Kerala High Court
Craft Centre And Ors. vs The Koncherry Coir Factories, ... on 7 July, 1990
Equivalent citations: AIR1991KER83, AIR 1991 KERALA 83, (1990) 2 KER LT 837, 1991 (2)COM LJ166KER, (1991) 2 COMLJ 166, (1990) 2 KER LJ 135, (1992) BANKJ 365, (1991) 3 CURCC 246
JUDGMENT S. Padmanabhan, J.
1. Law of limitation is not meant to be an aid to unconscionable conduct, although, if a claim is clearly barred, the Court must unhesitatingly dismiss the suit. It is a law of repose, peace and justice which bars the remedy after the lapse of a particular period by way of public policy and expediency without extinguishing the right except in certain cases. Therefore, the Court must lean against limitation and in favour of the subsistence of the right to sue where two views are clearly possible. When there is the benefit of a reasonable doubt in the matter of construction of a statement relied upon to serve as an acknowledgment to save limitation, the benefit of that doubt should go to the plaintiff. That is what V.R. Krishna Iyer, J. said in Eapen Panicker v. Krishna Panicker, (1970 KLT 42), following earlier Supreme Court decisions.
2. The Balance-sheet of a Company is the statement of its assets and liabilities as at the end of the financial year approved by the Board of Directors and authenticated in the manner provided by law. The persons who authenticate do so by authorisation as agents of the company. The inclusion of a debt in a Balance sheet duly prepared and authenticated may satisfy the requirements of law for a valid acknowledgment under Section 18 of the Limitation Act, provided the other conditions are satisfied, even though the directors by the authentication did not intend to make an acknowledgment. That is what a Division Bench of this Court said in Krishnan Assari v. Akilakerala Viswakarma Maha Sabha, 1981 Tax LR 2465: (1980 KLT 515).
3. Plaintiff and defendants represent two partnership firms dealing in coir and coir products. They had credit transactions admittedly upto 17-10-1976, by which Rs. 13,440.87 was due from the defendants to the plaintiff. The suit for realisation of the amount with interest and cost was filed on 20-3-1981 when the claim was admittedly barred by limitation if there was no valid acknowledgment saving limitation. Ext.A1 letter, alleged to have been written by the defendants to the plaintiff on 23-10-1978, was relied on in the plaint and proved as an acknowledgment saving limitation. If that is accepted, the suit is within time. Liability is admitted. Plea is only one of limitation. The fact that Ext.A1 contains a valid acknowledgment is also not in dispute. But the contention is that it will not help the plaintiff because it was written on 23-10-1976 and the year '1978' mentioned therein is only a typographical error. The trial Court said that even if there is such an error, Section 18(2) of the Limitation Act is such an error, Section 18(2) of the Limitation Act is a bar in proving it. The trial Court also relied on an alleged acknowledgment dated 7-7-1978 contained in the Balance-sheet of the first defendant firm. This is not an acknowledgment pleaded or proved by the plaintiff. But an admission of DW 1 in cross-examination that there was such a statement in the Balance-sheet was relied on. Seeking support from the above two decisions and giving the benefit of doubt to the plaintiff, the plea of limitation was repelled and the suit was decreed. That is how the defendants came up in appeal.
4. What Section 3 of the Limitation Act says is that every suit instituted after the prescribed period shall be dismissed, although limitation has not been set up as a defence. It is the duty of the plaintiff to convince the Court that his suit is within time. If it is out of time and the plaintiff relies on any acknowledgment or acknowledgments in order to save limitation, he must plead them or prove, if denied. An acknowledgment not pleaded in the plaint, atleast by way of amendment, cannot be relied on. The plaint must appear on the face of it to be within time. If not, the court can reject it on the ground of limitation even without issuing summons to the defendant and waiting for his plea of limitation. In this case, the only acknowledgment pleaded is Ext.A1 dated 23-10-1978. If the Court finds that the acknowledgment was only on 23-10-1976, the suit filed beyond three years, on 20-3-1981, could be dismissed on that ground itself. The provision in Section 3 is absolute and mandatory. The Court can claim no choice except to obey it in full. It is the duty of the Court to dismiss a suit which on the face of it is barred by time even at the appellate stage despite the fact that the issue was not at all raised.
