PERCY F FISHER Vs. ARDESHIR HORMASJI GAZDAR

JUDGEMENT

(1.) The plaintiff has filed this suit to recover from the 1 defendant the sum of Rs. 13,350 and interest for moneys lent and advanced to him at different times in 1920, and for an order for sale of certain shares alleged to have been pledged with him in or about January, 1922, as security for repayment of the loans advanced to him, and for other ancillary reliefs. The 1 defendant was adjudicated insolvent on November 22, 1933, and the Official Assignee is now on record as the 2nd defendant in the suit. He has appeared at the hearing and adopted the written statement of the 1 defendant who denies the loans and payments for interest, but says that moneys were paid by him to the plaintiff on account of the losses sustained by him on certain gambling and wagering transactions which, according to him, were carried on in the plaintiff's house. He denies the pledge and says that the shares, namely, 226 deferred ordinary shares and 236 preferred ordinary shares of the British Dye Stuffs Corporation, were entrusted by him to the plaintiff for sale in England in or about January, 1922, and have still remained unsold. In or about 1926 the British Dye Stuffs Corporation was amalgamated with other corporations in England, and the 1 defendant wanted to have the shares converted into shares of the new amalgamated company, but they could not be so converted unless 236 preference shares of the British Dye Stuffs Corporation which remained with him were also converted at the same time. He refused to hand these over to the plaintiff, and plaintiff refused to hand over the other shares to the 1 defendant unless the 1 defendant passed to him a receipt stating that the plaintiff held the shares in his possession as security for moneys advanced to the 1 defendant from time to time. Defendant has counterclaimed for the return of the shares which are still in the possession of the plaintiff.

(2.) Several issues were raised in the suit. The defendants, however, contend that the suit is barred by limitation, and the issue of limitation was tried as a preliminary issue. The loans having been advanced in 1920 and the alleged pledge being of January, 1922, this suit filed on May 13, 1929, is prima jade "barred, and it was for the plaintiff under the provisions of Order VII, Rule 6, of the Civil Procedure Code, to show the ground upon which exemption from limitation was claimed, so that the suit might still be within time. Certain payments are alleged in paragraph 3 of the plaint as payments to the. plaintiff by the 1 defendant in respect of interest as such, but these do not satisfy the requirements of Section 20 of the Indian Limitation Act, as they were admittedly not made before the expiration of the period of limitation. Counsel for the plaintiff next argued that he relied on all the payments specified in Ex. B to the plaint and also on the pledge for saving the bar of limitation, and he applied for amendment of the plaint accordingly. Counsel for the defendants objected, as the plaint and the written statement had both been filed more than five years ago, and the plaintiff was well aware that the 1 defendant had raised the defence of limitation. Under Order VI, Rule 17, however, the Court may, at any stage of the proceedings of a suit, allow a party to amend, and it has been held in Yakub Ibrahim V/s. Bai Rahimatbai that if the plaintiff has put forward one ground of exemption from limitation, he is not to be precluded from applying at the hearing to claim exemption on another and not inconsistent ground of exemption. In Gunnaji Bhawaji V/s. Makanji Khoosalchand (1908) I.L.R. 34 Bom. 250 the Appeal Court has gone even further and held that even if no ground of exemption from limitation is alleged, the plaintiff may still apply for an amendment of the plaint in order to show on what precise ground he contends that the suit is within time. The application was, therefore, allowed on certain terms as to payment of costs, and the amendments have accordingly been made.

(3.) Counsel for the defendants argued that on the facts as stated in the plaint, and assuming them for the sake of the argument on the issue of limitation to be true, the suit was still time-barred. The suit is for the recovery of the moneys alleged to have been advanced to the 1 defendant from time to time and also for realisation of the security given for the loans nearly two years later by sale of the shares which were pledged with the plaintiff and for a personal decree against defendant No. 1 in the event of a deficiency on such sale. A suit for the recovery of money secured by a pledge is really a suit for moneys lent and advanced, and it has been held in Yellappa V/s. Desayappa (1905) I.L.R. 30 Bom. 218 that a suit to recover a balance due after the sale of the pledged property is none the less a suit for money lent, even if the money claimed is secured by a pledge. If, therefore, the suit is one to recover the unpaid balance of a loan, the fact that moveable property has been pledged does not change the nature of the suit. The period of limitation for a suit to recover moneys lent and advanced is three years under Art. 57. When money is lent from time to time, limitation runs as regards each loan from the respective date of that loan. The loans were, according to the plaintiff, made at different times in 1920. A sum of Rs. 2,086 is credited to defendant No. 1 as of February 2, 1921, and the next payment of interest, which is specified in Ex. B, is of Rs. 75 on March 31, 1924, which is more than three years later. Accordingly, Section 20 of the Indian Limitation Act does not apply. Counsel for the plaintiff, however, relied on the alleged pledge in January, 1922, and argued that the giving of the pledge was an acknowledgment of liability on the part of defendant No. 1, and though Section 19 did not apply in terms as there was no acknowledgment in writing, he argued that the acknowledgment of liability was itself a cause of action, and the pledge in January 1922 helped to extend the period of limitation. He relied on Chunilal V/s. Laxman Govind (1921) I.L.R. 46 Bom. 24 but in that case the acknowledgment, which formed the basis of the suit, was in writing. No authority was cited to show that a subsequent pledge in 1922 is a new cause of action in relation to the personal claim for the loans alleged to have been advanced in 1920. In my opinion, neither the payments of interest nor the alleged pledge extend the period of limitation as regards the personal claim, and the same is therefore barred.