N.A.M. Appasami Pillai vs Morangam Muthirian and Another

Venkatasubba Rao, J.—The questions that arise are, first, whether the payment relied upon by the plaintiff has the effect of preventing the

bar of limitation; secondly, in the alternative, whether there is such an acknowledgment of liability as is sufficient for that purpose.

The plaintiff, alleging that a certain sum was due to him, has filed the suit. The defendant pleads that there was a mediation at which an amount

smaller than the sum claimed, was fixed as due by him and that he paid the sum so fixed in full discharge of the plaintiff''s claim. The plaintiff

contends that his suit is not barred as it has been brought within 3 years from the date of the payment. The defendant wrote a letter mentioning the

fact of the payment and the plaintiff''s further contention is, that it contains a sufficient acknowledgment. The lower Court has found on the issues of

fact, that the defendant has failed to prove that there was a mediation and that on the date of the payment there was still a balance due.

In the letter in question, the defendant, alleging the mediation, states expressly that beyond the amount he is remitting, no further sum is due; in

other words, that the payment is in full discharge of the debt. Does such a payment have the effect u/s 20 of the Limitation Act of removing the

statutory bar? This turns upon the view to be taken of the nature of the part-payment referred to in that Section. It is enacted that a part-payment

saves the Statute, upon the principle that it implies an admission of right and an acknowledgment of liability? The plaintiff contends that the section

does not require that the payment should be one from which an acknowledgment could be inferred, and for that contention he finds support in the

fact that in the case of part-payment of the principal, the section does not say that it should be made as such, the omission being significant as those

words occur in connection with the payment of interest. But I think it must be regarded as a fundamental principle that the Statute is not checked,

unless the part-payment is made as an admission of a right in the recipient to the balance of the debt; in other words, the payment must be such as

to amount to an acknowledgment of liability. In English law a part-payment accompanied by a denial of the debt is not sufficient; it is said that the

principle on which a part-payment saves the statute is, that it admits a larger debt to be due at the time of the part-payment, in other words, that it

recognises or affirms the indebtedness. It would no doubt be unsafe to construe or give effect to the provisions of an Indian Statute in the light of

the English principles; but the English Judges have pointed out that it is a principle applicable to part-payment under all statutes of limitations, that it

must be made as an admission; of right: this is thus a principle of universal application and does not depend for its validity upon the wording of a

particular enactment. If a debtor makes a payment which the evidence discloses is only in part, there being nothing in the circumstances to show

that he was unwilling to treat it as part-payment, the Court may, and does very properly infer that the payment implies an admission of a right in the

payee to the balance of the debt. Thus from a part-payment unaccompanied by an express denial or repudiation, an admission of right may be

inferred. But where, without there being a bare naked payment, the debtor expressly states that the payment is in full discharge, in such a case, far

from its amounting to an admission of right, there is an unequivocal denial of it.

In Harlock v. Ashberry (1882) 19 Ch. D. 539 it was held that a payment to come within Sections 2 and 24 of 3 and 4 Will. 4 c. 27 and

consequently within the supplementary enactment of 1 Viet. c. 28, must be one made by the mortgagor or some person bound to pay on his

behalf. Holker, L.J. refers to the payment in question as one enforced against a tenant by the mortgagee and says that it cannot amount to a

payment within the meaning of the section. For that the reason is thus stated:

What I have always understood to be the principle of the enactments and my view seems to be affirmed by the decision in Chinnery v. Evans

(1864) 11 H.L.C. 115 : 11 E.R. 1274 is, that the payment is to amount to an acknowledgment, and if that is so, it cannot be said by any possibility

that the payment in this case was a payment amounting to an acknowledgment,

That is to say, a payment made by a tenant does not imply an admission by the mortgagor of the mortgagee''s right and such a payment

therefore has not the effect of preventing the bar of limitation. Brett, L.J. also declares that the reason for not accepting the payment as valid is, that

in all statutes of Limitations the principle on which they are founded is, that in those cases in which a payment is allowed to take the case out of the

operation of the Statute of Limitations, it must be such a payment as amounts to an acknowledgment of liability. Jessel, M.R. makes an observation

to the same effect. It would be, as I have said, unsafe to construe the provisions of the Indian Limitation Act in the light of the Common Law

doctrine as to part-payment; but as the learned Lord Justices point out, the principle I have referred to underlies all Statutes of Limitations and is of

universal applications. Further the decision is valuable from another point of view. In the English Statute there construed, as in the Indian Limitation

