Decided on March 03,1953

Mittadar G. Ramaswamy Chettiar Appellant
K.K. Vallabha Anandar Alias Subbier Respondents


Venkatarama Ayyar, J. - (1.) THIS is an appeal under the Letters Patent against the Judgment of Satyanarayana Rao J. The plaintiff is the appellant, and the dispute relates only to the liability of the defendant to pay costs. The facts necessary for the purpose of this appeal are these : The 2nd defendant, Vallabha Ayyangar alias Subbier, was carrying on business in the name and style of Sri Varalakshmi Stores. On 8 -3 -1943, he borrowed a sum of Rs. 5000 from the father of the plaintiff on a promissory note. There was a partition in the family of the plaintiff, and in that partition this promissory note fell to the share of the plaintiff. On 15 -9 -1945, the promissory note was endorsed in favour of the plaintiff. On 1 -1 -1946, the 2nd defendant renewed the promissory note in favour of the plaintiff. It is on this promissory note that the present suit was filed on 17 -9 -1946. The first defendant in the suit was the Varalakshmi stores which became a partnership firm from 1944, the partners being the 2nd defendant and one Narasimhachari, and the second defendant was Vallabha Anandar 'alias' Subbier the maker of the promissory note. Along with the plaint, an application for attachment before Judgment was filed and it was served on the 2nd defendant on 6 -10 -1946. The summons in the suit was served also on the same date, and 17th October was the date fixed for the hearing of the suit. On that date, the 2nd defendant paid the plaintiff's advocate a sum of Rs. 5223 -15 -4, being the entire amount of principal and interest due on the promissory note upto that date; and contended that he was not liable to pay the costs of the suit. The only point for decision in the suit thereafter was whether the 2nd defendant should be made liable for costs of the action. The Subordinate Judge held that the plaintiff was entitled to costs and granted a decree thereafter. Against that, the second defendant preferred an appeal, A. S. No. 304 of 1947 to this Court. That was heard by Satyanarayana Rao J. who held on a consideration of the facts that the 2nd defendant should not be made liable for the costs of the suit. He accordingly reversed the judgment of the Court below with reference to costs. It is against this judgment that the plaintiff has preferred this appeal.
(2.) MR . A. Viswanatha Iyer learned counsel for the appellant, argues that costs are in the discretion of the first Court and that it was beyond the province of the appellate Court to interfere with the exercise of that discretion unless a question of principle was involved and that therefore the decree of reversal passed by Satyanarayana Rao J. was erroneous. He quoted a number of authorities in support of the position that when the Court of first instance exercised a discretion with reference to costs in a particular way, that should not be interfered with in appeal, even though the Court of appeal might feel that it would have exercised its discretion differently. He relied in support of this position on the authorities in - - 'Raghavachariar v. Ponnuswami Mudali', : AIR 1940 Mad 519 (A); - -'Kozhuvammal v. Paru Amma', : AIR 1940 Mad 589 (B); - - 'Narayana Reddi v. : AIR1950Mad36 (C) and - - 'Prokash Krishna v. Radhamadan Gopal', : 50 C WN 296 (D). To the general proposition as thus stated, there could be no demur. But the point here is something different. It is whether it is not open to the appellate Court to come to a different conclusion on the facts on which the Court below exercised its discretion. It is one thing to say that when discretion is exercised in one way on particular facts it should not be interfered with by a Court of Appeal; it is quite a different thing to say that even when the Court of Appeal differs on its view of the facts, it could not interfere with the order for costs made by the Court below. In - - 'Civil Service Co -operative Society v. General Steam Navigation Co.', , (1903) 2 KB 756 (E), the principles were thus stated by the Earl of Halsbury, L. C. : "No doubt, where a Judge has exercised his discretion upon certain materials which are before him, it may not be, and I think is not, within the power of the Court of appeal to overrule that exercise of discretion. But the necessary hypothesis of the existence of materials upon which the discretion can be exercised must be satisfied. In the present case, so far as the evidence before me goes, I can see no materials whatsoever upon which the learned Judge could exercise a discretion at all." What Satyanarayana Rao J. has done is, on the materials, to reverse the findings of fact of the Subordinate Judge, and the variation in the decree for costs was consequential on the reversal of the findings of fact of the Court below. We are of the opinion that in the view taken by Satyanarayana Rao J. of the facts, it was within his power to vary the order for costs made by the Subordinate Judge. Mr. Viswanatha Ayyar next contends that the findings of fact given by Satyanarayana Rao J. are not supported by the evidence. The facts which are established by the evidence are these : The 2nd defendant is stated to be an old customer of the plaintiffs' family which had been carrying on a money -lending business. Mr. Viswanatha Ayyar concedes that the interest on the promissory note had been paid regularly; therefore it is a case in which it cannot be said that the debtor was a person who was very much in default. In fact, the evidence discloses that at the time when the promissory note dated 8 -3 -1943 was renewed under Ex. P -1 on 1 -1 -1946, there were arrears of interest due on the old promissory note and that notwithstanding that such interest was in arrears that promissory note was returned to the 2nd defendant, and in March when the plaintiff wanted payment of interest on the promissory note, Ex. P -1, he was paid not merely the interest on Ex. P -1 due down to that date but, also arrears of interest payable under the promissory note, Ex. D -1, which was superseded by Ex. P -1. All this clearly indicates that the plaintiff had full confidence in the solvency of the 2nd defendant and that he was content to collect interest from time to time on the promissory note. It is found that as a matter of fact no demand in writing was made by the plaintiff calling for payment of the amount due under the promissory note. The plaintiff no doubt stated in evidence that he made oral demands. We agree with Satyanarayana Rao J. that in the absence of a written demand it will not be safe to act upon oral demands of the kind spoken to by the plaintiff. No satisfactory explanation has been given by the plaintiff for not making a demand in writing. It is admitted that the plaintiff made no demand whatsoever on the partner of the 2nd defendant, Narasimhachari. Mr. Viswanatha Aiyar argues that the liability under Ex. P -1 arose on 8 -3 -1943 before Narasimhachari was taken as partner by Sri Varalakshmi Stores and that in law he would not be liable. But the plaint does not proceed on the footing that Narasimhachari is not liable. The allegations in paras. 3 and 4 of the plaint clearly show that the plaintiff considered that he was liable. When it is admitted that the plaintiff did not make any demand on Narasimhachari whom he thought to be liable, that certainly supports the conclusion of Satyanarayana Rao J. that he made no demand on the 2nd defendant. The fact remains that the entire amount was paid by the latter on the very first day of the hearing. The point for consideration under these circumstances is whether there was any necessity for the plaintiff to file the suit and whether there was any default on the part of the 2nd defendant after a demand was duly made for the payment of the amount due under the promissory note. Satyanarayana Rao J. had ample materials on which he could come to the conclusion that it was the plaintiff that was responsible for the institution of the suit and that the real object was to throw costs on the 2nd defendant.
(3.) ACCEPTING as we do the findings of facts reached by the learned Judge and following the principles laid down in the decisions cited on behalf of the appellant, we do not find any sufficient ground for interfering with the discretion exercised by the learned Judge in the matter of costs.;

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