An acknowledgment under Section 19 of the Limitation Act, 1908, must be made before the expiration of the period prescribed for a suit, must be in regard to the liability in respect of the right in question, and must be made in writing and signed by the party against whom such right is claimed. An acknowledgment merely renews the debt and does not create a new right of action, and it need not be accompanied by a promise to pay either expressly or by implication.

Headnote:
ACKNOWLEDGMENT - LIMITATION ACT, 1908 - SECTION 19 - ACKNOWLEDGMENT OF LIABILITY - REQUIREMENTS - CONSTRUCTION OF DOCUMENT - INTENTION OF MAKER - SURROUNDING CIRCUMSTANCES.
Fact of the Case:

Respondent 1, a mortgagee, filed a suit to recover Rs. 4,64,213-5-3 on mortgages created by the mortgagor, John Carapiet Galstaun, who died pending the suit. The appellant, who became a party to the proceedings as an auction purchaser of one of the mortgaged properties, disputed the validity of the claim based on an acknowledgment of liability made by the mortgagor in a letter dated March 5, 1932.
Finding of the Court:

The Court held that the letter in question amounted to a valid acknowledgment under Section 19 of the Limitation Act, 1908, and that the mortgagee's claim was within time.
Issues: Whether the letter dated March 5, 1932, written by the mortgagor to the mortgagee constituted a valid acknowledgment of liability under Section 19 of the Limitation Act, 1908.
Ratio Decidendi: The Court observed that an acknowledgment under Section 19 of the Limitation Act, 1908, must be made before the expiration of the period prescribed for a suit, must be in regard to the liability in respect of the right in question, and must be made in writing and signed by the party against whom such right is claimed. The Court further noted that an acknowledgment merely renews the debt and does not create a new right of action, and that it need not be accompanied by a promise to pay either expressly or by implication. The Court held that the letter in question, when read in the context of the surrounding circumstances, clearly indicated the existence of a jural relationship between the parties as debtor and creditor, and that the mortgagor intended to admit such relationship. The Court also rejected the appellant's argument that the word "interest" used in the letter was vague and indefinite, and held that it referred to the mortgagee's interest as a puisne mortgagee.
Final Decision: The Court dismissed the appeal and upheld the decree of the Court of Appeal below, holding that the letter dated March 5, 1932, amounted to a valid acknowledgment under Section 19 of the Limitation Act, 1908, and that the mortgagee's claim was within time.

Judgment

GAJENDRAGADKAR, J. : This appeal arises from a suit filed by respondent 1 Durga Prosad Chamaria against respondent 2 the heirs of John Carapiet Galstaun and others in which he sought to recover Rs. 4,64,213-5-3 on the mortgages in suit. He had prayed for a preliminary mortgage decree according to O.XXXIV, R. 4 of the Code of Civil Procedure and had asked for the appointment of a receiver in that behalf. The said mortgages were created by delivery of documents of title to immovable properties by the mortgagor John Carapiet Galstanu who died pending the suit. The properties motgaged consisted of three items all of which are situated in Calcutta. These items are 24, Amratolla Lane, 96, Karaya Road and premises 167/1 and 167/5 Dhurrumtoall Street (Chandni Bazar). In the present appeal we are concerned with premises 167/1. Respondent 1 s case was that he had advanced several amounts on seven different occasions to the mortgagor between August 2, 1926, and November 27, 1931. According to the terms of the transaction no specific time for payment of the mortgage dues had been fixed, and it was agreed that the monies advanced would become due and be repaid on demand being actually made by the mortgagee. With this plea we are not concerned in the present appeal. It was further pleaded by the mortgagee that the mortgagor had acknowledgment his liability of the mortgagee s claim by letters of March 5, 1902, and February 17, 1943, which were signed by him. It is on strength of these acknowledgments that the mortgagee purported to bring his claim within time the suit having been filed on May 18, 1944.

2. Pending the suit the appellant was added as a party defendant on August 23, 1944. By this application made by respondent 1 in that behalf it was alleged that the appellant had become the auction purchaser of premises 165/1 at a sale held by the Sheriff of Calcutta on May 3, 1944, in execution of a decree passed in Suit No. 2356 of 1931 by the Calcutta High Court with notice of mortgage in favour of respondent 1. Since the said sale had been confirmed on July 6, 1944, the appellant had became a necessary party to the suit. That is how the appellant became a party to the proceedings and was interested like the mortgagor in disputing the validity of the claim made by respondent 1.

3. The principal issue which arose between the parties in the suit was one of limitation. It was not seriously disputed that the letter written by the mortgagor on February 17, 1943, amounted to an acknowledgment and it helped to bring within time respondent 1 s claim in respect of the last advance of Rs. 2,500/- made on November 27, 1931. Respondent 1 s case that the earlier letter of march 5, 1932 amounted to a acknowledgment was, however, seriously disputed by the appellant. If this letter is held to amount to a valid acknowledgment two items of consideration pleaded by respondent 1 would be within time; they are Rs. 20,000/- and Rs. 35,000/- advanced on the same day, September 10, 1926. Mr. Justice Banerjee, who tried the suit on the Original Side of the Calcutta High Court, held that the letter in question did not amount to an acknowledgment, and so he found that only the last item of Rs. 2,500/- was in time. In the result he passed a decree for Rs. 5,000/- only in favour of respondent 1.

4. Then respondent 1 took the dispute before the Court of Appeal in the Calcutta High Court. The Court of Appeal had upheld the case made out by respondent 1 in regard to the acknowledgment based on the letter of March 5, 1932, and in consequence it has been held that the principal amounts due to respondent 1 are Rs. 55,000/- and Rs. 2,500/-, and at the rate of interest payable thereon at 8 % simple, the total amount payable being subject to the maximum allowable under the Money-lender s Act. In accordance with these findings a preliminary decree has been drawn. It is this decree 1238 which is challenged before us by the appellant who has brought his appeal to this Court w

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