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Jeevraj and anr. Vs. Lalchand and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Limitation
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 237 of 1958
Judge
Reported inAIR1969Raj192
ActsLimitation Act, 1963 - Sections 19; Constitution of India - Article 141; Contract Act, 1872 - Sections 25(3); Stamp Act, 1899 - Schedule - Article 1
AppellantJeevraj and anr.
RespondentLalchand and ors.
Appellant Advocate M.M. Vyas, Adv.
Respondent Advocate Hastimal, Adv.
DispositionAppeal allowed
Cases ReferredGhulam Murtuza v. Mt. Fasihunnissa Bibi
Excerpt:
- - mangilal, 1961 raj lw 634, it was held by a learned single judge of this court after referring to a number of authorities, that expressions like 'lena dena, baki lena, baki dena or baki rahe' do not import a distinct promise to pay and merely amount to an acknowledgment. of this court, as he then was, that the decision of the supreme court in heeralal's case air 1953 sc 225 could not be said clearly to overrule the view that a mere acknowledgment as distinguished from an acknowledgment in which there are words from which an implied promise to pay may be inferred, cannot be the basis of a suit. strictly speaking, this question did not arise in the said case because the entries on which the suit was founded clearly fell within the term 'account stated',but the learned chief justice.....dave, c.j.1. this is a second appeal by the plaintiffs whose money suit was decreed by the trial court, viz., civiljudge, sojat, but dismissed by the district judge, pali, on the defendants' appeal.2. the suit was based on a khata-entry ex. 1 appearing in the plaintiff's account books. the said entry was in the following language:--[original in marwadi omitted -- ed.rendered in english, it would read as follows:-- 'account of shah kunanmalji lalchandji of marwar junction of the year s. 2009.6022/-balanceto be received as per account givenabove. rs. 6022/-in figures rupeessix thousand and twenty-two only.kati sudi 1 smt. 2009. signed bhandari jeevraj. balance struck in thepresence of kunanmal lalchand. signedlalchand for kunanmal lalchand. rs. 6022/- in figures rupees six thousand.....
Judgment:

Dave, C.J.

1. This is a second appeal by the plaintiffs whose money suit was decreed by the trial court, viz., CivilJudge, Sojat, but dismissed by the District Judge, Pali, on the defendants' appeal.

2. The suit was based on a Khata-entry Ex. 1 appearing in the plaintiff's account books. The said entry was in the following language:--

[Original in Marwadi Omitted -- Ed.Rendered in English, it would read as follows:--

'Account of Shah Kunanmalji Lalchandji of Marwar Junction of the year S. 2009.

6022/-

Balanceto be received as per account givenabove. Rs. 6022/-in figures Rupeessix thousand and twenty-two only.Kati Sudi 1 Smt. 2009. Signed Bhandari Jeevraj. Balance struck in thepresence of Kunanmal Lalchand. SignedLalchand For Kunanmal Lalchand. Rs. 6022/- in figures Rupees six thousand andtwenty-two are to be paid. Signed Misrimal KunanmaL Signed Premraj.

Witness- Sewag Pukhraj atRanawas at the instance ofMishri Mal of Marwar Junction in his presence.'

The defendants contested the suit on several grounds, one of them being that the entry Ex. 1 was merely an acknowledgment and that it could not be made the basis of the suit. The trial Court repelled this contention, dismissed other objections and passed a decree for Rs. 6215/- with costs and future interest. On the defendants' appeal, the District Judge came to the conclusion that the entry on which the suit was founded was nothing more than a mere acknowledgment and as such, the suit could not be based thereon. Accordingly, he allowed the appeal, set aside the trial Court's decree and dismissed the suit with costs.

He relied on the decisions of this Court in Hastimal v. Shankerdan, ILR (1951) 1 Raj 297=(AIR 1952 Raj 7 (FB)), and Ramdayal v. Maji Deodiji of Riyan, ILR (1955) 5 Raj 85=(AIR 1956 Raj 12). Aggrieved by that judgment and decree dated 14-5-58, the plaintiffs filed a second appeal which came before a learned single Judge of this Court. It was argued before him that the Full Bench decision of this Court in ILR (1951) 1 Raj 297 = (AIR 1952 Raj 7) (FB) (supra) must be taken to be overruled by the decision of their Lordships of the Supreme Court in Hiralal v. Badkulal, AIR 1953 SC 225. He, therefore, considered it proper that the case be referred to a Division Bench. When the case went to the Division Bench, it was observed by the learned Judges that in ILR (1955) 5 Raj 85 = (AIR 1956 Raj 12) (supra), it was held by a Division Bench of this Court that the Full Bench decision in Hastimal's case, ILR (1951) 1 Raj 297 = (AIR 1952 Raj 7 FB) (supra) was not overruled by the decision of their Lordships of the Supreme Court in Hiralal's case (supra)and that if that view required re-consideration, the case should be referred to a Full Bench, It is in these circumstances that the present case has come before us,

3. The short question which arises for our determination is, whether the suit could be founded on the basis of the document Ex. 1.

4. Now, the bare perusal of the document Ex. 1 would show that although it was noted therein that the balance of Rs. 6022/- was struck 'on the basis of account noted above', it is common ground between the parties that the previous account did not appear on the lead on which Ex. 1 was executed. The words as per account given above' appearing in Ex. 1 are, therefore, misleading. There was no account stated above the said entry. If the previous account were stated on the same leaf or this entry were made in continuation of an account appearing on the preceding page, perhaps it might have been possible for the plaintiffs to argue that it was an 'account stated'. The document Ex. 1 does not disclose what kind of transaction or transactions took place between the parties and how the figure of Rs. 6022/- was arrived at. It is settled law that a suit can be based on 'account stated' and this view has been taken by this Court also in Ramdayal's case, ILR (1955) 5 Raj 85= (AIR 1956 Raj 12) (supra). The term 'account stated', however, is to be understood in the sense explained by their Lordships of the Privy Council in Bishunchand v. Girdharilal, AIR 1934 PC 147. In that case, it was observed by their Lordships as follows:--

'Indeed, the essence of an account stated is not the character of the items on one side or the other, but the fact that there are cross items of account and that the parties mutually agree the several amounts of each and, by treating the items so agreed on the one side as discharging the items on the other side pro tanto, go on to agree that the balance only is payable. Such a transaction is in truth bilateral, and creates a new debt and a new cause of action. There are mutual promises, the one side agreeing to accept the amount of the balance of the debt as true (because there must in such cases be, at least in the end, a creditor to whom the balance is due) and to pay it, the other side agreeing the entire debt as at a certain figure and then agreeing that it has been discharged to such and such extent, so that there will be complete satisfaction on payment of the agreed balance. Hence, there is mutual consideration to support the promises on either side and to constitute the new cause of action. The account stated is accordingly binding, save that it may be reopened on any ground -- for instance,fraud or mistake -- which would justify setting aside any other agreement.' It is obvious that there being no cross-Items in Ex. 1, it cannot stand the test laid down by their Lordships of the Privy Council in the above passage and hence the entry does not fall within the ambit of the term 'account stated'.

5. It was next argued by the appellants' learned Counsel that the words 'Dena Chhe' appearing after the signature of defendant Mishrimal Kunanmal Indicate that the defendants had made an express promise to pay the amount of Rs. 6022/-, but, in my opinion, there is no force in this argument. These words only meant that Rs. 6022/- were payable. In Phoolchand v. Mangilal, 1961 Raj LW 634, it was held by a learned Single Judge of this Court after referring to a number of authorities, that expressions like 'Lena Dena, Baki Lena, Baki Dena or Baki rahe' do not import a distinct promise to pay and merely amount to an acknowledgment.

Both the Courts below have treated the entry Ex. 1 as an acknowledgment and, in my opinion, they rightly held it to be so. The only difference of opinion between the two Courts below was that while, according to the trial Court, Ex. 1 being an unconditional acknowledgment, the suit could be founded thereon, the first appellate Court was of opinion that even if the acknowledgment was unconditional, it could not, as such, become the basis of the suit. In its view, such an acknowledgment could only extend the period of limitation and the suit should have been based on the original cause of action. The real question for our determination therefore is, whether the suit could be based on the conditional acknowledgment contained In Ex. 1.

6. Unfortunately, there has been a sharp difference of opinion on this subject between different judges of different High Courts as also between different Judges of the same High Court. So far as this Court is concerned, it has been consistently taking the view ever since it decided in 1950, Kanraj v. Vijaisingh, 1950 Raj LW 284= (AIR 1951 Raj 74) that an acknowledgment of liability only extends the period of limitation, if it is made before the expiry of the period of limitation, but it does not create a new right and consequently, it cannot form an independent cause of action for a suit. In the said case, two learned Judges of this Court arrived at the above conclusion after reviewing a number of cases decided by different High Courts.

The correctness of this view was doubted later on, in another case, because the former Chief Court of Jodhpur had taken a different view and, therefore, the same question was referred to a Full Bench in ILR (1951) i Raj 297=(AIR 1952 Raj 7FB) (supra). All the learned Judges (although two of them were not parties to the first case) again held the view that 'a mere acknowledgment of debt did not operate as a new contract and could not be made the basis of a suit. It could only keep alive the original cause of action and the suit must be founded on such original cause of action. The acknowledgment of debt would enure to the benefit of the creditor for the purpose of saving limitation if it is made before the original debt became barred by time.'

7. In ILR (1955) 5 Raj 85= (AIR 1956 Raj 12) (supra), this question was raised again and it was urged that the Full Bench decision of this Court in ILR (1951) a Raj 297=(AIR 1952 Raj 7 FB) (supra) stood overruled by the decision of their Lordships of the Supreme Court in AIR 1953 SC 225 (supra). While dealing with this question, it was observed by Wanchoo C. J. of this Court, as he then was, that the decision of the Supreme Court in Heeralal's case AIR 1953 SC 225 could not be said clearly to overrule the view that a mere acknowledgment as distinguished from an acknowledgment in which there are words from which an implied promise to pay may be inferred, cannot be the basis of a suit. Strictly speaking, this question did not arise in the said case because the entries on which the suit was founded clearly fell within the term 'account stated', but the learned Chief Justice made these remarks in order to remove the cloud of doubt which was sought to be cast on the correctness of the view taken in ILR ; (1951) 1 Raj 297=(AIR 1952 Raj 7 FB) (supra).

