Baijnath Soti vs Bihari Ram, Sham Lal

Agarwala, J.—On 29th June 1919, the plaintiff''s father deposited Rs. 521 with the defendant firm, the amount being payable on demand with interest at 12 annas par cent per mensem. On 15th September 1924 an account was struck between the parties when Rs. 817 was found due from the defendant firm. On that day the defendant firm executed a hat-chitha for this amount in favour of the plaintiff and subsequently they paid Rs. 158 towards interest in various sums. The plaintiff instituted the present suit on 26th February 1929 claiming Rs. 999-15-3 by way of principal and interest. The defendant firm admitted the original deposit and also the execution of the hat-chitha, but contended that the interest agreed upon was simple and not compound as claimed by the plaintiff and, moreover, that on 5th March 1926, the plaintiff had demanded repayment of the debt and that in consequence of this demand Rs. 500 had been repaid.

Both the Courts below have found that there was an agreement to pay compound interest and that finding cannot be disturbed in second appeal.

The first Court decreed the plaintiff''s suit. In appeal the lower appellate Court agreed with the findings of the first Court, but held that the suit was time barred because the last payment made by the defendant was of Rs. 100 on 5th February 1926, which was more than three years from the date of the institution of the suit, and because the Court held that no demand had been made within three years of suit.

It has however been pointed out by the learned advocate for the appellant that the defendant admitted in para. 3 of the written statement that the plaintiff made a demand for the money on 8th Chait 1932 Sambat, corresponding to 5th March 1926, which was within three years of suit. The learned advocate for the respondent argues that this is only a part of the admission made by the defendant and that the admission in para. 3 should be taken as a whole. In para. 3 of the written statement the defendant states that there was this demand and that in consequence of it Rs. 500 was paid to the plaintiff. Now the only reason given by the Courts below for disbelieving the payment of Rs. 500 was that this sum was not mentioned in the hat-chitha although other payments of similar amounts had been entered therein. The lower appellate Court appears to have lost sight of the fact that the payment of Rs. 500 was in 1926 whereas the hat-chita had been executed in 1924.

The finding of both Courts however that Rs. 500 was not repaid is a finding of fact which cannot be disturbed in second appeal.

There is however no finding that there was no demand on the date stated by the defendant firm. The statement in para. 3 of the written statement is unambiguous on this point and I see no reason why it should not be accepted. Furthermore the learned advocate for the appellant relies on the observations; of Rao, J., in Ammakannammal and Another Vs. V.K. Damodara Mudaliar and Others, (of 92 I.C.) where his Lordship says:

To take another instance from the Limitation Act, under Article 60 the period of limitation for a suit to recover money deposited under an agreement that it shall be payable on demand, is three years from the date when the demand is made. The making of the demand is entirely dependent upon the volition of the plaintiff and the period of limitation may be indefinitely prolonged and a suit may be instituted without even a demand being made, in which case no question of limitation arises.

It is true that this observation is obiter dictum, but there is nothing in Article 60 or in the argument which has been addressed to mo which leads me to doubt the correctness of the pronouncement, nor has it been contended that Article 60 is not the Article that is applicable to the facts of the present case. Therefore whether there was a demand in March 1926, or not, the suit was not barred by limitation. The result therefore is that the decree of the Court below must be set aside and the suit decreed with costs to the plaintiff throughout.