SITARAM BABURAM Vs. SITARAM LALMAN THROUGH TULSI RAM

JUDGEMENT

(1.) This is an appeal by the plaintiff firm Sita Ram Babu Ram through Babu Ram. This firm instituted a suit against another firm Sita Ram Lalman through Tulsi Ram for the recovery of a certain sum of money based on a sarkhat dated 19 October 1933. The trial Court after giving relief on the question of interest to the defendant under the Agriculturists Relief Act decreed the plaintiff's suit for Rs. 2651-8-0. " This decree was upset in appeal by the lower appellate Court on a finding that the plaintiff's suit was barred by time. The sarkhat contains the following entries on the debit side: Rs. 1958-1-0 : 19 of October 1933; Rs. 100-0-0 : 21 of October 1933; Rs. 50-0-0 : 19 of November 1933; and on the credit side the entries are: Rs. 100 : 21 of November 1933; Rs. 50 : 6 of June 1934.

(2.) The suit was instituted on 14 December 1936, and unless the credit entry of 6 June 1934 can be invoked in aid by the plaintiff the suit would be barred by time. The credit entries, of which mention has been made by us so far, we might make clear, are entries of payments said to have been made by the debtor to the creditor. It is clear that this entry of Rupees 50 must either be towards interest as such or towards part payment of principal, the part payment appearing in the handwriting of the debtor. It is nobody's case, and in any event it has not been proved that this entry is of interest as such. The only question that remains for consideration is whether this payment can be treated as payment of principal. Although there is some doubt in the mind of the lower appellate Court about the last entries in the sarkhat, the finding of the learned Munsif has been accepted by the Civil Judge. It is not quite clear as to what the learned Judge meant by saying that he was doubtful about the last entries, whether he doubted their genuineness or what - but the fact remains that in the end he accepts the finding of the learned Munsif who of course had accepted the genuineness of the entire sarkhat. The learned Judge observed as follows: The creditor wants to save the limitation by arbitrarily treating the payment of Rs. 50 as part payment of principal and the amount of interest is also intact. I am therefore of opinion that the payment of Rs. 50 in this case cannot be treated as part payment of principal.

(3.) Learned Counsel for the plaintiff, appellant has argued that the materials on the record were sufficient to come to a definite finding on the question of this last payment as indeed the trial Court had done and the lower appellate Court has wrongly assumed that the only thing which was on the record was a statement in the plaint that the payment was appropriated towards principal. There can be no doubt that the law is that in the absence of definite instructions by the debtor the creditor can appropriate payments made by the debtor. In the case of interest, if it is attempted to save limitation, the instructions must be by the debtor and the payment must be of interest as such, but in the case of principal, if the debtor has given no instructions, the creditor can appropriate it, if he so chooses, towards principal and can save limitation provided time has not run out at the time of appropriation, and provided acknowledgment of payment appears in the handwriting of or on a writing signed by the person making the payment. Their Lordships of the Privy Council in Rama Shah Vs. Lal Chand say: While not of opinion that it need be shown that the creditor's appropriation has within the time limited been communicated to the debtor they are unable to regard the language of the section as satisfied unless within the prescribed period the creditor has in exercise of his right done something which treats the payment as made on account of principal. To evidence a definite appropriation to the principal debt made by the creditor within the period prescribed the manner in which the payment has been dealt with by the creditor in his own books of account will ordinarily be sufficient.