It was pointed out that in AIR 1953 SC 225 (supra), the suit was based on 'account stated' and the observations of their Lordships of the Supreme Court on the question whether a suit could, be founded on an unconditional acknowledgment were obiter. I agreed with the view of Wanchoo, C. J., that the observations of their Lordships in. Heeralal's case, AIR 1953 SC 225 did not clearly overrule the decision of this Court In ILR (1951) 1 Raj 297= (AIR 1952 Raj 7 FB). In 1961 Raj LW 634 (supra), this view again found support from another learned Single Judge of this Court.

8. Learned Counsel for the appellants has now again strenuously urged that the view expressed in ILR (1955) 5 Raj 85= (AIR 1956 Raj 12) (supra) Is not correct and that, according to the observations of their Lordships of the Supreme Court In AIR 1953 SC 225 (supra), a suit can be founded on an unconditional acknowledgment. It is pointed out that in the said case their Lordships had approved the view taken by their Lordships of the Privy Council in Maniram Seth v. Seth Rupchand, (1906) ILR 33 Cal 1047 (PC),Kahanchand Dularam v. Dayaram Amritlal, AIR 1929 Lah 263 and Fateh Mahommed v. Gangasingh, AIR 1929 Lah 264 and that the only conclusion deducible from their Lordships' remarks is, that a suit can be based on an unconditional acknowledgment since it implies a promise to pay the debt. It is urged that the view taken by the first appellate Court is incorrect, that the judgment and decree of that Court should therefore be set aside and that of the trial Court should be restored.

9. I have given anxious consideration to this argument. It may be observed that the sheet-anchor of the view that a suit can be founded on an unconditional acknowledgment because it implies a promise to pay, is the observation made by their Lordships of the Privy Council in Maniram Seth's case, (1906) ILR 33 Cal 1047 (PC) (supra). In almost all the later cases in which this view has been taken by the learned Judges of other High Courts, great stress is laid on the observations of their Lordships to the effect that 'an unqualified acknowledgment has always been held to imply a promise to pay because that is the natural inference it nothing is said to the contrary. It is what every honest man would mean to do.'

10. Now, it may be pointed out that their Lordships of the Privy Council have themselves observed in Punjab Co-operative Bank Ltd. v. Commissioner of Income-tax, Lahore, AIR 1940 PC 230 that 'every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed or qualified by the particular facts of the case in which such expressions are to be found'. It, therefore, becomes necessary to see in what connection their Lordships made the said observation and whether it would be proper to make use of it after it is severed from its context.

11. In (1906) ILR 33 Cal 1047 (PC) (supra), Maniram was an adopted son of one Motiram. There were regular dealings between Motiram and Seth Rupchand from July 21, 1895 to May 12, 1898; and at the close of dealings Seth Rupchand owed to Motiram Rs. 5841/9/1 on account of principal, and Rs. 2801/2/-for interest. There was no dispute between the parties about the correctness of these amounts. The only dispute between the contending parties was whether the action brought by Maniram after the death of his adoptive father was filed within the prescribed period of limitation. The suit was brought on 5-9-1901 and the only defence raised by Seth Rupchand was that the action was barred by lapse of time. It appears from the perusal oftheir Lordships' judgment that when Motiram died, he had left a will and therein he had appointed Seth Rupchand as one of the five trustees to administer his estate. Three of the trustees of whom Seth Rupchand was one, applied for probate. That application was opposed by the other two trustees and also by one Kishandas who was natural father of Maniram. The said application for probate failed on certain grounds which need not be enumerated here. One Rambordas, as next friend of Maniram, had instituted the suit. Later on, he was substituted by Maniram's natural father Kishandas. When Seth Rupchand raised the question of limitation, it was pointed out on behalf of the plaintiff Maniram that in the probate proceedings one of the objections against grant of probate in favour of Seth Rupchand was, that he owed money to Motiram's estate and that, in his examination during those proceedings, Seth Rupchand had made a statement to the effect that 'for the last five years he had open and current accounts with the deceased.'

This part of his statement was sought to be used as an acknowledgment for extending the period of limitation. After referring to this statement, it was observed by their Lordships that

'it was a clear admission that there were open and current accounts between the parties at the time of the death of Motiram. The legal consequence would be that at that date either of them had a right as against the other to an account. It follows equally that, whoever on the account should be shown to be the debtor to the other, was bound to pay his debt to the other, and it appears to their Lordships that the inevitable deduction from this admission is that the respondent acknowledged his liability to pay his debt to Motiram or his representative if the balance should be ascertained to be against him.'

The question raised before their Lordships was whether this much admission was sufficient in Indian Law to extend the period of limitation. While dealing with this question, their Lordships referred to the provisions of Section 19 of the Indian Limitation Act, as it stood at that time, and then posed the question 'whether an acknowledgment of liability, if the balance on investigation should turn out to be against the person making the acknowledgment, is sufficient'. While discussing this question, their Lordships referred to the following observations of Lord Justice Mellish in In re Rivers Steam Company, Mitchell's claim (1871) LR 6 Ch App 822:--

'An acknowledgment to take the case out of the Statute of Limitations, must be either one from which an absolute promise to pay can be inferred, or, secondly, an unconditional promise to pay thespecific debt, or, thirdly, there must be a conditional promise to pay the debt, and evidence that the condition has been performed.'

Thereafter, their Lordships proceeded to observe that-

'an unconditional acknowledgment has always been held to imply a promise to pay, because that is the natural inference, if nothing is said to the contrary. It is what every honest man would mean to do. There can be no reason for giving a different meaning _ to an acknowledgment that there is a right to have the accounts settled, and no qualification of the natural inference that, whoever is the creditor shall be paid, when the condition is performed by the ascertainment of a balance in favour _ of the claimant. It is a case of the third proposition of Lord Justice Mellish, a conditional promise to pay and the condition performed'.

It is crystal clear from what has been narrated above that Lord Justice Mellish had made the above observation while dealing with the question as to what kind of acknowledgment was sufficient to take the case out of the Statute of Limitations and their Lordships of the Privy Council also made the above observation only to stress that not only an unconditional but even a conditional promise to pay the debt could extend the period of limitation. Their Lordships only meant to point out the utility of an unconditional acknowledgment for saving the bar of limitation, and in that connection, it was observed that an unconditional acknowledgment always implies a promise to pay because that is the natural inference if nothing is said to the contrary. It was also observed by their Lordships that if there is a conditional promise to pay and if on the condition being performed a debtor is found liable to pay to the creditor, such an acknowledgment would extend the period of limitation.

In short, the observations of their Lordships were made only in connection with the question of limitation. There was no question before their Lordships whether in Indian Law a suit could be founded on an unconditional acknowledgment and, therefore, there was no decision to that effect. It is significant that even after the said observations of their Lordships of the Privy Council, there continued to remain a sharp difference of opinion between the learned Judges of different High Courts and even amongst the learned Judges of the same High Court as to whether a suit could be founded on an unconditional acknowledgment.

12. In Abdul Rafiq v. Bhajan, AIR1932 All 199, Sulaiman, Ag. C. J., as hethen was, examined the observations oftheir Lordships of the Privy Council inManiram Seth's case, (1906) ILR 33 Cal1047 (PC) (supra) at great length and took pains to show that their Lordships could not have meant to lay down that every unconditional acknowledgment which implies promise to pay, should be made the basis of the suit. It does not appear from Heeralal's case, AIR 1953 SC 225 (supra), if the views of Sulaiman, Ag. C. J., expressed in this case, were brought to the notice of their Lordships of the Supreme Court.

13. In Balkrishna v. Debsingh, AIR 1934 All 76, two other learned Judges of the same High Court agreed with the views of Sulaiman, C. J.

14. In Ht. Janaka v. Sheocharan, AIR 1932 Oudh 49, Wazir Hasan, C. J. and Srivastava, J., also expressed the same opinion that, according to the Indian Law, acknowledgment does not operate as a new contract, but only keeps alive the original cause of action.

15. In Ramprasad Jagbandhoo V. Anandi Brindawan Rawat, AIR 1938 Nag 180 also the observations of their Lordships made in Haniram Seth's case, (1906) ILR 33 Cal 1047 (PC) (supra) were pointed out to the Court and yet Vivian Bose, J., (who later on adorned the Supreme Court as a Judge) held the view that 'an acknowledgment under Section 19 of the Limitation Act cannot operate to save limitation unless it has been executed within time; 'also in such a case the suit must be founded on the original cause of action',' (underlining (here in ' ') is ours).

16. In AIR 1953 SC 225 (supra), their Lordships of the Supreme Court, no doubt, referred to the observations of their Lordships of the Privy Council in (1906) ILR 33 Cal 1047 (PC) (supra), to point out what their Lordships of the Privy Council had observed in that case, but did not offer their own comments about it. Their Lordships also referred to earlier decisions of the Lahore High Court. Out of them, AIR 1929 Lah 263 (supra), was obviously a suit founded on 'account stated'. The facts of the case AIR 1929 Lah 264 (supra), have not been stated in detail and, therefore, it cannot be said whether the suit in that case was based on an unconditional acknowledgment and no more. It is noteworthy that at the end of the paragraph 11 of their judgment, it was observed by their Lordships as follows:

'The acknowledgment which forms the basis of the suit was made in the ledger of the plaintiffs in which earlier mutual accounts had been entered and truly speaking, the suit was not based merely on this acknowledgment but was based on the mutual dealings and the accounts stated between them and was thus clearly maintainable.'

It is obvious from the said observation that the suit in that case was based on'account stated' and not on a mere unconditional acknowledgment.

17. Learned Counsel for the appellants has mainly stressed on what their Lordships further observed in paragraph 12 of their judgment as below:--

'Mr. Bindra drew our attention to a decision of the Allahabad High Court in Ghulam Murtuza v. Mt. Fasihunnissa Bibi, AIR 1935 All 129 wherein it was held that even if an acknowledgment implies a promise to pay it cannot be made the basis of the suit and treated as giving rise to a fresh cause of action. We have examined the decision and we are satisfied that it does not lay down good law.'

