A. S. Krishnappa Chettiar & Ors Vs.
Nachiappa Chettiar & Ors  INSC 54 (7 March 1963)
07/03/1963 MUDHOLKAR, J.R.
CITATION: 1964 AIR 227 1964 SCR (2) 241
R 1974 SC 968 (48)
Limitation-Suspension of limitation in cases
not covered by any specific provision of the Act, general principles of-Letter
written by defendant to the trustees-If acknowledgment of liability--Indian
Limitation Act, 1908 (9 of 1908), 88. 15 (1), 19.
The plaintiff, Ramanathan Chettiar, obtained
a decree in O.
S. No. 45 of 1943 for the recovery of an
amount due on promissory note against one Venkatachalam Chettiar and assigned
the decree in favour of the appellant in C. A. 105 of 1961. The execution application
filed by him proved infructuous because the first defendant was adjudicated an
insolvent on February 27, 1945. On September 9, 1946 a composition of the debts
due from the insolvent and his son, the second defendant, was arrived at. To
the deed of composition the second defendant was also a party though he was not
adjudicated an insolvent. Under that deed the creditors, including the four
appellants in this case, agreed to take 40% of the dues. Under the composition
arrangement, the entire property of the defendants, both in India and in Burma
was to vest in four trustees, one of whom was the insolvent that is, the first
defendant to the suit.
Two of the trustees were the present
appellant in C A. No. 104 of 1961 and the fourth trustee was an outsider. The
deed provided for the payment of the reduced amount by the trustees to
different creditors from the income of the properties or by sale or mortgage of
those properties within tour years from April 14, 1947. Tile deed further
provided for the extension of this time limit "according to exigencies and
necessity it the discretion of the first two trustees" i. e., the first
defendant and the appellant Chidambaram Chettiar. The composition contemplated
the realisation of the dues of the creditors front the income or sale or
mortgage of the Barma property, in the first instance. The composition scheme
was accepted by the insolvency court and the adjudication of the first
defendant as insolvent was annulled by the court on December 19, 1946.
Out of the Burma assets very little was
realised within the period of four years prescribed in the composition deed and
the trustees did not extend the time.
242 The appellants, therefore, sought
execution of their decrees against the Indian assets. The last execution
application in O. S. No. 46 of 1943 was dismissed on September 19, 1946, and no
petition was filed thereafter till 'June 13, 1952.
Similarly in the other three appeals
execution applications were filed more than three years after the dismissal of
the previous applications. In each of the execution applications, relief was
claimed only against the second defendant. The Subordinate Judge, before whom
the execution applications were filed, held that the adjustment precluded each
of the appellants from executing his decree for a period of four years from
April 14, 1947 and, therefore, the execution applications were within time. The
High Court disagreed with the Subordinate Judge and holding that the execution
petitions were barred by time allowed the appeals.
The main contention of the appellants in this
Court was that the principle underlying s. 15 (1) of the Limitation Act applied
to the present case and at any rate the letter written by the second defendant
to the trustees operated as an acknowledgment of liability under s. 19 of the
Held, that s. 15 (1) of the Limitation Act is
restricted in its application to a case where the execution of a decree has
been stayed by an injunction or an order. The Limitation Act is a piece of
adjective or procedural law and not of substantive law. Rules of Procedure
cannot be extended by analogy or reference to proceedings to which they do not
expressly apply or could be said to apply by necessary implication. Suspension
of Limitation in circumstances of the kind obtaining in these appeals is
neither explicit nor implicit in s. 15 upon which reliance is placed by the
Govind Naik Gurunathnaik v. Basawannawa
Parutappa, 1. L.R.
1941 Bom. 435, Pulin Chandra Sen v. Amin Mia
Muzaffar Ahmad, A. I.R.1933 Cal. 508, Lakhan Chunder Sen v. Madhusudan Sen,
(1907) 1. L. R. 35 Cal. 209, Nrityamoni Dassi v. Lakhan Chandra Sen, ( 1916) 1.
