ZAFAR HUSSAIN MIRZA, J.-The question of law on which the decision in this appeal turns is one as to the sufficiency of an entry of payment so as to save limitation under section 20 of the Limitation Act, 1908. Leave was granted to examine the argument that in the absence of any evidence on record to show that the appellant had deposited any amount in order to extend the period of limitation or by any authorized agent on his behalf and that the unsigned voucher for deposit of money in a bank cannot be considered as admitted entry where the account-holder himself has denied the deposit. Muhammad Naeem Butt, appellant, opened a current account at the Chowk Abresnamgran Branch, Peshawar City, of the respondent-bank in 1967, in the name of his trading concern known as Messrs Aleem and Company, Chowk Yadgar, Peshawar City. The appellant was given credit by the respondent bank by way of overdraft facility, secured against cheques and demand drafts sent for collection through the said branch. The appellant availed the credit facility thus extended from time to time and carried on transactions with the bank, so that their dealings resulted in an open, mutual and current account. According to the respondent bank the last transaction between the parties consisted of a credit deposit of a cash amount of Rs, 24,000 in the account on 13.4-1974. As the appellant stopped operating on his account a balance was struck by the bank, according to which a sum of Rs, 1,15,194.52 was due and payable by the appellant on 29- 12-1967. The demand for the repayment of the outstanding amount was made but as the appellant made no response thereto, the respondent bank filed a suit on 24-1-1977. For recovery of the aforesaid amount with a prayer for penente lite interest at Rs, 15% per annum, in the Court of special Judge, Banking Companies, N.-W. F. P., Peshawar. The appellant denied his liability and contested the suit on a general plea that the statement of account on which the suit was based was false, fictitious and incorrect.
2. It seems that the only issue on which the suit was contested before the trial Court was whether the suit was within time. The respondent-Bank contended that the suit having been filed within three years of the payment of Rs, 24,000 deposited in the account on 13-4-1974, the suit was well within the period of limitation. On the other hand the appellant challenged the genuineness of the entry relating to this payment and contended that it was neither made by himself nor by any authorised agent on his behalf. In support of this payment the pay-in-slip voucher Exh. P. W. 1-D/1, was produced and relied upon, which as stated before was denied to be an authorized payment by the appellant. In this connection the appellant stated "I have seen the original or Exh. P. W.-D/1. It has not been filled in my handwriting. It is not signed by me. It not filled in the handwriting of either of my brother or my father. The entry pertaining to this credit in the statement of account is, therefore, wrong."
3. Learned trial Court on examining the evidence adduced by the parties recorded its reasons and conclusions as under :- "It is a big amount and was deposited long before the expiration of limitation and no officer of the bank would be so generous as to part with a heavy amount like this for a fresh start of limitation in favour of the bank particularly at a time when there was adequate time to lodge suit, if required.
The amount has also been credited into the account of the defendant and an entry is there in the account reflecting the same. From the bank funds the amount could not have been taken out for deposit in the account of the defendant with a view to saving the limitation, because there would be no way to cover the amount. It is also un clear from what account the amount was taken for the purpose of deposit in the account of defendant. These reasons weigh against the defendant, but the requirement of law according to section 20 of the Limitation Act, in proviso thereto, is that acknowledgment of payment has to be in the handwriting of or in handwriting signed by the person making it. There is no such acknowledgment by the defendant in his own handwriting or handwriting signed by him or by his authorised agent. The handwriting in which the voucher was filled for the deposit (Exh.P.W. 1/D-1) has not been proved to be that of the defendant or signed by him or his any authorized agent. The provision in law is very clear and not susceptible to any different interpretation. The requirement therefore has to be satisfied as it is not a mere formality, and if that be so there will be no question of limitation running out in any case, as just by depositing a small amount from own funds the plaintiff would become entitled to a fresh period of limitation.
In order to guard against such hazards the provision has been made in law and it has to be obeyed in letter and spirit. There is no acknowledgment of payment made by the defendant in his own handwriting or in the handwriting signed by him or by an agent authorized by him. The payment, therefore, does not save limitation."
' Reliance was also placed by the respondent-Bank on the balance confirmation slip Exh. P. W. 1/8, dated 31-12-1975, but the Court rejected from consideration this document for reasons which may be set out from the following passage of the judgment : "This slip has not been signed by the defendant, but by his brother Mr. Ayub Butt. In relying on this slip, it was referred to the various withdrawals made by Mr. Ayub Butt, out of the account of the defendant, and also to his signature on the specimen signatures card Exh. P. W. 1/2, along with those of the defendant and his father Muhammad Yaqoob. It is a fact that the signature of Mr. Ayub Butt is also on the specimen signatures card and he had issued no less than 13 cheques for loravy amounts on the account under his own signature, but the defendant has denied that his brother was authorised to operate his account or to draw out of it any amount. It is also obvious from the record that Mr. Ayub Butt held no authority from the defendant for operation of his account. Nor is there any such authority of the defendant with the bank, allowing them to honour the cheques signed by his brother Mr. Ayub Butt, drawn on his account. The account was not joint so that it could be said that it could be operated by Mr. Ayub Butt also. In fact this is not the case of the plaintiff that the account was joint being operated by the defendant along with his brother and father, whose signatures appear on the specimen signatures card. Rather there is categorical assertion in the plaint that the account had been opened by the defendant as sole proprietor of Aleem and Company, There is also unmistakable statement by Nisar Ahmad P. W. 1 on the point that the account was being operated by the defendant himself. As such, the balance confirmation slip by Mr. Ayub Butt, as well as the promote Exh. P.W. 1/4 by him (Mr. Ayub Butt) are unavailing for the plaintiff."
