FOOD CORPORATION OF INDIA versus ASSAM STATE CO-OPERATIVE MARKETING AND CONSUMERS FEDERATION LTD. AND ORS.

Citation: [2004] SUPP. 5 S.C.R. 634 · Decided: 26-10-2004 · Supreme Court of India · Bench: R.C. LAHOTI · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
FOOD CORPORATION OF INDIA 
v. 
ASSAM STA TE CO-OPERATIVE MARKETING AND CONSUMERS 
FEDERATION LTD. AND ORS. 
OCTOBER 26, 2004 
[R.C. LAHOTI, CJ. AND ASHOK BHAN, J.] 
Evidence Act, 1872; Ss. 35 and 39: 
C 
Procurement of paddy-Payment of certain amount as advance by 
Food Corporation to supplier-Federation-Amount paid in excess of price 
of the paddy-Suit for recovery-Dismissed by trial Court on ground of 
limitation-Affirmed by High Court-On appeal, Held: Letters acknowledge 
receipt of the amount by the Federation from the Corporation, thus forming 
D part of the official correspondence entered into between the parties-Such 
official record itself is a relevant fact-Since the documents/letters were 
proved, their contents could be read in evidence. 
Limitation Act; Section 18: 
E 
Acknowledgement of liability in letters/correspondence between the 
parties-Effect on limitation-Held: Acknowledgement must relate to present 
subsisting liability and existence of jural-relationship between the partit!$ as 
of debtor and creditor-Intention to attempt such relationship must be 
apparent and could be inferred by implication from nature of the admission 
and not necessarily be expressed in words-So long as the statement in the 
F documents amounts to an admission of liability, any assertion as to denial 
of liability .thereof would be immaterial-Letters in question acknowledged 
liability .and thus have the effect of extending the period of limitation for 
filing of the suit-Hence, the suit not barred by limitation-8uit decreed for 
recovery of the amount from the respondents. 
G 
H 
Respondents-Federation, procuring agent of Assam Government 
requested the appellant-Food Corporation of India to take over paddy procured 
by them, for which the price has to be fixed by the Government of India. 
Appellant agreed to pay 90 per cent of the purchase price of the paddy to the 
respondent-Federation in instalments and balance thereof to be paid after 
634 
F.C.I. v. ASSAM STATE CO-OP. MKT. AND CONSUMERS FED. LTD. 
635 
fixation of the price of the paddy by the Government oflndia. On fixation of A 
the price, it was found that certain amount paid by the appellant-Corporation 
to the respondent-Federation was in excess of the price. Appellant claimed 
the excess amount by entering into correspondence with the respondent-
Federation and after serving a legal notice filed a suit for recovery. 
Dismissing the suit, Trial Court held that appellant was entitled to B 
recovery of the amount in question from the respondents, but the claim could 
not be decreed as suit was barred by limitation. High Court dismissed the 
appeal. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1.1. In both the letters written by the Respondent-Federation, it c 
has disputed its liability to pay the amount to the appellant in view of certain 
disputes relating to settlement of accounts. The fact remains that both the 
letters acknowledge receipt of certain amount by the Federation from the 
appellant-Corporation. It is true that the letters were not written in the D 
presence of PWl, who has also not deposed to any such facts as would amount 
to proof of execution of document. The fact remains that both these letters 
formed part of the official record of the appellant-Corporation and are placed 
as pieces or links found in the chain of long correspondence entered into 
between the parties. (638-H; 639-A-D) 
1.2. The letters having been tendered in evidence without any demur by 
the respondents, the same coming from proper custody and forming part of 
E 
, official record of the appellant-Corporation and being part of the chain of 
correspondence can be said to have been proved by PWl more so when his 
deposition to the effect that the letters were received from the Federation was 
not disputed by the Respondents-Federation either by directing any cross-
F 
examination on that part of the statement or by making any suggestion to the 
contrary indicating the respondent's case as regards the said letters. Hence, 
the documents/letters were proved and their contents can be read in evidence. 
[640-C, D, El 
P.C. Purushothama Reddiar v. S. Perumal, [1972) 1SCC9, relied on. G 
2.1. It is well-settled that to amount to an acknowledgement of liability 
within the meaning of Section 18 of the Limitation Act, it need not be 
accompanied by a promise to pay either expressly or even by implication. 
(640-F-G) H 
636 
SUPREME COURT REPORTS [2004] SUPP.

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