Patna High Court
Bindeshwari Prasad vs District Board Of Saran Through Special ... on 10 October, 1960
Equivalent citations: AIR1961PAT134, AIR 1961 PATNA 134
JUDGMENT Raj Kishore Prasad, J.
1. In this appeal, by the plaintiff, whose suit has been dismissed by the Court of appeal below, the only question involved is a question of limitation. The appeal involves the interpretation of Section 19(1) of the Limitation Act, hereinafter referred to as "the Act".
2. The plaintiff was a contractor who undertook to do some repair work from the defendant, the District Board of Saran. The work agreement was executed on the 25th July, 1947; the work order was given to the plaintiff on the 6th Septem-
ber, 1947; and, the work was to be completed by the 30th November, 1947. The plaintiff was proceeding with the work when, on the 1st of November, 1947, he was asked to stop it, and the work was entrusted to another contractor. Although the work was finished on the 1st of November, 1947, the present suit was filed on the 6th April, 1951. It is not disputed that Article 56 of the Act, as held by the Court of appeal below, applies here. Prima facie, therefore the suit was barred by limitation.
3. The plaintiff, however, in order to get over the bar of limitation, relied on the fact that the plaintiffs bill was passed on the 22nd June, 1948, for Rs. 314/-, as will appear from Exhibit B/3, and, therefore, that amounted to an acknowledgment of his claim in suit, which represented the balance of the amount of his bill disallowed, and, therefore, the period of limitation was extended under Section 19(1) of the Act, and, as such, the plaintiff's suit having been brought within three years from that date was not barred by limitation.
4. The only defence, with which we are concerned here, was that the action was barred by the lapse of time.
5. The trial Judge accepted the plaintiff's case that the passing of the bill on the 22nd June, 1948, amounted to an acknowledgment of the defendant's liability for the claim in suit within the meaning of Section 19 (1) of the Act, and, therefore, the plaintiffs suit was not barred by limitation. The plaintiff's suit was accordingly decreed in part.
6. On appeal, however, the learned Additional Subordinate Judge took the view that passing of the bill on the 22nd June, 1948, for a smaller amount, and, repudiating the rest of the claim of the plaintiff, did not amount to an acknowledgment of his liability by the defendant of the remaining amount of the bill, which had been rejected by the defendant, and which is the basis of the suit, and, as such, the plaintiffs suit having been brought after three years from the 1st November, 1947, when the work was finished, was barred by limitation. The learned Judge accordingly reversed the decision of the first Court and dismissed the plaintiff's suit in toto.
7. The only question, therefore, which falls, to be considered is, whether the passing of the bill in part on the 22nd June, 1948, amounts to an acknowledgment of the defendant's liability for the rest of the bill within the meaning of Section 19(1) of the Act.
8. Section 19(1) of the Act runs thus:--
"19(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) x x x x Explanation I.-- For the purposes of this sec tion 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 set-off, or is addressed to a person other than the person entitled to the property Or right."
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9. In support of his contention, Mr. Gupteshwar Prasad, who appeared for the appellant, relied only on the decision of Nigam, J. C., (as he then was), sitting singly, in Krishna Verma v. Ameer Singh, AIR 1954 Ajmer 27 which was also relied upon by the trial Judge. In my opinion, it does not support the contention of the appellant that if a bill is submitted for a certain amount, and, if a part of it only is passed, and the balance of it is, repudiated and disallowed, then the part which is allowed amounts to an acknowledgment of the remaining amount which has been disallowed.
10. There are, however, other decisions, some of which have been relied upon by the Court of appeal below, which support the view that in a case like the present, the admission of liability in respect of a portion of a claim made will not amount to acknowledgment of liability of the balance of the claim which has been repudiated and not accepted at all.
