Section 20 – Effect of acknowledgement or payment by another person

(1) The expression “agent duly authorised in this behalf” in sections 18 and 19 shall, in the case of a person under disability, include his lawful guardian, committee or manager or an agent duly authorised by such guardian, committee or manager to sign the acknowledgement or make the payment.

(2) Nothing in the said sections renders one of several joint contractors, partners, executors or mortgagees chargeable by reason only of a written acknowledgement signed by, or of a payment made by, or by the agent of, any other or others of them.

(3) For the purposes of the said sections,-

(a) an acknowledgement signed or a payment made in respect of any liability by or by the duly authorised agent of, any limited owner of property who is governed by Hindu law, shall be a valid acknowledgement or payment, as the case may be, against a reversioner succeeding to such liability; and

(b) where a liability has been incurred by or on behalf of a Hindu undivided family as such, an acknowledgement or payment made by, or by the duly authorised agent of, the manager of the family for the time being shall be deemed to have been made on behalf of the whole family.

Analysis of Sec. 20 –

An acknowledgment by a Legal Practitioner will be valid acknowledgment to bind his clients. And attorney is a duly authorised agent and an admission made by him in a letter to the attorney of the opposite party is a sufficient acknowledgment.

The Official Assignee is not the agent of the insolvent. Therefore, an acknowledgment made by him does not save limitation. An ‘Official Assignee’ is an officer appointed to administer the estate of an insolvent, under the Provincial Insolvency Act. He is not technically an agent of the insolvent. However, under Sec. 28 of the Provincial Insolvency Act, the properties of the insolvent vest in the official Receiver. Therefore, in respect of liabilities connected with insolvency, an acknowledgment by the Official Receiver saves time (State of U.P. V. Mool Chand AIR 1972 AII. 413)

The expression “lawful guardian” is not limited to a guardian appointed by the Court. It means any person who is entitled to act as guardian under the personal law of the minor. But a de facto guardian is not a lawful guardian within the meaning of this section and has no authority to acknowledge a debt.

Though the section lays down that a written acknowledgment or payment ‘only’ by a partner does not bind the other partner, yet the significance of the word ‘only’ should not be missed. The meaning of this word is that mere writing or signing of an acknowledgment by one partner does not necessarily by itself bind his co-partners; but it must also be shown that he had authority, express or implied, to make the acknowledgment on behalf of himself and his co-partners; and if it is shown, then of course the acknowledgement will be binding on them all.

Sub-sec. (2) abolishes the doctrine of implied agency as between co-debtors. If the fact of agency among co-debtors is established, then alone an acknowledgment or payment by one will take the debt out of the statute as against all. But if no such agency is provided, acknowledgment or payment by one of several joint debtors will give a fresh start of limitation against him alone.

Sub-sec 3(b) lays down two conditions in order that the acts of a member of a joint (undivided) Hindu Family specified in Secs. 18 & 19 may extend the period of limitation against all the members. These conditions are (i) that the loan must have been incurred by or on behalf of the joint family, and (ii) that specified acts must be the acts not of any member of the family but must be the act of the Karta. If the fact that the loan has been incurred on behalf of the family be established on the evidence, sub-sec. (3) (b) is attracted, if the acknowledgment or part-payment of the principal and interest has been made or endorsed by the Karta.