The acknowledgment must be made before the expiration of the prescribed period for a suit, and a fresh promise to pay a time-barred debt furnishes a fresh cause of action.

N.K. Mody, J.-

1. Being aggrieved by the judgment dated 28-2-2005 passed by XXI ADJ, Indore in Civil Regular Appeal No. 48-B/2003 whereby suit filed by the respondent for recovery of Rs. 77,000/-alongwith interest @ 6% per annum was decreed, the present appeal has been filed.

2. Short facts of the case are that respondent filed a suit on 26-10-2002 for recovery of Rs. 77,000/-alleging that respondent is Proprietor of M/s Kailash Finance Agency and is in the trade of finance. It was alleged that appellant took a loan from the respondent and executed Hundi in favour of respondent. It was alleged that on 10-7-1999 appellant acknowledged in his own hand-writing about the Hundi. It was alleged that total transactions which took place between the parties were 12 in number of amount which was outstanding against the appellant was Rs. 62,160/-. It was alleged that vide document dated 10-7-1999 appellant promised to pay the amount of each of the Hundi on every month. In the suit it was alleged that transaction took place between appellant and respondent for which Hundis were executed are w.e.f. 3-10-1992 to 25-2-1993. It was alleged that on account of repayment of loan amount cheques were given by the appellant on 4-2-1998, 6-4-1998 and 12-11-1999 which were dishonoured. In the suit it was alleged that on 10-10-2002 appellant made demand of dishonoured cheques which was amounting Rs. 14,147/-. It was alleged that after deducting the aforesaid amount outstanding amount has to be paid. It was prayed that decree be passed. The suit contested by the appellant by filing the written statement wherein all the plaint allegations were denied. It was denied that any amount is outstanding against the appellant. It was prayed that suit be dismissed. After framing of issues and recording of evidence learned Court below decreed the suit filed by the respondent against which present appeal has been filed.

3. Learned Counsel for the appellant submits that the impugned judgment passed by learned Court below is illegal, incorrect and deserves to be set aside. It is submitted that the transaction which took place between the appellant and respondent is for the period from 3-10-1992 to 25-2-1993. It is submitted that the alleged acknowledgment is dated 10-7-1999 since the amount was repayable within 3 years and there was no acknowledgment within that period, therefore, even if it is assumed that document dated 10-7-1999 was executed by the appellant, then too, since it was after expiry of period of limitation, therefore, limitation cannot be extended on the basis of that document. Learned Counsel placed reliance on a decision in the matter of Sampuran Singh Vs. Niranjan Kaur, AIR 1999 SC 1047, wherein Hon'ble Apex Court held that acknowledgment if any, has to be prior to the expiration of the prescribed period for filing the suit, in other words, if the limitation has already expired, it would not revive under this section. It is only during subsistence of period of limitation, if any such document is executed, the limitation would be revived fresh from the said date of acknowledgment. It is submitted that appeal filed by the appellant be allowed and the impugned judgment passed by learned Court below be set aside.

4. Learned Counsel for the respondent submits that since it was the fresh agreement, therefore, no error is committed by the learned Court below in decreeing the suit. Learned Counsel placed reliance on a decision in the matter of Bhansarlal Paramsukh Vs. Navalkishor Mungalal, reported in AIR 1958 MP 21, wherein Division Bench of this Court held that the acknowledgment of liability contained an express promise to pay the debt and even if it was made after the expiry of limitation it constituted a fresh promise to pay within the meaning of Section 25 (3) of Contract Act and as such the suit based thereon was maintainable. It was further held that it is well settled that a time-barred debt is a good consideration for a fresh promise to pay.