A consideration of the terms of Section 18 of the Limitation Act shows that the essential requisites of a valid acknowledgment are the following:
1. Acknowledgment must be made before the expiration of the period of limitation:
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In other words the acknowledgment must be made after the period of limitation has begun to run and while it is actually running. The expression “period prescribed” does not refer exclusively to the period prescribed by the first schedule to the Limitation Act.
The expression will include any period prescribed by the Act, whether in the body of the Act or in the first schedule. Thus, an acknowledgment may be made before the expiry of the period of limitation as extended by the operation of section 14 of the Limitation Act. [See Kamla Prasad v. Gulzari Lai, 1954 A.L.J. 712 (F.B.)].
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2. Acknowledgment of liability must be in writing:
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Hence an oral acknowledgment is not sufficient. Similarly, a mere payment of a sum of money towards the debt is not sufficient under the section although such payment may be intended as an acknowledgment of the debt.
3. Acknowledgment must be signed by the person making the acknowledgment or by his agent duly authorised in this behalf:
An acknowledgment not so signed will not be sufficient for the purpose of this section. Thus, a telegram cannot constitute a sufficient acknowledgment under this section as telegrams are not signed by the parties sending them.
Signature of an agent acknowledging the debt will not do unless the agent is duly authorised to make such an acknowledgment. A general authority is of no avail. A special authority to acknowledge such debt is necessary.
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4. Acknowledgment must be made by the party against whom any property or right is claimed, or by some person through home he derives title or liability:
It is sufficient under section 18, if the acknowledgment has been made by a person against whom the right is claimed in the suit. It is not necessary that at the time when the acknowledgment is made, such person must have an interest in the property in respect of which the acknowledgment is given. An auction purchase derives his title from the judgment debtor. Hence, if the judgment-debtor makes an acknowledgment of liability in respect of a mortgage on property, the acknowledgment will be binding on the auction purchaser.
5. Acknowledgment must be in respect of particular property or right claimed in the suit or application:
An acknowledgment of liability under this section must be in respect of the particular property or right claimed in the suit. In other words, unless it is shown that the right, acknowledged is identical with the right claimed in the suit, the section will not apply.
Thus, where the defendant owes several debts to the plaintiff and acknowledges his liability in respect of a debt and as it is not possible to identify the debt acknowledged with the claimed in the suit, the acknowledgment will be ineffective under the section.
An acknowledgment of a barred debt cannot give a fresh period of limitation in favour of a creditor because one of the essential conditions of a valid acknowledgment is that the acknowledgment must be made before the expiration of the period of limitation.