It is undoubtedly true that their Lordships did not approve of all that was observed by the learned Judges of the Allahabad High Court in AIR 1935 All 129. In that case, Sulaiman, C. J., had observed as follows:--

'But there is no doubt that a receipt containing an acknowledgment of a previous debt may not be a mere acknowledgment, i. e., a bare admission of the existing liability, but it may contain words indicating an implied promise to pay the earlier debt. 'Whether it is a mere acknowledgment or it is more than an acknowledgment and contains an implied promise to pay will of course depend on the terms of the particular document. But assuming that it amounts to an implied promise to pay, it does not follow that they can be made the basis of a suit' and treated as giving rise to a fresh cause of action. 'If the debt had not become barred by time then even an express promise to pay it is nothing more than a promise to do what a person is, under the law, bound to do. It cannot be treated as a fresh contract or a novation of the old contract and is on no higher footing than mere acknowledgment'. On the other hand, if the debt had become barred by time, then an implied promise to pay it would be of no avail because under Section 25(3), Contract Act, it cannot be treated as a promise, made in writing, to pay a time-barred debt. When there is no express promise to pay but the intention is inferred only indirectly, it cannot be treated as a promise in writing to pay the time-barred debt The plaintiff therefore would not be entitled to take advantage of such an implied pro-raise to pay a time-barred debt.

On the other hand, if there is a fresh consideration proceeding from the promise and the parties enter into a new contract which replaces the previous contract and supersedes it, then it certainly becomes the basis of a new cause of action and a suit would He upon it becausethe contract is binding on the parties, being for consideration. But where there isno fresh consideration proceeding from the promisee, the transaction cannot be treated as an agreement between two parties as it is only a one-sided promise to pay a debt which was due', (underlining (here in ' ') is ours).

It would appear from the above passage that Sulaiman, C. J., made a number of observations and it would be difficult to hold that their Lordships of the Supreme Court had disapproved all of them. For instance, it was observed by Sulaiman, C. J., that if the debt had become barred by time, then an implied promise to pay would be of no avail because under Section 25(3) of the Indian Contract Act, it cannot be treated as a promise made in writing to pay a time-barred debt. It is well settled that if there is a contract for paying time-barred debts under Section 25(3) of the Contract Act, the promise must be in writing and so there must be an express promise to pay. An Implied promise to pay time-barred debts would not be covered by Section 25(3) of the said Act.

It cannot be said that their Lordships of the Supreme Court were disapproving this expression of the view. What their Lordships appeared to have disapproved was perhaps the observations which preceded the remarks relating to Section 25(3) of the Contract Act. Sulaiman, C. J., had gone to the extent of saying that 'if the debt had not become time-barred, then even an express promise to pay it, is nothing more than a promise to do what a person is, under the law, bound to do. It cannot be treated as a fresh contract or a novation of the old contract and is on no higher footing than mere acknowledgment.' He also observed that even if a document was more than an acknowledgment and contained a further implied promise to pay, it could not be made the basis of a suit. This was an extreme view which did not appeal to us also because an express promise to pay a debt which was within limitation could not be placed on a worse footing than an express promise to pay the time-barred debt. Similarly, if, over and above the existing debt, there is some fresh consideration from the side of the creditor and on account of that consideration, there is an implied promise by the debtor to pay the debt, it can, as a new agreement, form the basis of the suit.

Therefore, while deciding ILR (1955) 5 Raj 85=(AIR 1956 Raj 12) (supra), it was thought that their Lordships of the Supreme Court had perhaps disapproved this extreme view when they observed that the decision En AIR 1935 All 129 (supra), did not lay down good law. In - the absence of detailed comments of their Lordships about this case, it is extremely difficult to say which observations were considered to be laying down bad law. Atany rate, their Lordships did not lay down firmly in positive terms that since an unconditional acknowledgment implies a promise to pay, it can, in every case, be made the basis of a suit.

18. In Shapoor Freedom Mazda v. Durga Prosad Chamaria, AIR 1961 SC 1236, their Lordships of the Supreme Court, after referring to Section 19 of the Indian Limitation Act and explaining its provisions, proceeded to observe that 'it is thus clear that acknowledgment as prescribed by Section 19 'merely renews debt; it does not create a new right of action'' (underlining (here in ' ') is ours). It is noteworthy that Section 19 refers both to conditional and unconditional acknowledgments and yet their Lordships observed that an acknowledgment merely renews debt. The use of the word 'merely' is significant and shows that in their Lordships' opinion the only utility of an acknowledgment was to renew the debt. Their Lordships further observed in clear words that it did not create a new right of action. It is also noteworthy that their Lordships, while observing that an acknowledgment does not create a new right of action, did not add that this would not apply if the acknowledgment is unconditional. It is true that their Lordships made no reference in that case to the observations made in AIR 1953 SC 225 (supra), nor there was a pointed question before their Lordships to decide whether an unconditional acknowledgment could be made the basis of the suit. But, one cannot lose sight of the fact that one of the learned Judges deciding this case was the same who had considered Heeralal's case, AIR 1953 SC 225 in ILR (1955) 5 Raj 85 = (AIR 1956 Raj 12) (supra).

19. I have referred to these observations only to show that counsel for either parties have not been able to refer to us any case wherein their Lordships of the Supreme Court might have clearly and firmly laid down that every unconditional acknowledgment can be made the basis of a suit. So long as their Lordships of the Supreme Court do not take a different view, I see no reason to make a departure from the view which this Court has consistently held so far and according to which an acknowledgment, whether it is conditional or unconditional, cannot form the basis of a suit and it can only serve the purpose of extending the period of limitation.

20. Moreover, in my humble view, it would be a very dangerous proposition of law to lay down under the conditions prevailing in this country that an unconditional acknowledgment should form the basis of the suit. The capacity of the majority of persons carrying on money-lending business in our country is notunknown. The Legislature is bringing out laws to relieve the debtors of usurious loans and excessive interest. In the case of agriculturist, under the Rajasthan Relief of Agricultural Indebtedness Act even the decrees of the courts are required to be reopened to find out the actual amount of principal and interest to provide relief to the poor debtors. Similar laws are In force in many other States. Even a decree obtained on an unconditional acknowledgment against the agriculturist would be of no avail to the creditor because the court will have to see all the previous accounts.

Thus, so far as agriculturists are concerned, even if it be held that a suit can be based on an unconditional acknowledgment, it would not serve the creditor's purpose. Apart from agriculturists, there are a large number of poor people including labourers and if the view that a suit can be based on the unconditional acknowledgment, is held it would bring untold misery to the poor debtors. I cannot do better than to reproduce here the following observations of Weston, C. J., in Shadiram v. Prabhu, AIR 1953 Punj 28:--

'The whole difficulty in these matters has arisen from the importation into India considered to be required by observations of the Privy Council, particularly in Maniram v. Seth Rupchand, 33 IA 165, (PC) of the rules of English Law now considered well established, namely that an unconditional acknowledgment by a debtor contains an implied promise to pay and further furnishes to the creditor a fresh cause of action. These rules did not spring from any fundamental principle of law but were judge-made to avoid a rigid rule of limitation imposed by the Statute of James I. In India, a signed acknowledgment of liability made in writing before the expiration of the period of limitation is enough to start a fresh period of limitation, and it is enough not only when the acknowledgment is unconditional but even when the acknowledgment is coupled with a refusal to pay. When the debt has become barred by limitation there is Section 25(3) of the Contract Act and there can be no doubt under the section itself that the written promise to pay falling within this furnishes a fresh cause of action. The doctrine that an acknowledgment without written promise made before the expiry of the period of limitation should furnish a fresh cause of action is for India quite unnecessary. In Maniram's case, the question was only whether the particular document amounted to an acknowledgment for the purposes of Section 19 of the Limitation Act and it is not easy to understand why reference to English principles was made. I have had some experience of the unfortunate results of the importation of the rule of fresh cause of action. In places where the ignorant and illiterate debtor is not protected by legislation which not only enables but requires the Courts to go behind transactions and ascertain their true nature, the debtor having given successive acknowledgments of amounts rising in rapid progression has often found himself ruined by a suit based on the latest acknowledgment without the Court having inquired into the true nature of the transaction. The general law contained in the Usurious Loans Act is not always enough to afford protection. Conditions in India are by no means the same as in England.'

The above passage shows how distressed even an English Judge felt over the view which prevailed in Punjab about an unconditional acknowledgment.

21. Even apart from considerations of justice and equity, I see a formidable legal difficulty in subscribing to the view that the suit can be based on an unconditional acknowledgment. The language of Section 19 of the old Limitation Act and Section 18 of the new Indian Limitation Act shows that if a creditor brings a suit which is time-barred if computed from the date of the original cause of action and wants to avail of an acknowledgment in order to save limitation, that acknowledgment must have been obtained before the date of expiry of the period of limitation. If the plaintiff brings the suit on the original cause of action and seeks to extend the period of limitation on the basis of conditional or unconditional acknowledgment, he will have to show that the acknowledgment was obtained by him before the period of limitation had expired. In other words, the section itself envisages that the burden of proving that the acknowledgment was made within the period of limitation is on the creditor.

Now, if it is held that a suit could be based on an unconditional acknowledgment, the creditor would be relieved of the necessity of proving that it was obtained within the period of limitation and the burden would shift to the debtor to show that it was time-barred. It would be an anomalous position that the person who brings the suit on the original cause of action will have to show even in the case of an unconditional acknowledgment that it was obtained within the period of limitation, while if he bases his suit on an unconditional acknowledgment he would be in a better position. The net result of holding that a suit can be based on an unconditional acknowledgment would be that even if the acknowledgment has been obtained in respect of time-barred debts, the burden would lie on the debtor to prove that the debt which was acknowledged was time-barred on the date of its execution.

