1. ' This application has been filed under section 7 of the Flour Milling Control and Development (Repeal)
2. Ordinance, 1977 read with sections 39 and 40 of the Industrial Development Bank of Pakistan Ordinance, 1961 for recovery of Rs,29,96,785.80.
3. ' The Federal Government in exercise of their powers conferred by section 5 of the Flour Milling (Control and Development) Ordinance, 1976 issued a Notification bearing No,S.R.O. 710(1)/76 and acquired ownership and management of certain Flour Mills specified in the Schedule. The Flour Mills of the respondents was also included in the said Schedule at Serial No,74 under the heading of "Karachi District". The Federal Government transferred the ownership and management 'of the establishments mentioned in the above said Notification situated within the Province to the Provincial Government.
4. ' The Provincial Government in exercise of their powers conferred under the said enactment set up Sindh Flour Milling Corporation, the petitioners above named and all the establishments acquired under the Notification, were transferred to the petitioners above named. After the establishment known as "Good Luck Industries" was acquired and transferred to the petitioners, the petitioners made certain payments for and on behalf of the respondents. The petitioners paid the aforesaid amount out of its funds. By Notification No, 724(1)/77 PUB dated 5-4-1977 the above establishment was denationalized. Possession of the said Mill was given to the Management of the respondents on or about 5-9-1977 and an inventory was prepared. In terms of section 7 of Flour Milling Control and Development (Repeal) Ordinance, 1977 (XXIX of 1977) the respondent was supposed to make payment of the amount due and payable by them to the petitioneRs, On the basis of Audit Report, a sum of Rs,50,49,267.18 was found due and recoverable from the respondents. The said fact was communicated to the Management of the respondents with details of the amount due and they were requested to pay the aid amount. The respondent did not agree with the value of the claim , determined by the petitioners and submitted their representation against the same. Their claim was examined and genuine adjustment was made. The final amount after adjustment was worked out to Rs,37,87,373.53 which the respondents were called-upon to arrange vide petitioner's letter dated 7-5-1991. Several reminders including legal notices were given to the respondents but the respondents did not make payment of the amount. The petitioners ultimately decided to file a case when the respondents came to know about the said fact by their letters dated 14-1-1993 and 31-1-1993 informed the petitioners of paying their dues and also requested the petitioners not to take the matter to a Court of law. They offered to pay the petitioner's dues alongwith legal expenses which were incurred by them. The amount agreed was , Rs,36,60,785.80 in regular monthly instalments of Rs,50,000. On account of the above understanding, the respondents 'paid a sum of Rs,6,70,000 to the petitioners from 31-1- 1993 till 5-7-1994, leaving a balance of Rs,29,90,385.85. In spite of repeated requests from the petitioners, the respondents did not make any payment of the dues after July, 1994. The petition er through a legal notice dated 13th November , 1994 called the respondents to make payment of their dues but the respondents did not respond. Hence the Judicial Miscellaneous Application.
5. ' I have heard learned counsel for the parties and examined the material on record.
6. ' The parties have relied on several case-laws which pertain to limitation, extension of period of limitation and section 25(3) of the Contract Act alongwith section 19 of the Limitation Act. In the case of U.B.L. v. Kurnool Muhammad Munir 1991 CLC 1758 . In this case the learned Single Judge of Sindh High Court had given a finding on section 25(3) of the Contract Act as well as section 19 of the Limitation Act. He had observed that the time for filing suit for recovery of overdraft had expired on 29th December , 1976. The time could not be revived or extended by the balance confirmation note executed after the period of limitation. However , he has further gone to observe that in case if the debtor has acknowledged his liability and this was done beyond the period of limitation for recovery of loan, therefore, the period would be extended after each acknowledgement.
7. Since the last letter was written on 3-9-1980 period was to expire on 3-9-1983 since the suit was filed before 3rd September , 1983, the suit was held to be within time.
8. ' In the case of Ghulam Haider v. Mst. Raj Bhari and 4 others PLD 1973 Lahore 372, the question came up whether the matter had abated and any appeal or suit would be also finished unless such abatement was set aside within specific period. Time could be extended under section 5 of the Limitation Act but delay of each day shall have to be explained.
9. ' In the case of National Bank of Pakistan v. Bawany Industries Ltd. And 3 others, 1982 CLC 2625 , there was acknowledgement of liability and suit was filed for recovery of money keeping in mind the last letter admitting liability . The Court held that fresh period of limitation was to be computed from 29-12-1997 which was the last date before filing of suit when the liability was admitted.
