Karnataka High Court
Sri K Chandrashekar vs The Manager The Comptrollers Office on 5 November, 2012
Author: Aravind Kumar
Bench: Aravind Kumar
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 05TH DAY OF NOVEMBER, 2012
BEFORE
THE HON'BLE MR.JUSTICE ARAVIND KUMAR
R.F.A.No.1109/2008
BETWEEN:
SRI.K.CHANDRASHEKAR
S/O SRI.K.KRISHNAMURTHY
MAJOR, 42 YEARS,
ASST. BRANCH MANAGER
LIC OF INDIA,
KOPPA BRANCH, KOPPA 577 126
PRESENTLY AT BANGALORE. ...APPELLANT
(BY SRI.PARAS JAIN, ADV.)
AND
1. THE MANAGER
THE COMPTROLLERS OFFICE
CO-OPERATIVE BANK
(LIC EMPLOYEES' BANK)
CUBBON ROAD,
BANGALORE-02
2. SRI. P.CHAKRAPANI
MAJOR, FATHER'S NAME NOT KNOW
DEVELOPMENT OFFICER,
LIC OF INDIA, PEENYA BRANCH,
EMPLOYEE NO.SR-509914 ...RESPONDENTS
(BY SRI.G.F.HUNASIKATTIMATH, ADV. FOR R1
R2 DISMSSED VIDE ORDER DATED 25.09.2012)
THIS RFA IS FIELD UNDER SECTION 96 OF CPC AGAINST
THE JUDGMENT AND DECREE DATED 14.08.2008 PASSED ON
ISSUE NO.3 IN OS NO.1877/2008 ON THE FILE OF THE XXXVII
ADDL. CITY CIVIL AND SESSIONS JUDGE, CCH-38, BANGALORE
CITY, DISMISSING THE SUIT AS NOT MAINTAINABLE.
2
THIS RFA COMING ON FOR ADMISSION THIS DAY, THE
COURT MADE THE FOLLOWING:
JUDGMENT
This appeal is by the plaintiff questioning the correctness and legality of the judgment and decree passed by XXVII Addl. City Civil and Sessions Judge, Mayo Hall, Bangalore, (CCH 38) in O.S.No.1877/2008 dated 14.08.2008 dismissing the suit filed by plaintiff for declaration as not maintainable in view of issue No.3 being answered in the affirmative.
2. Heard Sri.Paras Jain, learned counsel appearing for appellant. Though respondent No.1 is served and represented by Sri.G.F.Hunsikattimath, there is no representation. Appeal against respondent No.2 has been dismissed vide order dated 25.09.2012.
3. Parties are referred to as per their rank in Trial Court. Plaintiff filed a suit seeking following reliefs:
3
"a. pass a judgment and decree in favour of the plaintiffs, interalia declaring that the plaintiff is not liable for any of the loans availed by the defendant No.2 from defendant No.1 bank wherein the plaintiff is shown as surety fraudulently, by forging the plaintiff's signatures on the Surety Bond;
and b. may be further pleased to pass Judgment and Decree of Permanent
Injunction, restraining the defendants, their agents, representatives, men, hoodlums or anyone acting through/under them from proceeding against the plaintiff in respect of the loans obtained by defendant No.2 and from attaching the salaries of the plaintiff in this regard; and c. may be further pleased to declare all such loan documents executed by defendant No.2 with defendant No.1 Bank wherein the plaintiffs name is shown as "Surety" without the plaintiff's knowledge and consent, as void ab initio and not binding on this plaintiff and the said documents may kindly be revoked and necessary directions be 4 issued to the defendant No.1 Bank in this regard;
d. and pray for such other relief/s as this Hon'ble Court deems fit to grant in the facts and circumstances of the case, including Court Costs and the Advocate's fee and the cost of this Litigation in consonance with the law declared by the Supreme Court in the case of Salem Bar Association, in the ends of justice and equity."
