Acknowledgment of liability in reconciled accounts can extend limitation when an authorised agent finalises balances.

A written statement admitting a balance payable in a subsisting account can amount to an acknowledgment of liability under the Limitation Act if it shows a present debtor-creditor relationship, even without a promise to pay. Here, the correspondence reflected ongoing reconciliation, repeated admissions of amounts due in the corporation's books, and a letter stating the balance payable after adjustments. The writer was also treated as having implied authority, because he had been authorised to scrutinise claims, finalise accounts, and post consequential entries. The acknowledgment therefore extended limitation, and the claim was not time-barred.

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Issues: (i) Whether the letter written by the corporation's secretary-cum-chief accountant amounted to an acknowledgment of a subsisting liability so as to extend limitation. (ii) Whether the writer had implied authority to make such an acknowledgment binding on the corporation.

Issue (i): Whether the letter written by the corporation's secretary-cum-chief accountant amounted to an acknowledgment of a subsisting liability so as to extend limitation.

Analysis: An acknowledgment under the Limitation Act must relate to a present subsisting liability and indicate the existence of a jural relationship of debtor and creditor. It need not be a promise to pay, and may be gathered from the language used and the surrounding circumstances. The correspondence between the parties showed an ongoing process of reconciliation of accounts, repeated admissions that amounts were due in the corporation's books, and a statement in the impugned letter that after adjustments the balance payable stood at a specified figure and should be confirmed so that the claim could be settled. The confirmation sought did not qualify the admission of liability itself but related to the specific amount shown as payable.

Conclusion: The letter constituted an acknowledgment of liability and operated to extend limitation.

Issue (ii): Whether the writer had implied authority to make such an acknowledgment binding on the corporation.

Analysis: Although a secretary, even when combined with the role of chief accountant or holder of a power of attorney, would not ordinarily have authority by virtue of office alone to bind the corporation by an acknowledgment, the surrounding correspondence and conduct showed that he had been authorised to scrutinise claims, allow or disallow items, finalise the accounts, and post consequential entries in the corporation's books. The successive statements of account issued by him reflected balances as per the corporation's ledger and were consistent with a settled authority to arrive at the amount payable. On that basis, the acknowledgment was made within the scope of his implied authority.

Conclusion: The writer had implied authority to bind the corporation by the acknowledgment.

Final Conclusion: The claims were not barred by limitation, the High Court's dismissal could not stand, and the matter had to go back for decision on the remaining issues and quantification of the amounts due.

Ratio Decidendi: A written statement acknowledging a balance due in a subsisting account, made by an agent who is impliedly authorised to finalise accounts and settle differences, is an acknowledgment of liability that extends limitation.

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