Delhi District Court
Canara Bank vs Tina Sharma on 22 November, 2025
IN THE COURT OF SHRI DEVENDER KUMAR, DISTRICT JUDGE
(COMMERCIAL COURT-01), EAST DISTRICT
KARKARDOOMA COURTS : DELHI
CS (Comm.) No. 79/2025
Canara Bank
A body corporate constituted under the
Banking Companies (Acquisition and Transfer of Undertaking)
Act, 1970 having its registered office at 112 J.C. Road
Bangalore and amongst other branches,
one of its branch at Canara Bank, Nirman Vihar Branch,
A-1, Raja Towers Guru Nanakpura,
Opposite V3S Mall, Nirman Vihar, East Delhi -110092
Through its authorized Officer Ms. Shweta Kumari
Officer / Sr. Branch Manager
...... Plaintiff
Vs.
1. Tina Sharma (Borrower)
D/o Sh. Jagdish Chand
R/o House No. B-59, Gali no. 6,
Mandawali, Fazilpur,
Mandawali Unchepar, New Delhi -110092
Also at :
Tina Sharma (Borrower)
D/o Sh. Jagdish Chand
Working as Staff Nurse
at Muskan Maternity Centre,
F-27, Madhu Vihar, Patparganj,
Delhi -110092
Digitally
signed by
DEVENDRA
DEVENDRA KUMAR
CS (Comm) No. 79/2025
Canara Bank Vs. Tina Sharma & Anr. KUMAR Date: 1/36
2025.11.22
16:18:44
+0530
2. Mr. Ashish Kumar Singh
S/o Sh. B. D. Singh
R/o Flat No. 70, Pocket GH9 (also known as GH-9/70)
First Floor Paschim Vihar, New Delhi 110087
...... Defendants
Date of Institution : 19.03.2025
Date of Arguments: 29.10.2025
Date of Judgment : 22.11.2025
JUDGMENT:
1. Vide this judgment, I shall dispose of the suit for recovery of Rs. 18,35,346.62/- along with interest @ 9.05% plus 2% penal interest for delayed payment i.e. combined R.O.I @ 11.05% per annum filed by the plaintiff and against the defendants. Brief facts of the case are as under:
2. Plaintiff is a banking company corporate constituted under the Banking Companies (Acquisition & Transfer of Undertaking) Act 1970 and is being represented through its Authorized Representative / Senior Branch Manager, who is authorized through Power of Attorney to institute this suit on behalf of the plaintiff. It is further alleged that defendant no. 1 alongwith defendant no. 2 approached to the bank for housing loan to purchase a DDA flat at Sector 35, Rohini, Delhi under DDA Scheme, 2014. It is further alleged that the defendants filed loan application dated 16.04.2015 alongwith proof of allotment of flat and the plaintiff sanctioned housing loan with security of equitable mortgage after execution of conveyance deed from DDA in favour of the defendant no. 1. It is further alleged that the defendant no. 1 also acknowledged intimation of lien addressed to DDA Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. KUMAR 2/36 DEVENDRA Date:
KUMAR 2025.11.22
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and loan amount of Rs. 11,68,000/- was sanctioned vide Sanction Memorandum dated 25.06.2015 against base rate of interest @ 10% per annum floating. It is further alleged that the defendant no.1 executed housing loan documents alongwith undertaking dated 26.06.2015 to authorize the plaintiff to deduct EMI / interest / margin money from her bank account, whereas defendant no. 2 stood guarantor to the defendant no. 1.
2.1. Plaintiff has further alleged that monthly EMI of Rs. 9638/- was fixed, but an amount of Rs. 10,80,000/- was disbursed against sanctioned amount of Rs. 11,68,000/- to purchase flat. It is further alleged that the defendant 2 also acknowledged his liability upto limit of Rs. 28,86,000/-. It is further alleged that the defendant no.1 failed to maintain financial track during July, 2015 to 13.04.2017, due to the plaintiff served a notice showing liability of the defendant no.1 qua arrears of EMIs but the defendant paid Rs. 5,000/- on 25.04.2017 through DD against arrears of Rs. 22,473/-. It is further alleged that the plaintiff again served written communication dated 23.04.2017 thereby calling upon the defendant no.1 to clear outstanding amount, but the defendant did not pay EMIs regularly despite acknowledgment dated 15.12.2017 to acknowledge not only principal amount of Rs. 10,77,635/-, but also interest @ 9.25% per annum. It is further alleged that the defendant no.1 failed to regularize account despite acknowledgment dated 15.12.2017, due to again communication dated 24.05.2015 was served against liability of Rs. 10,99,588/- against outstanding payment of Rs.18,726/-.
Digitally signed by DEVENDRACS (Comm) No. 79/2025 KUMAR
Canara Bank Vs. Tina Sharma & Anr.
DEVENDRA 3/36
Date:
KUMAR 2025.11.22
16:18:56
+0530
2.2. Plaintiff has further alleged that the defendant no.1 kept on defaulting payment, due to the plaintiff kept again served notice and the defendant no.1 again acknowledged debts to the extent of Rs. 10,98,590/- on 01.06.2018 against interest @ 9.15% compounded monthly. It is further alleged that the plaintiff again issued communications dated 12.04.2019 and 21.05.2019 and ultimately loan was clarified as NPA on 26.10.2019. It is further alleged that the plaintiff served a legal notice dated 20.05.2020 thereby calling upon the defendants to pay outstanding amount of Rs. 11,32,327/-, but the defendants failed to pay. However, the defendant no.1 approached the bank and issued acknowledgement dated 11.10.2024 but still no payment was made, hence present suit.
