Patna High Court
Rajendra Prasad vs Gaya Prasad Sah on 24 March, 1975
Equivalent citations: AIR1975PAT312, AIR 1975 PATNA 312
JUDGMENT Madan Mohan Prasad, J.
1. This appeal by the defendant is directed against a decree for money passed by the Second Additional Subordinate Judge of Motihari.
2. The plaintiff-respondent filed a suit for recovery of Rs. 10,871/- being the principal and interest due on the basis of a Chitha dated Asarh Sudi 1366 F. S. corresponding to the 18th of July, 1959. The plaintiff alleges that he was a registered money lender and had transactions with the defendant who used to borrow money, for his business, as the head of a joint Hindu family, and the account used to be entered in his Bahi Khata kept in regular course of business. In the year 1366 accounting was done and the balance of Rs. 19,059/8/- was found due with the defendant and in respect of this amount due he had executed a Chitha on the 18th July, 1959. It is further said that there was, at the time of the execution of the Chitha, an oral agreement with the defendant to pay interest at the rate of 1 per cent. per mensem. This account was also entered into the Bahi Khata of the plaintiff. It is said that the aforesaid loan was taken for the benefit of the joint family. The plaintiff then states that a sum of Rs. 14,242/- was paid by the defendant through his brother and the said amount was also entered in the Bahi Khata and in the Chitha. In that view of the matter a sum of Rs. 10,064/- was found due towards the principal and a sum of Rs. 807/- towards interest was payable by the defendant. The cause of action for the suit, it is said, had arisen on the 18th July. 1959, the date on which the Chitha was executed after adjustment of accounts and on the 9th November, 1961, the date on which the aforesaid amount of Rs. 14,242/- was paid off.'
3. The defendant's case on the other hand is that it is true that the father of this defendant used to take loans from the plaintiff in course of his business but the aforesaid Chitha was executed by him without taking any accounts, on the assurance of the plaintiff that he would help the defendant by lending money, in times of need, for running of his business. It is said that there was no consideration paid for the Chitha aforesaid, that not a single pie remained due from this defendant, that there was no stipulation for payment of any interest over the amount mentioned therein, that the Chitha amounted to, mere acknowledgment and could not form the basis of the suit and the suit is bad for non-joinder of parties, that the suit comes within Section 7 of the Money Lenders Act, that it is a case where accounts should be reopened under Section 8 of the said Act, that the Bahi Khatas of the plaintiff were not kept in regular course of business, that no payment was made by the defendant through Bhupendra Prasad, that the plaintiff is not a registered money-lender and that the suit is bad on account of Section 4 of the said Act. On these grounds, it is stated that the suit is fit to be dismissed.
4. The following issues were framed:--
1. Is the suit as framed maintainable?
2. Has the 'plaintiff got any cause of action ?
3. Whether the suit is bad for defect of parties ?
4. Is the Chitha dated Asadh Sudi 13. 1366 F. S. corresponding to 18-7-1959, valid, genuine and for consideration ?
5. Whether the accounts can be reopened under Section 7 of the Bihax Money-Lenders Act ?
6. Whether the suit is barred by law of limitation ?
7. Was there any contract for payment of any interest, if so, at what rate ?
8. Is the suit hit by Section 4 of the Bihar Money Lenders Act?
9. Is the plaintiff entitled to any decree, if so, for what amount ?
5. The learned Subordinate Judge answered Issues Nos. 1 and 2 in the affirmative and Issues Nos. 3, 5, 6 and 8 in the negative. Regarding Issue No. 4 he found that there was no consideration for the chitha aforesaid but held that upon the plaint it was a case based on an earlier original transaction of the year 1956 and at that point of time Rs. 18,551/- had been advanced to the defendant in cash. According to him the chitha of 1959 was an acknowledgment of that past debt and therefore the suit could lie on the basis of the original advance. Accordingly he decreed the suit taking the advance of Rs. 18,551/- as initial loan. Regarding Issue No. 7 he allowed interest thereon at the rate of 11 annas per cent. per month as appeared from the past transaction and disallowed the claim of the plaintiff for interest at the rate of Re. 1/- per cent. per month. Of course, he allowed a set off of the payments made since the date of the original transaction.