5. An acknowledgment, in order to save limitation, must be in writing and signed by the party, against whom the property or right is claimed, or by any person, through whom he drives title or liability. As Explanation (b) indicates, signature of an agent duly authorised is sufficient. The alleged acknowledgment in the Balance-sheet, if duly proved, may be sufficient, as held in Krishnan Assari's case, 1981 Tax LR 2465 : (1980 KLT 515). But that acknowledgment ought to have been pleaded in the plaint, but it is not there. The Court cannot embark upon a rowing enquiry to help the plaintiff on the question of limitation by getting some admission from the defendant to save the plaint, which is ex facie barred by limitation. Apart from the absence of plea of such an acknowledgment in the pleadings, there is one other difficulty. Evidence acknowledgment saving limitation is only the writing signed. If that signed document is not before Court, oral evidence of its contents shall not be received by the Court. That is the mandate of Section 18(2) of the Limitation Act. The alleged Balance-sheet or even its copy is not before Court. The defendants were not even called upon to produce it. Therefore, no question of any adverse inference also can arise apart from the fact that this acknowledgment is not pleaded and not produced. The trial Court did not act legally in acting on such an acknowledgment to save limitation.
6. That takes us back to the question, whether the mistake regarding the year in Ext.A1 could be gone into by the Court. Section 18(2) permits proof of evidence regarding time of signing the acknowledgment in writing when it is undated. From that, a corollary may follow that if the acknowledgment in writing and signed is dated, oral evidence regarding the date is prohibited by implication. But every rule has its exception. Intention or object of Section 18(2) is to find out the real date of the written and signed acknowledgment for the purpose of saving limitation and to exclude fraudulent testimony. Vitiating factors could always be proved. The very purpose of the existence of courts is dispensation of justice between parties by finding out the truth, legality and justice of their contentions and not to deny justice on technical grounds. Even admissions could be explained or disproved. Mistake of fact or errors could always be proved to apprise the Court of the real position. A clerical or arithmetical or typographic error could always be proved. The Court is bound to accept such errors and correct mistakes. Section 18(2) of the Limitation Act cannot stand in the way of disproving the year of Ext. A1. The trial Court fundamentally went wrong in that respect and the approach resulted in failure of justice also. Benefit of doubt on the question of limitation cannot be extended to a person who wanted to misguide the Court by relying on a wrong year of acknowledgment.
7. Ext.B4 letter was admittedly written by the plaintff to the defendants on 18-10-1976 demanding the amount. Ext.A1 was produced by the plaintiff himself as the reply sent by the defendants to Ext.B4 acknowledging the liability. Ext, A1 is dated 23-10-1978. The year '1978' is said to be a typing mistake for '1976' and it was spoken to by DW 1. There is no counter evidence. Plaintiff did not examine himself nor any witness. He had no case that Ext.A1 is not the reply of Ext.B4 or Ext.B4 was replied only after two years. So also, there is no case that any other reply was received for Ext.B4 and no such reply was produced also. The office copy (carbon copy) of Ext.A1 was produced by the appellants as Ext.B5. Though the year '1978' is naturally there, it contains a dated initial in hand on the margine bearing the date 23-10-1976. That can be a subsequent insertion also. But Ext.B6 dated 29-10-1976 is admittedly the reply sent by the respondent-plaintiff to Ext.A1. In Ext.A1, which was sent in reply to Ext.B4, two facts are worth mentioning, (i) a statement that a partner by name Gopi is coming to settle the matter; and (ii) an invitation to the plaintiff to go to Raipur where appellants are having business. These two references are replied in Ext.B6, which bears the date 29-10-1976, even though in Ext.B6 the month and year of Ext.A1 are not given, but only the date is given. There is no case that Ext.B6 was in reply to any other letter and no such letter was produced. If so, it is clear that Ext.A1 is the reply to Ext.B4 and Ext.B6 is the reply to Ext.A1. Ext.B4 is dated 18-10-1976 and Ext.B6 is dated 29-10-1976. Ext.A1 must have been sent only in between these two dates.
8. A mala fide attempt was made by the respondent to contend that Ext.A1 was sent in reply to another letter dated 18-9-1978. A copy purporting to be an office copy of that letter was produced, but not proved. The original was not called for. DW 1 denied having received such a letter. But, in answer to further questions, he said that he could answer only on going through the file. From this answer, the trial Court presumed that such a letter must have been received. Such an inference is not possible from an honest answer given by DW 1. It is immaterial whether Ext. A1 was in answer to Ext.B4 or some other letter. The question is only whether it was written in 1976 or 1978. Ext.B6 and the non-production of any other letter, as the one for which Ext.B6 reply was sent, clearly indicate that Ext.B6 was in reply to Ext.A1 alone. Clearly Ext.A1 was sent on 23-10-1976 and the respondent was making an attempt to take advantage of typing mistake in it in order to plea an acknowledgment for saving limitation. Ext.A1 cannot, therefore, save limitation. There is no other acknowledgment pleaded or proved. Here, there is no question of two interpretations being possible and the plaintiff getting the benefit of any doubt. He was only trying to take advantage of a mistake in getting a decree on a barred claim.
Appeal is allowed. The decree and judgment of the trial Court are set aside. The suit is dismissed as out of time. No costs.