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2004 Supreme(Kar) 699

Karnataka High Court
Judges : S.B.Majage
ADIVELU - Appellant
Versus
NARAYANACHARI - Respondent
C. R. P. 4904 Of 2001
Decided On : 12/18/2004
Advocates Appeared :
A.MOHAN RAM, K.V.NARASIMHAN

The determination of whether an endorsement on a pronote amounts to a 'promise' under Section 25(3) of the Contract Act should be decided after evidence is adduced at trial.

Headnote:

endorsement - Contract Act - Section 25(3) - 18, 19 - The court discussed the endorsements on pronotes showing part payment and extending the period of limitation, and whether they could be construed as a 'promise' under Section 25(3) of the Contract Act. The court highlighted the requirements of Section 25(3) and the distinction between acknowledgment under Section 18 of the Limitation Act and a promise under Section 25(3) of the Contract Act. It emphasized that an acknowledgment coupled with an agreement to pay interest or containing a clear promise to pay could be regarded as a 'promise' to pay. The court also referred to the definition of 'promise' under Section 2(b) and the distinction between 'express' and 'implied' promises. It concluded that the determination of whether the endorsements amounted to a 'promise' should be decided after evidence is adduced at trial.

Fact of the Case:

The plaintiff brought suit against the defendant for repayment of two pronotes. The defendant filed a request to reject the plaint as barred by time, which was dismissed by the trial Court. The deceased defendant's legal representatives petitioned against this decision.

Finding of the Court:

The court found that the endorsements on the pronotes, containing acknowledgment and part payments, were made after the expiry of the limitation period. It emphasized that the determination of whether the endorsements amounted to a 'promise' should be decided after evidence is adduced at trial.

Issues: The main issue was whether the endorsements on the pronotes could be construed as a 'promise' under Section 25(3) of the Contract Act.

Ratio Decidendi: The court emphasized the requirements of Section 25(3) of the Contract Act and the distinction between acknowledgment under Section 18 of the Limitation Act and a promise under Section 25(3) of the Contract Act. It highlighted that the determination of whether the endorsements amounted to a 'promise' should be decided after evidence is adduced at trial.

Final Decision: The court rejected the petition, stating that there was no error of jurisdiction or illegality in the impugned order to interfere at that stage.

S. B. MAJAGE, J.

( 1 ) A short but an important question for consideration is; "whether an endorsement on pronote, showing part payment and extending the period of limitation, could be construed as "promise" under Section 25 (3) of the Contract Act?"

( 2 ) FACTS in brief, which gave raise to the question, are; Respondent narayanachari, who was the plaintiff in O. S. No. 201/ 00 before the court of Civil Judge (Sr. Dn) and JMFC at Bhadravathi, brought suit against one Adivelu (now deceased) stating that Adivelu borrowed a sum of Rs. 26,000/- on 20. 11. 91 and also Rs. 25,000/- on 15. 12. 91 under two different pronotes agreeing to repay the same with interest at the rate of Rs. 18% p. a. and in connection with first pronote, adivelu made part payments of Rs. 3,500/- and Rs. 3,000 on 8. 11. 94 and 18. 11. 97 respectively and, with regard to second pronote dated 15. 12. 91, he made part payment of Rs. 3,500/- on 8. 11. 94 and Rs. 4,000/- on 28. 11. 97 but not thereafter. As such, calculating the amount due under the said two pronotes, the plaintiff claimed Rs. 1,47,978/- from Adivelu showing that cause of action arose on 20. 11. 91, 15. 12. 91, 8,11. 94, 18. 11. 97 and 28. 11. 97. On his appearance before the trial Court, Adivelu filed I. A. 5 under Order 7 rule 11 of the CPC requesting to reject the plaint as barred by time. After hearing, the trial Court dismissed that I. A. by the impugned order. Hence, the L. Rs of the deceased defendant Adivelu are before this Court as petitioners.

( 3 ) IT was vehemently contended for them that even if the dates of alleged payments stated by the plaintiff are considered, the suit claim was barred by time on the date of suit and as such the endorsements made on the two pronotes on 18. 11. 97 and 28. 11. 97 respectively did not extend the period of limitation of time barred claims. On the other hand, the learned Counsel for the plaintiff supported the impugned order. Perused the records carefully.

( 4 ) IN the present case, the endorsements of the defendant on the pronotes contain acknowledgment and part payments made in connection with his liability namely, the debt due to the plaintiff. If they had been made before the expiry of the period of limitation provided under the Limitation Act, they would have certainly extended the period of limitation in view of Sections 18 and 19 of that Act as it is trite that to attract Section 18 and 19 of the Limitation Act, the acknowledgment or part payment made should be earlier to the expiry of the period of limitation provided under that Act. But endorsement/writing relied on by the plaintiff, containing acknowledgment with part payment, was made after the expiry of the period of limitation. Hence, the endorsement showing acknowledgment and part payment does not come to the aid of the plaintiff to extend the limitation period under Section 18 or 19 of that Act. Still, let me consider whether the acknowledgment and part payment made by the defendant could be of any help to the plaintiff or not.

( 5 ) ACKNOWLEDGMENT of liability is nothing but an admission of the truth of one's own liability. It is well settled that an unqualified, unequivocal and unconditional acknowledgment of a debt is a clear admission of the liability to pay it. Such an admission may be in any form and may be 'express' or 'implied', as held by the Supreme Court in the case of shapoor FREEDOM MAZDA v. DURGA PRASAD CHAMARIA AND ORS. , but, whatever may be the form, regard must be had to the meaning of the writer by judging the acknowledgment as a whole and also such surrounding circumstances as the Court can take into consideration in construing the acknowledgment rather than to the literal meaning of the words used in it. And while doing so, such acknowledgment requires to be construed liberally, as held in the case of Shapoor Freedom Mazda (Supra ).

( 6 ) AN acknowledgment under Section 18 of the limitation Act and a promise under Section 25 (3) of the Contract Act are required













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