10. ' In the case of Mst. Fattan Bi and other s v. Fateh Muhammad and 6 others PLD 1974 Lahor e 458, a question of deciding the widow right was taken up and it was observed that on the aspect of limitation, the matter had to be decided in accordance with law of limitation as in force at the time of institution of matter . It was to be observed that the right to file a suit should not have become barred and the principle of law, therefore, is that where a plaintif f or petitioner has lost his right to institute proceedings on the date when some other act comes into, force, that right is revived by the repeal of the statute under which the limit ation for those proceedings has expired.
11. ' In the case of Bank of India v. Muhammad Ashraf and others PLD 1965 Karachi 69, it was observed that the matter was to be deciaed and disposed of in accordance with law of limitation as enforce at time of institution of suit and not according to law prevailing at the time when cause of action has accrued.
12. ' In the case of Government of West Pakistan v. Syed Zainul Ebad Rizvi PLD 1977 Karachi 297, it was observed that acknowledgment of accountability as settlement of account amounted to acknowledgment of liability however , it was further observed that letters were written before expir y of initial or earlier period of limitation last letter written 3 years prior to filing of suit, suit was held within time.
13. ' In the case of Pakistan v. Messrs Aneejee Valeejee and Sons and another PLD 1978 Karachi 244 a Division Bench of this Court had observed that acknowledgment of liability must be interpreted liberally so as to maintain right to sue rather than in nega tion, admission need not be cleared and express but may be inferred by implication from language used and surrounding circumstances.
14. ' In the case of Habib Bank Limited v. Shamim Qureshi PLD 1988 Karachi 481, a Division Bench of this Court had given a finding under section 25(3) read with section 19. It was observed that suit was factually barred by time however , before brought by under section 25(3) of the Contract Act as debtor had acknowledged such debt and promised to the same the Division Bench also observed that such acknowledgment has to be made within 3 years for filing of the suit and time was to be computed from the date of fresh promise. Justice Saleem Akhta r as he then was, through observed that a promise to pay time-barred debt has to be made in writing by the person charged with liability or his author ized agent to pay a time-barred debt. Such promise will become an agreement. Any promise made by a third party to pay the time-barred debt of any other person will not fall within the ambit of section 25(3). A mere acknowledgment of debt does not amount to promise to pay. A promise to pay should clear an express term. He has further gone to observe that there was a basic difference between section 25(3) of the Contract Act and section 19 of the Limitation Act.
15. According to him under the contract there should be a promise in writing to pay time-barred claim in express terms or in such manner that a clear and absolute promise to pay can be spelt out. Mere implied promise such as bare acknowledgment of liability or entry in the account books will not attract section 25(3). Though that promise as contemplated by section 25(3) gives fresh cause of action.
16. ' In the case of Messrs Norwich Union Fire Ins. Society Limited v. Zakaria Industries, Karachi 1994 CLC 1280, in this case a Single Judge had observed that acknowledgment of liability would give a fresh point of limitation. Suit has to be filed within 3 years from the point of such acknowledgment.
17. ' In the case of Messrs United Bank Limited v. Messrs Bombay Frontier Old Tire Co. And another 1986 MLD 1613 , it was observed that correspondence extended creditor and debtor showed acknowledgment of liability period of limitation was to be computed from the last date of acknowledgment.
18. ' In the case of M. G. Kadir & Co. v. Abdul Latif PLD 1970 Karachi 708, a Division Bench of this Court passed an order in this case almost all the case-laws available on the subject a reasonable test to determine whether a writing constitutes sufficient acknowledgment under section 19 of the Limitation Act (i) whether there is admission of liability or of jurial relationship (ii) whether this admission is relatable to a subsisting liability in jurial relationship, so that in the latter case, on ascertainment of facts constituting the jurial relationship, as in the case of accounts between the parties, a debt or liability shall be found to exist against one or the other of the parties. This admission may be evident from the language of the writing itself or may be inferred by implication, or by ascertainment from the surrounding circumstances if there is any ambiguity in the writing.
19. ' There are several arguments put forward by both the sides. Both sides have tried to urge factual and legal view points. A detailed judgment had been pronounced by my respected brother Rana Baghwandas, J., as he then was and who is now Judge of the Supreme Court of Pakistan whereby he had dismissed this petition.
20. Against this judgment the petitioner had gone before a Division Bench of this Court who had made certain observation based upon which the judgm ent was set aside and the matter was remanded back to be heard and decided on merits as well as to discuss and give a finding on section 5(3) of the Flour Milling Control and Development (Repeal) Ordinance, 1977.
