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1949 DIGILAW 58 (SC)

NAGARMAL v. BAJRANGLAL

1949-11-14

LORD RADCLIFFE, LORD SIMONDS, SIR LIONEL LEACH

body1949
Judgement Appeal (No. 8 of 1947) from a judgment and decree of the High Court (February 8, 1944) which modified a judgment and decree of the court of the Subordinate Judge of Sambalpur (November 9, 1938). The respondents (plaintiffs) were members of a joint Hindu trading family, their firm being known as Thanduram Bajranglal. The appellants (defendants) had a joint family firm named Ramanand Ganpatrai, which had dealings with the respondents firm which was supplying them with rice and cash. On November 8, 1934, there was a statement of account between the two firms whereby a sum of Rs. 33,307.9.3 was found to be due to the respondents firm from the appellants firm. The latter being unable to pay that sum, Nagarmal, who was the manager of the appellants family and the managing partner of the appellants firm, on November 8, 1934, executed on behalf of his firm a hand note in favour of the respondents firm. Only a small part of the sum due thereunder having been paid by the appellants firm, the respondents, on September 30, 1937, brought the suit out of which this appeal arose and claimed a decree for Rs. 36,965 against the appellants jointly, with costs and future interest. The appellants filed two written statements, one by Nagarmal and the other by Mahabir Prasad and Satyanarayan, his nephews. The defence of Nagarmal was, inter alia, that the respondents firm had no cause of action and that the suit was not maintainable. The defence of the nephews was, inter alia, that any sum due to the respondents firm had become barred by limitation before November 8, 1934, the date of the hand note, and that the acknowledgment of a barred debt by Nagarmal was not binding on them. The Subordinate Judge, Sambalpur, decreed the respondents suit in full, awarding costs and future interest at the rate of six per pent, per annum. On appeal by the appellants the High Court (Fazl Ali C.J. and Reuben J.) affirmed the judgment and decree of the Subordinate Judge with a modification as regards the interest. 1949. Oct. 17, 18. Pringle K.C. and Bagram for the appellants. Rewacastle K.C. and Subha Row for the respondents. Nov. 14. The judgment of their Lordships was delivered by LORD SIMONDS. 1949. Oct. 17, 18. Pringle K.C. and Bagram for the appellants. Rewacastle K.C. and Subha Row for the respondents. Nov. 14. The judgment of their Lordships was delivered by LORD SIMONDS. This appeal is brought from a judgment and the decree of the High Court of Judicature at Patna of February 8, 1944, which affirmed (save for a certain modification in regard to interest) a judgment and decree of the Subordinate Judge of Sambalpur of November 9, 1938. At all relevant times the appellants carried on business as traders at Sambalpur as a Hindu joint family under the name and style of Ramanand Ganpatrai. The first appellant was the managing member the second and third appellants are his nephews and the fourth appellant is the son of the third appellant. The respondents are the sons and heirs of one Thanduram, who was first plaintiff in the proceedings out of which this appeal arises but has since died. At all relevant times these three persons carried on business as a Hindu joint family as dealers in rice and moneylenders at Sambalpur under the name and style of Thanduram Bajranglal. It is not disputed that between these two firms there had been, before November 8, 1934, a course of commercial transactions, nor is it now disputed that on that date the first appellant, as manager, purported to sign a hand note in the following terms— "Sri Ganeshji. "From the good place Sambalpur "I am writing to brother Thanduramji Bajrang Lal from Sambalpur. Compliments of Ramanand Ganpat Rai. On adjustment of account Rs. 33.307,9,3 (Rupees Thirty-three thousand three hundred and seven, annas nine and pies three) is due to you till Kartik Sudi 1, 1991. I shall pay you the money when you demand it. Dated the Kartik Sudi 1, 1991 Sambat. “On 4 one-anna Revenue Stamps "Sd. Ramanand Ganpatrai, "By the pen of Nagarmal" Nor, though at an earlier stage in the proceedings it was contended that at the date of the hand note, the appellants other than the first appellant had for many years been living and messing separately from him and that for that reason the hand note did not bind them, are its validity and binding effect challenged except on the single ground that the hand note was given in respect of debts which were already barred by the law of limitations. It is clear that this plea cannot avail the first appellant who himself signed the note. This was conceded by learned counsel for the appellants. On the other hand, it appears to be well-established law that a manager as such is not competent to bind the other members of a joint family by a promise to pay a debt already statute-barred. If, therefore, the appellants other than the first appellant were able to prove that the hand note had been given in respect of such debts, it appears that they would not be liable on it. By a pleaders letter of December 24, 1936, the respondents demanded payment of the sum alleged to be then due from the appellants and, that letter being unanswered, on September 30, 1937, filed their suit, claiming the principal sum of Rs. 33,307 and interest Bs. 3,651, together with future interest. The learned Subordinate Judge found in favour of the respondents and made an order against all the appellants for the full amount claimed together with future interest at 6 per cent, per annum. It seems that, owing to what can only have been an oversight, the order did not provide for any interest pendente lite. On what is now the only question outstanding in regard to the principal sum due on the note, the learned judge held against the appellants that there was "no definite evidence on their side to establish, that the dues " were time-barred. " This finding of fact, if it is sustained, is sufficient to dispose of the case, and their Lordships do not think it necessary further to examine the reasoning of the learned judge in which he holds that, even if the debts were time-barred, the first appellant had general authority to bind the other members of the family. The appellants appealed to the High Court at Patna and that court, while affirming the decision of the Subordinate Judge proceeded on somewhat different grounds. Reuben J., after pointing out that " the last real transaction between the parties immediately preceding November 8, 1934, " was a loan of Rs. 472-7-6 on May 27, 1931, found on an examination of the books of the respondents that there had been an annual adjustment of accounts between the firms and that the balance due from the appellants was carried forward in each year after adding to it the interest accumulated thereon. 