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Suit No. 1029 of 1952, (filed at the Chief Court of Sind at Karachi), decided on 29th May 1964.
, ----S. 19‑Acknowledgement of unpaid amount of advance‑Not destroyed by claim of set‑off-- Acknowledgement with regard to amount due‑Need not be accompanied by a promise to pay.
Rustamji's Commentary on Limitation, 6th Edition, page 191 ref.
Hakumat Singh v. Nenumal 22 S L R 117 ; Chhaterdhar v. Nasib Singh 78 I C 919 ; Yenkata v. Parthasara dhi I L R 16 Mad. 220 ; Messrs Yakub Habib v. Messrs A. A. Sattar P L D 1958 Kar. 534 and Muhammad Akbar Khan v. Province of West Pakistan P L D 1959 Lah. 295 distinguished.
Hassan A. Shaikh for Plaintiff.
Ihsanul Haq and Dingomal for Defendants.
Dates of hearing : 26th February, 9th March, 27th April, 4th and 11th May 1964.
This is a suit for the recovery of the principal amount of Rs. 20,500 and interest amounting to Rs. 6,697‑8‑0 in all Rs. 27,197‑8‑0.
2. The plaintiff alleged that he had advanced a sum of Rs. 45,500 to the defendants on 13th July 1948, as a loan ; that out of this amount the defendants repaid Rs. 25,000 on 31st August 1959 and the balance of Rs. 20,500 had remained unpaid. He has claimed interest at 6 Y. from 1‑8‑48 to 31‑8‑49 on Rs. 45,000 and further interest on Rs. 20,500 from 1‑9‑49 till the date of the suit. It is further averred that by a letter of 19th June 1952, the defendants acknowledged the credit balance of Rs. 20,500 as being due to the plaintiff. The cause of action, it is alleged, first arose on 31‑8‑49 because the amount was promised to be repaid within a fortnight. It further arose on 19th June 1952 when the defendants acknowledged the balance of the amount as being due to the plaintiff. The plaintiff thus claims the amount of the principal and interest and costs of the suit and such further relief which the Court may deem fit to grant. This suit was instituted on 5‑9‑52.
3. The defendants Messrs M. G. Kadir & Co. filed their written statement on 3rd March 1953. In this it was denied that the defendant had borrowed the sum of Rs. 45,500 on 13‑7‑48 or that the payment of Rs. 25,000 on 31‑8‑49 was towards this alleged loan. It was averred that two sums of money amounting to Rs. 45,500 were advanced by the plaintiff to the defendants on 10th July 1948 for purchase of cotton seeds ; that later on "these transactions mutually stood rescinded and the entire amount was allowed to be kept in account to be adjusted at the time of accounting of .partnership concern." It was alleged that for the season 1948‑49 two partnership concerns were run, one at Hyderabad (Sind) and the other at Mehrabpur. In both of these the defendants had half share whereas the plaintiff had 1/4th share and another gentleman named Zahid Hussain had the remaining 1/4th ‑share that the concern at Hyderabad was managed by Zahid Hussain and he was its accounting party and the concern at Mehrabpur was managed by the plaintiff and he was its accounting party. It was further alleged that the accounts of these concerns had not yet been rendered and the papers of Mehrabpur concern were with the plaintiff who was evading accounting. It would thus appear that the plea in para. 11 of the written statement that the entire amount of Rs. 45,000 was allowed to be kept in account with the defendant to be adjusted at the time of accounting had reference to these partnerships. It was further alleged that out of the aforesaid sum of Rs. 45,500 the plaintiff took back a sum of Rs. 25,000 on 31st August 1949 alleging urgent need and on a representation that the Mehrabpur concern was resulting in loss and that according to his estimates his liability, having regard to this share, would not exceed Rs. 20,500 and that, therefore, the plaintiff was leaving this sum of Rs. 20,500 for adjustment at the time of accounting of the partnership concerns.
4. It was further alleged that on 2nd July 1950 the plaintiff being in need of money was advanced a sum of Rs. 5,000 by way of loan. It may be noted that the defendant later on filed a separate suit for the recovery of this Rs. 5,000 being Suit No. 826/53 which was decreed ex parte.
