Amirjan Saheb vs Syed Khader

N.S. Ramaswami, J.—The plaintiff is the appellant. The suit out of which this second appeal arises is one on a promissory note admittedly

executed by the defendant in favour of the plaintiff, Ex. A-1 D/- 6-4-1966, is the promissory note for a sum of Rs. 1250 so executed. Admittedly

this amount represents part of the consideration detained by the defendant in respect of a land purchased by him from the plaintiff. On the same

date, namely 6-4-1966, when the promissory note was executed there was an agreement between the parties as per Ex. B-1. That shows that the

parties contemplated that there would be litigation regarding the title to the property as the Wakf Board was likely to claim the same to be its

property and therefore out of the total consideration of Rs. 4500 a sum of Rs. 1250 was left with the defendant, namely the purchaser himself, so

that the said amount could be spent for litigation expenses. The agreement provides that if any litigation starts within five years of transaction dated

6-4-1966, the expenses towards the same have to be met from out of the said sum of Rs. 1250 (and the plaintiff) would be entitled only to the

balance ii any after meeting the litigation expenses. There is also provision in the agreement that if no litigation is commenced disputing the title to

the property within five years, the plaintiff would be entitled to the entire promissory note amount and that if any litigation starts after the period of

five years it was the lookout of the defendant himself to meet the litigation expenses. There is the further provision that the defendant should keep

the promissory note alive by making payment before the expiry of three years.

Ex. A-3 dated 13-9-1968 is an endorsement admittedly made by the defendant on the promissory note paying a sum of Rs. 50 towards the

same. This is in accordance with the terms of the agreement, Ex. B1.

The plaintiff filed the suit on the promissory note claiming the entire amount as per the promissory note less the sum of Rs. 50 paid under Ex.

A.3. The defendant contended that the Wakf Board has filed a suit claiming title to the property which was sold by the plaintiff to the defendant

and that therefore the promissory note must be held to have been discharged. He also contended that, in any event, the suit is premature.

These contentions were not accept-ed by the trial Court because it was of the view that there was no suit filed by the Wakf Board in respect of

the property sold by the plaintiff to the defendant.

On appeal by the defendant, the lower appellate Court has found that the Wakf Board has in fact filed a suit claiming title to the property sold

by the plaintiff to the defendant and that therefore the suit is premature.

Ex. B.3 dated 8-2-1971, is a copy of the plaint in O. S. No. 256 of 1971, on the file of the trial Court. That is a suit instituted by the Wakf

Board against the present defendant. The lower appellate Court has pointed out that the subject-matter of this suit included the property sold by

the plaintiff to the defendant. This finding is not challenged before me by the plaintiff who has filed the second appeal. Therefore, the question is

whether the suit is premature as held by the lower appellate Court.

Mr. G. Jagadisa Iyer, learned counsel for the plaintiff-appellant contended that the promissory note, though contains the endorsement Ex. A.3,

which is an acknowledgment made by the defendant, was getting time barred when the suit was filed and under such circumstances, the lower

appellate Court is wrong in its view that the suit is premature. The view taken by the lower appellate Court is that because of Ex. B.1, agreement

between the parties, the time for payment of the amount under the promissory note has been postponed and therefore even though as an ordinary

promissory note it would get time barred within a few days after the date on which the present suit was filed, it would not be so time barred

inasmuch as time for payment had been postponed by a collateral agreement, namely, Ex. B.1. The decision of this Court reported in Manda

Subbamma and Another Vs. Karri Venkanna, has been relied upon by the lower appellate Court.

The contention of Mr. Jagdisa Iyer, learned counsel, is that that decision was rendered because of Article 80 of the Limitation Act of 1908 and

that the said decision would not be applicable now because, according to the learned counsel, Article 80 in the earlier Act has been omitted in the

Limitation Act of 1963 and there is no corresponding provision now. This contention is incorrect. Article 80 of the former Act said that in respect

of a suit on a bill of exchange, promissory note or bond, not expressly provided for, the three year period of limitation would begin to run when the

bill, note or bond becomes payable. If this Article is applicable then undoubtedly the present suit must be held to be premature, for the contention

that the promissory note was getting time barred and therefore the plaintiff was forced to file a suit would not be available. As already seen, Ex. B1

is a collateral agreement executed on the same day as the promissory note and that contemplates the promissory note amount being spent for the

litigation. The litigation having been started within five years as mentioned in the agreement, before ever the same comes to an end, there is no

knowing whether there would be any balance left out of the sum of Rs. 1250, after meeting the litigation expenses. Under these circumstances,

surely on the data when the present suit was filed, no amount had become payable.

That means the promissory note would not be time barred and the plaintiff need not have rushed to court saying otherwise the suit would be time

barred.

It is true that Article 80 of the former Act has been omitted in the Act of 1963. But it is incorrect to say that there is no corresponding

provision and that in spite of Ex B 1, the suit would be barred by limitation within three years of the date of Ex. A.3 (acknowledgment) and on that

score it must be held that the suit is not premature. In the objects and reasons to the Limitation Act, 1963, dealing with notes on clauses it is

pointed out that some of the Articles which may be conveniently omitted in favour of the residuary entry have been omitted and one such Article so

omitted in favour of the residuary entry, namely, Article 113 of the new Act would certainly cover a suit of the present type. No doubt, that Article

is the one corresponding to Article 120 of the former Act. Even though this Article does not specifically refer to suits on promissory note, bill of

exchange or bond, it can certainly be invoked in cases as the present one. The Article is general, in that any suit for which no period of limitation is

provided elsewhere the period of limitation is three years and from the date when the righ to sue accrues. In the present case undoubtedly when the

suit was filed, a right to sue had not accrued. It is not the case of the plaintiff that when he filed the present suit the litigation start ed by the Wakf

Board had come to an end and after meeting the litigation expenses there was any balance left in the hands of the defendant.

Under the above circumstances, the view taken by the lower appellate court that the suit is premature is therefore correct. The second appeal

fails and is accordingly dismissed. No costs.

My thanks are due to Mr. V. Venktaraman for having acted as amicus curiae in this case. The appellant to pay the court-fee.