NITHOOR THIMMANNA BHAT Vs. AITHAPPA ADYANTHAYA

JUDGEMENT

(1.) The promissory note on which the petitioner sued was dated 10 May, 1930. There was an endorsement of payment on 8 May, 1933, which gave a fresh period of limitation; and so the suit had to be filed on or before 8 May, 1936. On that date however, the Courts were closed for the summer recess. On the reopening day, 1 June, 1936, the payee under the promissory note assigned his rights in the promissory note to the present petitioner, and on the very same day the petitioner filed the suit. The District Munsif of Puthur, in whose Court the suit was filed, held that the suit was barred by limitation. He relied on the observation of the Chief Justice in the Full Bench decision of this Court in Fatma Bi v. Nagoorkhan (1931) 62 M.L.J. 256 : I.L.R. 55 Mad. 630 (F.B.), to the effect that Section 4 did not extend the period of limitation. He was of opinion that as at the time when the assignment was made the suit was barred, no rights passed to the assignee under the assignment. He therefore, although finding all the other points raised in favour of the petitioner, dismissed the suit.

(2.) All that happens after the lapse of three years after the creation of a debt is that the debt cannot be enforced in a Court of Law. The debt does not cease to exist; nor does the relationship of creditor and debtor. As Beasley, C.J., said in Fatma Bi V/s. Nagoorkhan (1931) 62 M.L.J. 256 : I.L.R. 55 Mad. 630 (F.B.), there was on the date of the reopening of the Court an enforceable debt. The question that arose in that appeal was whether a person who could have filed the suit on the reopening of the Court but was unable to do so because the debtor was adjudged an insolvent, could prove in insolvency; and Section 46 of the Presidency Towns Insolvency Act came up for consideration. That section says that all debts to which the debtor is subject when he is adjudged an insolvent shall be deemed to be debts provable in insolvency; and the Full Bench held that on the date of the insolvency, which was the day when the Court reopened that is, more than three years after the debt had been incurred, the debtor was still subject to the debt. If on the date of the assignment there was a debt, then there was nothing to prevent the creditor assigning it to some other person. A debtor might well pay his debt even though it were barred by limitation and one would expect an honourable debtor to do so. The lower Court is therefore clearly wrong in saying that on the date of the assignment there was no interest that could be assigned.

(3.) A decision of Beaman, J., in Visram Vasudeo Thakoor V/s. Tabaji Balaji Wagh (1912) 15 Bom. L.R. 348 has been referred to by the learned advocate for the petitioner in support of his contention that the petitioner was entitled to sue; but that learned Judge, differing from a Bench decision of his own Court in Bai Hemkore V/s. Masamalli (1902) I.L.R. 26 Bom. 782, adopted a reasoning which has since been held to be erroneous both in his own Court and in other Courts. As to the actual point that is raised here, Beaman, J., had very little to say. He argued on an analogy from a case where an acknowledgment took place during the Court recess after the period of limitation had expired. A decision on which some reliance has been placed by the other side is one of King, J., in Chidambaram Chettiar v. Venkatasubba Naik . That was a case where an acknowledgment took place beyond the period of limitation but during the recess. Section 19, which saves limitation in the case of certain acknowledgments made within the period of limitation prescribed, says that Where before the expiration of the period prescribed for a suit...in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing...a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.