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P.C. Bhandari Vs. New Victoria Mills - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 666 of 1971
Judge
Reported inAIR1979All1
ActsCode of Civil Procedure (CPC) , 1908 - Order 7, Rule 6; Code of Civil Procedure (CPC) (Amendment) Act, 1976; ;Limitation Act, 1963 - Sections 18
AppellantP.C. Bhandari
RespondentNew Victoria Mills
Appellant AdvocateK.L. Grover, Adv.
Respondent AdvocateS.N. Verma, Adv.
DispositionAppeal dismissed
Excerpt:
.....- suit for recovery of debt - letters of acknowledgement of debt sent after expiry of period of limitation - letters to be taken into account - can be permitted to claim exemption from law of limitation. (ii) unconditional acknowledgement - section 18 of limitation act, 1963 - challenged that acknowledgement should be unconditional - law does not require unconditional acknowledgement - acceptance of a legal relationship is sufficient. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by..........follows (at p. 1238): 'words used in the acknowledgment must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. if the statement is fairly clear, then the intention to admit jural relationship may be implied from it.' 9. this case was followed by the supreme court in tilak ram v. nathu : air1967sc935 . the matter again came up for decision before the supreme court in lakstmirattan cotton mills co. ltd. v. aluminium corporation of india ltd. : [1971]2scr623 and their lordships observed as under (at p. 1485): 'it.....
Judgment:

S.J. Hyder, J.

1. The short question which requires consideration in this second appeal is whether limitation for the suit filed by the plaintiff-respondent was saved under Section 18 of the Limitation Act, 1963. On this question, the two courts below have differed. The trial court was of the view that the suit of the plaintiff-respondent was barred by time and Section 18 of the Limitation Act did not come to his assistance. The lower appellate court, however, has taken a different view. It has come to the conclusion that Ext. 7 dated 13th of Nov. 1962 and Ext. 9 dated 14th ot May. 1963, which are letters written by the defendant were sufficient acknowledgments and saved limitation under Section 18 of the Act.

2. The suit filed by the plaintiff-respondent was for the recovery of a sum of Rupees5,622.88. It is not in dispute between the parties that the defendant-appellant was purchasing cloth from the plaintiff-respondent who are producers. The last purchase was admittedly made by the defendant on 15-9-1961 and the aforesaid amount represented the balance of the amount due to the plaintiff-respondent. The suit was instituted oil 11-3-66 i.e. well beyond three years from the date of the last purchase. In order to save limitation, the plaintiff relied oil a letter written by the defendant dated 2nd March, 1965. The trial court was of the view that the letter dated 2nd March, 1965 was an acknowledgment made after the expiry of three years from the date of the last purchase and could not be taken into account. It further held that Exts. 7 and 9, to which reference has already been made above, cannot be taken into consideration since the same have not been pleaded as saving limitation, in the statement of claim. The first court of appeal has held that the letters Exts. 7 and 9 could be taken into account in spite of the fact that they have not been referred to in the plaint, It further held that the said letters amounted to acknowledgment within the meaning of Section 18 of the Limitation Act, 1963 and, therefore, saved limitation. The appellate court accordingly decreed the suit of the plaintiff-respondent.

3. Order VII, Rule 6 of the Civil P. C. lays down that where a suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint shall show the ground upon which exemption from such law is claimed. To this rule, a proviso has been added by the C. P. G. (Amendment) Act, 1976, which reads as follows :--

'Provided that the court may permit the plaintiff to claim exemption from the law of limitation on any ground not set out in the plaint, if such ground is not inconsistent with the grounds set out in the plaint.'

4. The said amendment is of a procedural nature. It is settled law that a litigant has no vested right in procedure. There is no reason why the law amended should not be taken into account. The first court of appeal has exercised its discretion in favour of the plaintiff-respondent. The exercise of the said discretion cannot be said to be perverse or erroneous in law. Apart from the reasoning of the court below on this question, with which I concur, I am of the view that after the amendment in Order 7, Rule 6 of the Civil P. C., there can be no impediment in taking into consideration Exts. 7 and 9 for the purpose referred to in the opening part of the aforesaid provision of law.

