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1998 DIGILAW 1239 (MAD)

Perumal v. Sakthivel

1998-09-11

K.P.SIVASUBRAMANIAM

body1998
Judgment :- 1. This Second Appeal is directed against the judgment of the learned District Judge, Madurai North, at Dindigul, in A.S. No. 151 of 1983, dated 30.1.1984, confirming the judgment of the learned Subordinate Judge, Dindigul, in O.S. No. 204 of 1981 dated 27.4.1983. 2. The suit was filed on a promissory note for recovery of a sum of Rs. 26,521.80 with subsequent interest. According to the plaintiff, the defendant borrowed a sum of Rs. 17,220/- for his family expenses and business requirements from the plaintiff and executed a promissory note dated 15.9.1974 promising to repay with interest at 24 per cent per annum. The Debt Relief Act was in force from 16.1.1975 to 14.7.1978 and after excluding the said period the plaintiff has time limit to file the suit on 15.3.1981 and hence the suit was filed in time. According to the plaintiff, the defendant was getting an annual income of Rs. 50,000/- and therefore, he was not entitled to the benefits of the Tamil Nadu Debt Relief Acts 31 of 1976 and Act 13 of 1980. In spite of repeated demands the defendant did not pay the due amount. Hence the suit. 3. In the written statement, while resisting the suit claims, the defendant denied the execution of the promissory note. According to the defendant the said claim was totally false and fraudulent and that there was no occasion or necessity for him to borrow for a large sum for his family expenses. He is only a simple agriculturist and has no business whatsoever and the recital to the effect that he had received the amount for business will go to show that the promissory note was fraudulently created. The plaintiff was a well-versed litigant having number of litigations to his credits. He had Commission Mundy business at Dindigul in partnership with some of relations of the defendant and he understands that there were lot of disputes between the plaintiff and his partners. The plaintiff was a well-versed litigant having number of litigations to his credits. He had Commission Mundy business at Dindigul in partnership with some of relations of the defendant and he understands that there were lot of disputes between the plaintiff and his partners. The defendant would also state and admit to be correct that he was not entitled to any benefits of the Debt Relief Act at any point of time and therefore, he would contend that the suit promissory note which was alleged to have been executed by the defendant on 15.9.1974 was barred by limitation on 16.9.1977 and that therefore, the plaintiff having categorically stated that the defendant was not entitled to the benefits of the Act, the suit was badly out of period of limitation. Both the parties were related to each other and in view of the misunderstanding between the parties in connection with the landed properties, the plaintiff had come forward with the forged promissory note. 4. On a consideration of the said pleadings and the evidence both oral and documentary, both the Courts below came to the conclusion that the suit promissory note had been validly executed and hence the defendant was liable to pay the amount as demanded. The Courts below also held that the suit was filed within the period of limitation in view of the fact that there was no dispute over the fact that the defendant was owning lands. With the result, while the trial Court decreed the suit, holding that in view of the restricted claim made by the plaintiff claiming one and half of the principal amount, it was held that the plaintiff was entitled to recover a sum of Rs. 25,830/- with interest at the rate of 6 per cent per annum. The said decree was also confirmed by the lower appellate Court. Hence the present Second Appeal by the defendant. 5. As far as the merits of the appeal as regards the execution of the promissory note is concerned, both the Courts having held in favour of the plaintiff, there is no warrant to interfere with the concurrent findings of the Courts below. 6. Hence the present Second Appeal by the defendant. 5. As far as the merits of the appeal as regards the execution of the promissory note is concerned, both the Courts having held in favour of the plaintiff, there is no warrant to interfere with the concurrent findings of the Courts below. 6. However, learned counsel for the appellant points out that the suit was barred by limitation having regard to the fact that even as admitted by the plaintiff himself the defendant was not entitled to the benefits of the Tamil Nadu Debt Relief Act. But in the plaint, the plaintiff had not pleaded that he was under bona fide belief that the defendant was entitled to the benefits of the Tamil Nadu Debt Relief Act. Learned counsel for the appellant points out that as per attested copy of the plaint, received by him the plaintiff has positively stated that the defendant was not an agriculturist in terms of the Act 4 of 1938 and that he was also not entitled to the benefits of any of the subsequent Debt Relief Acts as the defendant was earning more than Rs. 50,000/- as income per annum. Therefore, according to the learned counsel, in the absence of any claim by the plaintiff that he was under bona fide impression regarding the entitlement of the benefits of the Debt Relief Act, the plaintiff was not entitled to exclude the period of moratorium. 