HIGH COURT OF KERALA
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(1.) The defendant in O.S. 43 of 1123 on the file of the District Munsiff of Meenachil, being a suit for realisation of amounts due under chitty security bonds, appeals against the decision of the Additional District Judge of Kottayam in A.S. 468 of 1951 modifying the decree passed by the Trial Court holding that the plaintiff is entitled to the full amount found due on scaling down under the Debt Relief Act of Travancore. The Trial Court held that the defendants liability was only to the extent of Rs. 140, 16 ch. 8 cash on the ground that the balance of the claim was barred as the acknowledgment of the defendant in the Debt Relief proceedings relied upon to get over the bar of limitation was with regard to the specific amount. The lower appellate court held that the payments made in the Debt Relief proceedings amounted to an acknowledgment of the whole debt found due as per the provisions of the Debt Relief Act and hence upheld the plaintiffs claim to the said extent.
(2.) Now on behalf of the appellant it is contended that as the admission of liability by the defendant in the proceedings in D.R.P. 670 of 1116 was only to the extent of the specific amount as found by the Trial Court any payment made also can be an acknowledgment of the said liability and not of the full amount found ultimately due. The lower appellate court has relied upon S.21 of the Travancore Limitation Act, VI of 1100 (corresponding to S.20 of the Indian Act) to hold that there was no limitation as payments were made in the Debt Relief proceedings towards the debt. The lower appellate court does not refer to S.19 of the Travancore Limitation Act (corresponding to the same section of the Indian Act) dealing with acknowledgment in writing. Now, if the acknowledgment coming under S.19 is to be deemed to be of a specific amount as held by the Trial Court and not of the amount which might be found due on settlement of accounts certainly payments made also could be considered as acknowledgment of that particular debt only. When, as the learned District Judge points out, in the affidavit of the defendant in the Debt Relief proceedings there is a reference to the claim of the plaintiff under the security bond and he admits the existence of an unsettled account between the parties though he states that according to him the debt is only to specific extent, in law it is enough acknowledgment to save the bar of limitation as regards the amount finally found due on settlement. The defendant did not resort to the forum constituted under the Debt Relief Act with a case that only Rs. 140 16 ch. 8 cash was due from him and praying for recording satisfaction of the entire debt on the deposit of the said amount. His prayer was for a settlement of accounts, putting forward his own claim regarding the liability as well as that of the plaintiff. When there is an acknowledgment of such an unsettled debt it amounts to an admission of liability to pay whatever amount was finally found due on settlement. Maniram Sath v. Rupchand Sath (33 Calcutta 1047) is the leading case on that point. In that case some statements made by the debtor in certain probate proceedings to the effect that for the last five years he had open and current accounts with the deceased and the alleged indebtedness does not affect his right to apply for probate were relied upon as sufficient acknowledgment to save bar of limitation and the learned Judge held that in law it was sufficient acknowledgment under S. 19 of the Limitation Act. There at page 1038 the various kinds of acknowledgments pointed out in In re Rivers Steam Co. Mitchells Claim (L.R. VI Ch. App. 822) are referred to, it being observed as follows:-
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 limitation must be either one from which an absolute promise to pay can be inferred or secondly an unconditional promise 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.
It was held that the acknowledgment in question there came under the third category. The following observations at page 1059 also may be pointed out:
The judgment in the Divisional Judges Court is also against the acknowledgment. The only reason given is that it would require a considerable stretch of imagination to place upon it a meaning that there was a right to have the account taken thereby implying a promise to pay. It has not, however, been argued that there was a promise to pay in any event. But the learned Judge does not seem to have considered the meaning which appears to Their Lordships to be the natural one, that the words import an admission of liability if the balance should prove to be against the respondent coupled with the fulfilment of that condition a statement of things which in all reason and sound sense places the acknowledgment upon the same footing as an acknowledgment unconditional in the first instance from which in English Law a promise to pay has always been inferred. The India Limitation Act, S.19, however, says nothing about a promise to pay and 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 which is fulfilled stand upon the same footing.
The principles laid down in the aforesaid decision have been followed in Subbraramiah v. Iragam Reddy ( AIR 1939 Mad. 300 ), Diwanni Widyawati v. Ranjidas & Co. (AIR 1939 Lahore 216) and other decisions. In the present case also the statements made by the defendant in the Debt Relief Proceedings amount only to an acknowledgment of liability for any amount ultimately found due on settlement of accounts as per the provisions of the said Act. When an order has been passed in the Debt Relief Proceedings settling the debt it is clear that the acknowledgment relied on is enough to save the bar of limitation as regards that settled amount. The argument advanced on behalf of the appellant that here it is not the case of a single debt as it arises out of a chitty transaction and hence the acknowledgment relied upon cannot be taken as the one with regard to the whole of the unsettled liability is without any force. The decisions relied upon by the learned counsel for the defendant cannot help him in view of the decision in 33 Calcutta 1047. Thus here there is a valid acknowledgment as contemplated under S.19 of the Limitation Act and further there had been payments towards the unsettled debt which also go to save the bar of limitation. So there is no ground to interfere with the lower appellate courts findings.
(3.) In the result the appeal is dismissed with costs.;
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