1. ZAFFAR HUSSAIN MIRZA, J.-This Letters Patent Appeal is from the judgment of a learned Single Judge of this Court in Suit No. 38/64 on the original side, whereby the snit of respondent No. 2 was decreed for a sum of Rs. 36,358/6, with interest at 6 % per annum.
2. The undisputed facts out of which the dispute in the present appeal arises are that respondent No. 1 Messrs Ameejee Valeejee & Sons wore awarded a handling contract for clearing, receiving, storing and forwarding wheat stocks to be imported by the appellant, Government of Pakistan. It appears that three shipments of wheat wets received and cleared by respon--dent No. 1 and various sums of money aggregating an amount of Re. 36,35/8/7 were paid by the firm as terminal tax to the Karachi Municipal Corporation (hereinafter referred to as the K. M. C.) the details of which are as under :
(1) 13-2-1960Re. 12,728/8
(2) 25-2-1960 Re. 12,213/9
(3) 3-3-19611Re. 11,416/6 The respondent No. 1 claimed reimbursement of this amount from the appellant but they were advised that goods which are in transit for movement to up country are exempted from payment of terminal tax and, therefore, the said respondent may prefer a claim for refund of the amount paid as terminal tax from the K M. C After exchange of some correspon--dence with the Government, the respondent No. 1 eventually submitted a claim for the refund by their application dated 6-3-190 to the Assessor and Collector of Terminal Tax, K. M. C. The latter, however, rejected the claim on the ground that the claim petition having been received by the K. M. C. On 19-7-1960 was time-barred under rule 17 of Terminal Tax Rules. The said respondent protested with the K. M. C.
3. And challenged the correctness of their stand via-a-via the date of presentation of the claim petition but no reply was given in response to their protest. Upon further representations by respondent No. 1, the K. M. C. Repudiated the claim for refund on the additional grounds that under the then existing rules the claim was not maintainable, that the respondent had failed to produce the Port-Trust trans--shipment receipts in terms of rule 2 of the Terminal Tax Rules, and that the claim was partly time-barred. By their letter dated 8-I1-1962, the appellant also repudiated their liability to pay the said amount to respondent No. I Thereupon the respondent No. d files Suit No. 38/64 for refund of Rs. 44,412 by the K. M. C. And alternatively against the present appellant for tie- imbursement of the amount.
4. The appellant resisted the suit and repudiated the claim for reimburse--ment of the amount on two pleas ; firstly that Municipal Tax clause was not included in the contract as the wheat was to be forwarders direct from the ship side to up country. And secondly that the K. M. C. Had levied the tax illegally in view of its letter dated 9-4-1960 for the reason that imported wheat was in transit only, through the limits of the K. M. C. The K. M. C. Also resisted the suit and justified the levy and collection of the amount in dispute on account of terminal tax as the goods in question "were at first unloaded and then re-loaded within the Municipal limits". The further plea taken was that the claim for refund made by the respondent No. I was time-barred. The Court framed several issue and after hearing the evidence decreed the suit against the appellant with interest for the sum of Rs. 36,358/6 only. The suit against the K. M. C. Was dismissed but the Court came to the con-- clusion that the latter was not entitled to recover the Terminal Tax according to the revised rates in the schedule of 1957 and, therefore, ordered that the present appellant would be entitled to the refund of the difference between the unamended schedule of rates and the rates revised in 1957 according to which the tax was collected. Aggrieved by this decision the appellant has come up in Letters Patent Appeal. Respondent No. 1 has also filed cross objections.
5. On the evidence adduced by the parties, the learned Single Judge found that respondent No. 1 had stored the wheat and then put the same into bags. Accordingly he came to the finding that the wheat-stock had been unloaded from the ship and reloaded within X. M. C. Limits for destinations up country. On the question whether the K. M. C. Could validly levey terminal tax, the learned Single Judge following the decision in the case of Pakistan Textile Millowners Association v. Administrator of' Karachi PLD 1963 SC 137, hold that the terminal tax was legally leviable and chargeable except that the same could not be levied according to the revised schedule of the rates introduced in 1957.
