Author: Grace Deebthee John
SYNOPSIS
INTRODUCTION
WHAT IS ACKNOWLEDGMENT?
EFFECT OF ACKNOWLEDGMENT
PRINCIPLES OF SECTION 18
SECTION 19
SECTION 20
REQUISTES OF VALID ACKNOWLEDGMENT
CASE LAWS
CONCLUSION
FAQ
INTRODUCTION
The law of limitations is based on the maxims “vigilantibus non dormientibus Jura subveniunt,” which states that the law will only assist those who are vigilant about their rights and not those who sleep on them, and “interest republicae ut sit finis litium,” which states that litigation should be limited in the interest of the state as a whole. The time frame during which an individual may initiate a legal action or file a lawsuit is determined by the statute of limitations. If a case is filed after the deadline has passed, it will be barred by the limitation. It implies that a suit filed with the court after the window of opportunity for a legal action to be started has closed will be limited. The term “limitation” literally means a restriction, rule, or collection of restricted conditions. The window of time within which the injured party may bring a lawsuit and ask the court for justice or remedy is known as the statute of limitations.
What is Acknowledgement?
When a writer acknowledges that he owes someone money, it can be addressed to the letter’s recipient or to someone else acting on their behalf. An acknowledgement is not as simple as stating that someone else owes you money.
An acknowledgement must be able to be interpreted as either an unqualified commitment to pay the specific obligation, an absolute promise to pay, or a conditional promise to pay the debt along with evidence that the condition has been satisfied. Acknowledgment is the defendant’s explicit and unambiguous admission of their current liability. It is a written declaration of an outstanding debt. An acknowledgment of conditioned liablity will not give a fresh start so long as the condition remains unfulfilled . An unqualified admission and an admission qualified by a condition which is filled stand precisely upon the same footing and both are within sec 18 of the Limitation Act.
Effect of written acknowledgment (1) If, prior to the end of the allotted time for a suit or application pertaining to any property or right, a written acknowledgement of liability concerning such property or right has been made and signed by the party asserting the property or right, or by any person from whom the party derives his title or liability, a new statute of limitations will be calculated as of the date of the written acknowledgement3
(2) In cases where the acknowledgement is not dated, oral testimony regarding the signing time may be provided; however, oral testimony regarding the contents of the document cannot be accepted due to the Indian Evidence Act, 1872.
Principle of Section 18 of the 1963 Limitation Act:
The basic principle behind this clause is that the statute of limitations shouldn’t be allowed to run when the parties who are liable acknowledge the existence of a claim. Each admittance offers further proof of debt. Section 18 does not extend the deadline; rather, it establishes a new one that begins on the acknowledgement date. When the defendant admits fault, the statute of limitations is terminated, allowing a fresh one to start on the date of the interruption and nullifying any that have already passed.
However, such recognition does not produce the new cause of action or the original cause of action. An acknowledgment just compensates for the discrepancy. According to the principles underlying Section 18, the bar of limitation should not apply when the parties who are liable recognize the existence of a claim. Each acknowledgement provides fresh evidence of the debt’s existence. The statute of limitations is not extended by Section 18, but a new term starts on the date of acknowledgment.
Fresh Time Limitation Period
A fresh statute of limitations starts after the debtor signs an acceptance of liability. We will attempt to define what is meant by recognition. “Acknowledgment,” as defined by the Oxford Dictionary, is the act of proving that one has seen and taken notice of the relevant work. Indian courts have interpreted the phrase “Acknowledgment” in cases relevant to Section 18 of the Act, giving it a very broad and comprehensive definition.
Acknowledgement of Debt after the Expiry of Limitation
By acknowledging a debt after the statute of limitations has passed, the debtor agrees to pay the creditor the entire amount originally agreed upon, or a fraction of it, depending on the terms of the specific arrangement. If a debt is acknowledged after the statute of limitations has passed, the consequences are outlined in Section 25(3) of the Indian Contract Act, 1872. A promise made in accordance with Section 25(3) of the Indian Contract Act would be applicable and cause the claim to be renewed even after the Statute of Limitations has passed, but the promise made under Section 25(3) of the Indian Contract Act is exempt from the acknowledgement requirement under Sections 18 and 19 of the Limitation Act, which together give the creditor additional grounds to sue the debtor.
19. Effect of payment on account of debt or of interest on legacy.Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
Explanation.
a)where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment
b)“debt” does not include money payable under a decree or order of a court.
Section 20 of Limitation Act, 1963:
Effect of acknowledgement or payment by another person-
This section is an explanatory as well as supplementary section to Section 18 and 19 and does not constitute an exception in the case of either of these section.
Section 20 deals with the question as to who can keep alive a right which is not time- barred. It does not deal with the question as to who can revive a time-barred debt.