5. It was further alleged by the defendants that from the returns furnished with the Income‑tax Department there appeared a loss of about Rs. 52,000 in the Mehrabpur concern but as the plaintiff failed to produce the account books the Income‑tax Department assessed a net profit of Rs. 1,41,644. It was further alleged that to Mr. M. G. Kadir personally was due a sum of Rs. 1,00,000 on account of the rent of the two factories where the partnership concerns were run. It was added that there was reason to believe that on the accounting of the partnership concerns a big sum will fall due against the plaintiff. It was lastly added that the two advances of July amounting to Rs. 45,000 by the plaintiff were by mutual consent mingled up with the partnership concern accounts and, therefore, any claim in respect of that sum was not maintainable in the absence of accounting.
6. The following issues were settled
"(1) Did the defendants borrow Rs. 45,500 (Rupees forty-five thousand and five hundred) from the plaintiff and paid Rs. 25,000 (Rupees twenty‑five thousand) as alleged in paras: 1 and 2 of the plaint
(2) Did the defendants acknowledge the balance of the amount due to the plaintiff out of Rs. 45,500 (Rupees forty-five thousand and five hundred) by his letter of the 19th June 1952
(3) Was the sum of Rs. 45,500 given in the partnership account If it was, what is its effect in the suit
(4) What is the amount, if any, due to the plaintiff from the defendants
(5) Was there any stipulation for payment of interest If no, is the plaintiff entitled to interest
(6) To what relief, if any, is the plaintiff entitled
(7) Has the plaintiff any cause of action
(8) Is the suit within time "
7. The fact of the payment by the plaintiff of Rs. 45,500 to the defendants is admitted. It was admitted in the written statement and it was also admitted by Mr. M. G. Kadir when he gave evidence in the suit as defendants' witness No. 1. At the stage of evidence it was common ground that this sum of Rs. 45,500 was paid, by the plaintiff to the defendant M. G. Kadir & Co. by means of two cheques in July 1948. The difference between the stand of the parties which is not really material is that according to the plaintiff it was a loan and according to the defendants this amount was advanced by the plaintiff on 10th July 1948 by means of two cheques against sale of cotton seeds (vide para. 10 of the written statements). In evidence Mr. M. G. Kadir stated that the plaintiff wanted to buy cotton seeds which were lying at Khanpur and Chowdhry and he made the advance of Rs. 45,500 towards this transaction. In cross‑examination he stated that the transaction upon the basis of which the plaintiff had paid him two sums of money amounting to Rs. 45,500 was rescinded by mutual consent and it was the plaintiff who asked him to keep this sum of Rs. 45,500 with him. He added that this was to be adjusted towards the partnership account. The same thing was said in para. 11 of the written statement. The plaintiff in his evidence on the other hand stated that he had paid this sum of Rs. 45,500 to Mr. M. G. Kadir as he told him that his firm needed this amount because it had purchased cotton seeds from Col. Wahiduddin in Bahawalpur and he had promised to repay this amount within 15 days. If the plaintiff was wanting to buy cotton seeds from Khanpur and Chowdhry it is not clear as to why he should advance this sum of Rs. 45,500 to the defendant. Besides it is important to note that in two registered letters from the plaintiff to the defendant dated 19th March 1952, Exh. 23, and 6th June 1952, Exh. 23, the plaintiff has pointedly said that this amount of Rs. 45,500 was advanced as a loan in July 1948. The defen dants replied on 19th June 1952 by letter Exh. P/11 in which it was said :‑
"You are no doubt correct in stating that there is a credit balance of Rs. 20,500 in your personal account in my books."
There was no repudiation of the assertion that this amount was advanced as a loan. There is then Exh. D/27 which was produced by the defendant and which is dated 22nd October 1949, in which the sum of Rs. 45,500 has been described as a loan towards which an alleged adjustment was made. I am, therefore, inclined to accept the plaintiff's version that this advance of Rs. 45,500 was a loan. Nothing much however turns upon this. The repayment of Rs. 25.,000 on 31st August 1949 is admitted by the defendants in the written statement as well as by Mr. M. G. Kadir in his evidence. My finding, therefore, on issue No. 1 is in the affirmative.
