Hemmo Pharma vs Dawood Shoes Pvt. Ltd. And Anr.
2003 Latest Caselaw 51 Bom

JUDGMENT

Deshmukh D.K., J.

1. The facts relevant and necessary for deciding this summons for judgment are that the plaintiff has filed this suit on two bills of exchange, one dated 3-4-1996 and other dated 19-7-1996. Both the bills of exchange are bill of exchange payable on demand. They are both drawn by the defendant No. 1 and accepted by the defendant No. 2. The suit has been instituted on 18-12-2000. The plaintiff is claiming that the period of limitation is extended against both the defendants, because of part payment made on 24-7-1998 by the defendant No. 1.

2. The defence of the defendants is that the period of limitation as against the defendant No. 2 will not get extended because of payment made by the defendant No. 1 on 24-7-1998 and as a part of the claim made in this suit is not triable in summary manner, both the defendants are entitled to unconditional leave to defend the suit. The learned Counsel appearing for the plaintiff relies on the provisions of section 19 of the Indian Contract Act and following judgments:-

i. Judgment of the Allahabad High Court in the case of Gaya Prasad and others v. Babu Ram and another ;

ii. The judgment of the Appellate Court in the case of Pachibenta Lakshmi Naidu v. Somahanti Gunnamma alias Chinnammi and others, 418 The Indian Law Reports (Vol. LVII).

iii. The judgment of the Madras High Court in the case of Pachibenta Lakshmi Naidu v. Somahanti Gunnamma alias Chinnamml and others.

iv. The judgment of the Calcutta High Court in the case of Achola Sundari Debi v. Doman Sundari Debi & others, A.I.R. 1926 Calcutta 150.

3. The learned Counsel appearing for the defendants, on the other hand, points out that in terms of the provisions of sub-section (2) of section 20 payment made by the drawer will not extend the period of limitation as against the acceptor.

4. Now, the relevant provisions are section 19, and sub-section (2) of section 20 of the Limitation Act. They read as under:-

19. Effect of payment on account of debt or of interest on legacy.-Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.

Explanation.---For the purposes of this section.-

(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment:

(b) "debt" does not include money payable under a decree or order of a Court.

20(2) Nothing in the said sections renders one of several joint contractors, partners, executors or mortgagees chargeable by reason only of a written acknowledgement signed by, or of a payment made by or by the agent of, any other or others of them.

It is clear from the perusal of the above quoted provisions that the person who is liable to pay the debts making payment on account of its debts or on account of interest or legacy before expiration of the period of limitation gives a fresh period of limitation. Perusal of the provisions of sub-section (2) of section 20 of the Limitation Act shows that the purpose of the provisions is to explain what is contained in section 19 and sub-section (2) of section 20 in terms lays down that if one of the several persons liable makes payment, that payment does not give fresh period of limitation to other person who were jointly and severally liable. So far as the authorities cited by the learned Counsel for the plaintiff are concerned, the judgment of the Allahabad High Court does not deal with this question at all. So far as the judgment of the Madras High Court is concerned, which is again considered by the Appellate Court, it also does not consider this question. The judgment of the Calcutta High Court does consider the provisions of section 20 of the Indian Limitation Act 1908 and the Calcutta High Court after considering the provisions of section 20 of Indian Limitation Act, 1908 holds that in case there are two mortgagors payment by one extends the period of limitation even also against the other. The Calcutta High Court, however, does not consider the provisions similar to the one contained in sub-section (2) of section 20. In my opinion, in view of the provisions of sub-section (2) of section 20 now it can not be argued that payment made by one of the several persons liable extends the period of limitation against all. It is, thus, clear that the suit as against the defendant No. 2 may be barred by the law of limitation. Therefore, a part of the claim made in the suit can not be tried in the summary jurisdiction of this Court.

5. The learned Counsel for the plaintiff submits that as the suit as against the defendant No. 2 may be barred by the law of limitation, the Court can pass a decree against the defendant No. 1 by granting this summons for judgment. In my opinion, the submission is not well founded. A part of the claim included in the suit appears to be clearly barred by limitation, therefore, the suit will not be maintainable as a summary suit. It is further to be seen here that though the acceptor and the drawer of the bill of exchange may be jointly and severally liable after the bill of exchange is accepted, an acceptor becomes a principal debtor and the liability of the drawer is that of a surety.

6. Taking over all view of the matter, therefore, in my opinion, it will not be appropriate to deny leave to defend to the defendant No. 1 also who is drawer of the bill of exchange which, according to the plaintiff, has been accepted by the defendant No. 2. Summons for judgment is, therefore, disposed of. Defendants are granted unconditional leave to defend the suit. Suit be transferred to commercial cause for trial. Written statement to be filed within eight weeks from today.

Considering the manner in which the summons for judgment was argued, in my opinion, it would be appropriate to saddle costs of this summons for judgment on the plaintiff. The plaintiff to pay costs of this summons for judgment to the defendants. The costs are quantified at Rs. 15,000/-

Parties to act on simple copy of the order duly authenticated by the Associate/Personal Secretary of the Court as a true copy.