KESARMAL INDAJISHET Vs. NARAYAN VIDYADHAR VANKDE

JUDGEMENT

(1.) THIS is a second appeal which has been referred to a bench because it raises the question how far a recent decision of the Privy Council on Section 20 of the Indian Limitation Act has affected Indian decisions on Section 19 of the Act.

(2.) THE facts are not in dispute. THEre was a loan made by the plaintiff to the defendant on April 2, 1933, of Rs. 1,120, which was entered in the khata of the plaintiff, and the entry was signed by the defendant. A suit on the khata was filed on December 14, 1937, more than three years after the date of the loan, and therefore prima facie it would be barred under Article 73 of the Indian Limitation Act. But on April 10, 1935, that is to say within three years of the loan and of the suit, an entry was made in the khata! in these terms : "Credited Rs. 30-10-0 on December 15, 1934, as the price of paddy": This was signed by the defendant. THEn the entry continues "This has been credited this day the date April 10, 1935, towards the above amount." That again is signed by the defendant. THE payment was not made in respect of interest, and therefore was not a payment of interest as such within the first paragraph of Section 20 of the Indian Limitation Act. But the creditor appropriated the amount towards interest, and consequently it was not a part payment of principal within the second paragraph of Section 20, and having regard to the recent decision of the Privy Council in Rama Shah v. Lal Chand (1940) L.R. 67 I.A. 160, S.C. 42 Bom. L.R. 640, it is quite clear that the payment does not operate to save limitation by virtue of Section 20 of the Act, it being neither a payment of interest as such, nor a part payment of capital. But there are authorities of the High Courts in India that Section 19 and Section 20 are quite independent of each other. Section 20 deals with the effect of part payment on limitation. Section 19 provides that where before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, then that starts a fresh period of limitation. THE question is whether the document of April 10, 1935, amounts to an acknowledgment of the right of the plaintiff to recover what is due on the khata of April 2, 1933. In the Privy Council case the debt sued on was a debt on a promissory note, and the part payment relied upon was evidenced by an endorsement on the note. " Paid Rs. 100 to-day in this pro-note (Signed) Lal Chand." It was not argued before the Privy Council that that document amounted to an acknowledgment within Section 19, and the whole of the judgment of the Privy Council is directed1 to the question whether the payment was a part payment within Section20. But it is of course clear that Section 19 was not overlooked ; indeed the section is mentioned in the judgment though merely to observe that an acknowledgment of right under Section 19 need not amount to a promise to pay. THE decision of the Privy Council, in my opinion, does amount to an authority for the proposition that an acknowledgment of a payment made in (meaning "in respect of") the promissory note on which the acknowledgment is endorsed, does not amount to an acknowledgment of any further liability on the promissory note, and if I may say so, I entirely agree with that view. A payment made merely in respect of the amount due on the promissory note on which the payment is endorsed may be a final payment, earlier payments not having been evidenced by endorsement, so that a mere endorsement of a payment in respect of the note does not involve by itself an admission of further liability on the note, I think the decision of this Court in Ganesh Narahar v. Dattatraya Pandurang (1922) I.L.R. 47 Bom. 632 : S.C. 25 Bom. L.R. 144 where it was held that an endorsement on a promissory note of three payments involved an admission of liability to pay the difference between the amount of the pro-note and the amount of the payments endorsed, cannot be reconciled with the Privy Council decision. But on the other hand, it seems to me that if the acknowledgment is an acknowledgment of a part payment of the amount due on the note, then that does imply a liability to pay something more under the promissory note, and is therefore an acknowledgment of the right of the creditor to recover something more on the promissory note in question.