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Lakshmi Ammal Vs. Rakkayi Ammal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1976)2MLJ234
AppellantLakshmi Ammal
RespondentRakkayi Ammal and ors.
Cases ReferredMeenammal v. S.N. Oavai Reddiar and Anr.
Excerpt:
- .....dated 31st may, 1957 marked as exhibit a-3; and that consolidating all the three amounts only, the suit promissory note exhibit a-4 was executed in lieu of the said three promissory notes. one of the contentions raised by the respondent was that the promissory note exhibit a-4 was insufficiently stamped and therefore it could not be sued upon. thereafter the appellant sought to recover the money on the basis of the original cause of action and the suit was ultimately disposed of on that basis. with regard to the claim of the appellant to recover the amount on the basis of the original cause of action, it was held by the courts below that the suit was barred by limitation and, therefore the suit instituted by the appellant was dismissed. it is against the said dismissal, the present.....
Judgment:

M.M. Ismail, J.

1. The plaintiff in O.S. No. 685 of 1967 on the file of the Court of the District Munsif of Madurai Town, who lost before the Courts below is the appellant herein. The suit was instituted for recovery of the amount said to be due under a promissory note dated 15th May, 1959 marked as Exhibit A-4., said to have been executed by the respondent herein in favour of the deceased Parthasarathi Iyengar for a sum of Rs. 1,500. It was the case of the appellant herself that no cash was paid on the date of Exhibit A-4; that prior to Exhibit A-4 the respondent had borrowed a sum of Rs. 500 under a promissory note dated 1st August, 1956 marked as Exhibit A-1, another sum of Rs. 500 under a promissory note dated 1st December, 1956 marked as Exhibit A-2 and a third sum of Rs. 500' under another promissory note dated 31st May, 1957 marked as Exhibit A-3; and that consolidating all the three amounts only, the suit promissory note Exhibit A-4 was executed in lieu of the said three promissory notes. One of the contentions raised by the respondent was that the promissory note Exhibit A-4 was insufficiently stamped and therefore it could not be sued upon. Thereafter the appellant sought to recover the money on the basis of the original cause of action and the suit was ultimately disposed of on that basis. With regard to the claim of the appellant to recover the amount on the basis of the original cause of action, it was held by the Courts below that the suit was barred by limitation and, therefore the suit instituted by the appellant was dismissed. It is against the said dismissal, the present second appeal has been filed.

2. Exhibit A-4 promissory note itself contains two endorsements of payment, one dated 20th March, 1962 marked as Exhibit A-9 and the other dated 4th March, 1965 marked as Exhibit A-10. The suit itself was instituted only on 23rd October, 1967. On the face of it, the original cause of action, namely, in respect of the three sums of Rs. 500 each referred to above, having arisen on 1st August, 1956, 1st December, 1956 and 31st May, 1957 respectively, the suit instituted in 1967 was barred by limitation unless the appellant could base her claim on any acknowledgment. According to the appellant, Exhibit A-4 itself constituted as, acknowledgment because it refers to the borrowing of Rs. 1,500. The Courts below have held that Exhibit A-4 could not constitute an acknowledgment and that even if it constituted an acknowledgment, the same would not be admissible in evidence and that consequently the appellant could not succeed on the basis of any such acknowledgment as contained in Exhibit A-4. I am of the opinion that the conclusion of the Courts below on this point is correct. In the first place, Exhibit A-4 itself does not refer to any debts outstanding as on the date on which Exhibit A-4 promissory note was executed, The recital in Exhibit A-4 proceeds as if on the date of Exhibit A-4 the respondent borrowed a sum of. Rs. 1,500. from the deceased Parthasarathy Iyengar. Once it is admitted that nq, amount was borrowed by the respondent on the date of Exhibit A-4 and that Exhibit A-4 was only a consolidated promissory note in lieu of Exhibits A-1, A-2 and A-3, it will follow that Exhibit A-4 does not constitute an acknowledgment of liability with regard to the amounts borrowed on 1st August, 1956, 1st December, 1956 and 31st May, 1957 respectively. Secondly, even assuming that Exhibit A-4 can be said to constitute an acknowledgment of liability, still Exhibit A-4 not being admissible in evidence, there is no acknowledgment of liability in law. It is admitted that Exhibit A-4 was insufficiently stamped as a promissory note. Therefore, by virtue of Section 35 of the Indian Stamp Act, it must be held that Exhibit A-4 cannot be admitted in evidence even for the purpose of showing that it constituted as acknowledgment of a pre-existing liability. Section 35 of the Stamp Act states that no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped. The scope of the expression, 'for any purpose' occurring in this section has been the subject-matter of consideration by the Courts and the Privy Council in Ram Rattan v. Parma Nand observed:

A document admitted in proof of some collateral matter is admitted in evidence for that purpose, and the statute enacts that it shall not be admitted in evidence for any purpose. Their Lordships see no reason why the words, 'For any purpose' in the Indian Act of 1879 should not be given their natural meaning and. effect. Such words may well have been inserted by the Legislature to get rid of the difficulties surrounding the question of what amounted to a collateral purpose.