It is well known that debtors generally belong to poorer classes and, in most cases, they are even illiterate. The accounts always remain with the creditors. If the creditor bases his suit on the original cause of action and uses the acknowledgment, conditional or unconditional, for purposes of saving limitation, he would not be deprived of justice for that reason alone. His only botheration may be to first disclose his original cause of action and then show how the acknowledgment had saved the debt from being time-barred. It was urged that a debtor on whom burden is cast may as well ask the creditor to produce his account books. In my opinion, this argument may not help the debtor because the creditor may say that his account books are lost or destroyed or he may put forward any other excuse. The provisions of Section 25(3) of the Contract Act would be rendered nugatory in many cases. On the contrary, the creditor stands nothing to lose if he bases his suit on the original cause of action and uses the acknowledgment, conditional or unconditional, for extending the period of limitation.

22. A question may also arise as to which Article of the Indian Limitation Act would apply for computing the period of limitation in case the suit is based on an acknowledgment. In the Limitation Act of 1908, which will hereinafter be referred to as the old Act, there was no specific Article to indicate that a particular period of limitation would apply in case the suit is founded on acknowledgment. Similarly, in the Limitation Act of 1963, which will hereinafter be referred to as the new Act, no such specific Article has been provided. Article 1 of the new Act, which corresponds to Article 85 of the old Act, provides that a suit for the balance due on mutual, open and current account, may be brought within three years from the close of the year in which the last item, admitted or proved, is entered in the account.

Article 19 of the new Act, which corresponds to Article 57 of the old Act, provides three years' limitation for a suit regarding money payable for money lent and the period of limitation is to be computed from the date when the loan is made. Article 20 of the new Act, which corresponds to Article 58 of the old Act contemplates suits similar to the one envisaged in Article 59 when the lender has given a cheque for the money. In this case, three years' period is to be computed from the date when the cheque is paid.

Article 21 of the new Act, which corresponds to Article 49 of the old Act, contemplates a suit for money lent under an agreement that it shall be payable on demand. In this case, three years' period is to be computed from the date when the loan is made. Article 22 of the newAct, which corresponds to Article 60 of the old Act, contemplates a suit for money deposited under an agreement that it shall be payable on demand. In this case, three years' period of limitation would begin to run from the date when the demand is made. Article 23 of the new Act, which corresponds to Article 61 of the old Act, envisages a suit for money payable to the plaintiff for the money paid for the defendant. Here, three years' period of limitation would run from the date when the money was paid. Article 24 of the new Act, which corresponds to Article 62 of the old Act, relates to a suit for money payable by the defendant to the plaintiff for money received by the defendant for the plaintiff's use. Here, the period of limitation runs from the date when the money was received. Article 25, which corresponds to Article 63 of the old Act, relates to a suit for money payable for interest upon money due from the defendant to the plaintiff. In this case, three years' period of limitation would run from the date when the interest becomes due.

23. Article 26 of the new Act, which corresponds to Article 64 of the old Act, relates to a suit for money payable to the plaintiff for money found to be due from the defendant to the plaintiff on accounts stated between them. In this case, three years' period of limitation begins to run from the date the accounts are stated in writing and signed by the defendant or his agent duly authorised. Similarly Article 28 of the new Act, which corresponds to Article 66 of the old Act, relates to a suit based on a single bond where a day is specified for the payment. In this case, three years' period of limitation would be computed from the day so specified.

24. It would not be proper to burden the judgment by reproducing the remaining Articles from 29 to 39. It would suffice to say that they contemplate suits based on bonds subject to conditions, suits founded on Bills of Exchange of different types and suits based on promissory notes containing different conditions, but there is no Article relating to a suit based on an acknowledgment. This again shows that an acknowledgment can only be used for purposes of extending the period of limitation of suits about which different Articles are provided but a suit based on mere acknowledgment, conditional or unconditional, is not contemplated by the Indian Limitation Act.

An unconditional acknowledgment in respect of a certain amount of money may not show whether the creditor's original claim was based on bond or promissory note or bill of exchange or account stat-i ed. Which Article would apply in such a case? Was it meant that a creditor basing his suit on mere acknowledgment should be in a better position than a per-son who files his suit on the original cause of action within the period of limitation? If it be urged that for a suit based on acknowledgment the new residuary Article 113 corresponding to old Article 120 may be applied, it would again create anomalous position. If the suit is based on the original cause of action, the period from which the limitation is to run would differ from suits to suits covered by different Articles, but if the suit is based on acknowledgment, all those distinctions would disappear. The old residuary Article 120 prescribed six years' limitation whereas for a suit on a bond only three years' limitation was prescribed. It was never the intention of the law that a longer period of limitation would be available to a suitor who bases his suit on acknowledgment as compared to a suitor who files it on the original cause of action. To my mind, therefore, an acknowledgment can only serve the purpose of extending the period of limitation in favour of a suitor but it cannot form the basis of a suit.

25. In the present case, it is clear from Ex. 1 that the creditor first wrote out the balance, made the entry that the amount of Rs. 6022/- was to be obtained from the judgment-debtor and placed his signature therein. He further wrote that this balance was found according to the account given above. In fact, there was no account given above the balance. The statement of the plaintiff Jeevraj recorded by. the trial Court shows that no account was in fact taken on the date Ex. 1 was executed. He says that only interest was added but there is no mention about addition of interest either in the said document. It is interesting to point out that although the plaintiff has claimed interest, there is no stipulation to pay any interest in Ex. 1. It is thus clear how unwary debtors are persuaded to sign the entries which on the very face are not correct. In the present case, the defendant was a businessman and it may be urged that he should have taken care to understand the entry before signing it.

But suppose in place of the defendants, there was another illiterate person whose thumb-mark was obtained on the said entry. Could this unconditional acknowledgment alone be sufficient to give a decree against him? The legal position would not change whether the debtor is a literate person or an illiterate person. What is meant to point out is that if unconditional acknowledgments are allowed to be made the basis of the suit, then there would be great possibility of the creditors realising even time-barred debts from the debtors if the debtors happen to be poor and illiterate. They would not be able to prove that the acknowledgment was made beyond time in the absence of any document in their possession.

26. It was next argued that even though the observations of their Lordships of the Supreme Court in AIR 1953 SC 225 (supra), were obiter, this Court is bound to follow the view because even the obiter remarks of their Lordships are entitled to great respect. Reference in this connection was also made to Article 141 of the Constitution of India. It would suffice to say that if their Lordships of the Supreme Court had declared the law clearly, then It would have been certainly binding on all Courts within the territory of India. Even the obiter observations of their Lordships are entitled to great respect and we would have certainly followed them without any reservation in ILR (1955) 5 Raj 85 = (AIR 1956 Raj 12) (supra). The judgment in that case was prepared by the then Chief Justice of this Court who later adorned the Bench of the Supreme Court as a Judge and Chief Justice. There was not the slightest idea of not following the dictum of their Lordships of the Supreme Court because of their being obiter. It was after long consideration that we decided ILR (1955) 5 Raj 85=(AIR 1956 Raj 12) and I still hold that the observations of their Lordships of the Supreme Court in AIR 1953 SC 225 (supra), do not necessarily overrule the view of the Full Bench of this Court in ILR (1951) 1 Raj 297 = (AIR 1952 Raj 7 FB) (supra).

27. Learned Counsel for the appellants has referred to Brij Behari Prasad v. Bir Bahadur Rai, AIR 1968 Pat 203 in which the learned Judges of the Patna High Court have not agreed with this Court's observations in ILR (1955) 5 Raj 85 = (AIR 1956 Raj 12). With great respect, I still differ with the view they have taken. It appears that their attention was not invited to the later observations of their Lordships of the Supreme Court in AIR 1961 SC 1236 (supra), because there is no reference to them in their judgment. It cannot be said what their Lordships' opinion would have been if the said case would have been pointed out to them.

28. It was also urged that Ex. 1 amounts to an agreement and, therefore, a suit could be based thereon. It was pointed out that both the debtor and creditor appeared to have met on the day the document was executed and since the acknowledgment was bilateral, it can be used as an agreement. To my mind, this argument is also without any force. An acknowledgment would remain an acknowledgment whether it is unilateral or -bilateral. A unilateral acknowledgment would, in most cases, be more reliable and convincing, because if the debtor makes a conditional or unconditional acknowledgment in the absence of a creditor, it cannot be urged by him as in the case of a bilateral agreement that it wasobtained by any kind of fraud, coercion, threat, Inducement or promise.

A perusal of the document Ex. I would show that there was no fresh consideration coming from the side of the creditor and therefore essentially it is nothing but an acknowledgment pure and simple. The learned Appellate Judge was, in my opinion, correct in holding that a suit could not be based on such an acknowledgment. An unconditional acknowledgment may amount to an agreement if there is an express promise to pay or if there is same new consideration proceeding from the creditor's side and in view of that consideration, the debtor makes an implied promise to pay the debt.

In the present case, there is no implied promise to pay over and above the acknowledgment. The first Appellate Court was therefore not wrong in holding that the suit could not be based thereon. The learned Appellate Judge was, however, not fair with the appellants in not permitting them to amend the plaint when a specific request was made before him. The only reason given by him was that the suit was brought two years after this Court decided Ramdayal's case, ILR (1955) 5 Raj 85 = (AIR 1956 Raj 12) (supra). He has not pointed out if that case was in the know of the appellants or their Counsel. The conduct of the appellants in this case was also not free from blame. They also did not come out honestly to disclose the circumstances in which the document Ex. 1 was executed. It is well known that in districts, proper legal help is not always available. The defendant could be compensated with costs for the trouble to which he was put. In my opinion, in a case like the present one, where a suit is filed by a plaintiff on the basis of an unconditional acknowledgment if he wants to amend the suit so as to base it on the original cause of action, the Court should not be harsh with him. After all, this is a matter of procedure which is to serve as a hand-maid of justice.

29. I would, therefore, allow the appeal and set aside the judgment and decree of the learned District Judge, but remand the case to the trial Court with permission to allow the plaintiffs to amend their suit so as to base it on the original cause of action and then try the case afresh.

Bhandari, J.

30. Two points arise for decision in this appeal, The first is whether on the proper construction of the language of Ex. 1, it should be held that it contains an express promise to pay by the defendants 2 to 4 and the second is whether Ex. 1 could be made the basis of the suit.