6. As to the objection that the claim for refund was barred by time prescribed under rule 17 of the K. M.
7. C. Rules, the learned Singe Judge was of the view that the aforesaid rule was not attracted as it related to the refund of excess recoveries and not, as in this case, to the refund of amount illegally recovered. Besides the learned Judge found the contention as unsustainable on facts on the main issue between the parties, namely, whether appellant was liable and bound by contract or otherwise to reimburse respondent No. I the amount in suit. The learned Single Judge, on the evidence reached the finding that the appellant was bound to do so on the terms of contract a3 contained in letter of Invitation to tender (Exh. 5/l) which expressly stipulated in its schedule of rates, Municipal terminal tax payable at actual.
8. Mr. Muzaffar Hassan, learned counsel appearing for the appellant in support of the appeal urged only the following three contentions :
(1) The learned Single Judge erred in holding that the Government of Pakistan was liable to reimburse the respondent No. 1 the amount paid towards the Terminal Tax under the terms of the contract.
(2) That the suit is time-barred against the Government of Pakistan.
(3) That no Terminal Tax was payable on the goods brought within the Municipal limits by sea as held in the case of Pakistan Textile Mill Owners' Association PLD 1963 SC 137.
9. It would be convenient to dispose of the third contention before examining the question of limitation. The submission of the learned counsel was that the Supreme Court had held in the case of Pakistan Textile Mills Owners' Associa--petition that no Terminal Tax was leviable on goods coming by sea. This, however, is not the correct position. At page 146 of the report E L D 1963 SC 137 their Lordships made the following observation: "The word 'terminal' must also have a reference to a terminus a quo ad quern. Thus the goods in transit are not liable for such Terminal Tax, as their journey has no terminal point within the municipal limits. In the case of the goods of the appellant, on the other hand, there is clearly such a terminal point, namely, the rail head, and the tar is levied at such terminal point. We see no justification, therefore, fog holding that the levy of Terminal Tax upon goods brought in by rail are, in any way, illegal or ultra vires"
10. This of course was a case of the goods brought in by rail for ultimate destination outside the municipal limits. At page 142 of the report it was, however, observed by their Lordships that the Terminal Tai on goods imported by sea or air, could still be levied at the old rates in force on the day when the Constitution of 1956 came Into force. The dictum laid down by their Lordships in the cited case the followed in the Pakistan Tobacco Co. Ltd v. Karachi Municipal Corporation PLD 1964 Kar. 468. In any case their is no reason to accept the wide proposition canvassed by the learned counsel that the goods imported by sea are not liable to Terminal Tax. In view of the finding of the learned Single Judge upon the evidence on record, which does not c311 for interference as shown above, that the goods were actually B brought within the Municipal limits for re-loading, we are unable to agree with the learned counsel that in the present case the Terminal Tax was not leviable on the wheat stocks in question.
11. The last question to consider is whether the suit was barred by limitation. The learned Single Judge answered the issue on this question in the negative and placed reliance on the case of Government of West Pakistan v. Ghulam Mohiyuddin PLD 1960 Pesh.
163. In that case a suit was brought for refund of licence-fee imposed on the export of the fruit from the Province, which was realised under a Government Notification issued under the North-West Frontier Province Essential Article Control Act, 1947. The defendant contended that the suit was barred under Article 2 of the Limitation Act whereas the plaintiff invoked Article 62 of the Limitation Act. The Court came to the conclusion that neither of the two Articles was applicable as the fee or tax levied by the Government cannot be hold to have been received by the Government for the use of the taxpayer.
