' WAJIHUDDIN AHMED, J.---This First Appeal is directed against the decree of dismissal of a suit filed by the appellant-Bank under the Banking Companies (Recovery of Loans) Ordinance, 1979. Such suit was dismissed by the Special Court (Banking) in the absence of the respondent-defendant, who was also ex parte there, on the ground of bar of limitation. In recording its fmding of dismissal the Court rejected the plea of the appellant-Bank, claiming revival of liability against the respondent on the basis of a purported promise claimed to be falling within the purview of clause
(3) in section 28 of the Contract Act, 1872. The writing, allegedly, incorporating the promise aforesaid was in the following terms:--- "Dear Sir, ' ADJUSTMENT OF MY HOUSE LOAN AMOUNTING TO Rs,53,741.20 ' With reference to your Letter No,MA. 3378/3713, dated 17-7-1983 I have to request you to kindly allow me to adjust the loan in easy instalments of Rs,500 effecting from August, 1983. In token of my promise I am enclosing herewith a cheque for Rs,Five Hundred dated drawn on.
' Further I request you to kindly waive the interest charged on my house loan for which I shall be highly obliged."
' The response to the purported letter of the respondent aforequoted from the bank, inter alia, ran thus:--- "2. That while appreciating your willingness to adjust the outstanding by instalments of Rs,500 p.m.
We wish to inform you that considering your present huge outstanding against all your captioned loan this instalment is too small to be acceptable to the bank."
2. The trial Court also noted that while in the writing ascribed to the respondent there was an enclosed cheque of Rs,500, the statement of account submitted before the Court by the bank depicted deposit of an identical amount in cash, leading the Court to conclude that the entire affair, pertaining to the alleged revival of obligations on the part of the respondent, could be a manipulated one. At the same time, regarding the merits or the case under clause (3) of section 25 of the Contract Act the conclusion at the trial was that the "promise", if any, on the part of the respondent was a conditional one and the conditions not being satisfied, and in fact rejected as the bank's response. Would show, no agreement within the meanings of section 25. Ibid. Came into being.
3. In this appeal before us, Mr. S. Hamid Hussain has contended that the "promise" on the part of the respondent was not conditional, at all and that for the purpose of section 25 of the Contract Act it did not require to be accepted by the promisee namely, the appellant-Bank. While the leained counsel has relied on several authorities to substantiate his argument we would only refer to those which appear to us to be directly relevant. Such are:---
(1) David Sutherland Clark v. Rose Grimshaw AIR 1923 Lah.
481.
(2) S. Venkatappayya v. Y. Venkatappayya AIR 1946 Mad.
72.
(3) Reasatullah v. Taipura Modern Bank Limited PLD 1968 Dacca 260.
(4) Hussain Corporation Limited v. Habib Bank Limited 1986 M LD 344.
(5) Habib Bank Limited v. Shamim Qureshi PLD 1988 Kar.
481.
' In the case of David Sutherland Clark a Division Bench of the Lahore High Court observes that for the purposes of section 25 of the Act, other conditions being satisfied, it is not necessary that the written proposal should be accepted in writing, acceptance before initiation of action, becoming a "promise", as defined. Relevant observation occurs in these words:--- "A document sufficiently complies with section 25 of the Contract Act when it is signed by the person to be charged, and refers to the debt in such a way as to identify it, and contains a promise to pay wholly or in part the debt referred to therein, or expresses an intention to pay, which can be construed to be a "promise". To create a "promise" within the meaning of the section it is not necessary that there should be an accepted proposal, acceptance before action, becoming by the definition clause, a promise when accepted."
' In S. Venkatappayya v. Y. Venkatappayya, the Madras High Court observes that a promise within the meaning of section 25(3) of the Contract Act does not come into being where a debtor's offer to pay seven annas in a rupee of the debt owing against him is not accepted by the creditor.
' In the Dacca case of Reasatullah, it is opined that for the purposes of section 25(3) of the Contract Act, other requirements being satisfied, it is not necessary that the promise to pay should be in express terms but if the intention to pay can be inferred even with the aid of attending circumstances the relevant writing may constitute the requisite "promise".
' Hussain Corporation Ltd. v. Habib Bank Limited, is a Single Bench decision from this jurisdiction rendered by S. Abdur Rehman, J. And very nearly resembles the circumstances of this case. The writing there was to the following effect:--- "To The Manager, Habib Bank Limited, Foreign Exchange Branch, Habib Square, Karachi.
L/C No,2403, Bill No,5961, A/c Hussain Corporation Ltd.
Sir, ' I had talk with Mr. Saeed Abbas, Officer of your Bank. I undertake the sum of Rs,25 per month being the instalment against my above bill, will be deposited in your Bank, as I cannot pay the lump sum amount. Further, I may state that I cannot pay any interest, the first instalment will be paid by 10th March, 1975.
' Thanking you. Yours faithfully, for Hussain Corporation Ltd.
(Sd.)
(Muhammad Yawar Hussain)."
