1994 (6) TMI 221 - HC - Indian Laws

Summary

Issues Involved:
1. Application of Section 18 of the Limitation Act, 1963.
2. Validity and sufficiency of acknowledgments to save limitation.
3. Merits of the plaintiff's claim and the correctness of the accounts.
4. Defendants' denial and burden of proof.

Issue-wise Detailed Analysis:

1. Application of Section 18 of the Limitation Act, 1963:
The appeal was referred to consider the correctness of the decision regarding the application of Section 18 of the Limitation Act, 1963. The main question was whether an acknowledgment that does not specify the quantum of liability can operate as an acknowledgment for a specific sum to save limitation under Section 18.

2. Validity and Sufficiency of Acknowledgments to Save Limitation:
The plaintiff claimed the suit was within the limitation period based on various acknowledgments. The court examined the nature of acknowledgments under Section 18, stating that an acknowledgment in writing creates a fresh period of limitation. It does not require the exact nature of the amount to be specified but must indicate the existence of a jural relationship between the parties, such as debtor and creditor. The court found that the correspondence between the parties, including letters and telegrams, constituted sufficient acknowledgment of liability, thus extending the limitation period.

3. Merits of the Plaintiff's Claim and the Correctness of the Accounts:
The plaintiff provided detailed accounts and correspondence to support the claim. The court noted that the transactions were not denied by the defendants, and the accounts were proven by the plaintiff. The defendants' witness, who was the accountant for Bharat Circus, did not dispute the accounts. The court found the accounts to be true and correct, stating that the defendants failed to discharge the burden of proof to challenge the accounts effectively.

4. Defendants' Denial and Burden of Proof:
The defendants' written statement consisted of flat denials without substantial evidence. The court criticized the trial judge for not considering the correspondence and documents on record and for ignoring the legal consequences of the defendants' denials. The court emphasized that the defendants were expected to produce evidence to challenge the plaintiff's accounts but failed to do so.

Conclusion:
The court allowed the appeal, quashing the judgment and decree of the trial court. The plaintiff's suit for Rs. 1,00,520 with interest at 6% per annum from the date of the suit till recovery was decreed against the defendants. The court held that the acknowledgments in the correspondence extended the limitation period, and the plaintiff's accounts were proven to be correct and undisputed. The defendants' failure to provide substantial evidence and the trial judge's casual approach were also highlighted.