3. Defendants have filed their written statement thereby alleging that this suit has not been instituted by a duly authorized representative of the bank and Ms. Shweta Kumari, who has instituted this suit has no valid power of attorney to institute this suit, as the person who executed power of attorney in her favour had already been retired much prior to filing of the suit. It is further alleged that the plaintiff obtained signatures of the defendants on blank papers and later on contents of those documents were forged. It is further alleged that forgery in documents may be verified by sanction letter, as loan amount of Rs. 11,68,000/- was sanctioned, whereas merely amount of Rs. 10,88,000/- was disbursed, which is beyond explanation as to how disbursal amount got reduced, though documents are containing similar amount of Rs. 11,68,000/-. It is further alleged that the plaintiff has not maintained proper Statement of A/c, due to there is no presumption of authenticity of account under section 4 of Banker's Books Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR Canara Bank Vs. Tina Sharma & Anr. DEVENDRA 4/36 Date:
KUMAR 2025.11.22
16:19:01
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of Evidence Act. It is further alleged that the plaintiff has claimed interest @ 11.50% per annum, whereas the defendants were disclosed interest merely @ 8% per annum, which is also against the contents of loan documents. It is further alleged that the plaintiff has no cause of action to file this suit and suit is liable to be dismissed.
3.1. Defendant has further alleged that this suit is barred by limitation as alleged acknowledgement dated 11.10.2024 is also forged and fabricated and may not be considered as acknowledgment to extent period of limitation and suit is liable to be dismissed. Defendants have denied allegations of the plaintiff and have prayed that no liability can be fastened upon them and suit may be dismissed.
4. Plaintiff has not filed any replication to written statement of the defendants.
5. On the basis of the pleadings of the parties, the following issues were framed vide order dated 15.07.2025 as under:
ISSUES
1. Whether present suit is within limitation? OPP
2.Whether plaintiff bank advanced loan of Rs. 10,88,000/-
(ought to be Rs.10,88,671/-) along-with interest to the defendant no. 1 as alleged? OPP
3. Whether defendant no. 2 stood guarantor to defendant no. 1 qua loan amount as alleged? OPP
4. Whether plaintiff is entitled for decree of amount of Rs.
18,35,346.62/- as prayed for ? OPP
Digitally signed
CS (Comm) No. 79/2025
by DEVENDRA
Canara Bank Vs. Tina Sharma & Anr. DEVENDRA KUMAR 5/36
KUMAR Date:
2025.11.22
16:19:07 +0530
5. Whether plaintiff is entitled for interest against decretal amount, if so, at what rate and for which period? OPP
6. Relief.
6. To prove case, the plaintiff has examined PW1, Ms. Shweta Kumari, who has deposed in verbatim of plaint in examination in chief and has relied upon documents Ex. PW1/1 to Ex. PW1/24 except Ex.PW1/21 (not on record) and Ex.PW1/23, which is Mark B. 6.1. During cross examination, PW1 has deposed that she was not present at the time of execution of power of attorney and cannot say whether the person who executed power of attorney in her favour is still holding same post and power to execute power of attorney, as it is promotional and transferable post. It is further deposed that concerned person might have retired and was not aware whether Mr. L.V.R Prasad is not General Manager since March, 2020, but it is denied that she has no valid power of attorney to file this suit and to depose before the court. It is further deposed that she is posted in present branch since July 2024 but loan was not sanctioned / or disbursed in her presence and even documents were also not executed in front of him. It is denied that she cannot say which documents were executed at the time of loan disbursal and later on as she was not present at the time of execution of loan documents. Vol. there is bank rule for pre-sanction and post-sanction documentation and documents are being executed according for disbursal of loan.
Digitally signed by DEVENDRA KUMARCS (Comm) No. 79/2025 DEVENDRA
Canara Bank Vs. Tina Sharma & Anr. Date: 6/36
KUMAR 2025.11.22
16:19:12
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6.2. PW1 has further deposed that loan in question was applied by the defendants at Laxmi Nagar branch which now has merged into Nirman Vihar branch and now Laxmi Nagar branch does not exist, but this fact is not mentioned in plaint. It is admitted that no personal notice was given to the defendants regarding merger of branches, but it was in public domain. It is admitted that there is no document on record to show that merged branch may file suit and it is denied Nirman Vihar branch has no authority to file present suit. It is further deposed that documents of the loan in question were executed at Retail Asset Hub, Bhagwan Dass Road and loan was sanctioned and disbursed from same branch. It is admitted that on the date when stamp papers were purchased, neither loan was sanctioned nor amount disbursed, but stamp papers were purchased by the party before sanction and disbursement date of loan amount but at the time of processing of loan. It is denied that stamp papers were purchased by the bank and not by the party.
6.3. PW1 has further deposed that loan amount sanctioned by the bank was Rs.11,68,000/- but amount of Rs.10,88,671/- was disbursed and difference between sanctioned and disbursed amount was due to final demand from the builder/ or authority (DDA in this case) and after maintaining the parties contribution / margin. It is admitted that she cannot tell after going through the documents as to why there was a difference between sanctioned and disbursed amount. It is denied that the defendants were informed about difference of sanctioned and disbursed amount but it is admitted that loan documents contain amount of Rs.11,68,000/- which was sanctioned to the defendants. It is further admitted that EMIs Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. KUMAR 7/36 DEVENDRA Date:
KUMAR 2025.11.22
16:19:18
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repayment and interest paid by the defendants was calculated against disbursed amount of Rs.10,88,671/-, which is reflected in Statement of A/c. It is further admitted that Statement of A/c is not showing that EMIs were calculated on the basis of disbursed amount. The processing charges of loan amount were of Rs.5,840/- and service tax was of Rs.818/-.
6.4. PW1 has denied that Ex.PW1/3 and Ex.PW1/12 or other documents are not containing signatures of defendant no. 2. The rate of interest was @ 10% per annum with 2% penal interest and it is denied that the defendants were disclosed rate of interest @ 8% per annum. It is further denied that signatures of the defendants were obtained on blank documents except document Ex.PW1/3, or that there was no lien of any property of the defendants against any loan. It is further deposed that amount paid by the defendant no.1 has been duly reflected in Statement of A/c and segregation of the principal and interest is to be calculated out of EMI/s. It is further deposed that account of defendants was declared NPA after three defaults of EMIs and it is denied that loan account was not declared NPA according to RBI guidelines, however factum of declaration of NPA is mentioned in Statement of A/c that loan was suspended on 27.11.2019.