According to sub-section (1), the expression “agent duly authorized in this behalf” in Section 18 and 19 shall, in the case of a person under disability, include his lawful guardian, committee or manager or an agent duly authorized by such guardian, committee or manager to sign the acknowledgment or make the payment.
Sub-section (2) declares that one of several joint contractors, partners, executors, mortgagees, will not render the other joint contractors, partners, executors or mortgagees chargeable under an acknowledgment or payment made by him or his duly authorized agent.
Sub- section (3)(a) provides that an acknowledgment signed by or a payment made, in respect of any liability, by any limited owner of property (e.g., widow) governed by the Hindu law, shall be a valid acknowledgment or payment, against a reversioner succeeding to such liability.
Sub-section (3)(b) provides that the manager of a Hindu joint family can make acknowledgment and payment so as to save limitation in regard to liabilities which are binding on the family. Such payment or acknowledgment must be deemed to be made on behalf of the family.
Requisites of a valid Acknowledgment
Acknowledgement must be made prior to the end of the statute of limitations; that is, it must be made both after the statute of limitations has started to run and during its actual duration. The act’s Sections 12 or 14 allow for an acknowledgement to be made prior to the statute of limitations’ expiration.
Liability acknowledgement must be in writing; hence, verbal acknowledgement is insufficient. Comparably, even while a payment may be meant as an acknowledgement of debt, it is insufficient under this clause to simply make a sum of money toward the debt.
The individual making the acknowledgement or his lawfully authorized agent must sign the acknowledgement. As a result, a telegram cannot be considered an acceptable acknowledgement because it is not signed by the people sending it. The legitimacy of acknowledgment is unaffected when initials are signed in lieu of a full signature.
The party who is claiming a party or right, or the person who is obtaining title or liability, must acknowledge the claim.
Acknowledgement must be in respect of the particular property or right claimed in the suit or application.
Acknowledgement need not be expressed, it may be necessary.
CASE LAWS
Union of India v. Seyadu Beedi Co. (1970):
According to the Madras High Court, recognition is not the same as merely writing to higher authorities to settle the debt. In response to the respondent’s notice of the suit’s filing, the appellants stated that the matter was being investigated and that the respondents would be liable for the costs if the action was filed before the investigation was complete. According to the court, the appellants’ response did not explicitly acknowledge culpability, and the evidence was insufficient to support even an implicit admission of liability. As a result, the statute of limitations could not begin again.
Tilak Ram V. Nathu ( AIR 1967 Sc 935)
The statement contained an admission by the party in court that he holds a property as a mortgagee or what he is disposing off are his mortgage rights therein . a sale deed , besides deed of sub mortgage, by which the party sold his mortgage rights were also produced as evidence of acknowledgement. The court observed, it is clear from Sec 18 that in considering whether a statement amounts to an acknowledgement of liability it Haas to be seen whether at the time of writing them the writer had in his mind the question as to liability or whether he was thinking of referring to some other matter.
CONCLUSION
The true goal behind the inclusion of Section 18 of the Act is rather evident and easy to comprehend. The creditor is fully entitled to collect the debt that the debtor owes him. Although the Section’s vittles are favorable to creditors, they also provide the debtor another opportunity to pay off the obligation. However, if the debtor can acknowledge his liability to the creditor before the allotted period has passed, he will also have more time to realize his debts against the creditor. The creditor is not required by Section 18 to appear in court. The creditor can go to court about the debt and has the ability to sue the debtor for not paying the amount.
FAQS
What does the law of limitations serve as?
– The statute of limits guarantees that claims are filed within a given period of time, according to the following principles:
“Vigilantibus non dormientibus jura subveniunt” means that the law supports people who pay attention to their rights.”Interest republicae ut sit finis litium” states that there should be a limit on litigation for the sake of state efficiency and public policy.
What is the statute of limitations?
– It is the allotted period of time for a party to file a lawsuit or start legal proceedings. The claim becomes time-barred after this point, which means the courts won’t consider it.
What does Section 18 of the Limitation Act define as an acknowledgment?
– A declaration in writing, signed by the debtor or other responsible person, acknowledging an existing debt or duty is known as an acknowledgment. The statute of limitations cannot be reset unless it is made before to the end of the limitation period.
Can verbal acknowledgment reset the limitation period?
– No, verbal acknowledgment is insufficient. Acknowledgment must be in writing and signed as per Section 18.
What is the effect of written acknowledgment on the limitation period?
– A valid acknowledgment resets the limitation period, which begins anew from the date of acknowledgment.
Does an acknowledgment need to mention the exact amount of debt?
– No, acknowledgment does not need to specify the exact amount but must clearly refer to the liability in question.
Does acknowledgment apply to all types of debts or liabilities?
– Acknowledgment applies to debts or liabilities other than those payable under a decree or court order.