L. R. 43 Cal. 660, Badruddin Khan v.
Mahyar Khan, I. L. R. 1939 All. 103 and
Managing Committee Sunder Singh Malha Singh Rajput High School, Indore v.
Sunder Sigh Malha Singh Sanatan Dharma Rajput
High School Trust, I. L. R. 1945 Lah. 8, distinguished.
Held, further, that in the present appeals
two different sets of persons, the defendants and the Trustees were liable and their
respective liablities were distinct. To refer to a liablility resting on someone
else was not to acknowledge one's own liability within the meaning of the word
in s. 19.
The defendant No. 2 had not even indirectly
referred to the 243 decree much less to the liability arising under any of
In the circumstances it must be held that the
letter dated April 19, 1949, did not extend the period of limitation.
Khan Bahadur Shapoor Freedom Mazda v. Durga
Prosad Ckamaria  1 S. C. R. 140, held inapplicable
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 104 to 107 of 1961.
Appeals from the judgment and order dated
July 5, 1956, of the Madras High Court in Appeal against order No. 480, 454,
478 and 479 of 1954 respectively.
A.V. Viswanatha Sastri and R. Gopalakrishnan,
for the appellant.
K.N. Rajagopal Sastri and M. S. Narasimhan,
for respondent No. 1.
1963. March 7. The judgment of the Court was
delivered by MUDHOLKAR J.--This appeal and civil appeals Nos. 104, 106 and 107
of 1961 arise out of execution proceedings in four different suits but as they
involve a common question they were heard together by the High Court and by us.
That question is whether the execution applications out of which these appeals
arise are within time.
We propose to treat C. A. No. 105 of 1961 as
a typical case.
The relevant facts thereof are briefly these
In O. S. 46 of 1943 one Ramanathan Chettiar
instituted a suit against one Venkatachalam Chettiar in the court of the
Subordinate Judge of Devakottai, for the recovery of a sum of Rs. 10,285/due on
promisory note dated November 20, 1942 with interest thereon. He eventually
obtained a decree for the full claim. In so far as the second defendant 244 is
concerned, he was made liable for the decrctal amount to the extent of this
interest in the joint family property of himself and his father. The plaintiff
assigned the decree in favour of Chidambaram Chettiar, who is the appellant in
C. A. 105 of 1961. He filed an execution application but the execution
proceedings commenced by him proved infructuous because the first defendant was
adjudicated an insolvent on February 27, 1945. On September 9, 1946 a
composition of the debts due from the insolvent and his son, the second
defendant. was arrived at. To the deed of composition the second defendant was
also a party though he was not adjudicated an insolvent. Under that deed the
creditors, including the four appellants before us, agreed to take 40% of the
dues, except one creditor who was to be paid a little more. The defendants, it
may be mentioned, bad extensive money-lending business in Burma and the bulk of
their property was situate in that country. Under the composition arrangement
the entire property of the defendants, both in India and in Burma was to vest
in four trustees, one of whom was the insolvent, that is, the first defendant
to the suit. Two of the trustees were the present appellants, Chidambaram
Chettiar and Krishnappa Chettiar, appellant in C. A. 104 of 1961. The fourth
trustee was an outsider. The total indebtedness of the defendants, as
ascertained on the date on which the composition was effected, was Rs.
