RANGASAMI AIYANGAR Vs. SOMASUNDARAM CHETTIAR

JUDGEMENT

(1.) THE defendant is the appellant. THE suit was brought upon oral agreement entered into between the parties on or about the 18 May, 1925, by which the defendant agreed to pay Rs. 55 to the plaintiff in satisfaction of his liability to the plaintiff under a promissory note which had been executed in plaintiff's favour by the defendant and some others jointly on the 31 July, 1915, for Rs. 300. THE plaintiff's case is that the executants of the promissory note including the defendant made several payments towards the amount due on the note and after giving credit for such payments there remained some balance due to the plaintiff and that four of the executants of the note agreed each to pay a certain amount to the plaintiff severally in discharge of their joint debt and that in accordance with such arrangement the defendant promised to pay the plaintiff Rs. 55 the suit amount. THE defendant in his pleadings denied the oral agreement as true. He contended also that, even if proved, it was invalid under Section 25 of the Indian Contract Act as the debt due under the prior promissory note was barred by limitation and therefore the agreement by the defendant to pay a barred debt will be valid only if it is in writing. THE learned District Munsif found the oral agreement sued on was true. He also found that the defendant's liability under the prior promissory note Ex. A was not barred by limitation and upon this finding he gave a decree for the plaintiff for the amount claimed. In this petition both the findings are contested by the defendant. As regards the factum of the agreement it is a question of fact and the finding of the District Munsif cannot be questioned in this petition. THE only point which is pressed on his behalf is that so far as the defendant is concerned the prior promissory note had become barred by limitation and that therefore the oral agreement which is sued on is not enforceable having regard to Section 25 of the Contract Act. THE prior promissory note is Ex. A, dated the 31 July, 1915. It was executed by six persons of whom the defendant is one, being the second executant of the promissory note. THEre are three endorsements of part-payments made on the promissory note. THE 1 is dated 12 June, 1916, and it evidences a payment of Rs. 250. That payment was by Ramaswamy Dikshitar, the first of the executants. THE 2nd endorsement is dated the 11 June, 1919, for the payment of Rs. 2 and it is signed by another executant Venkataramana Aiyar. THE third endorsement which is dated the 24 May, 1922 was for a payment of Rs. 5 towards interest and it was signed by the defendant and three others. It will be seen that each of the successive endorsements was made within the period of limitation prescribed for a suit on the note and that the oral agreement on which the present suit is brought was made within three years from the date of the last endorsement on the note. THE contention which is urged on behalf of the defendant is that the prior endorsements made on the note (A-l and A-2) which were not made by the defendant but by some of his co-obligors cannot operate as against him to save the promissory note from the bar of limitation either under Section 19 or Section 20 of the Limitation Act, and his own endorsement of payment of interest having been made long after the period of limitation for a suit on the note had expired, does not fulfil the requirements of those sections and cannot therefore save limitation as against him. THE District Munsif overruled that plea and in my opinion he was right in doing so. Under Secs.19 and 20 of the Limitation Act, part-payment or acknowledgment of a debt must, in order to save the debt from limitation, be made by the person liable to pay the debt or by his agent duly authorised in this behalf. Section 21 further provides that nothing in Secs.19 and 20 shall render one of several joint contractors chargeable by reason only of a written acknowledgment signed or of a payment made by or the agent of, any other or others of them. Where nothing more appears than that one of several co-obligors has made a payment, or an acknowledgment of liability, such payment or acknowledgment will not save limitation against the other obligors of the debt. It has to be shown that he made such payment or acknowledgment not only on behalf of himself but also as the duly authorised agent of his co-obligors. Such authority however need not be express; it may be inferred from the conduct of several co-obligors. In this case there were three successive endorsements. THE 2nd endorsement A-2 was made more than three years after the date of the pro-note and at a time when in the absence of authority on the part of the co-obligor who made the first payment the suit as against the rest would be barred. It must be held that the person who made a second endorsement did by his conduct ratify the prior payment of Rs. 250 which had already been made and the payment of which was endorsed on the pro-note on the 12 June, 1916. So also when the 3 endorsement was made on 24 May, 1922, by the four executants including the defendant, the only reasonable inference to be drawn from their conduct is that they held themselves as still bound under the promissory note by reason of the two prior endorsements evidencing part payments which had already been made to the plaintiff therefor. Of the four persons who have signed the endorsement A-3, Ramaswami Dikshatar had made the first payment which was endorsed on the 12 June, 1916, and another namely Venkataramana Aiyar made the second payment which was endorsed on the 11 June, 1919, and the defendant and another for the first time signed in the last endorsement A-3 which purports to be for payment of interest. On these facts it must be held that the defendant and the other co-obligor who for the first time made a payment for interest and signed the endorsement A-3 adopted the previous payments as made on their behalf also; the persons who made those payments and endorsed them on the note must be held therefore to have been duly authorised in that behalf by the defendant for the purposes of Secs.19 and 20. In a similar case it was so held by Hannay, J., see Annamalai Pattar v. Natesa Aiyar (1914) M.W.N. 792. I am therefore of opinion that as against the defendant the promissory note Ex. A was not barred at the date of the oral agreement on which the suit is brought. It follows therefore that the oral agreement is not void under Section 25 of the Indian Contract Act.

(2.) THE applicant wants to raise a new ground, namely, that the oral agreement sued on cannot be set up as it amounts to a variation of the written contract embodied in Ex. A and as proof of such agreement effected only orally is barred under Section 91 of the Evidence Act. This point was not raised either in the lower court or even in the grounds of the application and it is raised for the first time now. THE plaintiff's case is that the joint and several liability of the executants under the promissory note for the balance due on it was split up with the consent of all parties into a several liability on the part of each of the executants to the plaintiff. I do not see how this arrangement is obnoxious to Section 91 of the Evidence Act. Further I am not prepared even if the point is arguable to allow the plaintiff to raise such a technical plea for the first time at this stage of the case. THE application is dismissed with costs.