AI Structured Summary
Not yet generated for this judgment
Judgment
A. Subbulakshmy, J.—Plaintiff is the appellant.
The case of the plaintiff is as follows:--
The plaintiff is a contractor and the first defendant placed order with the plaintiff for supply of two drainage carts and four rubbish carts and the
plaintiff has sent those carts under invoice dated 16-11-1972 to the defendants. As per the invoice the defendants had to pay a sum of Rs.
10,634.98. The plaintiff received letters from the Divisional Development Officer. Tiruchy stating that the amount has been sent to the plaintiff by
means of cheques dated 30-11-1973, 14-3-1974 and 3-7-1974. The plaintiff received that letter on 9-1-1975. The first defendant then sent a
letter dated 7-10-1976 stating that the second defendant has misappropriated that amount. In spite of repeated demands, the defendant did not
pay that amount. The plaintiff came to know about the fraud only. On 7-10-1976 and so, the suit is not barred by limitation. The plaintiff also
claims interest at 9% and so, the plaintiff is entitled to a sum of Rs. 14,462.98.
The defendant resisted the suit on the ground that the suit is barred by limitation.
The suit was decreed by the trial Court, on Appeal, the first appellate Court set aside the judgment and decree of the trial Court dismissing the
suit.
As against that, the plaintiff has come forward with the present second appeal.
The substantial questions of law that were framed at the tin;e of admission of the second appeal are :--
i) Whether it is open to the contesting defendants to take up the plea of limitation on the ground that its own officer misappropriated the money?
ii) Whether the plaintiff had pleaded about defendants'' payments by cheque dated 13-11-1973, 14-3-1974 and 3-7-1974, and if so, whether
these payments by cheques would constitute acknowledgments to save limitation?
Counsel for the appellant submitted that the defendant has sent a letter dated 26-8-1974 to the plaintiff under Ex. A.21 stating that the amount
was paid under three cheques, but the plaintiff did not receive any cheque and the plaintiff has also received the letter Ex. A23 from the first
defendant stating that the second defendant has misappropriated the amount and that fraud came to be known to the plaintiff only on 7-10-1976
when Ex. A23 was sent by the first defendant informing the plaintiff that the cheques have been misappropriated by the second defendant and the
suit having been filed on 17-11-1976 is not barred by limitation.
Counsel for the respondents submitted that the goods were supplied to the defendants on 16-11-1973 and there is no acknowledgment of
liability by the defendants subsequently and so, the suit ought to have been filed within a period of three years from 16-11-1972 and the period of
limitation runs from 16-11-1972 and as the suit has not been filed within the period of limitation it is hopelessly barred by limitation.
As per Ex. A1 invoice, the goods were supplied to the defendant on 16-11-1972. The plaintiff takes shelter under the letters dated Exs. A21
and A23 stating that fraud has been played by the defendants and from the date of knowledge of fraud committed by the defendants, the suit is
filed within the time and so, it is not barred by limitation. Ex. A21 is sent by the Divisional Development Officer to the plaintiff on 26-8-1981
stating that on verification of records, it is seen that payments have been made by the Executive Officer, Ariyamangalam Town Panchayat by
means of cheques dated 30-11-1973, 14-11-1974 and 3-2-1974 and they were encashed. The plaintiff sent letter to the defendants on 5-9-1974
under Ex. A14 stating that they have not received payments from the defendants till then and the invoice had been pending for more than 24
months and if the payment is not received within 15 days, they have no alternative but to lake up the matter through Courts of law for recovery of
money. So, after receipt of the letter Ex. A21, the plaintiff sent letter to the defendant on 5-9-1974 demanding payment of the amount from the
defendants. The Collector sent letter Ex. A.16 to !he plaintiff on 23-9-1974 directing the defendants to settle the due giving intimation to their
office. These letters do not in any way constitute acknowledgment of liability as per Section 18 of the Limitation Act which reads that,
Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in
respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person
through whom he derives his title or liability, afresh period of limitation shall be computed from the time when the acknowledgement was so
signed.
In Khan Bahadur Shapoor Fredoom Mazda Vs. Durga Prosad Chamaria and Others, , the Supreme Court lays down that the words used in the
aeknowledgment must indicate the jural relationship of debtor and creditor and it must appear that the statement is given with the intention to admit
such jural relationship. In Valliamma Champaka Pillai Vs. Sivathanu Pillai and Others, , it has been held that.
Under Section 18, Limitation Act (Section 19 of the Travancore Limitation Act) one of the essential requirements for a valid ''Acknowledgment''
is that the writing concerned must contain an admission of a subsisting liability. A mere admission of a past liability is not sufficient to constitute such
an ''acknowledgment''.