6.5. PW1 has admitted that the defendant no. 2 was maintaining account in the bank but she was not aware whether he had any FDR with the plaintiff bank. However, it is admitted that bank account of the defendant no. 2 freezed by the plaintiff bank, but she was not aware whether FDR of the defendant was freezed or not. It is denied that no intimation was given to the defendant no. 2 prior to freezing of his account of FDR. It is Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR DEVENDRA Canara Bank Vs. Tina Sharma & Anr. Date: 8/36 KUMAR 2025.11.22 16:19:22 +0530 admitted that Ex.PW1/7 has not proved from which bank ECS payment was to be deducted, but it is mentioned in Ex.PW1/6. It is further admitted that Para 12 of plaint and Para 15 of her affidavit are containing different disbursed amount. It is further admitted that amount mentioned in guarantee covering letter Ex.PW1/11 is incorrect but it is denied that signatures of the defendant no.2 on Ex.PW1/11 are forged and manipulated by the bank. It is admitted that rate of interest at the time of disbursal of loan was 8.95% per annum, as mentioned in Para 17 of plaint. It is further admitted that she has not filed any proof regarding delivery of notice to the defendants, but it is denied that no legal notice was served upon the defendants. It is admitted that Ex.PW1/15, Ex.PW1/17 and Mark B are not containing details of previous acknowledgments of debt by the defendants, but it is denied that documents Ex.PW1/15 and Ex.PW1/17 got signed at the time of sanction of loan amount, or that documents were in blank at that time. It is further denied that Mark B is not containing signature of the defendant no. 1, or that this document is forged and fabricated. It is further denied that present suit was filed beyond the period of limitation or that the defendants never assured to the plaintiff to regularize their loan account.
7. Defendants have examined Ms. Tina Sharma as DW1, who has deposed in verbatim of her written statement and has not relied upon any document.
7.1. During cross examination, DW1 has deposed that she is 12th class passed and has done General Nursing and Midwife course and understand Hindi and English properly. It is further deposed that she has been working Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR DEVENDRA Canara Bank Vs. Tina Sharma & Anr. Date: 9/36 KUMAR 2025.11.22 16:19:30 +0530 as Nursing Staff at Muskan Clinic, F-27, Madhu Vihar, Delhi for the last 10-15 years. It is further deposed that she availed loan from Canara bank in the year 2015-2016 and loan application Ex.PW1/3 is containing her photograph and photograph of her brother-in-law Ashish Singh, stood guarantor for this loan. It is further deposed that contents mentioned in loan application are correctly filled and bearing her signatures and signature of Ashish Singh on Ex.PW1/3, whereas Ex. PW1/4 bears her signature and not signature of Ashish Singh. It is admitted that loan documents Ex. PW1/3 to Ex. PW1/12 bear her signatures and she applied for loan for purchasing of the flat in a draw by DDA. It is admitted that allotment letter and related documents issued by DDA and showed to the bank when she applied for housing loan. DDA demanded Rs. 14,00,000/- as a full and final cost of the flat.
7.1.1. DW1 has further deposed that sanctioned loan amount by the bank was to be repaid in EMIs. It is further deposed that rate of interest of loan is mentioned in Ex. PW1/4 but the bank official informed her at the time of handing over of sanction letter that interest was @ 7% to 8%. Loan was disbursed to DDA and she took over the possession of the flat and conveyance deed of the flat was issued and handed over to the bank and she paid EMIs for three years and thereafter failed to pay. It is admitted that she availed loan from the plaintiff and failed to repay it, but it is denied that she is liable to pay amount of Rs. 18,35,346.62/- including interest at the time of filing of this case.
Digitally signed by DEVENDRA KUMAR CS (Comm) No. 79/2025DEVENDRA Date:
Canara Bank Vs. Tina Sharma & Anr. KUMAR 2025.11.22 10/36 16:19:35 +0530 7.2. Defendants have also examined DW2 Ashish Kumar Singh, who has also deposed in verbatim of his written statement and has not relied upon any document.
7.2.1. During cross examination, DW2 has admitted that he is aware about contents of his affidavit Ex. DW2/A, and written statement and affidavit were prepared by his lawyer under his instruction. It is denied that he has not stated in his written statement as well as affidavit in evidence that he has not signed loan documents. Vol. He signed Loan application and affidavit. It is admitted that Tina Sharma is his sister-in-law (Saali) and she was allotted a DDA Flat at Rohini in a draw. It is denied that Ex.PW1/3 was not blank or was duly filled when signed. It is admitted that Ex. PW1/3 i.e. loan application contains his photograph which was affixed in his presence. It is admitted that he became guarantor to defendant No 1 Tina Sharma for availing Housing Loan but he was not informed about pro and cons of becoming a guarantor in a bank loan. It is admitted that it was his decision on the request of defendant No. 1 Tina Sharma to stand a guarantor for Housing Loan and he did not get any money from Tina Sharma. It is denied that he is not liable to pay loan amount on behalf of the principal debtor Tina Sharma being her guarantor.
8. I have heard the arguments and perused the record. My issue wise findings are as under: -
ISSUE No. 1: - The onus to prove this issue was fixed upon the plaintiff and to discharge the onus, the plaintiff has examined PW1 Ms. Shweta Kumari and has also cross examined DW1 & DW2. Plaintiff has Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. DEVENDRA KUMAR 11/36 KUMAR Date:
2025.11.22 16:19:41 +0530 not mentioned any particular paragraph of limitation in plaint but Paras 34 to 44 are pertaining to cause of action in which limitation has been covered. As per these Paras cause of action arose on 15.12.2017 when the defendants visited the bank and signed acknowledgment dated 15.12.2017, it again arose when the defendants signed second acknowledgment dated 31.05.2018, it again arose when the plaintiff sent letters dated 12.04.2019, 21.05.2019, 26.10.2019, on 20.05.2015 when legal notice was served and on 11.10.2024 when another acknowledgment was signed by the defendants.