8. Issue No. 2 relates to the question of the acknowledge ment by the defendants of the balance of Rs. 20,500. This can be more conveniently dealt along with issue No. 8, namely whether the suit is within time.
9. I will now come to issue No. 5, that is whether the sum of Rs. 45,500 passed into the partnership account. This is the main question as far as the defence on merits is concerned. The case of the defendants on this point is set out in paras. 11 and 17 of the written statement. In para. 11 it was said that the transaction (of purchase of cotton seeds by the plaintiff as alleged by the defendant) having been mutually rescinded the entire amount was allowed to be kept in account to be adjusted at the time of the accounting of the partnership concern. It was then alleged in para. 12 that on 31st August 1949 the plaintiff took back Rs. 25,000 on the allegation of urgent need and upon the assertion that his share of loss in the Mehrabpur concern would only amount to Rs. 20,500. In para. 16 it was stated that on accounting of the partnership concern a big sum would fall due against the plaintiff. The defence from these alleged facts was formulated in para. 17 wherein it was said that the advance of Rs. 45,000 in July 1948 having been mutually mingled up with the partnership accounts, any claim in respect of that amount is not maintainable in the absence of accounting. In evidence the same position was more or less adhered to by Mr. M. G. Kadir though he introduced another repayment of Rs. 45,000 to the plaintiff. But to this we shall come a little later. With regard to the question of mingling of the advance with the partnership account and the partnership business Mr. M. G. Kadir stated that he had two factories, one at Mehrabpur and the other at Hyderabad and the plaintiff was made a partner of four annas in respect of the business of both these factories and that he was in charge of Mehrabpur factory which had suffered considerable loss and, therefore, the plaintiff was liable to contribute towards this loss. The plaintiff on the other hand has stated that he was a four annas working partner in the Mehrabpur factory and it was expressly agreed that the would be only entitled to the profit in that proportion and that he would not be liable to any loss. He further stated that there was, in fact, no loss and that he should have got as his share of profit out of this factory and this would have amounted to about Rs. 44,000. In the witness box Mr. M. G. Kadir stated that it was the plaintiff who asked him to keep this sum of Rs. 45,500 with him and this was to be adjusted towards the partnership account. When he was asked as to when the plaintiff had said this, he replied that he had‑said this even before the starting of the partnership business in the course of an oral conversation. It is extremely difficult to accept this story. It was admitted by Mr. Kadir that the plaintiff Abdul Latif was merely a working partner. That being so, there would be no reason for the latter to leave his money in deposit with the defendant for adjustment towards the partnership account, particularly as on Mr. Kadir's own admission the partnership business had not even started at that time. Was it being anticipated even before the commencement of the partnership business that the partner ship was going to run into loss If that was so, the plaintiff would naturally have refused to have anything to do with that business. Furthermore, if what Mr. Kadir says is true this amount of Rs. 45,500 would have been transferred in the account books of the partnership, but admittedly this did not happen at any time and even when the defendants replied to the plaintiff's letter of 19th June 1952 (Exh. P/11) it was admitted that Rs. 20,500 stood to the credit of the plaintiff in his personal account in the books of the defendants.
