Acknowledgment of debt through payments resets the limitation period under the Limitation Act, allowing recovery suits even if initially time-barred.

J U D G M E N T

The suit for money based on a promissory note was dismissed by the trial court. The plaintiffs are in appeal.

2. The 2nd plaintiff is the power of attorney holder of the 1st plaintiff. It is the plaintiffs’ case that, on 04.08.2005 the defendant borrowed an amount of ` 21,55,200/- from the first plaintiff. Undertaking to repay the amount with interest, the defendant executed Ext.A2 promissory note of the same date, in favour of the first plaintiff. In partial discharge of the liability, the defendant paid an amount of ` 2 lakhs as per cheque dated 10.07.2007 and a further amount of ` 7 lakhs as per another cheque dated 01.07.2008. Alleging that in spite of demand the balance amount is not paid, the suit was filed.

3. Though the defendant admitted the issuance of Ext.A2 promissory note, he denied the transaction as pleaded by the plaintiff. It was contended that, on 25.08.2004 the defendant borrowed an amount of ` 10 lakhs and a further amount of ` 5 lakhs in March, 2005 from the first plaintiff. The debts were secured through sale deed executed in favour of the first plaintiff's wife. Subsequently, portion of the debt was repaid on two occasions as stated by the plaintiff. Since the plaintiff demanded additional security, Ext.A2 promissory note was issued to him. Thus, the defendant denied the plaint claim.

4. The trial court found that, though Ext.A2 promissory note was denied, its execution was not proved by the plaintiff. It was also held that the suit is barred by limitation.

5. Heard learned counsel on either side.

6. The following points arise for determination in the appeal.

(i) Is the finding of the first appellate court that the execution of Ext.A2 has not been proved, sustainable on the pleadings and evidence?

(ii) Is the finding of the trial court that the suit is barred by limitation, correct?

7. The trial court has proceeded as if the execution of Ext.A2 promissory note is denied by the defendant. However, at paragraph 5 of the written statement the defendant has categorically admitted the execution of Ext.A2 promissory note. Ext.A2 is dated 04.08.2005. His contention is that it was issued as an additional security for two loans of ` 10 lakhs and ` 5 lakhs which were availed in August, 2004 and March, 2005 respectively from the plaintiff. However, there is no evidence to show that there was any transaction between the parties prior to the date of Ext.A2 promissory note. When Ext.A2 promissory note, the execution of which is admitted by the defendant, is dated 04.08.2005, it was for the defendant to prove that it was issued in the circumstances as pleaded by him to secure a previous transaction different from that borne out by Ext.A2. There is absolutely no evidence with regard to the same. The defendant has not adduced any evidence. Incidentally, it is relevant to note that though in Ext.A5 notice issued by the plaintiff specific reference was made to the cheques, in Ext.A7 reply notice send by the defendant the defence as is set up in the written statement was not even hinted. Therefore, on the admission of the defendant of having executed Ext.A2 promissory note, and on his failure to prove the transaction at variance therefrom, Ext.A2 promissory note is only to be upheld. The finding of the trial court regarding the genuineness and execution of Ext.A2 promissory note is thus liable to be interfered with and I do so.

8. It is the contention of the defendant that the plaint claim is barred by limitation. To contend that the suit is not barred by limitation, the plaintiff relies on Section 19 of the Limitation Act . of the reads thus:-

“19. Effect of payment on account of debt or of interest on legacy.―Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made ; Provid