6. Learned counsel for the appellant has not challenged the findings of the court below except in relation to the following points. Firstly it is said that the court below has erred in not treating the chitha (Ext. 1 (a)) as a mere acknowledgment on the basis of which a suit could not lie; secondly, that the trial court has erred in going back to the past transaction of 1956 and thereby substituting a case not pleaded by the plaintiff, thirdly, that in absence of any stipulation in the chitha to pay interest, the court below has erred in allowing interest at the rate found in the past transaction and fourthly, that the transaction should have been reopened and examined in the light of Sections 7 and 8 of the Bihar Money Lender's Act.
7. I have gone through the pleadings of the parties and the evidence on the record with great care and I find that the trial court has rightly come to the conclusions that neither the suit is hit by Section 4 nor does Section 7 or Section 8 of the Money Lender's Act apply. Its finding that the suit was within time is also not open to any criticism. I do not find any defect of parties either in this case.
8. In respect of the question of application of Sections 7 and 8 of the Money Lender's Act, the counsel for the appellant tried to canvass before us that even the past loan of Rs. 18,551/- said to have been paid in cash was really not so paid and the amount itself represented a past debt. It was pointed out in this connection that it is supported by the evidence of D. W. Lakshman Prasad that actually there was a debt of Rs. 37,010/-, which was found due to Sarju Prasad Lachman Prasad the firm of a joint family of which the defendant, his brother and his father formed a branch. According to his evidence this total amount of Rs. 37,010/- was divided between the two branches of the same family, one consisting of Sarju Prasad and his sons Lachman Prasad, Bidyasagar and Daya and the second of Jamuna Prasad, the father of this appellant and his brothers. The amount thus came to be Rs. 18,505/- for each, as appears from the Rokar Bahi and Khatabahi, Ext. 3 and 4 series. This amount of Rs. 18,505/-which is falsely said to have been paid in cash but which was really past dues, it is urged, and another amount of Rs. 46/- which is also alleged to have been paid in cash both taken together make Rs. 18,551/-. It is said that even this sum of Rs. 46/- was not really paid in cash and it was a fictitious entry made. There is no satisfactory evidence on these points. The defendant has not produced the khata bahi of his father or ancestor's firm to show that the said amount of Rupees 18,551/- had not been received by him in cash on the 18th of July, 1956, the date of Ext. 1 the previous chitha. Further although the khata bahi for some of the relevant years of the plaintiff were produced the defendant could not show even therefrom that this amount of Rs. 18,551/- was not paid in cash. In the absence of evidence to that effect therefore the question of application of Section 7 or Section 8 of the Bihar Money Lender's Act does not arise.
9. The most important question which arises in this case is whether the suit is maintainable. According to the appellant it is based merely on the Chitha Ext. 1/A whereas according to the respondent it is a suit based on the original transaction of which reference has been made in Ext. 1/A and which was the subject-matter of a previous chitha dated the 18th July, 1956, (Ext. 1). Much will turn upon the answer to this question. Having carefully examined the plaint I am unable to come to the conclusion that it is a suit based on the original consideration. All that we find in the plaint is a statement giving the historical background in which adjustment of amount took place on the relevant date namely the 18th of July, 1959. There is no pleading regarding any previous chitha or about any transaction by way of any particular advance made previously. In other words it has not been pleaded as to when the loans which formed the original consideration were advanced. All that is said is, as I have said, by way of antecedent relationship viz., (that there used to be transactions "karbar wo lendeni" between the parties. This is said in paragraph 2 of the plaint. It is said further that there used to be accounting between the parties and the same used to be entered in the bahikhata. In para. 3 of the plaint it is said that after accounting of the previous transactions a sum of Rs. 19,059/- was found due from the defendant and a chitha (Ext. 1/A) was executed therefor. The next relevant paragraph is the one which recites that the cause of action arose on the date of the execution of the chitha. Reading the plaint as a whole there is no room for any argument in this case that the suit was based on the original consideration. Undoubtedly the plaintiff has filed his suit on the basis of the Chitha Ext. 1 (a) itself.
10. The question which comes next is whether the suit as framed is maintainable. Learned Counsel for the appellant has contended that the chitha is merely an acknowledgment of a debt and in absence of any promise to pay the debt, it does not create any liability or a cause of action. In this respect he has placed reliance on a Bench decision of this court in the case of Baidva Nath Pd. San v. Jamuna Pd. Sah, (1967 BLJR 763) and on an observation of the Supreme Court in the case of Shapoor Fredoom Mazda v. Durga Prasad, (AIR 1961 SC 1236). I am afraid that these decisions are of no avail to the appellant. In the case of Shapoor Mazda (supra) the suit was for recovery of mortgage dues and there was a letter which was said to be an acknowledgment within the meaning of Section 19 of the Limitation Act and the question was whether the claim was barred. Whale dealing with this question Gajendragadkar, J., speaking for the court said:--
".....,...... Acknowledgment as prescribed by Section 19 merely renews the debt, it does not create a new right of action. It is a mere acknowledgment of liability in respect of the right in question: it need not be accompanied by promise to pay either expressly or even by implication".