10. Then we go on to the next phase when it is alleged that the plaintiff had agreed to the leaving of the balance of Rs. 20,500 which, it is said, according to him represented his share of loss in the partnership business. Out of Rs. 45,500 Rs. 25,000 was repaid on 31st August 1949 and Mr. Kadir states that the balance of Rs. 20,500 was left by the plaintiff to remain with him because he (plaintiff) had said that his share in the loss of Mehrabpur factory amount to this much. This is also a false stand. The plaintiff at no time had admitted that there was any loss in the partnership business, much less that he was liable to the extent of Rs. 20,500 towards this loss. On the contrary, in the correspondence he was asserting that he was entitled to his share of profit amounting to about Rs. 44,000. 1 will again revert to the two registered letters, Exh. P/23 and P/24. In both of these he had pressed for the repayment of Rs. 20,500 and had in addition claimed a sum of Rs. 44,234‑12‑9 as his share of profit in the partnership business. When the defendant replied by Exh. P/11 dated 19th June 1952 it was admitted that there was a credit balance of Rs. 20,500 in the personal account of the plaintiff but what was questioned was the claim for profits and that according to the accounts of the Mehrabpur and Hyderabad concerns there would be a net loss of Rs. 43,712‑11‑0. What is important, however, to note is that the case which has been set up by the defendants in Court and which was deposed to by Mr. Kadir in the witness box that the plaintiff had accepted that is share of the loss would amount to about Rs. 20,500 and that is why he was leaving this amount with the defendants, was never so much as indicated in this reply Exh. P/11 which was in answer to pressing demands by means of registered letters from the plaintiff for the repayment of the sum of Rs. 20,500. If there was any truth in this story that the plaintiff had agreed to the adjustment of Rs. 20,500 on account of his share of the loss of the partnership I have not the slightest doubt that the defendants would have clearly said some such thing in their reply Exh. P. 11:
Mr. Latif : What do you mean by claiming the repayment of Rs. 20,500 and over and above Rs. 44,234‑12‑9 as your share of profit when you have yourself admitted that there was loss in that business and that your share of that loss would amount to Rs. 20,500 and for that reason you left that amount with us to be adjusted towards your loss.
On the contrary what they said was that "Yes, it was true that there was a credit balance of Rs. 20,500 but the accounts have not been made and the net debit balance of loss might amount to Rs. 43,712 in the business of Hyderabad factory". I might add that if this sum of Rs. 20,500 was agreed to be adjusted towards the loss as is alleged by the defendant this amount would at least then be transferred into the partnership account but we find from Exh. P/11 that it was still lying to the credit of the plaintiff in his personal account in the books of the defendant. I have, therefore, no hesitation in holding that the plaintiff Abdul Latif had never agreed to the keeping of Rs. 45,500 to be adjusted in the partner ship account nor had he agreed to the adjustment of Rs. 20,500 towards his share of loss in the business. I answer the first part of the issue No. 3 accordingly. As to the second part of this issue the effect of this finding would be that the plaintiff's claim in the suit for the repayment of Rs. 20,500 must succeed. If the defendant had any claim on the basis of partnership business it was open to them to file a suit for accounts. This has never been done in spite of all this talk about huge losses. In fact, from the order of income‑tax assessment which was produced by the defendants themselves it would appear that there was a large profit in the three business concerns. It may be mentioned that the defendants had alleged in para. 13 of the written statement that a sum of Rs. 5,000 was paid to the plaintiff on 2nd July 1950 by way of a loan. A voucher, Exh. D/14, for this sum was produced and in the column of particulars it is written that this was a loan. The plaintiff in his evidence has stated that this amount of Rs. 5,000 was paid to him in respect of the Meharabpur partnership business and that this had nothing to do with the loan account. With regard to the voucher, Exh. D/14, he said that he had signed the voucher but at that time when the signature was obtained there was only the figure of Rs. 5,000 in it and the writing in the column of particulars was done later on. It would be sufficient to say that this payment was admittedly made on 2nd July 1950 and yet the defendants in their letter, Exh. P/I1, have admitted that the credit balance of the plaintiff in the personal account on 19th June 1952 was still Rs. 20,500. It is, however, not necessary to labour the point any further because after the filing of the present suit Mr. M. G. Kadir filed a suit for this Rs. 5,000 in which he obtained an ex parte decree. All that need be said is that the ex parte decree in that suit does not detract from the plaintiff's claim in the present suit, because as I have said, his credit balance in the personal account was still Rs. 20,500 on lr9th June 1952 whereas the payment of Rs. 5,000 as per Exh. D/14 was on 22‑6‑50.
