Unconditional acknowledgment of debt can revive liability, support limitation, and justify reasonable interest on commercial accounts.

A clear and unconditional acknowledgment of debt in a signed balance sheet can operate as a promise to pay a barred debt under section 25(3) of the Contract Act and may also support the claim against limitation. The article further notes that account books and ledger entries, when corroborated by invoices, admitted dealings, and surrounding evidence, can establish supply transactions, outstanding balance, and liability, especially where the defendants do not enter the witness box and an adverse inference is drawn. Interest is recoverable on advances and goods supplied, but only at a reasonable rate; the excess claim was reduced while the principal claim substantially succeeded.

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Issues: (i) Whether the plaintiff proved the supply of goods and advances, the resulting outstanding balance, and the liability reflected in its accounts. (ii) Whether the defendants' acknowledgment in the balance sheet saved the claim from limitation or operated as a promise to pay a barred debt. (iii) Whether the plaintiff was entitled to interest and to what extent.

Issue (i): Whether the plaintiff proved the supply of goods and advances, the resulting outstanding balance, and the liability reflected in its accounts.

Analysis: The plaintiff relied on its regular account books, ledger extract, supporting invoices and the defendants' failure to enter the witness box. Mere entries in books of account do not by themselves charge liability, but the evidence was not confined to bare entries. The accounts were corroborated by the dealings between the parties, the admitted transactions, and the acknowledgment reflected in the defendants' balance sheet. The Court also drew an adverse inference from the non-examination of the material defence witnesses.

Conclusion: The plaintiff proved the transactions, the outstanding amount, and the defendants' liability.

Issue (ii): Whether the defendants' acknowledgment in the balance sheet saved the claim from limitation or operated as a promise to pay a barred debt.

Analysis: The balance sheet signed for the firm acknowledged the debt and was filed within three years of the suit. Even on the assumption that the acknowledgment was after limitation had expired, an unconditional acknowledgment of debt was treated as a promise to pay within the meaning of section 25(3) of the Contract Act. The Court held that the document clearly bound the firm through the partner's signature and that the claim was therefore enforceable in law.

Conclusion: The claim was within limitation, and alternatively the acknowledgment constituted a valid promise to pay the debt.

Issue (iii): Whether the plaintiff was entitled to interest and to what extent.

Analysis: The claimed rate of interest was found excessive and was reduced. Considering the nature of the claim as advances and price of goods supplied, interest was held admissible, but only at a reasonable rate.

Conclusion: The plaintiff was entitled to past interest at the reduced rate and to future interest on the principal sum.

Final Conclusion: The suit succeeded substantially, with a decree for the principal amount and reduced interest, while the excess claim was rejected.

Ratio Decidendi: A clear and unconditional acknowledgment of debt, when signed by a competent partner, may both support limitation and amount to a promise to pay a barred debt under section 25(3) of the Contract Act; account entries, when corroborated by surrounding evidence and adverse inference from the defendants' silence, can establish liability.

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