4. In support of above prayers, plaintiff's contention in the suit was that he was working at the relevant point of time as Assistant Branch Manager, LIC of India, Koppa Branch and defendant No.2 was working as Development Officer at Peenya Branch and defendant No.2 had availed loan of Rs.1,85,000/- on 16.04.2003 from Comptrollers Office Co-operative Bank (LIC Employees Bank) Cubbon Road, Bangalore and at his request plaintiff had stood as surety for the said loan transaction. It was contended that except said loan, plaintiff has not stood as surety for any other loan 5 transactions between defendant No.2 and defendant No.1. It was further contended that plaintiff received an intimation on 18.03.2006 from defendant No.1 regarding alleged due by defendant No.2 in a sum of Rs.3,633/- and on enquiry, defendant No.2 informed that the said loan amount had been repaid. However, plaintiff claimed that in the month of March 2007 a notice was received in respect of some other loan said to have been availed by defendant No.2 depicting plaintiff's name as surety. It was contended by the plaintiff that on enquiry he came to know that defendant No.2 had availed two other loans on 18.05.2004 and in the month of November 2004 and in the said loan transactions plaintiff's name has been fraudulently depicted as surety without his knowledge and consent. Plaintiff further claimed that his signature has been forged and he has not affixed his signature. Plaintiff contended that a reply was issued to the said notice dated 26.03.2007 denying his signatures or having signed the loan papers as surety for loans availed by defendant 6 No.2. He contends that inspite of such reply, notice of attachment of salary dated 04.07.2007 was issued to the extent of attaching a sum of Rs.1000/- per month from the salary of plaintiff commencing from July 2007 and contended that defendant No.2 is still working as Development Officer at Peenya branch and loan amount can be recovered from him by attaching defendant No.2's salary and despite such contention raised by plaintiff before defendant No.1 another notice intimating plaintiff that his salary was being attached from October 2007 vide notice dated 22.10.2007 came to be issued, which according to plaintiff was illegal and as such plaintiff claims to have been perforced to file the suit in question for the reliefs extracted hereinabove.
5. On issuance of said notice, defendant No.1 appeared and filed detailed written statement contending interalia that it is a Co-operative Bank registered under Karnataka Co-operative Societies Act, 1959, and membership of defendant No.1 bank is 7 reserved exclusively for employees of LIC of India and it has a total strength of 3800 members and plaintiff was a member with membership No.5485 as also defendant No.2 with membership No.5437. It was contended that it advances various types of loans to its members, which includes salaries, advances, loans and both plaintiff and defendant No.2 are having credit transactions with defendant No.1 bank for several years. It was further contended that plaintiff himself has admitted that he was a surety for loan amount of Rs.1,85,000/- availed on 16.04.2003, which would demonstrate that plaintiff is a member of first defendant Co-operative Bank. In respect of 'Suvidha Loan' availed by defendant No.2, plaintiff had stood as surety and a sum of Rs.50,000/- was sanctioned on 14.05.2004 repayable in 60 installments and plaintiff and defendant No.2 had executed "relevant" documents like promissory note, surety bond, undertakings as per Section 34 of the Karnataka Co-operative Societies Act, 1959, assuring repayment with agreed rate of interest. It was further 8 contended that defendant No.2 again approached defendant No.1 bank for sanction of surety loan as borrower and for the said loan also plaintiff had joined as a surety and considering the request of defendant No.2 a loan of Rs.2,50,000/- was sanctioned on 30.10.2004, which came to be availed by defendant No.2 on 02.11.2004. It further contended that defendant No.2 had executed relevant documents along with plaintiff. A contention was raised in the written statement that the suit in question was not maintainable in view of bar of Civil Court Jurisdiction and plaintiff has to raise a dispute before the Registrar of the Co-operative Societies under Section 70 of Karnataka Co-operative Societies Act, 1959. It further contended that under Section 118(1) (c) of the Act, jurisdiction of the Civil Court was barred in respect of any dispute required to be referred and adjudicated under Section 70 of the Act by the Registrar of Co- operative Societies Act, 1959. On these grounds defendant No.1 claimed that suit was not maintainable. 9
6. A further plea was raised that even otherwise before instituting the suit, notice under Section 125 of the Act was required to be issued and non issuance of such notice is also a ground to hold that the suit in question is not maintainable and on the grounds sought for dismissal of the suit. On the basis of the pleadings of parties issues were formulated by trial Court for its adjudication. However, issue No.3 was treated as preliminary issue since it was touching the jurisdiction of the Court to entertain a suit. The said issue reads as under:
"Does the defendant no.1 proves that suit of the plaintiff is not maintainable before this court in view of the specific provisions of Karnataka Co-operative Societies Act as alleged in the written statement?"