9. Ld. Counsel for plaintiff has argued that this suit is within limitation, as the plaintiff sanctioned loan amount on 25.06.2015 and the defendant no. 1 has repaid amount till 2017, when she started committing defaults in EMIs. It is further argued that the plaintiff sent various communications to the defendants on regular intervals and even the defendant no.1 also paid certain amount besides executing various acknowledgments which extended period of limitation. It is further argued that last acknowledgment was singed on 11.10.2024, which is Mark B, and has proved that this acknowledgment extended period of limitation afresh to file this suit. It is further argued that the defendant no. 2 also acknowledged his liability pursuant to guarantee covering letter and agreements Ex.PW1/11 and Ex.PW1/12, which have proved that both the defendants are liable to pay outstanding amount and suit is within limitation.
10. On the other hand, Ld. Counsel for defendants has argued that this suit is not within limitation as the defendants filed loan application on Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR Canara Bank Vs. Tina Sharma & Anr. DEVENDRA 12/36 Date:
KUMAR 2025.11.22
16:20:28
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16.04.2015, whereas loan amount was sanctioned on 25.06.2015 and the defendant no.1 paid EMIs amount upto 22.12.2018, when limitation first started to file this suit. It is further argued that alleged acknowledgments singed by the defendants were not according to law and could not extend the period of limitation to file this suit and suit is liable to be dismissed.
11. Admittedly, the onus to prove limitation is always on the plaintiff and if any suit is barred by limitation, then Section 3 of Limitation Act prescribes that the suit has to be dismissed outrightly even without taking defense of limitation by opposite party. In this case, loan application Ex.PW1/3 (colly) was filed on 16.04.2015 and loan was sanctioned vide sanction letter Ex.PW1/4 on 25.06.2015. Loan amount was disbursed on 27.06.2015 as per Statement of A/c Ex.PW1/22(colly). As per statement of A/C Ex.PW1/22 (colly), last payment of EMI was made by the defendant no.1 on 24.12.2019. In fact, the period limitation would start to run from same date when last payment was made in terms of Section 19 of Limitation Act, 1963.
12. However, Ld. Counsel for plaintiff has heavily relied upon Debt Acknowledgments executed by the defendants time to time. Ex.PW1/15 is first acknowledgment which was executed on 15.12.2017 to acknowledge liability of Rs. 10,77,635/- as on 28.11.2017. Thereafter, another acknowledgment Ex.PW1/17 was executed on 31.05.2018 qua liability of Rs. 10,98, 590/- as on 31.05.2018. This second acknowledgment extended the period of limitation upto 31.05.2021, though it was already upto 24.12.2022 as per last payment. Last Acknowledgment is dated 11.10.2024 Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR Canara Bank Vs. Tina Sharma & Anr.DEVENDRA 13/36
Date:
KUMAR 2025.11.22
16:20:34
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(Mark B) regarding acknowledgment of liability of Rs. 17,87,166.62/-
13. Admittedly, PW1 has admitted that loan account was suspended on 27.11.2019, whereas Statement of A/c Ex.PW1/22 (colly) has proved last payment on 24.12.2019. DW1 has admitted that she signed loan documents Ex.PW1/3 to Ex.PW1/12 and also that she applied and availed housing loan. Even she has also admitted that DW2 stood guarantor to her for this housing loan. She has further admitted that she paid EMIs for 3 years and DW2 has corroborated her testimony. No doubt the defendants have disputed written acknowledgments but they have not tendered any explanation, as to how and why they signed documents and containing their signatures, which suggests that documents were signed by them only.
14. Ld. Counsel for defendants has pleaded that documents got signed in blank, whereas this plea is not sustainable. Admittedly, both the defendants are well educated and were supposed to go through contents of documents before singing and they cannot dispute genuineness of loan documents after availing loan amount. Even other wise plea of blank document is a vague plea without any plausible explanation and is not sustainable.
15. Ld. Counsel for plaintiff has heavily relied upon written acknowledgment to prove limitation to file this case and this plea has to be considered. However, before taking up this plea legal sanctity of written acknowledgments must be ascertained. Even it is to be ascertain how much amount was sanctioned or disbursed. Sanction letter Ex.PW1/4 has proved that loan amount was of Rs. 11,68,000/- was sanctioned, whereas PW1 has Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. KUMAR 14/36 DEVENDRA Date:
KUMAR 2025.11.22
16:20:39
+0530
admitted during cross examination that only amount of Rs. 10,88,671/- was disbursed according to final demand by DDA. PW1 has admitted that loan documents are containing sanctioned loan amount of Rs. 11,68,000/-, whereas EMIs were calculated according to disbursal of amount of Rs. 10,88,671/- besides processing fees of Rs. 5,840/- and service tax of Rs. 818/-. Even rate of interest in sanction letter is @ 10% per annum floating, whereas loan agreement Ex.PW1/5 is containing rate of interest 0.00% per annum. Similarly, as per sanctioned latter, loan amount was repayable in 360 EMIs of Rs. 10,250/- each, whereas EMIs amount was of Rs. 9,638/- per month vide Ex.PW1/7. In fact, there were many contradictions between sanctioned and disbursed loan amount as well as EMI amount. However, that aspect may be considered after taking up issue of limitation.
16. In this case, part payment and written acknowledgments are material to determine limitation, due to Sections 18 & 19 of Limitation Act, 1963 are necessary to go through as under:
Section - 18. Effect of acknowledgment in writing.--(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation.--For the purposes of this section--
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is CS (Comm) No. 79/2025 Digitally signed by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. 15/36 DEVENDRA KUMAR KUMAR Date:
2025.11.22 16:20:44 +0530 accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right,
(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right."
& Section-19. Effect of payment on account of debt or of interest on legacy.--Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:
Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
Explanation.--For the purposes of this section--
(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment;
(b) "debt" does not include money payable under a decree or order of a court."
In view of abovesaid sections, it is clear that written acknowledgment of debt and liability in terms of section 18, or any part payment u/s 19 may extent limitation, but must be made within the period of limitation.
