P L D 1994 Karachi 248 (PLP)

(2) Relief? The plaintiff has examined Muhammad Younus and Anwar Javed Bhatti, whereas the defendants have examined Muneer Ahmed. I have examined the record and heard the learned counsel for the parties and my findings on the issues are as follows: Issue No. 1.

The promissory note dated the 29th June, 1972, is not in dispute. According to the deposition of Muhammad Younus (Exh.9) the deceased acknowledged his liability by letters dated January 8, 1974 (Exh.6) and March 18, 1974 (Exh.7) and made part payments on the 12th April, 1974, 24th January, 1975, 12th August, 1975 and 4th November, 1975. He has produced a cheque dated the 19th October, 1973 (Exh.P.9/1). The defendants' witness has produced the cheque dated the 3rd November, 1975 (Exh.ll/1). The cheque dated the 19th October, 1973 Exh.P.9/1 was issued by Central Cotton Mills, Ltd. to the order of the deceased who, having signed a receipt, on the back of the cheque, acknowledging the receipt of the amount thereof, deposited it with the plaintiff; and as shown by endorsement on the reverse of the cheque, the amount thereof was credited to the account of the deceased. The question, therefore, is whether the payment so made is part payment within the meaning of section 20(1) of the Limitation Act, which provides "Where payment on account of a debt or interest on legacy is made before the expiration of the prescribed period of limitation by the person liable to pay the debt or legacy, or by his duly authorised agent a fresh period of limitation shall be computed from the time when the payment was made: Provided that an acknowledgement of the payment appears in the handwriting of, or in a writing signed by, the person making the payment " It will be seen that in order to attract the provisions of section 20 it is necessary that (1) there should be payment, (2) that the payment should be on account of a debt or, as the case may be, of interest on a legacy, (3) that the payment should be by the person liable to pay the debt or, as the case may be, interest on a legacy, or by his authorised agent, and (4) that acknowledgement of the payment should appear in the handwriting of, or in a writing signed by, the person making the payment. Section 20 does not prescribe any particular mode of payment. Therefore, payment may be made in any form and it is enough that there is something tantamount to payment; and it is now well-established that payment by a cheque signed by a debtor and delivered to, and encashed by, the creditor is payment of the amount thereof. Does it made any difference that, as in this case, a cheque is not issued by the debtor himself but by third person in favour of the debtor who, in turn, endorses it to, or deposits it with the creditor who then encashes it and receives the payment? I think not, for in either case the effect is that the creditor in fact receives the payment. Such payment should, of course, on account of a debt; and it is a question of fact in every case whether the payment has been so made. In the present case, the plaintiff admittedly received and encashed the cheque and credited the proceeds to the account of the defendant thereby reducing the debt. The payment was, therefore, made o account of the debt in question in this suit: As to the third requirement of section 20, Mr. Baqar Maqbool, the learned counsel for the defendants, contents that the payment by cheque in this case cannot be considered payment by the defendant or his agent because the cheque was issued by M/s. Central Cotton Mills, Ltd., who have not been shown to be the agents of the defendant. The argument is misconceived: 'The cheque was, no doubt, issued by M/s. Central Cotton Mills, Ltd., but the payee of the cheque was none other than the defendant himself. The defendant was the holder or owner of the cheque and was entitled to receive the amount thereof. He could very well have encashed the cheque himself and then paid the proceeds thereof to the plaintiff. In that case, the payment would, without question, have been payment by the defendant himself. It makes no difference that; instead of doing so, the defendant, chose to deposit the cheque itself with the plaintiff- in the manner indicated above, and thus enabled it to receive payment. The payment was , therefore, made by the defendant himself and not by M/s. Central Cotton Mills, Ltd. It remains to be seen whether the acknowledgement of the payment appears in the handwriting of or, in a writing signed by, the defendant. If the defendant had himself issued the cheque, his signature thereon would surely have meant that the cheque was a writing signed by him and thus acknowledging the payment. Similarly, in this case, the signature of the defendant on the receipt on the reverse of the cheque, amounts to acknowledgment of the payment. Thus, the payment by the cheque, dated the 19th October, 1973, fulfils all the requirements of section

20. If any authority is needed, reference may be made to the case of Chotirmal Tirithada v. Ropchand Raghonathdas AIR 1931 Sindh 28 where it was held that a cheque drawn by a third person in favour of the judgment-debtor and endorsed by him in favour of the decree-holder who subsequently encashed it fulfilled the requirements of section 20 of the Limitation Act. The payment by the cheque dated the 19th October, 1973, had the effect of extending the period of limitation up to the 18th October, 1977. Before that date, the defendant wrote the letters dated the 8th January, 1974 and the 18th March, 1974; and the second of those letters appears to be an acknowledgement of liability extending the period of limitation up to the 17th March, 1977. But even without such an acknowledgement of liability, the suit is within time because before the expiry of the period of limitation as extended by part payment of the 19th October, 1973, the deceased, made another part payment, by a cheque dated the 3rd November, 1975, the amount whereof was credited to his account on the 4th November, 1975. The period of limitation was, thus, extended up to the 3rd November, 1978. The cheque dated the 3rd November, 1975, it may be noted, was similar to the earlier cheque dated 19th October, 1973, in that it was issued by Central Cotton Mills, Ltd. in favour of the deceased who deposited it with the plaintiff in similar manner. The position that emerges is that the period of limitation for the suit on the basis of the promissory note, commencing to run on the date thereof viz. the 29th June, 1972, was extended, successively, by the part payment on the 19th October, 1973, the acknowledgement dated the 18th March, 1974, and the part payment dated the 4th November, 1975, so that the last date for filing the suit was the 3rd November, 1978. Mr. Baqar Maqbool submits that, notwithstanding the period of limitation having been so extended, the suit is barred by limitation because it was filed on the 4th November, 1978, that is, a day after the period expired. Miss Sofia Saeed, however, points out that the 3rd November, 1978, was a Friday and submits, rightly, that the suit filed on the 4th November, is within time. I, therefore, find that the suit is not barred by Issue No.2:

There being no other issue, the plaintiff is entitled to relief claimed in the suit. Mr. Baqar Maqbool, however, submits that the defendants are liable only to the extent of any assets inherited by them from the deceased. He is right. The suit is, therefore, decreed as prayed against the defendants but the defendants will be liable only to the extent of any assets inherited by them from the deceased. AA./U-147/K Suit decreed.