K. Subramaniam Naidu vs T.N. Rajendran

The unsuccessful defendant in both the courts below is the appellant.

The case in brief is as follows: The plaintiff filed a suit for recovery of a sum of Rs.16,320 towards principal and interest. The defendant

borrowed a sum of Rs. 18,000 from the plaintiff on 12.10.86 and executed the suit promissory note Ex.A1. Only a sum of Rs 11,400 was paid

and the balance remains due and payable. The notice was also issued under Ex.A2 dated 9.10.89, calling upon the defendant to make the payment

and the amount was not paid. The defendant is employed as a Sub-Registrar at Hosur, drawing more than Rs. 3,000 per month and he also owns

immovable properties and, as such, not entitled to get benefit under any of the Debt Relief Act.

The defendant resisted the suit, denying the execution of the suit document and also passing of consideration of Rs. 18,000. He also denied the

payment of Rs 11,400 towards the suit transaction. There is no endorsement in the suit document relating to any payment and, as such, the suit is

also barred by time since it has not been filed within a period of three years. The plaintiff''s father was doing finance business at Gudiyatham. The

son of the defendant was running an industry under the name and style of ''Balaji Blue Metal'' and he had borrowed a sum of Rs. 10,000 from the

finance company in 1985. He was able to pay only a portion of the amount and the balance was not paid. The plaintiff''s father insisted the

defendant to make arrangement for the payment. The son of the defendant was made to join in the chit run by the plaintiff''s father and he was also

remitting a sum of Rs. 300 per month for a period of 60 months. The son of the defendant joined in two groups and in the first chit, he took the

auction amount of RS. 7,900 after deducting the commission and this amount was also adjusted towards earlier debt. In respect of the other chit

also, he successfully bid in the third instalment for a sum of Rs 8,100 after deducting the commission and that was also appropriated towards the

earlier liability. Only for due payment of the future instalments towards the chit groups, the suit document was taken from the defendant and no

money was paid, much less, Rs. 18,000 on 12.10.86. Another pronote was also taken from the wife of the defendant towards the chit transaction.

The entire chit subscription has been paid and the chit liability has already been discharged. No notice was also received by the defendant.

The trial court framed six issues and on behalf of the plaintiff, P.Ws.1 and 2 were examined and Exs.Al and A2 were marked. On the side of the

defendant, Exs.B 1 to B 30 were marked and D.Ws.1 and 2 were examined. The Trial court decreed the suit and aggrieved against this, the

defendant preferred A.S.No. 41 of 1995 on the file of District Court, Vellore, and the appeal was also dismissed, Aggrieved against this, the

defendant has come forward with the present second appeal..

The learned counsel for the appellant/defendant contended that both the courts below have erred in holding that the suit claim is within time. The

lower appellate court has not framed any point in respect of the plea of limitation. Failure to do so has resulted in miscarriage of justice. The

payments made were only towards the chit transaction and not in respect of the suit document i.e. pronote and as no demand was made within a

period of three years, the suit filed by the plaintiff after the lapse of three years is clearly barred by time. The courts below ought to have dismissed

the suit on the ground of limitation.

The points that arise for consideration are (1) Whether the suit claim is barred by limitation? and (2) To what relief ?

Points: The plaintiff has come forward with a specific case that the defendant borrowed a sum of Rs. 18,000 on 12.10.86 and executed the suit

document Ex.A1. Although in the written statement the defendant took a plea that the suit document was not executed by him. Subsequently he

admitted his signature in Ex.A1. When once the signature is admitted, the burden is upon the defendant to show that it is not supported by

consideration. The notice was issued under Ex.A2 i.e. on 9.10.89 and no acknowledgment has been filed in the case. There is no record to show

that the notice of demand was served on the defendant. Now the only plea raised by the learned counsel for the appellant is that the suit claim is

barred by time and, as such, it is unnecessary to go into the question whether the suit document is supported by consideration or not. Ex.A1 was

executed on 12.10.86 and the suit was filed on 15.10.89. Prima facie it is clear that the suit was filed after a period of three years. There is a plea

in the plaint that a sum of Rs. 11,400 has been paid towards the suit claim and under the circumstance, the suit is well within time. The burden is on

the plaintiff to show that towards the suit claim only, the sum of Rs. 11,400 was paid and it would save the limitation.

The plaintiff examined himself as P.W.1 and stated that a sum of Rs. 11,400 was paid towards the suit document. D.W.1 categorically stated

that the payment of Rs 11,400 was paid only towards the chit transaction. D.W.2 is none other than the son of the defendant and he also stated

that he was a member in the two chit groups run by the plaintiff''s father. The defendant also filed Exs. B1 to B30 in order to establish that the

plaintiff''s father was doing financial business and he was also doing chit business and it is unregistered one. The various letter correspondence

between the parties clearly established that D.W.2 was subscribing the two chits and payments have been made at the rate of Rs. 300 per month

for a period of 38 months. D.W. also categorically stated that towards the first chit, a sum of Rs. 7,900 and towards the second chit, a sum of Rs.

8,100 were adjusted towards the chit liability. If the plaintiff was able to produce the account relating to chit transaction, then necessarily it would

throw light as to whether the payment made viz., Rs 11,400 was towards the chit liability or towards the suit document. For obvious reasons the

plaintiff has deliberately with held the production of these two documents .

