The principle on which the rule of acknowledgement as enunciated in section 18 of the Limitation Act is based is that the bar of limitation should not be allowed to operate in cases in which the existence of claim is acknowledged by person who are under the liability; every acknowledgement affords a new proof of existence of the debt.
So the rules of limitation which are party based upon the tendency of evidence to disappear would not be allowed to obscure the essential justice of a case which is that the defendant having obtained an advantage to which he is not entitled should be compelled to pay it back.
Thus it is clear that the period of limitation is no enlarged under this section but fresh period begins to run from the date of the acknowledgment. Such an acknowledgment, however, does not extinguish the original cause of action nor create a new one. The basis of the claim is the original cause of action and the acknowledgement only shows that it still subsists and remains unsatisfied.
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ADVERTISEMENTS:
The rule in brief is that acknowledgement of any liability within the period of limitation made in writing by the party against whom the liability is alleged would give rise to a fresh period of limitation equal to the period prescribed by the Limitation Act.
A valid acknowledgment does not extend the period of limitation but it creates an entirely new period of limitation running from the date of acknowledgment.