1997SCMR536 (PLP)

AJMAL MIAN, J.‑‑‑These are direct civil appeals against me judgments/decrees dated 25‑8‑1993 passed by a learned Single Judge of the High Court of Balochistan in R.F.A. No.17 of 1992 (filed by the Quetta Municipal Corporation) and R.F.A. No.20 of 1992 (filed by the Government of Balochistan) against the judgment/decree dated 30‑4‑1992 of the learned Civil Judge, First Class, Quetta, in Civil Suit No. old No.3 of 1989 (new No. 141 of 1990) decreeing the suit of the appellant for a sum of Rs.15,39,365 for the land allegedly used by respondent No. l i.e. Quetta Municipal Corporation for the construction of road, allowing the same by setting aside the aforesaid judgment/decree of the learned Civil Judge inter alia on the ground of limitation.

2. The brief facts are that the appellant filed above suit for the following reliefs:‑‑ "(a) For payment of Rs.3,45,060 (being total of Rs.2,17,960 plus Rs.1,27,100 as mentioned in para: 9 and 10 above). (b) For payment of Rs.15,39,365 (being total of Rs.13,50,900 plus Rs.1,88,465 as mentioned in para: 9 and 10 above). (c) Cost of the suits. (d) Interest at prevalent Bank rate from date of suit till date of payment. " In the plaint it was averred that respondent No. l had taken over 21796 sq.ft. of new Khasra Nos.39/189/246 in the year 1972 for the construction of road. It was further averred that another piece of land measuring 1271 sq.ft. was taken over by respondent No. l in the year 19f.

1. The above suit was contested by respondents. On the basis of pleadings of the patties, seven issues were framed.

3. After recording evidence and hearing the parties, the learned Civil Judge by his above judgment/decree, declared the suit as above. Against the aforesaid judgment, the respondents filed aforementioned two R.F.As, which have been allowed on the ground of limitation as well as on the ground that there was no material reliable before the learned Trial Court on the basis of which the above quantum awarded under the decree could have been assessed (The later fact was even conceded by the learned counsel for the appellant before the High Court).

4. It seems that before the High Court, it was the case of the appellant and respondent No. l that Article 120 of the First Schedule to the Limitation Act was applicable. The learned Judge in Chambers accepted the above contention and examined the case on the above basis on the question of limitation and concluded that the suit was barred by time.

5. Mr. Basharatullah, learned Advocate Supreme Court appearing for the petitioners, has referred to Exh.P/1 (at page 211 of the paper book) and has contended that in view of the recommendations of the committee' contained in the above exhibit, subsection (3) of section 25 of the Contract Act, 1872, hereinafter referred to as the Act, was attracted and, therefore, the aforesaid suit, which was filed on 11‑3‑1989, was within three years and, hence, within the limitation period. However, he conceded that if this Court is to hold that Exh.P/1 does not fall within the ambit of subsection (3) of section 25 of the Act, the appellant's above suit would be barred by time. On the other hand. Mr. Tariq Mehmood, learned Advocate Supreme Court appearing for respondent No.l, has urged that in order to press into service section 25(3) of the Act, there are three requirements which are missing in Exh.P/1. According to him under section 40(2) of the Balochistan Local Government Ordinance, 1980, hereinafter referred to as the Ordinance, only the Municipal Corporation was competent to make any binding promise for making payment of any amount. Ch. Ejaz Yousuf, learned Additional Advocate‑General Balochistan, who has appeared for respondent No.2, has pointed out that factually the Provincial Government was not involved in the controversy. His further submission was that if the Provincial Government had been impleaded in the above suit on the basis of respondent No.l's letter dated 22‑11‑1988 (at page 213 of the paper book) whereby the appellant was informed that his case was considered by the Government in the Local Government Department and was rejected, in that event, Exh.P/1 had no relevance to the present case as admittedly it was a recommendation not by any Government officer but by a committee appointed by the Corporation.