17. Section 18 of Limitation Act came into interpretation before Hon'ble Apex Court in case titled Tilak Ram v. Nathu, 1966 SCC OnLine SC 99 and relevant observations are as under:
Digitally signed by DEVENDRACS (Comm) No. 79/2025 KUMAR
Canara Bank Vs. Tina Sharma & Anr. DEVENDRA 16/36
Date:
KUMAR 2025.11.22
16:20:50
+0530
8. The section requires (i) an admission or acknowledgment (ii) that such acknowledgment must be in respect of a liability in respect of a property or right, (iii) that it must be made before the expiry of the period of limitation and (iv) that it should be in writing and signed by the party against whom such property or right is claimed. Under the Explanation such an acknowledgment need not specify the exact nature of the property or the right claimed. It is manifest that the statement relied on must amount to an admission or acknowledgment and that acknowledgment must be in respect of the property or right claimed by the party relying on such a statement.
18. Further, in case titled Food Corpn. of India v. Assam State Coop. Marketing & Consumer Federation Ltd., (2004) 12 SCC 360, it has held that;
14. According to Section 18 of the Limitation Act, an acknowledgement of liability made in writing in respect of any right claimed by the opposite party and signed by the party against whom such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing a fresh period of limitation from the date on which the acknowledgement was so signed. 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.
15. The statement providing foundation for a plea of acknowledgement must relate to a present subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. The words used in the acknowledgement must indicate the existence of jural relationship between the parties such as that of debtor and creditor. The intention to attempt such jural relationship must be apparent. However, such intention can be inferred by implication from the nature of the admission and need not be expressed in words. A clear statement containing acknowledgement of liability can imply the intention to admit jural relationship of debtor and creditor. Though oral evidence in lieu of or making a departure from the statement sought to be relied on as acknowledgement is excluded but surrounding circumstances can always be considered. Courts generally lean in favour of a liberal construction of such statements though an acknowledgement shall not be inferred where there is no admission so as to fasten liability on the maker of the statement by an involved or far-fetched process of reasoning.
Digitally signed by DEVENDRACS (Comm) No. 79/2025 KUMAR
Canara Bank Vs. Tina Sharma & Anr. DEVENDRA 17/36
Date:
KUMAR 2025.11.22
16:20:56
+0530
(See Shapoor Freedom Mazda v. Durga Prosad Chamaria [AIR 1961 SC 1236] and Lakshmirattan Cotton Mills Co. Ltd. v. Aluminium Corpn. of India Ltd. [(1971) 1 SCC 67 : (1971) 2 SCR 623] ) So long as the statement amounts to an admission, acknowledging the jural relationship and existence of liability, it is immaterial that the admission is accompanied by an assertion that nothing would be found due from the person making the admission or that on an account being taken something may be found due and payable to the person making the acknowledgement by the person to whom the statement is made.
19. Further, in case titled New Mangalore Port Trust v. Clifford D'Souza, (2025) 5 SCC 577, it has observed that
25. Section 18 of the Limitation Act is very clear that where liability is acknowledged in respect of any property or right, a fresh limitation may be computed from the time when the acknowledgment was so signed. Clause (a) of the Explanation to Section 18 declares that an acknowledgment would be sufficient for various reasons to be stated therein, which includes the time for payment has not yet come as one of the reasons. In the present case this reason squarely applies.
20. Section 19 was also dealt with by Hon'ble Apex Court in case titled Shapoor Freedom Mazda v. Durga Prasad Chamaria , 1961 SCC OnLine SC 147 and relevant observations are as under:
6. It is thus clear that acknowledgment as prescribed by Section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication. The statement on which a plea of acknowledgment is based must relate to a present subsisting liability though the exact nature or the specific character of the said liability may not be indicated in words. Words used in the acknowledgment must, however, indicate the existence of jural relationship between the parties such as that of debtor and creditor, and it must appear that the statement is made with the intention to admit such jural relationship.
Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission in question need not be express but CS (Comm) No. 79/2025 Digitally signed Canara Bank Vs. Tina Sharma & Anr. by DEVENDRA 18/36 DEVENDRA KUMAR KUMAR Date:
2025.11.22 16:21:01 +0530 must be made in circumstances and in words from which the court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement. In construing words used in the statements made in writing on which a plea of acknowledgment rests oral evidence has been expressly excluded but surrounding circumstances can always be considered. Stated generally courts lean in favour of a liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. Broadly stated that is the effect of the relevant provisions contained in Section 19, and there is really no substantial difference between the parties as to the true legal position in this matter.
21. In another case titled Shanti Conductors (P) Ltd. v. Assam SEB, (2020) 2 SCC 677, it has further observed that:
16. We may notice the judgment of this Court dealing with Section 20 of the Limitation Act, 1908, which was akin to present Section 19 of the Limitation Act, 1963. In Sant Lal Mahton v. Kamla Prasad , 1951 SCC 1008, this Court held that for applicability of Section 20 of the Limitation Act, 1908, two conditions were essential that the payment must be made within the prescribed period of limitation and it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. This Court further held that for claiming benefit of exemption under Section 20, there has to be pleading and proof. In paras 9 and 10, the following has been laid down :
"9. It would be clear, we think, from the language of Section 20, Limitation Act, that to attract its operations two conditions are essential: first, the payment must be made within the prescribed period of limitation and secondly, it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. We agree with the Subordinate Judge that it is the payment which really extends the period of limitation under Section 20, Limitation Act; but the payment has got to be proved in a particular way and for reason of policy the legislature insists on a written or signed acknowledgment as the only proof of payment and excludes oral testimony. Unless, therefore, there is acknowledgment in the required form, the payment by itself is of no avail. The Subordinate Judge, Digitally signed by CS (Comm) No. 79/2025 DEVENDRA Canara Bank Vs. Tina Sharma & Anr. DEVENDRA KUMAR 19/36 KUMAR Date:
2025.11.22 16:21:06 +0530 however, is right in holding that while the section requires that the payment should be made within the period of limitation, it does not require that the acknowledgment should also be made within that period. To interpret the proviso in that way would be to import into it certain words which do not occur there. This is the view taken by almost all the High Courts in India and to us it seems to be a proper view to take.
