P L D 1970 Karachi 708 (PLP)

"You have not shown me the deed of assignment under which you make the claim. Further I have been issued an injunction order prohibiting me from paying the amount to anybody. A third party named Sundara Row has sent me a notice that the amount was due to him . . . . you are informed that you must send me the amount of subscription and I cannot give you credit for anything." The Chief Court of Oudh, in the case reported as Balbhaddar Singh and another v. Sheo Pearey Lal (A I R 1930 Oudh 67) took the view that section 19 of the Limitation Act did not prescribe that an acknowledgment should be express and it was sufficient for the purposes of this section if the admission of liability could be implied from the disputed writing. This view was reiterated in a later decision, Shah Muhammad Khan v. Ahmed All Khan (A I R 1935 Oudh 170) in which it was further held that an admission, however indirect, and even if accompanied by refusal to pay, was a sufficient acknowledgment of liability. The High Court of Allahabad, in its decision in Pandit Salig Ram v. Radhay Shiam (A I R 1931 All. 560) followed the Privy Council decision in Maniram Seth v. Seth Rupchand and held that undue stress should not be laid on the literal meaning of the words but regard should be had to what can be implied from the writing. In another case decided by the same High Court, B. Adya Prasad Singh v. Lal Girjish Bahadur Pal (A I R 1933 All. 364) the decree‑holder gave a letter to the judgment‑debtor agreeing not to take execution of the decree up to a certain date, which letter the judgment‑debtor annexed to an application which he made to the Court praying that the letter be kept on record. Niamatullah. J. delivering the judgment of the Division Bench, held that the application accompanied by the decree‑holder's letter was sufficient acknowledgment of liability on the debtor's part. It may be mentioned that in the application the judgment -debtor said no more than that the decree-holder's letter be kept on record. This application could not be said to have been written with the conscious intention of acknowledging a liability or unequivocally admitting a debt. Still, the application together with the letter was held to constitute valid acknowledgment. The Rangoon High Court has also taken the view that acknowledgment under section 19 need not be express or definite admission of liability. We may in this connection refer to the case of M. K. Kasiviswanathan Chettyar v. R. M. S. L. Kakshmanan Chettyar (A I R 1938 Rang. 84). In this case there was on the back of a promissory note for Rs. 12,500 an endorsement in the hand of the debtor that a sum of Rs. 410 had been paid. It was held that the only reasonable inference that could be drawn from this endorsement was that the debtor had acknowledged liability to pay the balance due on the promissory‑note and, therefore, the endorsement amounted to an acknowledgment. It will be interesting to take note of the decision of the High Court of Madras in Natesa Chetty v. Y. M. Subba Raya Chetty (A I R 1962 Mad. 389) wherein a tenant acknowledged liability for payment of rent, but at a lower rate, and claimed that whole arrears had thus been paid off. It was held that the assertion of the tenant that the rate was lower than that adjudged subsequently by the Court, and that therefore no arrears were due from him, was not sufficient to operate as repudiation of liability by the tenant, as acknowledgment of liability must be taken to be distinct from the dispute with regard to the rate of rent. In this connection we would refer to the English decision in Quincey v. Sharpe and another ((1876) 1 Ex. D 72) wherein the following letters were held to constitute acknowledg ment of liability "I shall be obliged to you to send in your account, made up to Christmas last. I shall have much work to be done this spring, but cannot give further orders till this be done. You have not answered my note. I again beg of you to send in your account, as I particularly require it in the course of this week."