5. The appellant has argued that the said letters namely, Exts. 7 and 9 did not amount to acknowledgment. The letter Ext. 7 dated 13th Nov. 1962, after stating that the account books of the defendant-appellant were not available at Kanpur and had been sent for the purpose of checking the payment made to the plaintiff, concluded by saying;

'For the present, I cannot say about the whole matter but I can assure you that I shall do my best to see that the outstanding, if any, is liquidated as early as possible.'

6. In the letter Ext. 9 dated 14th of May, 1963, it was stated that there were cordial relations existing between the parties and if in spite of that the plaintiff-respondent proceeded to take legal action for the recovery of the amount which they claimed was due to them, they could do so. It was also stated that the accounts sent by the plaintiff-respondent were being verified. In the said letter it was stated as follows in the last paragraph :-

'Anyway we will not bring this matter into controversy because we still hope that you will be able to pay us and we assure you that we will be able to pay you the last penny but it is necessary that we should be able to look into the matter in our books of accunts which are not in our possession.'

7. The appellant urged that the words quoted above did not amount to an acknowledgment of liability so as to attract Section 18 of the Indian Limitation Act, 1963. According to the appellant, an acknowledgment within the meaning of Section 18 of the Indian Limitation Act must be an unconditional admission to pay exact amount claimed by the plaintiff. It was submitted that by means of the said letters Exts. 7 and 9, the defendant appellant only stated that he would pay any sum of money which was found due after checking the amount with the help of his own account books.

8. After considering the matter, I am unable to accept the contention of the learned counsel. Section 18 of the Limitation Act does not contain anything to warrant the submission that the admission in order to amount to an acknowledgment within the meaning of Section 18 of the Limitation Act must be unconditional. The scope of Section 18 of the Limitation Act, 1963 which substantially corresponds to Section 19 of the Limitation Act, 1908, has been considered in a number of decided cases. A Division Bench of this Court in Sant Lal v. Beni Prasad : AIR1925All340 , held that when the writer of a document alleged to be an acknowledgment within the meaning of Section 19 of the Limitation Act, 1908, admitted the existence of a running account between the parties and went on to say that his representatives would compare accounts and pay what was found to be due was a sufficient acknowledgment within the meaning of the aforesaid provision of law. The matter was considered by the Supreme Court in Shapoor Fredoom Mazda v. Durga Prosad Chamaria : [1962]1SCR140 . In that case it was observed as follows (at p. 1238):

'Words used in the acknowledgment must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship. Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear, then the intention to admit jural relationship may be implied from it.'

9. This case was followed by the Supreme Court in Tilak Ram v. Nathu : AIR1967SC935 . The matter again came up for decision before the Supreme Court in Lakstmirattan Cotton Mills Co. Ltd. v. Aluminium Corporation of India Ltd. : [1971]2SCR623 and their Lordships observed as under (at p. 1485):

'It need not, however, amount to a promise to pay, for an acknowledgment does not create a new right of action but merely extends the period of limitation. The statement need not indicate the exact nature or the specific character of the liability. The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence of jural relationship between the parties, such as, for instance, that of a debtor and a creditor, and the intention to admit such jural relationship. Such an intention need not be in express terms and can be inferred by implication from the nature of the admission and the surrounding circumstances. Generally speaking, a liberal construction of the statement in question should be given.'

10. Keeping the test down in the cases referred to above, there cannot be any manner of doubt that the defendant-appellant admitted the jural relationship of debtor and creditor between himself and the plaintiff-respondent. The defendant-appellant also expressed his readiness and willingness to pay any amount which may be found due to the plaintiff-respondent after looking into the account books. The letter dated 2nd March, 1985 (Ext. 11) contains a clear and unequivocal admission of the plaintiff's claim without specifying the exact amount. In the written statement itself, it has been conceded on behalf of the defendant-appellant that a sum of Rs. 2749.70 was due to the plaintiff from them. Taking into account all these facts, I am of the opinion that the first court of appeal was right in passing a decree in favour of the plaintiff-respondent.

11. The result is that this second appeal fails and is hereby dismissed with costs.


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