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  • Section 25(3) of the Contract Act: see 57 Cal 394,4 8 Pat 706,5 18
  • provisions of Section 25(3) of the Contract Act.
  • Section 25(3) of the Contract Act.7.
  • Section 25(3) of the Contract Act,
  • SECTION 9 CONTRACT ACT
  • 19, Limitation Act,
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citation codes
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  • Section 25(3) of the Contract Act: see 57 Cal 394,4 8 Pat 706,5 18
  • provisions of Section 25(3) of the Contract Act.
  • Section 25(3) of the Contract Act.7.
  • Section 25(3) of the Contract Act,
  • SECTION 9 CONTRACT ACT
  • 19, Limitation Act,
Smart Summary

Factual and Procedural Background

This is a Letters Patent appeal arising from a suit to recover the balance of Rs. 1608 due on a khata dated 14th July 1908. The khata was executed as an acknowledgment of an original debt that fell due in 1890 and was time-barred by 1908. The debt had been revived by acknowledgments from time to time within the period of limitation until the filing of the suit. The trial court and first appellate court held that the khata constituted a fresh promise to pay under Section 25(3) of the Contract Act, thereby allowing the plaintiff's claim. However, Macklin J., in the second appeal, reversed this decision, holding that the khata did not contain an express promise to pay as required by Section 25(3) of the Contract Act and dismissed the suit. This appeal challenges that reversal.

Legal Issues Presented

  1. Whether the khata executed in 1908 constituted an express promise to pay a time-barred debt within the meaning of Section 25(3) of the Contract Act.
  2. Whether an unconditional acknowledgment, such as the khata in question, can be treated as a fresh promise to pay for the purpose of reviving a time-barred debt.
  3. The interpretation of the specific language "deva sahi" in the khata and whether it amounts to an express promise under the Contract Act.

Arguments of the Parties

Appellant's Arguments

  • The appellant contended that, following the Privy Council decision in 33 IA 165, an unconditional acknowledgment implies a promise to pay, and thus a promise can be inferred from the khata.
  • They argued that the word "sahi" in the khata, meaning "approval" or "acquiescence," coupled with the acknowledgment of the balance, constitutes an express promise to pay.

Respondent's Arguments

  • This information was not available in the provided opinion.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Section 25(3) of the Contract Act Requirement of an express promise to pay to revive a time-barred debt. The court held that the khata did not satisfy the requirement of an express promise under this section and thus could not revive the debt.
Section 19, Limitation Act Distinction between acknowledgment and promise in limitation context. The court recognized the difference between mere acknowledgment and a promise to pay for limitation purposes.
52 Bom 521 Express promise to pay is necessary in writing to base a suit on a time-barred debt. Used to support the proposition that implied promises inferred from acknowledgments are insufficient.
33 IA 165 (Privy Council) An unconditional acknowledgment implies a promise to pay. The court distinguished this case as dealing with acknowledgments within limitation period and not under Section 25(3) of the Contract Act.
46 Bom 243 Consideration of implied promise in acknowledgment cases. Referred to in analyzing the sufficiency of implied promises to revive debts.
57 Cal 394, 48 Pat 706, 18 Lah 234, 57 All 434 Judicial consensus that implied promises from acknowledgments are insufficient under Section 25(3). Supported the court's conclusion that an express promise is required.
Section 9 of the Contract Act Definition of express and implied promises. Applied to interpret the language "deva sahi" and determine the nature of the promise.
8 Bom 405 and 52 Bom 521 Interpretation of the phrase "baki deva" as "balance due." Used to understand the language of the khata in context.

Court's Reasoning and Analysis

The court analyzed the nature of the khata executed in 1908, focusing on whether it constituted an express promise to pay a time-barred debt under Section 25(3) of the Contract Act. It distinguished between mere acknowledgments and fresh promises, emphasizing that after the limitation period, only an express promise can revive a debt. The court referred to various precedents establishing that implied promises inferred from acknowledgments are insufficient.

It considered the appellant's argument that the word "sahi," meaning "approval" or "acquiescence," combined with "baki deva" ("balance due"), signified an express promise. The court applied the definition of express promise from Section 9 of the Contract Act, which requires that the promise be made in words, and found that the language of the khata did not meet this standard. The absence of any indication that the words were used in a trade context to signify an express promise further supported this conclusion.

Consequently, the court upheld the view that the khata was a mere acknowledgment and did not contain an express promise sufficient to revive the debt. It agreed with Macklin J.'s decision to dismiss the plaintiff's suit.

Holding and Implications

DISMISSED

The court dismissed the appeal, affirming that the khata did not constitute an express promise to pay under Section 25(3) of the Contract Act and therefore could not revive the time-barred debt. The direct effect is that the plaintiff's suit to recover the balance was rightly dismissed. No new legal precedent was established; rather, the decision reinforced the existing principle that only an express promise in writing can revive a barred debt under the Contract Act.