The above said principle has also been laid down in L.C. Mills v. Aluminium Corporation of India, AIR 1973 SC 1482. None of the documents
filed by the plaintiff establishes that there was acknowledgment of liability by the defendants within the period of limitation. The plaintiff has clearly
stated in Ex. A14 letter dated 5-9-1974 that if the payment is not received within 15 days, they have no other alternative other than to take up the
matter through Courts of law for recovery of money. To constitute acknowledgment of liability, there must be acknowledgment of liability made in
writing signed by the party and that too must be before the expiry of the prescribed period and only if there is acknowledgment of liability signed
by the party against whom such property or right is claimed, a fresh period of limitation starts from the time of acknowledgment of liability. Ex. A16
does not constitute acknowledgment of liability. It was sent by the Collector''s office to the defendants asking them to settle the dues under
intimation to that office. Sending of letter by the higher authorities to settle the accounts does not constitute acknowledgment of liability. There is no
acknowledgment of liability signed by the defendants so as to invoke Section 18 of the Limitation Act. So, it can be safely concluded that there is
no acknowledgment of liability by the defendants after Ex. A. 1. So, the limitation period runs from the date of the invoice viz., 16-11-1972.
Counsel for the plaintiff submitted that Section 17 of the Limitation Act is applicable to the instant case. As per that Section the date of
limitation starts only when the plaintiff came to know about the fraud committed by the defendant. In the instant case in Ex. A23 dated 7-10-1976
the first defendant has informed the plaintiff that the second defendant has misappropriated the amount and a complaint has been lodged with the
police. Basing upon Ex. A23, counsel for the plaintiff submitted that"" the period of limitation starts from 7-10-1976 and the suit having been filed
within the period of limitation, is not barred by limitation.
The supply was made under Ex. A.1 on 16-11-1972, so, the suit ought to have been filed within a period of three years from 16-11-J972.
The suit has been filed on 18-11-1979. Even with regard to the case of misappropriation of fund by the second defendant, it was informed to the
plaintiff on 7-10-1976 long after the period of limitation. The plaintiff was well aware that the amount due under the invoice Ex. A1 was not paid
by the defendants. Even then, the plaintiff has not chosen to file the suit within the period of limitation. The intimation by the defendants that
payments were made by three cheques was sent on 26-8 1974. The plaintiff ought to have been diligent enough to file the suit within the period of
limitation. It has been clearly stated in Ex. A21 with regard to encashment of the cheques. Then also, the plaintiff was keeping quiet and had come
forward with the suit on 18-11-1979. The plaintiff had not taken any steps within me period of limitation.
In Jagdish Lal v. Madan Lal, ILR (1960) 1324 (sic) it has been held that:
Before a party can avail of the benefit of Section 18 of the Limitation Act, he must show that there has been a fraud upon him and further that on
account of that fraud, he has been kept back from the knowledge of his right to institute a suit or make an application against the person guilty of
such fraud or accessory thereto.
In Chintamoni Moharana and Others Vs. Krushnaparsad Singh and Another, , it has been held that (at page 76):
A person, who in such circumstances desires to invoke the aid of Section 18, must establish that there has been fraud and that by means of such
fraud he has been kept from his knowledge of his right to sue or of the title wherein it is founded.
In Swarnamoyee Dasi Vs. Probodh Chandra Sarkar and Others, , it has been held that (at page 257):
In order to constitute fraud there must be some abuse of confidential position, some intentional imposition, or some deliberate concealment of
facts; a designed fraud, by which a party knowing to whom the right belongs conceals the facts, and circumstances giving that right.
In the case of In Re: Marappa Goundar, , it has been held that (at page 27):
A person desiring to invoke the aid of this section must establish three things viz.,
(1) that there has been fraud;
(2) that by means of such fraud he was kept from the knowledge of his right to sue or apply or of the title on which such right is founded; and (3)
time will be extended under the Section only as against the person guilty of fraud, or who is accessory thereto or who claims through the person
guilty of fraud otherwise than hi good faith and for valuable consideration. These three conditions must concur in proceedings to set aside execution
sales or the grounds set put in Section 18 of the Limitation Act. It is not enough for instance for the plaintiff or the applicant to show that the action
by the defendant or respondent was fraudulent.
In Kasturi Lakshmibayamma Vs. Sabnivis Venkoba Rao and Others, , it has been held that :
Limitation Act(1908): Section 18 --Plea of fraud as a ground of exemption from limitation --, It is necessary for plaintiff to give particulars of fraud
alleged -- General allegations not enough --Particulars should be such as to make out that plaintiff was kept in dark about her right to sue.
In the instant case, Ex. A. 23 letter has been sent long after the period of limitation. The plaintiff ought to have filed the suit within the period of
limitation. The plaintiff cannot take shelter under Ex. A. 23 for invoking Section 17 of the Act. The plaintiff has not established that in spite of
reasonable diligence, it was not in a position to discover the fraud prior to the intimation by the defendants. After supply of goods under Ex. A. 1
invoice the plaintiff has not chosen to file the suit when the payment was not forthcoming. The letter informing the fraud played by the second
defendant, sent long after the period of limitation will not save the period of limitation. Section 17 of the Act supplies only when the plaintiff has
been kept from the knowledge of his right to sue.
Mere intimation by the first defendant to the plaintiff about the misappropriation of cheques by the second defendant that too long after the period
of limitation does not constitute fraud committed by the second defendant. So, the plaintiff is not entitled to take shelter u/s 17 of the Act to
compute the period of limitation. The plaintiff ought to have filed the suit within three years from 16-11-1972. The plaintiff has not chosen to do so.
So, the suit is clearly barred by limitation. The, view taken by the first appellate Court is perfectly in order. There is no infirmity in the judgment and
decree passed by the first appellate Court.
In the result, the second appeal fails and is dismissed. No costs.