Learned counsel has placed great reliance on the first sentence aforesaid and urged that this must be taken to mean that in no case can an acknowledgment create a new right of action. In my view that would amount to reading into the observation of their Lordships what they have not said. It is obvious that the question was whether the letter in that case amounted to an acknowledgment and the learned Judge was merely explaining what an acknowledgment is. The case before their Lordships was one of acknowledgment of subsisting liability and the observations have to be read in the light of the facts of that particular case. The present case before us is not really one of acknowledgments pure and simple, of a subsisting debt but it is a suit based on the Chitha. The decision in the aforesaid case has therefore no application to the case before us, Turning to the other case of Baidya Prasad Sah, (supra) again, I find that the decision is of no avail to the appellant. That was a suit where the defendant used to take loans and there used to be adiustments of account and for the last time such an adjustment was made on a particular date and in respect of the amount found due a chitha was executed which contained a promise to pay interest at one per cent. R. K. Chaudhuri, J. with whom K. B. N. Singh. J. agreed held in that case that there the chitha was a mere acknowledgment of liability and it could not form the basis of the suit. This was held on the authority of the decisions in Shiv Ram Punnun Ram v. Faiz, (AIR 1942 Lah 50) (FB) and Hastimal v. Shanker Dan, (AIR 1952 Rai 7) (FB) Their Lordships however found that the suit in that case was not based merely on the chitha but also on the loan advanced. Learned counsel has placed reliance on the observation in respect of the chitha being a mere acknowledgment of liability and thus being incompetent to be the basis of a suit. With very great respect, in view of the decisions of the Privy Council and the Supreme Court, it is difficult to accept the proposition of law laid down in that case on the basis of the two decisions of the Lahore and Rajas-than High Courts. It appears that the attention of the learned Judges was not drawn to the case of Hira Lal v. Badku-lal, :(AIR 1953 SC 225) nor was their attention drawn to an earlier case of Mani-ram v. Seth Rupchand, ((1906) 33 Ind App 165) (PC). In the case of Hira Lal their Lordships of the Supreme Court said in paragraph 11 as follows:--
"Mr. Bindra next urged that the plaintiffs' suit should have been dismissed because it could not be maintained merely on the basis of an acknowledgment of liability, that such an acknowledgment could only save limitation but could not furnish a cause of action on which a suit could be maintained. The Judicial Commissioner took the view that an unqualified acknowledgment like the one in the suit, and the statement of the account under which the entry had been made were sufficient to furnish a cause of action to the plaintiffs for maintaining the present suit. We are satisfied that no exception can be taken to this conclusion. It was held by the Privy Council in Maniram v. Seth Rupchand, (1906) 33 Ind App 165 (PC) that an unconditional acknowledgment implies a promise to Pay because that is the natural inference if nothing is said to the contrary. It is what every honest man would mean to do. In Fateh Mahomad v. Ganga Singh, AIR 1929 Lah 264, the same view was taken. It was held that a suit on the basis of a balance was competent. In Kahan Chand Dularam v. Dayaram Am-ritlal, AIR 1929 Lah 263 the same view was expressed, and it was observed that the three expressions "balance due", "account adjusted" and "balance struck" must mean that the parties had been through the account. The defendant there accepted the statement of account contained in the plaintiff's account book, and made it his own by signing it and it thus amounted to an "accounts stated between them" in the language of Article 64 of the Limitation Act. The same happened in the present case. The acknowledgment which forms the basis of the suit was made in the ledger of the plaintiffs in which earlier mutual accounts had been entered and truly speaking, the suit was not based merely on this acknowledgment but was based on the mutual dealings and the accounts stated between them and was thus clearly maintainable."
