Patna High Court
Liquidator, Bagha Co-Operative ... vs Debi Mangal Prasad Sinha And Ors. on 25 September, 1936
Equivalent citations: 170IND. CAS.130, AIR 1937 PATNA 410
JUDGMENT Wort, J.
1. This appeal is against the decision of the Subordinate Judge in an action in which the Bagha Co-operative Society claimed a certain sum of money--a loan taken by one Munshi Muna Pal. The Judge in the Court below held that the action was barred by limitation. I must say that when the case was first opened, it seemed impossible to support the contention of Mr. Mitter appearing on behalf of the plaintiff-appellant that the letter of February 3, 1928, upon which he relies, gave a fresh start to limitation, and I am bound to add that I find some difficulty in coming to a conclusion in the matter. The question in the case was whether by the letter of February 3, 1928, a fresh start to limitation was given under Section 20, Limitation Act. The facts which it is necessary to state are very few. Although Munshi Muna Lal actually borrowed the money from the Bagha Co-operative Society, it has been found by the Court below that it was taken by Munshi Muna Lal on behalf of defendant No. 1, in other words, defendant No. 1 was the debtor.
2. Before dealing with the main point in the case I propose to refer to two arguments addressed to us by the learned Advocate for the respondents, who were defendants in the Court below. The first is as regards limitation and the second is with regard to the nature of the liability of defendant No. 1. So far as limitation is concerned, it was contended that this Court ought to hold, supporting the judgment of the Court below, that the action was in any event barred by limitation, that is to say, that the action was already barred when the letter of September 8, 1927, upon which this claim rests, was written. There is certainly nothing on the face of the record to entitle this Court to come to any such conclusion, and indeed it was never suggested in either of the Courts below that the action was so barred. The only question was whether the period of limitation between September 8, 1927, and the date upon which this action was brought was such as to bar the action; and as I have already indicated, the only way the plaintiff could get out of that case was to show that by the letter of February 3, 1928, a fresh start to limitation had been given. As regards the other question, the nature of the liability of defendant No. 1, it was contended by the learned Advocate appearing on behalf of the defendant-respondents that the Court below had no right to come to the conclusion that defendant No. 1 was the debtor, that is to say, that it was on his behalf that the money had been advanced. But, as I have already said, the basis of the claim was the letter of September 8, 1927, which is to the effect:
In obedience to your letter, dated September 8, 1927, I beg to state that I hold responsible myself regarding the payment of the dues against Munshi Muna Lal, a member of the Bagha Co-operative Society, by January 15, 1928.
3. The letter is then signed by defendant No. 1. It is rather difficult to ascertain from the plaint exactly what the case of the plaintiff is; whether it is a case of defendant No. 1 being a surety, whether defendant No. 1 was to be looked upon as a principal debtor, or whether Munshi Muna Lal was to be looked upon as the principal debtor. But one matter is perfectly clear and that is that the letter of September 8, 1927, does not put defendant No. 1 who wrote the letter in the position of a surety; he becomes by that letter on its propel construction the principal debtor whatever the position may have been prior to the date upon which the letter was written In, my judgment, therefore, that point cannot avail the respondents. The only other question, the main question in the case, is whether the payment has been made and acknowledged within the meaning of Section 20, Limitation Act. The letter of February 3, 1928, is a letter signed by Debi Mangal Prasad Sinha and its relevant portion is to this effect:
I would like to bring to your kind notice that on January 30, 1928, I had been to Bettiah for paying respect to you and depositing money on behalf of Munshi Muna Lal, but to my great misfortune I could not see you. The money has been deposited.
4. Now, certain payments had been made towards this debt on behalf of Munshi Muna Lal, and the one with which we are concerned is a payment of Rs. 394 odd entered in the books of the Society as paid on account of interest. That is to say, it appears that a payment was made to the Co-operative Society, the creditor, which appropriated it towards interest, and it must be assumed that the debtor consented to that appropriation. Being the debtor he had the first option: he could have appropriated the amount towards principal or he could have appropriated it towards interest according to his own wish. But as I have said the creditor having appropriated it and the debtor having consented I suppose it must be assumed that the amount was paid on account of interest, and it might be held to be paid as such within the meaning of Section 20, Limitation Act. That this payment of Rs. 391 odd was made, there can, be no doubt and the amount was paid on account of this debt which, in the first instance, had been incurred by Munshi Muna Lal. Now the question is whether the statement in the letter of February 3, 1928, that 'the money was deposited on January 30, 1928', can in the circumstances of the case be held to be an acknowledgment of payment within the third Sub-clause of Section 20 of the Act. The learned Judge in the Court below did not address his mind to this question as it was not raised. He held merely that the action was barred by limitation as the period of three years had elapsed from September 8, 1927. Now, as this point arises in the case, there are two courses open to this Court, first to remand the case to the learned Judge in the Court below to determine this question as a question of fact and secondly to investigate the matter for itself under the powers given to it by Section 103, Civil Proc edure Code. It is the latter coarse that we propose to take.