10. ... If the plaintiff's right of action is apparently barred under the statute of limitation, Order 7 Rule 6, Civil Procedure Code makes it his duty to state specifically in the plaint the grounds of exemption allowed by the Limitation Act, upon which he relies to exclude its operation; and if the plaintiff has got to allege in his plaint the facts which entitle him to exemption, obviously these facts must be in existence at or before the time when the plaint is filed; facts which come into existence after the filing of the plaint cannot be called in aid to revive a right of action which was dead at the date of the suit. To claim exemption under Section 20, Limitation Act the plaintiff must be in a position to allege and prove not only that there was payment of interest on a debt or part-payment of the principal, but that such payment had been acknowledged in writing in the manner contemplated by that section."
After going through the abovesaid case law, it stands proved that written acknowledgment or part payment must be within the existing period of limitation and also be clear to acknowledge outstanding liability due towards the party making that acknowledgment.
22. Now the case in hand has to be considered. Admittedly, written acknowledgment u/s 18 of Limitation Act may extend period of limitation and a fresh payment of limitation would start from the date of execution of written acknowledgment. However, acknowledgment of debt must be of exact due amount. In this case, loan amount of Rs. 10,88,671/- was disbursed on 26.06.2015 and the defendants signed first acknowledgment Ex.PW1/15 on 15.12.2017 qua amount of Rs. 10,77,635/- as on 28.11.2017. However, without expiry of period of 3 years after execution of Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. KUMAR 20/36 DEVENDRA Date:
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Ex.PW1/15, the defendant again executed new acknowledgment dated 31.05.2018, which is Ex.PW1/17. This acknowledgment was for amount of Rs. 10,98,590/- on 31.05.2018. In fact, this acknowledgment was much prior to expiry of limitation, due to this acknowledgment has to be considered to extend the period of limitation being a later acknowledgment. As per Ex.PW1/17, the limitation extended upto 31.05.2021 i.e. for 3 years after period of limitation.
23. However, the plaintiff has further relied upon another acknowledgment Mark B, which is dated 11.10.2024. It is acknowledgment of liability of Rs. 11,87,166.62/- as on 11.10.2024. In fact, period of limitation through Ex.PW1/17 extended upto 31.05.2021, whereas this acknowledgment Mark B was executed beyond the period of 3 years i.e. after 31.05.2024. I have already observed that acknowledgment must be within the existing period of limitation and any acknowledgment beyond the period of limitation cannot extend period of limitation to file a case. In fact, Section 18 of Limitation Act has failed to extend period of limitation.
24. Now the limitation has to be considered under Section 19 of Limitation Act. Admittedly, none of the parties has argued this plea, but still this court is also bound to check limitation even without taking defense by the defendants. Section 19 of Limitation Act is applicable against part payment of due amount. If a part payment is made within existing period of limitation, then a new period of limitation shall commence from that date of limitation.
Digitally signed by DEVENDRA KUMAR DEVENDRA CS (Comm) No. 79/2025 Date: KUMAR 2025.11.22 Canara Bank Vs. Tina Sharma & Anr. 21/36 16:21:18 +0530
25. Admittedly, the plaintiff has maintained Statement of A/c of the defendant Ex.PW1/22 (colly) and whatever payments were being made by the defendant no.1 were being entered into Ex.PW1/22, which has proved that last part payment of Rs. 10,000/- was made by the defendant no.1 on 24.12.2019. If the last payment was made on 21.12.2019, then the limitation was extended u/s 19 of Limitation Act by 21.12.2022, which was the last date of filing of the suit.
26. Plaintiff was entitled to invoke Section 12A of Commercial Courts Act, 2015 and to seek extension of time exhausted in said process, it has to be excluded. However, bank initiated process u/s 12A on 27.07.2023, which concluded on 19.08.2023 i.e. beyond the period of limitation, which was by 21.12.2022. As such, this suit is also barred by limitation under section 19 as well.
27. Ld. Counsel for plaintiff has pointed out there was a separate written acknowledgment of liability by the defendant no. 2, which is Ex.PW1/11. However, this document has proved acknowledgment of Rs. 28,86,000/-, whereas this amount was not due till filing of this suit. This document is disputed by the defendants and rather signature of the defendant no.2 on this document also disputed. However, this document cannot be considered as acknowledgment, as firstly it is dated 26.06.2015, whereas the defendant no.1 has paid amount upto 24.12.2019 and period of this acknowledgment was already over. Secondly, this document is pertaining to amount of Rs. 28,86,000/- which is beyond explanation. As such, it is no acknowledgment.
Digitally
signed by
DEVENDRA
CS (Comm) No. 79/2025 DEVENDRA KUMAR
Canara Bank Vs. Tina Sharma & Anr. KUMAR Date: 22/36
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28. So far as guarantee agreement Ex.PW1/12 is concerned, it was executed on 26.06.2015 and liability of guarantor is co-extensive and guarantor would be liable, if principal borrower is liable or fail to pay amount. Section 128 of Contract Act deals with liability of guarantor as follows:
Section 128. Surety's liability.--The liability of the surety is co- extensive with that of the principal debtor, unless it is otherwise provided by the contract.
In view of this section, it is clear the liability of the defendant no.2 is coextensive and similarly has held in case titled Industrial Investment Bank of India Ltd vs Bishwanath Jhunjhunwala, Civil Appeal No. 4613 of 2000 that the liability of a principal debtor and the liability of a surety which is co- extensive with that of the former are really separate liabilities, although arising out of the same transaction. Notwithstanding the fact that they may stem from the same transaction, the two liabilities are distinct. The liability of the surety does not also, in all cases, arise simultaneously.
29. However, if this suit is barred by limitation, then neither the defendant no.1 is liable nor the defendant no.2, whose liability is co- extensive.