472-7-6 on May 27, 1931, found on an examination of the books of the respondents that there had been an annual adjustment of accounts between the firms and that the balance due from the appellants was carried forward in each year after adding to it the interest accumulated thereon. He held that the proper inference to be drawn from the circumstances was that the first appellant, though he did not sign the accounts, was a party and assented to the adjustment, and accordingly the debt, even if it would otherwise have become statute-barred, was by acknowledgment kept alive against all the members of the family. Their Lordships do not dissent from the view that a manager has general authority to keep alive by acknowledgment a debt which is not yet statute-barred. But it appears to them that it is difficult to apply this principle unless the acknowledgment is such as to satisfy the conditions of s. 19 of the Limitation Act. It must be in writing and it must be signed. These conditions were not in the present case satisfied. Their Lordships are accordingly of opinion that the judgment of the High Court cannot, so far as it rests on this ground, be upheld. It is necessary, then, to return to the judgment of the Subordinate Judge. The other defences, to which it is not necessary to refer, failing them, it was incumbent on the appellants other than the first appellant to prove that the hand note given by him did not bind them because it was given in respect of debts then statute-barred. The appellants were in error in contending that it was for the respondents to prove the contrary. Prima facie they were liable in the suit in respect of a hand note given on November 8, 1934. If they alleged that it was not binding on them because it was given in respect of statute-barred debts, the burden was on them to prove it. It was not for the respondents to allege and prove that it was given in respect of debts that were not barred, nor for the court to take such a point. If they alleged that it was not binding on them because it was given in respect of statute-barred debts, the burden was on them to prove it. It was not for the respondents to allege and prove that it was given in respect of debts that were not barred, nor for the court to take such a point. The learned judge, having the books before him, not all of which appear to have been formally put in evidence, and having heard the> oral evidence, came to the conclusion, already stated, that there was no definite evidence on the side of the appellants to establish that the debts in respect of which the note was given were then time-barred. From this conclusion their Lordships cannot dissent. On the contrary, a consideration of such extracts from the books as are available, particularly that on p. 82 of the Record which purports, and was admitted by counsel for the appellants, to be a record of payments made by the appellants in the course of the year preceding November 8, 1934, would lead them to the same conclusion of fact. They are therefore of opinion that upon this main question the judgment of the High Court must be affirmed. It remains to deal with certain subsidiary questions in regard to interest. But before doing so it is necessary to note that during the pendency of the appeal from the Subordinate Judge to the High Court the provisions of the Orissa Money lenders Act (Orissa Act III of 1939) were extended to Sambalpur, and that the appellants claimed in the High Court that they should have the benefit of this Act which enables the court to give certain relief to a debtor in respect of interest. The appellants grounds of appeal before this Board in respect of interest are, first, that, though the hand note made no provision for interest, yet both by the Subordinate Judge and the High Court interest was allowed, and, secondly, that, though the decree of the Subordinate Judge did not provide for interest pendente lite and the respondents did not appeal from this part of his decree, yet the High Court did allow such interest. It appears to their Lordships that these grounds of appeal cannot be sustained. It appears to their Lordships that these grounds of appeal cannot be sustained. For, apart from any other reason for rejecting them, it is conclusive that the High Court thought fit to take advantage of the provisions of the Orissa Moneylenders Act, to reopen the whole of the transactions which culminated in the hand note of November 8, 1934, and to allow simple interest at 12 per cent, per annum up to November 7, 1934, and simple interest at 6 per cent, per annum thereafter, including the period pendente lite. Against this modification of the decree of the Subordinate Judge there has been no cross-appeal by the respondents and it appears to their Lordships that there can be no justification for disturbing a decree covering the whole field of interest which was no doubt made by the High Court in its discretionary jurisdiction after taking all relevant matters into consideration. Their Lordships will accordingly humbly advise His Majesty that this appeal should be dismissed. The appellants must pay the respondents costs of the appeal.