6. The basic question is, as to whether Exh. P/1 can be construed as a promise in terms of section 25(3) of the Act. In order to appreciate the above aspect of the case, it may be pertinent to reproduce section 25 of the Act, which read as follows:‑‑

"

25. An agreement made without consideration is void unless‑‑ (1) it is expressed in writing and registered under the law for the time being in force for the registration of documents and is made on account of natural love and affection between parties standing 'In a near relation to each other, or (2) it is a promise to compensate; wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do, or (3) it is a promise made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract."

7. We are not concerned with subsections (1) and (2) of the above section, but the same have some nexus to subsection (3). It may be noticed that section .25 of the Act provides that an agreement made without consideration is void but subject to three exceptions provided for in subsections (1) to (3). It may further be noticed that subsection (3) lays down that an agreement made without consideration is void unless it is a promise made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.

8. Mr. Basharatullah has referred to the case of Riasatullah v. The Tripura Modern Bank Ltd. (PLD 1968 Dacca 260) and to the case of Habib Bank Ltd. v. Shamim Qureshi (PLD 1988 Karachi 481). In the above first case, a Division Bench of the Dacca High Court highlighted the distinction between the provisions of section 19.of the Limitation Act and section 25(3) of the Act as follows:‑‑ "Mr. Masiruddin Chowdhury, who appeared for the appellant, has emphasized the following words, namely, ' it is a promise, made in writing', and has argued that the aforesaid provision means that the promise itself must be expressly made in writing. To us it seems that the contention seeks to extend the meaning of the words beyond their proper scope. All that the action requires is that the promise itself must be spelt out of a written document signed by the person who makes the promise. It has been held by the Trial Court that the aforesaid provision of section 25(3) of the Contract Act is distinct from that of section 19 of the Limitation Act. It is contended that two provisions do not mean one and the same thing. Probably it is correct to say so, although there may be, circumstances where a letter may be construed as an acknowledgment and also as constituting a fresh contract. The requirement of the section is not that the promise itself must be it: express terms but that such promise should be deducible from a written and signed document. It is clear that without written words and the signature of the promisor, there cannot be a contract within the meaning of the said section; but if the words used in writing to mean a promise to pay, or if from the said words a clear intention to pay can be inferred, then the requirement of section 25(3) of the Act is fulfilled, if the written document is signed. The attending circumstances can be used to construe the meaning of the words themselves. The view that we have taken is consonant to the observation of the Privy Council in the case of Muniram v. Seth Pupchand at page 172 of the said report it has been stated thus‑‑‑ 'An unconditional acknowledgment has always been held to imply a promise to pay, because that this the natural inference if nothing is said to the contrary. " Whereas in the second case, a Division Bench of the High Court of Sindh relied upon inter alia on the above report and pointed out distinction between the above two provisions. It may be advantageous to reproduce the following extract from the opinion of Saleem Akhtar, J. (as his lordship then was):‑‑ "For the present case only section 25(3) is relevant. To fulfil the ingredients of section 25(3) a promise should be made in writing by the person charged with liability or his authorised agent to pay a time barred debt. Such promise becomes an agreement. Any promise made by a third party to pay the time‑barred debt of any other person will not fall within the ambit of section 25(3). A mere acknowledgment of debt does not amount to promise to pay. There should be a promise to pay in writing in express terms or in such manner that a clear and absolute promise to pay can be spelt out. Mere implied promise such as bare acknowledgement of liability of entry in the account books will not attract section 25(3). Reference can be made to Makhi Lal Chand v. Gul Muhammad AIR 1933 Lah. 209; Baru Mal v. Daulat Ram and another AIR 1936 Lah.

164. Writing words like 'amount payable' or ' to be paid' have been held to constitute a clear promise to pay a debt. See Fateh Muhammad v. Surja AIR 1939 Lah.

486. There is basic difference between section 25(3) of the Contract Act and section 19 of the Limitation Act. Under the former there should be a promise in writing to pay a time‑barred debt. But under section 19 a mere acknowledgment in writing within the period of limitation extends the time. Promise as contemplated by section 25(3) gives a fresh cause of action. It applies when the debt is barred by time."

