AI Drafter 
TaxTMI 
TaxTMI 
2015 (2) TMI 1269
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.... of Rs. 25 lakhs from the date of decree till the date of payment. 3. The plaintiff, who is an Income-Tax Assessee, is also a leading Tamil Producer/Distributor-cum-Director. 3.1. The defendant is also one among the leading producers in the film industry. 3.2. For a Mega Production Venture, the defendant borrowed a sum of Rs. 25 lakhs from the plaintiff, in the year 2000, through three cheques. The cheques were duly encashed by the defendant through the Tamil Nadu Mercantile Bank. Having realized the encashed money and having been a borrowed money, it is the duty of the defendant to repay the same. But, as promised, the defendant did not repay the amount. 3.3. The defendant gave a letter to the plaintiff on 02.01.2007 admitting his liability to the tune of Rs. 25 lakhs. But, even thereafter the suit amount was not paid. That compelled the plaintiff to file the suit. 4. The defendant filed a written statement raising the following averments: 1. Suit is liable to be rejected as provided under Order VII Rule 11(d) of the Code of Civil Procedure. 2. The claim of the plaintiff is barred by limitation 3. The defendant never acknowledged his liability and hence the....
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.... that the suit claim is not barred by limitation as there is an acknowledgment of liability. But the defendant contends that there is no acknowledgment of liability and that even assuming that, it is there, the acknowledgment of liability was not made within the period of limitation and therefore, it is not valid. 9. The learned counsel for the defendant pointed out that the amount borrowed by the defendant by way of three cheques (issued by the plaintiff) remains proved, when documents have been filed to show that the defendant has encashed those cheques on 31.01.2000, 01.02.2000 and on 02.02.2000, for Rs. 8,00,000/-, Rs. 8,00,000/- and Rs. 9,00,000/-, respectively. Therefore, when the plaintiff has proved the payment of loan to the defendant, it is for the repudiating defendant to prove his case. 9.1. The case of the defendant stands on three footings: (i) the defendant never made any acknowledgment of liability and therefore, he is not liable; (ii) even assuming that there was such an acknowledgment as it was not made within the period of limitation, the acknowledgment will not have the effect of extending the limitation; (iii) in full quit, a sum of Rs. 15 lakhs have been....
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....om the time when the acknowledgment was so signed. It would be noticed that some of the relevant essential requirements of a valid acknowledgment are that it must be made before the relevant-period of limitation has expired, it must be in regard to the liability in respect of the right in question and it must be made in writing and must be signed by the party against whom such right is claimed. (iv) AIR 1999 Mad 371 (Kalpana Trading Co. v. Executive Officer, Town Panchayat, Tiruchirappali):- . To constitute acknowledgment of liability, there must be acknowledgment of liability made in writing signed by the party and that too must be before the expiry of the prescribed period and only if there is acknowledgment of liability signed by the party against whom such property or right is claimed, a fresh period of limitation starts from the time of acknowledgment of liability.... (v) 1996 (II) CTC 396 (Sri Vijayalakshmi Art Productions, Rep. By its Partners, v. Vijaya Productions Pvt. Ltd.,):- 21. The fact that the respondent has acknowledged liability on January 24, 1994, for a sum of Rs. 19,03,500 and paid the same in September, 1994, does not extend ....
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....a defence. 11.2. The proposition laid down in the above case cannot be disputed. It is settled proposition of law that the acknowledgment of liability should be made before the expiry of the period of limitation and that if it is beyond the period of limitation, it is of no use to the plaintiff. Apart from that, it is also the duty of the Court to find out whether the suit claim is barred by limitation or not, de hors the plea being raised by the other side. Doubtlessly, it is the duty of the Court to look into the aspect of limitation and to reject the plaint, if the claim is barred by limitation. Promise to pay time-barred debt novates agreement. 12. The issue to be decided, at this stage, is whether the suit claim is barred by limitation in the light of Exs.P4 and P5 documents. 13. During the pendency of the proceedings the defendant is stated to have given a letter, dated 29.09.2008 (Ex.P-5) to the plaintiff in which there is an express promise to repay the sum of Rs. 25,00,000/-. The relevant recital in Ex.P-5 reads as under:- We hereby extend the limitation and agree and undertake to repay the sum of rupees twenty five lakhs only payable by us to you as abov....
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....elevant to quote the decision reported in the case of Kapaleeswarar Temple v. T.Tirunavukarasu, AIR 1975 Mad 164, wherein it has been held as follows:- 6. It is thus clear that there are a catena of decisions and plethora of authority for holding that though a debt might have become time-barred on the date a debtor entered into a fresh obligation with the creditor to Day the liability, the said obligation, if it satisfies the conditions laid down in Section 25(3) of the Indian Contract Act, will amount to a fresh contract in the eye of law and can certainly be made the basis of an action for recovering the amount promised and acknowledged therein by the debtor. While Section 18 of the Limitation Act (Section 19 of the old Act) deals with an acknowledgment made by a debtor within the period of limitation, the contractual obligation which a debtor enters into under the terms of Section 25(3) has no reference whatsoever to the acknowledged debt being within time or not. 14.5. So far as this case is concerned, Ex.P-5 satisfies the requirement under Section 25 (3) of the Contract Act and therefore the defendant is liable to pay the admitted liability under Ex.P-5. ....
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....ashed the cheques obtained from the plaintiff has been proved before the Court. The defendant has also stated in the written statement that if books of accounts are produced, it will show that no amount is due from the defendant, meaning thereby that he has discharged the entire amount due to the plaintiff. 16.2. So far as the plea of discharge is concerned, it is the duty of the defendant to prove the same. The defendant has not proved the plea of discharge. When the defendant has stated that he has paid a sum of Rs. 15,00,000/- in full quit, and in the absence of proof, the conclusion is that the defendant has admitted his liability to the extent of Rs. 15,00,000/-. 17. Under Section 21 of The Indian Evidence Act, proof of admission against the persons who made the statement are relevant and admissible, though not in favour of them (except under limited circumstances). 17.1. Admissions, being declarations against the interest of the maker, are considered as good evidence against the maker. But it is always open to the maker of the admission to show that those statements were either mistaken or untrue. Thus admissions are not conclusive proof of facts admitted, but it may....