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TMI Blog2016 (5) TMI 1527X X X X Extracts X X X X X X X X Extracts X X X X ..... and dismissed the suit as being barred by law of limitation. 4. The present second appeal is directed against the aforesaid judgment of the First Appellate Court. The substantial question of law on which the present second appeal has been admitted is as to what would be the effect of the two letters written by the defendant/respondents dated 18.11.2006 and 20.11.2006 (Ex.PW2/2 and Ex.PW2/3) and whether the aforesaid letters would constitute a promise by the respondent/defendants to pay in whole or in part, the debt, of which the appellant Bank might have enforced the payment but for the law of limitation. 5. Necessary facts are as hereunder: 6. Respondent No.1, the sole proprietor of M/s Aggarwal Store, a kirana shop, dealing in grocery and items of daily need, applied for loan before the appellant Bank. The appellant Bank granted a cash credit limit of Rs. 1 lakh to respondent/defendant No.1. Respondent No.2 stood as a guarantor to the loan and the guarantee documents were executed on 27.11.2001. 7. The aforesaid cash credit limit was availed of by respondent/defendant No.1 but the repayments were very irregular. The appellant Bank sent reminders to the respondents No.1 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Principal Officer of the appellant Bank for some time, has also testified to the fact that the respondents/defendant No.1 availed of the cash credit limit of Rs. 1 lakh but defaulted in repayment of the same. He has also testified to the fact vide letter dated 31.10.1996 (Ex.PW2/1). Respondents/defendants have confirmed the correctness of the outstanding amount payable to the Bank and thus there is an acknowledgement of the liability of the respondents/defendants. 12. S.C. Rana (PW3), Chief Manager, Stressed Assets Resolution Centre, admitted of the default by the respondents/defendants in repaying the loan amount. 13. Despite opportunity to the respondents/defendants, no evidence was led on their behalf. As such, the Trial Court, in the absence of any rebuttal of the deposition of the prosecution witnesses, decreed the suit and declared the appellant Bank to be entitled to the decree of a sum of Rs. 2,42,199.37 along with interest @10% p.a. from the date of filing of the suit till its realization along with the costs. 14. The respondents/defendants challenged the aforesaid judgment of the Trial Court before the First Appellate Court primarily on the ground of limitation. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to be repelled on the premise that the aforesaid two letters were not merely acknowledgments of the liability to pay but were in the nature of a promise to pay a debt notwithstanding the recovery of the same being barred by limitation. A reference was made to the provisions of Section 25(3) of the Indian Contract Act. 18. Section 25 of the Indian Contract Act reads as hereunder: "25. Section 25 in The Indian Contract Act, 1872: Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law.-An agreement made without consideration is void, unless- (1) it is expressed in writing and registered under the law for the time being in force for the registration of 1[documents], and is made on account of natural love and affection between parties standing in a near relation to each other; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless. (3) It is a promise, made in writing and signed by the person to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is a distinction between an acknowledgement under Section 18 of the Limitation Act and a promise under Section 25 (3) of the Indian Contract Act inasmuch as though both have the effect of giving a fresh lease of life to the creditor to sue the debtor, but, for an acknowledgement under Section 18 of the Limitation Act to be applicable, the same must be made on or before the date of expiry of the period of limitation whereas such a condition is non-existent so far as the promise under Section 25 (3) of the Indian Contract Act is concerned. A promise under Clause 3 of Section 25 of the Indian Contract Act, even made after the expiry of the period of limitation would be applicable and would cause revival of the claim, notwithstanding the limitation. Under Section 25(3) of the Indian Contract Act, a promise in writing to pay in whole or in part, a time barred debt is not void. 25. For ascertaining whether the nature of the aforesaid letters (Ex.PW-2/2 & Ex.PW-2/3) are of a "promise to pay", it would be necessary to examine the definition of the word "promise‟ under Section 2(b) of the Indian Contract Act. 26. Section 2(b) of the Indian Contract Act reads as hereunder: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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