Tuesday, July 16, 2024

𝗝𝘂𝗱𝗶𝗰𝗶𝗮𝗹𝗗𝗿𝗲𝗮𝗺™

𝙰𝙵𝙵𝙾𝚁𝙳𝙰𝙱𝙻𝙴 & 𝙰𝙲𝙲𝙴𝚂𝚂𝙸𝙱𝙻𝙴

LIMITATIONMODEL ANSWER

ACKNOWLEDGEMENT & PART PAYMENT

What is the effect of acknowledgment of liability and part payment of debt?

Section 18 and 19 of the Indian Limitation Act, 1963, deals with the provisions of acknowledgment of liability and part payment of the debt respectively. According to section 18 of the Indian Limitation Act, 1963, if any person claims any right against another person or property from another person and that latter person acknowledges the claim of former person before the expiry of period of limitation which has been prescribed by this act for filing suit in respect of that right or property, then in such a case, the fresh period of limitation begins to run from the date of acknowledgment.

The main condition of this section is that the acknowledgment must be in writing and signed by the person or his authorised agent against whom the right or property has been claimed.

In the leading case of Kamta Prasad vs. Gulzari Lal, the Hon’ble court held that the acknowledgment must be before the expiry of period of limitation. If it is done after the expiry of period of limitation, then it will not have any effect and the period of limitation will not be extended.

Whereas, according to section 19 of the Indian Limitation Act, 1963, if any period of limitation has been prescribed for a suit regarding debt or interest on a legacy and before the expiry of that period of limitation, if any payment has been made by the person who is liable to pay, then in such a case, the fresh period of limitation will begin to run from the date on which any payment has been made.

According to this section, payment can be made by person himself or by his agent and to prove the payment, a person must acknowledge the payment in writing or signed by him.

In the leading case of Sant Pal Mahton vs. Kamla Prasad, the Hon’ble court held that the fresh period of limitation begins to run from the date on which payment has been made.

Moreover, in the leading case of Northern India Finance Corporation (P) Ltd. Vs. R.L. Soni, the Hon’ble court held that the period of limitation will be extended only if payment has been made. If payment has been made through cheque and if that cheque gets dishonour, then in such a case, period of limitation will not be extended.

The main objective behind these sections is to protect the interest of an aggrieved party. It is generally said that period of limitation has been prescribed so that parties may not file suit after a long period of time. If they file a suit after a long period of time, then it might be possible that the evidences may disappear or memory of witnesses may get faded.

But according to these sections, this problem cannot arise because whenever a person acknowledges his liability or made a part payment, then new cause of action arises at that particular time and new evidences creates at that time. That is why, in these cases, the period of limitation has been extended.

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