2016 (8) TMI 1097 - HC - Indian Laws

Guarantee executed by the defendant - period of limitation extended on account of the acknowledgement of debt, in terms of Section 19 of the Limitation Act, 1963 - Held that - Where a payment is made on account of a debt, before the prescribed period of limitation under the said Act expires, by the debtor, a fresh period of limitation is set into motion from the time such payment is made. In the present appeal, it is observed that subsequent upon the disbursement of the loan on 23.12.2000, the appellant has not averred that any payment has been received from the defendants. In the facts and circumstances, the submission made on behalf of the appellant to the effect that there was an acknowledgement on the part of the defendants, in view of the guarantee furnished by the latter, which according to them was a continuing guarantee and extended the period of limitation on account of acknowledgement of debt, is fallacious and devoid of merits. There admittedly is no other acknowledgement of debt in writing by the defendants apart from this unsupported argument of continuous guarantee set up by the appellant. Thus, the provision of Section 19 of the said Act, are not attracted to the facts of the present case.

Issues:
- Condonation of delay in refiling the appeal
- Appeal assailing judgment and decree for recovery of money
- Interpretation of Section 19 of the Limitation Act, 1963
- Application of the provision to the facts of the case
- Dismissal of the appeal on the grounds of limitation

The judgment addressed the issue of condonation of delay in refiling the appeal, where the delay was duly supported by an affidavit, and the court granted the condonation. Moving on to the main issue, the appeal under Section 96 of the Code of Civil Procedure challenged the judgment and decree passed by the District & Sessions Judge, which dismissed the suit for recovery of money as barred by limitation. The appellant contended that the guarantee executed by the defendant was a continuing guarantee, which extended the period of limitation due to the acknowledgment of debt under Section 19 of the Limitation Act, 1963. However, the court observed that no payment had been received from the defendants after the loan disbursement, leading to the dismissal of the suit by the trial court on the basis of limitation.

The court analyzed Section 19 of the Limitation Act, which states that a fresh period of limitation is triggered when a payment on account of a debt is made before the prescribed period expires. The provision requires an acknowledgment of the payment to be in writing, signed by the person making the payment. The court emphasized that mere demand notices or guarantees do not extend the limitation period unless there is a written acknowledgment of debt or part payment made by the debtor. In this case, the appellant failed to provide any such acknowledgment apart from the argument of a continuing guarantee, which the court deemed fallacious and lacking in merit.

The judgment highlighted the importance of strict adherence to the limitation period set by the law, emphasizing that the court has no discretion to extend it beyond the provisions of the Limitation Act. The court found that the suit filed by the appellant was clearly time-barred based on the trial court's findings, which were not challenged. Consequently, the dismissal of the suit on the grounds of limitation was upheld, as no other grounds were raised in the appeal. The decision of the trial court was confirmed, and the appeal was dismissed along with the pending applications.

In conclusion, the judgment provided a detailed analysis of the interpretation and application of Section 19 of the Limitation Act to the facts of the case, ultimately leading to the dismissal of the appeal due to the suit being barred by limitation. The ruling underscored the significance of meeting statutory timelines and the necessity of proper acknowledgment of debt or payments to extend the limitation period in legal proceedings.

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