11. I now come to Exh. D/27 which was introduced at the trial during the cross‑examination of the plaintiff. This document is described as a note'. In this, there is first an acknowledgement of the receipt of Rs. 50,000 for rape seeds. It is then added that afterwards this amount was adjusted to the under mentioned account:
|
| Rs. |
| (1) Adjusted towards the loan given to Mr. M. G. Kadir on 12‑7‑48 by two cheques | 45,500 |
| (2) Part realization of the price of motor car given to Mr. M. G. Kadir out of Rs. 17,000 | 4,500 |
|
| 50000 |
At the foot of this document towards right‑hand corner is the signature of the plaintiff Abdul Latif and underneath it is the date 22nd of October 1949. As I have said, this document was introduced in the course of the cross‑examination of the plaintiff evidently because the defence which had been put forward in the written statement that the plaintiff had agreed to the adjustment of the sum of Rs. 20,500 towards the loss of the partnership account was felt by the defendants not to be good enough. Before this document was shown to the plaintiff the‑ following question was put to him in the cross‑examination
'Q. I put it to you that Rs. 50,000 had been paid to you by Mr. Kadir for rape seed on 6‑4‑49 and in this connection the balance of the sum advanced by you had been adjusted
A. This is wrong. The payments are in respect of Mehrabpur factory business which was of cotton seed."
This answer would indicate that the plaintiff was genuinely not conscious of the existence of the document, Exh. D/27 which was later on shown to him. After the plaintiff had given his answer to the question as reproduced above, this document, Exh. D/27, was shown to him and he said that the signature was his bust the contents of the document were nothing but a fraud. When Mr. M. G. Kadir gave evidence on a subsequent date he stated in support of this document, Exh. D/27, that a sum of Rs. 50,000 was paid by him to the plaintiff for the purchase of rape seeds but he did not make any such purchase and adjusted the amount of Rs. 45,500 which he had advanced to him (defendant) and the remaining sum of Rs. 5,000 out of this Rs. 50,000 was adjusted by the plaintiff towards the transaction of an old car. He affirmed that the document, Exh. D/27, was in that connection. He was questioned by me on this point. He was asked that since he had already repaid a sum of Rs. 25, (300 on 31st August 1949 why was this further payment of Rs. 45,500 made. To this he replied that it was the plaintiff who had appropriated the sum of Rs. 45,500 out of the sum of Rs. 50,000 which had been given to him for rape seed. He was further asked that when this document, Exh. D/27, was given to him did he not tell the plaintiff that he had already been paid Rs. 25,000 on 31st August 1949 and how could he then again take a sum of Rs. 45,500 out of the sum of Rs. 50,000. The only answer to this given by the witness was that the occasion for saying this did not arise because the litigation had started between him and the plaintiff. By this litigation he meant the present suit and this it may be noted was not filed until 5th September 1952 The only other litigation was the suit filed by him for the recovery of Rs. 5,000 and that was filed after the institution of the present suit When he was further asked as to why he did not within the three years which intervened the execution of this document, Exh. D/27. and the filing of the suit in 1952, tell the plaintiff as to how he had appropriated the sum of Rs. 45,500 towards his advance though he had already been paid Rs. 25,000 in August 1949, the only answer that he gave was that he did not meet the plaintiff within these three years. He admitted that this document, Exh. D/27, was in the hand of his accountant Mr. Siddiqi who was dead. He was further asked as to why he had not stated the fact of this payment of Rs. 45,500 towards the plaintiff's advance of an equivalent amount in his (defendant) written statement. He gave the following answer :‑
"I thought that when the case comes up for hearing in Court I will produce this document. I did not inform my lawyer who had drafted this written statement that the plaintiff had been paid besides Rs. 25,000 another sum of Rs. 45,500."
12. I have not the slightest doubt that this document, Exh. D/27, was fraudulently created upon a piece of paper which bore the signature of the plaintiff. The story of adjustment of Rs. 45,500 as told by Mr. M. G. Kadir and as contained in the document, Exh. D/27, is on the face of it absurd and the statements made by Mr. M. G. Kadir in the witness box on oath in support of this story are pulpably untrue. There is no proof of the payment of this sum of Rs. 50,000 apart from Exh. D/27 and the word of Mr. M. G. Kadir. Surely, such a huge sum could not have been paid in cash when all payments between the parties were being made by cheques. No account book has been produced to sup port such an advance of Rs. 50,000. No mention of this was made throughout the correspondence between the parties when the plaintiff was pressing for the repayment of his money and it was not even thought fit to disclose this to the defendants' lawyer who drafted the written statement. I have, therefore, no hesitation in rejecting this story of the repayment of Rs. 45,500 as contained in Exh. D/27 and as supported by the oral evidence of Mr. M. G. Kadir. That he should have chosen to make such a statement is extremely regrettable.
