Decided on November 12,1965

TEG SINGH Respondents

Referred Judgements :-


Cited Judgements :-



S.S. Dhavan, J. - (1.)THIS is a defendant's second appeal from the decision of the Additional Civil Judge, Nainital reversing that of the Munsif, Ranikhet and decreeing the plaintiff-respondents' suit for specific performance of an agreement to sell land. It appears that there was a dispute between the plaintiff-respondents and the defendant-appellants over certain mutation proceedings initiated by the plaintiffs. It is not necessary to give details of this dispute except that it ended in a compromise on 17-9-1952. Under the terms of this compromise, four of the defendant-appellants executed an agreement promising to transfer within six months to the plaintiff-respondents by sale a certain immoveable property. THIS property is the land in dispute and the agreed sale price was Rs. 350/-. The four appellants who signed the agreement of sale deed, purporting to act on their own behalf as well as on behalf of the other defendants, are Ganga Datt (No. 2). Hiraballabh (No. 3), Khali Ram (No. 5) Keshab Datt (No. 7) The sale was not effected within the stipulated period or at any other time, bill on 14-9-1955, five of the defendants made an endorsement on the back of the deed explaining why the agreement had not been implemented and also explaining why there was delay in applying for permission to sell the land (It may be explained at this stage that the land in dispute is "protected land" as defined in Section 2 of the U. P. Regulation of Agricultural Credit Act, 1940 and could not be alienated without the permission of the Assistant Collector concerned) Even after this the defendants did not execute the sale deed and the plaintiff respondents, after giving notice to them, filed this suit for specific performance.
(2.)ALL the defendants resisted the suit and denied any liability under the agreement of 17th of September 1952. It is not necessary to consider all the pleas in defence except the three which have been raised in this appeal. First, they contended that the suit was time-barred: secondly, that the agreement having been made by four members of a joint family of seven, it was unauthorised and ineffective; thirdly, a decree for specific performance could be not passed in respect of protected land as it required the permission of the Assistant Collector and the Court could not compel the defendants to apply for this permission if they did not want to.
The trial court upheld these pleas and held that the suit was time-barred, the agreement of sale was unauthorised and ineffective and no decree for specific performance could be passed in respect of protected land as there was no way of compelling the defendants to apply for permission On appeal the learned Civil Judge disagreed with the trial court on all these three questions. He held that limitation had been extended by a subsequent acknowledgment of the defendants, that the agreement of sale was not unauthorised as it had been subsequently ratified by all the defendants who were not parties to it and that a decree for specific performance could be granted in respect of this land provided the defendants, or failing them the plaintiffs, obtained the permission of the Assistant Collector. He allowed the appeal and passed a decree for specific performance oh certain conditions. The defendants have come here in second.

I have heard Mr. L. M. Pant for the appellants. His first argument is that the lower appellate court erred in holding that the suit was not time-barred. To understand this argument, it is necessary to relate or re-call a few facts. The agreement to sale was executed on 17-9-1952. It contained a promise to execute a sale deed within six months, after obtaining the necessary permission; therefore the last date for performance of the contract was 16-3-1953, and limitation expired on 16-3-1956. The suit was filed on 29-4-1958. On the face of it, it was time-barred unless the period of limitation had been extended by any acknowledgment of liability by the defendants before 16-3-1956. The plaintiff-respondents relied on an endorsement made by the defendants on the back of the agreement. Its date is 14-9-1955, if it amounts to an acknowledgment of liability, limitation was extended and saved the suit. The whole question is whether the words of the endorsement amount to an acknowledgment of liability. It runs as follows: "Sab bhaiyon ke ek sath majud na hone par iqrarnama ki purti na ho saki. Raenama ho janeke bad Mst. Khimuni se adalat men darkhawast dilwane par bhi is karaj men der hui jo ke 4-10-1952 ko di gai." (Due to all the brothers not being able to meet together, the agreement could not be implemented. After the making of the agreement, an application was made on behalf of Mst. Khimuni before the Court but in spite of this application there has been delay in this matter").

(3.)MR. L M. Pant argued that these words contain a bare statement of fact that an agreement was made but no acknowledgment of liability and cited a number of decisions. Consolidated Agencies Ltd. v. Bertram Ltd. 1965 A. C. 470; Pandit Ram Hazari v. Ram Narain AIR 1963 All 422; Meharban Singh v. Panna Lal, AIR 1926 All 76, and Mst. Sham Devi v. Bhagwat Dayal, AIR 1925 All 353. I do not think these decisions help the appellants. Under Section 19 of the Limitation Act the period of limitation is extended if there is an acknowledgment of liability made in writing signed by the party which is sought to be made liable under it. The principle governing all cases where Section 19 is invoked for extending limitation is well established: "To take a demand out of the statute a limitation on the ground of an acknowledgment, the language of the debtor must amount to an unequivocal admission of a subsisting debt, that is subsisting at the time of the acknowledgment"--Law of Limitation by Rustumji, (5th Edition, Vol. 1 p. 297). But the difficulty is in applying the principle to individual. Whether any particular writing amounts to an admission of an existing debt depends upon its language and the context in which it was written. No rigid rule beyond the general principle enunciated above can be pronounced which will apply, to all writings in all circumstances. In the case before the Privy Council cited by MR. L. M. Pant the document in dispute was a balance-sheet signed by the directors long after the expiry of the period to which the balance-sheet related, and the Privy Council held that "the Directors' signature on the balance-sheets did not refer to a liability at the date of signature but to a liability which existed when the balance-sheet was made up." I have examined all the three Allahabad cases cited by MR. Pant in all of which the Court held that the document in question did not amount to an acknowledgment of liability on the date when it was signed.
But in the present case five of the defendants made an endorsement on the agreement itself in which they explained why the agreement had not been implemented. The limitation had not yet expired and the liability subsisted on the date when this endorsement was signed. Mr. L. M. Pant argued that this endorsement is nothing more than a mere statement of fact that the agreement could not be implemented, and does not amount to an acknowledgment of liability. I cannot agree. The context in which a writing alleged to be an acknowledgment of liability was made is material. Where a party to an agreement makes an endorsement on the part of the agreement itself explaining why he had been unable to implement it and describes the transaction as an agreement (Iqrarnama) and his explanation indicates a desire to satisfy the other party to the agreement that the failure to implement it was not wilful but due to causes beyond control, the endorsement on the agreement will be treated as an acknowledgment of liability. The first argument fails.


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