3. The question involved in the present case came to be directly considered by a Bench of this Court in Penatapati Nageswara Rao v. Moka Narayanamurthi and Anr. I.L.R. (1938) Mad.210 : 46 L.W. 692 : 175 Ind.Cas. 24 : (1973) 2 M.L.J. 805 : A.I.R. 1938 Mad. 75. In that case, a promissory note was executed reciting the debts already due under earlier promissory notes. The promissory note itself was insufficiently stamped, and on that account it was held to be inadmissible in evidence. However, it was contended before the Court that that portion of the promissory note which recited the previous promissory notes should have been admitted and if so admitted that would have saved the limitation in respect of the earlier instruments. This contention was rejected by the Court. The judgment starts by saying:

The question raised by this petition is whether an improperly stamped promissory note can be admitted in evidence to prove acknowledgment of liability in order to save limitation in respect of promissory notes previously executed.

Having thus stated the question that came to be considered, the Bench proceeded to state:

The section itself, in my opinion provides a complete answer to the petitioner's case. If an unstamped document cannot be admitted for any purpose it must mean, if the words are to be given their ordinary and plain meaning that it cannot be admitted under any circumstances in a civil suit. If the Legislature in placing this provision of law on the statute book had intended to allow unstamped instruments to be admitted for collateral purpose; it would surely have said so. It did not say so, but on the other hand it provided that a negotiable instrument which is insufficiently stamped at the time of execution cannot be properly stamped afterwards, even on payment of a penalty which is allowed in the case of other documents.

Thus, the Bench held that insufficiently stamped promissory notes cannot be admitted in evidence even to prove the acknowledgment of a liability in order to save limitation in respect of promissory notes previously executed. In my opinion, this decision directly applies to the facts of this case, and, therefore, Exhibit A-4 cannot be admitted in evidence even for the purpose of saving limitation, under the original cause of action, namely, loans advanced under Exhibits A-1, A-2 and A-3 already referred to.

4. Mr. S. Ramasubramaniam, learned Counsel for the appellant, repeatedly relied on the judgment of Rajagopalan, J., in Meenammal v. S.N. Oavai Reddiar and Anr. : AIR1960Mad237 . I am of the opinion that that decision has no application whatever to the facts of this case. In that case a promissory note was executed for a sum of Rs. 320. But that promissory note could not be admitted in evidence because it was insufficiently stamped. Therefore, the plaintiff therein laid the suit on the original cause of action, the debt itself, independent of the promissory note. The promissory note itself was marked as Exhibit A-1. There were endorsements of payment on Exhibit A-1 which were marked as Exhibits A-2, A-3 and A-4 and the plaintiff relied on those endorsements of payment to save the claim based on the original cause of action from being barred by limitation. The learned Subordinate Judge accepted the plaintiff's case that the promissory note in question was executed as security for the debt subsequently on the date on which the advance of loan was made and he also upheld the plaintiff's contention that the suit was maintainable on the original cause of action, the debt, even though Exhibit A-1 was inadmissible in evidence as a promissory note. However, he took the view that the endorsements Exhibits A-2, A-3 and 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, Exhibits A-2 to A-4 did not purport to acknowledge the debt itself. Rajagopalan, J., considered only this question and pointed out that when the defendant in that suit made payment towards the promissory note, it was obvious that what was paid was towards the debt evidenced by the promissory, note, and what was acknowledged successively in Exhibits 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 Exhibit A-1 in the sense that Exhibit A-1 would be admissible in evidence to prove the existence of the debt itself. In other words, the learned Judge reversed the conclusion of the learned Subordinate Judge that Exhibits A-2 to A-4 did not operate as acknowledgments of the debt itself and held that Exhibits A-2 to A-4, even though they purported to acknowledge the liability under the promissory note, constituted acknowledgment of the debt evidenced by the promissory note Exhibit A-1. The learned Judge had no occasion to consider the question whether Exhibit A-1 promissory note could have been admitted to prove any acknowledgment of the antecedent liability. Therefore, the judgment of Rajagopalan, J, relied on by the learned Counsel for the appellant is not Of any assistance whatever to the appellant herein.

5. In this case, the appellant also relied on Exhibits A-9 and A-10 endorsements of payment contained in Exhibit A-4. Even applying the judgment of Rajagopalan, J., that will govern only the acknowledgments Exhibits A-9 and A-10 and it will not govern Exhibit A-4, the promissory note itself. I have already referred to the dates of the three debts, namely, 1st August, 1956? 1st December, 1956 and 31st May, 1957. Unless there had been an acknowledgment in writing of the liability before the expiry of the period of limitation with reference to these three debts, the appellant cannot succeed and in this case Exhibits A-9 and A-10 came into existence in 1962 and 1965 respectively, that is, long after the expiry of the period of limitation with reference to Exhibits A-1, A-2 and A-3. If at all there is any acknowledgment in writing with reference to the debts evidenced by these three documents before the expiry of the period of limitation applicable to them, it is Exhibit A-4 only and that Exhibit A-4 is not admissible in evidence even as an acknowledgement of liability and therefore in law there is no acknowledgment of liability in respect of the debts evidenced by Exhibits A-1, A-2 and A-3. Hence, the suit of the appellant was rightly dismissed by the Courts below. Accordingly the second appeal fails and is dismissed. There will be no order as to costs. No leave.


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