10. We may now go to some of the important decisions in which mere existence of account has been held to be sufficient acknowledgment of liability. We have already taken note of the decisions of the Judicial Committee of the Privy Council in Maniram Seth v. Seth Rupchand on this question. Another decision to which we would like to refer in this connection is the decision of the Madras High Court in Sttayya v. Rangareddi and others (I L R 10 Mad. 259). In this case there was a dispute with regard to accounts between a commission agent and his principals. The dispute was referred to arbitration under a writing headed as "Memorandum of items to be settled", in which the principals denied that any balance would be found due to them, but admitted that accounts must be taken and that they would pay the balance if any was found against them. Later, a statement of accounts was supplied to the arbitrator by the principals, which contained a similar statement as made in the first writing. These statements were held to be acknowledgment of liability under the Limitation Act. This case was followed by the Sind Judicial Commissioner's Court in Jesomal Tahkandas and others v. Bansimal Jamnadas and others ((1909) 2 I C 370) in which it was held that for the purposes of an acknowledgment of right to save limitation, it is immaterial that in the writing the defendants have contended that nothing would be due to the plaintiff when accounts are taken. The High Court of Allahabad applied to the rule laid down by the Privy Council in Maniram Seth v. Seth Rupchand in deciding the case of Muhammad Abdullah Khan v. Ford & Macdonald Co. Ltd. (A I R 1930 All. 124) and observed that if the inevitable deduction from the letter is that the party against whom money is claimed acknowledged his liability to pay his debts if the balance should be ascertained to be against him, the statement would constitute acknowledgment even in cases where it is doubtful on which side the balance would lie. The Lahore High Court also followed the sane rule in Municipal Committee, Amritsar v. Ralia Ram and others (A I R 1936 Lah. 629), and observed that if there is an admission of an outstanding account, then there is acknowledgment of liability to pay the balance due which may be found to arise upon taking of the accounts. In this case the contractors had claimed against the Municipal Committee of Amritsar a sum of about Rs. 1,50,000 but the officials of the Committee admitted an amount of Rs. 17,000 subject to the counter‑claim of the Committee. The Court took the view that this position implied unsettled outstanding accounts and the Committee's letter accordingly constituted an acknowledgment. The case view prevailed in the Madras decision in V. Sub baramayya v Yerri Iragam Reddi and another (A I R 1938 Mad. 300). In an Oudh decision, Deputy Commissioner, Khari, Manager, Court of Wards, Mahewa Estate v. Thakur Brijandra Bahadur Singh (A I R 1940 Oudh 305) an entry in the debtor's own books of account with regard to a payment made "Alai Hisab" was treated as acknowledgment of liability for the arrears existing within three years of the date of this writing. The East Punjab High Court has also held, in Thakar Das and others v. Sant Ram (A I R 1949 East Pb. 219) that existence of an account without admitting any amount to be due in that account, is sufficient acknowledgement. This decision has gone further, and held that an endorsement made by the debtor on a promissory note that a certain amount had been credited to him was acknowledgement of liability for tile balance of the amount of the promissory note. The Court also observed that the test which should be applied in deciding whether a writing constitutes an acknowledgment is to see if it is possible to read the words used as acknowledging liability. This view was followed by the same Court in a later decision, Mst. Biro v. Dulla Singh (A I R 1961 Pb. 175), wherein the rule as to sufficiency of acknowledgment based on admission of existence of accounts was further elaborated, and it was held that a debtor while admitting the existence of an account may also claim that an account of set off or payment made by him, the balance will be found is his favour, but that still the debtor would be deemed to have admitted his liability to pay whatever is found due on the basis of the accounts.