2,16,077/4/8/but it was reduced under the arrangement to Rs. 86,430-13-3. There
are four schedules to the composition deed. Schedule A sets out the names of
the creditors and the amounts due to them, Schedule B sets out the properties
of the defendants and Schedules C and D set out the properties at Leiwo and
Meola respectively in Burma. The deed provides for the payment of the reduced
amount by the trustees to different creditors from the income of the properties
or by sale, or mortgage of those properties within four 245 years from April
14, 1947. The deed further provides for the extension of this time limit
"according to exigencies and necessity at the discretion of the first two
trustees" i.e., the first defendant and the appellant Chidambaram
Chettiar. The arrangement also provides for payment of interest at 5 annas per
mensem in respect of the amounts due on the decrees and 4 annas per mensem in respect
of other outstandings as from April 14, 1947. The composition contemplated the
realisation of the dues of the creditors from the income or sale or mortgage of
the Burma property, in the first instance. Clause to which deals with this
matter runs as follow "In case the properties of Burma firm are not
sufficient to pay the amounts set apart as payable to the creditors at 40 per
cent the individuals Nos. 1 and 2 Trustees shall sell the properties in British
India and set out in the B schedule herein and from out of the sale proceeds
distribute the amount to the creditors. Similarly, after the 40 per cent
amounts have been paid and if there should be any amount of deficiency for the
payment of the 60 per cent amount payable to Krishnappa Chettiar as described
in para 6 supra, even for that also, the individual Nos. 1 and 2 Trustees shall
sell the aforesaid British India properties and pay the aforesaid Krishnappa
Chettiar the entire balance amount." The composition deed contains various
other terms out of which it would be relevant to set out only the following two
"Clause 8 : Until 40 per cent of the
amount is paid to the creditors as aforesaid, the said Trustees, shall at the
time of disbursement of the dividend, pay from the 1st Chitirai of the year
Sarvajith for the annual expenses of the 246 family, a sum of Rs. 600 per annum
to individual No. 4 Trustees Venkatachalam Chettiar and a sum of Rs. 300 per
annum to his son Nachiappa Chettiar for the aforesaid expenses.
Clause 16 : After the annulment of the order
of adjudication herein, the aforesaid Venkatachalam Chettiar shall, in respect
of transfer etc., of management of the properties mentioned in C and D
schedules, execute a general power of attorney in the favour of individual Nos.
1 and 2 trustees and have the same registered." The composition scheme was
accepted by the insolvency Court and the adjudication of the first defendant as
insolvent was annulled by the court on December 19, 1946.
Due to political changes in Burma only very
little was realised out of the Burma assets within the period of four years
prescribed in the composition deed. The trustees who were empowered to extend
the time did not extend it. The appellants, therefore, turned to the Indian
assets and sought execution of their decrees against them. Two contentions were
raised on behalf of the defendants. One was that the Indian assets could not be
sold until the assets in Burma were completely exhausted and the other was that
the execution applications were barred by time.
In O. S. No. 46 of 1943 the last execution
application was dismissed on September 19, 1946 (E. P. No. 109 of 1946). No
execution petition was filed thereafter till the present petition (E. P. No.
117 of 1952). This was filed on June 13, 1952. Similarly in the remaining three
appeals also execution applications with which we are concerned were filed more
than three years after the dismissal of the previous execution applications. It
may be mentioned that originally the appellant as well as appellants in the
other appeals had sought the execution of their 247 respective decrees for the
fall amount. But they amended their petitions later on pursuant to the orders
of the court and restricted their claims to 40 per cent of the amounts due
under their decrees. The appellant Chidambaram filed an affidavit along with
the execution petition and set out the following grounds in support of his
contention that the execution application was within time.
"The trustees were able to realise some
of the assets of the defendants in Burma and to pay a dividend of 10 per cent
to the creditors. I was paid a sum of Rs. 562-4-0 by way of dividend for this
decree on August 10, 1949.
As the rest of the Burma assets of the
defendant could not be realised by the trustees on account of the civil war in
Burma and the land legislations passed there and as there was no prospect of
their being realised in the near future myself and A. S. K. Krishnappa Chettiar
aforesaid as managing trustees under the said composition offered to extend the
period of management by one year provided the defendants would consent to their
Indian assets being realised and distributed among the creditors. But the
defendants were not willing thereto and hence we thought fit to extend the
period of our management. We have filed a petition in I. A. No. 87 of 1951 in
the suit I. P. No. 1 of 1945 to have the said composition scheme set aside and
the 1st defendant re-adjudged as insolvent. The said petition is pending.
7. I am advised that as the said composition
arrangement has failed on account of the assets of the defendants not being
realised and the debts discharged within the four year period mentioned therein
I am in law and in equity entitled to recover the entire amount due to me under
this decree by executing it.
