Sudarshan Cargo Pvt. Ltd. v. Techvac Engineering Pvt. Ltd.
2013 (4) AKR 654
In the High Court of Karnataka at Bangalore
COP Number 11/2013
Before Justice Aravind Kumar
Decided on June 25, 2013

Relevancy of the case: Whether emails acknowledging the debt would constitute a valid and legal acknowledgement of debt, though not signed as required u/s 18 of the Limitation Act, 1963?

Statutes & Provisions Involved

• The Information Technology Act, 2000 (Section 2, 3, 4)
• The Indian Evidence Act, 1872 (Section 3)
• The Code of Civil Procedure, 1908 (Order V Rule 9)
• The Limitation Act, 1963 (Section 18)

Relevant Facts of the Case

• This is a petition for winding up of the respondent company as it is unable to pay its due to the petitioner. The petitioner is a licensed customs house agent, and an IATA accredited international freight forwarding agent.
• At the respondent’s request, the respondent carried four consignments by shipment during September – November 2008. Due to non-payment of dues by the respondent company, there was an exchange of emails between the respondent and petitioner. The petitioner did not receive any response after it reasserted its position of the amount due. Accordingly, the petitioners filed the present petition for winding up of the respondent company.
• After the submissions were made by the respondent, the court referred the matter for reconciliation of accounts, and the respondents were given one more opportunity to make the payment. However, the said dues have not been paid by the respondent.

 Prominent Arguments by the Advocates

• The learned counsel for the respondent contended that the alleged acknowledgement of debt from the respondent to the petitioner by email is not duly signed by the respondent and hence, it cannot be construed as a valid acknowledgement.
• The learned counsel for the petitioner contended that the respondent has never disputed the liability and having admitted the amounts due through emails, it cannot contend contrary to its own admissions.

Opinion of the Bench

• The respondent has only contended that the acknowledgement of debt is not valid under the eyes of the law as the said email has not been duly signed. At the same time, the respondent does not dispute other emails that have been sent to the petitioner.
• Section 18 of the Limitation Act, 1963 has two essential requirements for valid acknowledgement
  1. It must be in writing;
  2. It must be signed by the party against whom such right is claimed.
• On the other hand, the Information Technology Act, 2000 provides for legal recognition of transactions carried out through electronic communication that involve the use of alternatives to paper-based methods of communication and storage of information. Section 4 of the act provides that if the information is to be in writing or in the typewritten or printed form, the requirement is deemed to have been satisfied if such information is rendered or available in an electronic form and the same is accessible to be used for a subsequent reference. The Evidence Act, 1872, was also amended by this act.
• Order V Rule 9 enables the court to issue summons to the defendant by delivering or transmitting a copy addressed to the defendant or his agent by means of fax message or electronic mail service.
• As the respondents have not disputed information transmitted by them through the use of computer and its network, the acknowledgement of debt through emails have to be construed and read as a due and proper acknowledgement, and it would meet the requirements laid down under Section 18 of the Limitation Act, 1963.

Final Decision

• An acknowledgement of the debt by email originating form a person who intends to send or transmit such electronic message to any other person, who would be the addressee, would constitute a valid acknowledgement of debt and it would satisfy the requirements of Section 18 of the Limitation Act, 1963, when the originator disputes having sent the email to the recipient.
• The petition is admitted, and the petitioner is permitted to take out advertisements in the Hindu (English newspaper) and Vijaya Karnataka before July 16, 2013.

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