A. Gopala Aiyar vs Ramaswamy Sastrigal

The District Judge has found a personal agreement by the defendant with the plaintiff to pay certain debts owing by the plaintiff. The plaintiff has

paid these debts-The date of the agreement was January 15th, 1898, and the suit was instituted on December 5th, 1904. The question is: Is the

plaintiff''s claim to recover under the agreement in respect of the debts paid within three years from the institution of the suit barred by the law of

limitation?

The contention on behalf of the plaintiff was that his cause of action arose on the dates of payment of the several debts, which the defendant had

agreed to pay. The defendant''s contention was that the plaintiff''s cause of action arose on the repudiation of his liability under the contract by the

defendant, or on the breach of the contract by the defendant, the breach to be deemed to have occurred on the expiry of a reasonable time from

the date of the contract (Section 49 of the Indian Contract Act.)

The District Judge finds against the fact of the alleged repudiation, but assuming the defendant repudiated his agreement more than three years

before the institution of this suit, we are of opinion that time would not begin to run as against the plaintiff from the date of the repudiation of the

agreement by the defendant.

u/s 39 of the Indian Contract Act which embodies the principle of law enunciated in Hochster v. De La Tour (1853) 2 E. & B. 678. and Frost

v. Knight (1872) L.R. 7 Ex. 111 the promisee may put an end to the contract. He is not bound to. If he is entitled to treat the contract as

subsisting, and he does treat it as subsisting, it is clear that no cause of action arises on the repudiation of the contract by the promisor. See

Subbaraya Reddi v. Manicka Goundan (1911) M.W.N. 265.

The plaintiff''s answer to the defendant''s second contention is that his cause of action was not the defendant''s failure to fulfil his contract, but the

fact that he had discharged a liability, which the defendant had agreed to discharge. The allegation in the plaint is that the creditors pressed the

plaintiff, and some of them sued him. This does not seem to be denied in the written statement, but there was no issue on the question and there is

no finding that the payment was otherwise than voluntary.

If the payment was voluntary we do not think the case comes within the principle of the decision in Kumar Nath Bhattacharjee v. Nobo Kumar

Bhattacharjee ILR (1898) C 241 where the suit was for contribution under an agreement in respect of a debt which had been realised by the sale

of the plaintiff''s property. In Dorasinga Tevar v. Arunachalam Chetti ILR (1899) M. 441 the defendant agreed to discharge a debt due by the

plaintiff to a third party and to pay the plaintiff any damage he might sustain if the defendant tailed to discharge the debt. No time was fixed for the

performance of the contract. The defendant having failed to discharge the debt for nearly three years, it was held he was bound to do so within a

reasonable time, and that his failure to do so during the three years was a breach of his contract, not with-standing that the third party had not

enforced his claim against the plaintiff.

In the present case the plaintiff must show a breach of con-tract by the defendant. The fact that he himself paid the debts, in itself, in our opinion,

gives him no cause of action. If he paid them before the expiry of a reasonable time after the agreement, the defence would have been open to the

defendant that he had not had reasonable time to fulfil his contract, and that he had consequently not broken his contract. If the plain-tiff waited till

the expiry of a reasonable time the defendant''s breach of contract would give him a cause of action, whether he himself paid the debts or not. See

Dorasinga Tevar v. Arunachalam Chetti ILR (1899) M. 441. The question as to what is a reasonable time is a question of fact-Contract Act,

Section 40. In Dorasinga Tevar v. Arunachalam Chetti ILR (1899) M. 441 the court held a defendant, who had failed to fulfil a contract similar to

this for nearly three years, had failed to do so within a reasonable time.

8.We do not think it can be put more favourably to the plaintiff than to say that the reasonable time in this case is three years. We hold, therefore,

that the defendant''s contract was broken on the expiry of three years from the date of the agreement, i.e., on January 15th, 1898, and that the

plaintiffs right to recover became time-barred on the expiry of three years from January 15th, 1901,i.e, on January 15th, 1904.

The result is, the appeal is allowed and the plaintiff''s suit is dismissed with costs throughout.