12. Accordingly Court came to the conclusion that the claim for refund of fee illegally charged would be governed by Article 120. The decision in this case would therefore be relevant only so far as the claim for refund, in the present case, against the K. M. C. Is concerned. However, the position qua the appellant is distinguishable as the cause of action, so far as the appellant is concerned was for re-imbursememt and not for refund of payments made without being due or chargeable. The appropriate Article would be either Article 51 or Article 115 of the Limitation Act. Article 61 governs a suit for money payable to plaintiff for money paid for defendant and provides a period of 3 years commencing from the date when the money Is paid. Article 115 is attracted in a suit for compensation for the breach of any contract, express or implied not in writing registered. Again the period of limitation provided ie 3 years commencing from the time when the contract is broken. In my opinion the last-mentioned Article governs the suit as against the appellant in view of the facts of this case. It Is the case of the plaintiff in the plaint that the terms of the contract provided for reimburse--ment of payment made by respondent No. 1 on account of Municipal Term' C cal Tax at actuals. As wt have found agreeing with the learned Single Judge that the appellant was liable to reimburse the payments made toward Municipal Tax, the refusal on the part of appellant to pay the amount would therefore be in breach of the terms of the contract. In a judgment reported as Asmy Trading Co. v. Shahdra Pioneer Co-Op. Multipurpose MW Socy. Ltd. PLD 1975 Kar. 209. To which one of us was a patty, it was held that the term "compensation" used in Article 115 is not necessarily restricted to a claim in unliquidated damages but includes also a claim for sum certain. The time would therefore run from the date when the breach of contract occurred. The payments were made by the respondent No. 1 in February arid March 1960. The appellant declined to reimburse the said respondent by their letter dated 13-5-1960 (Exh. 5/15). Even the appeal for refund of the amount was dismissed by the Chief Assessor and Collector, K. M. C. On 8-7-1960 (Exh.
13. 5/18). By a farther communication dated 21-9-1960 the K. M. C. informed respondent No. I through their counsel that no refund can be permitted (Exh. 5/20). The suit having been filed on 7-11-1963 was beyond time with reference to any of the above dates. It seems the plaintiff was conscious of this position and therefore set up a plea to para. 26 of the plaint that by virtue of a letter dated 24-2-1961 addressed by the appellant to the K. M. C., copy whereof was sent to the respondent No. 1, a fresh period of limitation for the suit commenced from that date. In support of this plea Mr. Mohsin Tayyabali urged that the aforesaid letter constituted an acknow--ledgement of liability under section 19 of the Limitation Act. The question that arises for consideration, therefore is, whether the letter (Exh.5/23) dated 24-2-1961 written on behalf of the appellant to the K. M. C. Qualifies as an acknowledgment in writing under section 19 of the Limitation Act so as to give rise to a fresh period of limitation. It would be advantageous to set out the document in question :- No. FG-2 (18)/60-AV.
14. Government of Pakistan, Ministry of Food & Agricultural, (Food Division)
15. Karachi, the 24th February 1961.
16. To The Chief Assessor & Collector of Terminal Tax.
17. Municipal Corporation, Opposite Railway goods Office, McLeod Road, Karachi.
18. Sub : Terminal Tax-Imported wheat.
19. Sir, I am directed to refer to this Ministry's letter of even number dated 23-7-1960 (copy enclosed) on the above subject and to request that an amount of Rs. 36,358/6 paid as Terminal Tax by Messrs Ameejee & Valeejee & Sony. Clearing and Forwarding Agents to this Ministry, may please be refunded to them at an early date under intimation to this Ministry.
20. The entire wheat of the three steamers was despatched to up-country direct from the Wharf and therefore the question of levying Terminal Tax does not arise.
21. Early action will be appreciated.
22. Your obedient servant, (Sd.)
23. (Q. A. Jaffri) for Director of Procurement and Distribution (Foodgrains).
24. Copy to :
(1) Messrs Ameejee Valeejee & Sons, Campbell Street, Karachi with reference to their letter No. F. D.
25. No. C&P/WT-Contract 61 dated 20-1-1961. They ma; please contact Karachi Municipal Corporation for refund of the amount.
(2) Accounts Branch."
26. The perusal of the contents of the aforesaid letter does not reveal an express admission that there is a debt owed by the appellant to respondent No. 1. But it is now well laid down that an admission of liability need not be express and may be inferred by Implication from the language of the writing and the surrounding circumstances. In M. G. Kadir & Co v. Abdul Latif PLD 1970 Kar. 708. The D. B.
