Report No. 69
H. Other Points
12.132. It is often found that a particular statement bears a dual character, inasmuch as, in one respect, the statement is against the interest of the maker, but, in another respect, it is in his favour, as likely to advance his proprietary or pecuniary interest.
12.133. In this connection, we may refer to statements recording payment of interest or of part of a debt as a statement against interest. Previously, part payment of interest or principal did not, under the Indian Law of Limitation,1 revive the right to sue for the remainder of a debt. The consideration of the present question was, therefore, of importance only in connection with one class of cases, namely, where a money-bond contained a stipulation-(i) that the sum secured thereby shall be payable by instalments, and (ii) that, on default being made in the payment of any one instalment, the whole amount or the aggregate of all the instalments shall become due and payable.
Where default was made in the payment of one instalment, the cause of action in respect of the whole amount accrued, and limitation therefore began to run. The obligee of a bond (the creditor), which had become barred by limitation in consequence of the whole amount having become payable on default, might attempt to evade limitation by endorsing the payment of one or more instalments. Such endorsement had the semblance of being against interest, but was, in reality, quite the contrary. In cases of this nature, if the endorsement was offered as an entry against interest, it ought not to be admitted unless and until it is shown to have been made at a time when it was against the interest of the obligee to make it.
1. Indian Limitation Act, 1859.
12.134. According to the provisions of the later Limitation Acts,1 and also under the present Act,2 the period of limitation for a suit on a promissory note or bond payable by instalments, which provides that if default be made in payment of one instalment the whole shall be due, begins to run when the first default is made, except where the payee or obligee waives the benefit of the provision, in which case limitation begins to run when fresh default is made in respect of which there is no such waiver. Even under3 these Acts, therefore, it may be often to the interest of the obligee to offer proof of such endorsements (recording payment), so as to make it appear that a debt in regard to which limitation has begun to run, is not barred.
1. Limitation Acts of 1871, 1877, 1908.
2. Article 37, Limitation Act, 1963.
3. (a) Sethu v. Navana, ILR 7 Mad 577;
(b) Gapala v. Parannna, ILR 7 Mad 383;
(c) Chani Bash Shah v Kadani Mandal, ILR 5 Cal 97;
(d) Nobodin Chandra Saha v. Rain Krishna Rai Chozadhri, ILR 14 Cal 397.
12.135. There is another rule of the law of limitation, relevant to the present topic. Part-payment of interest or of principal revives the right to sue for the remainder of the debt. This rule was first introduced in India by the Limitation Act of 18711. The existing law is in section 19 of the Limitation Act of 19632 which enacts as follows.-
"19. When interest on a debt or legacy is before the expiration of the prescribed period, paid as such by the person liable to pay the debt or legacy, or by his agent duly authorised in this behalf, or when part of the principal of a debt is, before the expiration of the prescribed period, paid by the debtor or his agent duly authorised in this behalf, a new period of limitation, according to the nature of the original liability, shall be computed from the time when the payment was made :
Provided that in the case of part-payment of the principal of a debt, the fact of the payment appears in the handwriting of the person making the same."
1. Section 21, Limitation Act, 1871 (9 of 1871).
2. Section 19, Limitation Act, 1963.
12.136. To adopt what Lawton J. said with reference to the corresponding English provision, the sub-section does not change the nature of the right; "it provides that, in the specific circumstances of an acknowledgement or payment, the right shall be given a notional birthday and on that day, like the Phoenix of the fable, it rises again in renewed yout.- and also like the phoenix, it is still itself."
The express provision that the payment, whether of interest or of principal, must, in order to create a new period of limitation, have been made before the right to sue had become burred. Appears to require proof of the time of payment. Where the payment is of part of the principal, the proviso to the section of the Limitation Act1 (regarding handwriting of the debtor), will, in most cases, afford a security against fraud. But, where the payment is of interest only, the endorsement could be made fraudulently.
1. Section 19, Limitation Act, 1963, (supra).
12.137. It would, from the above discussion, appear that such statements would become relevant under clause (3), though, in another respect, they help the maker. Presumably, the court will look to the substance of the matter, in deciding whether they fall within clause (3).
12.138. Statements as to rent.-
Another illustration of a statement having a dual character may be considered. The question before the Court in Rajah Leelanund Singh v. Mst. Tulsamal I uckpattee Thakoorain, (1874) 22 WR 231 (Cal), was whether the rent payable to the zamindar by the Ghatwal during a certain period was Rs. 75 or Rs. 175. The zamindar relied upon a statement, prepared by the then zamindar many years previously, of the Ghatwali villages in the mahal, in which there was a recital against the name of the property in question that the original rent was so much and the increased rent so much. Markby J. held, that this statement was inadmissible. He said : I cannot bring it under any of the rules of evidence which allow a statement of a deceased person to be put into evidence.
It does not appear to me to be a statement in any way detrimental to his interest; on the contrary so far as regards the rate of rent. of course, it would be his interest to state it to be as high as possible. In appeal, however, Couch, C.J., and Ainslie, J., said: "We cannot concur in the ' opinion of the learned Judge that this statement was not admissible in evidence. It is a statement by which the interest in the mahal of the person making it is reduced or affected; it is against his interest and against his proprietary right. The effect of its is to cut down the proprietary right, to subject it to the tenure or incumbrance which is mentioned.
It is true that in one part of it there is what may be said to be not against his interest but in his favour, namely, the amount of the original rent and increased rent payable to him. But when a document of this kind is tendered in evidence, it is not to be divided into parts, and the part which is in favour of the person making it rejected, and that which is against his interest accepted. The question is, whether, taking the document as a whole, it is against the interest of the proprietary right of the person making it. In estimating the value of any particular part of it, that may be looked at; but the principle upon which the admissibility of it is determined is whether it has been made under such circumstances as makes it reasonable to suppose that it was done bona fide, and the statements are true."
12.139. Just before this passage, there is mentioned of the provisions of the Evidence Act. The judgment of Markby, J. was given in April, 1874, and though the evidence had been recorded in or before 1869, it appears that the admissibility of the statement in question was considered with reference to the Act of 1872. And even if Act 2 of 1855 be taken as the Evidence Act then applicable, there is no difference in the principle to be applied. Act I of 1872 made no change in the law in this respect.
12.140. Amendment needed.-
In the result, the only change needed is an amendment to the effect that recitals as to boundaries should not be admissible under section 32(3). The clause should be amended for the purpose.