31. I take the first contention first. The Khata Ex. 1 mentions at the outset that the creditors had to take Rs. 6022/-on the basis of the previous khata. This entry is signed by one of the plaintiffs Jeevraj. It is further mentioned that this balance had been struck in the presence of Kunanmal Lalchand. Then the entry is signed by the defendants Nos. 2 to 4. defendant No. 2 mentioning with his signature that Rs. 6022/- are to be paid. The argument addressed on behalf of the plaintiffs appellants is that in Ex. 1 there is not merely admission that Rs. 6022/-are due but it further contains that this amount is to be paid 'Dena Chhe' that is, 'Dena Hai' and that these words must be construed as a promise on the part of the defendants to pay the aforesaid amount.

It is contended that when a debtor states in an acknowledgment that a particular amount is to be paid, it must be construed as containing an express promise that that particular amount shall be paid and that such a case must be distinguished from a case in which it is only mentioned that a particular amount is due.

32. After careful consideration of the matter, I am of the view that no such distinction can be drawn. In both the cases, there is a mere admission of liability to pay. When a debtor says that a particular amount is to be paid, it cannot be held that he has said in so many words that he shall pay it. As I shall point out presently, in such a case there is an implied promise to pay. But it cannot be held that there is an express promise to pay. The case in which there is a mention that particular amount is to be paid stands on the same footing as the case when there is mere mention that a. particular amount is due. This disposes of the first contention.

33. The second contention deserves serious consideration. I regret I am unable to agree with the view of my Lord the Chief Justice on this point.

34. When the suit was filed, the Indian Limitation Act, 1908, was in force and reference to sections and articles in this judgment is to the provisions contained in that Act. Section 19 of that Act was as follows:--

'19. Effect of acknowledgment In writing.

(1) Where, before the expiration of the period prescribed 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 in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing theacknowledgment is undated, oral evidencemay be given of the time when it wassigned; but subject to the provisions ofthe Indian Evidence Act, 1872, oral evidence of its contents shall not be received.

Explanation I. For the purposes of this section an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come, or is accompanied by a refusal to pay deliver, perform or permit to enjoy, or is coupled with a claim to a set-off, or is addressed to a person other than the person entitled to the property or right.

.....'

Now an acknowledgment will be effective under Section 19 even if it does not contain a promise to pay whether express or implied. It will be effective even when it is accompanied by a refusal to pay or even when it is coupled with a claim to a set-off. It may be addressed to a person other than a person entitled to the property or right. An acknowledgment under Section 19 does not create any contract. It merely extends the period of limitation for a suit or application in respect of any property or right so acknowledged. It is for this reason that it is said that an acknowledgment cannot form the basis of the suit because the suit must disclose the facts constituting the basis of the claim of the plaintiff. It may, however, be mentioned that there is a specific provision in Article 64 which provides for three years' limitation from the date when the accounts are stated between the parties, Such a suit is called a 'suit based on accounts stated'. As explained by their Lordships of the Privy Council in Siqueira v. Noronha, AIR 1934 PC 144 and AIR 1934 PC 147, the essence of an account stated is that there are cross-items of account and that the parties mutually agree the several amounts of each and by treating the items so agreed on the one side as discharging the items on the other side pro tanto, go on to agree that the balance only is payable. As pointed out in Bishun Chand's case, AIR 1934 PC 147 (supra):

'Such a transaction is in truth bilateral, and creates a new debt and a new cause of action ............ there is mutualconsideration to support the promises on either side and to constitute the new cause of action.'

This is technically the real account stated to which Article 64 is applicable and the law has treated such an account stated as bilateral agreement arrived at between the parties by which the person who signs the entry showing the balance due must be deemed to have promised to pay the balance due to the other party. Such account stated is to be distinguished from an account stated in which there is merely an acknowledgment of the balance without the statement of account.

The trial Court when it held that Ex. 1 amounted to account stated, did not take the correct view.

35. Now, let us examine the circumstances under which a mere acknowledgment can form the basis of the suit. Obviously such a document in order to form the basis of the suit must be an agreement under which the defendant has to pay a particular sum of money to the plaintiff. An acknowledgment under Section 19 may be a unilateral transaction. It may be an act on the part of the defendant to which the plaintiff had not signified his assent. Such a unilateral act may be good acknowledgment if conditions of Section 19 are satisfied. For example, the debtor may send a letter to the creditor acknowledging his liability or the debtor may make a statement in a Court acknowledging that he is liable to pay a certain amount or that he may make a mention in any other document that he is liable to pay a certain amount to the creditors.

All these acts are of the result of unilateral acts of the defendant but they become an acknowledgment if the conditions under Section 19 are satisfied. These acts do not amount to an agreement and on the basis of such a document no suit can be filed. But a document may be bilateral in nature under which the defendant acknowledges his liability to pay a certain amount to the creditor. If such a document contains an express promise to pay, there will be little room for the contention that it cannot form the basis of the suit. We have, however, to examine a case in which there is no express promise to pay but there is an unconditional acknowledgment that a particular amount is due. There are two views possible to take in such a case. The one is that mere admission of liability does not contain even an implied promise to pay, and, therefore, it cannot be any agreement under the provisions of the Indian Contract Act. The other view is that it imports an implied promise to pay, and, therefore, it is as good an agreement under the Indian Contract Act as any other agreement, and if such an agreement is enforceable at law under the provisions of the Contract Act, a suit can be founded on it.

36. The controversy on this point took a serious turn after their Lordships of the Privy Council made the following observations in (1906) ILR 33 Cal 1047 (PC):

'An unconditional acknowledgment has always been held to imply a promise to pay, because that is the natural inference, if nothing is said to the contrary. It is what every honest man would mean to do.'

These observations were no doubt made in a case in which the respondent Roopchand who was the defendant in that case had filed a written reply setting out that 'for the last five years he had open and current accounts with the deceased.' The question before their Lordships to decide was whether it was a sufficient acknowledgment under Section 19 of the Limitation Act. Their Lordships held that it was a case of a conditional promise to pay in which condition had been performed and it was a good acknowledgment under Section 19 of the Limitation Act.

The observation that an unconditional acknowledgment always implied a promise to pay was, therefore, clearly obiter dicta, and the question before the High Courts in India was what weight should be attached to this observation. In some cases it was pointed out that this observation was based on the English law and their Lordships of the Privy Council never meant that the principle of English law should be applied in India specially in view of the Indian provisions contained in Section 19 of the Indian Limitation Act, Section 25 of the Indian Contract Act and Article 1, Schedule I of the Indian Stamp Act, while the other High Courts have held that this observation has to be given effect to and there was nothing in the Indian Law which made it necessary to take a different view.

37. Before I deal with this matter, I may refer to the origin of the doctrine that an unconditional acknowledgment implies a promise to pay in England. In this connection I may refer to Chitty on Contracts Vol. I paragraph 1498 which runs as follows:

'Origin of the doctrine. The Jacobean statute of 1623 contained no provision that an acknowledgment of a debt or part payment thereof should extend the period of limitation. At least as early as 1699, however, the Judges held that if the defendant made a fresh promise to pay the debt, time began to run anew from the date of the promise. From this it followed that an acknowledgment or part payment had the same effect if, but only if, a fresh promise to pay could thereby be inferred. This judicial process was described by Lord Sumner as 'the task of decorously disregarding an Act of Parliament. The kudge-made doctrine was recognised by two statutes, one of which required that the acknowledgment should be in writing and signed by the person chargeable, while the other made the signature of his duly authorised agent sufficient. For specialty debt the Civil Procedure Act, 1833, abolished the requirement (productive of so much litigation) that there must be an implied promise to pay; but this requirement continued to exist for simple contract debts until 1940. These statutes have all been repealed by the Limitation Act, 1939.'

I may further refer to the observations of Viscount Cave in Spencer v. Hemmerde, (1922) 2 AC 507:

'My Lords, the law relating to matters of this kind is not in doubt. The statute (21, Jac. 1, c. 16, s.3) enacted that .........

all actions of debt grounded upon any lending or contract without specialty ... ...... shall be commenced and sued ......

within six years next after the cause of such actions ......... and not after, andmade no reference to any acknowledgment; but it was held in a series of cases that a promise by the debtor to pay the debt, if given within six years before action brought, was sufficient to create a new contract and so to take the case out of the operation of the statute, the existing debt being a sufficient consideration to support the promise. It was also held that a simple acknowledgment of the debt, without any express promise, was sufficient for the purpose, an acknowledgment implying a promise to pay. Some of the earlier cases went so far as to decide that an acknowledgment was sufficient, though coupled with a promise to pay at some future time which had not arrived or upon some condition that had not been performed, or even with an absolute refusal to pay; but this was set right by the decision of the Court of King's Bench in Tanner v. Smart, ((1827) 6 B. & C. 603,609) where Lord Tenterden in giving the judgment of the Court, said: 'Upon a general acknowledgment, where nothing is said to prevent it, a general promise to pay may, and ought to be implied; but where the party guards his acknowledgment, and accompanies it with an express declaration to prevent any such implication, why shall not the rule 'expressum facit cessare tacitum' apply?'

'No doubt the doctrine so established was originally judge-made law; but it has stood unchallenged for nearly a century, and indeed it has received statutory recognition.'

.....

'Since the case of Tanner v. Smart the law as there laid down has been uniformly accepted, and it must be held to be settled law (1) that a written promise to pay a debt given within six years before action is sufficient to take the case out of the operation of the statute of James I; (2) that such a promise is implied in a simple acknowledgment of the debt; but (3) that where an acknowledgment is coupled with other expressions, such as a promise to pay at a future time or on a condition or an absolute refusal to pay, it is for the Court to say whether those other expressions are sufficient to qualify or negative the implied promise to pay.'

It has been urged before us that the doctrine that an acknowledgment implies a promise to pay is peculiar to English law and should not be imported in India.

