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Civil Revision Application No. 106 of 1955, decided on 12th September 195 .

, S. 19‑Admission in writing should be in nature of unqualified acknowledgment of subsisting liability.

An admission in writing cannot be treated as acknowledgment unless it is in the nature of an unqualified acknowledgment of a Subsisting liability. . The mere fact that a party has referred, while denying liability, to an agreement on the basis of which the dispute has arisen between them, will not render such reference an acknow ledgment within the meaning of section 19 of the Limitation Act. The language of section 19 of the Limitation Act in this respect is very clear. It does not merely require that there should be an admission about the existence of a contract but also requires that there must be acknowledgment of liability in respect of such contract.

Explanation I of S. 19, Limitation Act applies to cases where there is an admission that a debt is due but the refusal is based on such grounds which don't amount to denial of liability. In order to constitute acknowledgment there must be clear admis sion of a subsisting liability.

The question whether a document contains an acknowledgment of liability depends primarily on the terms and language of the document, taking as a whole and though the Courts are expected to give liberal construction, their language cannot be twisted in such a way as to bring it within the four corners of the above‑mentioned provisions of law.

Hukumat Singh Kundanmal v. Nenumal Rejhumal A I R 1928 Sind 45 ; Raghubar Dayal v. Banwari Lal A 1 R 1933 All. 352 ; Fatechand Ganeshram Agarwal v. Wasudeo Shrawan Dalal and another A I R 1948 Nag. 334 and Jainarain v. The Governor‑General of India A I R 1951 Cal. 462 ref.

Muhammad Suleman for Appellant.

M. H. Memon for Respondent.

Date of hearing : 1‑9‑58.

This is an application for the revision of the judgment of the Chief Judge, Small Causes Court, Karachi, decreeing the opponent's claim based on a contract for the supply of goods.

The facts leading to the present revision application are that the applicants under a contract dated 3‑6‑1950 agreed to sell to the opponents 5,000 yards of Japan Kora crane deer cloth at Rs. 1‑4‑6 per yard including Sales Tax. According to the terms of the contract, the opponents deposited a sum of Rs. 640 towards the sale price and the applicants agreed to supply the said goods on arrival from steamer "Pumba" after clearance from Customs on payment of the balance of the price. It, however, appears that the applicants failed to supply the said goods within a reasonable time of the arrival of the steamer on 28‑6‑1950. The opponents, therefore, claimed from the applicants a total sum of Rs. 1,186‑14‑0 namely Rs. 546‑14‑0 as damages and Rs. 640 as refund of the amount deposited with the applicants. The applicants having refused to pay the said amount, the opponents filed a suit, being Suit No. 34 of 1954, in the Karachi Small Causes Court for the recovery of the said amount. Mr. Feroze Nana Ghulam Ally heard the suit and decreed the same by his judgment dated 14‑4‑55.

The learned counsel for the applicants has challenged the finding of the learned Judge on the ground that the claim in ques tion was not within time and time has not been extended under section 19 of the Limitation Act on the basis of the applicants' counsel's letter dated 13‑7‑1953. The question for determination therefore is whether the said letter amounted to an acknowledge ment within the meaning of section 19 of the Limitation Act and has extended the period of limitation of the opponents' claim. The decision of this question depends on the construction of the letter dated 13‑7‑1953 written on behalf of the applicants. This letter (Exh. 14) is reproduced below :‑

" Iqbal H. Kazi. Kotwal & Co.

Advocate. Jehangir Kothari Building,

Denso Hall, Bunder Road,

Karachi.

13th July 1953.

To

S. Y. Khwaja Esq.,

Advocate, Room No. 81,

New Cloth Market,

Karachi.

Dear Sir,

My client Mr. Yaqoob Habib Kaliya has placed in my hands your Registered letter dated 20th May 1953 bearing No. C‑43/5/53 addressed to him with instructions to reply thereto as under :‑

As you have committed a breach of contract by not lifting the contract goods in spite of repeated requests both oral and written, you are not entitled to claim Rs. 1,186‑14‑0 from my client. On the contrary you are liable to my client in damages for not taking delivery of the goods due to downward trend of the market.

In the circumstances the requisition contained in your letter under reply cannot be complied with.

If inspite of the above any action is taken against my client as threatened the same shall be defended at your client's entire risk as to costs and consequences.

Yours truly,

(Sd.) IQBAL H. KAZI,

Advocate."