7. After considering the arguments advanced by the respective learned Advocates appearing for the parties, trial court answered the issue in the affirmative and dismissed the suit. It is this judgment and decree which is assailed in the present appeal. 10
8. Sri.Paras Jain, learned counsel appearing for appellant reiterating the contentions raised in the appeal memorandum would contend that suit filed by plaintiff was very much maintainable before Civil Court and pleas advanced, grounds urged in the suit would not come within the definition of the words used in Section 70(1) of the Act namely "the business of a Co- operative society" and as such finding recorded by the Trial Court that suit is not maintainable is erroneous and liable to be set aside. He would further elaborate his submissions by contending that when plaintiff has specifically stated that he has not stood as a surety and moreover when the documents said to have been executed by plaintiff were not produced by the defendant No.1 bank before trial court, it would strengthen the case of plaintiff that he has not executed any loan documents and as such an adverse inference ought to have been drawn against defendant No.1 and suit should have been decided on merits. He would 11 further submit by contending that plaintiff cannot be held liable or responsible for the follies of defendant No.1. He would also contend that claim of the defendant No.1, Bank was barred by limitation and bank could not have proceeded against a surety when the claim against borrower -defendant No.2 itself had become time barred. He would contend that finding recorded by the Trial Court that suit could not have been instituted without issuance of notice as per Section 125 of the Karnataka Co-operative Societies Act is erroneous and liable to be set aside.
9. In support of his submission he has relied upon the following judgments:
1) AIR 1982 SC 121:
Chhaganlal Keshavlal Mehta vs. Patel Narandas Haribhai.
2) 2006 (2) AIR Kar. R 504:
Schedule Caste (Harijan) House Building Co- operative Society Ltd., Bangalore and Anr. vs State of Karnataka and Ors.
3) 2006 (2) AIR Kar R 517:
Vijay Dev S.V. vs. Govt. of Karnataka & Ors. 12
10. Having heard the learned counsel appearing for appellant and on perusal of judgment and decree passed by the Trial Court, I am of the considered view that following points would arise for my consideration:
1. Whether the Trial Court was justified in answering issue No.3 in the affirmative by holding that suit instituted by the plaintiff was not maintainable and answering the same in the affirmative and dismissing the suit.
2. What order or decree?
11. The facts which are not in dispute can be crystallized as under:
Plaintiff and defendant No.2 are employees of LIC of India and they having been working as Officers of the said Corporation. Plaintiff and defendant No.2 are also the members of defendant No.1 bank with their membership Nos.5485 and 5437 respectively. Plaintiff and defendant No.2 had also credit transactions with defendant No.1 bank on earlier occasions. 13
12. Plaintiff unequivocally admits that defendant No.2 availed a departmental loan on 16.04.2003 for a sum of Rs.1,85,000/- and at the request of defendant No.2 he had stood as surety for the said loan transaction. However, it is the specific claim of the plaintiff that except standing as a surety for the said loan transaction, he has not signed or affixed his signature on any other loan papers or in respect of any other loan said to have been borrowed by second defendant from first defendant-bank. It is on these lines, plaintiff has set up his plea in the suit in question before the Trial Court.
13. Under Order XIV Rule 2 all issues framed are required to be adjudicated to ensure finality to the lis. The exception carved out to such a rule can be traced to clause (a) and clause (b) of Sub Rule (2) of Rule 2 which reads as under:
14
"2. Court to pronounce judgment on all issues.-
(1) xxx (2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to-
Or
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.
14. In the instance case issue No.3 was framed by trial court which would squarely fall within clause (a) and (b) of Sub Rule (2) of Rule (2) and as such as proceeded adjudicate said issue as a preliminary issue and said exercise carried out by the trial court cannot be found fault with.
15. In the instant case a specific defence was set up by the first defendant-bank that it is a Co-operative 15 Bank registered under the Karnataka Co-operative Societies Act, 1959, (hereinafter referred to as K.C.S Act, for brevity) and a machinery is provided under the Act for redressal of grievances of its members namely, to adjudicate the dispute raised under Section 70 of the Karnataka Co-operative Societies Act, 1959, which mandates that, if there is any dispute between a Co- operative society (which includes Co-operative bank) and the member or vice-versa such disputes are to be raised before Registrar of Co-operative Societies and have to be adjudicated as per provisions of said Act. It was also contended that in the event of a suit being instituted by member against a Co-operative society it should have been preceded with issuance of a notice which is required to be issued under Section 125 of the Act. Section 118 of K.C.S Act bars the jurisdiction of the Civil, Labour or Revenue Courts or Industrial Tribunal to the extent K.C.S Acts provides for. Section 118 of K.C.S. Act reads as under:
16
"118. Bar of jurisdiction of Courts: - (1) Save as provided in this Act, no [Civil, Labour or Revenue Court or Industrial Tribunal] shall have any jurisdiction in respect of, --
(a) the registration of a co-operative society or bye-laws or of an amendment of a bye-law;
(b) the removal of a committee [or member thereof]
(c) any dispute required under Section 70 to be referred to the Registrar for the recovery of moneys under Section 100;
(d) any matter concerning the winding up and the dissolution of a co-
operative society.
