Skip to content


Prafulla Chandra Nag Vs. Jatindra Nath Kar - Court Judgment

LegalCrystal Citation
SubjectCivil;Limitation
CourtKolkata
Decided On
Reported inAIR1938Cal538
AppellantPrafulla Chandra Nag
RespondentJatindra Nath Kar
Cases ReferredPannalal v. Ram Singh
Excerpt:
- .....actions, 1909 edition, page 374:the limitation act, 1623, may be excluded by paid payment of the debt or payment of interest, when the payment is made under such circumstances that there can be implied from it a promise to pay the balance of the debt or the debt, as the case may be. it must be a payment of a portion of the debt accompanied by an acknowledgment from which a promise may be inferred to pay the remainder. the bar of the statute is precluded by payment of interest; because the payment of interest is an acknowledgment of the debt and the law implies from the acknowledgment of the debt, a promise to pay it.9. these passages not only confirm the view taken by sir lawrence jenkins c. j. but they go further and show that a cheque may not only be payment but also acknowledgment......
Judgment:

S.K. Ghose, J.

1. This is an appeal under Clause 15, Letters Patent from the judgment of my learned brother Henderson J. The relevant facts are these: The plaintiff brought a suit alleging that he had agreed to construct a house for the defendant according to an estimated cost of Rs. 7555 less the sum of Rs. 555 claming Rs. 1776 as the amount due. The defendant con. tended that on account of the work being unsatisfactory, it had to be stopped after a certain time, that the total dues were settled at Rs. 4878 minus a rebate of Rs. 359 proportionate to the rebate of Rs. 555 upon the original estimate of Rs. 7555, that he made certain payments and that only Rs. 31 was due from him except with regard to some scaffolding materials. The Munsif decreed the suit at Rs. 531. On appeal by the defendant the Subordinate Judge reduced the figure to Rs. 480. The defendant again appealed to the High Court. Our learned brother Henderson J. agreed with the Subordinate Judge but allowed further appeal. Hence this Letters Patent Appeal by the defendant.

2. In this appeal two questions are raised. The first is that the defendant appellant is entitled to rebate as claimed by him proportionate to the rebate of Rs. 555 upon the original estimate. This argument is sought to be supported upon the principle of quantum meruit but really what the appellant asks us to do is to make a new contract for the parties. Henderson J. pointed out that the appellant himself put an end to the work before it was concluded, the original estimate of the plaintiff was set aside and the suit is for the work actually done. Therefore there can be no question of rebate on the basis of the original estimate. The point therefore fails.

3. The next point is that of limitation. The defendant's case is that he made a payment of Rs. 300 upon the settled account arrived at on the intervention of an Engineer, Mr. B. Dhar. This payment was made by two cheques which were given to the plaintiff by the defendant on 28th January 1929. Prom the date of that payment the present suit was instituted within three years. Henderson J. held that there was sufficient compliance with the proviso to Section 20, Limitation Act. This finding is challenged in this appeal. Now it is admitted that the payment of Rs. 300 was made by-two cheques as aforesaid and also that this payment was towards the plaintiff's claim and not on any other account. The question is whether the cheques are to be held to be acknowledgment of the payment in the handwriting of the appellant. The first point is whether the cheques are payments at all. This point was settled by the judgment of Sir Lawrence Jenkins C.J. in Kedar Nath Mitra v. Dinabandhu Saha (1916) 3 AIR Cal 580. There, a cheque was delivered to a payee by way of payment and was received by him as such. Jenkins C. J. pointed out that 'there was no suggestion in that case that the cheque upon presentation was not paid and in fact it was.' Upon these facts it was held that the cheque operates as a payment subject to the condition subsequent that if upon due presentation the cheque is not paid the original debt revives. Then he said:

If I am right in the view that the cheque actually was a payment, the very payment was in the handwriting of the person making the same.

