Conflicts between Limitation Act and Contract Act;
N.K.Assumi
(Querist) 28 May 2008
This query is : Resolved
If after the expiry of limitation period an exacknowledgement is executed under section 18 of the limitation Act by way of revival letter to pay the existing pronote, can it be read as one as a promise to pay time barred debt under section 25(3) of the Contract act, even if the acknowledgement do not contain any promise to pay time barred debt?
amit gupta_lawyer
(Expert) 28 May 2008
see any acknowledgement in writing regarding the past debt with the promise to pay is a valid promissory note and will be considered as the new cause of action and the limitation period to claim such money starts as fresh from there only. whereas in ur case there is acknowledgement of past debt but no promise to pay well in that case it is not a valid promissory note but the undertaking/content of new acknowledgement has to be seen properly so that it can be made as a continuing cause of action from the past promissory note.
N.K.Assumi
(Querist) 29 May 2008
The said acknowledgement read like this, this was also made to be signed by my client without teling him what it was all about:
Acknowledgement of liability/ Promise to pay the loan with interest:
1.I hereby acknowledge my liability.........Rupees........principal amount......borrowed by me from you during...
(Nothing was mentioned in those dotted lines)
2. I acknowledge and confirm for the purpose of Section 18 of the limitation Act 1963 and any like limitation law in order to preclude any question of limitation........
3.i further promise to pay the aforesaid sum within 20/10/2006.
The above letter clearly spell out that the said document was for the purpose of section 18 of the limitation Act and not one under section 25(3) of the Contract act, as clause 2 clearly mentioned section 18 of the LA. What is your opinion on this letter? Please give me your suggestions. With regards.
N.K.Assumi
(Querist) 29 May 2008
Dear Amit,
If the Court has to treat all documents under section 18 of the LA 1963, as one under section 25(3) it will be better to scrap the sections 18 to 20 of the LA of 1963. What I sincerely feels is that acknowledgement under section 18 of the LA is for the purpose of existing liability. Section 25(3) CA is very clear that it 1. Promise to pay time barred debt 2.Signed by the debtor. Signed means with the knowledge that the debtor promise to pay time barred debts.Please share your expertise in the matter.