(2) While co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with, or instituted against, the Liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose.
(3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any Court on any ground whatsoever."
16. The relevant clause which requires to be examined in the factual background would be clause (c) of Sub Section (1) of Section 118 namely bar of jurisdiction of Court with reference to dispute requires 17 to be adjudicated under Section 70, since it is an undisputed fact that plaintiff is a member of first defendant Co-operative Bank.
17. It is the contention of Sri.Paras Jain learned counsel appearing for appellant that Section 70 is not attracted to the facts and circumstances of the case at all and as such bar created under Section 118 of K.C.S Act would not be attracted at all. He would press into service the words used in Sub Section (1) of Section 70, which is to the effect "business of a co-operative society"
to contend that it would not mean and include a dispute relating to the one in question whereunder the plaintiff has absolutely denied the execution of loan papers or having stood as surety to the loan papers or having stood as surety to the loan transaction between second defendant and first defendant bank and as such it cannot be construed as a dispute to be adjudicated by the Registrar of Co-operative Societies under Section 70. It is an undisputed fact that plaintiff is a member of 18 first defendant Co-operative Bank, under Clause (a) of Sub Section (2) of Section 70 defendant No.1 bank for recovery of its debt or demand due from a member or its nominee, heirs or legal representatives of a deceased member whether such debt is admitted or denied can be enforced by raising a dispute under Section 70 of K.C.S Act.
18. In the instant case it is the plaintiff who disputes that there is no such document executed by plaintiff as surety for the loan transaction between second defendant and first defendant. Said dispute would necessarily touch the business of first defendant bank since it is engaged in the business of advancing loans to its members. The claim of first defendant bank against the plaintiff is on the ground that plaintiff has stood as a surety towards the loan borrowed by second defendant and such guarantee is coextensive with that of the principal borrower. If plaintiff claims to have not executed any document or has denied the execution of 19 document on the ground that his signature has been forged (as pleaded in the plaint) it is for the plaintiff to establish by raising a dispute in this regard as required to be raised under Section 70 of the Karnataka Co- operative Societies Act, 1959. Under Clause (c) any dispute which requires to be adjudicated under Section 60 would bar the jurisdiction of the Civil Court to adjudicate such disputes. At this juncture itself it would be appropriate to note the two judgments relied upon by the learned counsel for appellant plaintiff to buttress his arguments that Civil Court jurisdiction is not excluded.
1). AIR 1982 SC 121- Chhaganlal Keshavlal Mehta vs. Patel Narandas Haribhai. It has been held in the said judgment as follows;
"2. The expression "business of the society"
has been considered by several decision of this Court. In Deccan Merchants Co-operative Bank Ltd. v. Dalichand Judgraj Jain, (1969), 1 SCR 887: (AIR 1969 SC 1320) it was pointed out "the word 'business' has been used in a narrower sense and it means the actual trading or commercial or other similar business activity of the society which the society is authorised to enter into under the 20 Act and the Rules and its bye-laws." In co- operative Central Bank ltd. v. Additional Industrial Tribunal, Andhra Pradesh, (1970) 1 SCR 205: (AIR 1970 SC 245), it is said "but the meaning given to the expression 'touching the business of the society', in our opinion, makes it very doubtful whether a dispute in respect of alteration of conditions of service can be held to be covered by this expression. Since the word 'business' is equated with the actual trading or commercial or other similar business activity of the society, and since it has been held that it would be difficult to subscribe tot eh proposition that whatever the society does or is necessarily required to do for the purpose of carrying out its objects, such as laying down the conditions of service of its employees, can be said to be a part of its business, it would appear that a dispute relating to conditions of service of the workmen employed by the society cannot be held to be a dispute touching the business of the society."
2). 2006 (2) AIR Kar R 504- Schedule Caste (Harijan) House Building Co-operative Society Ltd., Bangalore and Anr. Vs. State of Karnataka and Ors.