27. After undertaking an extensive review o the case-taw, laid down that a writing claimed to be an acknowledgment must be Interpreted liberally, so as to maintain the right to sue rather than in negation or derogation of such right. The learned Judges of the D. B. Laid down the test to determine whether a writing constitutes sufficient acknowledgment under section 19 of the Limitation Act as under :-
(i) Whether there is admission of liability or of jural relation--ship :
(ii) Whether this admission is relatable to subsisting liability or jural relationship so that in the latter case, on ascertainment of facts constitut--ing the jural relationship, as in the case of accounts between the parties, a debt or liability shall be found to exist against the one or the other of the parties.
28. This decision was followed in a later case reported as Harchandari v. Popular Metal Works PLD 1971 Kar. 925. In the light of the principles enunciated in these decisions, we have come to the conclusion that the letter (Exh 5/23) does constitute a valid acknowledgment under section 19 and has the effect of extending the period of limitation by 3 years with effect from 24-2-1961.
29. Now this letter has been written In continuation of the Ministry's previous letter dated 23-7-1960 which Is to the evidence vide Exh. 5/ 1 6 and was to the same affect and in turn referred to yet another previous letter of the Ministry on the subject dated 9-4-1960. It would be pertinent to reproduce this letter also as under :- No. FG-8 (50)/59 Government of Pakistan, Ministry of Food & Agricultural, (Food Division)Karachi, dated the 9th April 1960.
30. To Messrs Ameejee Valeejee & Sons Campbell Street, Karachi.
31. Subject : Terminal tax Dear Sire, I am directed to reproduce below a copy of letter No. THC/1240/58, dated the 8th December 1958, from the Chief Assessor and Collector of Terminal Tax, regarding exemption from payment of Terminal Tax, of goods which are in transit for movement to up country. No terminal tax is therefore payable by Government in respect of wheat being booked direct from shipside to up country destinations.
32. You are requested to check up if any payment of Terminal Tax has been made by you in respect of wheat sent direct from shipside to up country stations, in which case necessary refund claims may be preferr--ed against the Terminal Tax Department.
33. Yours faithfully, (Sd.) Illegible for Director of Procurement and Foodgrains Distribution Copy to :
(1) The Chief Assessor & Collector of Terminal Tax. Karachi Municipal Corporation. Opp. Railway Goods Office, Meclod Road, Karachi.
(2) Accounts Branch.
(3) R. P. Branch."
34. The import of this letter clearly was that the appellant eras communicating to the respondent No. 1 their stand that no terminal tar was payable on their goods which are in-transit and requested respondent No. 1 that if any payment on account of the tax has been made by the latter a claim for refund he preferred. The words "no terminal tax is therefore payable by the Government in respect of wheat being booted direct from shipside to up country destinations", are very significant. They clearly Imply that the appellant was calling upon its agent to claim refund on their behalf as the Government was not liable to terminal tax on their goods which were in transit. The sequence of letters commencing from the last-mentioned communication culminates in the letter Exh. 5/23, upon which reliance has been placed. But even otherwise in the last-mentioned letter also it was conceded on the part of the appellant that respondent No. 1 were agents of the Ministry and on this basis the appellant called upon the K. M. C. To refund the amounts received by way of terminal tax under intimation to the appellant. Having regard to these facts the test laid down in the cited decisions is fully applicable, inasmuch as an admission of jural relationship is established from the contents of the latter in the context of the preceding correspondence and the facts therefore positively lead to the inference that in case of refusal on the part of the K. M. C. To allow refund of the payments, a debt or liability would be found to exist against the appellant. Thus suit filed by the respondent No. 1 qua the appellant was also abundantly within time.
35. The respondent No. 1 has not pressed the cross objections filed by it In the result, the appeal fails and is accordingly dismissed with costs.
36. I. MAHMUD, J.-I agree.