9. On the other hand, Mr. Tariq Mehmood has referred to the case of Anwarul Haq v. State Oil Company Ltd. (1993 CLC 1565), in which a Division Bench of the High Court of Sindh pointed out the distinction between sections 19 and 25(3) and observed that in order to invoke section 25(3) of the Act, the following three ingredients should be established:‑‑ (a) There must be a promise; (b) Signed by a person to be charged therewith or by an agent generally or specially authorised in that behalf; and (c) There is a debt which is barred by time.

10. The ratio of the above cases seems to be that the main distinction between section 19 of the Limitation Act and section 25(3) of the Act is, that under the former provision if a person who is liable to be sued in respect of any property or right, acknowledges 'his liability before the expiry of the period of limitation for filing of a suit or an application in respect thereof, a fresh period of limitation shall be computed from the time when the acknowledgment is so made. Whereas, under the latter provision, a person or his authorised agent makes promise to pay a time‑barred debt. Furthermore, a Court, while construing a promise in terms of section 25(3) of the Act will be liberal inasmuch as, it will ascertain the intention of the promisor from the contents of the writing containing the promise and it would not give too much emphasis to the form of the writing.

11. The basic requirement of subsection (3) of section 25 of the Act appears to be that there should be promise in respect of payment of a debt or part thereof. The word "debt" has been defined by the well‑known judicial dictionaries and the same has also been subject‑matter of interpretation: (i) In Stroud's Judicial Dictionary, II Edition., Vol. I, at page 733 the word "debt" has been defined as under:‑‑ "A 'debt' is a sum payable in respect of a liquidated money demand, recoverable by action". (ii) In Burrow's "Words and Phrases Judicially Defined". Vol. 2, p.32, the above definition of Stroud's Judicial Dictionary has been quoted as under: ‑‑ "The word 'debt' is defined in Stroud's Judicial Dictionary as 'a sum payable in respect of a liquidated money demand, recoverable by action'. " Stroud, while quoting the definition of the word "debt" relied upon the case of Rawley v. Rawley (1876) 1 QBD 460. (iii) In the case of Kathu v. Anjaman Imdad Qarza (PLD 1949 Lahore 79), the learned Judges of the Division Bench of the Lahore‑High Court, while construing the word "debt" used in section 34 of the Provincial Insolvency Act, 1920, held that it meant only those debts which were provable under section 34 of the Act. It was further held that "debt" means an actually existing debt i.e. perfect and absolute debt and not merely a sum of money which may or may not become payable on some future time or payment of which is dependent on contingencies. (iv) In the case of First National City Bank, Karachi v. Income‑Tax Officer, Karachi and another (PLD 1976 Karachi 552), a Division Bench of the erstwhile High Court of Sindh and Balochistan, while construing the expression "money is due or may become due to assessee" used in subsection (5A) of the Income‑tax Act, 1922, held that it means an existing debt either presently payable or an existing debt payable in future. (v) In the case of P.S.L. Ramanathan Chettiar and others v. .O.R.M.P.R. Ramanathan Chettiar (AIR 1968 SC 1047), the Indian Supreme Court, while construing section 3(iii) of the Madras Agriculturists' Relief Act (IV of 1938), held that "a debt is a liability to pay in present or in future as ascertainable sum of money". A perusal thereof indicates that, with no stretch of imagination, the above writing can be treated as a promise to pay a debt. It contains merely a recommendation to the effect that the appellant be paid some compensation for the land used for the construction of the road. It does not specify any amount for it contains any basis on which the amount was to be calculated. Hence, it cannot be urged that the above recommendation contains promise to pay a debt in terms of section 25(3) of the Act. Secondly, the promise should be made by the person g who is liable to pay the debt or his authorised agent. Such promise should be in writing and duly signed by him. The above recommendation has been made by a committee. It is not a resolution passed by the respondent No. l Corporation, which was competent to make any commitment as to its liability in terms of the Ordinance. On the basis of the above recommendation, the appellant could not have invoked section 25(3) of the Act for a claim of over Rupees fifteen lacs. We are, therefore, of the view that the learned Judge in Chambers was right in holding that the appellant's suit was barred by time. Hence, the above appeals have no merits, they are dismissed with no order as to costs. A.A./B‑274/S Appeals dismissed.