SUBBARAMA AIYAR Vs. APTVEERABADRA PILLAI

JUDGEMENT

(1.) In the suit from which this Second Appeal lies, the question arose as to the effect of a statement made by a witness in certain criminal proceedings, whether that statement amounted to an acknowledgment of, liability within Section 19 of the Limitation Act. The statement is as follows: - I executed the promissory-note Ex. R (suit promissory-note). The contents of the promissory-note are correct." Ex. R (which is Ex. A in the present case) is a promissory-note acknowledging liability for Rs. 1,322-11-11 with a promise to pay with interest at 12 per cent, per annum. On that promissory-note there were, at the date that the document was shown to the witness, four endorsements of various payments in 1912. The statement made by the witness is, admittedly, within the period of limitation which has to be applied in this case. The question is whether this amounts to an acknowledgement.

(2.) Both the appellant and the respondent have relied on the decision of the Privy Council in Muniram Seth V/s. Seth Rupchand I.L.R. 33 Cal. 1047 (P.C.), the vakil for the appellant contending that their Lordships of the Privy Council have Laid down that the whole of the recognised English lajv on this subject applies in India. The passage from which he seeks to draw this inference is as follows: - "The Indian Limitation Act, Section 19, however, says nothing about a promise to pay and requires only a definite admission of liability, as to which there can be no reason for departing from the English principle that an unqualified admission and an admission qualified by a condition, which is fulfilled stand upon precisely the. same footing." Bearing in mind that their Lordships begin the sentence by saying that " The Indian Limitation Act says nothing about a promise to pay," it seems to me necessarily to follow that the reasoning of Courts in England based on the theory underlying the effect given to an acknowledgment, namely, that they indicate a promise to pay has very little application to cases under the Indian Act. Their Lordships also point out that the requirements of English Law are, if anything, more, stringent than those of Indian Law. This is, of course, due to the fact that Lord Tenterden's Act (9, Geo. IV C. 14,) of 1828, Section 1 assumes that the legal effect of the writing is that it evidences a new or continuing contract. It was the necessity of finding this new and continuing contract which induced English courts to give such a liberal interpretation to ordinary acknowledgments and read into them a promise to pay on the basis that honest men always intend to pay something the liability to which they acknowledge, but under the Indian Law, as pointed out by their Lordships, there is no necessity to show anything from which a promise to pay could be inferred and, therefore, any decisions of the Courts of India which consider these acknowledgments on the basis that they must be such from which a promise to pay can be inferred are no longer good law.

(3.) The same case was relied on for the respondent because of the particular matter dealt with and the language applied to the matter by their Lordships. The acknowledgment in the case before their Lordships was as follows; it was in probate proceedings: "That the applicant Rupchand Nanabhai is a big Mahajan of Burhampur paying Rs. 106 as income-tax. For the last five years he had opened current accounts with the deceased." Their Lordships say that the words " for the last five years" must necessarily have reference to the five years prior to the death of the testator which was in October 1898 and it appears that the petition in which the words are found was put in on the 28 of September 1889 very nearly a year later. Assuming, as their Lordships do, that the admission is of the condition of affairs up to the date of the testator's death, their Lordships say this: The legal consequence would be that at that date either of them had a right as against the other to an account." And at page 1059 their Lordships say, "If nothing further is alleged, the natural presumption is that they continued unsettled at the time the statement was made." If such an inference that accounts remained unsettled for a year after the period to which the acknowledgments refer can be made, it seems to me that where the statement is as to one transaction like the existence of a liability on a promissory note, the inference must necessarily be much stronger because admittedly, where there are open accounts, the fact of the liability which is the basis of the whole effect of the section can only be ascertained when the accounts have been taken, whereas there is no question of accounts where the amount admitted to be due is on a promissory note and there is no suggestion of any credit on any other account. Miller, J. of this Court had to consider this case in Ranganayakalu Aiya V/s. Subbayyan 5 M.L.T. 71 and said as follows quoting the passage at page 1059: "That is to say or so it seems to me an acknowledgment of liability existing at a past date without any allegation that the liability has since ceased, is presumed to be an acknowledgment of liability when the statement is made." If that is the correct deduction from the language used by the Privy Council, then that is amply sufficient to cover this case, and, speaking for myself, I cannot see why we should not draw the same deduction from that language. It may not necessarily always be that deduction to be drawn; but considering that the admission is one of the execution of a promissory note without any allegation that it has been discharged, I fail to see why a court cannot draw from such a statement the inference that the liability on the promissory note is still subsisting, still more so where as in the case before us for consideration the document, the contents of which are admitted by the deponent to be correct, shows payments endorsed of an amount which is not nearly sufficient to cover the principal and the interest which whouldhave accrued at the date when the statement was made.