11. Turning to the decision in The Bank of Bahawalpur v. Karim Hayat we have reproduced the document which was set up as an acknowledgment of liability. This document was not an unequivocal admission of the subsisting debt in the opinion of the learned Single Judge. As the judgment would show, this conclusion would appear to have been reached on the following statement made by the defendant in his deposition in Court:‑ "I was called to the house of Mr. Hassan Mahmud when Kh. Muhammad Iqbal was also present. I owed him some money and he asked me that I should give him such a letter as Exh. P. 60 and on that being done he will see that the payment in respect of the furniture is made by the Bahawalpur State within two or three days. If the bills had been paid by the State the balance after the adjustment of my account with the bank would have been definitely much more than my liability to Mr. Hassan Mahmud who was the partner or proprietor of Mahmud & Co. However, I was in distress and I executed this document under pressure. This letter was drafted by Kh. Muhammad Iqbal. This letter was typed at the house of Mr. Hassan Mahmud." flow, it is a well‑recognized rule that the meaning of a document must be gathered from its language. Surrounding circumstances can be looked into only if the language is vague and ambiguous. But oral evidence of the writer of the document is the person 3,ho has written the document cannot be allowed to state as to what his intention in writing the document. This rule rests on weighty authority. We may refer to the decision of the Privy Council in Ped Maharani v. Collector of Etawan ((1894‑95) 22 I A 31) in which their Lordships disapproved the course followed by the High Court of Allahabad in admitting the Collector to give oral evidence of his intention for the purpose of construing a notice given by him. This rule has been reiterated by the Judicial Committee in several subsequent decisions, some of which are Lampson v. City of Quebec (A I R 1920 P C 103), Sri Rajah Vatsavaya Venkota Subhadrayyamma Jagapati Bahadur Garu v. Sri Poosapati Vankatapati Raju Garu and others (A I R 1924 P C 162) and Royal Bank of Canada v. Joseph Salvatori (A I R 1927 P C 272). We would in particular refer to the observations in Lampson v. City of Quebec, in which their Lordships stated that the deed should be construed according to the intention of the parties to it as revealed by the language they had used in the deed itself, and that it is not permissible for the parties to the deed to come into Court and say "our intention was wholly different from that which the language of our deed expresses, disregard what we said and construe it according to what we meant to say but did not say". This rule has been followed in several decisions by the High Courts, but we would refer only to the cases of Ishri Prasad Kishun Tewari v. Chandrabhan Prasad Kishun Tiwari (A I R 1939 All. 177) and Munshi Lal v. Hira Lal and another (A I R 1947 All. 74), as both these cases are on constructions of acknowledgment. In the first case it was held that the acknowledgment should be construed from the language of the writing itself, without even looking into the surrounding circumstances. In the second case, Braund, J. delivering the judgment of the Full Bench stated the rule in the following words :‑‑ . . it is clear that a document said to constitute an acknowledgment has to be construed in the context in which it is given and that, where its language is not clear in itself, the context may be examined to see what it is to which the words refer. That is not to say that any equivocation in an acknowledg ment can be cured by ascertaining what the probable intention of the acknowledger was, That is quite a different thing. Thus, the learned Judge who decided the case of The Bank of Bahawalpur v. Karim Hayat omitted to take into consideration this well‑established rule relating to the construction of documents when he admitted the writer of the acknowledgment in evidence and permitted him to state as to what was his intention when he wrote ‑the disputed document. There is also another difficulty in our way in following the decision in this case. The document relied upon as an acknowledgment in this case was a letter to the creditor, in which the creditor was requested that the amounts which may be received on the debtor's bills from the Government of Bahawalpur should be utilized for adjusting the outstanding accounts which the debtor had with the creditor, and that the balance should be credited to the account of another creditor, namely, Mahmud & Co. A somewhat similar direction was treated by the Judicial Committee of the Privy Council as acknowledgment in Sukhamonl Chowdhrani v. Ishan Chundar Roy ((1897‑98) 25 1 A 95), which was a decision in appeal from a suit brought for contribution by one of the three joint debtors. It appeared that these debtors had earlier petitioned to the Court to appoint a manager to protect their joint property and had prayed that the receipts realized by the manager should be applied in payment of the debts of the creditors specified in the list annexed to the petition. This petition was held by the Privy Council to constitute acknowledgment of liability under the statute of limitation, even though the request to apply the receipts towards adjustment of debts was not addressed to the creditors, unlike the case of The Bank of Bahawalpur v. Karim Hayat, in which the direction of similar nature was made to the creditor, and therefore this direction stood on a stronger footing for the purpose of being treated as acknowledgment than the request in the Privy Council case, which was made not to the creditors but to the Court.

12. In the foregoing discussion we have taken note of the judgment in L. P. A. No. 25 of 1964 to which the learned Judge whose judgment is now impugned in the present proceedings, and who also decided the case of The Bank of Bahawalpur v. Karim Hayat was himself a party. Four documents were held to constitute acknowledgment in this case. One was Exh. 55 dated the 31st August 1951, in which the accounts submitted by the creditor were accepted subject to claims for adjustments. The second document was Exh. 8, dated the 15th August 1952 by which the Chairman of the Sind Purchasing Board was requested to see a Secretary to the Government to settle the commission payable to the Board, which statement was an admission of the existence of accounts. The third was Exh. 29, dated 4‑11‑1954, which ran as follows :‑ "The following audit reports received from the Comptroller, Sind are sent herewith in original for information and necessary compliance :‑

1. Report for the period 1‑11‑48 to 31‑10‑49 2. 1‑11‑49 to 31‑10‑50 3. 1‑11‑50 to 31‑10‑53 The replies should please be furnished within a fortnight so that it may be possible to forward them to the Comptroller, Sind before settlement of accounts are finally made. The original audit reports should please be returned early after keeping a copy for your record. Please acknowledge." The fourth document was Exh. 49, dated 13th May 1955, which was in these words :‑ "Please refer to the letter quoted above and expedite disposal of paras. 3 to 6 of the above report as desired by the Comptroller, Sind immediately.