Mr. Sulleman, the learned counsel for the applicants, has urged that this letter cannot be treated as an acknowledgment because the applicants have clearly denied their liability to pay the amount in question on the ground that the opponents committed breach of the contract. There is much force in this contention. Mr. Memon the learned counsel for the opponents, has however taken me through a number of decisions of the Indian High Courts and has urged that when there is an admission about the existence of the contract in dispute, this admission is an acknowledgment and will extend the period of limitation within the meaning of section 19 of the Limitation Act. He invited my attention to Hukumat Singh Kundanmal v. Nenumal Rejhumal (A I R 1928 Sind 45), Raghubar Dayal v. Banwari Lal (A I R 1933 All. 352), Fatechand Ganeshram Agarwal v. Wasudeo Shrawan Dalai and another (A I R 1948 Nag. 334) and Jainarain v. The Governor‑General of India (A I R 1951 Cal. 462) in support of his case. These cases are clearly distinguishable and cannot be applied to the facts of the present case. In A I R 1928 Sind 45, the suit was for settlement of partnership accounts. The plaintiff relied on certain letters in each of them, the defendant admitted the existence of the partnership and his obligation to settle the partnership accounts, and the learned Judges held that the defendant having made clear admission of his liability to render accounts, they amounted to acknowledgments and extended the period of limitation. In A I R 1933 All. 352 there was a clear acknowledgment in the written statement of an earlier suit between the parties that a‑ sum of money was due to the plaintiff by the defendant on promissory notes, although it was pleaded that the amount due on the pro missory note was to be paid under a separate agreement and have been paid. Similarly in A I R 1948 Nag. 334, the parties have referred their dispute arising out of a contract to arbitration for the determination of their liabilities. It was held that the legal effect of an unqualified admission that the defendants purchased certain goods and a difference having cropped up in respect of those dealings, the matter was referred to arbitration, was that the parties have agreed that whoever on accounting is found as debtor, will pay the amount and such an admission was an acknow ledgment within section 19 of the Limitation Act. The decision in A I R 1951 Cal. 462, is also not helpful. In that case the railway authorities wrote a letter to the plaintiff that one bundle of cloth belonging to them was lying undelivered at destination at their responsibility and they should arrange to take its delivery at an early date, it was held that it was an admission of facts of which liability in question is a necessary consequence and it amounted to an acknowledgment. The facts in the present case, however, stand on a different footing. In this case the opponents claimed the refund of the amount deposited with the applicants and also claimed certain amount as damages for breach of contract and the applicants' counsel replied that they are not liable to pay the amount as the opponents have committed breach of the contract. Thus there is no admission of such facts, the legal consequence of which will be the payment of the money by the party at default.

It seems to me that an admission in writing cannot be treated as acknowledgement unless it is in the nature of an unqualified acknowledgment of a subsisting liability. The mere fact that a party has referred, while denying liability; to an agreement on the basis of which the dispute has arisen between them, will not render such reference an acknowledgment within the meaning of section 19 A of the Limitation Act. The language of section 19 of the Limita tion Act in this respect is very clear. It does not merely require that there should be an admission about the existence of a contract but also requires that there must be acknowledgment of liability in respect of such contract. The learned counsel invited my attention to Explanation I of section 19 of the Limitation Act which says that an acknowledgment may be sufficient even if it is accompanied by a refusal to pay or is coupled with a claim to a set‑off. But it applies to such cases where there is an admission that a debt is due but the refusal is based on such grounds which don't amount to denial of liability in order to constitute acknow ledgement there must be clear admission of a subsisting liability.

In the present case the reply of the learned counsel for the applicants contains the following statement :‑

(1) As you have committed breach of contract, you are not entitled to claim Rs. 1,186‑14‑0.

(2) On the contrary you are liable to my client in damages.

(3) The requisition contained in your letter cannot be com plied with.

It is thus apparent that in clear terms the claim of the opponents was repudiated. It is not in an ambiguous term and is not even capable of two meanings. There is thus no doubt that in ‑this letter the applicants at no stage admitted their liability and the mere fact that a passing remark has been made about the contract between the parties will not convert this letter into an acknowledge ment within the meaning of section 19 of the Limitation Act. In my opinion the question whether a document contains an acknowledgment of liability depends primarily on the terms and language of the document, taking as a whole and though the Courts are expected to give liberal construction, their language cannot be twisted in such a way as to bring it within the four corners of the above‑mentioned provisions of law.

After careful consideration of the matter, in my opinion, the learned Judge below fell into a serious error in treating this letter as an acknowledgement under section 19, Limitation Act and failed to appreciate the essential ingredients which bring a writing into the category of acknowledgment.

For the above reasons the application is accepted with costs and the judgment of the Court below is set aside.

K. M. A. Application accepted.

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