Moppuru Narayana vs Mallavarapu Lurudu Mareyya

Somasundaram, J.—This revision is by the plaintiff against the dismissal of S. C. S. No. 140 of 1946 by the Subordinate Judge of Tenali.

The suit is for the recovery of Rs. 331-4-0 based on an acknowledgment of liability made by the defendant in his own writing on 11-5-1945.

This was done in a note book belonging to the plaintiff and it was left in the possession of the plaintiff. The writing was in Telugu and as there was

some dispute with regard to the translation, I had it translated by Court and it reads as follows :

Three hundred and two rupees and annas eight only being the amount due to this date on looking into the accounts up to this date in respect of

miscellaneous khatha (account) and in respect of the principal and interest relating to previous accounts.

Sd. Mallavarapu Lurdu Marayya.

The plaintiff bases his action solely on this acknowledgment as is clear from his averments in paras. 1 and 4 of his plaint. The lower Court finds that

there is no ether evidence of the amount now claimed except the acknowledgment relied on and this finding is not seriously disputed by the plaintiff.

The only question is whether this document is admissible in evidence. u/s 35, Stamp Act:

No instrument chargeable with duty shall he admitted in evidence for any purpose ..... unless such instrument is duly stamped:

Provided that-

(a) any such instrument not being an instrument chargeable with a duty of one anna (or half an anna only), or a bill of exchange, or promissory note,

shall, subject to all such exceptions, be admitted in evidence on payment of the duty with which the same is chargeable ...... together with a penalty

of five rupees, or, when ten times the amount of the proper duty or deficient portion thereof exceeds five rupees, of a sum equal to ten times such

duty or portion.

Article 1 of Schedule I is as follows :

Acknowledgment of a debt exceeding twenty rupees in amount or value, written or signed by, or on behalf of, a debtor in order to supply

evidence of such debt in any book (other than a banker''s passbook) or on a separate piece of paper when such book or paper is left in the

creditor''s possession : provided that such acknowledgment does not contain any promise to pay the debt or any stipulation to pay interest or to

deliver any goods or other property.

This document will therefore be admissible in evidence only if it falls within the proviso. The classes of documents to which the prohibition in the

proviso applies are: (1) bill of exchange, (2) promissory note, (3) an instrument chargeable with the duty of one anna or half anna only. If this

document therefore falls within any one of the above classes, it will not help the plaintiff. That this is not a bill of exchange or a promissory note is

clear from the terms of the document and is conceded to be so by both the parties. What is contended for by the plaintiff is that though apparently

this falls under Article 1 to Schedule I, it does amount to a promise to pay the debt and therefore this falls outside the purview of documents

prohibited under proviso (a) to Section 35; that is to say, the privilege granted by the proviso which does not apply to the three classes of

documents mentioned above applies to this case.

This argument is based on the dicta of the Privy Council in Maniram Seth v. Seth Rupchand, 33 Cal. 1047 : 33 I. A. 166 . Their Lordships in

that case were considering the question whether a particular statement amounts to an acknowledgment within the meaning of Section 19, Limitation

Act. The statement which was the subject of construction by the Privy Council was : ""For the last five years he (the respondent) had open and

current account with the deceased."" Their Lordships construed this as a clear admission on the part of the respondent that there were open and

current accounts between the parties and they further held :

The legal consequence would be that at that date either of them had a right as against the other to an account. It follows equally that, whoever on

the account should be shown to be the debtor to the otter, was bound to pay his debt to the other, and it appears to their Lordships that the

inevitable deduction from this admission is that the respondent acknowledged his liability to pay his debt to Motiram or his representative, if the

balance should be ascertained to be against him"" (at p. 1057).

Then they proceeded to consider whether this is sufficient under the Indian law to take the case out of the statute of limitation and they held this

was a sufficient acknowledgment. In doing so they pointed out that there is no reason for drawing any distinction between the English and Indian

law and held following In re River Steamer Co.; Ex parte Mitchell''s claim, (1871) 6 Ch. A. 822 : 25 L T. 319 :

That an acknowledgment to take the case out of the Statute of limitations, must be either one from which an absolute promise to pay can be

inferred, or, secondly, an unconditional promise to pay the specific debt.

They further added :

An unconditional acknowledgment has always been held to imply 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. There can be no reason for giving a different meaning to an acknowledgment that there is

a right to have the accounts settled, and no qualification of the natural inference that, whoever is the creditor shall be paid, when the condition is

performed by the ascertainment of a balance in favour of the claimant.

These observations are relied on to state that this acknowledgment amounts to an unconditional promise to pay and this therefore takes the case

out of the category of Article 1 and therefore is admissible in evidence. In the Privy Council case their Lordships were construing a particular

statement as to whether it amounts to an acknowledgment within the meaning of Section 19 , Limitation Act so as to save limitation. They were

comparing the Indian and English law.

There is no doubt, there is an observation that every acknowledgment is an implied promise to pay. But the words in Article 1 are ""that such an

acknowledgment does not contain any promise to pay the debt or any stipulation to pay interest or to deliver any goods or other property.

It is one thing to say that an acknowledgment of a debt implied a promise to pay and another thing to find within the meaning of Article 1, Schedule

1 whether such an acknowledgment does or does not contain any promise to pay. The words ""contain any promise to pay"" in my opinion amount

to more than a mere implied promise. If every acknowledgment of a debt is to be taken as containing a promise then there is no need for the

Legislature to add the words ""provided that such an acknowledgment does not contain any promise to pay the debt."" The words, undoubtedly,

indicate express terms of promise and not merely an implied promise which is inherent in every acknowledgment of a debt. I therefore do not

accept the contention that it is a promise to pay. It therefore falls under the first portion of Article 1.

The next question to be considered is whether this is intended to supply the evidence of debt. It is a matter which depends on the facts of each

case and the lower Court has come be the conclusion that there was no other evidence in this case and that it is intended to supply evidence of the

debt. I agree that the document was given to the plaintiff with the intention to supply evidence of a debt and therefore the document clearly falls

within the first portion of Article 1, Schedule 1. If it falls under Article 1 then this document is inadmissible in evidence u/s 35 and the prohibition in

proviso (a) applies to it. As pointed out by the lower Court there is no other claim based on the original cause of action. The suit was therefore

rightly dismissed.

In the result the petition fails and is dismissed with costs.