R.S.A.No.3087 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No.3087 of 2008 Date of Decision:24.9.2008 Shabeg Singh .....Appellant versus Raj Kumar .....Respondent CORAM: HON'BLE MR.JUSTICE AJAY KUMAR MITTAL. Present: Mr. Baltej Singh Sidhu, Advocate for the appellant. **** AJAY KUMAR MITTAL, J. The present regular second appeal filed by the defendant is directed against the judgment and decree dated 4.6.2008 passed by the lower appellate Court whereby that of the trial Court dated 19.8.2005 dismissing the suit of the plaintiff for recovery of Rs.6,25,000/- was set aside and the suit of the plaintiff was partly decreed. Put shortly, the facts of the case are that the defendant had been selling his crops to the plaintiff firm and also used to take amount on credit from time to time and had been returning the same which was credited in his account. It was pleaded that on 18.10.1997, the defendant visited the shop of the plaintiff and enquired about his account, on which a total sum of Rs.1,73,378/- (including interest of R.S.A.No.3087 of 2008 -2- Rs.13,713/-) was outstanding towards him. The defendant took another sum of Rs.2,26,622/- in cash from the plaintiff and also executed a pronote and receipt to the tune of Rs.4 lacs on the same day, i.e. 18.10.1997 in the presence of the witnesses and agreed to pay interest at the rate of 2% per month. It was further pleaded that a dispute arose between the parties and a compromise was got effected between them vide agreement dated 30.7.1998. In the said compromise, the defendant admitted the outstanding amount of Rs.4,00,000/- and the execution of the pronote and receipt dated 18.10.1997 and agreed to pay an amount of Rs.3,65,000/- to the plaintiff upto 31.10.1998, in default, the defendant would pay the amount along with interest . It was further agreed in the compromise that the defendant would withdraw the criminal case filed against the plaintiff and the plaintiff would return the pronote and receipt to the defendant after receiving the aforesaid amount. According to the plaintiff, the defendant made a payment of Rs.56,690/- on 7.5.1999 through M/s Siri Ram Kishan Chand and sons and thereafter failed to make the payment of the outstanding amount and a total amount of Rs.6,25,000/- (Rs.3,08,310/- as principal plus Rs.3,16,690/- interest) is outstanding and recoverable from the defendant after deducting the amount of Rs.56,690/- paid on 7.5.1999. The plaintiff requested the defendant to make the payment of the outstanding amount but he refused to do so and that gave rising to the filing of the suit. The claim of the plaintiff was controverted by the defendant by filing a written statement and raising various preliminary objections therein. It was pleaded that neither the defendant borrowed any R.S.A.No.3087 of 2008 -3- amount nor executed pronote and receipt in favour of the plaintiff. It was further pleaded that the defendant had been selling his agricultural produce at the plaintiff's firm but after Harri 1997, the relations between the plaintiff and the defendant became strained and the plaintiff showed a huge amount outstanding against the defendant. According to the defendant, he under fear and compelling circumstances signed the pronote and bahis and the agreement dated 30.7.1998 was a false and fabricated document as no compromise was effected between him and the plaintiff. The other averments made in the plaint were denied and a prayer for dismissal of the suit was made. The trial Court on appreciation of the oral as well as the documentary evidence adduced by the parties held that the plaintiff failed to prove the execution of the pronote and receipt dated 18.10.1997 on the basis of which compromise dated 30.7.1998 was effected. It was further held that the plaintiff was not entitled to the recovery of Rs.6,25,000/- from the plaintiff and that the suit of the plaintiff was time barred. Accordingly, the trial court vide judgment and decree dated 19.8.2005 dismissed the suit of the plaintiff. Feeling aggrieved, the plaintiff approached the lower appellate court which vide judgment and decree dated 4.6.2008 accepted the appeal. The lower appellate court while setting aside the judgment and decree of the trial court held that the suit was filed within limitation. The lower appellate court recorded that the parties had entered into a written compromise/agreement on 30.7.1998 whereby the defendant had