LUKSHMI SHUD KHADI BHANDAR Vs. BHAGAT SINGH

JUDGEMENT

(1.) The only question involved in this second appeal is whether the suit was within time because of an alleged acknowledgment of liability made by the defendant.

(2.) It is not denied that in order that an acknowledgment may fall within the purview of Section 19, Limitation Act, and give a fresh start to the period of limitation the acknowledgment should be of a subsisting liability. The acknowledgment upon which the plaintiff relied in the present case is said to be contained in Ex. P-1, a letter written by the defendant to the plaintiff on 4 April 1940 and a statement of an account attached thereto. The letter itself does not contain any admission of liability. On the other band, it is mentioned therein that it is the plaintiff that owes something to the defendant. After referring to a previous letter that the defendant sent to the plaintiff, by which he was asked to appoint an arbitrator to settle his account, it went on to say that the plaintiff should nominate his arbitrator on the receipt of the letter so that the defendant might also nominate his arbitrator and take necessary steps to have the question referred to arbitration. The concluding part of the letter contained a warning to the plaintiffs that in case he failed to accede to the defendant's wishes, the latter would be forced to take the matter to Court. The heading of the account which the defendant sent to the plaintiff with the letter mentioned above (Ex. P-6) was ? Statement of account showing the amounts payable by you to us." It consisted of several items which, according to the statement, the plaintiff owed to the defendant and those due by the defendant to the plaintiff. The total of the first set of items came to Rs. 736/2/3 and that of the second set to Rs. 574/1/3, leaving a balance of Rs. 162/1/- due by the plaintiff to the defendant.

(3.) The counsel for the plaintiff-appellant urged that though the letter itself did not contain in so many words any acknowledgement of liability, taken along with the statement of accounts that accompanied it, it implied an "acknowledgment of an open and unsettled account" and as such it was sufficient to attract the application of Section 19. I have no hesitation in holding that the contention is wholly devoid of force. As I have already observed, the words of the letter not only do not imply any admission of the defendant's liability to the plaintiff, but on the other hand it is stated therein that the plaintiff owes something to the defendant and the Statement of the account was enclosed with the letter in order to clarify the whole position. It is correct that the letter contained a request to the plaintiff to join with the defendant in referring the matter to arbitration for the settlement of the dispute, but the dispute, according to the contents of the letter, was with regard to the exact amount due by the plaintiff to the defendant and not by the defendant to the plaintiff. It is, therefore, entirely wrong to say that the letter either by itself or read along with the statement of account that accompanied it contained admission of an open account.