4. No doubt this was with reference to the old Act; while now by the amendment of 1927 it is not 'the fact of the payment' appearing in the handwriting of the person making the payment but 'an acknowledgment of the payment' appearing in the same handwriting that has got to be proved. So far as this question is concerned, it seems to me that, although the fact of payment may be different from the acknowledgment, if the cheque itself is evidence of the fact of payment it is also evidence of acknowledgment. It has been contended that acknowledgment must necessarily follow the payment. I do not see why the two may not be simultaneous. If we take the acknowledgment to mean admission (the ordinary dictionary meaning) of the payment, it may be admission that payment is being made and not necessarily that payment has already been made.

5. Mr. Bagehi has further contended that cheque itself is not the payment and he seems to argue as if payment must be in cash, although when a direct question was put to him he conceded that he could not take up that standpoint. In support of his argument Mr. Bagchi has relied on Mackenzie v. Tiruvengadathan (1886) 9 Mad 271. This was distinguished and practically dissented from by Sir Lawrence Jenkins C. J. in the case in Kedar Nath Mitra v. Dinabandhu Saha (1916) 3 AIR Cal 580. The case in Mackenzie v. Tiruvengadathan (1886) 9 Mad 271 was followed in Earn Chandar v. Chandi Prasad (1897) 19 All 307 but was subsequently dissented from in the same High Court in M.B. Singh & Co. v. Sircar & Co. : AIR1930All392 , which took the same view as in Kedar Nath Mitra v. Dinabandhu Saha (1916) 3 AIR Cal 580. In our own Court, the high authority of Jenkins C. J. with regard to this question has never been dissented from. On the other hand, it was followed in Maurice Mayahas v. W. Morley (1925) 12 AIR Cal 937. The Madras case was also dissented from in Mandardar Aitch v. Secy. of State (1902) 6 CWN 218. That the mode of payment need not be in cash has been pointed out in several cases. For instance, payment may be by adjustment of debts, as in Guljar Mandal v. Sariman Mandalini (1923) 10 AIR Cal 71. In Currie v. Misa (1875) 10 Ex 153 at p. 164 the following passage is relevant:

This is precisely the effect which both parties intended the security to have, and the doctrine is as applicable to one species of negotiable security as to another; to a cheque payable on demand as to a running bill or a promissory note payable to order or bearer, whether it be the note of a county bank which circulates as money, or the note of the debtor, or of any other person. The security is offered to the creditor, and taken by him as money's worth, and justice requires that it should be as truly his property as the money which it represents would have been his, had the payment been made in gold or a Bank of England note.

6. In Marreco v. Richardson (1908) 2 KB 584 it was held that the date of part payment of a debt was the date when the cheque was handed by the defendant to his creditor and not the date when the cheque was in fact paid by virtue of an arrangement. Sir Gorell Barnes, President, says at p. 589:

In the present case the part payment relied upon was by a cheque, a negotiable instrument, and payment by cheque has always been considered to be a conditional payment: while the cheque is running, the right of action for the original debt is suspended and the payment is therefore conditional. This cheque was the acknowledgment to which the plaintiff pointed as implying a promise to pay the whole debt which would prevent the operation of the statute.

7. To the same effect is the following passage in Banning on the Limitation of Actions, Edn. 3, p. 51:

When a debtor gave a bill on account of the debt and the bill proved ultimately worthless, the bill (being a conditional payment) operated as an acknowledgment of the debt; and if a bill be given in part payment of a debt, and the bill is duly paid when due, the bill operates as a part payment from the time of the delivery of the bill (and not merely from the time of the actual payment).

8. See also the following passage in Light-wood's Time Limit of Actions, 1909 Edition, page 374:

The Limitation Act, 1623, may be excluded by paid payment of the debt or payment of interest, when the payment is made under such circumstances that there can be implied from it a promise to pay the balance of the debt or the debt, as the case may be. It must be a payment of a portion of the debt accompanied by an acknowledgment from which a promise may be inferred to pay the remainder. The bar of the statute is precluded by payment of interest; because the payment of interest is an acknowledgment of the debt and the law implies from the acknowledgment of the debt, a promise to pay it.