19. The words "business of the society" as found in U.P. Co-operative Societies Act (11 of 1966) is analogous or akin to the words used in Section 70 of the Karnataka Co-operative Societies Act, 1959. In the said judgment issue regarding declaratory relief sought for 21 by the respondent's employee therein that the retrenchment of his services is bad in law came to be rejected on the ground of non maintainability of the suit, since it was held that an employee was having an alternate remedy of raising a dispute under the U.P. Co- operative Societies Act. In this background their Lordships have held that the dispute in respect of alteration of conditions of services would not subscribe to the proposition that whatever the society does or is necessarily required to do for the purpose of carrying its objects such as laying down the conditions of service of its employees, can be said to be a part of its business. That is not the factual matrix in the instant case. In the instant case first defendant is a Co-operative bank engaged in the business of lending moneys to its members and also accepting deposits from its members apart from carrying on incidental or ancillary business. Undisputedly plaintiff as well as second defendant had taken loans on earlier occasions or in other words had credit transactions with first defendant bank. Plaintiff 22 in the instant case denies the execution of suit documents or the documents based on which the bank is attempting to enforce the debt recoverable from second defendant and plaintiff. In that view of the matter it cannot be construed or held that such claim does not fall within the scope of the "business of the society". In that view of the matter the above judgment relied upon by the learned counsel for appellant is inapplicable to the facts and circumstances of the present case.
(2) (2006) 2 AIR KAR 504: Schedule Cast (Harijan) House Building C0-operative Society Ltd., Bangalore & Anr. Vs. State of Karnataka & Ors.
"25. In order to appreciate the scope and ambit of Section 70 of the Act, it is necessary to carefully construe the words used in the Section. Section 70 of the Act reads as under:
"70. Disputes which may be referred to Registrar for decision. (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises-23
(a) among members, past members and persons claiming through members, past members and deceased members, or
(b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society, or
(c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee heirs, or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or
(d) between the society and any other co-
operative society or a credit agency. Such dispute shall be referred to the Registrar for decision and no Court or labour or revenue Court or Industrial Tribunal shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. (2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society, namely-
(a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
24
(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of a President, Vice-President, Chairman, Vice-chairman, Secretary, Treasurer or Member of Committee of the society.
(d) any dispute between a co-operative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a co-operative society notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947);
(e) a claim by a co-operative society for any deficiency caused in the assets of the co- operative society by a member, past member, deceased member or deceased officer, past agent or deceased agent or by any servant, past servant or deceased servant or by its committee, past or present whether such loss be admitted or not.
(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a co-
operative society, the decision thereon of the 25 Registrar shall be final and shall not be called in question in any Court"
A reading of Section 70 of the Act makes it very clear that sub-section (1) of Section 70 deals with the parties to the disputes, whereas, sub-section (2) deals with what a dispute is and sub-section (3) states that if any question arises where a dispute referred to the Registrar under the Section is a dispute or not, the decision thereon of the Registrar shall be final and shall not be called in question in the Court. Therefore, for application of Section 70, firstly the dispute should be between persons who satisfy the requirements mentioned in Section 70(1) of the Act and the dispute should fall within the categories mentioned in Section 70(2) of the Act. A careful reading of Section 70(1) of the Act discloses that the dispute touching the constitution, management or the business of a co-operative society should arise among members, past members and persons claiming through members, past members and deceased members or between the aforesaid category of persons or past committee, any present or past officer, agent or employee or nominees, legal representatives of the deceased officer, agent or employee or between the society and any other co-operative society. Unless a dispute is between the aforesaid category of persons, the Registrar would get no jurisdiction to entertain a dispute under section 70 of the Act. If it is averred in the dispute that the opposite party is not a member of the society at all, the question whether the opposite party is a member of the society or not 26 cannot be gone into in a dispute under section 70 of the Act. The principles embodied under Order VII Rule 11 of Code of Civil Procedure squarely applies to such a situation. In other words, if the dispute do not disclose the aforesaid jurisdictional aspect, the dispute shall be rejected at the threshold. As it is settled law to find out whether the dispute is maintainable or not what is to be seen is only the averments in the dispute and not the averments in the statement of objections filed by way of defence. Similarly, if the petitioner avers that the respondent is not a member and the respondent avers that the petitioner is not a member of the society, unless this jurisdictional question or membership is decided first, the Registrar would not get jurisdiction to entertain the dispute. He is not the competent person to decide that issue also. It would be in the nature of declaration of status of the parties. Therefore, a dispute regarding membership of the society is outside the purview of the dispute under Section 70 of the Act.