4. In consequence of such writing two instalments were deposited by the debtor and some adjustment from another account was also made. In such circumstances, it was observed that there being a refusal to pay interest, the writing could be construed as a promise to pay the principal amount. The distinguishing aspect, however, of the precedent case lies in the fact that the creditor is not reflected to have declined to accept the offer, which, as noted above, is not the position in the instant case.
' Habib Bank Limited v. Shamim Qureshi, is again a decision from this jurisdiction authored by Sajjad All Shah and Saleem Akhtar, JJ. (as they then were). In the main judgment delivered by Sajjad All Shah, JJ. And in the concurring note of Saleem Akhtar, J., the various ingredients of section 25(3) have been closely examined and guidlines for interpreting that provision in the Contract Act have been succinctly spelled out.
' In the first place, we respectfully express our complete agreement with the enunciations recorded in the cited case-law. In order to elaborate the reasons for our concurrence and the effect thereof on the determination of the controversy in hand we propose to reproduce hereunder, apart from clause (3) of section 25 of the Contract Act, the definition clauses in section 2(b), (e) and (h) pertaining to the words "promise", "agreement" and "contract" and section 9 of the same Act, which elaborates upon those definitions:- "CONTRACT ACT, 1872.
2(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted becomes a promise:
(e) Every promise and every set of promises, forming the consideration for each other, is an agreement.
(g) ....................................
(h) An agreement enforceable by law is a contract:
9. Promises, express and implied.---In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied."
25. Agreement without consideration void, unless it is in writing and registered. Or is a promise to compensate for something done, or is promise to pay a debt barred by limitation law.---An agreement made without consideration is void, unless--- (1)
(2).....................
(3) 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 the creditor might have enforced payment but for the law for the limitation of suits.
' In any of these cases, such an agreement is a contract.
' Explanation 1..............
' Explanation 2.
5. On examination of the above-quoted provisions it becomes manifest that an offer or proposal in itself is not a "promise"; such becomes a "promise" only when it accepted. Next, a "promise" in itself can be the equivalent of an agreement whereas an agreement enforceable by law is a contract.
Section 9 of the Contract Act signifies that a proposal or acceptance of any promise need not be in words. This seems to have been deviated from in relation to an agreement covered by clause (3) of section 25 in that the kind of "promise" (in the contexual sense of an offer) contemplated therein has to be in writing and must satisfy also the other conditionalities of the clause, as laid down by Sajjad All Shah and Saleem Akhtar, JJ. In the case of Habib Bank Limited (supra). However, the rule in section 9 aforesaid remains applicable to acceptances of proposals covered by clause (3) of section 25. To be more precise such acceptances can be otherwise than in words and need not be in writing at all. Hence the cited dicta that mere initiation of action on a proposal covered by clause
(3) of section 25 on the part of the creditor/promisee, implying acceptance by conduct, is sufficient for legal purposes. At the same time, even this does not mean that rejection of an offer of promise, otherwise satisfying the requirements of clause (3) of section 25, would still constitute a promise or agreement as contemplated by law. If there be such a repudiation there would be no promise to be enforced in novation of an earlier time-barred contract..
6. We may now advert to the question whether a promise to pay, falling within the terms of clause
(3) of section 25 can be conditional. It appears to be a well-settled principle that such a promise may be absolute or conditional. If absolute, there would be no question of the creditor or promisee refusing to accept it, and therefore, little scope for any controversy. It is only when the proposal or offer to pay a time-barred debt is conditional that the necessity for acceptance would arise and, as said, the requisite acceptance can be express or implied. In case of refusal to accept,- the conditional offer or proposal cannot be deemed to mature into a promise, equivalent to an agreement and would not revive a time-barred debt or sustain an action therefor.
7. Looking at the controversy from the above angles, it would seem that no due promise came into being to sustain the suits, upon the dismissal of which this appeal has been preferred.
' At this stage, it will be unfair not to mention that Mr. S. Hamid Hussain has been at pains to interpret the alleged offer of the respondent-debtor as involving mere pleas of indulgence in the way of allowing instalments for repayment of the debt and waiver of interest due on the principal amount. We, however, are of the view that the word "promise in section 25 of the Contract Act, as has been laid down in Habib Bank Limited v. Shamim Qureshi, above, is to be distinguished from the word "acknowledgement" occurring in section 19 of the Limitation Act, 1908. The concept of "promise" here involves a conscious undertaking to pay. Law has insisted upon a writing in that behalf to be duly signed so as to make the intention to pay adequately manifested. Because an undertaking to pay is involved, the promisor has every right to ensure for himself the mode of payment and if he insists to pay instalments he can be construed to express himself very clearly that he cannot pay otherwise than in instalments. Likewise, if he disowns the payment of interest such can also be a condition subject to which alone he can be required to pay. Responding, if the creditor clearly and manifestly declined, there comes into being no "promise", which can be enforced.
' The Special Court (Banking), apart from the foregoing has also expressed its reservations to accept the purported agreement under section 25 of the Contract Act as a genuine transaction.
That conclusion is also based on sound logic and nothing that Mr. S. Hamid Hussain has urged has the potential to persuade us to take any different view of the matter. ' with no order as to costs.