8. The said composition provides for a
maintenance allowance of Rs. 600 and Rs. 30 annually being given to the 1st and
2nd defendant respectively at the time of distribution of the dividends. In
respect thereof a notice was issued by the 2nd defendant on April 19, 1949 to
myself and A.
S. K. Krishnappa Chettiar aforesaid wherein
there is an acknowledgment of liability in respect of the several debts
mentioned in the said composition. Further the trustees have, acting under the
authority given to them by the defendants under the said composition, paid me
Rs. 562-4-0 on August 10, 1949 by way of dividend for this decree and have duly
entered the same in the accounts maintained by them. Moreover I could not
execute the decree during the four years from April 14, 1947 or any extended
period during which the trustees had to manage, realise and distribute the
assets of the defendants. There is therefore no question of limitation.".
Similar grounds were set out in the
affidavits filed by the other appellants also.
It may be mentioned that in each of the execution
applications relief was claimed only against the second defendant because in
insolvency petition No. 87 of 1951 filed by some of the creditors the first
defendant, was readjudicated an insolvent by the court on August 3, 1954.
The execution application was, as already
stated, opposed by the second defendant firstly on the ground that the composition
arrived at between him and his father on the one hand and the creditors on the
other was still in force, that the arrangement was irrevocable and operated as
a complete discharge of the liability of the defendants for all time.
The second ground was that the execution
application was barred by time.
249 The precise pleas of the second defendant
regarding limitation were as follows :
(a) that the adjudication of his father as an
insolvent and the pendency of insolvency proceedings against him would not
affect limitation in so far as he was concerned;
(b) that the receipt by the appellant and
other creditors of certain amounts as dividends in August, 1949 would not
extend the period of limitation for execution proceedings;
(c) that the acknowledgment relied upon is
"'wholly wrong, misconceived and untenable." According to him there
was no acknowledgement of liability of any kind in the notice referred to in
the affidavit much less the liability of the second defendant to discharge the
decree which had in fact become extinguished and effaced by reason of the
composition arrived at on September 9, 1946.
In the course of the arguments before the
executing court it was urged on behalf of the appellants in those appeals that
the four years within which the trustees were required to realise the Burma
properties and pay off the debts of the creditors must be regarded as a period
during which the execution of the decrees was stayed and that consequently on
the principles underlying s. 15 of the Indian Limitation Act, 1908, that period
should be deducted from computing the period of limitation for preferring execution
The Subordinate judge, before whom the
execution applications were filed, upheld this contention and held that the
execution applications were within time. He also held that the execution
applications arrived at between the parties operated as an adjustment 250 of
the decree on the date on which that composition was effected or from the date
on which the adjudication was arrived at and that though the composition could
not be certified to the executing court under 0. XXI, r. 2, C. P.
C. within the time permitted by law, it could
be certified even now at the instance of the decree-holder because it was open
to the decree holder to certify an adjustment at any time he liked. According
to the learned Subordinate judge, the adjustment precluded each of the
appellants from execution his decree for a period of four years from April 14,
1947 and, therefore, the execution applications were within time. The High
Court, however, disagreed with the Subordinate judge on both the grounds and holding
that the execution petitions were barred by time allowed the appeals.
It may be mentioned that neither of the two
courts below has considered the contention of the appellants in these appeals
that the letter dated April 19, 1949 sent by the second defendant to two of the
trustees operated as an acknowledgment of their liability or that dividends
paid to the appellants by the trustees in August, 1949 operated to extend the
time of limitation.
Mr. Viswanatha Sastri, who appears for the
appellants in these appeals, has raised only two contentions. The first is that
the principle underlying s. 15 (1) of the Limitation Act is applicable to a
case of this kind and that, therefore, the execution applications are within
time. The second is that at any rate the letter dated April 19, 1949, written
by the second defendant to the trustees operates as an acknowledgment of
liability under s. 19 of the Limitation Act and, therefore, saves the
limitation in respect of all the execution applications except the one out of
which C. A.