13. There now remains the question of limitation which is the subject matter of issues 2 and 8. The advance of Rs. 45,500 was made on 10th July 1948. On 31st August 1949 a sum or Rs. 25,000 was repaid by Mr. M. G. Kadir to the plaintiff by means of a cheque. It was conceded by Mr. Dingomal, the learned counsel for the defendants who appeared at the stage of argument that this part repayment by cheque would give a fresh start to limitation. He, however, very strenuously contended that in so far as the suit was instituted on 5th September 1952 it was barred by limitation by 5 days. It was, however, asserted on behalf of the plaintiff that by virtue of the acknowledgement of the debt contained in Exh. P/11, a fresh period of limitation has to be computed as from that date. Reliance was placed on section 19 of the Limitation Act, subsection (1) of which reads as follows :‑
"19. (1).‑Where, before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgement 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 some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed."
Exh. P/11 has already been referred to on more than one occasion in this judgment. It will, however, be necessary to revert to it again for purposes of seeing whether it serves as an acknowledge ment as contemplated by section 19 of the Limitation Act. The first paragraph of this letter which was relied upon by the plaintiff reads as follows :‑
"You are no doubt correct in stating that there is a credit balance of Rs. 20,500 in your personal account in my books, but I failed to understand as to how you arrived at the figure of Rs. 44,234‑12‑9 as due to you on account of the partnership in the cotton ginning and pressing factory at Mehrabpur and Hyderabad."
Reference is then made to the accounts of the business of the Mehrabpur and Hyderabad factory and press and it is said that there was a net debit balance of Rs. 43,712‑11‑0 in the account of these factories business and that this balance had been arrived at after ignoring the lease money of Rs. 50,000 for each factory. Then in the concluding para. it is said that in view of these accounts it will be seen that the net position would be a debit balance against the plaintiffs and not a credit balance in his personal account. It is added by Mr. M. G. Kadir who has signed this letter that the plaintiff should go through the accounts and that on his part he was always prepared to furnish any information and to give such assistance that might be required in this connection.
14. Mr. Dingomal contended that the effect of the acknow ledgement in the earlier part of the letter as to the balance f Rs. 20,500 has been destroyed by the subsequent statement referring to the account of the partnership business of the factories and the concluding statement that when these are taken into account there would be a debit balance and not the credit balance in the personal account of the plaintiff. He cited a number of decisions. I will only mention them because I have gone through each one of them and I find that none of them apply to the facts of the present case and are clearly distinguish able. The case cited by him are those reported in.
(1) Hakumat Singh v. Nenumal 22 S L R 117
(2) Chhaterdhar v. Nasib Singh 78 I C 919
(3) Venkata v. Parthasara 16 I L R Mad. 220
(4) Messrs Yakub Habib v. Messrs A. A. Sattar P L D 1.958 Kar. 534, and
(5) Muhammad Akbar Khan v. Province of West Pakistan
P L D 1959 Lah.295.
15. The acknowledgement in the earlier part of the defendants' letter of 19th June 1952 must be read with the plaintiff's letter of 6th June 1952, ;.Exh. P/24, to which it is a reply. In this the plaintiff has said :‑
"By a letter dated 19‑3‑52 1 requested you to make payments of the following items due to me from you
(a) Rs. 20,500 outstanding against you in respect of the loan of Rs. 45,500 given to you ; and
(b) Rs. 44,234‑12‑9 due to me from you on account of the partnership in the Cotton Ginning & Pressing Factories , at Mehrabpur and Hyderabad."