2. Please note that unless all the points raised by the Comptroller, Sind on your accounts are disposed of no payment can be made to you in final settlement of your accounts." Each of these letters, as also the memorandum of the proceedings of a meeting, was held to constitute an acknowledgment. It could be contended with regard to each of these documents that it did not contain unequivocal admission of liability or that it was not written with the conscious intention of admitting any liability. Such an argument could be put forth with consi derable force at least with regard to the third and fourth documents, that is, Exh. 29 and Exh.

49. But since these docu ments, as also the first two letters, admitted existence of accounts, the rule laid down by the Privy Council in Mani Ram Seth v. Seth Rupchand was applied, and consequently the letters were treated as sufficient acknowledgment to save the suit from the bar of limitation. This case may be compared with the rank of Bahawaipur v. Karim Hayat, in which the disputed document admitted the existence of accounts between the parties, and in addition contained directions to the creditor with regard to the manner in which the receipts of money should be utilized, that is, for adjustment of the creditor's accounts as also the accounts of another party to whom the debtor was shown as owing moneys. It will thus be seem that the learned Single Judge, in subscribing to the judgment in the Province of West Pakistan v. Sind Purchas ing Board (L. P. A. No. 25 of 1964), in effect departed from his earlier decision in The Bank of Bahawalpur v. Karim Hayat. We would, therefore, venture to say that this latter case is no longer of any avail to the appellants before us.

13. As regards the decision in Yacoob Habib Kaliya v. Messrs A. A. Sattar relied upon by Mr. 12amchandani, the writing which was relied upon as acknowledgment was as follows:‑ "My client Mr. Yaqoob Habib Kaliya has placed in my hands your .Registered letter dated 26th May 1953 bearing No. C‑43‑5‑53 addressed to him with instructions to reply thereto as under :‑‑‑ As you have committed a breach of contract by not lifting the contract goods in spite of repeated requests both oral and written, you are not entitled to claim Rs. 1,186‑14‑0 from my client, on the contrary you are liable to my client in damages for not taking delivery of the goods due to downward trend of the market. In the circumstances the requisition contained in your letter under reply cannot be complied with. If in spite of the above any action taken against my client as threatened the same shall be defended at your client's entire risk as to costs and consequences." It was held that this writing was not in the nature of an unqualified acknowledgment of a subsisting liability. It is with greatest respect, and with utmost reluctance, that we would venture to differ from this view, and our reason for doing so is the language of Explanation 1 in section 19 of the Limitation Act, under which an acknowledgment may be sufficient to save an action from the bar of limitation B even if it is accompanied by refusal to pay or is coupled with the claim to a set‑off: Now, in the case under review, the seller admitted that he had with him a deposit of Rs. 1,186‑14‑0 but claimed that this amount could not be refunded as the buyer was himself liable for payment of damages for failing to take delivery of the goods. This is no more than a claim to set‑off the buyer's deposit against the damages claimed by the seller, and in our opinion the seller's writing was qualified to be treated as an acknowledgment of liability under Explanation I. It appears to us that the learned Judge who decided this case rejected the seller's writing as acknowledgment on the ground that the right of set‑off had already been exercised and accordingly the letter did not constitute admission of a subsisting liability. But we do not find any words in this writing to support this view. Further, the question is whether Explanation 1 only refers to the right of set‑off which is claimed in praesenti in the writing which is set up as an acknowledgment, and not to a set‑off the right to which is claimed to have been exercised already. It appears to us that in majority of cases in which the debtor's admission of liability is coupled with the claim of set‑off, the debtor would generally C assert that he had already exercised this right and, therefore, nothing was due to the creditor. We do not think that the language of Explanation 1 would not apply to a set‑off of this nature. In our opinion this Explanation would cover a set‑off claimed in praesenti as well as a set‑off, the right to which is stated to have been exercised at a point in time antecedent to the writing which is put forth as acknowledgment as the expression "claim to a set‑off" used in this Explanation would apply to both the cases. This is the view which prevailed in an Indian case, Sivakasi Match Exporting Co. v. Ramanlal Mohanlal Bros. (A I R 1963 Mad. 403) in which the buyer, who had declined to accept the goods for not conforming to specifications, claimed the refund of his deposit, and the supplier wrote as follows: "You are liable to pay in the shape of damages for breach of contract made by you in not taking delivery of the goods a sum of Rs.880‑9‑2. 1 have appropriated from out of the advance payment the said sum towards damages. There is thus a small balance of Rs. 120‑6‑10 standing to your credit." It was held that the letter constituted valid acknowledgment of liability for the whole deposit. It will be noted that the seller's claim was that he had already exercised the right of set‑off, in other words, the letter referred to a state of affairs which existed in the past and did not make a claim to a set‑off, in praesenti. With regard to the decision of this Court in Muhammad Akbar Khan v. Province of West Pakistan, the admission relied upon by the plaintiff was contained in a statement made in the Court by the defendant's Advocate in these terms:‑ "It is correct that when prohibition was enforced from the 1st October 1948, stock worth Rs. 65,000 or Rs. 66,000 belonging to the plaintiff, was handed over to Edulji. It is also correct that the sale proceeds of this stock have not been deducted from the amount of the demand notes issued to the plaintiff. This will be deducted." This writing was rejected by the Court as acknowledgment. Again, with the greatest respect, we would say that this statement at least admitted the existence of an account and would thus come within the rule laid down by the Judicial Committee of the Privy Council in Manikram Seth v. Seth Rupchand though the writing may not have qualified to be treated as acknowledgment for other reasons.

