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1938 Supreme(Mad) 177

IN THE HIGH COURT OF MADRAS
Madhavan Nair, J.
Vakkalanka Kondamma
Versus
Kasaneedi Venkatarayadu and Ors.
Decided On : 10.05.1938

The endorsement of cancellation on the previous promissory note constituted a valid acknowledgment of liability, and the suit was not barred by limitation.

Headnote:

Amendment - Promissory Note - Indian Stamp Act - Section 35

Fact of the Case:

The plaintiff sought enforcement of a promissory note, which was insufficiently stamped and inadmissible in evidence under Section 35 of the Indian Stamp Act. The plaintiff applied for an amendment to rely on an earlier promissory note, which had been cancelled and superseded by the suit note. The amendment was refused, and the suit was dismissed.

Finding of the Court:

The Court found that the endorsement of cancellation on the previous note amounted to a valid acknowledgment of liability, and the suit was not barred by limitation. The Court set aside the decision of the lower Court, allowed the amendment, and remanded the case for further proceedings.

Issues: The main issue was whether the plaintiff could rely on the earlier promissory note after the suit note was found to be insufficiently stamped and inadmissible in evidence.

Ratio Decidendi: The Court held that the endorsement of cancellation on the previous note constituted a valid acknowledgment of liability, and the suit was not barred by limitation. The Court also emphasized that the amendment should be granted to enable the determination of the real question in issue between the parties.

Final Decision: The Court set aside the decision of the lower Court, allowed the amendment, and remanded the case for further proceedings. The plaintiff was ordered to pay the costs incurred by the respondent.

JUDGMENT

Madhavan Nair, J.

1. The plaintiff is the petitioner. Her suit was for the enforcement of a promissory note dated 9th August, 1929, executed by the first defendant, the undivided father of defendants 2 to 5. The promissory note bears an endorsement on the back of part payment, dated 6th July, 1932. The plaint was filed on 28th June, 1935. The suit note was insufficiently stamped and was inadmissible in evidence under Section 35 of the Indian Stamp Act. The plaintiff therefore on 30th July, 1935, applied for an amendment of the plaint seeking permission to take his cause of action on the promissory note dated 11th August, 1926, which had been cancelled and superseded by the execution of the suit note which was renewal of this note. This note also had been filed along with the suit note. The application for amendment was refused by the learned Judge on the ground that the endorsement dated 6th July, 1932 can only refer to the suit note and cannot be taken as an acknowledgment of the prior promissory note debt. The order further stated:

Even assuming that the endorsement has such an effect, the claim on the prior pronote became barred after the expiry of three years from the date of endorsement, that is, 6th July, 1932. The plaintiff cannot be allowed to get over the difficulty of limitation by obtaining the amendment.

2. The amendment having been refused the suit was dismissed. In the Civil Revision Petition the main argument has been that in the circumstances of the case, the amendment should have been allowed.

3. The granting of an amendment is left to the discretion of the Court under Order 6, Rule 17, Civil Procedure Code. As a general rule leave to amend will be granted to enable the Court to determine the real question in issue between the parties provided that the amendment will occasion no injury to the opposite party except such as can be compensated for by costs or other terms to be imposed by the Court. Consideration of the question whether any injury will be caused to the defendant in the present case will entail practically a decision of the plaintiffs case; and if in the course of the discussion it is found that the defendant is not deprived of any legitimate plea that he can raise, including of course the plea of limitation, I think the amendment should be granted. I would therefore proceed to consider the case on its intrinsic merits before deciding whether the amendment should be allowed or not.

4. It is clear that no new cause of action is introduced in the suit if the plaintiff is allowed to rely upon the earlier promissory note dated 11th August, 1926. The debt was originally incurred under that note and afterwards it was renewed on 9th August, 1929, by the suit note. The suit note therefore embodies the original claim and in seeking the amendment the plaintiff is only asking for the enforcement of that claim, which he should be allowed to enforce if such enforcement will not prejudice the defendant-in putting forward any legitimate plea which the defendant might have. The plea relied on by the defendant is the plea of limitation. We shall proceed to examine how far this plea can be availed of by the defendant in the circumstances of the case.

5. The suit upon the earlier note dated 11th August, 1926, will be barred on the date of the plaint if the debt is not in the first place acknowledged before the expiry of three years from the date of the note. The first acknowledgment relied on is on 9th August, 1929, the date of the suit promissory note. Even if an acknowledgment is established on that date, the plaintiff will have to rely on yet another acknowledgment to bring the suit within time; about this, later. About the first acknowledgment, it is argued by the respondent that the suit note executed on 9th August, 1929, being insufficiently stamped, cannot be relied upon for any purpose and so cannot serve as an acknowledgment on 9th August, 1929, of the original liability. But it is urged on behalf of the p











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