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V.V. Nagappa Chetty and ors. Vs. A.R.M.S. Ramanathan Chetty - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in29Ind.Cas.422
AppellantV.V. Nagappa Chetty and ors.
RespondentA.R.M.S. Ramanathan Chetty
Cases ReferredKariyappa v. Rachappa
Excerpt:
interest, payment of, when saves bar of limitation - evidence to prove such payment--pattis--debtor--party to such arrangement--limitation act (ix of 1908), 19--contract of guarantee--consideration--actual release of claim necessary and not mere promise. - .....consent of the debtor, constituted a new loan. we, therefore, find that the plaintiffs' claim to recover money from defendants nos. 5 and 6 is barred by limitation, and had become barred on 2nd february 1906, the later payments not reviving it. the next question is whether the plaintiffs are entitled to recover the amounts from defendants nos. 1 to 4. the plaintiffs' case is that 1st defendant's father, chokalingam chetty, was appointed as their agent in may-june 1901, and that he, as their agent, lent a sum of rs. 10,068-4-6 on their behalf to the defendants nos. 5 and 6 without the plaintiffs' consent. the debt has been discharged in part and part of it still remains unpaid. when chockalingam chetty's connection with the agency ceased in 1906 plaintiffs' new agent, raman chetty,.....
Judgment:

1. This is an appeal from the decree of the Subordinate Judge of Ramnad dismissing the plaintiffs' suit to recover a certain sum of money which was advanced to the defendants Nos. 5 and 6 by the 1st defendant's father who is said to have undertaken subsequently to pay the money to the plaintiffs in case of default by defendants Nos. 5 and 6. The Subordinate Judge found that the suit against defendants Nos. 5 and 6 was barred by limitation and as far as defendants Nos. 1 and 2 are concerned, there was no consideration for their father's undertaking to pay. The date of the loan is 7th July 1901. The suit itself was instituted only on the 3rd August 1911.

2. The plaintiffs' case in effect is that as the interest fell due, a sum was advanced to the debtor equivalent to that interest, which was discharged wWi that amount, and the defendants this became indebted to the plaintiffs in two principal sums which must be treated as a new loan, though it clearly represented the original amount and its interest. There was in this case really no loan advanced, but what happened is described thus by the plaintiffs' 1st witness:

3. Every 6 months or one year interest statements are prepared in the case of loans advanced to other firms. The interest is entered in the accounts. Even if no payment is made, the amount is credited and debited in the accounts. Copies of these accounts are sent to the firm owing money. Such accounts were in this case sent to defendants Nos. 5 and 6.' There is no evidence that these defendants either acknowledged receipt of these accounts or that they accepted the liability to pay the consolidated amount. It is argued that in order to save the bar of limitation no actual payment is necessary and that the evidence shows an agreement between the parties intended to have the effect of discharging the interest that was due, and that this has the same effect as payment of money. The answer to this argument is that the arrangement or agreement must be one to winch the debtor was a party, and the creditor cannot by an unilateral act without the assent of the debtor save the bar of limitation. In the case relied on by the appellants, Kariyappa v. Rachappa 24 B.M 493 : 2 Bom. L.R. 378 there was a mutual settlement. The accounts had been gone into by the parties and the balance struck. This constitutes payment of the smaller debt. It is not the mere existence or a statement in writing of a demand that constitutes a payment. It is only the striking of the balance when there are defts due on both sides that constitutes it. In In re Tricumdas Mills Co. Ltd. 11 Ind. Cag. 552 : 13 Bom. L.R. 482, as also in the other cases cited, there was an arrangement entered into between the parties at the time the accounts were struck whereby the interest was added to the capital and the whole was treated as a new loan. In this case no such arrangement has been proved and we cannot, therefore, hold that these entries, adding interest to the capital made only by the creditor without the consent of the debtor, constituted a new loan. We, therefore, find that the plaintiffs' claim to recover money from defendants Nos. 5 and 6 is barred by limitation, and had become barred on 2nd February 1906, the later payments not reviving it. The next question is whether the plaintiffs are entitled to recover the amounts from defendants Nos. 1 to 4. The plaintiffs' case is that 1st defendant's father, Chokalingam Chetty, was appointed as their agent in May-June 1901, and that he, as their agent, lent a sum of Rs. 10,068-4-6 on their behalf to the defendants Nos. 5 and 6 without the plaintiffs' consent. The debt has been discharged in part and part of it still remains unpaid. When Chockalingam Chetty's connection with the agency ceased in 1906 plaintiffs' new agent, Raman Chetty, insisted that this debt which was advanced without the plaintiffs' knowledge and in order to oblige debtor, should be excluded from the accounts as an old one uncollected or that the said person should pay it up in cash. Thereupon the plaintiffs and the said Raman Chetty (the new agent) agreed and (thereupon) the said amount was debited as Nadappu account in the name of the A. Rm. A.M.S. shop of the 5th and 6th defendants in the said Raman Chetty's new account on the 29th Jhai of Visvavasu year (11th February 1906) as for 21st instant (3rd February), showing therein (also) the suretyship of the said Chockalingam Chetty. A letter was also obtained from the said Chockalingam Chetty on the 1st Masi of the said Visvavasu year (12th February 1906) in the name of the said Raman Chetty in his capacity as agent of the plaintiffs' shop specifying the particulars of the said suretyship.' It is not proved in this case that on the date of Chockalingam Chetty's surety-bond the plaintiffs were entitled to recover the account from Chockalingam. The release of a claim or the compromise of a doubtful claim would, no doubt, have been a sufficient consideration for the undertaking by Chockalingam Chetty to pay, but in this case the plaintiffs did not give up their claim against defendants Nos. 5 and 6. The persons who were entitled even after this agreement to recover the money from the defendants Nos. 5 and 6 were the plaintiffs and they have now sued to recover that amount. The money was not advanced to the defendants Nos. 5 and 6 on any guarantee given by the 1st defendant. On the date of Exhibit A the claim against defendants Nos. 5 and 6 was barred by limitation.

4. We are, therefore, of opinion that the Sub-ordinata Judge is right in holding that there was no consideration.

5. We, therefore, dismiss the appeal with costs.


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