IMPORTANT POINT
The court clarified that acknowledgment of liability under Section 18 of the Limitation Act does not extend the limitation period unless explicitly stated, and review is not a substitute for appeal.

JUDGMENT :

(Manoj Kumar Ohri, J.)

Review Pet. 16/2024

By way of present petition, petitioner (defendant) is seeking review of the judgment dated 08.12.2023 whereby two applications came to be decided. The first being petitioner’s application under Order 7 Rule 11 of CPC for dismissal of the suit as time barred, which was dismissed. The second application being respondent’s (plaintiff’s) application under Section 14 of the Limitation Act, which was allowed.

2. Petitioner has sought review of both the decisions on the ground that the court overlooked certain documents and written submissions filed by the defendant, which led the court to reach erroneous decisions on the said two applications.

As far as petitioner’s application under Order 7 Rule 11 of CPC for dismissal of the suit as time barred is concerned, the petitioner has contended that the court erred in relying upon the decision in Manoj Kumar Goyal V Jagdish Prasad Modi, reported as 2014 (3) ILR (Del) 1595 which lays down an incorrect proposition of law on acknowledgment of liability under Section 18 of the Limitation Act.

Petitioner has argued that Manoj Kumar Goyal (Supra) incorrectly postulates that the extension of limitation period in the cases of acknowledgment of liability under Section 18 of the Limitation Act commences from the expiration of time promised to make payment in the written acknowledgment and not from the date of acknowledgement. Petitioner has submitted that it had submitted written submissions relying upon various prior judgments, wherein the courts have held that the extension of time will be counted from the date of acknowledgment and not from the expiration of time promised to make payment in the acknowledgement.

According to the petitioner, this Court should have followed the earlier judgments and by following the later judgement, the court has ignored the rules of precedents, which lead to an incorrect decision.

3. This being the only ground for seeking review, it must be said that the petitioner has wrongly premised the review on the said ground. It must be clarified that this Court only concurred with the view laid down in Manoj Kumar Goyal (Supra) which was rendered by a court of equal bench strength and decided the application thereof. It will be incorrect to say that the court followed an incorrect precedent.

4. The question that emerges for consideration is whether the view formed by this court, which concurred with view taken in Manoj Kumar Goyal, (Supra) regarding Section 18 of the Limitation Act, has ignored any binding precedent due to which there is an error apparent on the face of the order of the kind that could be rectified in the review jurisdiction.

5. Petitioner has cited five judgments on the proposition, to argue that the question of law having been settled in the judgments passed by various High Courts prior to Manoj Kumar Goyal, this court could not have taken a contrary view.

On a careful perusal, except one, none of the other judgments cited by the petitioner have been delivered by this Court, much less being of a higher bench strength, to act as a binding precedent for this court. In Valliamma Champaka Pillai v. Sivathanu Pillai, reported as (1979) 4 SCC 429, the Supreme Court held that the judgement of one High Court could, at best have a persuasive effect on another High Court and would not bind it in any manner. The relevant part is extracted hereunder:-

"21. These erroneous decisions of the Travancore Court could, at best, have a persuasive effect and not the force of binding precedents on the Madras High Court. There is nothing in the States Reorganisation Act 1956 or any other law which exalts the ratio of those decisions to the status of a binding law nor could the ratio decidendi of those decisions be perpetuated by invoking the doctrine of stare decisis."

6. The Bombay High Court in Commissioner of Income-Tax v. Thana Electricity Supply Ltd., reported as 1993 SCC OnLine Bom 591 explained the hierarchy of binding precedent