No. 104 of 1961 arises. According to Mr.
Sastri the composition of a decretal debt does not amount to an adjustment or
satisfaction of a decree until the acts required to be 251 done there under
have been performed. Here the composition scheme required payment of 40 per
cent of the decretal debts by the trustees to the craditors. According to him,
until that condition was fulfilled the original decree cannot be said to have
been satisfied. Since the decrees herein involved could not be regarded as
having been satisfied they are still alive. Then, according to Mr. Sastri,
where a composition scheme prescribes the period during which a condition has
to be performed, till the expiry of the period or performance of the condition
the operation of the decrees must be deemed to have been stayed. For, during
this period it would be incompetent to the decree-holders to execute their
decrees. Such period could therefore be deducted by applying the principles
underlying s. 15 (1) of the Limitation Act from computing the period of
limitation for filing a fresh execution application. He concedes that here the
composition scheme not having been certified to the execution court, the
defendants would not have been able to resist an execution application if made
within the period of four years specified in the deed of composition. But the
composition being binding on the appellants, they would have laid themselves
open to suits for damages at the instance of the defendants if they had
proceeded to execute their decrees within this period. Section 15 (1) of the
Limitation Act runs thus :
"15 (1) : In computing the period of
limitation prescribed for any suit or application for the execution of a
decree, the institution or execution of which has been stayed by injunction or
order, the time of the continuance of the injunction or order, the day on which
it was issued or made, and the day on which it was withdrawn, shall be
excluded." It is clear from its terms that it is restricted in its
application to a case where the execution of a decree 252 has been stayed by an
injunction or an order. By no stretch of imagination can it be said that the
acceptance by the insolvency court of the composition operated as a stay of
execution of the decrees for the period of four years referred to in the deed
or as an injunction. Further, the second defendant was not a party to the
insolvency proceedings and could, therefore, not have been entitled to the
benefit of the order of the court accepting the scheme of composition.
In support of his contention that the
principles underlying s. 15 (1) are applicable to a case like the present one,
Mr. Sastri has strongly relied on the decision in Govindnaik Gurunathnaik v.
Basauannawa Parutappa (1). There, Beaumont C. J., has observed at P. 437 :
"Section 15 of the Act recognizes the
principle that in computing the period of limitation prescribed for an
application for the execution of a decree, any period during which the
execution of the decree has been stayed must be excluded; and it would
certainly seem right to apply a similar principle to applications in a suit
which has been stayed;
in terms., however, the section does not
apply. The only authority on the point, to which we have been referred, and
which was referred to in the lower Courts, is Pulin Chandra Sen v. Amin Mia
Muzffar Ahmad (2)." Saying that this decision had stood for some years and
had not been dissented from the learned Chief justice observed "I would
rather base the appellant'scase on the ground that the right to appear for a
final decree was suspended duringthe period in which the suit was stayed. Sucha
principle was applied by the CalcuttaHigh Court (1) I.L.R, 1941 Bom. 435.
(2) A.I.R. 1933 Cal. 508.
253 in Lakhan Chunder Sen v. Manhusudan Sen
(1) affirmed by the Privy Council in Nrityamoni Dassi v. Lakhan Chandra Sen
(2)." It would thus appear that the learned Chief Justice based his
decision really on s. 14 of the Limitation Act. In both the cases referred to
by the learned Chief Justice the provisions of s. 14 of the Limitation Act were
In Pulin Chandra Sen's case(3), the facts
were these: The next friend of it minor instituted a suit upon a mortgage but
died after the preliminary decree was passed. No new next friend was, however,
appointed in his place. The minor made an application for passing a final
decree within 3 years after attaining majority, but three years after the
period of grace fixed by the preliminary decree. The High Court, while holding
that though the erstwhile minor was not entitled to claim the benefit of s. 6
of the Limitation Act, held that the execution application must be regarded as
within time since it had been made within three years from the date when the
right to apply accrued to him on his attaining majority. No doubt, this is a
case where in effect the court has applied the principles underlying s. 6
though it was clearly of opinion that s. 6 in terms did not apply. There is no
discussion of the point at all and, therefore, we do not think that this is a
decision which needs to be considered.