30. Ld. Counsel for plaintiff has argued that due to corona period, the limitation was stopped and that period has to be excluded. However, limitation once starts that ends with expiry only. No doubt during corona period, Hon'ble Supreme Court of India stayed / excluded period of limitation during 15.03.2020 to 28.02.2022, but limitation of this case Digitally signed by DEVENDRA KUMAR CS (Comm) No. 79/2025 DEVENDRA Canara Bank Vs. Tina Sharma & Anr. Date: 23/36 KUMAR 2025.11.22 16:21:43 +0530 expired way back on 31.05.2021 under Section 18 of Limitation Act and on 22.12.2022 under Section 19, due to it cannot be said that the plaintiff is entitled for any benefit of such extension of limitation as well. As such, the plaintiff has failed to discharge the onus to prove Issue no. 1 and this issue is decided in favour of the defendants and against the plaintiff.
31. ISSUE Nos. 2 & 3: - The onus to prove issues was fixed upon the plaintiff and to discharge the onus, the plaintiff has examined PW1 Shweta Kumari, who has proved loan application Ex.PW1/3 (colly) and sanction letter Ex.PW1/4. She has also proved guarantee agreement Ex.PW1/12. These documents have not been denied by DWs, who have deposed during cross examination that the defendant no.1 availed housing loan from Canara Bank in the year 2015-2016 through loan application Ex.PW1/3 and Ashish Singh/ Defendant no.2 stood guarantor to her. DW1 has duly admitted that she signed documents Ex.PW1/3 to Ex.PW1/12. No doubt the defendants have disputed contents of certain documents being signed in blank but they have duly admitted that loan amount was sanctioned and disbursed to DDA and even the defendant no. 1 also paid EMIs for 3 years. As such, the defendants have not disputed that loan amount of Rs. 11,68,000/- was sanctioned and Rs. 10,88,671/-, actually disbursed, repayable in 360 months EMIs.
32. Similarly, DW2 has also not disputed that the defendant no.2 stood guarantor to the defendant no. 1, who is his sister-in-law. DW2 has acknowledged that he is well educated and was supposed to go through documents before putting signatures. He has denied that Ex.PW1/3 is Digitally signed by DEVENDRA CS (Comm) No. 79/2025 DEVENDRA KUMAR Canara Bank Vs. Tina Sharma & Anr. KUMAR Date: 24/36 2025.11.22 16:23:02 +0530 containing his photograph, or that he authorized the bank to become a guarantor for the defendant no. 1 for housing loan. However, DW1 has admitted that loan application affixed photographs of defendant no.2 and it stands proved that the defendant no. 2 stood guarantor to defendant no.1.
33. No doubt the plaintiff has proved document Ex.PW1/11 to prove that the defendant no.2 acknowledged his liability pursuant to his guarantee agreement Ex.PW1/2. However, this document is just letter addressed by the defendant no.2 to the plaintiff, but the plaintiff has disputed it and the plaintiff has not proved it, either by proving postal receipt of dispatch or by the than manager who received this document, and in the absence of proving this documents, it could not be proved that Ex.PW1/11 was sent by the defendant no.2. Even otherwise Ex.PW1/11 has shown acknowledged of liability of Rs. 28,86,000/-, which is not even due till date, due to this document cannot be considered a valid acknowledgment. However, by the testimonies of PW1 and DWs, it stands proved that the plaintiff sanctioned loan of Rs. 11,68,000/- but disbursed Rs. 10,88,671/- to purchase a DDA flat and Statement of A/c Ex.PW/22 (colly) has also corroborated this fact. However, plea of the defendants that they signed blank documents could not be proved. As such, the plaintiff has discharged the onus to prove both issues and both issues nos. 2 & 3 are decided in favor of the plaintiff and against the defendants.
34. ISSUE Nos. 4 & 5 - The onus to prove these issues was fixed upon the plaintiff and to discharge onus, the plaintiff has examined PW1 and has also cross examined DW1 & DW2. Plaintiff has alleged that the defendants Digitally signed by DEVENDRA CS (Comm) No. 79/2025 DEVENDRA KUMAR Canara Bank Vs. Tina Sharma & Anr. KUMAR Date: 25/36 2025.11.22 16:21:48 +0530 approached to the plaintiff for housing loan to purchase a DDA flat and applied for loan and the plaintiff considered and sanctioned loan amount of Rs. 11,68,000/-, out of which, Rs. 10,88,671/- were disbursed. However, Ld. Counsel for defendants has raised various pleas to counter this relief of the plaintiff and his pleas must be considered.
35. First plea taken by the Ld. Counsel for defendants is regarding institution of this case, as AR appointed by the plaintiff was not authorized to institute to this suit. It is further argued that AR instituted this suit through power of attorney executed in her favor, whereas the person who executed this power of attorney had already been retired much prior to institution of this suit, due to she was not authorized to institute this suit and suit is liable to be dismissed.
36. On the other hand, Ld. Counsel for plaintiff has argued that power of attorney was executed by Mr. L. V. R Prasad, Chief General Manager, HR of the plaintiff in favor of PW1 and this power of attorney is still valid despite retirement of executant of power of attorney, as this power of attorney was never withdrawn by the plaintiff, due to plea taken by the defendants is liable to be rejected.
37. Admittedly, a Civil Suit by a company / corporation has to be singed and verified by authorized representative in terms of Order 29 Rule 1 of CPC, whereas appointment of Recognized Representative must be in terms of Order 3 Rule 2 of CPC. Order 29 Rule 1 is as under:
Digitally signed by DEVENDRA KUMARCS (Comm) No. 79/2025 DEVENDRA
Canara Bank Vs. Tina Sharma & Anr. Date: 26/36
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Order 29 Rule 1. Subscription and verification of pleading.-- In suit by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case.
38. In view of Order 29 Rule 1 of CPC, authority mentioned under abovesaid provision must sign and verify pleadings like Secretary, Director, or any other Principal Officer of the company / Corporation. These Authority may sign and verify pleadings besides other Authorized Representatives, as appointed by a company / corporation on its behalf through Board Resolution. The authority of other recognized agents has been prescribed under Order 3 Rule 1 & 2 of CPC as under:
Rule 1. Appearances, etc., may be in person, by recognized agent or by pleader.--Any appearance, application or act in or to any Court, required or authorized by law to be made or done by a party in such Court, may, except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent, or by a pleader [appearing, applying or acting, as the case may be, on his behalf :
Provided that any such appearance shall, if the Court so directs, be made by the party in person.