21. ' Whilst going through. The judgment of the Single Judge the issue of matter being barred by limitation had also been raised and even though it has been discussed the finding whether indeed the matter was barred by limitation has not been given. Learned counsel for the plaintif f has urged that even though it was taken over under Notification within a span of one year the Establishment was denationalized and possession was given back on the 5th of September , 1977. In the plaint the petitioners have themselves stated that the petitioner wrote to the respondent on 7-5-1991 calling upon the respondent to arrange for payment. Whereafter several reminders were sent in the year 1993 according to the plaintif f the respondent acknowledged liability and offered to pay the amount and in regular monthly instalment. Thereafter certain amount was paid between 31- 1-1993 till the 5th July of 1994 and substantial amount was paid. However , after July, 1994 no payment was made resulting in a legal notice. According to the petitioner the cause of action accrued ultimately in 1994 when a legal notice was sent. The suit on the other hand, had been filed on the 30th November , 1995. The annexures to the plaint indeed show that the statement of accounts were prepared at the time of denationalization. Furthermore summaries were also prepared which indicated that liabilities pertaining to the period before 1976 were paid by the corporation. Thereafter the first letter that they had produced is dated 7-5- 1991 it has been addressed by the petitioner to the respondent. Another letter dated 27-6-1991 has also been placed on record. Another reminder is 30-7-1991. A final notice dated 12-8-1991 has also 'been placed on record. Then there is a letter dated 14-12-1991. And eventually a legal notice, dated 30-9-1992. It would be interesting to note that the last letters have threatened the respondents of initiating the recovery under sections 39, 40 and 41 of the I.D.B.P . Ordinance read with section 7(2) of the Flour Milling Control and Development (Repeal) Ordinance, 1977. A letter was received by the respondent in October , 1992 when they requested the petitioner to give them some time. This has been followed up by another letter dated 14-1-1993. In this letter also they have concluded by assuring that the amount shall be paid. -Thereafter in January , 1993 they have for the first time asked for monthly instalment. There are several covering letters annexed which show that the cheque of Rs,50,000 each has been sent towards instalments.
22. ' At that time of arguments the counsel for the plaintif f pointed out that by virtue of explicit acknowledgment of liability and followed up by payment of monthly instalment the period of limitation had been extended to that effect, the learned counsel had relied on several case-laws in which Judges had observed and concluded that the time would be computed from the last date of acknowledgment or payment and suit had to be filed within 3 years thereof.
23. ' The counsel appearing on behalf of the respondent however , insisted that relying on section 19 of the Limitation Act, the acknowledgment of liability has to be made in writing before the expiration of the period prescribed for a suit or application. According to the learned counsel the respondent was denationalized in 1977 and at the time of denationalization accounts were drawn and entire books were handed over. Even assuming for a minute that at the time of denationalization respondent was aware of said amount having been cleared the fact remains that by their own admission the petitioner first wrote to the respondents in the year 1991. Ultimately this J.M. Was filed in 1995. Even presuming that time can be extended it is well-settled that time has to be extended and the acknowledgment has to be made before the expiry of limitation period from the date when such liability accrued. Both the sides do not deny that the period computation A would be computed from the date when the respondent was denationalized and accounts were drawn. Much after the period of limitation had expired the petitioners filed this particular Judicial Miscellaneous.
24. ' This is a Judicial Miscellaneous that has been filed and not a suit for recovery , it has been filed on the basis of section 7 of the Repeal Ordinance read with sections 39 and 40 of the I.D.B. P. Ordinance. In a similar and identical matter G. H. Malik, J., as he then was, in J. Miscellaneous No, 8 of 1983 had given a finding on sections 5 and 7 of the Repeal Ordinance, as well as the relevant section of the I.D.B.P . Ordinance. After going through in detail the relevant law he has given a finding that even if 6 years were to be computed under the I.D.B.P . Ordinance the suit would be barred if not filed within 30 days of the notice. In the present case assuming that the first notice was given on the 7th May, 1991 then the suit would be hopelessly barred as after 30 days of notice proceedings have to be initiated. It would also be appropriate that in the counter -affidavit, the counsel for the defendant has placed on record several correspondence whereby they have challenged the amount demanded. According to them the amounts so paid were subject to a final adjustment and settlement of accounts. In fact they have given details of the same by the letter dated 27-9-1993.
25. ' According to Navin Merchant, the learned counsel for the defendant even if the notice of the counsel for the petitioner was to be taken into consideration then the last notice given was 19th November , 1994 and the suit had to be filed for the recovery and proceedings had to be initiated within 30 days thereof. However , the Judicial Miscellaneous was filed on 30-11-1995. The matter is clearly time-barred and is accordingly disposed of.