I need not refer to the other aspects of this doctrine; but so far as the proposition that an unconditional acknowledgment implies a promise to pay is concerned, there is nothing peculiar in it as their Lordships of the Privy Council observed in Mani Ram's case, (1906) ILR 33 Cal 1047 (PC) (supra), that 'this is what every honest man would mean to do' when he makes an unconditional acknowledgment. Their Lordships of the Privy Council again reiterated the same proposition in AIR 1934 PC 144 when they tried to distinguish real account stated from a mere acknowledgment and they observed as follows:

'Their Lordships think that what has been forgotten is that there are two forms of account stated. An account stated may only take the form of a mere acknowledgment of a debt, and in those circumstances, though it is quite true it amounts to a promise and the existence of a debt may be inferred, that can be rebutted, and it may very well turn out that there is no real debt at all, and in those circumstances there would be no consideration and no binding promise.'

In the aforesaid observations, it has been laid down that a mere acknowledgment amounts to a promise. This means that there is implied promise to pay even in a mere acknowledgment. Of course such acknowledgment must be unconditional.

38. Then again in Surendra Prasad v. Gajadhar Prasad, AIR 1940 FC 10, their Lordships of the Federal Court, while construing the word 'bond' in Bihar Money-lenders (Regulation of Transactions) Act (7 of 1939) observed as follows:--

'If the promise to pay is to be inferred by implication, then the document may amount to acknowledgment of liability or adjustment, or even account stated .........

Thus the view that an unconditional acknowledgment implies a promise to pay cannot be considered to be peculiar to England. If the presumption that a debtor intends to pay what he acknowledges unconditionally can be drawn in England, there is much more ground for drawing such a presumption in India for the reason that an Indian not only considers payment of debt a part of his legal duty but also of his religious obligation.

39. Having said so, I proceed to refer to some of the decisions of the Indian High Courts in which this controversy has been referred. It is not my purpose to review all the cases on the subject because the point under consideration is to determine the effect of the observations of their Lordships of the Supreme Court in Hiralal's case, AIR 1953 SC 225 (supra).

40-41. I may, however, refer to AIR 1932 All 199 in which all the contentions that arise in such a case have been summedup. In that case, Niamatullah, J., took the view that an unconditional acknowledgment implied a promise to pay and could be made the basis of the suit. Sulaiman, Ag. C. J., expressed the contrary view. Niamatullah, J., relied on the observations in (1906) ILR 33 Cal 1047 (PC) (supra) and then proceeded, to observe as follows:

'This rule is based on a principle of universal application and common-sense, and is not peculiar to any particular system of law. Where two persons examine their mutual dealings and one of them formally acknowledges his indebtedness to the other to a certain extent in a document which complies with all the formalities of the law for example, the Stamp Act, no other explanation than that he promised to pay the amount is conceivable. If in making the acknowledgment he has included time barred debts which he might have well repudiated it may still be open to him to plead failure of consideration to that extent. The creditor places himself in a disadvantageous position in this respect by omitting to take a bond containing an express promise to pay which alone can successfully meet the plea of want of consideration.'

Sulaiman, Ag. C. J., after noticing Section 19 of the Indian Limitation Act, observed that mere acknowledgment is not sufficient under Section 19 unless it is shown that it has been made before the expiration of the prescribed period and further observed as follows:

'It follows that it is not sufficient for the plaintiff to merely prove the acknowledgment of liability to pay a money debt and throw the burden of showing that the acknowledgment was made beyond time on the debtor by invoking the aid of a general principle of common law that an acknowledgment necessarily implies a promise to pay it. The aid of any such principle cannot be sought to override the express provisions of the statute of limitation and be made the excuse for casting the onus of proof on the defendant. If such an indirect evasion of the law were permitted it would have the effect of nullifying the express provisions of Section 19 so far at any rate as acknowledgments of money debts are concerned.'

Another difficulty that was pointed out was that under Section 25 of the Contract Act, the mere implied promise to pay Involved in a mere acknowledgment would not be sufficient under Section 25 of the Contract Act and to avoid such a result, recourse must be had to reading Section 25 as if the word 'express' were interpolated before the word 'promise' so as to exclude implied promise.

42. In AIR 1935 All 129, Sulaiman, C. J., adhered to the view expressed byhim earlier and further pointed out that If a receipt containing acknowledgment indicated an implied promise to pay an earlier debt, it would not form the basis of the suit and observed as follows:--

'But assuming that it amounts to an implied promise to pay, it does not follow that they can be made the basis of a suit and treated as giving rise to a fresh causa of action. If the debt had not become barred by time then even an express promise to pay it is nothing more than a promise to do what a person is, under the law, bound to do. It cannot be treated aa a fresh contract or a novation of the old contract and is on no higher footing than mere acknowledgment. On the other hand, if the debt had become barred by time, then an implied promise to pay it would be of no avail because under Section 25(3), Contract Act, it cannot be treated as a promise, made in writing, to pay a time-barred debt. When there is no express promise to pay but the intention is inferred only indirectly it cannot be treated as a promise in writing to pay the time barred debt. The plaintiff, therefore, would not be entitled to take advantage of such an implied promise to pay a time-barred debt.'

I may also refer to the state of law which prevailed in the Lahore High Court. In Ganpat v. Daulat Ram, 68 Pun Re 1904, it was held that a transaction between two parties which results in the striking of a balance may, according to the particular facts and the nature of the entry, amount to one or other of two things. If it amounted merely to an acknowledgment of an existing debt due from one of the parties to the other, it was an acknowledgment and could not furnish a cause of action. If the striking of a balance may mean something more than a mere admission of a liability in respect of an existing debt, that is if it amounted to a fresh contract for the old contract, it would be made, the basis of suit on that document.

43. The principle enunciated in 68 Pun Re 1904 (supra), was accepted by a Division Bench of the Lahore High Court in Pala Mal v. Tula Ram, 119 Pun Re 1908. But in AIR 1929 Lah 264, Shadi Lal, C. J. and Skemp, J. took the view that an unconditional acknowledgment implied a promise to pay and could support a suit. They relied on the Privy Council case in (1906) ILR 33 Cal 1047 (PC) (supra) and pointed out that the decision in Pala Mal's case, 119 Pun Re 1908 (supra), could not be held as good law after the decision in Maniram's case, (1906) ILR 33 Cal 1047 (PC). Their Lordships also referred to a decision of the Bombay High Court in Chuni Lal Rattan Chandra Gujarathi v. Laxman Govind Dube, AIR 1922 Bom 183 in which the same view was taken.

44. The Full Bench of this Court in Hasti Mal's case, ILR (1951) 1 Raj 297= (AIR 1952 Raj 7 FB) (supra), has taken the view that a suit could not be founded on a mere acknowledgment as a mere acknowledgment of debt does not operate as a new contract and cannot be made a basis of the suit. For this the Full Bench relied on 1950 Raj LW 284 = (AIR 1951 Raj 74) and accepted the view of law taken in that case.

45. Now, I proceed to consider the decision of their Lordships of the Supreme Court in AIR 1953 SC 225 (supra). The suit in that case was based on the following entry in the plaintiff's books which was signed by the defendant in that case:

'Rs. 34000/- balance due to be received upto Bhadon Sudi 11 Smt. 2006 made by check and understanding of accounts with Hiralal's books.'

This was a case on the basis of account stated falling, under Article 64 of the Indian Limitation Act. It was contended before the Supreme Court that the suit could not be maintained merely on the basis of acknowledgment of liability. Their Lordships proceeded to observe as follows:

'Mr. Bindra next urged that the plaintiffs' suit should have been dismissed because it could not be maintained merely on the basis of an acknowledgment of liability, that such an acknowledgment could only save limitation but could not furnish a cause of action on which a suit could be maintained. The Judicial Commissioner took the view that an unqualified acknowledgment like the one in the suit, and the statement of the account under which the entry had been made, were sufficient to furnish a cause of action to the plaintiffs for maintaining the present suit. We are satisfied that no exception can be taken to this conclusion. It was held by the Privy Council in Maniram v. Seth Rupchand, 33 Ind App 165 (PC) that an unconditional acknowledgment implies a promise to pay because that is the natural inference if nothing is said to the contrary. It is what every honest man would mean to do. In Fateh Mahomed v. Ganga Singh, AIR 1929 Lah 264 the same view was taken. It was held that a suit on the basis of a balance was competent. In Kahanchand Dularam v. Dayaram Amrit-lal, AIR 1929 Lah 263, the same view was expressed and it was observed that the three expressions 'balance due', 'account adjusted' and 'balance struck' must mean that the parties had been through the account. The defendant there accepted the statement of account contained in the plaintiff's account book, and made it his own by signing it and It thus amounted to an 'account stated between them'

In the language of Article 64, Limitation Act. The same happened in the presentcase. The acknowledgment which forms the basis of the suit was made in the ledger of the plaintiffs in which earlier mutual accounts had been entered and trully speaking, the suit was not based merely on this acknowledgment but was based on the mutual dealings and the accounts stated between them and was thus clearly maintainable.

Mr. Bindra drew our attention to a decision of the Allahabad High Court in Ghulam Murtuza v. Mt. Fasihunnissa Bibi, AIR 1935 All 129 wherein it was held that even if an acknowledgment implies a promise to pay it cannot be made the basis of suit and treated as giving rise to a fresh cause of action. We have examined the decision and we are satisfied that it does not lay down good law.'

46. The question before us is how far the aforesaid observations of their Lordships of the Supreme Court overruled the view taken by the Full Bench of this Court in Hastimal's case, ILR (1951) 1 Raj 297= (AIR 1952 Raj 7 FB) (supra). On behalf of the plaintiff-appellants it is contended that the decision of their Lordships of the Supreme Court approved the observations made by their Lordships of the Privy Council in Maniram's case, (1906) ILR 33 Cal 1047 (PC) (supra), that an unconditional acknowledgment implied a promise to pay and further approved the decision of the Lahore High Court in AIR 1929 Lah 264 (supra). It was further pointed out by the Supreme Court that the observations of Sulaiman C. J. in AIR 1935 All 129 (supra) that even if an acknowledgment implied a promise to pay it could not be made the basis of the suit did not lay down a good law.