It is obvious from the aforesaid that the Supreme Court laid down the law that an unqualified acknowledgment could form the basis of the suit if it implies a promise to pay and that is the natural inference unless there is anything to show to the contrary. They overruled the view of the Allahabad High Court in Ghulam Murtaza v. Mt. Fasiunnissa Bibi, (AIR 1935 All 129) as will appear from paragraph 12 :--
"Mr. Bindra drew our attention to a decision of the Allahabad High Court in Ghulam Murtaza v. Mt Fasiunnissa Bibi. (AIR 1935 All 129) wherein it was held that even if an acknowledgment implies a promise to pay it cannot be made the basis of suit and treated as giving rise to a fresh cause of action. We have examined the decision and we are satisfied that it does not lay down good law." This decision of the Supremo Court has been followed by another Bench of this Court in Briibihari Pd. v. Birbahadur Rai, (AIR 1968 Pat 203). I may as well mention that the case of Baidya Nath Pd. Sah was also considered in the case of Brijbehari Pd. (supra). In this case G. N. Prasad, J., sitting with R. K. Chaudhuri, J., did not follow the decision in the case of Baidya Nath Pd. and said that the attention of their Lordships in that case was not drawn to any authority for the proposition that a chitha containing acknowledgment of liability could not form the basis of a suit and particularly the attention of their Lordships was not drawn to the decision in the case of Mani Ram, (33 Ind APP 135) (PC) or to the decision of the Supreme Court in Hira Lal's case (supra). Their Lordships referred to a decision of this Court in Deorai v. Indra-san, (AIR 1929 Pat 258 (2)) which followed an earlier decision of this Court in the case of Suraj Pd. Pandey v. W. W. Boucke. (AIR 1920 Pat 161) and distinguished the same. It will appear that the view of Rajasthan High Court also has changed after the decision of the Supreme Court in Hiralal's case. It appears that in the case of Jeev Rai v. Lalchand, (AIR 1969 Rai 192) (FB) a Full Bench consisting of the learned Chief Justice and two other Judges considered the previous decision in AIR 1952 Rai 7 (FB) (supra). The learned Chief Justice took one view but the two other learned Judges took a contrary view and held that in the case of Hiralal (supra) the Supreme Court had laid down the law under Article 141 of the Constitution which is that the proposition that an acknowledgment cannot form the basis of a suit is not good law. I respectfully concur in this view of Rajasthan High Court. I may mention here that the majority judgment placed reliance also on the decision of this Court in the case of Briibihari Pd. (supra). I have not the slightest doubt that what their Lordships of the Supreme Court have said in Hira Lal's case is meant to be the law. Had it not been so, it was not necessary for their Lordships to approve of the decision in the case of Mani Ram (supra) and to notice the decision in the case of Ghulam Mur-taza (supra) and to say that it did not lay down good law. In that view of the matter the suit could lie on the basis of the chitha and it is not open to the appellant in this case to say that the chitha amounted to a mere acknowledgment and since it contained no promise to pay the suit could not be based thereon.
11. In the present case it will be relevant to read the chitha Exts. 1/a and 2 which is as follows:--
"Chitta bana dia Rajendra Pd. Kalwar Sahkim Kesaria se sahi bakalam khas. Hs. Raiendra Prasad.
Lekha Gaya Pd. Sah, Sakim Kesaria Ka Jamakharcha San 1366 Sha. Isbi San 1959 Tarikh 18-7-1959.
Rs. 19059/8/- Mi Asarh Sudi 13 Ke Jama-hisab karke purane chittha ka banki lei Unis Hajar Unsath athana.
14242/- Miti Kartick sudi sk baste Bhupendra Pd dey gai choudoa hajar dosou bialis rupeya kebal M, S. 106/62. Ext. 1 (a) M. S. 106/62.
Sd. ......
Wosuli Rs. 14242/- darai kiva 2nd. Addl. Sub-Judge Sd. ......
19-7-65.
M. S 106/62 Ext. 2.
Sd.......
2nd. Addl. Sub-judge 19-7-65".
Looking at Ext. 1/a what do we find ? We find that certain amount has been found due after the accounting in respect of the previous transaction which was embodied in the previous chitha. There is acknowledgment of this debt. Obviously in view of the law laid down in Mani-ram's case the acknowledgment implies a promise to pay. We also find that a payment was made towards the aforesaid amount by the defendant and an entry to that effect was made in the chitha itself. This clearly indicates the promise to pay and a partial fulfilment of that promise. The suit is thus one on the basis of a chitha implying a promise to pay. It is not said that a suit would not lie on its basis if it be held to imply a promise to pay. In that view of the matter, therefore, the suit was maintainable. The argument of the learned counsel to the contrary must be rejected.