20. A perusal of the above judgment would disclose that a question whether the party who is a member of the society or not was held to be cannot gone into in a dispute raised under Section 70 of the Act and it was held in the said case by applying principles embodied under Order VII Rule 11 of CPC plaint cannot 27 be rejected on the defence set up by the defendant and by applying the said principles to reject the suit claim. In the instant case this Court is not faced with such a situation and plaintiff is undisputedly a member of the first defendant Co-operative bank. He claims that he has not executed the loan documents on the basis of which claim is made against him and contends that signatures found on those documents have been forged. If it were to be really so, it is always open to the plaintiff to raise such a plea in a dispute before the Registrar of Co-operative Societies, who would adjudicate such dispute under Section 70 of the Act. In that view of the matter the above referred judgments relied upon by the learned counsel for appellant is inapplicable to the facts and circumstances of the present case.
21. In view of the above discussion it is to be concluded and held that the finding arrived at by the Trial Court answering issue No.3 in the affirmative and dismissing the suit as not maintainable on the ground 28 that there is a bar under Clause (c) of Sub Section (1) of Section 118 as one which does not suffer from any infirmity and also in view of fact that such dispute is required to be raised by the plaintiff before the Registrar of Co-operative Societies and as such conclusion of the trial Court does not suffer from any error whatsoever either on facts or on law which calls for interference at the hands of this Court. Accordingly said contention stands rejected.
22. Yet another contention raised by the learned counsel for appellant though not raised in the Court below which relates to the issue of limitation raised by contending that the claim of defendant No.1 bank was time barred against defendant No.2 and consequentially the claim against plaintiff also has to recede to the background or in other words it becomes time barred is being examined since this Court being a First Appellate Court and appeal being continuation of original proceedings.29
23. A perusal of copy of the plaint made available by the learned counsel for plaintiff would disclose that at paragraph 10 of the plaint the cause of action has been pleaded and it is said to have commenced on 18.03.2006, 23.06.2007 when notices were issued by first defendant bank about the loans advanced and on 04.07.2007 and 22.10.07 when defendant No.1 bank issued notices interalia attaching the salary of the plaintiff. When the first notice dated 18.03.2006 came to be issued by the defendant No.1 regarding overdue of the loan amount borrowed by defendant No.2 for a sum of Rs.3,633/-, plaintiff claims that he made enquiries with second defendant and he was informed about said amount having been repaid by him to first defendant-bank. In other words the said notice dated 18.03.2006 received a quietus. Second notice is said to have been received by plaintiff during March 2007 which is dated 23.06.2007 and plaintiff himself admits that he made enquiries with first 30 defendant-bank and came to know that loans relating to said notices were obtained by second defendant on 18.04.2004 and November 2004 whereunder the name of plaintiff was shown as surety in respect of these loans. The notice dated 22.10.2007 attaching salary is well within the period of limitation even if the loan recovery relates to the one borrowed during November 2004 notice issued in October 2007 is well within time and it had not become time barred and as such the plea of limitation raised in the present appeal for the first time is examined and rejected for the reasons aforesaid. Even otherwise said plea would be required to be examined in an appropriate form in the event of dispute being raised by bank for recovery of its dues.
24. In this regard the learned counsel for appellant has relied upon the judgment of the Hon'ble Apex Court in the case of Vijay Dev S.V. vs. Govt. of Karnataka & Ors. reported in 2006 (2) AIR Kar R 517. However said judgment would be inapplicable to the 31 facts and circumstances of the present case for the reasons aforesaid namely at the cost of repetition it can be noted that plaintiff himself admits that on enquiry he came to know one of the loan was borrowed by second defendant during November 2004 to which documents plaintiff has been shown as surety and he also admits in the plaint at paragraph 7 that first defendant-bank issued notice dated 22.10.2007. In other words it is well within the period of limitation and it cannot be construed that the claim of the defendant No.1 bank was either time barred against the principal borrower namely defendant No.2 or the guarantor i.e., plaintiff. Hence the contention of the learned counsel for appellant with regard to limitation also stands rejected. Accordingly point No.1 formulated hereinabove is answered against the appellant and in favour of first defendant.
25. For the reasons discussed hereinabove, I pass the following:32
ORDER i. Appeal is hereby dismissed with costs.
ii. The judgment and decree dated 14.08.2008 passed in O.S.No.1877/2008 by the XXXVII Addl.
City Civil & Sessions Judge, Bangalore, is hereby affirmed.
iii. Cost is quantified at Rs.3,000/- payable by the appellant to first defendant.
iv. Registry to draw the decree accordingly.
Sd/-
JUDGE DR