled to rely on this letter as a fresh promise to pay a barred debt, and, if so, to what extent the defendants would be liable under this document. Sub-section (3) of Section 25, of the Contract Act, which is relevant for our purpose, reads as follows:

25. An agreement made without consideration is void, unless:

(3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent, generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.

It would be seen from this section that, in order to invoke this provision, the following conditions must be satisfied : (i) it must refer to a debt of which the creditor might have enforced payment, but for the law of limitation. In other word the consideration for the- promise is an identifiable debt, the recovery of which is barred by limitation; (ii) There should be a distinct promise to pay wholly or in part such a debt; (tit) The promise must be in writing and signed by the person or his duly authorised agent. The scope of this section had also come up for consideration in some reported cases, the earliest of which is Appa Rao v. Suryaprakasa Rao I.L.R. (1900) Mad. 94 : (1900) 9 M.L. J. 330. That was a case in which the suit was filed for the recovery of rent and interest for faslis 1300 to 1307. The defence was that the claim in respect of faslis 1300 to 1303 was barred by limitation. The liability, for the balance was not disputed. A letter signed by the first defendant after the claim in respect of faslis 1300 to 1303 had become barred was relied on by the plaintiff as a promise to pay the barred debt, under Section 25 (3) of the Contract Act. That letter was in the following terms:

In your letters, dated 24th March, 1888, you said that the kattubadi from fasli 1300 to fasli 1307 was in arrears, and that the same should be sent through your peon. There are no collections now. I shall send by the end of the vysakha month (April to May). Please to consider.

The question for consideration was whether this letter came within Section 25 (3) of the Contract Act and constituted a promise to pay a barred debt. This Court held that for the purpose of satisfying Section 25 (3) it was enough if the document referred to a debt in such a way as to identify it and contained a promise to pay and that it was not necessary either that the promissor must be aware that the debt was barred or that the acceptance should be reduced to writing. In this view the said letter was held sufficient to satisfy the provisions of Section 25 (3), and the suit was decreed

4. Ganapathy Moodelly v. Muniswami Moodelly I.L.R. (1910) Mad. 159 : 5 I.C. 754 : related to a suit on a promissory note, dated 1st December, 1904. It was found, on evidence, that it was a renewal of a prior promissory note, dated 1st January, 1889, which was not enforceable as the debt had become barred, before it was renewed and that there was no reference in the promissory note to the barred debt. This Court held that, though the suit promissory note simply referred to a promise to pay a certain sum of money, it was open to the plaintiff to say that the actual consideration was something different from that recited, in the document itself and that effect must be given to the real consideration. This was the settled view of this Court in Vasudeva v. Narasamma I.L.R. (1882) Mad. 6 and Kumara v. Srinivasa I.L.R. (1888) Mad. 213. If the recitals in the document are not themselves conclusive and do not preclude the Courts from ascertaining and giving effect to the real intention of the parties, the plaintiff can prove, in evidence, that the real consideration under the promissory note was a barred debt, and the document itself need not refer to the barred debt. This decision, in my opinion, is not inconsistent with the view expressed in Appa Rao v. Suryaprakasa Rao I.L.R. (1900) Mad. 94 : (1900) 9 M.L.J. 330, where it was held that the debt itself, which had in fact become barred, must be referred to in the document. A promise to pay a certain sum of money is certainly necessary to be found in the document, and the document should either expressly refer to the barred debt or there should be evidence in the suit disclosing that the debt which formed the consideration was a definite and barred debt. It is not correct to say that Ganapathy Moodelly v. Munisuiami Moodelly I.L.R. (1910) Mad. 159 : 5 I.C. 754 is authority for the position that the promise need not be with reference to a debt which is barred by the law of limitation.

5. The question whether a promise should be made by the original debtor or even for a promise by a third party a barred debt could form the consideration does not arise for determination in this case and it is therefore not necessary to refer to those cases which dealt with that question.

6. Exhibit A-10 refers to a promissory note for Rs. 250, dated 28th April, 1951 and another promissory note for Rs. 1,000 dated 28th June, i951. The suit was for the recovery of the amount due under the promissory note, dated 28th April, 1951 for Rs. 250 and another promissory note for Rs. 750, dated 28th June, 1951. The learned Counsel for the appellant contended that the reference to the promissory note for Rs. 1,000, dated 28th June, 1951 in Exhibit A-10 was a mistake for Rs. 750, dated 28th June, 1951. There is no evidence in this case to the fact that it is a mistake, and I am, therefore, unable to proceed on the basis that it is a mistake. It might or might not be that there was another promissory note for Rs. 1,000 bearing the same, dated 28th June, 1951. If Exhibit A-10 is to be treated as a promise to pay, the amount mentioned therein will have to be taken as it is and could not be altered. There is also no evidence that there was any prior promissory note for Rs. 1,000, dated 28th June, 1951 which formed the consideration for the promise contained in Exhibit A-10. We must therefore proceed on the basis that Exhibit A-10 only promises to pay the promissory note debt of Rs. 250, dated 28th April, 1951. So far as the said claim is concerned, there can be no doubt that there is a promise to pay this money. As already seen, the acceptance of this promise need not be in writing. The very fact that the plaintiff waited for three months prayed for in that letter without resorting to the filing of the suit or taking such other action shows that he had accepted the promise. The learned Counsel for the respondents is well-founded in his contention that, when a portion of the barred debt alone is contained in the promise which formed part of the agreement under Section 25 (3) of the Contract Act, a decree could be given only for such portion and not for the entire barred claim. This contention is also supported by the decision in Govindan Nair v. Achuthan Nair : AIR1940Mad678 . In that case the suit was instituted for the recovery of Rs. 288 being the price of paddy alleged to have been due from the defendant. The letter which was relied on as an agreement under Section 25 (3) of the Contract Act was written to the plaintiff by the defendant asking him to come and receive fifty paras of paddy towards what was to be given to the plaintiff. It was held that though it contained a definite request to receive fifty paras of paddy, there was nothing in it which could be said to disclose an express promise to deliver the remaining paddy and that, in the absence of an express promise, the remaining paddy could not be claimed. The following passage in the decision may be usefully quoted:

