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1986 Supreme(AP) 350
Andhra Pradesh High Court
Judges : P.KODANDA RAMAYYA
INDIAN COMMERCE AND INDUSTRIES CO.PVT.LTD., REGD.OFFICE AT BROADWAY MADRAS, M.L.MANOHAR, AUTHORISED DIRECTOR OF COMPANY - Appellant
Versus
Union of India, GENERAL MANAGER, S.C.RAILWAY, SECUNDERABAD - Respondent
Decided On : 09-09-86
An acknowledgment of liability under Sec. 18 of the Limitation Act, 1963, must be clear and unequivocal, and a payment on account of a debt under Sec. 19 of the Act must be made in respect of a debt that is already due and owing.
Headnote:
LIMITATION ACT, 1963 - SEC. 18, 19 - ACKNOWLEDGMENT OF LIABILITY - PAYMENT ON ACCOUNT OF DEBT - INTERPRETATION - EFFECT ON LIMITATION.
Fact of the Case:
Plaintiff sued the railway authorities for non-delivery of goods, claiming compensation. The railway authorities admitted liability and made a partial payment, but the plaintiff filed the suit after the limitation period had expired. The plaintiff argued that the acknowledgment of liability and the partial payment saved the limitation.
Finding of the Court:
The court held that the acknowledgment of liability under Sec. 18 of the Limitation Act, 1963, must be clear and unequivocal, and the letter relied upon by the plaintiff did not meet this requirement. The court also held that the partial payment under Sec. 19 of the Act was not made on account of a debt, as the claim for non-delivery of goods is a claim for damages and not a debt.
Issues: 1. Whether the letter relied upon by the plaintiff constituted an acknowledgment of liability under Sec. 18 of the Limitation Act, 1963? 2. Whether the partial payment made by the railway authorities was made on account of a debt under Sec. 19 of the Limitation Act, 1963?
Ratio Decidendi: 1. The court interpreted Sec. 18 of the Limitation Act, 1963, and held that an acknowledgment of liability must be clear and unequivocal. The letter relied upon by the plaintiff did not meet this requirement as it did not contain an unqualified admission of liability. 2. The court interpreted Sec. 19 of the Limitation Act, 1963, and held that a payment on account of a debt must be made in respect of a debt that is already due and owing. The claim for non-delivery of goods is a claim for damages and not a debt, and therefore the partial payment made by the railway authorities was not made on account of a debt.
Final Decision: The court dismissed the plaintiff's appeal and the railway authorities' cross-objections, holding that the suit was barred by limitation.
( 1 ) THE plaintiff in the suit is the appellant therein. The suit was laid for recovery of a sum of Rs. 70,000/- with interest thereon for non-delivery of the goods by the defendant-railway authorities. The Plaintiff s case is that it booked an order for one wagon load of M. S. Plates for the use of its factory at Ramayarappadu with M/s. Hindustan Steel Limited. , Calcutta, and accordingly it despatched one wagon load of the said material to the plaintiff s Factory at Ramavarappadu, but the said consignment did not reach the destination, as it would appear that it was delivered to a different place, and that the plaintiff, after lodging the complaint with the defendant-railway authorities, received only Rs. 24,457-40, the price at which those goods were purchased at Calcutta, and the defendant refused to pay the ruling price of the goods at Andhra Pradesh. Hence the suit was file.
( 2 ) THE defence is substantially one of limitation, though the defendants contended that the claim of the plaintiff is not tenable, and they are not bound to pay more than the price at which the goods were purchased and also put the plaintiff to proof to the quantum of damages claimed by it. On this controversy, the Court below held on the issues framed, as found in paragraph 7, that the defendant-railway authorities are negligent in carrying the goods of the plaintiff, that the plaintiff purchased the goods in open market at Rs. 3,950/- per metric ton, that, since the consignment did not reach the place as expected, the plaintiff did not claim any profits, but only claimed the the market rate of the goods, on the date it purchased at Calcutta, that the receipt of Rs 24,457-40 by the plaintiff was not in full and final settlement of its amount, and that the suit notices are valid. The Court below however held that the claim of the plaintiff is barred by limitation and consequently dismissed the suit. Against the said judgment and decree, the present appeal is filed.
( 3 ) IT is not in dispute that Article 11 of the LIMITATION ACT, 1963 36 of 1963 (hereinafter referred to as the Act) applies to the facts of the present case which is in these terms :"11. Against a carrier for compensation for nondelivery of, or delay in delivering, goods three years. When the goods ought to be delivered. "it is not in dispute that the goods were booked on 1-1-1970. The plaintiff admitted in his evidence that the goods should normally reach within two months and, during that period, the goods ought to have delivered, within the meaning of Column (3) of Article 11 01 the Act, and the suit ought to have been filed on 1-3-1970, but however the suit was filed on 2-2-1974. The learned counsel for the plaintiff contended lhat, as the defendant acknowledged the debt under sec. 18 of the Act and also made payments towards the liability on account oi the debt under sec. 19 of the Act, and hence the suit claim is not barred. I must consider this submission separately, as different considerations have to be applied, while invoking sec. 18 or under sec. 19 of the Act.
( 4 ) SECTION 18 (1) of the Act is in the following terms :"18. Effect of acknowledgment in writing : (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment 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 any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. "xx xx xx xx xx in support of this claim, based upon the acknowledgment two documents have to be referred, i. e , Exs. A-9 and A-11, Ex. A-9is the letter issued by the defendant-railway authorities on 17-11-1970, Which reads as follows : " xx xx xx xx xx the actual cost of the consignment booked under the subject RR as per senders original invoice is Rs.
