Balance sheet acknowledgment can save limitation, while interest was reduced and instalment relief with attachment continued.

Entries in a company's balance sheets can constitute a written acknowledgment of liability under Section 19 of the Limitation Act if they record the debt as subsisting and are duly signed in accordance with company law, so the suit was not barred by limitation. The court also held that interest had been wrongly awarded at 5 per cent for part of the period where the advance carried interest at 4 per cent, and the decree was modified accordingly. Instalment relief was granted for satisfaction of the decretal amount, with the attachment before judgment continued for two years to secure payment.

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Issues: (i) Whether entries in a company's balance sheets constituted an acknowledgment of liability within the meaning of Section 19 of the Indian Limitation Act so as to save the suit from limitation; (ii) Whether the plaintiff was entitled to interest at 5 per cent per annum for the entire period awarded by the court below; (iii) Whether the decretal amount should be made payable by instalments with continuation of the attachment before judgment.

Issue (i): Whether entries in a company's balance sheets constituted an acknowledgment of liability within the meaning of Section 19 of the Indian Limitation Act so as to save the suit from limitation.

Analysis: A written and signed acknowledgment made before expiry of limitation is sufficient under Section 19 of the Indian Limitation Act. The balance sheets in question specifically showed the plaintiff's claim as a liability of the company. The objection that the plaintiff was a signatory to some of the balance sheets did not defeat the acknowledgment, because later balance sheets were signed by other directors and, in any event, the balance sheet for 1952-1953 was validly signed by the requisite number of directors under Section 133 of the Indian Companies Act, 1913. The acknowledgment in the balance sheets was treated as an admission of a subsisting liability by implication.

Conclusion: The balance sheets constituted valid acknowledgments of liability, and the claim was not barred by limitation.

Issue (ii): Whether the plaintiff was entitled to interest at 5 per cent per annum for the entire period awarded by the court below.

Analysis: The suit was founded on an advance carrying interest at 4 per cent per annum. The court below had wrongly granted interest at 5 per cent per annum for part of the period. The proper rate for that period was 4 per cent per annum, and the decree required modification to that extent.

Conclusion: The award of interest was reduced to 4 per cent per annum for the relevant period.

Issue (iii): Whether the decretal amount should be made payable by instalments with continuation of the attachment before judgment.

Analysis: In view of the circumstances, the decree was fit to be satisfied within two years by equal monthly instalments. To secure recovery, the attachment before judgment was ordered to continue for the same period, and default in payment of consecutive instalments would make the entire balance immediately executable.

Conclusion: Instalment payment was granted, and the attachment before judgment was continued for two years.

Final Conclusion: The appeal succeeded only to the limited extent of reducing the interest rate, while the decree was otherwise maintained with instalment relief and continuation of attachment.

Ratio Decidendi: A company's balance sheet can amount to an acknowledgment of liability for limitation purposes when it records the debt as subsisting and is duly signed in accordance with the governing company law.

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