OFFICIAL ASSIGNEE OF MADRAS REPRESENTING THE ESTATE OF R KASI VISVANADHA MUDALIAR Vs. VAKUPPUSWAMI NAIDU

JUDGEMENT

(1.) One Visvanadha Mudaliar, now deceased, a dealer in tobacco and the 1 defendant who is also doing business in tobacco purchased goods from him and eventually on account of such dealings and of a promissory note for Rs. 2450 on the 20 September, 1928 there was a sum of Rs. 6323-13-10 owing to Visvanadha Mudaliar on a balance of accounts. According to the account books of Visvanadha Mudaliar there was on the 20 September 1928 a settlement of accounts and a promissory note for the before-mentioned amount was executed by the 1st defendant in favour of Visvanadha Mudaliar payable on demand. It is necessary to mention also that the 2nd and 3 defendants were trustees appointed by Visvanadha Mudaliar under a deed of trust dated 23 August, 1928, under which Visvanadha Mudaliar himself and the 2nd and 3 defendants were to be trustees of this business for the purpose of realising the assets and outstand-ings of it. After this deed of trust the 2nd and 3 defendants enterted into possession of Visvanadha Mudaliar's estate and amongst the assets there was the debt due by the 1 defendant to Visvanatha Mudaliar of Rs. 2450 on the promissory note and certain sums were also due amounting to Rs. 3923-13-10. The 1 defendant paid to the trustees small sums of Rule 50 Rs. 30 and Rs. 20 and giving credit for those amounts the balance of Rs. 6323-13-10 became the amount due on the 20 September, 1928, as is shown in Visvanadha Mudaliar's account-book. After the execution of the promissory note the first defendant continued to pay towards the amount due by him instalments of Rs. 10. These payments are credited in Visvanadha Mudaliar's account-book and although some of the payments were of Rs. 20 instead of Rs. 10 and some were not made weekly in the majority of cases weekly payments were made. The last instalment paid, according to the account-book, is dated 29 June, 1929. These instalments amounted in the aggregate to Rs. 340 leaving therefore a balance due by the 1 defendant to Visvanadha Mudaliar of Rs. 5983-13-10 on the 29 June, 1929. On the 3 April, 1929 an insolvency petition was presented against Visvanadha Mudaliar and on it he was adjudicated an insolvent on the 22nd July, 1929. Thereafter his estate vested in the Official Assignee who on the 14 May, 1932 filed the suit under appeal claiming the sum of Rs. 5983-13-10 the balance due from the 1 defendant to the insolvent.

(2.) At the trial the 1 defendant admitted the execution of the promissory note and pleaded that he had discharged the promissory note by payment of the amount due to Visvanadha Mudaliar shortly after the execution of the promissory note. Thus there was no denial of the debt but a plea that it had been fully discharged. He also pleaded that the suit on the promissory note was barred by limitation; and taking the date of it, the suit on the promissory note clearly was barred. But in order to save limitation the plaintiff in his plaint set up an arrangement between Visvanadha Mudaliar and the 1 defendant whereby the promissory note amount was to be repaid by weekly payments and that the note was only to be enforced if there was -a default in such payments and that such payments had been made up to June 1929 and he also pleaded that a letter written by the 1 defendant's lawyer dated the 18th February, 1931 asking to be allowed to look into the accounts amounted to an acknowledgment of the claim by the 1 defendant, a plea which is obviously unsustainable. The plaintiff also pleaded that he was entitled to exclude the period between January, 1931 during which he was kept out of possession of the promissory note by the 1 defendant, that this was done fraudulently and that as a result for nearly ten months he was unable to file the suit. There is also a claim for negligence or breach of trust against the 2nd and 3 defendants trustees, another claim which is clearly unsustainable.

(3.) The learned trial Judge felt that he had no alternative but to dismiss the suit and that he was unable to hold that the plaint contained sufficient allegations to found a claim on the balance of account due irrespective of the promissory note and also that he would not allow the plaint to be amended to raise such a claim and whilst apparently - although this is not quite clear - agreeing that there was an arrangement for the payment of the debt of weekly instalments of Rs. 10 negatived the plaintiff's contention that the promissory note was only to become enforceable if and when there should be a default in the payment of the instalments. With regard to the latter arrangement we are satisfied that the learned trial Judge took the right view. There is no evidence at all supporting it. The promissory note itself does not set it out; on the contrary its terms contradict such an agreement because it is payable on demand. Therefore, the plaintiff's contention that the bar of limitation was saved by reason of such an arrrange-ment and that the period of limitation started to run only from the date of default, namely, June, 1929, rightly failed, With regard to the other part of the arrangement, namely, that the debt was to be paid by weekly instalments of Rs. 10 the learned trial Judge holds as a fact that such payments were being made by the first defendant under his liability to pay the balance of account and further says : "The balance of account was payable by instalments or at any rate was being paid by instalments". He does not definitely record a finding that there was such an arrangement although, in our view he may have intended to so find. There is, however, ample evidence on the record before us to enable us to give a definite opinion. The account book, as before stated, shows a large number of payments of Rs. 10 a week and in some cases Rs. 20 in a fortnight and there is also oral evidence with regard to this. In our view these payments were being made as a result of an agreement to do so. With regard to the contention of the plaintiff that the plaint sufficiently alleges a cause of action on the original debt, such contention was negatived by the learned trial Judge. In paragraph 6of the plaint that debt is set out as being made up of Rs. 2,450 and certain sums due on accounts amounting to Rs. 3,923-13-10. Nothing more is said thereafter about that debt except that in his prayer the plaintiff asks for a decree for the balance due. The promissory note and its origin are set out in paragraph 7 and throughout it is the one cause of action to which reference is made, and in paragraph 22 it is stated that the cause of action in this suit arose on the date on which the promissory-note was executed. Apart therefore, from the mention of the original debt, there is no further mention of it in the plaint except so far as it is included in the promissory-note amount. In our view, the plaint does not contain sufficient material upon which to found a claim upon any debt irrespective of that evidenced by the promissory-note. But this does not conclude the matter because we have still to consider whether the learned trial Judge was right in not allowing the plaint to be amended in order to raise such a claim. Before us a-number of cases were cited in support of the appellant's contention that an amendment ought to have been granted. The first of these was The E.B. Commercial Bank Ltd. V/s. Surendra Narayan Saha (1935) 39 C.W.N. 1235. In that case the claim in the plaint was based upon an insufficiently stamped promissory-note alone and a prayer for amendment so as to introduce a claim on the loan being refused and the suit dismissed, the High Court in First Appeal, allowed the amendment to be made and on such amendment decreed the claim, although at the date the amendment was prayed for in the trial Court the claim was already time-barred. This was done in accordance with the rule that in such circumstances amendment may be allowed in special cases were the defendant is not prejudiced, the defence in that case being a total |denial of the loan. In dealing with the question of the amendment, Derbyshire, C.J., says referring to Order 6, Rule 17, Civil Procedure Code: The difficulty lies in applying this rule where, as here, the defendant claims a time- bar under the Statute of Limitations. In Weldon V/s. Neal (1887) 19 Q.B.D. 394 Lord Esher said : "We must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments.... Under very peculiar circumstances the Court might perhaps have power to allow such an amendment, but certainly as a general rule it will not do so.