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TMI Blog2016 (5) TMI 1527X X X X Extracts X X X X X X X X Extracts X X X X ..... gment is that the same is payable and that the person making the acknowledgement would pay such amount or else there would be no requirement of making any such acknowledgment. No doubt, there is a distinction between an acknowledgement under Section 18 of the Limitation Act and a promise under Section 25 (3) of the Indian Contract Act inasmuch as though both have the effect of giving a fresh lease of life to the creditor to sue the debtor, but, for an acknowledgement under Section 18 of the Limitation Act to be applicable, the same must be made on or before the date of expiry of the period of limitation whereas such a condition is non-existent so far as the promise under Section 25 (3) of the Indian Contract Act is concerned - also, implied promise is not unknown under the Indian Contract Act. The letters indicate the categorical endorsement of the liability to make the payments, and thus, it could be treated as an implied promise to pay. The circumstances under which such an acknowledgement was made, viz. after the reminders by the Bank for repayment of the loan amount, further lends support to the hypothesis that the aforesaid letters are in the nature of a promise to pay. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a kirana shop, dealing in grocery and items of daily need, applied for loan before the appellant Bank. The appellant Bank granted a cash credit limit of ₹ 1 lakh to respondent/defendant No.1. Respondent No.2 stood as a guarantor to the loan and the guarantee documents were executed on 27.11.2001. 7. The aforesaid cash credit limit was availed of by respondent/defendant No.1 but the repayments were very irregular. The appellant Bank sent reminders to the respondents No.1 and 2 for returning loan amount. It was in this context that the two letters dated 18.11.2006 and 20.11.2006 were written by the defendants/respondents. The letters are reproduced as hereunder: With reference to my/our cash credit Account with you secured by a Demand Promissory Note dated, the 27.11.2001 for ₹ 1,00,000/- with interest made by me/us in favour of SBI, Pushpa Bhawan and endorsed by the payees to you I/we acknowledge for the purpose of Section 18 of the Limitation Act, 1963 and any like limitation law in order to preclude any question of limitation law that I am/we are liable to you for payment of the said Promissory Note with interest in respect of all present and future indebtednes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no evidence was led on their behalf. As such, the Trial Court, in the absence of any rebuttal of the deposition of the prosecution witnesses, decreed the suit and declared the appellant Bank to be entitled to the decree of a sum of ₹ 2,42,199.37 along with interest @10% p.a. from the date of filing of the suit till its realization along with the costs. 14. The respondents/defendants challenged the aforesaid judgment of the Trial Court before the First Appellate Court primarily on the ground of limitation. It was urged that Section 3 of the Limitation Act, 1963 provides that if a suit is barred by limitation, the same is liable to be dismissed even in absence of any defence. It was further contended that the last payments towards the credit facility were made on 02.09.2002 by the Bank and a suit for recovery of the balance amount could have been lodged only within three years after 02.09.2002. The respondents/defendants, though had written two letters on 18.11.2006 and 20.11.2006 respectively (quoted above) and the balance confirmation was signed by them on 31.10.2006, but the aforesaid documents which are being claimed as revival letters by the Bank, were actually written/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is void, unless- (1) it is expressed in writing and registered under the law for the time being in force for the registration of 1[documents], and is made on account of natural love and affection between parties standing in a near relation to each other; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless. (3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract. 19. It was thus urged by the appellant Bank that the suit was predicated on the agreement/promise of the respondents to pay the amount of loan which had been received by them while enjoying and availing of the cash credit limit. 20. The First Appellate Court, on a perusal of the two revival letters (Ex.PW2/2 and Ex.PW2/3) did not consider it to be a promise to pay or restitute the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of limitation would be applicable and would cause revival of the claim, notwithstanding the limitation. Under Section 25(3) of the Indian Contract Act, a promise in writing to pay in whole or in part, a time barred debt is not void. 25. For ascertaining whether the nature of the aforesaid letters (Ex.PW-2/2 Ex.PW-2/3) are of a promise to pay , it would be necessary to examine the definition of the word promise‟ under Section 2(b) of the Indian Contract Act. 26. Section 2(b) of the Indian Contract Act reads as hereunder: (b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise; 27. Section 9 of the Indian Contract Act provides that if the proposal of acceptance is made in words, the promise is said to be express but under other circumstances it remains an implied promise. 9. Promises, express and implied.-In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied. 28. Thus implied pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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