Rama Cotton Rice and Dall Mills vs Chanan Dass and Sons

Harjit Singh Bedi, J.—This is a plaintiff''s Second Appeal.

The plaintiff/appellant M/s Rama Cotton Rice and Dall Mills, filed a suit for the recovery of Rs. 3,000/- advanced as loan to the defendant/respondent M/s Charan Dass and Sons. The suit was contested by the respondent on various grounds. It was denied that any loan had been taken from the appellant and that in any case, the suit was barred by limitation. The trial Court framed the following issues:-

Whether the plaintiff-firm is a registered one and Todar Mal is a registered partner of the said firm? OPP.

Whether suit is maintainable in the present form as per para 2 of the replication? OPP Objected to.

Whether the plaintiff advanced the amount of Rs. 2,000/- to the defendant-firm. If so, through whom? OPP.

If issue No. 3 is proved whether defendant-firm is not liable to pay the alleged amount? OPD.

Whether the suit is within limitation? OPP.

Whether Charan Dass was sole proprietor of defendant-firm. If so to what effect? OPD.

Whether plaintiff-firm is entitled to interest. If so at what rate and to what amount? OPP.

Relief.

The learned Subordinate Judge, decided Issue Nos. 1 to 4 and 6 and 7 in favour of the appellant, but decided Issue No. 5 with regard to the question of limitation against the appellant and consequently, dismissed the suit on that short ground. Aggrieved thereby, the appellant filed a first appeal and as the only issue against it was Issue No. 5, the question of limitation alone was involved. It was argued before the lower Appellate Court that while submitting the Income Tax Return in the year 1975, the respondent-firm had acknowledged the suit amount every year upto the 6th of February, 1969 i.e. when the debt fell due and as the suit had been filed on 11th January, 1977, it was clearly within limitation. Reliance was primarily placed on the Income Tax Returns for the years 1970-71 to 1976-77, in which the respondent is stated to have acknowledged his liability to pay the debt. The Appellate Court, however, disagreed with the contention raised by observing that the condition for the applicability of Section 18 of the Limitation Act, 1963 (hereinafter called ''the Act'') had not been complied with. The appeal was, accordingly, dismissed.

Mr. Suvir Sehgal, the learned counsel for the appellant appearing in this Second Appeal has argued that the statement made in the Income Tax Return which had been produced in Court, though not exhibited, was sufficient acknowledgement of debt to save limitation and as such, the finding of the Courts below that the suit was barred by time, was wrong. He has pointed out that a presumption could be drawn that the Income Tax Returns which had been produced in the Court by the dealing hand, had been signed by the respondent-firm.

I have considered the argument of the learned counsel for the appellant. Section 18 of the Act, prescribes rigid conditions for its applicability and inter alia provides that in order to amount to an acknowledgement to save limitation, a writing has to be signed by the parties or by any person through whom he derives his title or liability and a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. Explanation (b) to the Section defines the word "signed" to mean signed either personally or by an agent duly authorised in this behalf. Admittedly, there is no document signed by the respondent on record which could be said to be acknowledgement in terms of Section 18 of the Act. It does appear that the Income Tax Returns were produced in Court in a sealed cover at the time of the evidence but they were sent back after their perusal and were not exhibited. The Court is, accordingly, left guessing on the lack of evidence as to whether the Income Tax Returns had been signed or not. Even the official of the Income Tax Department who produced the returns was not called upon to depose as to whether they had been signed by any person duly authorised on behalf of the respondent-firm. I am, thus, of the opinion that no fault can be found with the judgments of the Court below. The appeal is, accordingly, dismissed. No costs.