At the end of the letter payment is asked of both the items and it is stressed that this should be done promptly as the plaintiff was in urgent need. It would be noticed that the two demands have been kept separate, one on account of the balance of the loan of Rs. 45,500 and the second on account of the alleged profit of the business. With regard to the first item Mr. M. G. Kadir in his letter, Exh. P/11, made an unqualified acknowledge ment of liability when he said "you are no doubt correct in stating that there is a credit balance of Rs. 20,500 in your personal account in my books." Can it be said that because of the further reference in this letter with regard to the partnership affairs and the ultimate conclusion of the writer that when the losses of the partnership are taken into account the personal account of the plaintiff would be changed from credit balance into a debit balance, the effect of the said acknowledgement is destroyed In my opinion, the answer to this question must be in the negative. With reference to issue No. 3 I have already held that this advance of Rs. 45,500 or the unpaid balance of Rs. 20,500 was never mixed up with the partnership account. That position is abundantly borne out by Exh. P/11 itself. On 19th June 1952, there was admittedly a credit balance of Rs. 20,500 in the personal account of the plaintiff in the books of the defendants. With regard to partnership affairs the least that can be said is that it was in dispute. The plaintiff was claiming Rs. 44,000 and odd as profit and the defendants were saying that there was loss. That matter has never been settled The fact that the defendants said that on the accounting of the partnership business the balance of the personal account would be wiped out, would only show that a claim of set off was being put forward. That does not destroy the effect of the acknowledgement of the unpaid amount of the advance within the meaning of section 19 of the Limitation Act. It would be useful to reproduce Explanation I to section 19 of the Limitation Act :‑
"Explanation l.‑For the purpose of this section an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come, or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to a set‑off, or is addressed to a person other than the person entitled to the property or right."
According to this Explanation an acknowledgement may be sufficient though it is coupled with the claim to a set‑off. I have already pointed out that there was a clear acknowledgement of liability with regard to Rs. 20,500 in Exh. P/11. With this was coupled at best a claim of set off, alleged to be arising out of the partnership business. Mr. Dingomal contended that the acknow ledgement in Exh/11 with regard to the amount in suit was not accompanied by a promise to pay and the existence of such promise was negatived by the assertion of the defendant that upon the partnership account the credit balance would be turned into a debit balance. He further contended that there was no acknowledgement of a subsisting liability in Exh. P/11. I am unable to agree. An acknowledgement of liability implies promise to pay and when there is such an acknowledgement as in this case it clearly involves an admission of a subsisting liability. The counter‑claim or the set‑off which was being made by the defendants does not detract in any manner from the effect of the acknowledgement of liability with regard to the amount in suit and which was in a separate personal account. I would like to B add that having regard to the language of section 19, all that is required is that there should be an acknowledgement of liability made in writing signed by the party concerned. It would, there fore, appear that the promise to pay is not a requirement o section 19. Rustomji in his Commentary on Limitation, 6th Edition, has dealt with this point at page 191. This is what the learned author has said :.
"Under section 19, a mere acknowledgement of liability suffices (and no promise to pay, express or implied, is required). In Chhaterdhari Matho v. Nasib Singh (1928) 78 1 C 919 (Pat.), an acknowledgement was held to be insufficient under section 19 on the ground that it negatives the implication of a promise to pay. But this is not, it is submitted, per se a good ground for rejecting an acknowledgement if it otherwise comes within the purview of section 19."
16. For the reasons given I hold that in view of the acknowledgement contained in the letter Exh. P/11 dated 19th June 1952 a fresh period of limitation would have to be computed as from that date. It follows that the suit is, therefore, within time. I answer issues 2 and 8 accordingly.
17. Issue No. 7 was not pressed. Issue No. 5 relates to the question whether there was any stipulation for payment of interest. Even the plaintiff Abdul Latif has not stated in his evidence that there was a stipulation for payment of interest but even if he had said so I would not have accepted that evidence because though the advance was made in July 1948 and Rs. 25,000 were repaid on 31st August 1949 no claim of interest was made and in the two registered letters, Exhs. P/24 and P/25, written in 1952 just before the filing of the suit the demand was made for the repayment only of the principal amount of the balance namely Rs.20,500. On this issue, therefore, I hold that the plaintiff is not entitled to interest up to the date of the suit. As from the date of the suit I am of the opinion that it is an eminently fit case in which the plaintiff should be allowed interest on the principal sum of Rs. 20,500 at the rate of 6 per annum.
18. In view of my findings I decree the plaintiff's suit with costs and with interest at 6 % on the principal amount, of Rs. 20,500 from 5‑9‑52 until the date of the decree and further at the same rate until payment.
K. B. A. Suit decreed.
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