' On the aforesaid view the trial Court held the suit to be barred by limitation and dismissed the same vide judgment, dated 8-10-1981.
4. The respondent-Bank, being aggrieved by the aforesaid judgment and decree passed by the trial Court, went up before the Peshawar High Court, Peshawar, in an appeal under section 12 of the Banking Companies (Recovery of Loans) Ordinance, 1979. Learned Judges of the Division Bench of that High Court, who heard the appeal, did not agree with the finding recorded by the trial Court and held that the deposit in question was made by the brother of the appellant, named Muhammad Ayub Butt, who was duly authorized to make the payment on behalf of the appellant in view of the evidence on record. As a result it was held that the payment by way of deposit of a sum of Rs, 24,000 in the appellant's account made on 13-4-1974, constituted a valid acknowledgment in terms of section 20 of the Limitation Act, and therefore, the suit was well within time. On this view of the matter the learned Judges, allowed the appeal and remanded the suit for decision on merits on the rest of the issues framed by the Court vide judgment, dated 27-9-1982.
5. It is contended on behalf of the appellant that the High Court erred in holding that Muhammad Ayub Butt was acting as an agent for the appellant when there was no such evidence on record.
Learned counsel for appellant supported the finding given by the trial Court and argued that the requirements of section 20 of the Limitation Act are not satisfied from the evidence produced by the bank, in so far as, there is nothing on the record to prove that the voucher for the deposit of the amount on 13-4-1974, was in the handwriting of Muhammad Ayub Butt, specially when the mandatory requirements of the proviso to section 20, that the acknowledgment of the payment should be in the handwriting or in handwriting signed by the person making the payment, were clearly not satisfied.
6. We have carefully examined the evidence on record and before dealing with the argument of the learned counsel, it seems appropriate to refer to the material part of the evidence which has bearing upon the question raised. Mr. Nisar Ahmad Qureshi who was the Manager of the Bank at the relevant time was examined as a witness on behalf of the respondent-Bank. He has produced the pay-in-slip Exh. P. W. 1/D-1. He has frankly admitted that he was unable to say who had filled in this voucher, that the voucher did not bear the signature of the appellant nor was it filled by him.
This witness has disclosed that the account in the name of Messrs Aleem and Company was opened along with the specimen signatures card showing the authorized signatures for the purpose of operating the account on 15-9-1967 (Exhs. P. W. 1/2 and P. W. 1/3). In his evidence the said witness asserted that they had obtained the signatures of Muhammad Naeem Butt, who is the brother of the appellant on 15-9-1967. According to the witness the specimen signatures on the card were of the appellant, Muhammad Yaqub and Muhammad Ayub. The further fact disclosed by the witness was that although the account was mainly operated by the appellant, but some of the necessary documents were not signed by him. These documents including one of the most important document, namely, the balance confirmation slip, dated 31.12-1975 were admitted by the appellant in his deposition to have been signed by his brother. The appellant in his evidence admitted his signatures on the specimen signature card and also admitted that the other two signatures are those of his brother Muhammad Ayub Butt and his father. The appellant also admitted that certain cheques pertaining to this account were signed by his brother, Muhammad Ayub Butt although he emphatically asserted that he had not authorized him to operate the account.
7. In the context of the aforesaid material part of the evidence on record, now we will proceed to consider the question whether the payment dated 13-4-1974, can be appropriated to section 20 as an acknowledgment in order to provide a fresh terminus a qua for the commencement of a fresh period of limitation. It is not disputed before us that there existed between'. The parties a mutual, open and current account, and that the suit was brought on the balance due on such account.
