P. SUBBIAH Vs. A. SHANMUGHAM

JUDGEMENT

(1.) THE plaintiff in O.S. No. 277 of 1968, on the file of the Subordinate Judge of Tiruchirapalli, is the appellant. The suit was for recovery of a sum of Rs. 15,400/ - on the fact of a promissory note executed by the defendant in favour of the plaintiff on 23 -11 -1964 under Ex.A -1. In the plaint, the bar as to limitation is got over by reference to Ex. A -2, which is a counter -affidavit filed by the defendant in the insolvency proceedings in I. P. No. 6 of 1967, on the file of the. Subordinate Judge's Court, Tiruchirapalli. The plaintiff himself was the petitioning creditor in the above insolvency petition. In answer to the petition to adjudicate the defendant as insolvent, the defendant stated, in so far as the suit promissory note was concerned, no amount was paid to the plaintiff for principal or interest and added that he paid a sum of Rs. 600/ - in March, 1965, towards the promissory note land another sum of Rs. 1,500/ - in March, 1966, towards the interest on the promissory note to the father of the plaintiff. He would also take up the plea that the promissory note was benami for the plaintiff's father. On the basis of these allegations in Ex. A -2 in the above insolvency proceedings, the plaintiff sought to get over the plea of limitation and file an action for the recovery of the suit amount with costs.

(2.) THE defendant reiterated in the written statement filed in the present action that the suit was barred by limitation as there was no acknowledgment of liability within the meaning of law to save the bar of limitation. He would say that the allegations on which the plaintiff based his claim to circumvent the plea of limitation and particularly those extracted by him in the plaint, as conttained in the counter -affidavit in I. P. No. 6 of 1967, did not save limitation. He again admitted that he paid a sum of Rs. 600/ - and Rs. 1,500/ - towards the suit promissory note to the father of the plaintiff in March, 1965 and March, 1966 and in the end he would state that no decree could be passed as there was no acknowledgment of liability. He also took up the plea that he was an agriculturist entitled to the benefits of Act IV of 1938. He stated that the rate of interest was exorbitant and usurious. The following issues were framed : -

(3.) IN the instant case, the learned trial Judge and we are constrained to say, even the counsel for the plaintiff in the Lower Court and before us, paid attention only to Section 18 of the Limitation Act and examined the situation whether the statement made by the defendant in the counter -affidavit in the insolvency proceedings would amount to an acknowledgment in writing within the meaning of Section 18 of the Limitation Act of 1963. Undoubtedly, Section 18 is the provision, if the only question which arises for decision is whether a particular writing made by a borrower in relation to a debt of his is an acknowledgment of liability creating a fresh cause of action in favour of the creditor. This is the essence and substance of Section 18 (1) of the Limitation Act which provides that, where before the expiration of the prescribed period for a suit, an acknowledgment of liability in respect of such property in writing signed by the party against whom such property or right is claimed is made, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. In the view that we are taking, it is unnecessary for us to go into the vexed question whether the text of the writing as reflected in the counter -affidavit in the insolvency proceedings would amount to an acknowledgment in writing within the meaning of Section 18 (1) of the Act so as to give the plaintiff a fresh cause of action. As we said, possibly, attention was paid only to this aspect of the case when in the pleadings and even in the circumstances which preceded the action, the borower did according to him, pay on account of the debt a certain sum before the expiration of the prescribed period of limitation for the recovery of such a debt.