The contention that, if a person promises to pay a part of the debt, he should be taken to have promised to pay the whole of the debt has in my opinion no substance. If a person promises to pay a portion of a barred debt, he can only be sued for that portion alone and not for the whole debt. If, on the other hand, he promises to pay the whole of the barred debt in writing, he could be sued for the whole of the debt.

The only other question that remains to be considered is whether the suit should have been filed on the promise contained in Exhibit A-10 as forming a fresh cause of action, or whether the suit should be based on the original debt. In this connection the learned Counsel for the appellant referred to the decision in Soore Venkatappayya v. Talnvarlhi Venkatappayya : AIR1946Mad72 . The suit in that case was brought in 1940 on a promissory note, dated 20th February, 1933. The two payments made on 25th December, 1934 and 19th November, 1937 were held not to save the suit from the bar of limitation. On 9th August, 1939 the defendant applied to the Debt Conciliation Board for relief and on 1st June, 1940 he made a statement before the Board undertaking to pay seven creditors of whom the plaintiff was one, at the rate of seven annas in the rupee, if he was granted four months' time from that date. It was argued on behalf of the plaintiff that this statement could be utilised to found a claim based on Section 25 (3) of the Contract Act. It was found in that case that, though four of the creditors agreed to the proposal, the plaintiff did not agree. This Court held that, after the definite refusal by the plaintiff to the offer of the defendant, it was impossible to understand how the claim under Section 25 (3) could be made. Section 25 (3) was based on agreement and the refusal of the plaintiff conclusively showed that there was no agreement. The learned Counsel for the appellant contended that, if the plaintiff in that case had accepted the agreement, this Court would have decreed the suit and that it was only on the basis that there was no agreement that the suit was dismissed. It is difficult for me to come to the conclusion what would have happened if there was an agreement in that case. The question whether the suit based on the promissory note could be decreed on the basis of the promise under Section 25 (3) of the Contract Act was not specifically canvassed in that case and therefore it is no authority on that question. Be that as it may, I am of the view that, if there is a statement of fact of the promise to pay contained in the letter, and that is shown as part of the cause of action, there could be no objection for considering the claim under Section 25 (3) of the Contract Act, even if the suit is prima facie based on the original debt itself. A similar view was expressed in Maidens Hotel, Delhi v. Willmott A.I.R. 1935 Lah. 984, though in a different context. The question for consideration there was whether an amendment of the plaint should be permitted in order to make the promise contained in a letter a specific cause of action. The learned Judge held that the amendment was not necessary, as even in the original plaint the promise contained in the letter was referred to and that therefore the claim could be considered under Section 25 (3) of the Contract Act.

7. For the foregoing reasons, I am of the view that the plaintiff is entitled to a decree in respect of the sum of Rs. 250 which was payable under the promissory note, dated 28th April, 1951. But if Exhibit A-10 is the cause of action, the decree could be given only on the basis of that letter. That letter does not contain any promise to pay interest and therefore the liability was to pay only the sum of Rs. 250 and not interest. of course, the plaintiff will be entitled to interest from the date of the suit on this sum of Rs. 250.

8. One other point that arises for consideration is this. The letter Exhibit A-10 is signed only by the son, the second-defendant in the suit. The learned Counsel for the appellant brought to my notice a decision of this Court in Rama Pattar v. Viswanalha Pattar : AIR1922Mad23 , where it was held that a debt contracted by the manager of a joint Hindu family for joint family purposes was a debt due by the other members of the family within the meaning of Section 25 (3) of the Contract Act and that a promissory note executed by the latter undertaking to pay such debt after it had become barred was valid and binding on them. Unfortunately for the plaintiff in this case, the letter Exhibit. A-10 was written by the second defendant, the son, who was not the manager of the joint Hindu family, though it appears that the original debt itself was borrowed for the purpose of the joint family, and therefore no decree could be granted as against the first defendant in this case.

9. In the result, the judgments and decrees of the Courts below, in so far 'as they are against the appellant herein, are set aside, and the suit is decreed as against the second defendant for a sum of Rs. 250 with interest at six per cent, from the date of the suit. The decree granted by the Courts below against the second defendant in respect of the hand-loan will stand. There will be no order as to costs. No leave.

10. Before parting with this case I must express my sincere thanks to Mr. S. Jagadisan, the learned Counsel who argued the case as amicus curiae for the respondents.


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