HABIB BANK LTD. Versus KHALID AKBAR

1. By a short order passed on 9-10-1988, I have allowed this Revision Application by setting aside judgment of Appellate Court and order of the trial Court .for disposal of suit according to law, with reasons to be given later, which follow now.

2. M/s. Habib Bank Limited who are applicants before me filed a suit for recovery of Rs.6,018.94 against borrower Khalid Akbar and his guarantor S. Jarrar Hussain in the Court of XXIlth Civil Judge Second Class based on promissory note dated 23-9-1972. Both defendants m the suit were served and filed application under Order 7, Rule 11, C.P.C. on the ground that suit was time- barred. This application was allowed by the trial Court vide order passed on 20-9 1978, in consequence whereof plaint was rejected as being time-barred. Against this order, Habib Bank filed an appeal which was dismissed by learned VIth Additional District Judge, Karachi vide judgment dated 12-3-1983.

3. It appears that both the Courts below were influenced by mistaken view of law. Article 64-A of the Limitation Act, which prescribes limitation for filing suit within three years from the date when the debt becomes due is applicable in suits which are filed by way of summary proceedings as contemplated under Order 37 C.P.C. In the instant case the suit was not filed under Order 37 C.P.C. but was filed in the ordinary course. For such suit for recovery of money in the ordinary course Article 57 of the Limitation Act would apply which prescribes period of three years for filing of suit from the date when the loan is made. Article 57 of the Limitation Act is to be read in conjunction with Section 25(3) of the Contract Act, which contemplates that agreement without consideration is void except in case when there is a promise made in writing and signed by the person to be charged therewith or by his agent generally or specially authorised in that behalf to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. This provision prescribes two conditions. Firstly that there should be promise in writing which is different from acknowledgement in writing as contemplated under Section 19 of Limitation Act. Secondly that promise is made after the period of limitation has expired. It is also noteworthy and pertinent to point out that there is basic difference between Section 25(3) of Contract Act and Section 19 of Limitation Act. Requirement of Section 19 of the Limitation Act is that there is to be acknowledgement of liability in writing made before the expiry of period of limitation fixed in filing suit or application. There is noticeable difference between an acknowledgement of liability in writing which can be without promise to pay and the promise in writing in which there is categorical assurance for payment. In support of the proposition stated above, reliance can be made on the case of Habib Bank Ltd. v. Shamim Qureshi PLD 1988 Kar.481.

4. In the instant case, learned Additional District Judge was mistakenly under impression that Article 64-A of the Limitation Act would apply, which is meant only for suits filed under Order 37 C.P.C. Since this is a suit for recovery of money filed in the ordinary course, hence Article 57 of Limitation Act will apply to be read with Section 25(3) of the Contract Act. In the instant case promissory F note was executed on 23-9-1972 and suit was filed within 3 years. On 13-2-1978 borrower Khalil Akbar who is defendant No.1 in the suit, addressed a letter to the Manager, Habib Bank, which is reproduced hereunder:-

5. 49/C, Block 2

6. PECHS, Karachi

7. February 13, 1978

8. The Manager,

9. Habib Batik Ltd.

10. Eidgah Branch,

11. Karachi.

12. Dear Sir,

13. I had taken a loan of Rs.3,000 from your branch a few years back on the personal guarantee of a friend. Due to unforeseen events I failed to pay back the loan, which I believe stands outstanding in my name.

14. I shall be obliged if you will let me know exactly how much amount I owe to your bank; upon receipt of your reply I hope I shall be able to arrange regular repayment of your instalments starting from the month of May, 1978.

15. Thanking you.

16. Yours faithfully sd/-

17. (KHALID AKBAR)"

18. Letter reproduced above is pivotal document for the reason that all important questions revolve round this letter and its interpretation. This letter is written by borrower on 13-2-1978, when suit, which could have been filed on the basis of promissory note, had become time-barred under Article 57 of the Limitation Act. Secondly in this letter there is clear cut acknowledgement of liability to pay the loan and further there is categorical promise to make repayment. This letter, therefore, fulfils the requirements contemplated under Section 25(3) of the Contract Act, as such suit filed 'on 24th April, 1978 was within time. In the circumstances, order passed by the trial Court rejecting the plaint and judgment passed in appeal maintaining order of the trial Court are hereby set aside and the case is remanded to the trial Court for disposal of suit according to law.

19. M.Y.H./H-162/K

20. Case remanded