Legal Question in Civil Litigation in India

Re: LimitationAct Sec19.Application in SummarySuit, When amnt paid credited as i

Please read Section 19 of the Limitation Act carefully. I'm reproducing it for your benefit below.

"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.-For the purposes of this section,-

(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."

Sec 19 specifies three requirements for extending the period of limitation.

1. Some payment be made within the period of limitation by the debtor "on account of a debt".

2. Towards either interest or principal

and

3. Payment be evidenced by the handwriting of the debtor or his authorised agent.

If all these three requirements are satisfied, then the period of limitation is extended or to use the language of section 19

"a fresh period of limitation shall be computed

from the time when the payment was made" .. See Proviso to Sec. 19. the payment here refers to the last payment made by the debtor.

Therefore the borrower has no right to claim that the payment was made and credited only towards interest and not towards principal and hence the suit is barred by limitation. The section extends the time if the payment is made "on account of debt" and does not distinguish between how the amount was credited by the lender. The law seeks to do substantive and real justice and does not seek to avoid justice by technical stands unless there is a clear case of laches by the lender which is absent here.

I understand your point as to whether any Supremem Court citations are available to support your view but I think a mere reading of the Section neutralises your expecatations. Here as you say, payments were made by the debtor without specifying what for they are paid but you agree that they are paid on account of debt which brings Section 19 in to operation.

Thank you,

N. Ramaswami