P.W.1 in the course of evidence admitted that he was a partner in Maruthi Chit Company at Gudiyatham. Admittedly the defendant has sent

some of instalments through demand drafts and P.W. 1 denied the suggestion that they were sent towards the chit transaction. Another suggestion

that all the instalments were sent towards the chit transaction was also denied by P.W.1. But, however, he is not prepared to produce the relevant

documents. He also denied the suggestion a sum of Rs 11,400 paid towards the chit transaction was entered for the suit transaction. He is having a

separate bank account is also admitted. According to the evidence of P.W.1 the suit transaction is a separate one and the chit transaction is a

separate one. If really the payments were made towards the suit transaction, necessarily there should be some endorsement on the back of Ex.A1

but unfortunately, there is no such endorsement to show that any payment was made towards the suit pronote. The non-production of the chit

accounts would only go a long way to show that it can be safely concluded that the alleged payment of Rs 11,400 was only towards the chit

transaction and not towards the suit promissory note. When once this conclusion is reached, much less, there is no material to show that any

payment was made towards the suit pronote, it is evidently clear that the suit is clearly barred by time.

D.W.1 in the course of evidence stated that whenever amount was sent in demand draft, he also used to send a covering letter towards the

same. P.W. 1 also in the course of cross examination, is not able to state when the last payment was made towards the suit promissory note to

save limitation. There is only a general statement in the plaint that towards the suit pronote, Rs 11,400 was paid and nowhere in the evidence also,

the last date of payment has not been specifically mentioned. It, therefore, follows that the payments made towards the chit transaction have also

been tacked on as if paid towards the suit pronote to save limitation.

The learned counsel for the appellant also relied on a decision of this court in V. Srinivasa Iyengar v. K.K. Mohideen, 1972 T.L.N.J. 52

relating to the acknowledgment of liability. It is stated that the right acknowledgement should be identical with the right claimed in the suit. Applying

the principle to this case, it is manifestly clear that the payment made towards the chit transaction has been made use of as if payment made

towards the suit pronote only for the purpose of saving limitation. The plaintiff has also not filed any covering letter said to have been sent along

with the demand drafts by the defendant. When admittedly the sum of Rs 11,400 was not paid in a lumpsum and it was paid only in instalments,

would only probabilise the case of the defendant and improbabilise the case of the plaintiff. The aforesaid facts only indicated that whatever

payment made by the defendant was only with reference to the chit transaction and not with reference to the suit pronote.

The learned counsel for the plaintiff respondent relied upon a decision in Srinivas Ram Kumar Vs. Mahabir Prasad and Others, and this

decision has no application to the case on hand. The facts in that case disclosed that the plaintiff filed a suit for specific performance alleging that

money was paid as price where as the defendant pleaded that the money was received as a loan. The learned counsel for the plaintiff also relied

upon another decision in Khan Bahadur Shapoor Fredoom Mazda Vs. Durga Prosad Chamaria and Others, on the scope of essentials of

acknowledgment and there must be jural relationship of debtor and creditor. There is no dispute about this proposition and it has no application to

the case on hand.

The plaintiff also relied upon another decision of Apex Court in K.P.O. Moideenkutty Hajee Vs. Pappu Manjooran and Another, wherein it is

observed that even though promissory note recited cash consideration but immovable property was delivered by plaintiff-respondent to defendant-

appellant, held, consideration for the promissory note proved, burden of proof is of academic interest where evidence has been adduced by

parties. There is also no dispute about this proposition. The plaintiff also relied upon another decision of this court in Madhavan v. Kannammal and

others, 1989 (I) M.L.J. 136, wherein it is observed that on the plaintiff abandoning his own case and claiming relief on the basis of defendant''s

case, the Court can grant relief on facts of the case established by records if they were not pleaded by parties. This decision is also not applicable.

As adverted, even in the course of evidence, P.W. 1 admitted that the payment of Rs. 11,400 was only towards the suit claim and not for the chit

transaction. There is no pleading in the plaint that the payments were made towards the chit transaction. Now the defendant has taken a specific

plea that the payments already made were towards the chit transaction and not for suit transaction. The burden is only upon the plaintiff to establish

that payments were made towards the suit promissory no and it would extend the period of limitation. In my view, in the absence of any

endorsement in Ex.A1 coupled with the fact that there is no material to show when the last payment was made towards the suit pronote, it cannot

be said that the suit is filed within time. There is also one more circumstance to show that notice was issued only at the end of the period of three

years and no acknowledgment has also been filed relating to the same.

The courts below have not appreciated the legal position is their proper perspective. It is unfortunate that the lower appellate court has not

discussed the plea of limitation although raised by the defendant in the written statement. The entire discussion related only to the passing of

consideration relating to the suit document. When a legal plea has been raised. It is the duty of the court to consider and decide the same in

accordance with law. Simply because there is a concurrent finding by the courts below, it cannot be said that this appeal has to be dismissed.

When the finding is not based on legal evidence and the question of limitation has not been considered by the lower appellate court, necessarily this

court can interfere in the findings of the courts below. There is prima facie material to come to the conclusion that the suit claim is barred by time

and because of improper appreciation of evidence, there is miscarriage of justice and, as such, interference is called for.

For the reasons stated above, the second appeal is allowed and the judgment and decree of the courts below are set aside and the suit is

dismissed. However, in the peculiar circumstances of the case, there will be no order as to costs. Consequently, C.M.P.No. 16948 is closed.