On behalf of the defendants-respondents it is however contended that the case before the Supreme Court was on accounts stated falling under Article 64 of the Limitation Act and in that case the point whether a mere conditional acknowledgment could form the basis of the suit or not was not fully considered, nor did it arise for consideration. Then it is pointed out that the aforesaid observations of their Lordships of the Supreme Court do not contain a definite approval of the observations in Maniram's case (1906) ILR 33 Cal 1047 (PC) (supra) that an unconditional acknowledgment implied a promise to pay. Fateh Mohammed's case AIR 1929 Lah 264 of the Lahore High Court was also not definitely approved. It was also contended that the view taken by the Allahabad High Court in Gulam Murtuza's case AIR 1935 All. 129 (supra) was overruled only to the extent that a receipt which contained a mere acknowledgment could not be made the basis of the suit.

Learned Counsel for the defendants-respondents has strongly relied on theDivision Bench judgment of this Court in Ram Dayal's case ILR (1955) 5 Raj 85 = (AIR 1956 Raj 12) (supra) and has urged that the view taken in that case is correct. That was again a case of accounts stated and it was held that the case fell under Article 64 of the Limitation Act. The question whether Hiralal's case AIR 1953 SC 225 (supra) has overruled the Full Bench decision in Hasti-mal's case ILR (1951) 1 Raj 297 = (AIR 1952 Raj 7 (FB)) (supra) was also examined and it was pointed out that the case before the Supreme Court was not on the basis of mere acknowledgment and that the disapproval of the decision in Gulam Murtuza's case, AIR 1935 All 129 was only of the observations that a receipt which contained a mere acknowledgment could not be made the basis of the suit. It was also pointed out that of the two Lahore cases referred to by the Supreme Court, 68 Pun Re 1904 (supra) was of accounts stated and the facts of the other case were not mentioned in detail and it could not be said that the suit in that case was based only on an acknowledgment.

47. At the outset, I may point out that the observations of their Lordships of the Supreme Court, as far as they are material for the purposes of the appeal, were obiter dicta inasmuch as their Lordships were deciding a case which fell under Article 64 of the Indian Limitation Act and were not dealing with the question whether a mere acknowledgment could form the basis of the suit. But even the obiter dicta of the Supreme Court is entitled to the highest respect. Their Lordships of the Supreme Court in I. T. Commr. v. Vazir Sultan & Sons, AIR 1959 SC 814 observed that:

'It is no doubt true that this Court was not concerned with any agency agreement in the last mentioned case ((1927) 12 Tax Cas 927) and the observations made by this Court there were by way of obiter dicta. The obiter dicta of this Court, however, are entitled to considerable weight and we on our part fully endorse the same.'

Before corning into force of the Constitution, the view taken in some cases was that the courts in India must not depart from the long consistent course of decisions simply on the basis of a dictum or a supposed dictum of their Lordships of the Privy Council on a matter on which it was not directly necessary for their Lordships to decide in the case. Reference in this connection maybe made to Anand Prakash v. Narain Das AIR 1931 All 162 (FB), but in other cases the view taken was that the decision oftheir Lordships of the Privy Council though it was obiter dicta was entitled to the highest respect from all the Indian Courts, and must be followed by theHigh Courts. Reference in this connection may be made to In re Benaras Bank Ltd., AIR 1940 All 544, State of Bombay v. Chhaganlal, AIR 1955 Bom 1 (FB) and In re Tushar Kanti Ghosh, AIR 1935 Cal 419.

48. After the coming into force of the Constitution, the position is that the law declared by the Supreme Court is binding on all courts within the territory of India. This is what Article 141 has laid down. The principle of law enunciated by the Supreme Court, even by way of obiter dicta must be taken to be the law declared by the Supreme Court even if the pronouncement of such principle was not necessary for the decision of the case. What is to be determined is whether the Supreme Court intended to lay down any principle of law. If any principle of law has been laid down after consideration by the Supreme Court, it amounts to declaration of law for the purpose of Article 141 even though such principle has been laid down by way of obiter dicta. In this connection we may refer to Bimla Devi v. Chaturvedi AIR 1953 All 613 a Division Bench of the Allahabad High Court in which it is observed as follows:

'Article 141 mentions that 'the law declared by the Supreme Court shall be binding on all Courts within the territory of India'. Where the Supreme Court deliberately with the intention of settling the law pronounces upon a question, the pronouncement is the law declared by the Supreme Court within the meaning of Article 141 and is binding on all courts in India. .........

It is true that where a point has not been argued and certain general observations have been made which may seem to cover points not argued before the Court, they may not be considered to be binding, and in such cases the binding nature of the observation of the Court may be limited to the points specifically raised and decided by the Court. It is also true that pronouncements made on concessions of counsel, where a point is not argued, are not binding -- Venkanna v. Laxmi Sanappa, AIR 1951 Born. 57 at p. 63 but otherwise even what is generally called an 'obiter dictum' provided it is upon a point raised and argued, is binding upon the Courts in India.'

The above passages correctly sum up the position in law after coming into force of the Constitution which incorporated Article 141 in it.

49. In my view, in Hiralal's case, AIR 1953 SC 225 their Lordships of the Supreme Court laid down that the proposition that an acknowledgment cannot form the basis of suit is not a good law. The whole trend of the judgment is that their Lordships approved the aforesaid observations contained in the Privy Council judgmentland also approved the view taken in Fateh Mohammed's case, AIR 1929 Lah 264 and disapproved the law laid down in Gulam Murtuza's case, AIR 1935 All 129

50. It is mentioned in Fateh Mohammed's case, AIR 1929 Lah 264 (supra) that the plaintiff sued on the basis of a balance. The lower court dismissed the suit relying on Pala Mal's case, 119 Pun Re 1908 (supra) and holding that a mere balance does not imply a promise to pay and therefore does not support a suit. What is of substance is that the view taken in Pala Mal's case, 119 Pun Re 1908 was not regarded as good law in Fateh - Mohammed's case, AIR 1929 Lah 264 and that the rule laid down in Mani-ram's case, (1906) ILR 33 Cal 1047 (PC) that an unconditional acknowledgment implied a promise to pay was approved. Now I have pointed out that in Pala Mal's case, 119 Pun Re 1908 the Lahore High Court has taken the view that mere acknowledgment could not form the basis of the suit.

This view must be taken to be not laying down a good law as Fateh Mohammed's case, AIR 1929 Lah 264 has been approved by their Lordships of the Supreme Court. All this is made further clear from what their Lordships said in the concluding part of the judgment that the observations in Gulam Murtuza's case AIR 1935 All 129 (supra) that 'even if an acknowledgment implied a promise to pay, it could not be made the basis of suit and treated as giving rise to fresh cause of action' did not lay down a correct law.

51. Learned counsel for the defendant-respondents have referred to the decision of their Lordships of the Supreme Court in AIR 1961 SC 1236 wherein it has been observed that an acknowledgment as prescribed by Section 19 merely renews a debt; it does not create a new right of action and that it is a mere acknowledgment of the liability in respect of the right in question and need not be accompanied by a promise to pay either expressly or even by implication. This is of course true. But in my opinion, if there is a promise to pay even by implication in an agreement, it does create a new right of action on which a suit can be founded. There is nothing in this case which goes contrary to the view expressed in Hiralal's case, AIR 1953 SC 225 (supra).

52. I may also refer to AIR 1968 Pat203 where a Division Bench of the Patna High Court has taken the view that the judgment of the Rajasthan High Court inRam Dayal's case, ILR (1955) 5 Raj85=(AIR 1956 Rai 12) that theSupreme Court had disapproved thedecision of the Allahabad High Courtin Gulam Murtuza's case, AIR 1935 All 129 only to a limited extent in so far as the Allahabad High Court Judges had expressed the view that when a receipt contained a mere acknowledgment or more than an acknowledgment and contained words indicating an implied promise to pay it could not in either view be made the basis of a suit was not correct and that the Supreme Court disapproved the proposition that even where an acknowledgment implied promise to pay, it could not be made the basis of suit or treated as giving rise to a fresh cause of action. With respect, I agree with the view taken by the Patna High Court,

53. I may, however, make it clear that I do not mean to say that in all cases an unconditional acknowledgment could form the basis of the suit. As I have already pointed out in the opening part of my judgment that an acknowledgment under Section 19 may be a unilateral act and such an acknowledgment may not be sufficient to form the basis of the suit. Unless, there are bilateral acts which give rise to an agreement enforceable at law under the provisions of the Indian Contract Act, there can be no question of a unilateral transaction forming the basis of a suit For, after all, what is sought to be enforced in a Court of law is a right accruing on a breach of a term of a contract, though such contract may contain an implied promise to pay. The Indian Contract Act, however, does not require that the promise to pay to be enforceable must always be in express terms.

54. Now let me proceed to examine whether there are other unsurmountable difficulties contained in the provisions of the Indian law which stand in the way of taking this view. One such difficulty pointed out by Sulaiman Ag. C. J. in Abdul Rafiq's case, AIR 1932 All 199 (Supra) is that it will be an indirect evasion of law nullifying the express provisions of Section 19 of the Limitation Act. In my view, Section 19 is not at all nullified because Section 19 is applicable to all kinds of acknowledgments whether unilateral or bilateral or whether they are conditional or unconditional or whether they contain a promise to pay or do not contain a promise to pay. There is nothing in Section 19 which lays down that if an acknowledgment amounts, in the eye of law to an agreement, it cannot be formed the basis of the suit.

55. Another difficulty pointed out in the same judgment is that in Section 25(3) of the Contract Act the words 'promise to pay' occur and these words shall have to be construed as meaning 'express promise to pay'; but it is a settled law that an implied promise to pay involved in a mere acknowledgment would not be sufficient under Section 25 of the Contract Act I do not consider that it would violate the principles governing interpretation of lawif Section 25(3) is read in this manner. Bose J. in AIR 1938 Nag 180, has pointed out that unless a promise to pay is in writing it cannot fall within the purview of Section 25(3) of the Contract Act. The implied promise to pay which is contained in all acknowledgments does not attract the provisions of Section 25(3) because the promise to pay is not in writing.