7. While reading the attested copy of the plaint given to the defendant, in paragraph 6, it is stated that the defendant was not an agriculturist in terms of Act 4 of 1938, a perusal of the original of the plaint shows that the last word in Tamil has been struck off in pen. There is no initial for scoring off the said expression. But whatever it might be, there is no dispute over the fact that the plaintiff has positively stated that the defendant was not entitled to the benefits of the Debt Relief Act and that he has also not pleaded that he was under the bona fide impression that the defendant was entitled to the benefits of the Act. 8. But whatever it might be, there is no dispute over the fact that the plaintiff has positively stated that the defendant was not entitled to the benefits of the Debt Relief Act and that he has also not pleaded that he was under the bona fide impression that the defendant was entitled to the benefits of the Act. 8. The question which arises for consideration is as to whether the plaintiff can be allowed to contend on the one hand that the defendant is not entitled to the benefits of the Act and at the same time plead that he did not file the suit within the period of limitation in view of the exclusion of the moratorium period. 9. The relevant statutory provision which deals with exclusion of time for limitation is Section 5 of the Tamil Nadu Indebted Agriculturists (Temporary Relief) Act, 1976 (Act 15 of 1976). The corresponding provision in Act 10 of 1975 also is verbatim the same as in Section 5 of Act 15 of 1976. It is as follows:— “5(1) In computing the period of limitation or limit of time prescribed for a suit for the recovery of a debt or an application for the execution of a decree passed in such suit, the time during which the institution of the suit or the making of application was barred by Section 3 or during which the plaintiff or his predecessor-in-title, believing in good faith that Section 3 applied to such suit or such application, refrained from instituting the suit or making the application, shall be excluded. Explanation - “Good faith” shall have the meaning assigned to it in Clause (22) of Section 3 of the General Clauses Act, 1897 (10 of 1897). Explanation - “Good faith” shall have the meaning assigned to it in Clause (22) of Section 3 of the General Clauses Act, 1897 (10 of 1897). (2) Where in a suit or an application in which the question of exclusion of time under sub-Section (1) arises, the defendant or the respondent, or one of the defendants or respondents, with respect to whom the question is raised, would have been an agriculturist but for the fact that in the year 1971-72, 1972-73, 1973-74 or 1974-75 he had been assessed to income-tax under the Income-tax Act, 1961 (43 of 1961), or to agricultural income-tax under the Tamil Nadu Agricultural Income-tax Act, 1955 (Tamil Nadu Act V of 1955), or Sales tax under the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act 1 of 1959), or under the Central Sales Tax Act, 1956 (74 of 1956), it shall be conclusively presumed that, in refraining from instituting the suit or making the application, the creditor believed in good faith that such defendant or respondent was an agriculturist.” 10. Learned counsel for the appellant relies on a judgment of a Division Bench of this Court in Prabhakar and Company, M/s. v. V. Subramaniam (1989-1 L.W. 555). While considering the effect of the expression “good faith” as occurring in Section 5 of 1975, the Division Bench held that even though Section 5(2) of Act 10 of 1975 says that the mere inaction on the part of the creditor in filing the suit shall be presumed to be in good faith, on his part, the said principle cannot be invoked where the pleadings are otherwise. The question regarding good faith is an important fact to be established by the plaintiff in order to enable him to avail the benefits under the relevant Act. 11. Learned counsel for the appellant also relies on an unreported judgment of K. Sampath, J. in S.A. No. 119 of 1985 dated 20.3.1998 (N.K. Ramasami v. Nagammal). In that case the learned Judge held that having regard to the averment made in the plaint to the effect that the defendant was not entitled to the benefits of the Act, it was not open to the plaintiff to contend that he believed in good faith that he could not file a suit during the moratorium period. 12. In that case the learned Judge held that having regard to the averment made in the plaint to the effect that the defendant was not entitled to the benefits of the Act, it was not open to the plaintiff to contend that he believed in good faith that he could not file a suit during the moratorium period. 12. In reply to the said submission, learned counsel for the respondent contends that in those two judgments the effect of presumption as raised in Sub-Section 2 of Section 5 has not been considered in the said judgments. The contention of the learned counsel cannot be sustained having regard to the fact that in the judgment of the Division Bench, Section 5(2) of the Act has been specifically considered. According to learned counsel, the presumption would arise automatically once the debtor is shown to be an agriculturist. 