14. It now remains to examine the effect of the other cases cited before us by Mr. Dingomal Ramchandani. We will first refer to the decisions in Venkata v. Parthasarahdi and Hukumatsingh Kundanmal v. Nenumal Rijhoomal. The opinion expressed in these cases does not seem to be consistent with the provisions of section 19 of the Limitation Act, particularly with Explanation 1 thereto. It has been noted that under this Explanation an acknowledgment may be sufficient even if it is accompanied by refusal to pay, or is coupled with a claim to a set‑off. If a writing is in these terms, then it would be difficult to maintain that the writer intended to continue the relationship of debtor and creditor until this relationship was lawfully D determined. The refusal to pay, or the claim to a set‑off, would obviously not bear out such intention. Still, under section 19, the statement is to be treated as sufficient acknowledgment. In the two cases decided by the Indian Supreme Court, Shapoor Freedom Mazda v. Durga Prosad Chamaria and others and Tilak Rain and others v. Nathu and others much emphasis has been laid on the requirement that the writing which is put forth as acknowledgment should have been written with the conscious intention of acknowledging a subsisting liability or jural relationship. But the learned Judges did realize the difficulty inherent in the principle of "conscious intention." There is no l method available to the Courts to ascertain if a document was written with full consciousness or that the writer's intention was directed towards the question of admission of his liability, except E to look at the language of the document itself, and if there is any! ambiguity therein, to examine the context or the surrounding circumstances in which the document was written. Apparently, it was this difficulty which persuaded the learned Judges to lay down the further rule that the intention need not b‑. expressed in words, but may be inferred by implication. Moreover, to laying down the rule that the writer's intention should be directed towards the question of admission of his liability, the learned Judges unduly restricted the scope of section 19 and the Explanation thereto, and took up a position contrary to the principle enunciated by the Judicial Committee in Mani Ram Seth v. Seth Rupchand in which the mere reference to the existence of account was held to be an admission of liability even though the writer did not admit any debt and expressly used the words "alleged indebtedness". This view, we would say with great respect, is consistent with the rule that acknowledgments should be construed liberally, so as to maintain the right to sue, rather than in negation or derogation of such right. With regard to the other cases relied upon by Mr. Ramchandani, namely, Badri Das v. Monohar Das, K. Shaikh Meera Sahib & Co. v. Shaik Nainar Lubbay Marcayar, Rangaswami Chetti v. Thangavelu Chetti and Karamadai Naicken v. R. Raju Pillai & another the decisions therein are clearly distinguishable, as in all these cases the debtor asserted that he was not liable for the debt as it had already been discharged by payment or in some other mode. These cases, therefore, do not give any assistance in deciding the point with which we are faced in the proceedings before us. The question then is, what is the reasonable test to determine whether a writing constitutes sufficient acknowledgment under section 19 of the Limitation Act. Taking into considera tion the rule laid down by the Judicial Committee in Maniram Seth v. Seth Rupchand and in the several other decisions reviewed above, according to which an admission of liability need not be expressed but may be inferred by implication from the language of the writing and the surrounding circumstances, we should think that the test is‑ (i) Whether there is admission of liability or of jural relationship; (ii) Whether this admission is relatable to a subsisting liability or jural relationship, so that in the latter case, on ascertainment of facts constituting the jural relationship, as in the case of accounts between the parties, a debt or liability shall be found to exist against one or the other of the parties. This admission may be evident from the language of the writing itself, or may be inferred by implication, or by ascertainment from the surrounding circumstances if there any ambiguity in the writing. This test, in our view, appears to be in accord with the decision in Maniram Seth v. Seth Rupchand and with several other cases which we have had occasion to review at length in this judgment.

