Section 18 of the Limitation Act;
N.K.Assumi
(Querist) 10 August 2008
This query is : Resolved
Dear Sir,
can this documents in question amount to acknowledgement under section 18 of the LA or section 25(3) of the Indian Contract Act?
1. i hereby acknowledge my liability of Rs... ...(blank) borrowed by me from you during...(blank)
2. i acknowledge and confirm for the purpose of section 18 of the limitation act of 1963............. till the said loan is fully repaid by me.
3. i further promise to pay the aforesaid sum within 20/110/2006 failing which you can take necessary action against me.
Sign by barrower
( Revenue stamp)
This documents was send by the plaintiff the creditor to the defendant the barrower and when it was signed and send by the barrower the plaintiff on the strength of the said document as one under section of the limitation act and filed suit against the Defendant.
The suit was barred and when they realized that the suit was barred under section 18 of the LA, they said that it was a fresh contract under section 25(3) of the Contract Act, can you agree to that line of reasoning? can you cite any court rulings on this issues?
N.K.Assumi.
KamalNayanSaxena
(Expert) 10 August 2008
Acknowledgment of liability by a party not only save period of limitation but also gives cause of action to plaintiff to base its claim.
Section 18(1) itself starts with the words "Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made. .". Thus, the acknowledgment, if any, has to be prior to the expiration of the prescribed period for filing the suit, in other words, if the limitation has already expired, it would not revive under this Section. It is only during subsistence of a period of limitation, if any, such document is executed, the limitation would be revived afresh from the said date of acknowledgment.
I understand that after the expiry of the period of limitation nothing short of a clear promise can provide a fresh period of limitation. But such a promise can also be inferred by necessary implication. The Supreme Court in Hiralal v. Badkulal AIR 1953 SC 225 quoted with approval a Privy Council decision in Maniram v. Seth Rupchand 33 Ind Appeals 165 (PC) (C), that an unconditional acknowledgment was sufficient to furnish a cause of action for it implied a promise to pay. Being thus clear, it amounts to a promise within the meaning of Section 25(3) of the Contract Act. If so, the suit is plainly within time.
But in your case the amount has left blank, hence adverse inference may be drawn in your favour.
On this point, I will discuss case law later.
Murali Krishna
(Expert) 12 August 2008
Please refer to a recent judgemnt of AP High Court reported in AIR 2008 AP 131. Facts are:
"The plaintiff advanced a sum of Rs. 2,25,000/- to the 1st defendant during May 1997 without executing any document. The 1st defendant postponed the repayment of the said amount for a long time and ultimately on the intervention of the elders and well-wishers, the 1st defendant executed an agreement dated 10.12.2000 agreeing to repay the amount due within six months; in default, he would handover his house bearing No. 1-9-559 to the plaintiff as per the market value prevailing as on 10.6.2001. The first defendant though did not make the payment within the time agreed, issued a cheque dated 30.6.2001"
The High Court held: " Section 25(3) of the Contract Act, 1872 operates as an exception to the law of limitation and where there is an agreement between the parties under which there is an express promise to pay the time barred debt, the suit cannot be held to be barred by limitation." Hence, the finding of fact recorded by the Courts below that Ex.Al agreement is an acknowledgment of the liability of the 1st defendant in respect of the debt availed by him in the year 1997 does not suffer from any infirmity. Consequently the suit cannot be held to be barred by limitation.
I hope this will give you clarifications.
N.K.Assumi
(Querist) 13 August 2008
Dear Kamalnayan Saxena,
Thank you so much for your expertise. Can you please look up to the decisions of Calcutta high Court as reported in Nur Hussain Serang Vs Tamaji Ud Din AIR 1941 Cal 449 page 451, Siram Arjundas Vs G.G.In council 86 CLJ 308 and Laxminaryan Pairo Vs State of Orissa (1975) 41 Cut.L.T.180 at pge 181-185: i am not having those reports and If you can please see those reports and let me know the observations of the Court and also your own views in the matter, I will be very grateful.
By the way when appeal is filed from the lower court to the superior Civil court in the District what term is used by the Respodent/Defendants for written submission against the appeal in favor of the decree of the lower Court: we usually used Affidavit in Opposition in reply to the memorandum of appeal: is that the correct one or memorandum of Objections as per Order 41 R 22: Could you kindly let me know about this aspects also? once again thank you. Hope to hear from you soon.
N.K.Assumi.
N.K.Assumi
(Querist) 13 August 2008
Dear M.Krishna,
Thank you for your kind reply. In AP case there was a clear case of Contract say novation which extend the period of limitation, but in my case the documents was send as one under section 18 of the LA as the documents itself express that "for the purpose of section 18 of the limitation act and not for the purpose of Contract act under section 25. More over the amount payable by the defendaant was left blank, so can we read that as contract under section 25(3) Once again thank you and hope to hear from you soon.
N.K.Assumi.
KamalNayanSaxena
(Expert) 15 August 2008
Dear Assumi
I apologize for the delay in reply. You have raised a very interesting question. I will try to resolve your query as soon as I get free.
N.K.Assumi
(Querist) 16 August 2008
Dear Kamalnayan Saxena,
We are all aware how deep is the law, the more we dive the more it gets deeper and finding the finality for the cause of justice takes time and hard labor. I am in no hurry except my handicap in not having those states report. So take your time and do let me know please. Once again thank you for your considerate opinion and help.
With kind regards and hope to hear from you soon.
N.K.Assumi
