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HIGH COURT OF JUDICATURE AT MADRAS
S. VIMALA, J.
R. Madesh – Appellant
Versus
M. Rathinam, Prop. Sri Surya Movies – Respondent
Civil Suit No. 250 of 2007
Decided On : 11-02-2015
Limitation Act - Section 18, Section 19 - The court analyzed the provisions of the Limitation Act regarding acknowledgment of liability. The court considered the requirements for a valid acknowledgment of liability and the effect of such acknowledgment on the limitation period. The court also referred to relevant case law on the issue.
Fact of the Case:
The plaintiff filed a suit seeking recovery of a sum of Rs.25,50,000/- from the defendant. The defendant admitted his liability in a letter but failed to make the payment. The defendant raised the defense of limitation. The court had to determine whether the suit claim was barred by limitation and whether the admission made by the defendant was valid. The court also had to decide whether a judgment on admission could be given based on the admission made in the written statement.
Finding of the Court:
The court analyzed the provisions of Order XII Rule 6 of the Civil Procedure Code, which allows for judgment on admission. The court also examined the requirements for a valid acknowledgment of liability under Section 25(3) of the Indian Contract Act. The court considered the evidence presented by both parties and the relevant case law on the issue of limitation and acknowledgment of liability. The court concluded that the suit claim was not barred by limitation and that the admission made by the defendant was valid. The court also held that a judgment on admission could be given based on the admission made in the written statement.
Ratio Decidendi: The court held that the suit claim was not barred by limitation as there was a valid acknowledgment of liability made by the defendant. The court also held that a judgment on admission could be given based on the admission made in the written statement. The court further held that the defendant was liable to pay the suit claim to the plaintiff based on the admission made and the evidence presented.
Result: The court partly decreed the suit and granted a decree in favor of the plaintiff for a sum of Rs.15,00,000/- payable with interest at 6% per annum from the date of decree till the date of payment.
Whether the plaintiff is entitled to a decree based upon the admission made by the defendant in the pleadings or otherwise (written statement and Exs.P-4 and P-5) admitting his liability, based upon the provisions of Order XII Rule 6 of the Civil Procedure Code, providing for Judgment on admission?
1.1. When the acknowledgment of liability, though made after the period of limitation, satisfies the conditions laid down under Section 25(3) of the Indian Contract Act, would it amount to a fresh contract in the eye of law and whether it can be made the basis of an action for recovering the amount promised and acknowledged therein by the debtor?
1.2. These are the main issues to be answered in this suit.
2. This suit has been filed by the plaintiff seeking recovery of a sum of Rs.25,50,000/- with future interest at 12% p.a. on the principal sum of Rs.25 lakhs from the date of decree till the date of payment.
3. The plaintiff, who is an Income-Tax Assessee, is also a leading Tamil Producer/Distributor-cum-Director.
3.1. The defendant is also one among the leading producers in the film industry.
3.2. For a Mega Production Venture, the defendant borrowed a sum of Rs.25 lakhs from the plaintiff, in the year 2000, through three cheques. The cheques were duly encashed by the defendant through the Tamil Nadu Mercantile Bank. Having realized the encashed money and having been a borrowed money, it is the duty of the defendant to repay the same. But, as promised, the defendant did not repay the amount.
3.3. The defendant gave a letter to the plaintiff on 02.01.2007 admitting his liability to the tune of Rs.25 lakhs. But, even thereafter the suit amount was not paid. That compelled the plaintiff to file the suit.
4. The defendant filed a written statement raising the following averments:
1. Suit is liable to be rejected as provided under Order VII Rule 11(d) of the Code of Civil Procedure.
2. The claim of the plaintiff is barred by limitation
3. The defendant never acknowledged his liability and hence the suit is barred by limitation.
4. Even assuming that there was an acknowledgment of liability, still as it was not made within the period of limitation, still the suit claim is barred.
5. The plaintiff must prove his entitlement to a sum of Rs.25 lakhs.
6. The defendant had paid a sum of Rs.15 lakhs in full quit and the plaintiff, who promised to report the settlement to the Court, did not do so and hence there is no liability to pay.
5. On behalf of the plaintiff, the Accountant of the plaintiff has been examined as P.W.1 and Exs.P1 to P8 have been marked.
5.1. On the side of the defendant, no oral or documentary evidence has been produced.
6. Out of the eight documents marked, on the side of the plaintiff, the document (letter), dated 29.09.2008, said to have been written by the defendant in favour of the plaintiff, is claimed to be a document of admission of the suit claim. Based upon the said letter, the learned counsel for the plaintiff filed an application under Order XII Rule VI of the CPC., praying the Court to give a judgment on admission. This Court, by order, dated 12.01.2011, did not allow the application, but directed the parties to face the trial.
7. Thereafter, the following issues have been framed by this Court on 21.06.2011:-
i. When the defendant acknowledged his liability to the suit claim by way of his letter dated 29.09.2008 addressed to the plaintiff, is it open to the defendant now to dispute the suit claim on the question of limitation?
ii. When the defendant after accepting his liability to pay the suit claim and after effecting part-payment towards the suit during the pendency of the suit, is there any defence for the defendant denying or disputing to pay the balance of the suit claim?
iii. When the defendant admitted his liability to the suit claim and issued three cheques each for Rs.5,00,000/- totalling Rs.15,00,000/- and got them bounced for insufficiency of funds, is it now open to the defendant to de
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