11. In Maniram v. Seth Rupchand, ILR 33 Cal 1047 : 33 Ind App 165 (PC), the Privy Council had to consider whether a certain admission by the respondent, in that case, amounted to an acknowledgment of his liability within the meaning of Section 19 of the Limitation Act, and was sufficient by the Indian Law to take the case out of the Statute of Limitation. In that connection, Sir Wilfred Wills, who delivered the opinion of the Board, at p. 1058, observed :--
"In a case of very great weight, the authority of which has never been called in question, Lord Justice Mellish laid it down that 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 promiste to pay the specific debt, or, thirdly, there must be a conditional promise to pay the debt, and evidence that the condition has been performed: In re Rivers Steamer Co., Mitchell's claim, (1871) 6 Ch. A. 822 at p. 828. 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 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."
12. The just mentioned Privy Council case was affirmed by Mahajan, J., as he then was, in Hirilal v. Badku Lal, AIR 1953 SC 225. His Lordship, who pronounced the unanimous decision of the Court, held, that an unqualified acknowledgment was sufficient to furnish a cause of action, and, further, quoted with approval, the following pas-
sage from the judgment of Sir Wilfred Wills, reproduced partly in extenso above, in the above mentioned Privy Council case, "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."
13. A Division Bench of this Court, in Chhaterdhari Mahto v. Nasib Singh, AIR 1924 Pat 808, held that the statement that there was a debt, but it had been discharged was not sufficient to constitute acknowledgment of liability under Section 19(1) of the Act.
14. A similar view was taken by Satyanarayana Rao, J., sitting singly, in Karamadai Naicken v. R. Raju Pillai, AIR 1949 Mad 401, in which he held that when the statement of liability is coupled with a statement that it is discharged, a subsisting liability on that date cannot be inferred. It was further held that an acknowledgment to be valid must be an acknowledgment of subsisting liability and the statement must be taken as a whole and the intention must be gathered by reading the document as a whole and not confining attention to a particular portion of it, as it is wrong to dissect the statement into two parts, the first part containing an admission of liability and the second part the mode in which it was discharged.
15. In Debji Ghelabhai and Brothers v. R.D. Mehta and Co., Asansol, AIR 1935 Cal 255, Mitter, J., of the Calcutta High Court, sitting singly, held that there need not be a promise to pay, but the document in question must on a fair reading amount to an admission of liability, absolute or conditional, and, in the latter case the condition must be fulfilled, and that where the letter or the document relied upon expressly states that (here is no liability and the liability is in fact denied and repudiated, it cannot be said that limitation is extended under Section 19 of the Act.
16. In the above case, the plaintiff agreed to supply to the defendant two thousand pieces of Sal wood sleepers at his colliery, but out of two thousand pieces, 800 pieces were bad and had to be rejected. The plaintiff, therefore, in that case, brought a suit, but just two days after the period of limitation, for recoverv of the price of the 800 pieces of sleepers which had been rejected by the defendant. To get over the bar of limitation, the plaintiff, in that suit, relied on a letter written by the defendant to the plaintiff in which it was stated that 800 pieces of the sleepers purchased' were lying rejected, and, therefore, they should be removed by the plaintiff. His Lordship held that as the defendant in his letter stated that he was. under no liability for the price of 800 pieces of rejected sleepers, and, acknowledged liability only in respect of the balance of 1200 pieces of sleepers, it did not amount to an acknowledgment of his liability under Section 19(1) of the Limitation Act, in respect of the rejected 800 sleepers, which were the subject matter of the suit before him, so as to save limitation.
17. In Ram Mangal Prasad Shahi v. Achhaibar Prasad Shahi, AIR 1954 Pat 575, C.P. Sinha, J., as he then was, sitting singly, while pointing out the distinction between an acknowledgment of lia-
bility under Section 19 of the Limitation Act and a promise to pay a borrowed debt under section 25(3) of the Indian Contract Act, at page 579, observed:--
"Section 19 of the Limitation Act lays down that a fresh period of limitation shall be counted for a suit or application in respect of any property or right where the 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. It speaks of the extension of time for a suit in respect of any property or right: it has no reference to the actual amount of liability in respect of right or property. All that is needed under this section is that an acknowledgment of liability in respect of property or right has been made before the expiration of the period of limitation prescribed for a suit or application in respect of such property or right coupled with the other formal requirements as signing in writing by such party against whom the property or right is claimed or by some person through whom he derives title or liability.''