The next two decisions relied on are
Badruddin Khan v. Mahvar Khan (4) and Managing Committee Sundar Singh Malha
Singh Rajput High School, Indora v. Sundar Singh Malha Singh Sanatan Dharma
Rajput High School Trust (5). In both these cases the court applied what
according to it were the general principles underlying s. 15 of the Limitation
Act, though the facts of these cases do not strictly fail within the purview of
that section. The question (1)(1907) 1 L.R. 35 Cal. 209.
(3)A.1 R. 1933 Cal, 508.
(2) (1916) I.L R. 43 Cal. 660, (4) I.L.R.
1939 All 103 (5) I. L. R. 1943 Lah. 8.
254 is whether there is any well-recognized
principle hereunder the period of limitation can be regarded as being suspended
because a party is prevented under certain circumstances from taking action in
pursuance of his rights. The Limitation Act is a consolidating and amending
statute relating to the limitation of suits, appeals and certain types of
applications to courts and must, therefore, be regarded as an exhaustive Code.
It is a piece of adjective or procedural law and not of substantive law. Rules
of procedure, whatever they may be, are to be applied only to matters 'to which
they are made applicable by the legislature expressly or by necessary implication.
They cannot be extended by analogy or reference to proceedings to which they do
riot expressly apply or could be said to apply by necessary implication. It
would, therefore, not be correct to apply any of the provisions of the
Limitation Act to matters which do not strictly fall within the purview of
those provisions. Thus, for instance, period of limitation for various kinds of
suits, appeals and applications are prescribed in the First Schedule. A
proceeding which does not fall under any of the articles in that schedule could
not be said to be barred by time on the analogy of a matter which is governed
by a particular article, For the same reasons the provisions of ss. 3 to 28 of
Limitation Act cannot be applied to situations which fall outside their purview.
These provisions do not adumbrate any general principles of substantive law nor
do they confer any substantive rig, its on litigants and, therefore, cannot be
permitted to have greater application than what is explicit or implicit in
them. Suspension of limitation in circumstances of the kind obtaining in these
appeals is neither explicit nor implicit in s. 15 upon which reliance is placed
on behalf of the appellants. We are, therefore, unable to accept the first
argument of Mr. Sastri.
Coming to the second argument of Mr. Sastri
it would be useful to reproduce the relevant portion 255 of the letter dated
April 1.9, 1949, on which reliance is placed :
"The properties of our client's family
and his father, Venkatachalam Chettiar's share of properties have vested in you
in the capacity of Trustees as per the composition scheme of arrangement
effected on September 9, 1946 and you are managing the same, and you have to
pay Rs. 300 per annum to our client from 1st Chitrai of Sarvajit year (April
14, 1947) for his family expenses as provided in the scheme of composition and
you have paid Rs. 300 and for the year Sarvajit and have obtained a receipt
there for from my client. You have not paid the sum of Rs. 300 due for the year
Sarwadhari to our client though he demanded you many times. As it is learnt
that individual No. 2 out of you, are raising non maintainable objections and
the sum of Rs. 300 due for the year Virodhi, still remains to be paid, I have
been given instructions to demand the total amount of Rs. 600 payable for the
aforesaid years. So you should pay the amount to my client and obtain a receipt
therefore within one week after the receipt of this notice. Further you have
till now collected Rs. 17,500 as per the scheme of arrangement and though you
have received the amount long time ago, you have not paid to the creditors
their dividend amounts, you are bound by law and equity to pay interest to the
aforesaid amounts You are hereby informed that as you have not paid to the
creditors the dividend amounts my client is put to a heavy loss and that you
are bound to bear all the losses that may be caused thereby and make good the
losses ; you should immediately pay off the creditors the dividends and in
default my client will have to launch 256 proceedings against you and seek
reliefs through Court." This letter was written by the, vakil of the
second defendant to the Trustees demanding payment of the maintenance allowance
due to the second defendant. The second object of this letter was to require
the trustees to pay out of the funds in their hands dividends due to the
various creditors under the composition scheme. Mr. Sastri contends that this
letter contains a definite admission of the jural relationship between the
defendant on the one hand and the creditors on the other i. e., the
relationship of creditor and debtor and, therefore, this is an admission of
liability under the decrees. Relying upon the decision of this Court in Khan
Bahadur Shapoor Freedom Mazda v. Durga Prosad Chamria (1), he says that the
essential requirement for sustaining a plea of acknowledgment under s. 19 of
the Limitation Act is that the statement on which it is sought to be founded
must relate to a subsisting liability, indicate the existence of jural
relationship and must be intended, either expressly or implied, to admit that
jural relationship. Where such jural relationship is admitted expressly or
impliedly, he contends, that the mere fact that the precise nature of the
liability is not mentioned would not prevent the acknowledgment from falling
within s. 19.
