Which Act whether old or new to prevail.

The first defendant is the appellant before us. The appeal arises out of O.S. No. 9862 of 1972 on the file of the learned III Assistant Judge, City Civil Court, Madras. The said suit was filed on the foot of a promissory note, The plaint allegations are as follows. The first defendant was subscribing to a monthly chit, the total amount of which was Rs. 30,000/-in M/s. Indo Mercantile Fund (P) Ltd., which went into liquidation and he got the bid amount of Rs. 19,500/-in the first auction held on 17th August, 1968. He along with defendants 2 to 4 as sureties executed in favour of the plaintiff on 20th September, 1968 a promissory note for Rs. 29,000/- agreeing to pay interest at 12 per cent per annum in consideration of the bid amount paid to the 1st defendant on 19th October, 1968 by cash. The first defendant has paid a total amount of Rs.1,900/- till 19th December, 1968 and during the period ending with 19th December, 1968 the dividend declared amounted to Rs. 600/- In all a sum of Rs. 2,500/- has to be credited towards his account. The first defendant is therefore liable to pay the balance of Rs. 27,500/-and interest of Rs. 13, 062.50 from 20th December, 1968 to the date of plaint, amounting in all to Rs. 40,562.50. Defendants 2 to 4 are also liable to pay the said amount. The defendants in spite of repeated demands have failed to do so and therefore the suit is filed for directing the defendants 1 to 4 to pay the plaintiff a sum of Rs 40.562.50 with interest at 6 per cent per annum on Rs. 27,500/- from the date of plaint till the date of recovery of the entire amount. The first defendant admitted that he has subscribed to a chit under the plaintiff for a total sum of Rs. 30,000/- and also he received a sum of Rs. 19,500/-. He equally admitted the execution of the promissory note for Rs. 29,000/-. on 20th September, 1968. There is a failure of consideration to the extent mentioned above. The first defendant was regular in his payment and would have continued to pay the instalments but for the facts that the conduct of the chit was wound up. If the plaintiff company had conducted the chit the first defendant would have been in a position to get dividend every month Further, the suit is barred by limitation under section 458-A of the Companies Act and under section 25 of the Tamil Nadu Chit Funds Act. As regards the defence of the second defendant, it does not matter to us. because the first defendant alone is the appellant before us. Defendants 3 and 4 remained ex parte.

1. Whether there is partial failure of consideration for the pronote ?

2. Whether the claim is barred?

3. To what sum the plaintiff is entitled?

4. To what relief?

Additional Issues:

1. Did the 2nd defendant agree to pay interest?

2. Is the plaintiff entitled to interest from 20th December, 1968 till date of plaint?.

3. Is the suit sustainable on the suit promissory note?

4. Is the suretyship cancelled as stated in para 13 of the written statement of 2nd defendant?

5. Is the amount claimed correct?

On issues 1, 3 and additional issues 1 to 5, the learned City Civil Judge came to the conclusion that the liability to pay the amount is only under Ex.A-1, that there is no bar to enforce the liability under Ex. A-1, that Ex. A-1 is not for surety and as such all the defendants are liable to pay the suit amount claimed in the suit. In the result, he answered all the issues in favour of the plaintiff. On Issue No.2 viz., the limitation, he was of the view that section 458-A of the Companies Act, would apply because that is a special law. Further, he was also of the view that section 8 of the General Clauses Act lends support to his view. In the result, he decreed the suit as prayed for. Thus, the appeal.

3. Learned counsel for the appellant Mr.U.N.R. Rao though attempted to argue that there is a failure of consideration, ultimately he did not press the point in view

of the categoric ruling of this Court on identical issue in C.A. Durgachalam v. Jannet Chit Fun