9. These passages not only confirm the view taken by Sir Lawrence Jenkins C. J. but they go further and show that a cheque may not only be payment but also acknowledgment. The Indian Statute only requires that the acknowledgment must be of the payment; it is not necessary that it must also be stated that the payment is towards a particular debt. Mr. Bagchi has referred to the case in Beti Maharaci v. Collector of Etawah (1895) 22 IA 31. But that was a case under Section 19, Lira. Act which relates to an acknowledgment of liability towards a particular debt which is a different matter from acknowledgment of payment, as required by the proviso to Section 20. Mr. Bagchi has also referred to the case in Muthiah Chettiar v. Kuttayan Chetty (1919) 6 AIR Mad 952 a Madras case which followed the decision in Mackenzie v. Tiruvengadathan (1886) 9 Mad 271. This view was dissented from in the case in Mandardar Aitch v. Secy, of State (1902) 6 CWN 218, where it was held, distinguishing Section 19 from Section 20, Lim. Act, that it is not necessary that the writing of payment (or acknowledgment, as the case may be) must, on the face of it, show expressly that the payment was made as such. To the same effect is the decision in the case in M.B. Singh & Co. v. Sircar & Co. : AIR1930All392 mentioned above. Our attention has also been drawn to a decision of a single Judge in Jagtu Mal Sada Sukh Rai v. Charanji Lal Fakir Chand (1933) 20 AIR Lah 341 as also the case in Municipal Committee, Amritsar v. Ralia Ram (1936) 23 AIR Lah 629 which support the view taken by Henderson J. Mr. Bagchi has laid great stress on the decision of their Lordships of the Judicial Committee-in the case in Manmohan Das v. Baldeo Narain Tandon and he-has contended that the effect of this decision is to negative the view taken by Sir Lawrence Jenkins. But this decision refers-to Arts, 57 and 58, Lim. Act where the-question turns on the payment of a cheque which is a different matter from the cheque-being taken as payment of the debt. As mentioned already, Jenkins C.J. pointed out that the parties accepted the cheque as-payment and that is the case here. It was-never the case that the parties did not accept the cheque as payment nor was it brought out that the cheque was actually paid into the Bank a considerable time later. That being so, on the facts of the present case it cannot be said that the view taken by Sir Lawrence Jenkins C. J. should not be accepted as correct and relevant. As I have pointed out the acknowledgment was simultaneous with the payment; the appellant himself wrote out the cheque by which he paid, and it follows necessarily that by such writing he acknowledged the debt. Therefore there was compliance with the proviso to Section 20, Lim. Act and the view taken by Henderson J. was correct.

10. The only other matter that has been raised is with regard to a sum of Rs. 60 which was not included in the original estimate. It is contended that limitation is not saved with regard to this sum. Henderson J. says that acknowledgment is not of the debt but of the payment and if once limitation is saved, the debtor is liable for any sum which the Court, after investigation, finds to be due. I am in agreement with this view. The decision in Pannalal v. Ram Singh (1929) 16 AIR Lah 288 is not relevant because there the question was with regard to two debts whereas in the present case there is one debt, only the amount being in dispute. The appeal must therefore fail and it is dismissed with costs.

Nasim Ali, J.

11. I agree. Where the payment is proved by oral evidence or by some writing not in the handwriting or in the writing signed by the debtor, an acknowledgment of payment in the handwriting, or in the writing signed by the debtor may be necessary to save limitation under proviso to Section 20, Lim. Act. But where as in the present case the fact of payment appears in the handwriting of the debtor there is no reason why the said writing should not be taken as an acknowledgment of payment also. There is nothing in the proviso to Section 20 which precludes the same document as being treated as evidence of the fact of payment as well as an acknowledgment of the payment.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //