P L D 1964 (W (PLP)

(1) Adjusted towards the loan given to Mr. M. G. Kadir on 12‑7‑48 by two cheques 45,500 (2) Part realization of the price of motor car given to Mr. M. G. Kadir out of Rs. 17,000 4,500 50000 At the foot of this document towards right‑hand corner is the signature of the plaintiff Abdul Latif and underneath it is the date 22nd of October 1949. As I have said, this document was introduced in the course of the cross‑examination of the plaintiff evidently because the defence which had been put forward in the written statement that the plaintiff had agreed to the adjustment of the sum of Rs. 20,500 towards the loss of the partnership account was felt by the defendants not to be good enough. Before this document was shown to the plaintiff the‑ following question was put to him in the cross‑examination 'Q. I put it to you that Rs. 50,000 had been paid to you by Mr. Kadir for rape seed on 6‑4‑49 and in this connection the balance of the sum advanced by you had been adjusted? A. This is wrong. The payments are in respect of Mehrabpur factory business which was of cotton seed." This answer would indicate that the plaintiff was genuinely not conscious of the existence of the document, Exh. D/27 which was later on shown to him. After the plaintiff had given his answer to the question as reproduced above, this document, Exh. D/27, was shown to him and he said that the signature was his bust the contents of the document were nothing but a fraud. When Mr. M. G. Kadir gave evidence on a subsequent date he stated in support of this document, Exh. D/27, that a sum of Rs. 50,000 was paid by him to the plaintiff for the purchase of rape seeds but he did not make any such purchase and adjusted the amount of Rs. 45,500 which he had advanced to him (defendant) and the remaining sum of Rs. 5,000 out of this Rs. 50,000 was adjusted by the plaintiff towards the transaction of an old car. He affirmed that the document, Exh. D/27, was in that connection. He was questioned by me on this point. He was asked that since he had already repaid a sum of Rs. 25, (300 on 31st August 1949 why was this further payment of Rs. 45,500 made. To this he replied that it was the plaintiff who had appropriated the sum of Rs. 45,500 out of the sum of Rs. 50,000 which had been given to him for rape seed. He was further asked that when this document, Exh. D/27, was given to him did he not tell the plaintiff that he had already been paid Rs. 25,000 on 31st August 1949 and how could he then again take a sum of Rs. 45,500 out of the sum of Rs. 50,

000. The only answer to this given by the witness was that the occasion for saying this did not arise because the litigation had started between him and the plaintiff. By this litigation he meant the present suit and this it may be noted was not filed until 5th September 1952 The only other litigation was the suit filed by him for the recovery of Rs. 5,000 and that was filed after the institution of the present suit When he was further asked as to why he did not within the three years which intervened the execution of this document, Exh. D/27. and the filing of the suit in 1952, tell the plaintiff as to how he had appropriated the sum of Rs. 45,500 towards his advance though he had already been paid Rs. 25,000 in August 1949, the only answer that he gave was that he did not meet the plaintiff within these three years. He admitted that this document, Exh. D/27, was in the hand of his accountant Mr. Siddiqi who was dead. He was further asked as to why he had not stated the fact of this payment of Rs. 45,500 towards the plaintiff's advance of an equivalent amount in his (defendant) written statement. He gave the following answer :‑ "I thought that when the case comes up for hearing in Court I will produce this document. I did not inform my lawyer who had drafted this written statement that the plaintiff had been paid besides Rs. 25,000 another sum of Rs. 45,500."

12. I have not the slightest doubt that this document, Exh. D/27, was fraudulently created upon a piece of paper which bore the signature of the plaintiff. The story of adjustment of Rs. 45,500 as told by Mr. M. G. Kadir and as contained in the document, Exh. D/27, is on the face of it absurd and the statements made by Mr. M. G. Kadir in the witness box on oath in support of this story are pulpably untrue. There is no proof of the payment of this sum of Rs. 50,000 apart from Exh. D/27 and the word of Mr. M. G. Kadir. Surely, such a huge sum could not have been paid in cash when all payments between the parties were being made by cheques. No account book has been produced to sup port such an advance of Rs. 50,

000. No mention of this was made throughout the correspondence between the parties when the plaintiff was pressing for the repayment of his money and it was not even thought fit to disclose this to the defendants' lawyer who drafted the written statement. I have, therefore, no hesitation in rejecting this story of the repayment of Rs. 45,500 as contained in Exh. D/27 and as supported by the oral evidence of Mr. M. G. Kadir. That he should have chosen to make such a statement is extremely regrettable.

13. There now remains the question of limitation which is the subject matter of issues 2 and

8. The advance of Rs. 45,500 was made on 10th July 1948. On 31st August 1949 a sum or Rs. 25,000 was repaid by Mr. M. G. Kadir to the plaintiff by means of a cheque. It was conceded by Mr. Dingomal, the learned counsel for the defendants who appeared at the stage of argument that this part repayment by cheque would give a fresh start to limitation. He, however, very strenuously contended that in so far as the suit was instituted on 5th September 1952 it was barred by limitation by 5 days. It was, however, asserted on behalf of the plaintiff that by virtue of the acknowledgement of the debt contained in Exh. P/11, a fresh period of limitation has to be computed as from that date. Reliance was placed on section 19 of the Limitation Act, subsection (1) of which reads as follows :‑ "19. (1).‑Where, before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the' party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed." Exh. P/11 has already been referred to on more than one occasion in this judgment. It will, however, be necessary to revert to it again for purposes of seeing whether it serves as an acknowledge ment as contemplated by section 19 of the Limitation Act. The first paragraph of this letter which was relied upon by the plaintiff reads as follows :‑ "You are no doubt correct in stating that there is a credit balance of Rs. 20,500 in your personal account in my books, but I failed to understand as to how you arrived at the figure of Rs. 44,234‑12‑9 as due to you on account of the partnership in the cotton ginning and pressing factory at Mehrabpur and Hyderabad." Reference is then made to the accounts of the business of the Mehrabpur and Hyderabad factory and press and it is said that there was a net debit balance of Rs. 43,712‑11‑0 in the account of these factories business and that this balance had been arrived at after ignoring the lease money of Rs. 50,000 for each factory. Then in the concluding para. it is said that in view of these accounts it will be seen that the net position would be a debit balance against the plaintiffs and not a credit balance in his personal account. It is added by Mr. M. G. Kadir who has signed this letter that the plaintiff should go through the accounts and that on his part he was always prepared to furnish any information and to give such assistance that might be required in this connection.

14. Mr. Dingomal contended that the effect of the acknow ledgement in the earlier part of the letter as to the balance f Rs. 20,500 has been destroyed by the subsequent statement referring to the account of the partnership business of the factories and the concluding statement that when these are taken into account there would be a debit balance and not the credit balance in the personal account of the plaintiff. He cited a number of decisions. I will only mention them because I have gone through each one of them and I find that none of them apply to the facts of the present case and are clearly distinguish able. The case cited by him are those reported in. (1) Hakumat Singh v. Nenumal 22 S L R 117 (2) Chhaterdhar v. Nasib Singh 78 I C 919 (3) Venkata v. Parthasara 16 I L R Mad. 220 (4) Messrs Yakub Habib v. Messrs A. A. Sattar P L D 1.958 Kar. 534, and (5) Muhammad Akbar Khan v. Province of West Pakistan P L D 1959 Lah.295.

15. The acknowledgement in the earlier part of the defendants' letter of 19th June 1952 must be read with the plaintiff's letter of 6th June 1952, ;.Exh. P/24, to which it is a reply. In this the plaintiff has said :‑ "By a letter dated 19‑3‑52 1 requested you to make payments of the following items due to me from you (a) Rs. 20,500 outstanding against you in respect of the loan of Rs. 45,500 given to you ; and (b) Rs. 44,234‑12‑9 due to me from you on account of the partnership in the Cotton Ginning & Pressing Factories , at Mehrabpur and Hyderabad." At the end of the letter payment is asked of both the items and it is stressed that this should be done promptly as the plaintiff was in urgent need. It would be noticed that the two demands have been kept separate, one on account of the balance of the loan of Rs. 45,500 and the second on account of the alleged profit of the business. With regard to the first item Mr. M. G. Kadir in his letter, Exh. P/11, made an unqualified acknowledge ment of liability when he said "you are no doubt correct in stating that there is a credit balance of Rs. 20,500 in your personal account in my books." Can it be said that because of the further reference in this letter with regard to the partnership affairs and the ultimate conclusion of the writer that when the losses of the partnership are taken into account the personal account of the plaintiff would be changed from credit balance into a debit balance, the effect of the said acknowledgement is destroyed ? In my opinion, the answer to this question must be in the negative. With reference to issue No. 3 I have already held that this advance of Rs. 45,500 or the unpaid balance of Rs. 20,500 was never mixed up with the partnership account. That position is abundantly borne out by Exh. P/11 itself. On 19th June 1952, there was admittedly a credit balance of Rs. 20,500 in the personal account of the plaintiff in the books of the defendants. With regard to partnership affairs the least that can be said is that it was in dispute. The plaintiff was claiming Rs. 44,000 and odd as profit and the defendants were saying that there was loss. That matter has never been settled The fact that the defendants said that on the accounting of the partnership business the balance of the personal account would be wiped out, would only show that a claim of set off was being put forward. That does not destroy the effect of the acknowledgement of the unpaid amount of the advance within the meaning of section 19 of the Limitation Act. It would be useful to reproduce Explanation I to section 19 of the Limitation Act :‑ "Explanation l.‑For the purpose of this section an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come, or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to a set‑off, or is addressed to a person other than the person entitled to the property or right." According to this Explanation an acknowledgement may be sufficient though it is coupled with the claim to a set‑off. I have already pointed out that there was a clear acknowledgement of liability with regard to Rs. 20,500 in Exh. P/11. With this was coupled at best a claim of set off, alleged to be arising out of the partnership business. Mr. Dingomal contended that the acknow ledgement in Exh/11 with regard to the amount in suit was not accompanied by a promise to pay and the existence of such promise was negatived by the assertion of the defendant that upon the partnership account the credit balance would be turned into a debit balance. He further contended that there was no acknowledgement of a subsisting liability in Exh. P/11. I am unable to agree. An acknowledgement of liability implies promise to pay and when there is such an acknowledgement as in this case it clearly involves an admission of a subsisting liability. The counter‑claim or the set‑off which was being made by the defendants does not detract in any manner from the effect of the acknowledgement of liability with regard to the amount in suit and which was in a separate personal account. I would like to B add that having regard to the language of section 19, all that is required is that there should be an acknowledgement of liability made in writing signed by the party concerned. It would, there fore, appear that the promise to pay is not a requirement o section

19. Rustomji in his Commentary on Limitation, 6th Edition, has dealt with this point at page

191. This is what the learned author has said :. "Under section 19, a mere acknowledgement of liability suffices (and no promise to pay, express or implied, is required). In Chhaterdhari Matho v. Nasib Singh (1928) 78 1 C 919 (Pat.), an acknowledgement was held to be insufficient under section 19 on the ground that it negatives the implication of a promise to pay. But this is not, it is submitted, per se a good ground for rejecting an acknowledgement if it otherwise comes within the purview of section 19."

16. For the reasons given I hold that in view of the acknowledgement contained in the letter Exh. P/11 dated 19th June 1952 a fresh period of limitation would have to be computed as from that date. It follows that the suit is, therefore, within time. I answer issues 2 and 8 accordingly.

17. Issue No. 7 was not pressed. Issue No. 5 relates to the question whether there was any stipulation for payment of interest. Even the plaintiff Abdul Latif has not stated in his evidence that there was a stipulation for payment of interest but even if he had said so I would not have accepted that evidence because though the advance was made in July 1948 and Rs. 25,000 were repaid on 31st August 1949 no claim of interest was made and in the two registered letters, Exhs. P/24 and P/25, written in 1952 just before the filing of the suit the demand was made for the repayment only of the principal amount of the balance namely Rs.20,

500. On this issue, therefore, I hold that the plaintiff is not entitled to interest up to the date of the suit. As from the date of the suit I am of the opinion that it is an eminently fit case in which the plaintiff should be allowed interest on the principal sum of Rs. 20,500 at the rate of 6 per annum.

18. In view of my findings I decree the plaintiff's suit with costs and with interest at 6 % on the principal amount, of Rs. 20,500 from 5‑9‑52 until the date of the decree and further at the same rate until payment. K. B. A. Suit decreed.