Indeed the learned counsel for the appellant on a pointed question conceded to this position and submitted that the relevant Article applicable in this case is Article 85 of the first Schedule to the Limitation Act. According to the evidence of the Manager of the respondent-Bank the last cheque drawn on this account was on 27-11-1972. The plea of acknowledgment was apparently taken by the respondent-Bank with a view to save the suit from the bar of limitation with reference to the said date of the last drawn cheque, so that the suit filed in 1977 may be within the period of limitation of three years from the date of the disputed payment by way of deposit. On a consideration of these facts, however, we feel that the question of acknowledgment is wholly irrelevant and the only question was whether otherwise the credit C entry in the account in respect of the disputed deposit, dated 13-4-1974, was a genuine and actual payment with the private of the appellant. It will be convenient at this stage to set out the provisions of the Article 85 which are as under {{TABLE}} Descriptian of suit Period of limitation. For the balance due Three years. On a mutual, open and current account, where there have been reciprocal demands between the parties. Time from which period begins to run The close of the year in which the last item admitted or proved is entered in the account, such year to be computed as in the account. {{TABLE}} It will be seen from the above that the limitation for a suit for the balance due on a mutual, open and current account is three years from the close of the year in which the last item admitted or proved is entered in the account, such year to be computed as in the account. This being a case in which a schedule bank is involved, it is clear that the accounting year was the normal financial year commencing from 1st July to 30th June, therefore, if the last item in the account was dated 13- 4-1974, the suit could be brought within three years with effect from the close of the accounting year, namely, 30-6-1974. On the other hand, if the said entry was not proved to be with the consent and privity of the account-holder, then the limitation will have to be computed with reference to the date when the last cheque was drawn, namely, 27-11-1972. By the last mentioned reckoning the closing date of the said year will be 30-6-1973 and the suit would, therefore, be obviously barred by time. The purpose of pointing out this aspect is to highlight the fact that the stringent requirements of section 20 of Limitation Act are not attracted in the present case.
8. We will now take up the consideration of the point whether it has been proved from the evidence on record that the disputed payment was with the consent and privity of the appellant or not. As mentioned earlier, there is evidence on record to show that Muhammad Ayub Butt, the brother of the appellant had signed certain original documents and securities in support of the credit arrangement between the parties at the time the account was opened. Not only that, but he also operated the account by drawing cheques thereon with his signatures, which duly appeared on the specimen signature card. The oral assertion of the appellant that he had not authorized Muhammad Ayub Butt to operate the account, hardly advanced his case in the face of these admitted facts. The said Muhammad Ayub Butt much after the disputed payment was made specifically affirmed the correctness of the account on 31-12-1975. He, therefore, fully acknowledged the deposit of Rs, 24,000 as correctly made on behalf of the appellant on 13-4-1974.
All this evidence coupled with the observations of the trial Court that such a huge amount of Rs, 24,000 could not have been deposited by the bank from its own funds, clearly tips the balance against the appellant that the payment was not on his behalf or with his privity and authority. It is admitted by the appellant in his testimony that he used to send various amounts from time to time for deposit in his account through others and he did not always fill in the voucher for the deposit of the same. All this clearly leads to the inference that the entry regarding the disputed deposit is genuine and authorized one. The suit having been filed within time with reference to this entry was, therefore, not barred by limitation. We cannot, therefore, agree with the reasoning adopted by the learned trial Court that the technical requirements of section 20 of the Limitation Act were not proved to have been complied with, since we have held that section 20 is not attracted to this case. To sum up our conclusion, we hold that section 20 of the Limitation Act was not a relevant provision of law having effect on the question of limitation in this case, for the simple reason that this was F not a case in which the original period of limitation for the recovery of a debt had expired and a fresh period of limitation was sought on the basis of acknowledgment. As explained above the question in this case was only whether the suit was within time prescribed by Article 85, which turned on the finding whether the last item in the account between the parties was a genuine entry. On the basis of the evidence, we have come to the conclusion that the amount of Rs, 24,000 was deposited in the account on 13-4-1974, under the authority and on behalf of the appellant. The suit was, therefore, within time.
9. Be that as it may, even if section 20 of the Limitation Act is attracted in this case we feel that it has been established on the record that the aforesaid disputed payment constituted an acknowledgment as it was made by duly authorised agent of the appellant. The strongest argument of the learned counsel for the appellant was that as the voucher supporting this payment (Exh. P. W. 1/D-1) was neither proved to be in the handwriting of the appellant nor was signed by him or his authorized agent, the requirements of the proviso to section 20 (1) have not been satisfied. In this regard it may be stated that section 20 does not expressly sal that the statute is saved only as against the person making the payment. The section in express terms also envisages payment by the duly authorized agent of a person liable to pay the debt. Therefore, the payment made by an authorized agent in terms of section 20 will be sufficient to constitute acknowledgment thereunder. According to section 186 of the Contract Act, the authority of an agent may be express or implied, with the result that agency need not be created expressly by a written document and can be inferred from circumstances and the conduct of the parties. Having regard to the established facts in this case, namely, that Muhammad Ayub Butt signed the promote, security bond, agreement to pay interest as well as draw cheques on the account on the strength of his authorized signatures on the specimed signatures card, it is hardly open to question that he was the authorized agent of the appellant in his dealings with the bank. Once this is established it is not difficult for the respondent-Bank to prove that the payment on 13-4-1974, was made by the said Muhammad Ayub Butt as an agent of the appellant, in that, the outstanding balance was confirmed under the signatures of Muhammad Ayub Butt on 31-12-1975, vide Exh. P. W.
1/D-I. It is, therefore, clear that he admitted and owned the payment made on the aforesaid date in writing under his signatures. All the requirements of section 20 of the Limitation Act were thus fulfilled by the evidence produced on behalf of the respondent-Bank.
10. In the result this appeal is dismissed with costs.