5. Looking at the evidence, a number of facts have in my judgment clearly proved first, that a payment was made on January 30, 1928, of Rs. 394 odd. I think also that it would not in any way be straining the evidence to hold that this was the payment made on January 30, 1928, and placed against interest in the manner which I have already indicated. It is also proved by the evidence of the plaintiff that the account was recorded in the name of Munshi Muna Lal as to do otherwise would be contrary to the rules of the Society. We then come to the letter of February 3, 1928, itself. The letter clearly admits a payment. It was contended by the learned Advocate for the respondents that the word used was 'deposited.' But I think it would be taking a very strange view of the letter if we hold that when the writer says 'money was deposited' he did not mean that he had paid the money. He admits having paid the sum on January 30, 1928. There can be no doubt whatever on the evidence taken as a whole of his having paid the amount against the account of Munshi Muna Lal. Taking the evidence as a whole, there can be no doubt in my judgment that the payment referred to by the letter of February 3, 1928, was this payment of Rs. 394 odd. There was one point taken by the learned Advocate for the respondents and it was this: that the letter of February 3, 1928, does not admit a payment by the debtor as such, but admits a payment on behalf of Munshi Muna Lal. To give effect to that argument would, in my judgment, be placing words in Section 20, Limitation Act, which are not there. All that is required by the section is an acknowledgment of the payment by the debtor.
6. We are not dealing here with the question of agency, otherwise certain very difficult questions would have arisen. As I have said, all that is required is an acknowledgment of the payment by the debtor, and in this case the person who wrote the letter of February 3, 1928, has been held to be the debtor. I do not think othere can be any doubt in this case that in the discussion which took place on the evidence, the payment which is referred to in the letter of February 3, 1928, was the payment which the plaintiff had proved, and in my opinion it would be taking a somewhat grotesque view of the evidence to hold otherwise. I have already stated in the course of my observation that from one point of view it might be taken that the payment of Rs. 394 odd referred to in the letter of February 3, 1928, was the payment of interest as such within the, meaning of Section 20, Limitation Act. I do not propose to come to any definite conclusion on that although I have the gravest possible doubts whether that could be said to be the case having regard to the plain construction of Section 20. When it speaks of an acknowledgment of the payment of interest, and acknowledgment of payment of interest as such, I am of the opinion (although perhaps it is unnecessary to decide the point definitely in this case) that the writing which is the acknowledgment of the payment of interest must also contain the description of the payment as a payment of interest. But it is unnecessary as I have observed to decide that question having regard to the view that I take of Section 20 as a whole. In this connection I must refer to the Full Bench decision of the Allahabad High Court in Udeypal Singh v. Lakshmi Chand 58 A 261 : 159 Ind. Cas. 387 : AIR 1935 All. 946 : (1935) ALJ 1029 : 1935 ALR 1107 : 8 RA 428 (FB). This case is relied upon by the learned Advocate for the respondent to support his contention that the letter of February 3, 1928, does not give a further period of limitation as it is not an acknowledgment within the meaning of Section 20, Limitation Act, because there is no payment within that section. The learned Chief Justice of the Allahabad High Court construing this section came to this conclusion at p. 276 Page of 58 A.--[Ed.] of the Report:
I have, therefore, come to the conclusion that where money is paid by a debtor without specifying whether the payment is towards interest or towards principal, leaving it to the option of the creditor to appropriate it as he likes, and the creditor appropriates it towards interest, there is neither a payment of interest as such nor a part payment of the principal within the meaning of Section 20, but there is a mere unspecified payment of money, which has subsequently by the act of the creditor become a payment of interest.
7. Thorn, J., with one other of the learned Judges of the Court took an opposite view, but the majority concurring in the view taken by the Chief Justice, that view prevailed. But with great respect to the learned Judges the effect of the opinion there expressed would be to place words in Section 20, Limitation Act, which do not appear. The learned Chief Justice points out that where money is paid and there is no appropriation, or to put it more accurately, no specification whether payment is towards interest or towards principal, it cannot be payment within the meaning of Section 20 of the Act. Now, it is quite clear that under Section 20, Limitation Act, if the creditor is to rely upon a payment of interest, it must be a payment of interest as such, but as regards a payment towards principal no such specification is necessary. Now the effect of the opinion expressed by the majority of the Judges of the Allahabad High Court would make it necessary, both in the case of payment towards interest and in the case of payment towards principal, for the payer to specify towards which items they were made. In my view, with great respect, the opinion expressed is a view that I cannot possibly take, upon what seems to me, to be the plain construction of Section 20 of the Act. Having regard to the view I take of the letter of February 3, 1928, connected as it is with the payment of Rs. 394 odd, I am of the opinion that the action is not barred by limitation, and, therefore, the decision of the learned Judge in the Court below is wrong. The appeal is, therefore, allowed, the judgment of the learned Subordinate Judge is reversed and the judgment of the trial Court restored with costs throughout.
James, J.
8. I agree.