SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1928 Supreme(Mad) 153

IN THE HIGH COURT OF MADRAS
Venkatasubba Rao, J.
Chegamull Suganmull Sowcar
Versus
V. Govindaswami Chetty And Ors.
Decided On : 3 April, 1928

The main legal point established in the judgment is that the rights under the original promissory notes were subsisting and could be enforced against the estate of the deceased partner, despite the contentions raised by the defendants.

Headnote:

Contract Act - Partnership - Section 41, Section 62 - The court discussed the applicability of Section 41 of the Contract Act and rejected the contention that the original obligation was discharged due to the acceptance of a fresh promise. The court also dismissed the argument of novation under Section 62, emphasizing that the plaintiff's rights under the original notes were subsisting. The court held that the plaintiff could fall back upon his original cause of action and recover the money due from the estate of Chengayya.

Fact of the Case:

The plaintiff lent money to a partnership firm. After the death of one of the partners, the plaintiff sought to enforce his rights under the promissory notes against the estate of the deceased partner. The defendants contested the claim, arguing that the original obligation was discharged and the claim was barred by limitation.

Finding of the Court:

The court found that the plaintiff's rights under the original promissory notes were subsisting and not barred by limitation. The court rejected the defendants' contentions and held that the plaintiff could recover the money due from the estate of the deceased partner.

Issues: The issues involved the applicability of Section 41 and Section 62 of the Contract Act, the bar of limitation, and the validity of the equitable mortgage created in favor of the plaintiff.

Ratio Decidendi: The court held that the plaintiff's rights under the original promissory notes were not discharged and could be enforced against the estate of the deceased partner. The court also ruled that the claim was not barred by limitation and found the equitable mortgage to be invalid.

Final Decision: The court passed a decree in favor of the plaintiff against the defendants for the amounts due, rejecting the defendants' contentions and ruling in favor of the plaintiff.

JUDGMENT

Venkatasubba Rao, J.

1. Several questions of law have been argued by Mr. Rangaswami Ayyangar, but I do not think that I need on that account reserve judgment. The case now comes up before me after report by the Commissioner, who has been appointed to enquire into certain matters, but, I understand, that for the purpose of this judgment, it is unnecessary either to look into that report or to go through the pleadings. The facts, as stated from the Bar, may be briefly summarized. The plaintiff lent moneys to a firm known as Govindaswami & Co. It originally consisted of two divided brothers, Govindaswami and Chengayya. The former had sons, who do not matter for the present, excepting one of them, Lingayya by name. During the continuance of the firm, Chengayya died in 1916; his widow Chinna, Kannammal took her husbands place in the partnership and the business was continued in the same manner as before. She died on 20th April 1920, having ten days before her death adopted Lingayya as her son. The business of the firm was continued, it having been taken for granted that Lingayya represented Chengayyas estate in the partnership.

2. During the lifetime of Chengayya, the partnership executed two promissory notes in favour of the plaintiff. They were both dated 8th June 1914, the first being for Rs. 5,000 and the second for Rs. 2,500. Title-deeds relating to certain properties belonging to Chengayya were deposited with the plaintiff by way of creating an equitable mortgage. At the same time, the plaintiff took from the firm two memoranda of deposit of title deeds signed by the partners. On 19th December 1920, that is, after the death... of Chinna Kannammal, fresh promissory. notes were taken by the plaintiff for certain amounts. The sums due under the original two notes were included in them and, as a matter of fact, the fresh notes were intended to supersede the orginal two notes of 1914. In 1921, another new promissory note came into existence,...which was intended to serve as a renewal of one of the notes of 1920. The promissory notes of 1920 and 1921 were signed by Govindaswami and Lingayya, the latter representing the estate of Chengayya.

3. The suit was brought on the note of 1920 which was not superseded and on the note of 1921, and the plaintiff claimed that a sum of Rs. 60,000 odd was due to him.

4. After the death of Chengayyas widow his daughters, defendants 4 and 5, filed a suit in this Court, impeaching the adoption of Lingayya. The suit was filed in February 1921, and on 31st August 1922;: a decree was made setting aside this adoption. The result of the decree is to vest the property of Chengayya in his daughters, defendants 4 and 5.

5. The case has been argued before me on the footing that in the circumstances that have happened Chengayyas estate is not liable under the notes of 1920 and 1921. The plaintiff says that he has been driven to fall back upon his original cause of action and seek to enforce his rights under the notes of 1914. The question to be decided is: Is there any impediment in the way of the plaintiff obtaining a decree on the original notes?

6. Mr. Rangaswami Aiyangar, for defendants 4 and 5, contends, firstly, that Section 41 Contract Act, applies and that the plain-tiff cannot recover the amount evidenced by the earlier promissory notes. Section 41 runs thus:

When a promisee accepts the performance of the promise from a third person, he cannot afterwards enforce it against the promisor.

7. This contention is obviously untenable. In the first place, Lingayya cannot be regarded as a third person" within the meaning of this section. The plaintiff accepted the. signature of Lingayya, not on the footing that he was a stranger, but that he represented the estate of Chengayya. That was a mutual mistake, which vitiated the transaction and which frustrated the intention of the parties. There is another answer to this contention. The section does not say that the original obligation comes to an end, merely beca















Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top