1. This appeal arises from the decree passed by the Assistant District Judge (1) Gauhati in TS No. 104 of 1978.
2. Facts—The plaintiff, the United Bank of India, on 11.12.73 lent Rs. 18,500/- to the contesting defendant Umesh Chandra Cha-kravarty for purchasing an Ambassador Car. The loan was payable-with interest by monthly instalments of Rs. 500/-. After the purchase of the car, the Car (ASU 770) was hypothecated to the bank by the defendant.
3. According to the plaintiff-bank, the amount payable by the contesting defendant became Rs. 29,758.54 including interest, but he failed to pay the same. Accordirgly, the suit had been instituted by the plaintiff-bank against the defendant claiming, inter alia, recovery of Rs. 29,758.54. The suit was proceeded exparte against other defendants who had been alleged as guarantors. The main defence of the contesting defendant was that the suit was barred by limitation. The trial Court decreed the suit by holding that the suit was not barred by limitation. Hence this appeal by the defendant.
4. The first question which arises for consideration is whether the suit was barred by limitation. The date of loan was 11.12.73 and the suit was filed on 30.9.78 It is not disputed that the prescribed period of limitation for the suit is 3 years. Therefore, the prescribed time for the suit would expire on 11.12.76, if the date of loan is excluded. But there were other documents executed by the defendant marked as Exts-8, 9, 10, 11, 14 and 14. Exts 8 and 14 are acknowledgement of liability in respect of Rs. 24,604.34 made by the defendant, which were signed on 15.2.77 by the defendant. Ext 9 is ‘letter of Continuity’ but it does not bear the date of signing by the defendant. Ext 10 is the ‘Letter of Lien’ and Ext 11 is ‘Deed of Hypothecation’. These two documents were also signed on 15.2.77-Ext 12 is the ‘Promissory Note’ for Rs. 18,500/-. In Ext 12 the promissory note, the date put by the defendant-1 has been overwritten by different hand and ink, although the date apparently seems to be 15.2.77 Ext-9 to 12 were contenparancous documents executed and sent by the defendant along with the link letter of acknowledgement of liabilities (Ext 8) which was signed by the defendant on 15.2.77 Therefore, all these documents, namely Exts 9 to 12 indicate that a promise was made by the defendant to pay a time barred debt in writing in respect of Rs. 18,500/- with a minimum interest at 13% per annum.
5. In view of the above discussion, it is coucluded that the defendant acknowledged the liability in respect of Rs. 24,604.34 (a time barred debt) on 15.2.77, and that he made a new promise om 15.2.77 to pay Rs. 18,500/- with minimum interest at 13% per annum after the suit for recovery of Rs. 24,604.34 was barred by limitation.
6. With regard to acknowledgement, under section 18 of the limitation Act, the acknowledgement must be before the expiration of the prescribed period of limitation. Therefore, the acknowledgement which were made after the expiration of the prescribed period of limitation cannot be considered. In the present case, the acknowledgement of the liability was made in respect of Rs. 24,604.34 after the expiration of period of limitation prescribed for the suit. Therefore, the acknowledgements were of no consequence, and as such, the remedy for recovery of the old debt was barred by limitation.
7. Coming to the promise to pay a time barred debt, subsection (3) of section 25 provides that an agreement made without consideration is void unless it 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 creditor might have enforced the payment, but for the law for limitation of suit. Such an agreement is a contract. The illustration (e) appended to section 25 runs:
“A owes B Rs. 1000/- but the debt is barred by the limitation-Act. A signs a written promise to pay B Rs. 500/- on account of debt. This is a contract.”
8. Under sub-section (3) of section 25 of the Contract Act a written promise to pay debt barred by limitation law is a cantract consti tuting a new cause of action which can form a basis for a suit by the creditor. As regards the old debt, limitation bars the remedy,. but does not extinguish the debt and, therefore, the old debt may be, or may not be, revived. It dopends upon the terms of the agreement. The distinction between section 18 of the Limitation Act and sub section (3) of section 25 is that in case of section 18, the written acknowledgement of liability must be made before the expiration of period of limitation for a suit, and the promise under sub-section (3) of section 25 may be made after the expiration of period of limitation.
9. In the presant case, the new promise was made on 15.2.77 by the defendant in respect of Rs. 18,500/- only with interest thereon out of Rs. 24,604.34 after the expiration of the limitation prescribed for the suit for Rs. 24,604.34. Therefore, I am of the view that the old debt of Rs. 24,604.34 could not be revived on the fact and circumstances of the case. In such a situation, the suit in respect of the new promise for payment of Rs. 18,500/- with interest would be maintainable and claim of the old debt was barred by limitation as the old debt was not revived, as already stated.
10. The next question which arises for consideration is what would be the amount which shall be awarded to the plaintiff-bank. As already stated, the suit for Rs. 18,500/- with interest under the new promise was maintainable. Ext-15, statement of accounts of the bank, shows that the plaintiff has already paid Rs. 4,120/- of which Rs. 2,620/- was paid before the new promise; Rs. 1,500/-, after the new promise. Interest can be claimed for the period prior to the date of institution of the suit if there is an agreement for payment of interest at fixed rate and the Court may also allow such interest and interest as is provided under section 34, CPC. But considering the facts and circumstances of the case, I am not inclined to award any more interest, and I hope, it will be fair and just if the suit is decreed for Rs. 18,500/- only. I do so accordingly. As regards the other reliefs, it is for the Court executing the decree.
11. In the result, the appeal is partly allowed and the decree of the trial Judge is modified to the extent indicated above. Parties are to bear their own costs thoughout.