Provided that save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgement of the payment appears in handwriting of, or in a writing signed by, the person making the payment.
For the purposes of Section 19, according to the explanation, (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. Section 19 does not prevent the operation of Section 18 and the two sections are not mutually exclusive. Section 18 only operates against the person who makes the acknowledgement, but Section 19 makes the part- payment good in favour of any suit on that liability. Under Section 19 all that is necessary is that an acknowledgement of payment should appear in the handwriting of or be signed by the person making it. But this is not enough under Section 18. Under Section 18 there must be an admission of existing liability, while under Section 19 it is enough if the writing merely records the fact of payment. An acknowledgement under Section 18 must be by the person against whom property or right is claimed or by some person through whom he derives his title or liability to payment.
For the purpose of Section 19 it will only be by the person liable to pay debt. Mere endorsement of payment without anything more will not operate as an acknowledgement under Section 18 of the Limitation Act and it will be too broad a proposition to lay down that every endorsement of subsisting liability for debt would amount to acknowledgement. In Ramchandra v. Giridharilal, [ILR (1964) 15 Raj.
282] it has been held that endorsement of the debtor on the back of the hand note in the handwriting of the debtor that certain amounts were paid by the debtor on a certain date attracts only Section 19 but that does not amount to acknowledgement of liability within the meaning of Section 18. If the endorsement is not by the debtor but by the creditor that would not amount to payment to attract Section 19. In Today Stationers and Gift Centres v. Allahabad Bank, [2004(1) ICC 166 (P&H)] it has been held that mere entry by the bank in its books of account of the interest due to the debtor would not stop the time running because such unilateral entry by the bank in his books of account was not based on mutual transactions and are unilateral action by the bank. Section 19 of the Limitation Act applies only to a suit for a debt both secured and secured or legacy or to the case of a mortgage with possession. It does not apply to a suit for redemption of a mortgage. The proviso to this section does not apply where the mortgaged land is in possession of the mortgagee. Section 19 of the Limitation Act does not make a distinction between a payment of interest and a payment of principal.
The word ‘prescribed’ in Section 19 means the period prescribed in the first schedule and the Limitation Act and not the period within which the plaintiff may bring his suit. A payment by cheque satisfies the requirement of Section 19 of the Limitation Act in as much as the acknowledgement of payment appears in the handwriting of or in a writing signed by the person making the payment in the form of a cheque. Regarding post-dated cheque, the payment for purposes of Section 19 can only the date which the cheque bears and cannot be on the date of the cheque is handed over, for the cheque, being postdated, can never be paid till the date on the cheque arrived.
A payment saves limitation under Section 19 if it is made by a person liable to pay it. The expression ‘person liable to pay is of wide connotation. It is not restricted to personal liability only. It will cover the property liability also.
The fact of part-payment of the principal of a debt, interest on principal must appear in the handwriting of, or in a writing signed by the person making the payment and not in that of any other person, even though the latter may have been expressly authorised to endorse the fact of payment. Where the payment is made by a person who does not know how to write the endorsement it may be made in the handwriting of a third party and the payer may subscribe his mark to the endorsement. In order to attract Section 19, payment has to be made within the period of limitation and not that the acknowledgement of such payment has to be made within the period of limitation. It will suffice if it is signed before the suit is commenced. Under Section 19 it is the payment which extends the limitation and such payment has to be proved in a particular way, namely, a written or signed acknowledgement. That is the only mode of proof of such payment.
Payment of part of the mortgage-debt made by one of the mortgagors will give a fresh start of limitation to the mortgagee not only against the mortgagor making the payment but also against all the mortgagors. The agent who can give the creditor the benefit of Section 19 has to act within the terms of his authority. The guardian of a minor appointed under the guardians and wards Act is an agent authorised to make a part- payment of the principal of a debt due by the ward, if it is shown that the guardian’s act is for the protection and benefit of the wards property. It is not necessary that the agent should be authorised in writing to make a payment, nor that he should be expressly authorised; it is sufficient that the authority is implied. Payment by the principal debtor does not give a fresh starting point against the surety. If a suit is barred by limitation as against the principal debtor, but if the surety has made certain payments and endorsements on the bond on which the suit is based, the plaintiff is entitled to a decree against the surety. Explanation (a) to Section 19 is meant to extend the time for a suit by the mortgagee to recover a debt secured by the Usufructuary mortgage, and does not apply to a suit for redemption by the mortgagor.
If the mortgagee is in possession of the mortgaged land and receive the produce of the land in lien of interest, such receipt of produce must be deemed to be payment of interest in Dadia Bhailal Motichand v. Vanad Maganlal Hirabhai, [AIR 1966 Guj. 59] it has been held that where rent note is executed by the mortgagor simultaneously with the mortgage, the transaction is a mortgage with possession, and limitation runs from the date when the part-payment was made by the mortgagor to the mortgagee. ‘Land’ in Explanation (a) to Section 19 includes house.
Explanation (b) to Section 19 of Limitation Act lays down that ‘debt’ does not include money payable under a decree or order of the Court.