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Issues Involved:
1. Whether the letter dated 16th April 1946 amounted to an acknowledgment of liability and extended the limitation for the two suits. 2. Authority of Shri N.L.V. Subramaniyam to acknowledge liability on behalf of the corporation. Issue-wise Detailed Analysis: 1. Whether the letter dated 16th April 1946 amounted to an acknowledgment of liability and extended the limitation for the two suits: The common question in all three appeals was whether the letter dated 16th April 1946 (exhibit 1) amounted to an acknowledgment of liability and extended the limitation period for the suits. The court noted that if the letter did not save limitation, both suits were barred by time. The letter was written by Shri N.L.V. Subramaniyam, the secretary of the corporation, in response to a letter dated 25th February 1946 from the Gupta group. The correspondence between the parties was exploratory and aimed at clarifying the state of accounts, rather than binding any party to the statements made. The court concluded that the letter did not amount to an acknowledgment of liability because it was not meant to bind the parties and was merely part of an ongoing discussion to settle accounts. 2. Authority of Shri N.L.V. Subramaniyam to acknowledge liability on behalf of the corporation: The court emphasized that for an acknowledgment to be valid under Section 19 of the Limitation Act, the person making the acknowledgment must have the authority to do so. The court examined the evidence to determine whether Shri N.L.V. Subramaniyam had such authority. The only evidence on record was the statement of Shri Subramaniyam himself, who admitted that he did not have the authority to acknowledge debts and that his correspondence was meant to clarify the position and would have required confirmation by the directors. The court found that there was no evidence to show that the secretary had the power to bind the corporation financially. The court referred to the principles laid down in Uma Shankar v. Govind Narainl AIR 1924 All. 855, which held that a person merely authorized to write routine letters could not bind the principal by any acknowledgment. The court also discussed the general position of a secretary in a corporation, noting that under both Indian and English company law, a secretary does not have inherent powers to bind the corporation in financial matters unless specifically authorized. The court dismissed the argument that the secretary's authority to sign pleadings under Order 29, Rule 1, Civil Procedure Code, implied a broader authority to bind the corporation financially. The court concluded that the letter dated 16th April 1946 did not amount to an acknowledgment of liability and was not sufficient to extend the limitation period. Consequently, both suits were dismissed on the ground of limitation. Judgment: The appeals filed by the corporation (Appeals Nos. 441 and 442 of 1950) were allowed, and the appeal filed by the company (Appeal No. 198 of 1952) was dismissed. The corporation was awarded costs in both suits and in both courts.
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