1. ' NADEEM AZHAR SIDDIQI, J.---This execution application has been filed on 30-11-1998 for execution of judgment dated 13-5-1990 and decree dated 22-5-1990. The officer has raised following objection on 2-11-1999:-- "How this execution application is in time after three years"
2. ' Vide order dated 1-5-2000 above office objection was upheld and the execution application was dismissed as barred by limitation.
3. ' The decree-holder has filed C.M.A. No,1936 of 2000 for review of the order dated 1-5-2000.
4. ' By order dated 6-5-2002 order dated 1-5-2000 was recalled and the execution application was restored to its original number on the file.
5. ' The decree-holder challenged the order dated 1-5-2000 by filing Special High Court Appeal No,339 of 2000 and the - judgment-debtor filed Constitutional Petition No,1346 of 2002 challenging the order dated 6-5-2002. The appeal and the petition were decided by a common order dated 17- 9-2003, relevant portion of which is reproduced herewith:- "(ii) The Execution Application be and is restored to its original position and the office objection with regard to the limitation shall be decided afresh with opportunity to the decree-holder to take all steps with regard to the objection by filing matter containing the admissions of liability by judgment-debtor in accordance with law."
6. ' From the above appellate order it is clear that the two orders were set aside and the execution application was restored with the direction to decide office objection regarding limitation afresh.
7. ' After the appellate order the decree-holder filed documents on 25-11-2003 under cover of its statement.
8. ' Learned counsel for the D.H. Submits that the execution is not time barred and has been filed within the period prescribed for filing of execution application. He submits that after the decree, J.D.
9. Has entered into negotiation with the bank and on various occasions through several documents acknowledged its liability to pay the debt and on every acknowledgment the time for filing of the execution is extended. He refers to the letters of J.D. Dated January 13, 1992 and December 7, 1091 to show that the liability has been accepted. He then refers to the Annual Reports of the J.D. For the years 1990 to 1998 and 2001 and states that in all these reports the debt was acknowledged and accepted and the entries in the Annual Reports are acknowledgment within the meaning of section 19 of the Limitation Act. He then refers to several other documents placed on record to show that the parties were corresponded with each other to resolve the matter and at no point of time the J.D. Has denied or refused to pay the debt. He then refers to an undertaking dated June 30, 1997 executed by the Deputy Managing Director of the judgment-debtor by which the judgment-debtor undertook to pay an amount of Rs,35,122,500 by 5-12-1997. He relied upon the following reported cases:--
(1) Messrs M.G. Kadir and Co. v. Abdul Latif PLD 1970 SC 708.
(2) Abdul Latif v. Messrs M.G. Kadir and Co. PLD 1964 W.P. Karachi 558.
(3) Deputy Custodian of Enemy Property v. Karachi Electric Supply Corporation Ltd. 1986 CLC 2808.
(4) Karachi Electric Supply Corporation Ltd. v. Deputy Custodian of Enemy Property 1989 ALD 468; and
(5) Rajah of Vizianagaram v. The Official Liquidator Vizianagaram Mining Company Limited AIR 1952 Madras 136.
10. ' Learned counsel for the J.D. Submits that the decree was passed on 22-5-1990 and the execution can be filed within three years from that date. He then submits that first application for execution of a decree is governed by Article 181 of the First Schedule of Limitation Act and the limitation is three years and any application for execution of a decree made thereafter would be barred by said article. He then submits that in none of the documents referred by the learned counsel for D.H. The J.D. Has specifically acknowledged the debt and promised to pay the same. He then submits that the entries in the annual accounts cannot be equated as acknowledgement in terms of section 19 of the Limitation Act. He then submits that due to non-filing of execution within the time prescribed by law valuable right has been accrued in favour of the J.D. And the same cannot lightly be taken away. He further submits that undertaking cannot be considered as acknowledgement as the same was executed after the expiry of period of limitation. He has relied upon the following reported cases:--
(1) National Bank of Pakistan v. Azizuddin 1996 SCM R 759.
(2) Habib Bank Limited v. Five Star Travels 2006 CLD 1396.
