Doshi v Patel (Civil Suit No. 326 of 1952) [1953] EACA 35 (1 January 1953)

ORIGINAL CIVIL

Before WINDHAM, J.

SHANTILAL LILADHAR DOSHI, Plaintiff

$\boldsymbol{\nu}.$

KISHORBHAI TRIKAMBHAI PATEL, Defendant Civil Suit No. 326 of 1952

Evidence—Stamp Ordinance, section 22—Foreign promissory note—Note unstamped—Whether presentation unnecessary—Whether inadmissible in evidence—International Private Law—Limitation—Limitation Ordinance (Cap. 11), section 37 (2)—Whether Indian Limitation Act, 1908, applied— Whether contract extinguished or, merely, remedy time-barred—Limitation Ordinance, section 51-Whether Indian promissory note time-barred after three, but within six, years of making.

The defendant made a demand promissory note in favour of the plaintiff at Bombay on 24th October, 1947. On 19th August, 1952, the plaintiff demanded payment from the defendant who failed to pay. The plaintiff then sued the defendant, both parties then being resident in Mombasa. The defendant did not contend that he was not the maker of, or had met, the promissory note. He submitted first that the note was inadmissible in evidence because section 22 of the Stamp Ordinance (Cap. 259) required that the note should have been stamped before presentment for payment and, in fact, it was never so stamped, and, second, that the claim was statute-barred because under the Indian Limitation Act, 1908, the suit fell to be dismissed, having been instituted more than three years after making the note. The defendant pleaded section 37 (2) of the Limitation Ordinance (Cap. 11), and maintained that the foreign law of the contract in limitation applied. The proper law of the contract was the law of India, he submitted, as contained in the Indian Limitation Act, 1908, which went further than barring the remedy and extinguished the contract itself and so applied in Kenya. The period of limitation in that Act was three years and not six years, as legislated in the Limitation Ordinance, which period of limitation did not apply.

Held (24-4-53).—(1) There was never any legal necessity to present this promissory note drawn out of the Colony for payment, since the defendant was the maker of the note and, accordingly, presentation for payment was not necessary to make him liable upon it,<br>as provided for in section 88 of the Bills of Exchange Ordinance (Cap. 291). That being so, section 22 of the Stamp Ordinance, requiring stamping of the note, was inapplicable, since it applied as against the maker only when presentation for payment or acceptance was a legal necessity. The note was therefore, admissible in evidence, although unstamped.

(2) Section 37 (2) of the Limitation Ordinance (Cap. 11) applied a foreign law of limitation as a defence only where the foreign law has extinguished the contract and not mercly barred the remedy. The note was a foreign note and the foreign law of the contract was the law of India as contained in the Indian Limitation Act, 1908, but that Act<br>merely provided procedurally that no action on a promissory note may be maintained<br>after the expiry of the three-year period of limitation statute-barred.

Cases cited: Griffin v. Weatherby, (1867-8) 3 Q. B. Cases 753; Gajadhar v. Jagannath, (1924) I. L. R. 46 All. 775; Baleswar v. Latafat, (1945) I. L. R. 24 Pat.

249.

Inamdar for plaintiff.

I. S. Patel for defendant.

JuDGMENT.-This is a suit on a demand promissory note made by the defendant in favour of the plaintiff at. Bombay on 24th October, 1947, for Rupees 5,950, being the equivalent of Sh. 8,925. Only two points have been argued in defence to this action. First, it is contended that, in accordance with section 39 of the Stamp Ordinance (Cap. 259), the promissory note was inadmissible in evidence because section 22 of that Ordinance requires that it should have been stamped before presentation for payment, and, in fact, it never was so stamped nor, indeed, was it at any time presented for payment. The answer to this contention· is two-fold. First, there was never any legal necessity to present this promissory note for payment at all; for the defendant-was the maker of the note and, accordingly, presentation for payment was not necessary in order to render him liable on it, the note not being one which was made payable at a particular place. Section 88 (1) of the Bills of Exchange Ordinance (Cap. 291) makes this clear. That being so, section 22 of the Stamp Ordinance was inapplicable since it applies, as against the maker, only where presentation for acceptance or payment is a legal necessity; *see* on this point *Griffin v. Weatherby,* (1867-8) 3 Q. B. Cases 753

The second line of defence is that this claim is time-barred. This action was lodged on 6th September, 1952. The promissory note, as we have seen, was made on 24th October, 1947, in Bombay. Under the Indian Limitation Act, 1908, this claim would have been statute-barred, since the period of limitation under that Act, in respect of actions upon promissory notes, is three years from the date of the making of the note, and not, as in Kenya, six years, as provided in section 51 of the Limitation Ordinance (Cap. 11). Section 37 (2) of the Limitation Ordinance {Cap. 11) is, accordingly, relied on, which provides that: "No foreign law of limitation· shall be a defence to a suit instituted in the Colony on a contract entered into in a foreign country, unless the foreign law has extinguished the contract during the period prescribed by such a foreign law". It is argued that the foreign law in this case, namely section 3 of the Indian Limitation Act, 1908, did "extinguish" the contract by providing that any suit instituted in respect of it after the period of limitation should be dismissed. The wording of section 3 of that Act is as follows: -

"Subject to the provisions contained. in sections 4 to 25 (inclusive), every suit instituted, appeal preferred, and application made after the period of limitation prescribed therefor by the first schedule shall be dismissed, although limitation has not been set up as a defence."

But it seems clear to me that section 3 does not extinguish the contract a,t all. lt merely provides, by way of procedural law, that no action shall be brought in resr;ect of it after the expiry of the period of limitation. That being so, its provisions are applicable only in the courts of India. It is trite law that to render a contract ·unenforceable in the courts is a very different thing from rendering it void or from "extinguishing" it. I need do no more than quote the following passage from one of the judgments in *Gajadhar v. Jagannath,* (1924) I. L. R. 46 All. 775, at page 786, dealing with the Indian Limitation Act: -

"Does a debt cease to be debt because its recovery is barred by the statute of limitation? Clearly not. Limitation extinguishes the remedy 6ut, except in the case covered by section 28 of the Limitation Act, does not destroy the right. Section 28 applies only to suits for possession of property and has no applica•tion to the case of a debt." ·

It only remains to add that section 2"8 of the Indian Limitation Act, which does expressly "extinguish" the right of-··any -·person· to sue for "possession of any property" after the expiry of the relevant ·period of limitation, is inapplicable to the present case since "property" in that section. applies only to chattels or land, and not to a debt for which a person makes himself liable upon a promissory note. This point is made clear· in *Ba/eswar v. Latafat,* (1945) I. L. R. 24 Pat.

249. I accordingly hold that the claim in the· present case is not statute-barred.

For these reasons this action must succeed. Judgment is entered against the defe~d\_ant in favour of the plaintiff in the terms prayed, with costs.