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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the payment of Rs. 1,000 by bank draft was made towards the suit promissory note; (ii) whether, on exclusion of time under Section 13 of the Limitation Act 1908, an acknowledgment made within the extended period could give a fresh period of limitation under Section 19.
Issue (i): Whether the payment of Rs. 1,000 by bank draft was made towards the suit promissory note.
Analysis: The documentary record, including the family day-book entry, the bank passbook entry, and the letter referring to the amount and the balance of the debt, showed that the draft was credited against the promissory note. The contrary inference drawn below from internal mistakes in the accounts and the reference to the Thanathu account was held to be unsustainable, as the materials as a whole established that the payment related to the suit debt.
Conclusion: The payment of Rs. 1,000 was held to be towards the suit promissory note.
Issue (ii): Whether, on exclusion of time under Section 13 of the Limitation Act 1908, an acknowledgment made within the extended period could give a fresh period of limitation under Section 19.
Analysis: Section 3 requires dismissal of a time-barred suit, while Sections 14 to 18 deal with computation by addition or exclusion of time. The exclusion contemplated by Section 13 was treated as effectively extending the period within which an acknowledgment could be made. The Court distinguished the position from Section 4, which merely permits filing on reopening after holidays and does not enlarge the period for acknowledgment. On that reasoning, an acknowledgment within the period as computed after exclusion fell within Section 19.
Conclusion: The suit was held to be within time and not barred by limitation.
Final Conclusion: The decree of the court below was set aside and the suit was decreed with costs.
Ratio Decidendi: Where time is excluded in computing limitation, the resulting extended period remains within the statutory period for an acknowledgment under Section 19 of the Limitation Act 1908, and a payment shown to have been made towards the debt operates accordingly to save limitation.
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