Sarju Sahu and others vs Sukhi Lal awl others Sukhi Lal awl others Vs Sarju Sahu and others

Jwala Prasad, J.—This appeal is directed against the decree passed by the Subordinate Judge of Patna dated the 14th March 1921, in a suit brought by the plaintiff to recover Rs. 500 with interest at Rs. 1-8-0 per cent per mensem from 11th April 1916, on the foot of the document Exhibit I dated the 11th April, 1916. The defendants are appellants. The only point urged by the learned Vakil on their behalf is that the claim of the plaintiff with respect to Rs. 207-5-6 was barred by limitation. That sum represents the amount which was found due from the defendants to the plaintiff upon an adjustment of account of the dealings between the parties. The adjustment took place on the 8th Chait Suit 1973 (Sambat) corresponding to the 11th April, 1916. (8th Chait corresponds to two days 10th and 11th April). The suit was instituted on the 8th April 1919, that is, within three years from the adjustment of accounts. The learned Vakil on behalf of the appellants contends that the time should be computed from 6th Chait 1973, corresponding to 8th April, 1916 when the last item on the credit side is shown in the account books. In that case the suit will be barred by one day inasmuch as it ought to have been filed on the 7th. The learned Subordinate Judge over ruled this contention on the ground stated by him that the said sum of Rs. 107-5-6 found due from the defendants merged itself into the sum of Rs. 500 with respect to which the aforesaid document (Exhibit 1) was found executed by the defendants on the 11th April 1916, and, therefore, there was a new agreement by the defendants to pay Rs. 500 taken by the defendants, a part of it Rs. 207 odd in satisfaction of the prior dues and the balance of Rs. 292-10-6 taken in cash. The evidence in this case was that only Rs. 2i)2-10-6 was paid in cash when the document in question was executed and the balance represented the plaintiff''s dues under the bahi khata account. There is no mention of the dues in the bahi khata account in the document in question and consequently that transaction was wiped off and converted into a new transaction in respect to which the document (Exhibit 1) was executed. Therefore, we agree with the view taken by the learned Subordinate Judge that the document (Exhibit 1) created new obligation upon the part of the defendants to pay the said sum as mentioned therein and the entire sum is, therefore, recoverable on the basis of the said document. The previous transaction between the parties and the sum due thereunder was only used in the case as evidence of how the consideration of Rs. 500 was paid to the defendants. Admittedly the suit as based on the document is not barred and, therefore, the appellants contention must fail. The appeal must, therefore, be dismissed with costs.

The respondents, however, have filed a cross-objection. It relates to the interest which the learned Subordinate Judge has disallowed to them in his partial decree. It is contended on their behalf that the document in question was a negotiable instrument and consequently under S. 80 of the Negotiable Instruments Act the Court below should have at least given interest at the rate of 6 per cent per annum. The document in question, however, is not a Negotiable Instrument It is not a promissory note under S. 4 of the Negotiable Instruments Act, inasmuch as there is no unconditional term to pay a fixed sum of money. The document is in the shape of a request to the plaintiff to pay the defendants Rs. 500 which the defendants would pay with interest. his was, therefore, a conditional contract. The liability was upon the defendants after an advance of Rs. 500 was made by the plaintiff. No doubt the payment has been proved and the liability under the document is clear; but the document as executed is not an unconditional contract and is, therefore, not a promissory note under the Negotiable Instruments Act. Therefore, the contention put forward on behalf of the plaintiff respondent must be overruled.

It is then said that they should have been allowed interest at the rate of 1 1/2 per cent per mensem. The document says.

I shall pay the principal with interest at the rate of 1-8-0 per cent.

It is not mentioned there as to whether the rate of interest aforesaid will be per mensem or per annum. The document is, therefore, ambiguous and under Clause 6 of S. 92 of the Evidence Act no evidence could be given to clear up that ambiguity as held in Protap Chandra Saha v. Mohamed Ali [1913] 41 Cal. 342 - 18 C.W.N. 592 - 9 C.L.J. 66 - 20 I.C. 443 Therefore, the appellants are not entitled to interest at the rate of 1 per cent as claimed by them. That case was with respect to agricultural holding and the claim was based upon a lease in which the rate of interest mentioned one anna per rupee, but the other specification of whether monthly or annual was not mentioned and, therefore, Sir Lawrence Jenkins, C. J., held that there was a blank left as to whether the interest was per annum or per mensem and under Clause 6 of S. 92 of the Evidence Act no evidence could be given to clear up what that blank meant. The Court in that case held that for arrears of agricultural holdings no interest was allowable but damages, and, therefore, the Subordinate Judge in that case allowed damages at the rate of 25 per cent and that was upheld by Sir Lawrence Jenkins, C. J. We are not dealing with the case for arrears of rent due from agricultural holdings but with a contract to repay the money taken as loan and, in the absence of any contract to the contrary, the Interest Act of 1839 would apply. Under S. 1 of the Act the plaintiffs are entitled to interest at a rate not exceeding the current rate of interest. In this case no time was fixed for the payment of the loan in the document (Exhibit No. 1) and, therefore, under the Interest Act the plaintiffs are entitled to interest at the rate not exceeding the current rate of interest from the date of demand. The money was demanded on the 8th March 1919 by a registered notice and the plaintiffs are, therefore, entitled to interest from that date at the rate of 6 per cent, per annum.

The cross appeal is, therefore, allowed to that extent without costs. The result is that the decree of the Court below is modified by allowing interest at the rate of six per cent, per annum from the 8th March, 1919, up to the date of realisation.

Ross, J.

I agree.