(3) National Development Leasing Corporation v. Messrs Sunshine Cloth Limited 2006 CLD 726.
(4) Mehboob Khan v. Hassan Khan Durrani PLD 1990 SC 778 and
(5) Habib Bank Limited v. Zulfiqar All Khan 2002 CLD 1758.
11. The judgment in this matter was passed on 13-5-1990 and the decree was framed on 22-5-1990.
12. Admittedly the same was not challenged in appeal and has attained finality. For filing execution application Article 181 of the 1st Schedule of Limitation Act is applicable and the execution can be filed within three years when the right to apply accrues. The right to apply accrues on the day when the judgment was pronounced. Admittedly the execution application was filed beyond the period prescribed by Article 181 of the 1st Schedule of Limitation Act. The decree-holder is claiming benefit of section 19 of the Limitation Act on the basis of letters of the judgment-debtor and the acknowledgment of debt made by the judgment-debtor in their annual reports.
13. ' Before proceeding further it will be appropriate to refer subsection (1) of Section 19 of the Limitation Act, which reads as under:-- "Where before the expiration of the period prescribed for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed."
14. The decree-holder has referred to letters and annual reports signed by the representatives of Judgment-debtor.
15. ' The first letter is dated December 7, 1991 addressed by the judgment-debtor to the decree-holder, operative part of which is read as under:- "In the spirit of having good relationship with consortium banks, we submitted many proposals to National Bank of Pakistan which could provide a basis for a practical compromise on the issue of their stuck up loan but unfortunately these efforts have not yielded any fruit so for. It is therefore requested to kindly intervene in the matter to resolve this long outstanding issue in the best interest of all the concerned parties."
16. ' The second letter is dated January 13, 1992 addressed by the judgment-debtor to Pakistan Banking Council with copy to decree-holder in which the judgment-debtor has stated that there was a general consensus on the mode of repayment of the principal amount of loan, but the suggestion regarding treatment of interest needed further consideration.
17. ' From the above two letters the judgment-debtor acknowledged their liability towards the decree- holder but from these letters also, the execution is time barred, as the same was not filed within three years from the date of those letters. The judgment-debtor in its annual report for the year 1990 signed by the Chief Executive and Deputy Managing Director have stated as under:-- "Overseas credit facilities include borrowings from nationalised banks to the extent of Rs,7.5 million and are secured against second charge on the movable fixed assets of the Company. All other overseas credit facilities are secured against the book debts of overseas operations. Overseas liabilities including credit facilities and interest thereon are not reflected in these accounts."
18. ' The similar entry is also available in the annual report for the year, 1991.
19. ' In the annual report for the year, 1992 signed by the above two representatives it was stated as under:- "Contingencies and Commitments:--
(a) Overseas borrowings from National Bank of Pakistan, led consortium amounting to Rs,7.5 million together with the accumulated interest of Rs,6.8 million have not been reflected in these accounts.
20. Company is contesting this liability in the Court established under the Banking Companies (Recovery of Finances) Ordinance, 1979. Overseas liabilities will be recorded in the books after verification of their legal status by competent Court of law. These facilities are secured against second charge on the movable fixed assets of the company."
21. ' Similar entry as above is also available in the annual reports for the years 1993, 1994, 1995, 1996, 1997 and 1998. The only difference is that the interest has been shown to be increased in every report.
22. The entries in the annual reports signed by two representatives of the judgment-debtor can be treated as acknowledgement in terms of section 19 of the Limitation Act, as the same is in writing and contains acknowledgement of liability.
23. ' The Honourable Supreme Court of Pakistan in the reported case of Messrs M.G. Kadir and lCo. v.
24. Abdul Latif PLD 1970 SC 708 (sic) has laid down a test to determine whether a writing constitutes acknowledgement under section 19 of the Limitation Act as under:-- "(i) Whether there is admission of liability or of jural relationship;
(ii) Whether this admission is relatable to a subsisting liability or jural relationship, so that in the latter case, on ascertainment of facts constituting the jural 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.
25. ' 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 any ambiguity in the writing."