12. It must however be held that the trial court has erred in decreeing the suit for the reason given by it and in the manner it has been done. As I have said earlier, it was a suit not based on any original consideration and therefore it was not permissible for the subordinate Judge to go back to any earlier transaction. The view that he took was that there was a previous chitha (Ext. 1) which showed that cash amount of Rs. 18,551/- had been advanced to the defendant Taking that as the basis and as the principal loan advanced he decreed the suit for that amount along with interest at a rate at which it was found to have been paid thereon. It was not at all a case based on the original transaction, The chitha in question Ext. 1/a does not speak of any particular previous loan advanced in token of which the chitha was executed. It merely makes a reference to the previous chitha. It was thus not permissible for the trial court to substitute a new case and a new cause of action for the one alleged by the plaintiff in respect of a debt the cause of action for which could have arisen three years earlier. The decree passed by the learned Subordinate Judge has got to be modified in the light of the findings on the point and I find that the suit being based on the transaction stated in Ext. 1/a it should be decreed for the sum of Rs. 19,059/8/- after deducting Rs. 14,242/- the payment already made i.e., for the balance of Rs. 4,817/8/-.
13. That brings us to the next question as to whether the plaintiff is entitled to any interest on the aforesaid amount of Rs. 19,459/8/-. It has been urged on behalf of the appellant that the chitha Ext. 1/a does not show any stipulation of any interest and therefore it is not permissible in the present case. On the other side it has been contended firstly that there is oral evidence adduced on behalf of the plaintiff to prove a contemporaneous agreement to pay interest at the rate of one per cent. per month. Alternatively, it has been urged that assuming that this evidence is not accepted in view of the reference in Ext. 1/a to the earlier chitha (Ext. 1) of 1956, it is open to the court to look into the earlier transactions and if it be so it would appear that interest at the rate of (11 annas per cent.) per month was payable and was paid at that rate and in any event therefore interest at the rate of 11 annas per cent. per month awarded by the court below must be sustained. I am afraid it is not possible to accept this contention of learned counsel for the respondent. I must straightway say, as I have done earlier, that the suit being based on the chitha Ext. 1/a alone, it is not open to us to go into the previous transactions and take the amount thereof as the original consideration. The present chitha is only an acknowledgment to pay a particular amount. To impart into it anything which was the subject-matter of previous transaction would amount to importing extraneous evidence into the acknowledgment itself. It is a case where only a certain amount found due on a particular date has been made the subject-matter of the chitha with a promise to pay. If we were to import into it the rate of the interest paid in respect of the prior sum it would amount to importing into Ext. 1, a further promise to pay interest at the rate at which it was previously paid. The acknowledgment here is merely to pay a certain ascertained amount of debt without any stipulation with regard to payment of interest. It is therefore not open to us to insert into this acknowledgment the liability to pay interest at any rate whatsoever. That meets the argument in this behalf.
14. Coining now to other argument in respect of the evidence adduced to prove contemporaneous agreement between the parties to pay interest an objection has been taken on behalf of the appellant that to allow such evidence would be a violation of Section 92 of the Evidence Act- Section 91, of the said Act lays down that when the terms of contract or of a grant or of any other disposition of the property has been reduced to the form of a document no evidence shall be given in proof of the terms of such contract, grant or other disposition of property except the document itself. Section 92 next lays down that when the terms of such contract, grant or disposition have been proved according to Section 91 no evidence of any oral agreement shall be admitted for the purpose of contradicting, varying, adding to or subtracting from its term. There are however several provisos to this section and the one relevant to the present case is proviso 2 which is as follows:--
"The existence of any separate oral agreement as to any matter on which a document is silent and which is not inconsistent with its terms may be proved. In considering whether or not this proviso applies the court shall have regard to the degree of formality of the document."
It is therefore obvious that where the document is silent the existence of any separate oral agreement in respect thereof, if not inconsistent with its term, may be given. It must be noted that in considering the question of application of this proviso, the court has to keep regard to the degree of formality of the document itself. It is well settled that where the document is formal and if the matter in respect of which the evidence is sought to be adduced was a matter which necessarily would have been mentioned in the document, evidence in that regard shall not be allowed. If however the document is not formal and it need not have contained all the matters relating thereto and when the document is silent, in such cases it is open to the party to lead evidence in respect of the matter on which it is silent.
