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Raja Sreenath Roy and ors. Vs. Raja Peary Mohan Mookerjee - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in39Ind.Cas.205
AppellantRaja Sreenath Roy and ors.
RespondentRaja Peary Mohan Mookerjee
Cases ReferredOukur Pershad Bustooree v. Musammat Foolcoomaree Bebee
Excerpt:
limitation act (xv of 1877), schedule ii, articles 115, 65, 120 - guarantee on demand note, suit upon--limitation--surety--negotiable instruments act (xxvi of 1881), section 74--presentation, rule as to, applicability of, to contingent securities. - .....the case other than that of an ordinary guarantee, and the rule as to an ordinary guarantee on a demand note or of a debt payable on demand is admitted and is clear according to english law, which must be administered in this court on the original side; and that the guarantee was made on the demand note and executed in respect of it, is not open to question in the case.7. but even assuming that the supposed intention is to be a guide in dealing with this matter, assuming that such an intention was manifested in the guarantee, still in this case the note was not presented for payment of such residue as remained due upon, it for five and a half years after its execution.8. it is true that the rule as to reasonable time necessary for the presentation of a note payable on demand, which is.....
Judgment:

1. This suit is brought against the defendants Nos. 1 to 6 as representatives of Shamadhone Mookerjee upon a promissory note for Rs. 15,000, made payable on demand, dated the 14th August 1886. The amount claimed is Rs. 8,398-10-6. There is no doubt that that amount is due on the note and the suit was practically undefended, so far as the defendants Nos. 1 to 6 were concerned. The 7th defendant, the respondent, was sued upon a letter of guarantee made by him in favour of the plaintiff in the following terms:

I am very thankful to you for your having agreed to lend a further sum of Rs. 15,000 (fifteen thousand) to my relative Babu Shamadhone Mookerjee. The money has been to-day paid to him in my presence by Babu Jadabchander Dutt, M.A. If there be a default in the re payment of the loan you may look to me for re payment.

2. The original Court held the suit barred by imitation, holding that Article 65 of the Limitation Act (Act XV of 1877) applied; and the plaintiff appeals on the ground that the suit against defendant No. 7 is not barred by limitation.

3. The plaint states, and the fact is, that payment of the sum claimed was demanded from the defendants Nos. 1 to 6 in January 1892, and, on their default, demand was made on defendant No. 7 on the 23rd January 1892, and payment was refused by him.

4. It is admitted by the learned Counsel for the appellant that on a contract of guarantee, such as the present, it is not necessary, according to English Law, to give notice, but the guarantor may be sued on at once.

5. But it is said that, in this case, you must look at the intention of the parties; that the real contract must be looked to, and that in this case the intention was to pay when, and in case, default should take place, and only in case of default.

6. But, in the first place, the language of the guarantee importing such intention does not really create any liability in the case other than that of an ordinary guarantee, and the rule as to an ordinary guarantee on a demand note or of a debt payable on demand is admitted and is clear according to English Law, which must be administered in this Court on the Original Side; and that the guarantee was made on the demand note and executed in respect of it, is not open to question in the case.

7. But even assuming that the supposed intention is to be a guide in dealing with this matter, assuming that such an intention was manifested in the guarantee, still in this case the note was not presented for payment of such residue as remained due upon, it for five and a half years after its execution.

8. It is true that the rule as to reasonable time necessary for the presentation of a note payable on demand, which is the same in Section 74 of the Negotiable Instruments Act and in the English Law, is not, with respect to an instrument intended to be a continuing security, to be enforced with extreme stringency, an example of which is to be found in Chartered Mercantile Bank of India, London and China v. Dickson, (1871) 3 P.C. 574. But in the present case it would not be, in our power, to infer that upon the terms of the guarantee as made the intention could be imputed to the defendant to remain indefinitely liable for whatever amount might be due in respect of the demand note after such a period as elapsed in the present case before demand was made; confessedly, if the period of limitation did not begin to run at the time of the execution of the guarantee, there is no other period from which it could begin to run until the refusal in January 1892, five and a half years after the execution of the guarantee.

9. So far as to the argument as to intention; and in truth the question in this case is as to whether or not any Article of the Limitation Act now in force applies other than Article 120. Article 65 which the learned Judge was of opinion applied to the case, we are unable to think does apply. That is for compensation for breach of a promise to do anything at a specified time or upon the happening of a specified contingency and the time from which the period begins to run is when the time specified arrives or the contingency happens.

10. We are unable to say that the terms of that Article apply to the present case. The obligation certainly arose uno flatu with the execution of the document, and there is no contingency to be found in the case. In short, the suggestion that Article 65 applies would involve the assumption that a claim could not be made on the guarantee until after default had been made on demand by the person guaranteeing.

11. Article 83 we need not consider, but Article 115 is the Article which was chiefly considered before us: it was contended that that Article could not apply to the present case, and if it could not, the case would fall within Article 120, and limitation would not bar the claim in this suit. We think that Article 115 applies. It was said that that Article does not apply, in that breach of contract is not a term under which the present case could be brought. It was contended that Article 115 only applies to cases where the obligation arises at a time subsequent to the making of the contract; but no authority was cited to us which supports this proposition. The description of suit to which the Article applies, is, to use the language of the Article, for compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for,' and the time from which limitation begins to run is, when the contract is broken, or (where there are successive breaches) when the breach in respect of which the suit is, instituted occurs. ' Now, whatever might be supposed, at first sight, on reading the language of that Article, it is clear, upon the authorities, that it is not limited to the case of damages for breach of contract, and that it is applicable to a case of liability under a simple debt due, a liability such as, under the old law, was discussed by Mr. Justice Macpherson in a case cited by Mr. Pugh in reply [Parbati Charan Mookerjee v. Ramnarayain Matilal 5 B.L.R. 396 : 16 W.R. 161 note], a liability such as is spoken of by their Lordships of the Judicial Committee of the Privy Council in referring to the Indian decisions on the words of the old Act of 1859 in the case of Oukur Pershad Bustooree v. Musammat Foolcoomaree Bebee 16 W.R. (P.C.) 35 ; 14 M.I.A. 134 ; 10 B.L.R. 15 ; 2 Sar. P.C.J. 703 ; 20 E.R. 737. The words of the old Act (Act XIV of 1859, Section 9) are, 'suits brought to recover money lent or interest or for the breach of any contract,' and it is clear, we think, upon the language of that decision, that so far as that case goes, it is an authority for the proposition that the words in the old Act of 1859, similar to those in Article 115 of the present Act, are applicable to the case of a debt due.

12. In the present case, this is the nature of the obligation that arose against the defendant immediately on the execution of the guarantee, and we think that limitation ran from that date, and that, therefore, the suit was barred under Section 115 and that the appeal must be dismissed with costs.


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