13. The rule of limitation and prescription is founded upon principles of public policy, equity-vide the Maxim, “Vigilantibus non dormientibus jura subveniunt”- Laws come to the assistance of the vigilant and not of the sleepy. The right which is conferred on the individual as a result of rule of limitation is a vested right and such a right cannot be taken away or postponed except by legislative sanction. Section 3 of the Limitation Act 1963 makes it mandatory on the part of the Courts to reject all suits in limine if instituted after the period of limitation. The extension of the said period of limitation which has the consequential effect of taking away or postponing of such a vested right in the debtor, is incorporated in the Debt Relief Acts as a consideration for his not paying the debts on demand and to give him temporary shelter from the immediate onslaught of a money decree against him. After the moratorium period is over, the vested right of the debtor of limitation is renewed and the creditor is required to institute the suit within the period of limitation. The entitlement of the creditor to ignore the vested right of the debtor is not to be blindly applied by raising a presumption against every citizen who is an agriculturist. In our country which is an agrarian society, more than three-fourth of the population have something to do with agriculture. The entitlement of the creditor to ignore the vested right of the debtor is not to be blindly applied by raising a presumption against every citizen who is an agriculturist. In our country which is an agrarian society, more than three-fourth of the population have something to do with agriculture. Even top-most businessmen and professionals possess some agricultural or horticultural holding and it would be a travesty of the object of the Debt Reli ef Act as well as Law of Limitation, if the creditor should be allowed to avail the presumption arising under sub-Section 2 of Section 5, even as against such people. The expression “believing in good faith” implies a state of mind of the creditor regarding his knowledge about the status of his debtor. Such a claim debtor is not to be blindly applied by raising a presumption against every citizen who is an agriculturist. In our country which is an agrarian society, more than three-fourth of the population have something to do with agriculture. Even top-most businessmen and professionals possess some agricultural or horticultural holding and it would be a travesty of the object of the Debt Relief Act as well as Law of Limitation, if the creditor should be allowed to avail the presumption arising under sub-Section 2 of Section 5, even as against such people. The expression “believing in good faith” implies a state of mind of the creditor regarding his knowledge about the status of his debtor. Such a claim should necessarily be supported by a pleading and minimum evidence. The presumption under sub-Section (2) is only a factor which will be taken into account by the Court in assessing the evidence of the cred itor regarding his good faith. If suppose evidence is let in by the debtor to show that the creditor was fully aware that the debtor was a big industrialist or a professional in addition to being an agriculturist, it would be ridiculous to assume that the creditor was under a bona fide belief that the debtor was entitled to the benefits of the Act. The presumption under Sub-Section (2) is intended to cover only a case of doubt in which the circumstances may disclose that there are reasonable grounds for the creditor to have been under a bona fide impression that the particular debtor was entitled to the protection of the Act. The presumption under Sub-Section (2) is intended to cover only a case of doubt in which the circumstances may disclose that there are reasonable grounds for the creditor to have been under a bona fide impression that the particular debtor was entitled to the protection of the Act. It is not to be invoked in a case where the creditor would not even condescend to plead that he had believed something in good faith. Nor is it intended to cover a case where the plaintiff unreservedly pleads that the debtor is not entitled to the protection of the Act, and at the same time pleads that he did not file the suit because of the moratorium period. For the purpose of denying the debtor his entitlement to the benefits of the Act, he would plead negatively, but for the purpose of escaping the rigour of limitation, he would very conveniently state that he did not file the suit earlier because of the moratorium period. The Courts cannot be silent spectators of blatantly contradictory pleadings aimed at abusing special benefits arising out of the statutory provisions. 14. This particular aspect of the present case has not been properly considered by the Courts below. Both the Courts below have proceeded to deal with the said issue in a very summary manner, merely on a presumption that the defendant was an agriculturist and therefore, the suit had been filed within the period of limitation. 15. Therefore, it is inevitable to hold that the suit is barred by limitation. 16. With the result, the Second Appeal is allowed and the suit filed by the plaintiff is dismissed.