1. The defendant is the appellant. The plaintiff, respondent herein, who is a dealer in automobile parts, filed the suit for recovery of a sum of Rs. 4,395.72 with future interest. His case was that he has supplied motor car parts to the defendant on various occasions between 29-7-1958 and 31-10-1961 and that in respect of those supplies of goods the suit amount was due. While calculating the amount due, he has also calculated interest periodically and added it and has claimed compound interest. The appellant filed a written statement in which he raised two main contentions; Firstly, the supply on credit of the goods was not to the defendant personally but to his father and brother-in-law, one V. K. Jagannathan. It was further contended that the calculation of compound interest is wrong and that only a sum of Rs. 4,027.21 would be due under the account if his other contentions fail. There was also the plea that the suit was barred by limitation.
2. Both the courts below have concurrently held that the supply of goods was to the defendant personally and not to his father or brother-in-law and that therefore he was liable to pay the suit amount. Though the learned counsel for the appellant challenged this finding, I find that the finding is supported by both documentary and oral evidence and that there are absolutely no grounds to interfere with that finding.
3. On the question of limitation, both the courts below have held that Ex. A-78, which is a cheque dated 17-3-1960 executed by V. K. Jagannathan in favor of the plaintiff for a sum of Rs. 563/-, which was given by the defendant to the plaintiff would amount to an 'acknowledgment' of liability, and that, therefore, the suit was within time. In the plaint, the plaintiff stated that the suit was not barred by limitation because of Article 64 of the Limitation Act of 1908 and in view of the payment by cheque of the sum of Rs. 563/- on 17-3-1960. I fail to see how Article 64 of the Limitation Act of 1908, which corresponds to Article 26 of the Limitation Act of 1963, would in any way save the suit from the bar of time. The 'statement of account' referred to in that Article is a statement signed by the debtor or his duly authorized agent. There is no statement signed by the defendant or his duly authorized agent, produced in this case. Therefore, Article 64 of the old Act is not applicable to this case.
4. Learned counsel for the respondent supported the judgment of the courts below on the contention that Ex. A-78, cheque will amount to an 'acknowledgment' of liability within the meaning of Section 20 of the old Act, corresponding to Section 19 of the new Act and would save the suit from the bar of limitation. Ex. A-78 is a cheque drawn by one V. R. Jagannathan in favor of the plaintiff for a sum of Rs. 563/-. It was stated in the plaint, and also it was the evidence of the plaintiff, that it was the defendant who brought this cheque and gave it to the plaintiff and that the amount was given credit to in the accounts of the defendant. In order to give a fresh start of limitation under Section 20, the payment should have been acknowledged in writing by the person making the payment. If the payment towards the debt was made by the debtor himself, the writing required is the writing of the debtor. But if the debtor chooses to pay the amount towards the debt through his authorized agent, then, the acknowledgment in writing must be by the agent who actually paid the amount towards the debt. But, in this case, the payment was made by the debtor himself, but the cheque was drawn by V. K. Jagannathan, who is stated to be the brother-in-law of the debtor. It is true, if the cheque had been drawn by the defendant himself in favor of the plaintiff and that payment was accepted by the plaintiff, that cheque would amount to an 'acknowledgment' in writing which would give a fresh period of limitation. But, in this case, the cheque was not issued by the defendant (debtor), but it was drawn by V. K. Jagannathan. The payment was actually made by the defendant. Therefore, Section 20 is not complied with in order to get a fresh period of limitation. Section 20 is a special provision which enables the creditor to get a fresh period of limitation when there is an acknowledgment in writing by the debtor. In my opinion, the conditions laid down in this section will have to be strictly complied with and there is no question of an extension of that principle to any other category of acknowledgment. The acknowledgment, in this case, is not in conformity with the provisions of Section 20 and therefore the plaintiff will not be entitled to a fresh period of limitation from the date of that payment.
5. The suit was filed on 15-12-1961. As seen from the facts, the plaintiff was supplying materials on credit and going on debiting the account of the defendant and furnishing statement of accounts every month. It appears to be a running account and therefore the plaintiff will be entitled to claim all the credits which he has given for a period of three years prior to 15-12-1961. Any amount due for the supply made prior to three years from 15-12-1961, will be clearly barred by limitation. But the sum of Rupees 563/- paid on 17-3-1960 being an open payment, it was open to the plaintiff to credit that amount towards even the barred debts. Even if the plaintiff had not actually appropriated the sum of Rs. 563/- to any barred debt, as an open payment under the famous rule in Clayton's case, the first debit entry will be set off by the first credit entry. It is not disputed that prior to 15-12-1958, more than Rs. 563/- was due. The amount that was due as on 14-12-1961 is stated to be a sum of Rs. 1,572.07. After deducting the sum of Rs. 563/-, a sum of Rs. 1,009.07 will fall beyond the period of limitation. The suit in respect of that amount is, therefore, liable to be dismissed as barred by limitation.
6. The Lower Appellate Court has decreed the suit for a sum of Rs. 3,474.65 with future interest from the date of suit. In view of my finding that the claim in respect of a sum of Rs. 1,009.07 is barred by limitation, the plaintiff will be entitled to a decree for a sum of Rs. 2,465.58 with subsequent interest from the date of suit. There will be a decree accordingly in favor of the plaintiff for Rs. 2,465.58 with future interest. The suit claim for the balance is dismissed.
7. There will be a decree accordingly in the second appeal. The parties will pay and receive costs proportionate to their success throughout.
8. Decree modified.