Act, what takes the case out of the Statute is a bare payment and nothing is said about its involving an admission of liability. That decision therefore

I regard, apart from the principles enunciated there, as an authority on the construction of our Act. See also Taylor v. Hollard (1902) 1 K.B. 676.

In Brajendra Kishore Roy Chowdhury v. Hindustan Co-operative Insurance Society, Ltd. I.L.R.(1917) 44 Cal. 978 both Sanderson, C.J. and

Mookerjee, J., refer to the principle that a part-payment keeps alive a debt, as it involves an admission of the right (pp. 991 and 1000). In

Sakharam Manchand v. Keval Padamsi I.L.R.(1919) 44 Bom. 392 the learned Judges, while holding that certain payments saved the claim, point

out that those were not intended to be made in full satisfaction (p. 396). Rustomji in his work on Limitation takes the view that I have here

expressed.

In Section 20 in the case of payment of interest, both debt and legacy are mentioned, whereas the legacy is left out where the section deals with

part-payment. Mitra thinks that the reason for this distinction is, that under the law a legacy is not necessarily payable in full and a payment

therefore of a part of the legacy by the executor does not involve the admission on his part that a larger amount is payable (Mitra on Limitation,

Vol. I, 6th Edn., page 413). There is in this passage a recognition of the principle to which I have adverted, although I must say that Mitra goes on

to observe:

It would seem that tinder Section 20, the creditor would be entitled to a fresh period of limitation, although the debtor intended the payment as a

payment of the whole debt in full (p. 416).

This remark is inconsistent with his earlier observation, and for my part, I am prepared to hold that the principle laid down by the Lord Justices

in Harlock v. Ashberry (1882) L.R. 19 Ch. D. applies.

Then remains the second point, is the acknowledgment contained in the letter in question sufficient? What the defendant asserts there is in effect:

There was on my part a past liability for a larger sum. But owing to certain claims I made, the mediators fixed my debt at a reduced amount. For

that sum alone I am liable, which I am remitting.

In regard to the original debt there is no more than a bare recital of a past event. The real question is, can the whole statement taken together be

construed as an admission of subsisting liability? Far from there being an admission, there was a distinct assertion, amounting to a denial of the

original amount being due. It has been held that there is no rule of law that an admission of a past liability unaccompanied by an allegation of

discharge should in all cases be interpreted as an admission of subsisting liability. The question in each case is, is it a proper inference to draw from

the facts and circumstances, that the debtor intended to make an admission that on the date it was made, the debt was existing? In Kandaswami

Reddi v. Suppammal I.L.R.(1921) 45 Mad. 443 : M.L.J. 268 and The Official Assignee of Madras v. Subramania Aiyar (1923) 46 M.L.J. 1.

This is a stronger case; the debtor has not to rely upon a mere negative act, namely, the absence of an allegation that the debt has since become

discharged, but there is a positive assertion that the original liability has since ceased. A statement such as:

I owed you six months ago Rs. 100, but to-day I owe you only Rs. 50"" cannot by any stretch of language be construed as an admission that the

amount due on the date it was made, was Rs. 100. (See the observations of White, C.J., in K. Sheik Meera Sahib and Co. Vs. Sheik Naina

Lubbay Marcayar and Others, .

The Lower Court has rightly dismissed the plaintiff''s suit and the Civil Revision Petition is dismissed. Mr. S. Tyagaraja Aiyar, being unable

owing to some difficulty to appear for the respondents, has argued the case as amicus curiae and I must express my obligation to him. I make no

order as to costs as the respondents are unrepresented.