ALLIED TRADING CO Vs. S L VERMA

JUDGEMENT

(1.) [Appellants 3 & 4 are brothers. Wife of appellant 3 is sister of respdt. Appellants 3, 4 & 5 are partners of App. 1 & 2. Respdt repatriated from Burma on 12.1.67. He sued appellants for recovery of Rs. 1 lac alleged to have been deposited on 1.4.67 evidenced by a written receipt. He further pleaded that Defts. paid him interest on 10.10.68 & 12.11.69 after deducting Rs. 1,200.00 as tax deducted at source and deposited in State Bank and as after that nothing was paid, he made a demand by letter of 6.9.71 and then sued Defts. on 14.7.72. The Defts. contended that alleged deposit receipt was without consideration ; that plaintiff came from Burma without any funds & could not bring any and had no money to deposit, that the documents had been obtained by the plaintiff by mis-representation and that the suit was barred by time. Trial Court held that there was consideration and the suit was within limitation. Defts. appealed against it to D.B. D.B. dismissed the appeal, holding :-

(2.) The second issue regarding limitation was also decided by the learned trial Judge is favour of the plaintiff. It was not denied before him that the period of limitation was three years and the suit was brought within this period by having resort to Ext. P. 7, the payment of interest on 12.11.1969, acknowledged under Ext. Public Witness . 3/4 on 19.1.1970. Ext. P.W. 3/4 recorded the payment of interest & the question to be considered was on account of the debt incurred under Ex. P. 3/A. Trial Judge referred to the provisions of S. 19 of the Limitation Act, 1908 (reproduced in S. 18 of the Act of 1963) and judicial decisions thereunder cited on behalf of the defendants and agreed that, to save limitation under that section, a mere endoresement of payment would not be sufficient but that there must in addition be an acknowledgement of a subsisting liability. Such, however, was not the position u/s 19 of the 1963 Act. The learned Judge-pointed out that, u/s 19 of the 1963 Act, a payment on account of a debt had the effect of extending the period of limitation. The proviso to that section only required that an acknowledgement of the payment had to appear in the handwriting of, or in a writing signed by, the person making the payment. The acknowledgement need not show, on the face of it, that the payment was made on account of a particular debt, that could be proved by evidence aliunde. In the present case, the plaintiff had stated that he had been paid Rs. 12,000.00 towards interest in Oct., 1968 and again in Nov., 1969. The certificate Ext. P. 3 clearly states that the plaintiff was paid the interest of Rs. 12,000.00 in respect of the period 1.4.67 to 31.3.68. Again, in respect of the subsequent period the certificate Ext. P.W. 3/4 which was ultimately furnished by defendant 5 under the date 19.1.1970 shows the payment of Rs. 12,000.00 on 12.11.69 as interest to the plaintiff, after deduction of Rs. 1,200.00 by way of tax. Plaintiff has deposed that this was in respect of his debt. It is not the case of the defendants that there was any other debt due from the defendants to the plaintiff or any one else to which it could pertain. The payment of Rs. 12,000.00 could, therefore, be reasonably inferred as payment on account of the debt under Ext. P.W. 3/1. If this payment of Rs. 12,000.00 was of interest on account of the debt under Ext. Public Witness . 3/1 and was made on 12.11.69, it would extend the period of limitation, since there was an acknowledgement of the payment (Ext. Public Witness . 3/4) in the handwriting of defendant 5 who has signed as partner of the defendant firm. A fresh period of limitation had, therefore, to be computed from the time when payment was made. Suit having been filed on 14.10.72 within 3 years from 12.11.69 was therefore very much within time......

(3.) The learned trial Judge has held that in this case there has been a payment on account of the debt before the expiration of the prescribed period by the person liable to pay the debt or by his agent duly authorised in this behalf on 12.11.69 that this payment has been acknowledged in writing by Ext. P.W. 3/4 and that, therefore, the suit filed within three years of that date has been filed within time. There can be no doubt, for the reasons already stated, that the payment by the defendants of a sum or Rs. 12,000.00 to the plaintiff on account of the debt on 12.11.69 has been established. We agree with the learned trial Judge that though the income tax deduction declaration (Ext. Public Witness . 3/4) does not show that the tax deduction at source is in respect of this particular debt, it is open to the plaintiff to show that the payment made to him on 12.11.69 was on account of this debt by leading other evidence. As we have already pointed out the declaration of tax deduction at source is inextricably linked up with the payment of Rs. 12,000.00 by way of interest on a debt owed by the defendants to the plaintiff whatever the sum may be. It is not the case of the defendants that they owed the plaintiff any other sum of money or paid any other amount to him by way of interest. On the other hand, the plaintiff has specifically deposed that this payment was towards this debt and, for reasons already discussed, this version deserves to be accepted. Therefore, there is clear evidence to show that the payment on 12.11.69 evidenced by the declaration dated 19.1.70 is a payment on account of this debt that is claimed by the plaintiff in suit.