Maharashtra Agro-Chemicals and Fertilizers vs Deoram Baburao Gavade (Deceased) through L.R.''s

V.A. Mohta, J.—This Second Appeal is filed by the original plaintiff-Messrs. Maharashtra Agro-Chemicals and Fertilizers, whose suit for recovery of Rs, 4,928/- against original Defendant Deoram (since deceased)-the Respondent, has been dismissed in Appeal by the District Judge, Pune, on the ground of limitation.

The defendant used to purchase goods from the plaintiff on credit and used to make payment of the price from time to time. Purchases continued upto 1970, Some payments were made thereafter. On 11th August, 1975, accounts were settled. A sum of Rs. 4,400 was found due from the defendant. Defendant put signature on the revenue stamps affixed on the account book, endorsing that a sum of Rs. 4,400 was due and that he would repay the said amount on or before ensuing Diwali. Amount was not paid Legal notice was issued but with no response, and hence, suit for recovery of the principal sum along with interest at the rate of 12% per annum was filed in the year 1976. Defendant resisted the suit on the ground that his signature was obtained by mis-representation and on the false promise that 5% commission would be deducted, At the trial, the Plaintiffs partner entered into witness box and proved several documents including the endorsement, dated 11th August, 1975, (Exhibit 26). Defendant chose not to enter into having been obtained by the misrepresentation. Consequently, decree for the Principal sum with interest was granted.

The defendant appealed, and, for the first time, raised a contention that the suit was barred by the limitation since the endorsement, dated 11th August, 1975, was an acknowledgment of a time-barred debt which did not save limitation in view of Section 18 of the Limitation Act. The Appellate Court, allowed this point to be raised, upheld the point and dismissed the suit on that ground. Hence, this Second Appeal by the original Plaintiff.

I have heard the parties and perused the original Exhibit 26. I am satisfied that Exhibit 26 is not merely an acknowledgment of a time-barred debt but it contains a fresh promise to pay the said debt on or before the ensuing Diwali. The case will therefore be clearly governed by Section 25(3) of the Contract Act, which, unfortunately, does not seem to have been brought to the notice of the learned District Judge. u/s 25(3) a debtor can enter into an agreement in writing to pay the whole or part of a debt of which the creditor might have enforced payment, but for the law of limitation. While, mere acknowledgement u/s 18 of the Limitation Act, in order to be valid, must be made before the expiry of the period of limitation, a promise, u/s 25(3) to pay the debt may be made even after the debt has become barred by the limitation. A time-barred debt can form a good consideration because, the debt is not extinguished although the remedy is lost. That Section 25(3) does not to prove a dead right but to resuscitate the remedy to enforce the payment by a suit. The right of the lender to receive payment and the obligation of borrower to repay never dies by lapse of time. That dies is the remedy.

The suit filed within three years from Exhibit 25 therefore could not be dismissed on the grounds of limitation.

In the result, this Second Appeal is allowed. The judgment and decree passed by the learned District Judge is quashed and set aside, and in its place the following order is passed :

The suit of the Plaintiff is decreed with costs throughout. Defendant to pay a sum of Rs. 4,400 to the plaintiff together with interest at the rate of 6% percent per annum from the date of the suit till realisation of the amount.