18. The question under consideration has been thoroughly and clearly dealt with in AIR's Commentaries on the Indian Limitation Act, 3rd Edition, Vol. I, Note 11, Page 595, Note 18, pages 601-604 and Note 32 page &38.
19. The principles, therefore, which emerge and which can be extracted therefrom, and, from the authorities above-mentioned, may be restated in the following words:
20. It is a general principle of the interpretation of Statutes of Limitation that such Statutes being in derogation of the right to sue, exceptions to the Statutes must be construed liberally. Section 19, therefore, which contains an exception to the bar of limitation, must be construed liberally. Section 19, as such, must not be held to require an acknowledgment in any particular form or an express acknowledgment. Even a statement which. if literally construed, does not amount to an acknowledgment may be held to be sufficient for the purpose of this section, if it implies an admission of liability.
21. The very opening words of Section 19 indicate that an acknowledgment to be valid must relate to the time when the right was still enforceable. An acknowledgment of liability therefore, must be made before the expiry of the period of limitation for the suit or application. Such an acknowledgment, however, merely saves the running of limitation and does not create a fresh right. It operates to create a fresh start of time. The object of Section 19 is to give a privilege and not to curtail the ordinary periods of limitation. When, therefore, an acknowledgment is given before the Statute had begun to run, the acknowledgment will not immediately set limitation running. It operates as a fresh cause of action.
22. The word "acknowledgment", used in Section 19(1) of the Act is not a word of art and must be construed in its plain, literal sense. An acknowledgment of liability under this section, therefore, simply means an admission of the truth of one's liability. The admission may be in any form and may be express or implied. But the section requires a definite acknowledgment of liability. A document, alleged to contain an acknowledgment of liability, must, therefore, be liberally construed that is to say, in construing such document regard must be had to the meaning of the writer, judging from the document, read as a whole, and such surrounding circumstances as the Court can take into consideration in construing the document, rather than to the literal meaning of the words used.
23. The construction of documents alleged to contain acknowledgments of liability is governed by the same principles as those that apply to the construction of other documents. The general principle is that the meaning of a document must primarily be ascertained from the language used in it and the surrounding circumstances cannot be taken into account except when such language is ambiguous and capable of more than one interpretation. Subhadrayyamma v. Venkatapathi, AIR 1924 PC 162 : 52 Ind App 1 and Royal Bank of Canada v. Joseph Salvatori, AIR 1927 Privy Council 272.
24. The rule of construction of a deed is that where a document has to be construed, the intention must be gathered, in the first place, from the document itself. If the words are express and clear, effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out. The fundamental rule is to ascertain the intention from the words used; the surrounding circumstances are to be considered but that is only for the purpose of finding out the intended meaning of the words which have actually been employed. The real question in such a case, therefore, is not what the parties intended or meant, but what is the legal effect of the words, which they used. If, however, there is an ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended: Chunchun Jha v. Ebadat Ali, AIR 1954 SC 345 and Ramgopal v. Nand Lal, AIR 1951 SC 139.
25. The document, alleged to contain an acknowledgment of liability, must, as such, clearly contain within itself the meaning that the party is admitting his liability, that is to say, an admission of a subsisting liability. An acknowledgment of liability necessarily implies a knowledge on the part of the person alleged to make the acknowledgment that he is admitting something. The section, therefore, requires a conscious acknowledgment of liability.
26. Section 19, which deals with payments, is not to be read as based upon the theory of implied promise: per Sir George Rankin, in Rama Sah v. Lal Chand, AIR 1940 PC 63: 67 Ind App 160. In view of Explanation I to Section 19 of the Act, it is plain that now there is an express provision in the section itself that an acknowledgment may be sufficient though it is accompanied "by a refusal to pay", and, as such it cannot he. said that the acknowledgment contemplated by the' section is one which implies a promise by the defendant to fulfil his obligation.
