(1.) The defendant is the appellant. The suit is on a promissory note dated 19-9-1972 executed by the defendant in favour of the plaintiff for a sum of Rs. 5000 / -. According to the plaintiff, the defendant paid a sum of Rs. 1000/- and made an endorsement on 15-3-1975. It is stated in the plaint that while making the endorsement, the defendant added the words "for Devi Talkies (P) Ltd'. above his signature and the words "Managing Director" below the same. It is stated that the plaintiff did not notice the mistake immediately and as the endorsement was made by the defendant himself, he was personally bound. The suit was filed on 15-3-1978.
(2.) The defendant stated as follows in the written statement : The defendant was the Managing Director of M/s. Devi Talkies (P) Ltd., which owned a cinema theatre called Devi Talkies. The previous Managing Director filed a suit against the company and the Board of Directors for an injunction restraining them from interfering with his management. The suit was dismissed and an appeal met with the same fate. A receiver was in management during the pendency of the suit and the appeal. There was a second appeal in the High Court and the receiver was continued by interim orders. The High Court suggested a lease of the theatre. The Directors decided to take the lease in the name of the defendant for the benefit of the company and deposited the lease amount of Rs. 13,000/- per annum. The Directors by name Sounderaraja Iyengar and Parthasarathy Iyengar paid Rs. 5000/- each and a shareholder by name Srinivasan paid Rs. 3000/-. Parthasarathy Iyengar obtained a promissory note from the defendant for Rs. 5000/- in the name of his wife Rangammal, while Soundararaja Iyengar obtained another promissory note in the name of his daughter, the plaintiff. Thus, the amounts were not borrowed by the defendant for his personal use. No consideration passed under the promissory notes. After the disposal of the second appeal, the Board of Directors passed a resolution on 25-7-1973 to treat the lessee's management as company management from the inception. The payment made towards the promissory note was made by the company and on behalf of the company. The amount payable to Srinivasan, the share-holder was paid from out of the funds of the company on 5-3-1975. Thus, the company alone was liable to pay the amount and the defendant could not be made liable in his individual capacity. The defendant was entitled to the benefits of Debt Relief Legislation of Tamil Nadu. The suit is barred by limitation as the endorsement will not save the suit.
(3.) The trial Court held that the defendant obtained the amount under the promissory note in his personal and individual capacity and the endorsement made by him under Ex. A-2 saved the suit from the bar of limitation. But the trial Court dismissed the suit holding that it was premature in view of the provisions of Tamil Nadu Act 40 of 1978.