Report No. 89
Section 20: Acknowledgment or Payment by Another Person
20.1. Section 20.- The two sections discussed in the preceding chapte.-sections 18 (acknowledgment) and 19 (paymen.-operate in situations of considerable variety. Thus, in business and commerce, where debts and other liabilities are dealt with through agen.-the more so when the debtor is a corporate bo.-there might, be cases where more persons, than one share the burden of a liability, but the correspondence is carried on by only one of them. Hindu law also presents certain peculiar situations.
There may be limited owners of property, on the expiry of whose limited interest others will succeed to the property. Or, which is the more common case n.-a liability may have been incurred by or on behalf of a Hindu undivided family as such, but its affairs are (as is the usual practice) managed by the manager, who transacts dealings on its behalf.
In all these cases, the question may arise whether, and if so, how far, a person is bound by an acknowledgment signed by another person, e..-(i) agent, (ii) another joint contractor, etc. (iii) or limited owner in Hindu law or manager of a Hindu undivided family. To put it differently, to what extent is a person vicariously bound by an acknowledgment or payment made by another person, in the context of the statutory provisions under which the acknowledgment or payment has the effect of giving a fresh period of limitation.
Section 20 seeks to answer these questions, in three sub-sectio.-Sub-section (1) gives, to the express "agent duly authorised in this behal.-an expression that occurs in section 18 (acknowledgment) as well as in section 19 (paymen.-an extended meaning, whereunder, in the case of a person under disability, it includes his lawful guardian, committee or manager or an agent of such guardian, committee or manager.
Sub-section (2) of section 20 reads as unde.-
"(2) Nothing in the said section [i.e., sections 18-19] renders one of several joint contractors, partners, executors or mortgagees chargeable by reason only of a written acknowledgment signed by, or of a payment made by, or by the agent of, any other or others of them."
Sub-section (3) deals with the special situation arising under Hindu law, mentioned above. Brief.-(a) an acknowledgment or payment in respect of liability by a limited owner of property governed by Hindu law is valid as against a reversioner succeeding to such liability and, (b) an acknowledgement or payment in respect of a liability (incurred by or on behalf of a Hindu undivided family), made by the manager of the family for the time being is deemed to have been made on behalf of the whole family.
This is a statement of the significant features of the section. We now proceed to consider some of the important points.