Ajmira Desai vs Madanlal

Jaganmohan Reddy, J.—This is a second appeal in execution proceedings; against the concurrent orders of the lower Courts rejecting the objection of the judgment-debtor that the execution petition of 3rd Isfandar 1359-P is barred by limitation. The Respondent (decree-holder) obtained a decree against the judgment-debtor'' (Appellant) on 31st Shehrewar 1352. There-alter, an execution petition was tiled, but was dismissed on 27-2-53 with this endorsement that "the judgment-debtor had paid one instalment and the same be paid to the decree-holder. Execution petition dismissed in part satisfaction, of the decree and his do form part of the original E.P." The decree-holder alleged that out of a sum of Rs. 157-3-11 due towards interest, an amount of Rs. 56-4-0 including Rs. 31-4-0 credited towards wood ''chobina'' given to him on this account on 20th Isfandar 1354 P. and Rs. 25/-cash paid on 18-2-57 P. was paid. In all, a sum of Rs. 334-6-10 was due.

The Respondent further alleged that he had approached the judgment-debtor and demanded payment at any rate of interest and in compliance with this demand, the Respondent (judgment-debtor) agreed to pay in kind the interest and fixed the value of the goods at Rs. 31-4-0 which was appropriated to the credit of the judgment-debtor Similarly the amount of Rs. 25/- was also paid towards interest the execution Court after taking evidence held that the sum of Rs. 31-4-0 and Rs. 25/- were paid towards interest in pursuance of the undertaking given by the judgment-debtor. In appeal this finding of fact was also confirmed and the execution petition was held to be within time. The learned Advocate for the Appellant submits that for purposes of Section 20, Limitation Act, before any amounts can be credited as being the value of goods delivered towards the debt, there should be a prior agreement; between the judgment-debtor and the decree-holder that there will be a payment in kind. In support of this proposition, he has cited the cases of--''Bhutnath Debi v. Sashimukhi Brahmin AIR 1926 Cal 1042 (A);--Mylam v. Anndyi Madan 29 Mad 234 (B) and--Kollipara Pullamma v. Maddulla Tatayya 19 Mad 340 (C). Taking the case of 19 Mad 340 (C) first, it will be seen that it is against, the proposition submitted by the learned advocate for the Appellant. In that case Sir Arthur Collins, C J. & Benson, J. relying on--Amos v. Smith (1862) 1 H & C 238 (D)--Maber v. Maber (1807) LR 2 Ex 153 (E) and--Hart v. Nash (1335) 2 Cr M & R 337 (F) observed:

The broad rule deducible from those cases seems to be that though the payment need not be in money, but may be in goods, or even by a settlement of account between the parties, yet the payment must be of such a nature that it would be answer in a suit brought by the Plaintiff to recover the amount.

In ''29 Mad 234 (B) no question of the nature under consideration arose. In that case there was an agreement between the debtor and the creditor whereby the creditor was to take possession of the land and take the produce as interest on the amount due to him under the promissory note. That is not a case where it was decided that an agreement is necessary be-forehand for payment in kind. In the case of ''AIR 1926 Cal 1042 (A)'' all the amounts were paid in cash except one where paddy was delivered and the value of it was credited. The question that arose for determination was whether all these amounts were in fact paid. The learned Judges held that the books of account were fabricated and in fact the finding of the lower Courts that no amounts have been proved to be paid towards interest was justified. It was further held that if was well established that payments within the meaning of Section 20, Limitation Act need not be in cash or currency. Page, J., however, observed that if there was to be a payment in kind the party alleging that the payment was made must prove that there was an agreement between the parties that it may be made in that particular manner. The basis of Page, J.''s judgment was that the finding of the lower Court that there was no payment on 17-1-1952 which related to the paddy was correct inasmuch as the witnesses were disbelieved. In view of this finding, the observations in my view are obiter. There is nothing in Section 20, Limitation Act which postulates a prior agreement before payment in kind may be made.

The Privy Council in the case of--Sukhamoni v. Ishan Chunder 25 Ind App 95 at P. 101 (G) clearly laid down that Section 20, Limitation Act which permits a new starting point of time when interest on a debt is paid by a person liable to pay the debt or by his agent, does not specify any particular mode or form of payment and there are many modes in which payment may be made. Similarly in the cases of-- Kandaswami Mudaliar Vs. Thevammal, and-- Prafulla Chandra Nag Vs. Jatindra Nath Kar, , payments of interest by means of a promissory note and cheque were held to be good payments. It is now well established that where the debtor expressly states at the time of payment that it is towards interest or that it is for the amount so paid it can be treated as payment towards interest within the meaning of Section 20. In--National Bank of Upper India Ltd. v. Bansidhar AIR 1929 PC 297 (J), it was held that where a bank issued notices for interest due from its customers, the payment, by the debtor of a lump sum to the bank followed by allocation by the bank of the amounts towards interest and the subsequent credit entries by the debtor in his accounts towards payment of interest was payment towards interest saving limitation under the section.

The principle that the intention of the debtor may be proved not only by the statements made by him at the time of the payment but in any other manner as would appear from the circumstances of the case has again been confirmed by the case of--Rama Shah v. Lal Chand AIR 1940 PC 63 (K). From the facts as found in this case by the two lower courts, it is clear beyond doubt that the intention of the judgment-debtor was to have the value of the wood i.e., Rs. 31-4-0 credited towards payment of interest and that the same was in fact so appropriated by the Respondent. In these circumstances, limitation is saved u/s 20, Limitation Act. There is, therefore, no substance in the appeal and it is consequently dismissed with costs.