Judgement

Appeal (No. 62 of 1933) from a judgment and decree of the Court of the Judicial Commissioner, North-West Frontier Province (June 27, 1932), reversing a judgment and decree of the Subordinate Judge, Mardan (October 15, 1931).

On April 1, 1917, the respondents [except respondents Nos. 2 and 3, who were held not to be joint], members of a joint Hindu family, who carried on business as moneylenders, received from the appellant the sum of Rs.43,900, giving him in exchange a document of even date bearing a one anna stamp, and signed by two of the respondents, managers of the joint family. The document stated that " This (one) receipt is hereby executed by [the two respondents] . . . .for Rs.43,900....received.... for and on behalf of [the appellant]. This amount to be payable after two years. Interest at the rate of Rs.5-4-0 percent, per year to be charged." The appellant alleged that after the expiry of the two years the money, together with interest due at that time, was allowed to remain in deposit with the respondents at the same interest on condition that he could recover the amount on demand at any time.

On July 22, 1929, the appellant sent notice to the respondents claiming repayment of the money, and on their failure to comply with that notice he instituted proceedings on July 25, 1929, for recovery of the principal sum, with interest.

The first respondent, in his written statement, alleged that the appellant had not deposited the money, but had lent it, and, further, that " the plaintiff has received back his amount on the expiry of two years term mentioned in the pronote, dated April 1, 1917." The respondents pleaded that the money having been lent and not deposited, the appellants claim did not fall within art. 60 of the First Schedule to the Indian Limitation Act, 1908, and was time barred. They further denied that there was any agreement apart from that recorded in the document of April 1, 1917.

The facts and the relevant statutory provisions appear from the judgment of the Judicial Committee.

The Subordinate Judge, on a preliminary issue, held that the document of April 1, 1917, was a promissory note, was improperly stamped, and therefore inadmissible in evidence. After amendment of the plaint the judge held that the money was placed with the respondents as a deposit for two years and repayable on demand after the expiry of the two years, and he decreed the plaintiffs claim.

On appeal, the judges of the Court of the Judicial Commissioner were of opinion that the amount was not paid to the respondents as a deposit on April 1, 1917, but must be regarded as a loan, and that therefore the suit was barred by limitation under art. 59 of the Limitation Act, which provides three

Law. Rep. 63 Ind. App. 279 ( 1935- 1936) Nawab Major Sir Mohammad Akbar Khan V. Attar Singh

69

years limitation for a suit for money lent under an agreement that it shall be payable on demand, the period to run from the time when the loan was made.

1936. Feb. 27,28 ; March 2,3, 5. Upjohn K.C., Wallach and Pringle for the appellant. The first question is whether the document of April 1, 1917, is a promissory note within s. 4 of the Negotiable Instruments Act, 1881. It is not a pro missory note it is taken out of the definition in

s. 4, as there is no unconditional undertaking to pay. If the document is a receipt it is properly stamped if it is a promissory note it is not properly stamped, and is inadmissible in evidence s. 35 of the Stamp Act (II. of 1899). After the two years mentioned in the document there was a new contract. [Reference was made to art. 60 of the First Schedule to the Indian Limitation Act, 1908.] A deposit, as distinct from a loan, means a passing of money not for the convenience of the man to whom it is given, but for the benefit of the person who hands it over.

[LORD ATKIN. In the case of a loan the borrower is a debtor, and he has to pay. In the case of a deposit there is no obligation to pay until demand, the person wit