UNITED BANK LIMITED, STOCK EXCHANGE BRANCH, LAHORE vs S. KHALID
This civil appeal was filed by United Bank Limited against the judgment and decree dated 17-1-1994 passed by the learned Special Judge Banking, Lahore, which dismissed the appellant-Bank's suit for recovery of Rs. 9,49,780 as time-barred. The suit was instituted on 12-3-1993 and was based on a promissory note executed by the respondent-defendant on 13-5-1974. The appellant-Bank relied upon a document dated 31-3-1992 (Exh. P-6) as a valid acknowledgment extending the limitation period. The core legal question was whether a written acknowledgment executed after the expiry of the prescribed limitation period could extend limitation under Section 19 of the Limitation Act 1908. The Lahore High Court held that to constitute a valid acknowledgment under Section 19 of the Limitation Act 1908, the acknowledgment must be executed before the expiration of the original limitation period. Since the document relied upon was executed long after three years from the promissory note's date, it could not extend limitation. Consequently, the High Court affirmed the dismissal of the suit and dismissed the appeal.
- Must an acknowledgment of debt be executed prior to the expiry of the period of limitation to extend limitation under Section 19 of the Limitation Act 1908?
- Can a written acknowledgment executed after the prescribed limitation period revive a time-barred cause of action on a promissory note?
- Section 19, Limitation Act 1908
' JAWWAD S. KHAWAJA, J.---This appeal impugns the judgment and decree, dated 17-1-1994 passed by the learned Special Judge Banking, Lahore. The appellant/ plaintiff Untied Bank Ltd., filed a suit against the respondent/defendant for recovery of Rs,9,49,780. The said suit was based on a promissory note, dated 13-5-1974 executed by the respondent/defendant in favour of the plaintiff- Bank. The suit itself was filed on 12-3-1993. As such, the learned Special Judge, Banking was of the view that the suit was time-barred. The Bank placed reliance on Exh. P-6 which, according to it constituted an acknowledgment whereby the period of limitation stood extended. We have seen Exh.P-6 which is dated 31-3-1992. In order for the said document to constitute a valid acknowledgement under section 19 of the Limitation Act it was necessary that the same be executed within the period of limitation. In the present case since the promissory note relied upon by the Bank is dated 13-5-1974 in order for any acknowledgement to be valid for the purpose of extending the period of limitation it ought to have been executed within three years from the date of the promissory note. Admittedly this is not the case in the present appeal.
2. In view of the foregoing discussion, we are not in any doubt that the impugned judgment and decree is in accordance with law. The suit of the appellant-Bank was rightly dismissed as having been barred by limitation. This appeal, as a consequence. Is dismissed.