Bichitranand Sahu and Another vs Mir Mahebub Ali

Meredith, J.—This is a plaintiffs'' second appeal against a judgment of affirmance, dismissing the suit. The appellants sued for recovery of Rs. 1238-5-0 due on a handnote dated 10-12-1926, executed by the defendant for Rs. 700.It was alleged that the defendant had paid Rs. 162 towards interest on different dates, and had noted the payments on the back of the hand note. The hand note specified interest at 24 per cent. per annum, but interest was claimed only at Rs. 12 per cent. simple, and Rs. 248-10-3 was remitted.

It is unnecessary to consider the defence, for it has been disbelieved by both the Courts below, who have found that the plaintiffs had established their case, but both Courts have held that the suit was barred by limitation. The account shows numerous payments in the year 1927, one payment of Rs. 10 on 2-91930, one of Rs. 10 on 17-8-1933, and one of Rs. 6 on 11-8-1936. The payments of 1933 and 1936 are endorsed as being towards interest, but that of 1930 is not so endorsed. It is not the appellants'' case that this payment was appropriated towards principal. Therefore, the legal position is that, unless this payment of 1930 was a payment of interest as such, the claim would be barred by the lapse of more than three years between 1927 and 1938: see the leading case AIR 1940 63 (Privy Council) Both the Courts below have assumed that it was the plaintiffs'' case that they had appropriated the payment towards interest, which would, of course, not save limitation, but a perusal of the plaint shows that that was not the plaintiffs'' case. Their case was not that they had made the appropriation, but that the payment had been made towards interest, that is to say, it was a payment of interest as such. It has been clearly laid down by the Privy Council, see National Bank of Upper India v. Banshidhar AIR 1929 P.C. 297 that it is not necessary that the endorsement shall itself show that the payment was of interest as such. That can be established by external evidence, so that even where the endorsement is in blank it may be possible to show that the payment was towards interest as such.

Admittedly, in the present case there is no evidence on the point. The plaintiffs succeed on the pleadings or not at all. It is contended that they must succeed on the pleadings, because it is clearly asserted in para. 2 of the plaint that the whole sum of Rs. 162 was paid towards interest, and this has been nowhere specifically denied in the written statement. I am of opinion that this contention is correct. Under Order 8, Rule 5, Civil P.C.,

Every allegation of fact in the plaint, ii not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability: Provided that the Court may in its discretion require any fact so admitted to be proved otherwise than by such admission.

Further, under Order 8, Rule 3:

It shall not be sufficient for a defendant in his written statement to deny generally the grounds urged by the plaintiff, but the defendant must deal specifically with each allegation of fact of which he does not admit the truth, except damages.

An examination of the written statement shows that the assertion that the payments were towards interest is nowhere specifically denied, or even denied by necessary implication. There is a mere general assertion in para. 12: "The facts that the defendant has not specifically admitted should be treated as denied." This is not enough. In para, & it is stated: "The plaintiffs'' claim is barred by limitation" but that also is too general. In para. 5 there is a statement: "In reality there was no agreement for payment of interest nor was the defendant liable to pay the principal." That is obviously a challenge to the liability in general, and in particular of the specification for payment of interest in the hand-note. What is most significant is that in para. 8 the defendant admits that occasional payments were made as per plaintiffs'' directions. If it was intended to deny that these payments were towards interest, that was the place to do so specifically. On the other hand, the admission that "the payments were made as directed by the plaintiffs" lends some support to the plaintiffs'' case.

The learned District Judge seems to have been sensible of the difficulty. He refers to the pleadings, and says that he thinks there must be something to show that at the time it was intended that the payment should be towards interest, whereas there was nothing on the record to show it. Though he has not said so, presumably he was relying upon the proviso to Order 8, Rule 5. If so, I must observe that, in my judgment, that proviso should not generally be used to support a plea of limitation, because such a plea is never one which the Courts: regard with favour, though upon the law of limitation they may have to give effect to it. There are no equities in favour of the man who pleads limitation.

In the present case I consider that it was not established that the claim was barred by limitation, The claim was proved and was moderately framed, interest being reduced to the very reasonable figure of 12 per cent. per annum simple and a substantial remission being made. I would, therefore, allow this appeal, and decree the suit with costs throughout, allowing interest pendente lite at the rate claimed, i.e. 12 per cent. and future interest at the court rate of 6 per cent. per annum.

Ray, J.

I agree.