1935 (7) TMI 26 - HC - Indian Laws

Summary

Issues:
1. Limitation - Whether the suit was barred by limitation.
2. Set-off - Whether the defendants were entitled to a certain set-off against the plaintiffs' claim.

Limitation Issue:
The case involved a money suit based on a hundi for a specific amount. The defendants raised the issue of limitation, arguing that the suit was time-barred. The plaintiffs, who were minors, sought to save limitation by citing certain payments made by the defendants. The trial court held that the suit was not barred by limitation due to the minority status of the plaintiffs. The Court of appeal upheld this decision. The defendants contended that as the hundi was in the name of a firm, the firm could not benefit from Section 6 of the Limitation Act. However, the court clarified that a firm is not a legal entity and that partners collectively constitute a firm. The plaintiffs, being minors, could avail themselves of the provisions of Section 6, regardless of the hundi being in the firm's name. The court rejected the argument that the plea of minority to save limitation was not raised in the plaint, emphasizing that the law itself indicates the circumstances under which a different period will apply.

Set-off Issue:
Regarding the set-off claimed by the defendants, four items were in question. Two items were allowed by both lower courts, one was disallowed, and the fourth item, representing the cost of litigation for appointing a guardian for the minor plaintiffs, was the subject of contention. The trial court allowed this amount as an equitable set-off, but the Court of appeal disagreed. The defendants argued that the amount was legally recoverable under Section 70 of the Contract Act. However, the court found that the amount spent on litigation was not connected to the hundi transaction and was not legally recoverable from the plaintiffs. The court highlighted that Section 70 applies when a benefit is done to another not intended gratuitously, and the person benefiting should have the option to refuse it. The court concluded that the defendants were not entitled to recover the litigation costs from the plaintiffs and dismissed the appeal with costs.

This detailed judgment by the High Court of Patna addressed the issues of limitation and set-off in a money suit involving minors and a hundi transaction. The court clarified the legal principles regarding firms, minors' rights under the Limitation Act, and the scope of recoverable costs under the Contract Act.