CRAFT CENTRE Vs. KONCHERRY COIR FACTORIES CHERTHALA

JUDGEMENT

(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 substance 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 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 S.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 ( 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 feet that Ext.A1 contained 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, S.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