15. Learned counsel for the appellant has cited some cases before us but in my view they are of no avail. He has placed reliance on the decisions in Banwari Lal v. Jagar Nath Pd., 1 Pat LJ 71 = (AIR 1916 Pat 406 (1)), Lachmi-chand Jhowar v. Hamendra Pd. Ghose, 26 Ind Cas 736 = (AIR 1915 Cal 37) and Moti Biswas v. Haripada Pal, (AIR 1923 Cal 402). In the case of Banwari Lal (supra) there was a suit based on a Hundi and it was said that It was a negotiable instrument and relying on a decision of the Calcutta High Court in Lachmi Chand Jhowar v. Hamendra Pd. Ghose, 18 Cal WN 1260 = (AIR 1915 Cal 37) which was a case on the basis of a promissory note, the learned Judge held that Section 92 was a bar to the reception of oral evidence in support of a contract for payment of interest which was not mentioned in the Hundi. The case of Lachmi Chand Jhawar itself had gone up in Letters Patent Appeal before the Division Bench of the Calcutta High Court and the view of the learned Judge was upheld (see 26 Ind Cas 935 = (AIR 1915 Cal 321 (1))). In Moti Biswas's case (AIR 1923 Cal 402) (Supra) the suit was based on a promissory note. It is obvious that these were cases of negotiable instruments like promissory notes which were formal documents and since there were omissions in such formal documents of any agreement to pay interest, oral evidence proving the existence of such agreement could not be accepted. The same principles cannot however be applied to a document which is not a formal one.
16. The principle underlying the law is that when a transaction has been reduced to writing that must be regarded as the appropriate and the only evidence of the terms of agreement. The question therefore as to what is the nature of the document becomes a very important one because upon its nature will depend the answer to the question as to whether the document can be treated to be one which is supposed to incorporate all the terms of agreement. If the document is a formal one, obviously the presumption is that it incorporates the entire agreement between the parties. That is the reason why oral evidence is excluded. If the document is of an informal nature it need not contain within itself all the terms agreed to between the parties because by its very nature it is not supposed to be a document complete in all respect. It is therefore well settled that where the document is a formal one no oral evidence relating to any contemporaneous agreement inconsistent with the terms of the document would be permitted. The same cannot however be said in respect of an informal document. In the present case the chitha being an informal document the law laid down in the cases aforesaid has no application.
17. The question whether a Chitha is a formal document has been considered in two cases which I have come across. Firstly, in the case of Nabin Chandra v. Devendra Mohan, (36 Ind Cas 612 = (AIR 1917 Cal 210)), there was a hathchitha in respect of a sum of Rupees 6,001/-. It did not contain any stipulation for payment of interest. It was held as follows:--
"The hatchitha in dispute in this case is an extremely informal document. It is virtually a mere memorandum of loan. Evidence was therefore rightly admitted to show the rate of interest under Section 92, Sub-section (2) of the Evidence Act."
In another case of Umesh Chunder Baneya v. Mohini Mohun Das, ((1882) 9 Cal LR 301) there was also no mention of interest in the hatchitha which was held to be a document of informal nature and on that account oral evidence of contemporaneous agreement to pay interest was held to be admissible. It is thus obvious that if the document is informal, oral evidence of a contemporaneous agreement can be permitted in view of the proviso 2 of Section 92 of the Evidence Act. I need not however be understood to say that in every case of a document which is called a hathchitha, oral evidence would be permissible. In my view the court has to determine upon the basis at the document as to whether it is formal or informal irrespective of the name given to it by the parties. If a hatchitha is one as in the present case, which contains only an acceptance of a liability and promise to pay a previous debt there is no escape from the conclusion that it is an informal document which need not contain all that had been agreed to between the parties. Where however a hathchita amounts to a promissory note and thus is of a formal character proviso 2 of the Section 92 may not be of any avail. In my view therefore it was open to the plaintiff in the present case to lead evidence to show a contemporaneous agreement between the parties in respect of payment of interest.
