Back
Supreme Court
Honble R. C. LAHOTI (CJI) & ASHOK BHAN, J.
Food Corporation of India - Appellant
Versus
Assam State Co-operative Marketing and Consumers Federation Limited & Ors. - Respondents
Civil Appeal No. 2259 of 1999
Decided On : October 26, 2004
HELD : According to Section 18 of the Limitation Act, an acknowledgement of liability made in writing in respect of any right claimed by the opposite party and signed by the party against such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing of fresh period of limitation from the date on which the acknowledgement was so signed. It is well-settled that to amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act, it need not be accompanied by a promise to pay either expressly or even by implication.
The statement providing foundation for a plea of acknowledgement must relate to a present subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. The words used in the acknowledgement must indicate the existence of jural relationship between the parties such as that of debtor and creditor. The intention to attempt such jural relationship must be apparent. However, such intention can be inferred by implication from the nature of the admission and need not be expressed in words. A clear statement containing acknowledgement of liability can imply the intention to admit jural relationship of debtor and creditor. Though oral evidence in lieu of or making a departure from the statement sought to be relied on as acknowledgement is excluded but surrounding circumstances can always be considered. Courts generally lean in favour of a liberal construction of such statements though an acknowledgement shall not be inferred where there is no admission so as to fasten liability on the maker of the statement by an involved or far-fetched process of reasoning. (Para 14 & 15)
(2). According to the plaintiff, the State through its procuring agent, the Federation, requested the plaintiff through the Government of India to take over 20,000 metric ton of procured paddy of kharif season 1975-76 as per specification and price to be fixed by the Government of India. The request was acceded to by the plaintiff. It was also agreed that the plaintiff shall pay 90 per cent of the amount as advance in nine instalments on the condition that the balance 10 per cent will be paid after fixation of price by the Government of India. An amount of Rs.1.8 crores was to be paid by way of advance. However, by mistake the plaintiff paid a sum of Rs. 2 crores as advance to the Federation during the period 16/2/76 to 27/2/76. In a meeting which took place on 20/9/1976, wherein the representatives of the parties and the Government of India were present, the price of paddy was fixed and it was resolved that the value of the paddy, supplied by the Federation to the plaintiff was Rs. 1,60,63,190 as against an advance of Rs. 2 crores by the plaintiff to the Federation and thus there was an amount of Rs. 39,36,810/- paid by the plaintiff to the Federation in excess.
(3). Here itself, it may be mentioned that the plaintiff also claimed an amount of Rs. 7,03,541/- from the Federation on account of quality cut. However, we do not propose to deal with that claim inasmuch as it has been negatived by the trial court itself and we do not find any reason to take a different view.
(4). Correspondence ensued between the parties regarding the plaintiffs claim against the Federation. Several letters were exchanged. At the end, the plaintiff served a legal notice and filed the suit for recovery on 13/05/1980.
(5). The defendants contested the suit. The principal defence raised in the written statement was that the suit was barred by time inasmuch as the cause of action, if any, had arisen to the plaintiff on 20/09/1976 and the suit was filed beyond three years from date and as such was beyond the period of limitation. The defendants also expressed in the written statement a desire of pleading set-off and also of raising a counter claim but that was not done. After trying all the issues, the trial court held that the plaintiff was entitled to recovery of Rs. 39,36,810/- only from the Federation, but even that claim could not be decreed as the suit was filed beyond the prescribed period of limitation. Consequently, the suit was directed to be dismissed.
(6). The plaintiff preferred an appeal in the High Court. The only issue agitated in the High Court was the one of limitation. The High Court found no reason to take a view different from the one taken by the trial court and accordingly, directed the appeal to be dismissed. This is an appeal by special leave preferred by the plaintiff.
(7). The issue as to limitation centers around two letters respectively dated 29/03/1977 and 30/07/1977 marked as Exhibits 8 and 9 (Annexures P4 and P5). According to the plaintiff these two letters written by the Federation amount to acknowledgement of liability within the meaning of Section 18 of the Limitation Act, 1963 and have the effect of extending the period of limitation. The trial court has found the letters not proved and also not amounting to such ack
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
