Clause 12 of the Baroda State (Application of Laws) Order, 1949, prescribed a period of limitation for suits on promissory notes and the part-payment of principal made on 23-6-1951 was a valid acknowledgment under Section 20 of the Limitation Act.

1. This Revisional application raised a short point of limitation winch is of some importance for similar claims in the district of Baroda, The petitioner filed a suit in tile Court, of the Civil Judge, Junior Division, Kadi, to recover Rs. 449/- on a promissory note.

The promissory note had been executed in favour of the petitioner on 18-5-1918. On 23-6-1951 there was an acknowledgment by part-payment or the principal amount and so the petitioners case was that the suit filed by him on 18-6-1954 was within time. The learned trial Judge has held that the suit is barred by limitation and so the petitioners claim has been dismissed. Mr. Shastri for the petitioner contends that, in coming to the conclusion that the suit was barred by limitation, the learned Judge has misconstrued the effect of the provisions contained in Clause 12 of the Baroda State (Application of Laws) Order, 1949.

2. It is common ground that a suit on a promissory note under the law of limitation prevailing in Baroda prior to its merger was governed by a rule of six years, though the corresponding law in the rest of the State of Bombay prescribes a period of three years for such a suit.

After the State of Baroda merged with Bombay, the Baroda State (Application of Laws) Order 1949, was promulgated and Clause 12 of this Order has provided that,

"notwithstanding anything contained in this Order, if the period of limitation prescribed by the Indian Limitation Act, 1908 (9 of 1908), for any suit, appeal or application is less than the period prescribed by any corresponding law in force in the Baroda State Immediately before the commencement of this Order, such suit, appeal or application may be instituted within two years next after the date of the commencement of this Order or within the period prescribed by such corresponding law, whichever period first expires".

The object of enacting this clause obviously was to protect claims based on promissory note from being extinguished by limitation by the application of the Bombay law of limitation. Legislature knew that in the State of Baroda a longer period of limitation had been prescribed for suing on promissory notes and it was apprehended that if the rule of three years was immediately made applicable to the State of Baroda, it would adversely affect several claims on promissory notes which were hi time under the Baroda law, but which would be barred by time under the Bombay law. That is why Clause 12 provides that claims made on promissory notes should be enforced by a suit within two years next after the commencement of this Order or within the period prescribed by such corresponding law in Baroda, whichever period first expires.

In regard to the promissory note In question under the Baroda law the last date to file a suit would have been. 8-5-1954, whereas the two years commencing next after the coming into force of this Order would expire on 1-8-1951. Since Clause 12 prescribes that a suit on a promissory note must be brought within such of the two periods as would first expire, it must be held that the present suit had to be filed on or before 1-8-1951.

Before this period of two years expired, on 23-6-1951 a part-payment of the principal has been made and the creditor relies upon this part-payment as amounting to an acknowledgment within the meaning of Section 20, Limitation Act. If the part-payment in question amounts to a valid acknowledgment under Section 20 the present suit would be in time. If, on the other hand, the said part payment does not amount to a valid ackowledgment, the suit would be beyond time.

3. Section 20 of the Limitation Act deals with the effect of payment on account of debt or interest on legacy and it provides that where payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay the debt, a fresh period of limitation shall be computed from the time when the payment was made.

The learned trial Judge has held that the payment in quest