This view has been approved by the Division Bench of the Nagpur High Court in Shivjiram Dhannalal v. Gulabchand Kalooram, AIR 1941 Nag 100. Sulaiman C. J. in Gulam Murtuza's case, AIR 1935 All 129 (Supra), himself expressed his view that when there is no express promise to pay but the intention is inferred only in-directly, it cannot be treated as a promise in writing to pay the lime-barred debt, and that an implied promise to pay would not be of any avail under Section 25(3) of the Contract Act.

56. I am of the opinion that in order, that a case may fall under Section 25(3) of the Contract Act, there must be an express promise to pay though the word 'express' is not used in Section 25(3) because otherwise there will be no promise to pay in writing as required under that provision.

57. Now I take up the provision of Article 1, Schedule I of the Indian Stamp Act which runs as follows:

'SCHEDULEI StampDuty on Instruments.

Descriptionof Instrument.

ProperStamp Duty,

1.

ACKNOWLEDGMENTof a debt exceeding twenty rupees in amount or value, written or signed by,or on behalf of, a debtor in order to supply evidence of such debt in anybook (other than a banker's pass-book) or on a separate piece of paper when such book or paper is left inthe creditor's possession: provided that such acknowledgment does not containany promise to pay the debt or any stipulation to pay interest or to deliverany goods or other property.'

It may be contended that if an unconditional acknowledgment is held to import an implied promise to pay, every unconditional acknowledgment will be an agreement under the Stamp Act. The first thing necessary for holding a document to be an acknowledgment of debt under Article 1 of the Stamp Act is that such an acknowledgment must be supplied by a debtor for furnishing the evidence of debt. Then it must be kept in view that the provisions of the Stamp Act are meant for taxing what is contained in that document and not what flows from it. In Carbolic Smoke Ball Company's case, (1892) 2 QB 484, Hawkins J. observed as follows:

'It may be staled, however, that in considering whether a document is governed by the article or the proviso it is important to bear in mind the well settled (but often forgotten) principle that it is the document as it stands and not the bargain to which it refers, which has been made chargeable to stamp duty. As has been well put, the duty is on the instrument and not on the transaction. If, therefore, a document is so worded that it expressly, or by necessary implication, comes within a particular provision of the Act, it must, be stamped accordingly. But the implication must arise from the phraseology used in the document, and not be a matter of legal inference or presumption'.

58. Viewed in this light, an acknowledgment of debt even though it contains an implied promise to pay must be stamped under Article 1, Schedule I of the Stamp Act. The proviso further makes it clear as it says that if an acknowledgment is not to fallunder Article 1 Schedule I, such an acknowledgment must not contain any promise to pay a debt or any stipulation to pay interest or to deliver any goods or other property. It only means that so long as the acknowledgment does not contain any of these things expressly, it will remain an acknowledgment though by implication there may be contained in it a promise to pay a debt or to pay interest. This view has been taken by the Full Bench of the Lahore High Court in Shiv Ram Punnun Ram v. Faiz, AIR 1942 Lah 50 in which Dalip Singh J. observed as follows:--

'Now I have only to notice the last contention of the Advocate General, namely, that the entries in question are bonds or agreements by reason of the terms of Sec-lion 6, Stamp Act, which contemplates that a document may fall into two categories and since every unconditional acknowledgment implies a promise to pay, therefore, all unconditional acknowledgments are agreements and, if attested, are bonds, because by the definition of a bond the person executing the bond obliges himself to pay a certain sum. According to him, therefore, since an unconditional acknowledgment by reason of the implied promise to pay obliges a person to pay the sum acknowledged, therefore, it is, if attested, always a bond. He conceded that the language about an agreement in the Stamp Act being different, it might remain only an acknowledgment and not an agreement. It seems to me however that this argument mistakes the real nature of stamp duty which is not based on the legal obligation flowing from a document but is based on the nature of the document itself. What is tax-ed in other words is not the transaction but the document and therefore, whatever implied promise there may be involved in an unconditional acknowledgment, it can never be a bond unless the obligation is contained in the document itself in express terms'.

The same view has been taken by the other Judges. I am in respectful agreement with the view expressed in those cases. I may also refer to Narayana v. Lurudu Mareyya, AIR 1951 Mad 605 and Premsingh v. Gajrabai, AIR 1959 Madh Pra 327, in which the same view has been taken.

59. Thus from the standpoint of the Contract Act, an agreement containing an implied promise to pay may form the basis of the suit, yet for the purpose of Article 1 Schedule I of the Stamp Act, it will remain as an acknowledgment and stamped in accordance with that Article.

60. Lastly, a general argument has been addressed to us that if it is held that a suit can be based on an unconditional acknowledgment, it will operate against debtors in India who arc mostly illiterate, inasmuch as the creditor will be relieved of the duty to show that the debt was within time when the acknowledgment was made. I may point out that a written acknowledgment of a debt is a common feature of mercantile transaction in this country, and there is no reason that the case of the creditor should be thrown out simply on the ground that he has based his suit on a document which does not contain an express promise to pay if the other circumstances show that it embodies an agreement arrived at by the parties.

In such a case, it is for the defendant to raise his plea that such an agreement is without consideration and the Court may decide this point casting the duty of proving consideration according to law. Ordinarily it will be for the defendant to show that the previous debt had become time-barred and this he can do by asking the plaintiff by producing the account-book containing the previous account between the parties. To protect the ignorant debtors, there are already several enactments, and if the case of the debtor falls under those enactments, he may avail the remedy provided therein.

61. In the light of the aforesaid observations, when I examine the facts of the case, I find that Ex. 1 though it only contained an implied promise to pay came into existence as a bilateral agreement. The creditors and debtors sat together and after going through their old accounts arrived at a sum of money which the respondents admitted due to the plaintiffs. Such a document could form the basis of suit and the suit of the plaintiffs could not be thrown out on that ground. It was for the defendants to show that Ex. 1 was without consideration or was executed as a result of fraud or mistake.

It is contended that in the absence of the previous account, it cannot be said that Ex. 1 was executed on the date when the amount due on the previous account was within limitation and it was for the plaintiffs to prove that the transaction embodied in Ex. 1 was with consideration. In my view, in the circumstances of the case, it was for the defendants to take the plea of want of consideration and they did not take up any such plea to prove that the sum due under the previous account was not within limitation on the dale of the execution of Ex. 1. As a mater of fact, the plaintiffs sought permission to amend their plaint by referring to the previous account in the lower appellate Court, but the defendants opposed such application for amendment. This contention of learned counsel has got no force.

62. The lower appellate Court has held that the plaintiffs have failed to prove any usage showing that the defendants were liable to pay any interest on the Khata Ex. 1, and, therefore, the plaintiffs cannot recover any interest. This appears to be correct and instead of a decree for Rs. 6215 as awarded by the trial Court the plaintiffs are entitled to a decree for Rs. 6022/-against the defendants Lalchand, Misrimal and Premraj.

63. In my opinion, the appeal should be allowed and the decree passed by the trial Court should be restored with this modification that instead of Rs. 6215/-. the decree should be passed for Rs. 6022/- only. The plaintiffs should get interest at 8 annas per cent. per mensem on this amount from the date of the filing of the suit instead of al 10 annas per cent per mensem as awarded by the trial Court. The parties be ordered to give and lake costs proportionately to their success and failure in all the three Courts.

Tyagi, J.

64. I perused the judgments of my Lord the Chief Justice and my learned brother Bhandari J., very carefully. I regret to express my inability to subscribe to the view of the learned Chief Juslice that the Supreme Court did not lay down firmly in positive term in the case of AIR 1953 SC 225, that an unconditional acknowledgment implies promise to pay and it can be made the basis of a suit. It is true that while disapproving the decision of Sulaiman C. J. in Ghulam Murtuza's case AIR 1935 All 129, the Supreme Court has not given any elaborate reasoning but Mahaian J. (as he then was) in para 12 of the said judgment has categorically mentioned as follows:

'Mr. Bindra drew our attention to a decision of the Allahabad High Court in Ghulam Murtuza v. Mt. Fasihunnissa Bibi, AIR 1935 All 129 wherein it was held that even if an acknowledgment implies a promise to pay it cannot be made the basisof the suit and treated as giving rise to a fresh cause of action. We have examined the decision and we arc satisfied that it does not lay down good law'.

These observations, in my humble opinion leave no room for doubt that the Supreme Court rejected this view of the Allahabad High Court that even if an acknowledgment implies a promise to pay it cannot be made the basis of the suit and treated as giving rise to fresh cause of action. I feel myself unable to interpret the judgment of the Supreme Court in Hiratal's case, AIR 1953 SC 225 in any other way except that it lays down the law that an acknowledgment if it implies a promise to pay can give rise to a fresh cause of action and be made the basis of a suit. In view of this pronouncement of the Supreme Court which has been made after approving the observations of the Privy Council in AIR 1934 PC 147 and the view taken in Fateh Mahommed's case, AIR 1929 Lah 264 and expressly disagreeing with the law laid down in Ghulam Murtuza's case, AIR 1935 All 129 (Supra), I am left with no alternative but to express my agreement with Bhandari J.

65. I cannot, however, help mentioning that the views expressed by my Lord the Chief Justice about the difficulties which an unwary and illiterate debtor is likely to face due to this deviation from the consistent view which this Court has been taking on this aspect of the law are equally shared by me, but I feel that the law Courts, in view of the clear pronouncement of the Supreme Court in Hiralal's case, AIR 1953 SC 225 arc unable to extend any protection to the illiterate debtor. It is for the Legislature to take a note of this situation and to provide protection to the illiterate debtor by enacting law on the pattern of the Rajasthan Relief of Agricultural Indebtedness Act. Courts, however, are bound to follow the law laid down by the Supreme Court.

66. With these observations, I agree with the judgment of Bhandari J.

BY THE COURT

67. According to the majority view, the appeal is allowed and the decree passed by the trial Court is restored with this modification that instead of Rs. 6215/-, the decree is passed for Rs. 6022/- only. The plaintiffs shall get interest at eight annas per cent per mensem on this amount from the date of the filing of the suit instead of at ten annas per cent per mensem as awarded by the trial Court.


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