An acknowledgment of liability under Section 18 of the Limitation Act must be in writing, signed by the party against whom the property or right is claimed, and must contain an admission of a subsisting liability.

Plaintiff is the appellant.

2. The case of the plaintiff is as follows :-

The plaintiff is a contractor and the first defendant placed order with the plaintiff for supply of two drainage carts and four rubbish carts and the plaintiff has sent those carts under invoice dated 16-11-1972 to the defendants. As per the invoice the defendants had to pay a sum of Rs. 10,634.98. The plaintiff received letters from the Divisional Development Officer. Tiruchy stating that the amount has been sent to the plaintiff by means of cheques dated 30-11-1973, 14-3-1974 and 3-7-1974. The plaintiff received that letter on 9-1-1975. The first defendant then sent a letter dated 7-10-1976 stating that the second defendant has misappropriated that amount. In spite of repeated demands, the defendant did not pay that amount. The plaintiff came to know about the fraud only. On 7-10-1976 and so, the suit is not barred by limitation. The plaintiff also claims interest at 9% and so, the plaintiff is entitled to a sum of Rs. 14,462.98.

3. The defendant resisted the suit on the ground that the suit is barred by limitation.

4. The suit was decreed by the trial Court, on Appeal, the first appellate Court set aside the judgment and decree of the trial Court dismissing the suit.

5. As against that, the plaintiff has come forward with the present second appeal.

6. The substantial questions of law that were framed at the time of admission of the second appeal are :-

i) Whether it is open to the contesting defendants to take up the plea of limitation on the ground that its own officer misappropriated the money?

ii) Whether the plaintiff had pleaded about defendants' payments by cheque dated 13-11-1973, 14-3-1974 and 3-7-1974, and if so, whether these payments by cheques would constitute acknowledgments to save limitation?

7. Counsel for the appellant submitted that the defendant has sent a letter dated 26-8-1974 to the plaintiff under Ex. A.21 stating that the amount was paid under three cheques, but the plaintiff did not receive any cheque and the plaintiff has also received the letter Ex. A23 from the first defendant stating that the second defendant has misappropriated the amount and that fraud came to be known to the plaintiff only on 7-10-1976 when Ex. A23 was sent by the first defendant informing the plaintiff that the cheques have been misappropriated by the second defendant and the suit having been filed on 17-11-1976 is not barred by limitation.

8. Counsel for the respondents submitted that the goods were supplied to the defendants on 16-11-1973 and there is no acknowledgment of liability by the defendants subsequently and so, the suit ought to have been filed within a period of three years from 16-11-1972 and the period of limitation runs from 16-11-1972 and as the suit has not been filed within the period of limitation it is hopelessly barred by limitation.

9. As per Ex. A1 invoice, the goods were supplied to the defendant on 16-11-1972. The plaintiff takes shelter under the letters dated Exs. A21 and A23 stating that fraud has been played by the defendants and from the date of knowledge of fraud committed by the defendants, the suit is filed within the time and so, it is not barred by limitation, Ex. A21 is sent by the Divisional Development Officer to the plaintiff on 26-8-1981 stating that on verification of records, it is seen that payments have been made by the Executive Officer, Ariyamangalam Town Panchayat by means of cheques dated 30-11-1973, 14-11-1974 and 3-2-1974 and they were encashed. The plaintiff sent letter to the defendants on 5-9-1974 under Ex. A14 stating that they have not received payments from the defendants till then and the invoice had been pending for more than 24 months and if the payment is not received within 15 days, they have no alternative but to take up the matter through Courts of law for recovery of money. So, after receipt of the letter Ex. A21, the plaintiff sent letter to the defendant on 5-9-1974 demanding payment of