18. The plaintiff has adduced evidence to the effect that there was an agreement with the defendant that he would pay interest at the rate of one per cent. per month over the amount mentioned in Ext. 1/a. The evidence is so worthless that I cannot act upon it P. W. 1 is a chance witness who speaks only in respect of the transaction previous to the one evidenced by Ext. 1/a. P. Ws. 2, 3, 4 and 5 speak about the agreement relating to the present transaction. According to P. W. 2 who is no one else but the plaintiff, although there was a stipulation to pay interest only at the rate of 11 annas per cent. per mensem on the previous loan at the time of execution of the present chitha. Ext. 1/a there was an agreement between the parties that the defendant would pay interest at the higher rate of one per cent. per month. He admits however that this agreed rate of interest was not recorded in the chitha. Acording to him, his witness in respect of the agreed rate of interest is one Jagarnath Singh. This person is no other than P. W. 1. He does not however say a word as to what was the rate of interest agreed to between the parties at the time of execution of Ext. 1/a. In fact this witness has also not given any good reason for his likely presence at the shop of the plaintiff and he does not mention his presence at all at the time of execution of the chitha. Ext. 1/a. Therefore the person whom the plaintiff claims to be his witness on the point is not at all his witness on that point. P. W. 3 is another chance witness. He claims to have gone to the shop of the plaintiff for purchase of wheat. According to him also at the relevant time of execution of Ext. 1/a there was a contract of novation between the parties that is in lieu of 11 annas per cent. interest was agreed to be paid at the rate of one per cent. The witness says that he does not remember whether the plaintiff had asked the defendant to enter the rate of interest also in the chitha. According to the witness the only other person who was present then was Kodai Ram P. W. 4. He therefore contradicts the evidence of the plaintiff to the effect that the only witness on the point was Jagarnath P. W. 1. P. W. 4 also speaks about the same novation of contract. He also does not know whether the rate of interest was inserted in the chitha itself. He does not remember what was the principal amount of the previous debts and how much was the interest. This person is also a chance witness who claims to have gone to the shoo of the plaintiff for purchase of Tisi. P. W. 5 is another witness who in his examination-in-chief states the same thing. He is also a witness in respect of novation of contract- He also like others is a chance witness who claims to have gone to the shop of the plaintiff for purchasing two logs of wood. There is no evidence to show that the plaintiff held shop of wheat, Tisi or timber. He. also does not know whether the rate of interest was embodied in the chitha. It is thus obvious that one witness on whom the plaintiff relied in his evidence does not support him and the evidence of other witnesses can hardly be treated as convincing. The plaintiff himself is too interested in the matter to be relied upon in absence of any cprroboration. Further it is difficult to believe that the rate of interest agreed to between the parlies could have been at the rate of one per cent. in the circumstances of the present case. Admittedly there have been transactions between the parties for a long period- Admittedly Ext. 1/a did not evidence a cash payment of money. Admittedly the rate at which the defendant paid interest on the prior debt was 11 annas per month i.e., nearly 8 per cent. It is difficult to believe in this circumstance that the debtor would be willing to pay more and the creditor would expect much more than the previous amount for the simple reason that the debtor had paid a considerable amount of interest and would ask for a remission rather than agree to pay interest at an enhanced rate. The evidence of the defendant (D. W. 8) is that he had told the plaintiff that he would not be able to pay any further interest and he had executed the chitha for the amount he was asked to do. It is obvious that the plaintiffs' evidence on the point is worthless and no contract has been proved.
19. The question then Is whether the plaintiff is entitled to any interest from the date of the execution of the chitha to the date of the suit. Admittedly the chitha does not contain any stipulation to pay interest. The evidence regarding a contemporaneous agreement is worthless-The court below allowed interest treating the suit to be based on the original advance made in the year 1956 which I jfound to be wrong. The result is that there was no stipulation to pay interest on the amount of the chitha. Interest can be allowed only under a provision of law or under a contract or in accordance with a mercantile usage, if proved. In respect of the present transaction which is based on an informal document there is no question of allowing interest under any provision of law i.e., Section 80 of the Negotiable Instruments Act does not apply. No evidence has been led about any mercantile usage. The result is that I am unable to award any interest to the plaintiff for the period up to the date of the suit. The claim in this respect must be disallowed.
20. In the result, I set aside the decree passed by the court below and decree the plaintiff's suit for a sum of Rs. 4,817.50 paisa. the balance due from him as stated earlier with proportionate cost. On this amount the defendant would be liable to pay interest at the rate of 6 per cent. per annum from the date of the suit until the realisation of that amount from the defendant. The appeal is thus allowed in part. In the circumstances of the case I direct the parties to bear their own costs so far as this appeal is concerned.
S.K. Choudhuri, J.
21. I agree.