27. A Division Bench of this Court in Ramdin Singh v. Ram Parichan Singh, AIR 1942 Pat 170, held as below:
28. The intention of the law is manifestly to make an admission in writing of an existing jural relation equivalent for the purposes of limitation to a new contract; but for this purpose the consciousness and intention must be as clear as they would be in a contract itself. Section 19 says nothing about promise to pay, but requires only a definite admission of liability, as to which there can be no reason for departing from the English principle that an unqualified admission and an admission qualified by a condition whch is fulfilled stand upon the same footing.
The admission of liability or acknowledgment must be one which can be implied from the facts and surrounding circumstances and is not one which is implied as a matter of law. Evidence is always admissible to prove the surrounding circumstances in which the document came to be executed. Each case roust be treated on its own merits and from the language used and the circumstances in which the acknowledgment is made, it must be decided whether it amounts to an implied acknowledgment of subsisting liability.
29. The admission of "liability" contemplated by Section 19 of the Act, must mean an admission of liability to the plaintiff or one claiming under him: Mylapore Iyasawmy Vyapory Moodaliar v. Yeo Kay, 14 Ind App 168 at p. 172 (PC). It is then only that an acknowledgment of liability, although it does not confer title, extends the period of limitation within which a suit must be brought.
30. In the light of the above principles, let us now see, here, if Exhibit B/3 amounts to an acknowledgment of its liability by the deiendant of the plaintiff's claim in the suit within the meaning of Section 19(1) of the Act.
31. The statement, Exhibit B/3, relied upon as an acknowledgment of a subsisting liability of the plaintiff's claim in suit, must be taken as a whole and the intention must be gathered by reading the document as a whole and not confining attention to a particular portion of it, as it is wrong to dissect the statement into two parts, the first part containing an admission of liability of the portion of the claim allowed, and. the second part, the denial of liability of the balance of the claim, so as to furnish a fresh cause of action and to save limitation. If so construed, it would be obvious from Exhibit B/3 that no liability has been admitted at all by the defendant to pay the claim in suit to the plaintiff to take the case out of the Statute of Limitation, and, under those circumstances, Article 56 must prevail.
32. The plaintiff, no doubt, submitted his bill for the full amount but out of it only Rs. 314/-was allowed, and, the balance was disallowed. It is, therefore, plain that the defendant admitted its liability to pay only Rs. 314/-, and not a shell more, and, it did not admit its liability to pay the balance of the bill of the plaintiff, which was the subject matter of the suit; on the other hand, it expressly disallowed it and definitely repudiated its liability in respect of the sum disallowed. In these circumstances, upon the true construction of Section 19(1), it cannot be said that merely because the defendant allowed the bill in part, i. e. for Rs. 314/-, it acknowledged its liability to pay also the balance of the bill, even when it expressly disallowed it and thereby repudiated its liability to pay it.
33. When, therefore, the plaintiff submits his bill for a certain amount of money, for work done, to the defendant, and the defendant passes the bill for a lesser amount and disallows the plaintiffs claim for the rest and expressly denies and repudiates its liability in respect of the remaining amount of the bill, the mere fact that the defendant passes the bill for a lesser amount and thereby admits its liability to pay the sum allowed, cannot amount to an acknowledgment of its liability to the plaintiff to pay also the balance amount of the bill which was expressly disallowed.
34. In the instant case also, similar is the position. The document in question, Exhibit B/3, on a fair reading cannot amount to an acknowledgment of its liability by the defendant to the plaintiff in respect of the sum disallowed within the meaning of Section 19(1) of the Act.
35. In my opinion, therefore, the decision of the learned Judge of the Court of appeal was correct, and, he rightly held that Exhibit B/3 was not sufficient in law to constitute an acknowledgment of its liability by the defendant to pay the claim in suit to the plaintiff within the meaning of Section 19(1) of the Act, so as to take the suit out of the bar of limitation, and, as such, the suit was barred under Article 56 of the Limitation Act.
36. In the result, the appeal fails, and, is dismissed; but, in the circumstances of the case, there will be no order for costs.