accepted the liability of outstanding amount of Rs.3,65,000/- which was to be deposited with the respondent-plaintiff in two installments, i.e. first R.S.A.No.3087 of 2008 -4- installment of Rs.1,65,000/- on 31.10.1998 and second installment of Rs.2,00,000/- on 15.5.1999. Further, in the criminal complaint filed by defendant-Subeg Singh against Raj Kumar-plaintiff, an application, Ex.P11, was filed by the defendant wherein he had admitted that he had entered into a compromise for Rs.3,65,000/- and the criminal court after recording the statement of the defendant on 29.9.1998 ordered the complaint to be dismissed as withdrawn vide Ex.P7/A. Accordingly, it was held that the defendant-appellant had admitted the compromise between him and the plaintiff concerned by virtue of Ex.P11 and the suit of the plaintiff was decreed to the extent that he was entitled to recover Rs.3,65,000/- along with interest at the rate of 12% per annum from the date of execution of the pronote, i.e. 18.10.1997 till the date of decision of the appeal, i.e. 4.6.2008, and future interest at the rate of 6% per annum from 4.6.2008 till the date of realization. I have heard learned counsel for the appellant and perused the impugned judgments with his assistance. Learned counsel for the appellant has submitted that the agreement/compromise and Ex.P11 relied upon by the lower appellate court as acknowledgment for extension of limitation was in the criminal case and the same could not be treated as an acknowledgment for the purpose of extension of limitation in this case. He further submitted that the principal amount claimed from the defendant was Rs.3,08,310/- whereas the decree had been passed for the recovery of Rs.3,65,000/-. Section 18 of the Limitation Act, 1963 (in short “the Act”) relates to the effect of acknowledgment in writing. It reads thus:- “18. Effect of acknowledgment in writing.- (1) R.S.A.No.3087 of 2008 -5- Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation.- For the purposes of this Section,- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right, (b) the word “signed” means signed either R.S.A.No.3087 of 2008 -6- personally or by an agent duly authorised in this behalf, and (c) an application for execution of a decree or order shall not be deemed to be an application in respect of any property or right.” The aforesaid provision postulates that where before the expiration of period of limitation for filing a suit in respect of any property or right, an acknowledgment is made in writing by the party against whom such property or right is claimed regarding the liability in respect of such property or right, a fresh period of limitation commences from the time of signing of the acknowledgment. The appellant could not run away from the fact that the acknowledgment of debt had been made and as per Section 18 ibid it does not draw any distinction between civil or criminal proceedings but relates to the acknowledgment of an existing debt. Thus, the plea of the learned counsel for the appellant that the acknowledgment was made in criminal proceedings does not carry any weight. In view of the findings recorded, it cannot be disputed that the defendant vide compromise deed dated 30.7.1998 and Ex.P11 had accepted the liability of outstanding amount of Rs.3,65,000/- which was to be deposited with the respondent in two installments, i.e. first instalment of Rs.1,65,000/- on 31.10.1998 and the second instalment of Rs.2,00,000/- on 15.5.1999. The suit having been filed on 30.7.2001/1.8.2001 for recovery of a loan amount cannot be said to be beyond limitation on the face of the compromise dated 30.7.1998 and the acknowledgment of the existing debt by way of application, Ex.P11. R.S.A.No.3087 of 2008 -7- Now adverting to the next submission of the learned counsel for the appellant, suffice it to notice that no installment in terms of the aforesaid compromise was made by the appellant to the respondent. It is, thus, undisputed that an amount of Rs.3,65,000/- is outstanding against the defendant-appellant which is inclusive of interest accrued on the debt also. The said submission is, therefore, rejected. No question of law much less a substantial question of law arises in this appeal for consideration of this Court. In view of what has been stated above, the present appeal fails and the same is hereby dismissed with no order as to costs. September 24, 2008 (AJAY KUMAR MITTAL) gbs JUDGE