That was a case in which the mortgagor had
written to his creditor a letter to the following effect "My dear
Chandni Bazar is again advertised for sale on
Friday the 11th inst. I am afraid it will go very cheap. I had a private offer
of Rs. 2,75,000 a few days ago but as soon as they heard it was advertised by
the Registrar they withdrew. As you are interested why do you not take up the
whole. There is only (1) (1962] 1 S.C.R. 140.
257 about 70,000 due to the mortgagee-a
payment of 10,000 will stop the sale.
Yours sincerely, Sd/J. C. Galstaun." The
q qestion to be considered was whether this amounted to an acknowledgment of
the mortgagee's right. This Court held that it did amount to an acknowledgment
and observed thus :
"It is thus clear that acknowledgment as
prescribed by s. 19 merely renews debt; it does not create a new right of
action. It is a mere acknowledgment of the liability in respect of the right in
question ; it need not be accompanied by a promise to pay either expressly or
even by implication. The statement on which a plea of acknowledgment is based
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. Words
used in the acknowledgment must, however, indicate the existence of jural
relationship between the parties such as that of debtor and creditor, and it
must appear that the statement is made with the intention to admit such jural
relationship. Such intention can be inferred by implication from the nature of
the admission and need not be expressed in words.
If the statement is fairly clear then the
intention to admit jural relationship may be implied from it. The admission in
question need not be express but must be made in circumstances and in words
from which the court can reasonably infer that the person making the admission
intended to refer to a subsisting liability as at the date of the statement. In
construing words used in the statements made in 258 writing on which a plea of
acknowledgment rests oral evidence has been expressly excluded but surrounding
circumstances can always be considered. Stated generally courts lean in favour
of a liberal construction of such statements though it does not mean that where
no admission is made one should be inferred., or where a statement was made
clearly without intending to admit the existence of jural relationship such
intention could be fastened on the maker of the statement by an involved or far-fetched
process of' reasoning. Broadly stated that is the effect of the relevant
provisions contained in s. 19, and there is really no substantial difference
between the parties as to the true legal position in this matter.' In our
opinion, this case is not of assistance co the appellants. In the appeals
before us though there was a personal liability on the defendants under the
various decrees, their liability which was created by the composition deed was
only on properties in which they had, consequent on the creation of a trust
under the composition deed, only a beneficial interest. This new liability had
to be discharged by the trustees in whom the legal title to the property vested
Thus there were two different sets of persons who were liable, the defendants
and the Trustees and their respective liabilities were distinct. What the
defendant No. 2 has referred to is the liability of the Trustees arising under
the terms of the deed of composition and could be enforced only against them.
To refer to a liability resting on someone else is not to acknowledge one's own
liability within the meaning of the word in s. 19.
The defendant No. 2 has not even indirectly
referred to the decree much less to the liability arising under any of them.
In the circumstances we must hold that this
letter does not extend the period of limitation. For these reasons 259 we
uphold the decision of the High Court and dismiss each of these appeals with
costs. There will, however, be only one hearing fee.