R.S.A. No. 1037 of 1986 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A. No. 1037 of 1986 Date of decision: 1-7-2010 Ram Sarup ......... Appellant Vs Nagin Chand .........Respondent CORAM:- HON'BLE MR. JUSTICE HARBANS LAL Present: Mr. D.C.Dhaula, Advocate, for the appellant None for the respondent HARBANS LAL, J. This appeal is directed against the judgment/decree dated 5.11.1985 passed by the court of learned Additional District Judge, Barnala whereby he dismissed the appeal filed against the judgment and decree dated 5.11.1984 rendered by the court of learned Sub Judge Ist Class, Barnala vide which he dismissed the suit of the plaintiff. The factual matrix is that the defendant took plaintiff's factory on rent. He vacated the factory premises on 14.9.1977 and at that time, the defendant owed a sum of Rs.4200/- regarding the electricity bill consumption in the said premises. On 18.12.1982 he entered into an agreement with the plaintiff and paid a sum of Rs.1000/- to the plaintiff on that day and agreed to pay the balance amount of Rs.3200/- in monthly installments of Rs.350/- each commencing from 7.2.1983. Each installment was payable by the 7th of each calendar month. The defendant failed to pay any amount to the plaintiff as stipulated in the agreement. On these allegations, he filed the suit for recovery of Rs.3200/- as principal amount R.S.A. No. 1037 of 1986 2 and Rs.335/- by way of damages in the shape of interest on the said amount making the total claim of Rs.3535/-. Having entered appearance the defendant filed written statement traversing the averments contained in the plaint with the assertion that the alleged agreement is a forged document and that the suit may be dismissed. The following issues were framed:- 1. Whether the plaintiff is entitled to recover Rs.3200/- from the defendant as alleged?OPP 2. Whether the plaintiff is entitled to recover Rs.335/- as damages from the defendant?OPP 3. Whether the plaintiff has got no locus-standi to file the present suit?OPD 4. Whether the suit is time barred?OPD 5. Whether the civil court has got no jurisdiction to try the civil suit?OPD 6. Whether the plaint is vague, if so, its effect?OPD 7. Relief After recording evidence and examining the same, the learned trial Court dismissed the suit. Feeling aggrieved therewith, the plaintiff went up in appeal, which was also dismissed by the court of learned Additional District Judge, Barnala. Being undaunted and dissatisfied with the judgments recorded by both the Courts below, the plaintiff has preferred this appeal. This case was adjourned from time to time for arguments, but none had been putting in appearance on behalf of the respondent despite the R.S.A. No. 1037 of 1986 3 fact that this matter for hearing was also displayed on the net. However, I have heard the learned counsel for the appellant besides perusing the record with due care and circumspection. The short point raised by Mr. D.C.Dhaula, Advocate on behalf of the appellant is that as stipulated in the agreement Ex.P-1 the respondent had agreed to pay the balance amount of Rs.3200/- by way of monthly installment of Rs.350/- each, qua which he committed default. However, the debt was time barred, but Ex.P-1 having been executed by the defendant -respondent of his own is a valid consideration and specifically enforceable being a bilateral contract in view of the provisions of Section 25(3) of Contract Act, 1872. He further punctuated that the provisions of Section 18 of the Limitation Act being not applicable to this agreement, the impugned judgments are liable to be set aside. These contentions merit rejection for the discussion to follow hereunder:- The following substantial question of law arises for determination:- “Whether Ex.P-1 is covered by the provisions of Section 25(3) of the Contract Act, 1872?” Section 25 of the Contract Act, 1872 reads as under:- “25.Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt, barred by limitation law.-An agreement made without consideration is void, unless- (1) it is expressed in writing and registered under the law for the time being in force for the registration of 2[documents] and R.S.A. No. 1037 of 1986 4 is made on account of natural love and affection between parties standing in a near relation to each other ; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do ; or unless (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract. Explanation 1.-Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made. Explanation 2.-An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate ; but the inadequacy of the consideration may be taken into account, by the Court in determining the question whether the consent of the promisor was freely given.” For a case to come under Sec.25(3)(e) of the Act, there must be an express promise made in writing, signed by the persons to be charged therewith to pay only or any part of the debt of which the creditor might have enforced payment, but for the law for the limitation of suits. It is not necessary that in such writing itself the consideration should have been described as past debt. When in fact it is a past debt and was known to the R.S.A. No. 1037 of 1986 5 debtor as such a barred debt and knowingly he entered into an agreement, it is valid consideration for the promisee to pay under Sec.25(3) of the Act as ruled in Kadir Usman Mujawar Vs. Dattatraya Bhaskar Sinkar 2005 (3) Maharashtra Law Journal 1076 In Ex.P-1 it has been recited that there is still doubt with regard to the receipt of Rs.7000/- and if the first party (referring to Nagin Chand respondent) shows such receipt, this amount shall be adjusted and if he failed to do so, in that eventuality, the same shall not be set off. These words clearly indicate that this agreement is partly vague and is thus rendered unenforceable. It was obligatory upon the plaintiff- appellant to prove the existence of the old debt, the payment of which could not be enforced because of the law for the limitation of the suit. Under the stress of cross-examination, Ram Sarup plaintiff-appellant as PW-1 has testified that “ I have not brought with me the Rent note of the factory. I do not know when the factory was given on rent. xx xx I have not brought the electricity Bill and their payment receipts.” The defendant-respondent by appearing as DW-1 has totally denied the averments embodied in the plaint. In his written statement he has denied even the location of the factory. In such a situation, the plaintiff was supposed to disclose in his replication as to where the alleged factory is situated. But to his utter dismay, the replication is absolutely silent on this aspect. There being sweeping denial on the part of the defendant, it was obligatory upon the plaintiff to produce the rent note, electricity bills alongwith their payment receipts and relevant entries if any, in the account books in proof of the fact that the past debt did exist against the defendant. It was further required to be demonstrated that it was well within the knowledge of the defendant that it was a time barred debt which he had promised to pay by executing a writing voluntarily in R.S.A. No. 1037 of 1986 6 favour of the plaintiff. This evidence is lacking. Ravinder Singh PW-2 the attesting witness of Ex.P-1 went on to say in his cross-examination that “ I do not know, who was the owner of that factory and it was with whom on rent. I also do not know the duration of tenancy. xx xx At the time of settlement of amount, the electricity Bills or their payment receipts were not shown.” This evidence gives an inkling that signatures of this witness were obtained on Ex.P-1 in a perfunctory manner. Startlingly enough that he has regretted his inability to disclose the name of the owner or the tenant of the premises. In such state of affairs, it would be going too far to say that the defendant of his own had promised to pay the time barred debt by signing on Ex.P-1 in the presence of Ravinder Singh (sic). Thus to my mind, the ingredients of Section 25(3) ibid have not been fulfilled. As its consequence, Ex.P-1 is not covered by these provisions of law. Sequelly, the substantial question of law stands answered against the plaintiff-appellant. In the result, this appeal fails and is dismissed with no order as to costs. (HARBANS LAL) JUDGE July 1, 2010 RSK NOTE: Whether to be referred to the Reporter or not? Yes/No