15. Turning to the present case, the writing which is set up as acknowledgment is Exh. P‑11 and is dated 19th June 1952. This writing has been reproduced above in full. This letter expressly admitted that "there is a credit balance of Rs. 20,500" in the respondent's personal account in the books of the appellants. But the letter proceeded to set off this balance against certain claims which the appellants alleged were pending against the respondent. Thus, this letter has two points, namely, (1) there is admission of the existence of a credit balance in the appellants' books in favour of the respondent, and (2) ‑there is a claim to set off this balance against various debts alleged to be due by the respondent to the appellants. As observed by the learned trial Judge, this letter would qualify to be treated as acknowledgment by reason of the provisions of Explanation 1 in section 19 of the Limitation Act. Even if we were to agree with Mr. Ramchandani that we should follow the decision in Muhammad Akbar Khan v. Province of West Pakistan in interpreting Explanation 1 to mean that the right to a set‑off contemplated therein, is that which is claimed in praesenti we would say that even in that case Exh. P. 11 would constitute valid acknowledgment of liability. The existence of a credit balance in the respondent's favour is admitted in praesenti and the letter further makes a claim, again in praesenti to set off this balance against the various debts allegedly due from the respondent to the appellants. We are, therefore, unable to agree with the learned Advocate both in his contentions that this letter is not an admission of liability coupled with the claim to a set‑off, or that the letter was not written with the conscious intention of acknowledging the liability unequivocally.

16. We may now come to the next question, that is the weight to be attached to Exh. D/27 which purports to be dated 22nd October 1949. It is a receipt without stamps and reads as follows:‑ "Received from H. O. Karachi on 6‑4‑49 the sum of Rs. 50,000 (Fifty thousand) only for rape‑seed, but after this amount was adjusted to the under mentioned accounts. (1) Adjusted towards the loan given to Mr. M. G. Kadir on 12‑7‑48 by two cheques Rs. 45,500 (2) Part realization of the price of motor car given to Mr. M. G. Kadir out of Rs. 17,000 Rs. 4,500 Rs. 50,000 N. B. No entry of these transactions in the books of accounts of the Mehrabpur Factory. (Sd ) A. Latif 22‑10‑1949." This document was not relied upon in the written statement of the appellants, nor was it produced within the time fixed by the Court for production of documents by the parties. It was introduced for the first time during the cross‑examination of the respondent, but before it was shown to him the following question was put to him: "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?" The plaintiff's answer was as follows:‑ "This is wrong. The payments are in respect of Mehrabpur factory business which was of cotton seed." With regard to the document itself, the respondent admitted his signature thereon, but asserted that its contents were a forgery. For the appellants, Mr. M. G. Kadir gave evidence, in the course of which he stated that a sum of Rs. 50,000 had been paid by him to the respondent for purchase of rape‑seed, which purchase was actually not made, and consequently, the respondent's advance of Rs. 45,500 was adjusted against that amount and the balance of Rs. 4,500 out of Rs. 50,000 was appropriated towards the transaction of an old car. Now, Exh. D/27 purports to be dated 22nd October 1941. But on 31st August 1949, the appellants bad already paid Rs. 25,000 to the respondent out of his advance of Rs. 45,