    Balkrishna Mansukhram v. Jayshankar Narayan

    Wassoodew, J.:— This is a Letters Patent appeal from the decision of Macklin J. in a case where the plaintiff sued to recover the balance of Rs. 1608 due on a khata dated 14th July 1908. That khata was subsequently revived by acknowledgments from time to time each within the period of limitation till the filing of the suit. It has been found as a fact and that finding has been accepted as correct—that the original debt fell due in the year 1890, and that in 1908, when the khata in suit was executed in acknowledgment of that debt, the debt had become time-barred. The khata is in the following form:

    A balance is struck. The said rupees two thousand and six and two annas and six pies are found due. The same are duly payable.

    2. The Gujarati words are baki nikliya te deva sahi. The trial Judge and the Judge of first appeal held for the purpose of limitation that khata constituted a fresh promise to pay within the meaning of Section 25(3) of the Contract Act, and accordingly the plaintiff's claim was decreed. Macklin J. in second appeal came to a contrary conclusion holding that as the basis of a claim upon a writing reviving a time-barred debt must be an express promise to pay contained in the writing, the requirements of Section 25(3) of the Contract Act, were not satisfied by the khata. Accordingly the decree of the Courts below was reversed and the plaintiff's suit dismissed.

    3. The distinction between a mere acknowledgment under B. 19, Limitation Act, and a “promise” under Section 25(3) of the Contract Act, has been well recognized. After the period of limitation there must be a fresh promise to pay. A Bench of this Court in 52 Bom 5211 has held that (page 527):

    If there is an express promise to pay, made in writing and signed by the person to be charged therewith to pay a time barred debt, it may be made the basis of a suit, but…. that an implied promise to pay, to be inferred from an acknowledgment which contains no express promise to pay a time barred debt, cannot be made the basis of a suit.

    4. It has been argued by the learned advocate on behalf of the appellant that as their Lordships of the Privy Council in 33 IA 1652 have held that “an unconditional acknowledgment has always been held to imply a promise to pay,” a promise can be inferred from the khata in question. That was a case which dealt with an acknowledgment made within the period of limitation, and there was no occasion to consider the effect of such an acknowledgment; on the provisions of Section 25(3) of the Contract Act. The effect of the ruling in 33 IA 165 and 46 Bom 24,3 which referred to it, was considered in 52 Bom 521, and it was held that an implied promise to pay inferred from an acknowledgment could not be made the basis of a suit to recover a debt barred at the time of the acknowledgment. We think for the purpose of Section 25(3) of the Contract Act, there must be an express promise as opposed to an unconditional acknowledgment involving an implied promise to pay. There seems to be practically a consensus of judicial opinion on the point that a mere implied promise to pay, which may be conveyed by an unconditional acknowledgment, would not be sufficient for the purposes of Section 25(3) of the Contract Act: see 57 Cal 394,4 8 Pat 706,5 18 Lah 2346 and 57 All 434.7 In the last mentioned case Sulaiman C.J in dealing with the requirements of Section 25(3) of the Contract Act, expressed the view that (page 438):

    If there is a fresh consideration proceeding from the promisee and the parties enter into a new content which replaces the previous contract and supersedes it, then it certainly becomes the basis of a new cause of action and a suit would lie upon it because the contract is binding on the parties, being for consideration. But where there is no fresh consideration proceeding from the promisee, the transaction cannot be treated as an agreement between two parties as it is only a one sided promise to pay a debt which was due.

    5. If those observations imply that there should be a fresh consideration from the promisee for the purpose of Section 25(3) of the Contract Act, with great deference it seems to me difficult to agree with that view. S. 25(3) in express terms refers to the circumstances under which a plea of absence of consideration cannot avail the promisor. It is therefore going contrary to the express provisions of the enactment to hold that there should be a fresh consideration for a promise of this kind.

    6. The question in this appeal is essentially one of construction of the language of the document itself. The words used are “deva sahi” and the question is whether they can be interpreted to mean an express promise within the meaning of Section 25(3) of the Contract Act.

    7. The words “baki deva” have been judicially interpreted in 8 Bom 4058 and 52 Bom 521 as implying “balance due.” But it has been argued that the additional word ‘sahi’ is of special significance which, coupled with the previous words, expressly connotes a promise to pay the balance of the debt found due. We have been referred to the dictionary rendering of the term ‘sahi.’ The word, according to Molesworth, (Marathi Dictionary), “is constantly at tached to notes, bonds, deeds, etc., etc. implying approval and acquiescence.” That is also, according to Pathak'g Etymological Gujarati English Dictionary, the Gujarati meaning of that word. Assuming then that sahi means “I approve of or I acquiesce in,” the question is whether that rendering of the word would be sufficient to constitute a promise to pay. Now express promise as stated in Section 9 of the Contract Act, implies that the proposal or acceptance of any promise is made in words. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied. We think, after giving careful consideration to the language used, that those words cannot be interpreted as containing an express promise. It has not been suggested that the parties used those words with reference to some well-known usage of the trade signifying an express promise. Therefore applying the ordinary etymological meaning to the words in the interpretation of the language of this khata, we think that the view of Maoklin J. is correct. We therefore dismiss this appeal with costs.

    N.J Wadia, J.:— I agree.

    B.D/R.K

    8. Appeal dismissed.

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    Comments

    Balkrishna Mansukhram v. Jayshankar Narayan
    (Jun 23, 1938)