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1974 Supreme(Mad) 243

Madras High Court
RAMAPRASADA RAO,MAHARAJAN
P.Subbiah - Appellant
Versus
A.Shanmugham - Respondent
Decided On : 06/27/1974

Advocates:
A. V. Raghavan, for Appellant; R. Mohan and V. R. Nagarajah, for Respondent.

Payment on account of a debt before the expiration of the prescribed period under Section 19 of the Limitation Act saves the bar of limitation.

Headnote:

LIMITATION ACT - SECTION 19 - PAYMENT ON ACCOUNT OF DEBT - FRESH PERIOD OF LIMITATION - ACKNOWLEDGMENT OF LIABILITY - SECTION 18 - DISTINCTION - INTEREST - RATE OF INTEREST - DISCRETION OF COURT.

Fact of the Case:

Plaintiff filed a suit for recovery of a sum of Rs. 15,400/- on the fact of a promissory note executed by the defendant in his favor. The defendant pleaded limitation and benami. The plaintiff relied on a counter-affidavit filed by the defendant in insolvency proceedings as an acknowledgment of liability under Section 18 of the Limitation Act.

Finding of the Court:

The court held that the suit was not barred by limitation as the defendant had made payments on account of the debt before the expiration of the prescribed period under Section 19 of the Limitation Act. The court also held that the rate of interest granted by the lower court at 12% was not excessive.

Issues: 1. Whether the suit is barred by limitation? 2. Whether the defendant is an agriculturist entitled to the benefits of Act IV of 1938? 3. Whether the rate of interest is excessive?

Ratio Decidendi: 1. Section 19 of the Limitation Act provides that where payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay the debt, a fresh period of limitation shall be computed from the time when the payment was made. 2. The payments made by the defendant in March 1965 and March 1966 saved the bar of limitation under Section 19 of the Limitation Act. 3. The rate of interest granted by the lower court at 12% was not excessive.

Final Decision: The appeal was partly allowed with costs. The court decreed the suit for Rs. 11,561/- with interest at 12% per annum from the date of the plaint.

Judgement

RAMAPRASADA RAO, J. :- The plaintiff in O. S. No. 277 of 1968, on the file of the Subordinate Judge of Tiruchirapalli, is the appellant. The suit was for recovery of a sum of Rs. 15,400/- on the fact of a promissory note executed by the defendant in favour of the plaintiff on 23-11-1964 under Ex.A-1. In the plaint, the bar as to limitation is got over by reference to Ex. A-2, which is a counter-affidavit filed by the defendant in the insolvency proceedings in I. P. No. 6 of 1967, on the file of the. Subordinate Judge's Court, Tiruchirapalli. The plaintiff himself was the petitioning creditor in the above insolvency petition. In answer to the petition to adjudicate the defendant as insolvent, the defendant stated, in so far as the suit promissory note was concerned, no amount was paid to the plaintiff for principal or interest and added that he paid a sum of Rs. 600/- in March, 1965, towards the promissory note land another sum of Rs. 1,500/- in March, 1966, towards the interest on the promissory note to the father of the plaintiff. He would also take up the plea that the promissory note was benami for the plaintiff's father. On the basis of these allegations in Ex. A-2 in the above insolvency proceedings, the plaintiff sought to get over the plea of limitation and file an action for the recovery of the suit amount with costs.

2. The defendant reiterated in the written statement filed in the present action that the suit was barred by limitation as there was no acknowledgment of liability within the meaning of law to save the bar of limitation. He would say that the allegations on which the plaintiff based his claim to circumvent the plea of limitation and particularly those extracted by him in the plaint, as conttained in the counter-affidavit in I. P. No. 6 of 1967, did not save limitation. He again admitted that he paid a sum of Rs. 600/- and Rs. 1,500/- towards the suit promissory note to the father of the plaintiff in March, 1965 and March, 1966 and in the end he would state that no decree could be passed as there was no acknowledgment of liability. He also took up the plea that he was an agriculturist entitled to the benefits of Act IV of 1938. He stated that the rate of interest was exorbitant and usurious. The following issues were framed :-

1. Whether the promissory note is benami as contended by the defendant?

2. Whether the plaintiff has no means to advance the amount ?

3. Whether the discharge pleaded is true?

4. Whether the interest claimed is high and if so. to what interest is the plaintiff entitled to?

5. Whether the suit is barred by limitation ?

6. To what relief is the plaintiff entitled ?

On Issues 1 and 2, the learned Subordinate Judge held that, as there was no evidence let in by the defendant, who set up the plea of benami, the contention of his that the plaintiff could not lay an action on it, though the negotiable instrument was in his favour, was not sustainable. In those circumstances, he found Issues 1 and 2 against the defendant. On Issue 3, there was no evidence by the defendant as to the plea of discharge, and those circumstances, that issue was found against the defendant. But on Issue 5, which is the principal issue canvassed before us also, the learned Subordinate Judge was of the view that there was no acknowledgment of liability as is contemplated under the provisions of law and that the paragraph in the counter-affidavit of the defendant, relied upon by the plaintiff, in the insolvency proceedings, would not save limitation. Against this dismissal of the suit on the ground that the suit is barred by limitation, the plaintiff has come up to this Court.

3. The only essential point which is urged before us for our consideration is whether the suit is barred by limitation and whether the plaintiff is entitled to the relief asked for. The plea of limitation, if taken by a litigant has to be examined with reference to all the available statutory provisions, and not necessarily in the perspective





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