26. ' In the same judgment the Honourable Supreme Court has held that an acknowledgment is an admission by the writer that there is a debt owed by him. The Supreme Court has further held that Limitation Act being a statute in derogation of the right to sue, exceptions in the Act must be construed liberally and that a writing claimed to be an acknowledgment must, therefore, be interpreted liberally, so as to maintain the right to sue rather than in negation or derogation of such right.
27. The entries available in the annual reports have been examined on the above touchstone. It appears that by the said entries the judgment-debtor has acknowledged in writing the debt owed by them to the decree-holder. It is not necessary that acknowledgment is accompanying with promise to pay. In the reported case of Abdul Latif v. Messrs M.G. Kadir and Co. PLD 1964 (W.P.)
28. Karachi 558 it has been held as under:-- "I would like to add that having regard to the language of section 19, all that is required is that there should be an acknowledgment of liability made in writing signed by the party concerned. It would, therefore, appear that the promise to pay is not a requirement of section 19."
29. ' In the reported case of Deputy Custodian of Enemy Property v. Karachi Electric Supply Corporation Ltd. 1986 CLC 2808, it has been held as under:-- "In the present case the liability which existed on the date of preparation of the balance-sheet remained the same when it was signed. Therefore, the entries in the balance-sheet amounted to acknowledgment of liability. The suit is, therefore, within time."
30. ' In another reported case of Karachi Electric Supply Corporation Ltd. v. Deputy Custodian of Enemy Property 1989 ALD 468 a learned D.B. Of this Court has held as under:-- "Implied and indirect admission of liability would constitute an acknowledgment and that admission of mere existence of an account is sufficient acknowledgment of liability under section 19 of the Limitation Act.
31. ' Where an entry in a balance sheet fulfils the requirement of section 19 of the Limitation Act, 1908, there is no reason why it should not amount to an acknowledgment of liability and give a fresh start to the period of limitation.
32. ' Admissions though made in discharge of their duty are nevertheless conscious and voluntary admissions. A document is not taken out of the purview of section 19 of the Limitation Act merely on the ground that it is made under compulsion of law."
33. In view of the above, the annual reports signed by the representatives of the judgment-debtor would constitute an effective acknowledgment of the debt at the dates on which they were actually signed and there is no dispute that, the annual reports were not signed by the representatives of the judgment-debtor containing acknowledgment.
34. In the instant case there is clear, unequivocal and unqualified acknowledgment of liability within the period prescribed by law in the shape of Annual Reports from 1990 onwards and gives afresh start to the period of limitation on signing of every report.
35. ' The judgments cited by the learned counsel for judgment-debtor deal with the limitation of filing of execution application, which is not under dispute. The facts of those judgments are distinguishable and have no direct bearing upon the merits of this case.
36. In view of the above, office objections are overruled. The execution application is held to be within time.
37. ' Before parting with this order, it appears appropriate to direct the parties to comply with the order passed in Special High Court Appeal No, 339 of 2000 and Constitutional Petition No,1346 of 2002, the relevant portion of which is reproduced herewith:- "(iii) National Bank of Pakistan as well as the Ministry of Finance and are directed to decide the matter pertaining to the loan on the terms of the Incentive Scheme of the State Bank expeditiously as possible but not later than six months."
38. ' Since the above order was not complied with vide order dated 1-11-2007 the President, National Bank of Pakistan and Ministry of Finance were directed to submit their report. From the perusal of the record it reveals that order has not been complied with and no report .Has been submitted.
39. ' Office is once again directed to send copy of the order dated 17-9-2003 passed in Special High Court Appeal No,339 of 2000 and Constitutional Petition No, 1346 of 2002 along with copy of this order and order dated 1-11-2007 to the President, National Bank of Pakistan and Secretary, Ministry of Finance for compliance and to submit their reports within four weeks, failing which, the President, National Bank of Pakistan and Secretary, Ministry of Finance are required to be present in Court in person along with their explanations, if any, for noncomplying with the Court orders.
40. ' The copies of the above orders be also supplied to the learned Deputy Attorney General for ensuring the compliance of the above orders.