Effect of Acknowledgment on Period of Limitation
The expression acknowledgement itself has not been defined in the limitation Act. The word acknowledgment is not a word of art and must be construed in its plain literal sense. An acknowledgment must be conscious and distinct admission of an existing liability or jural relations between the parties but there is nothing in law to require that an acknowledgment should be express. It may be implied provided the implication is a necessary implication so as to render the acknowledgment clear and unequivocal. It may be added that the acknowledgment need not to specify every legal consequence of the thing acknowledged.
Admission of liability
An acknowledgment is an admission by the writer, that there is a debt owed by him. The admission may be in any form. It may be express or implied. It may or may not be addressed to the person to whom liability is acknowledged. But the admission must somehow be of liability, a mere admission of title or a state of things is not enough.
Essentials of acknowledgment
Following conditions must be fulfilled in order to constitute a valid acknowledgment under the law.
An acknowledgment under this section must be in writing: an oral acknowledgment is not sufficient. When plaintiff had not produced any writing by which the defendant had acknowledged the debt, S.19 was not applicable and plaintiff could not claim protection u/s 19 L.A 1908. Therefore, entries in the Bank accounts regarding payments made by a debtor of the Bank, though correct, cannot amount to acknowledgment within the meaning of the section so long as they are not acknowledged in writing by the debtor.
19 prescribes one condition only, namely, that acknowledgment has been made in writing signed by party against whom such property or right is claimed. An acknowledgment of liability under this section must be signed by the person making the acknowledgment or by is agent. A telegram, or a plan not signed by a party but containing an acknowledgment of liability and filed along with plaint and entries in accounts books not signed by parties do not amount to acknowledgment under this section.
Before expiration of the period prescribed
Acknowledgment in writing or payment on account of debt has to be made before expiration of period of limitation. The expression period prescribed by the Act, whether in the body of the Act, or in the first schedule. Where a plaintiff is entitled to a deduction of time under the provisions of some other Act, the period will be a period prescribed within the meaning of this section. This section applies also to periods of limitation prescribed by special or local laws. However, the extra time which a litigant get u/s 4 is not a part of period prescribed.
Acknowledgment must be definite
The section requires a definite acknowledgment of liability. The document alleged to contain an acknowledgment of liability must clearly contain within itself the meaning that the party is admitting his liability. Where the document is equally capable of meaning either that the party is admitting liability or that he is not doing so, the document can never be sufficient for purposes of this section.
Liability is necessary for acknowledgment
An acknowledgment for the purposes of S.19 cannot be said to have made if when making it there was no present subsisting liability against the person making the acknowledgment. There must exist a jural relationship between the parties at the time when one of them makes the acknowledgment and it must appear that the statement is made with the intention to admit such jural relationship.
Fresh period of limitation shall be computed
Where acknowledgment is made before expiration of period of limitation, fresh period of limitation shall be computed from the time, when such acknowledgment has been made. This section does not provide that a fresh period of limitation shall computed for once only from the date of acknowledgment of liability. Each time a liability is admitted directly or indirectly, expressly or impliedly, overly or implicitly same will have the effect of giving a fresh period of limitation in respect of liabilities so admitted. Thus, where a person borrowed a many from bank in 1956. Therefore, the borrower executed and delivered to the bank from time to time hypothecation agreements, revival letters, acknowledgment of liabilities and written promises to clear outstanding and payable dues. Lastly, the borrower executed acknowledgment in writing to pay as on 1977. It was held that not only liability was kept alive for the purposes of computing period of limitation for filing a suit but a fresh period of limitation was also to be computed from 1977.
S.19 does not make any distinction between an acknowledgment which will give fresh period of limitation for execution of decree and an acknowledgment which will give a fresh period of limitation for filing suit.
Who may make acknowledgment.
Acknowledgment in respect of right in property in terms of S.19 may be competently made either my party against whom such right be claimed or by some person through whom he derives title or liability. It may be competently made either personally or by agent duly authorized. It is sufficient under this section if the acknowledgment has been made by a person against whom the right is claimed in the suit.
Acknowledgment by agent
An acknowledgment may be competently made either personally or by agent duly authorized. The authority of the agent to make an acknowledgment on behalf of another may be special or general. The expression duly authorize would include duly authorized either by action of the party indebted or by force of law or order of the court.