500. When Mr. M. G. Kadir was asked to explain how, after payment of Rs. 25,000 to the respondent, the whole sum of Rs. 45,500 could be adjusted against the sum of Rs. 50,000, the reply was that the appropriation represented by Exh. D/27, was done by the respondent himself. But Mr. M. G. Kadir admitted that this document was throughout in his possession. When asked as to why he did not point out this discrepancy to the respondent, the only reply was that the occasion for doing so did not arise as litigation had already commenced between the parties. The reference to the litigation could have been only to the present suit, but this suit was filed on 15th September 1952. The other litigation between the parties arose when the appellants sued the respondent for Rs. 5,000 but that suit was filed much after the presentation of the plaint in the suit from which this appeal has come up before us. This long interval of time was pointed out to Mr. M. G. Kadir in his examination, but he contented himself by saying that he did not meet the respondent during all this time and, therefore, did not have any occasion to point out to him that after payment of Rs. 25,000 to him on 31st August 1949 the, whole sum of Rs. 45,500 could not again be adjusted against Rs. 50,000 Mr. M. G. Kadir admitted that the document Exh. D/27 was in the handwriting of his accountant, one Mr. Siddiqi, who is now dead. When asked as to why he did not state in his written statement that Rs. 45,500 had been paid by Exh. D/27, he replied that he thought he would produce this document when the case came up for hearing. The witness further admitted that information with regard to this document was not given to the Advocate who drafted the written statement on the appellants' behalf. Thus, it is apparent, that no reliance was placed by the appellants on Exh. D/27 in their written state ment, which did not even contain a reference to this document. Even in Exh. P. 11, dated 19th June 1952, the appellants did not at all refer to this document. On the other hand, they admitted that the respondent had a credit balance with the appellants of Rs. 20,500 which sum the appellants claimed to set off against various debts alleged to be owing from the respondent with regard to the two partnership concerns mentioned above. Before Exh. D/27 was shown to the respondent during his cross‑examination it was not at all the case of the appellants that the whole amount of Rs. 45,500 had been paid under Exh. D/27, and that in addition the appellants had further paid a sum of Rs. 25,000 to the respondent on 31‑8‑

49. Their case throughout was that the respondent did have a balance of Rs. 45,500 with the appellants, out of which Rs. 25,000 were paid to the respondent on 31st August 1949, and the balance of Rs. 20,500 continued to remain in credit in the appellants' books, but that the appellants had the right to set off this amount against the debts which they claimed from the respondent. Thus, the appellants, when they produced Exh. D/27, attempted to introduce a new defence al together, which was totally inconsistent with the pleas taken in their written statement as well as in the correspondence exchanged between the parties previously, including Exh. P/11 dated 19th June 1952. In our opinion, the learned Single Judge was right in refusing to place any reliance on this document, or in allowing the appellants to produce further documents, at the close of the arguments in the case, which purported to support Exh. D/27. Any other course would have placed the respondent in a seriously disadvantageous position, as thereby the appellants would have been enabled to set up a defence which did not find any place in their written statement or in the correspondence which they exchanged with the respondent. A further fact which should be noted in connection with Exh. D/27 is, that in the ordinary course the appropriations made in this document should have found mention in the appellants, books of account, bat these books were not produced by the appellants and this omission has not been explained at all by Mr. Ramchandani before us, nor was any explanation on this point given to the learned trial Judge who decided the case. For these reasons, we are of the view that there is no substance even in the second point urged by Mr. Dingomal Ramchandani in support of the present appeal.

17. From the evidence it is clear that advance of Rs. 45,500 was made by the appellants to the respondent on 10‑7‑

48. Out of this amount, a sum of Rs. 25,000 was repaid to the respondent on 31st August 1949. This part‑payment would give a fresh start to the period of limitation. Before the new period of limitation expired, the appellants wrote Exh. P/11, dated 19th June 1952, in which they admitted that there was in existence in their books of account a credit balance of Rs. 20,500 in the respondent's favour. We have already held that this document is a valid and sufficient acknowledgment of liability under section 19 of the Limitation Act, and accordingly a new period of limitation was set in motion on 19th June 1952 when this document was written. The respondent's suit itself was filed on 5th September 1952 and was therefore clearly within the prescribed period of limitation.

18. For the foregoing reasons, we hold that this appeal has no substance and accordingly fails with costs in the respondent's favour. S. Q. Appeal dismissed.