Limitation in recovery suits: consent terms did not revive the claim, and winding-up time was not excluded.

A recovery suit was held time-barred because the invoices predated the filing by more than the ordinary limitation period, and no saving provision applied. Consent terms and the consent order did not amount to a valid acknowledgment under section 18, as they did not clearly admit subsisting liability before expiry of limitation; the deposit made under them was treated only as compliance. The court also held that limitation could not be waived or defeated by estoppel once the statutory bar operated. Time spent in winding-up proceedings was not excludable under sections 14 or 15, so the claim remained barred.

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Issues: (i) Whether the suit for recovery was barred by limitation on the facts pleaded in the plaint; (ii) Whether the consent terms and consent order amounted to an acknowledgment of liability extending limitation; (iii) Whether limitation could be waived or the defendant estopped from pleading limitation; (iv) Whether the time spent in the winding-up proceedings was excludable under the Limitation Act.

Issue (i): Whether the suit for recovery was barred by limitation on the facts pleaded in the plaint.

Analysis: The invoices were of February and March 1983 and the suit was filed on 5 December 1986. On the plaintiff's own showing, the ordinary period for recovery had expired before the suit was instituted. The court examined the pleaded dates and held that, unless limitation was saved by a recognised provision, the claim was time-barred.

Conclusion: The suit was barred by limitation.

Issue (ii): Whether the consent terms and consent order amounted to an acknowledgment of liability extending limitation.

Analysis: An acknowledgment under section 18 must be in writing, signed, and made before expiry of the prescribed period. The consent terms merely confirmed the earlier conditional order and extended time for deposit and filing of suit; they did not contain a clear acknowledgment of subsisting liability to pay the debt. The subsequent deposit of Rs. 60,000 was also treated as compliance with the order and not as acknowledgment of the debt. By the date of the consent terms, the claim had already become time-barred.

Conclusion: The consent terms and consent order did not amount to an acknowledgment of liability.

Issue (iii): Whether limitation could be waived or the defendant estopped from pleading limitation.

Analysis: The plea of waiver was founded on the same consent terms, but those terms did not show any conscious waiver of the limitation defence. The court further held that limitation is a matter the court must notice under section 3, and there can be no waiver or estoppel against a statutory bar once the claim is time-barred.

Conclusion: There was no waiver of limitation and no estoppel against the limitation defence.

Issue (iv): Whether the time spent in the winding-up proceedings was excludable under the Limitation Act.

Analysis: Section 15(3) was held inapplicable because the suit was not by a receiver, interim receiver, liquidator, or provisional liquidator. Section 14 also did not assist the plaintiffs because the winding-up petition was not a proceeding concerning the same matter in issue as the recovery suit, and the court was not unable to entertain it by reason of defect of jurisdiction or a like cause. The earlier company petition was in fact entertained, and the later filing of the suit did not attract exclusion of time.

Conclusion: The period spent in the winding-up proceedings could not be excluded.

Final Conclusion: The plaintiff's recovery claim was held to be time-barred, the preliminary issue was decided for the defendant, and the suit was dismissed with the deposited amount directed to be refunded.

Ratio Decidendi: A consent order confirming a conditional order does not amount to an acknowledgment of liability unless it clearly and timely ises the debt, and time spent in winding-up proceedings is not excluded under the Limitation Act unless the statutory conditions for sections 14 or 15 are strictly satisfied.

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