Rule 2. Recognised agents.--The recognised agents of parties by whom such appearances, applications and acts may be made or done are--
(a) persons holding powers-of-attorney, authorising them to make and do such appearances, applications and acts on behalf of such parties;
(b) persons carrying on trade or business for and in the names of parties not resident within the local limits of the jurisdiction of the Court within which limits the appearance, application or act is made or done, in matters connected with such trade or business only, where no other agent is expressly authorised to make and do such appearances, applications and acts.
39. In view of abovesaid legal proposition, it stands proved that Recognized Representative may be authorized by way of power of attorney CS (Comm) No. 79/2025 Digitally signed Canara Bank Vs. Tina Sharma & Anr. by DEVENDRA 27/36 DEVENDRA KUMAR KUMAR Date: 2025.11.22 16:21:58 +0530 / Resolution of Board of Directors in terms of Section 291 of Companies Act, 1956 (Now corresponding section under Companies Act, 2013). The authority of Authorized Representative under Order 3 Rule 1 & 2 CPC viz- a-viz signing authority of Authorized Representative under Order 29 rule 1 & 2 of CPC has been defined in case titled Nibro Ltd. v. National Insurance Co. Ltd., (1991) 70 Comp Cas 388 (Delhi) as under:
Order 3, rule 1 provides that any appearance, application or act in or to any court required or authorise by law can be made or done by the party in person or by his recognized agent or by a pleader appearing, applying or acting, as the case may be, on his behalf. Provided of course, such an appearance, application or act in or to any court is required or authorised by law to be done or done by a party in such court. Where, however, there is an express provision of law, then that provision will prevail. Thus, if an authority is given to a pleader or a recognised agent as provided by law, the recognised agent or pleader can file an appearance or file a suit in court if the party himself is not in a position to file it. In my view, if a party is a company or a corporation, the recognised agent or a pleader has to be authorise by law to file such a plaint. Such an authority can be given to a pleader or an agent in the case of a company by a person specifically authorised in this behalf. In other words, a pleader or an agent can be authorised to file a suit on behalf of a company only by an authorised representative of the company. If a director or a secretary is authorised by law, then he can certainly give the authority to another person as provided under Order 3, rule 1.
The authority of a principal officer of a company in relation to suits filed on behalf of the limited company does not extend beyond what is laid down in Order 29 of the Code of Civil Procedure. That provision does not entitle the principal officer of a company to file a suit on its behalf and for that the authority has to be found either in the articles of association of the company or in the resolution of its board of directors. In the articles of association of several companies, provision is generally made authorising their managing directors and other officers to file and defend suits on their behalf. Similarly, the board of directors of a company can authorise the institution of a suit on behalf of the company by a resolution. In the case of some companies the articles empower the managing director or directors to appoint general attorneys and general managers and given them authority to institute suits on behalf of the company. But in the absence of any proof in regard to any such power having been conferred on Shri Ram Lal Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. KUMAR 28/36 DEVENDRA Date:
KUMAR 2025.11.22
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Choudhary, it is not possible to accept his statement that he was authorised to file the suit as the principal officer of the plaintiff hotel. It is well-settled that under section 291 of the Companies Act except where express provision is made that the powers of a company in respect of a particular matter are to be exercised by the company in general meeting, in all other cases the board of directors are entitled to exercise all its powers. Individual directors have such powers only as are vested in them by the memorandum and articles. It is true that ordinarily the court will not unsuit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter. It has far-reaching effects. It often affects the policy and finances of the company. Thus , unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. Needless to say such a power can be conferred by the board of directors only by passing a resolution in that regard.
40. Further, in a landmark judgment titled United Bank of India v. Naresh Kumar, (1996) 6 SCC 660, it has held that;
9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In CS (Comm) No. 79/2025 Digitally signed Canara Bank Vs. Tina Sharma & Anr. by DEVENDRA 29/36 KUMAR DEVENDRA Date:
KUMAR 2025.11.22
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addition thereto and dehors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer.
13. The court had to be satisfied that Shri L.K. Rohatgi could sign the plaint on behalf of the appellant. The suit had been filed in the name of the appellant company; full amount of court fee had been paid by the appellant-Bank; documentary as well as oral evidence had been led on behalf of the appellant and the trial of the suit before the Sub- Judge, Ambala, had continued for about two years. It is difficult, in these circumstances, even to presume that the suit had been filed and tried without the appellant having authorised the institution of the same. The only reasonable conclusion which we can come to is that Shri L.K. Rohatgi must have been authorised to sign the plaint and, in any case, it must be held that the appellant had ratified the action of Shri L.K. Rohatgi in signing the plaint and thereafter it continued with the suit.
41. A combined reading of both abovesaid judgments made it clear that pleadings must be signed by authority mentioned under Order 29 Rule 1, or by any Authorized Agent / Representative. The authorization of any authorized representative may be in terms of Order 3 Rule 2 of CPC, or by the Company through Resolution of Board of Directors in terms of Section 291 of Companies Act, 1956 (or corresponding section under Companies Act, 2013). However, authority of a person/s mentioned under Order 29 Rule 1 of CPC to sign the pleadings must be proved through Article of Digitally signed CS (Comm) No. 79/2025 by DEVENDRA Canara Bank Vs. Tina Sharma & Anr. KUMAR 30/36 DEVENDRA Date:
KUMAR 2025.11.22
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Association, or Resolution of Board of Directors as held in case titled State Bank of Travancore v. Kingston Computers (I) (P) Ltd. , (2011) 11 SCC 524 as under:
14. In our view, the judgment under challenge is liable to be set aside because the respondent had not produced any evidence to prove that Shri Ashok K. Shukla was appointed as a Director of the Company and a resolution was passed by the Board of Directors of the Company to file a suit against the appellant and authorised Shri Ashok K. Shukla to do so. The letter of authority issued by Shri Raj K. Shukla, who described himself as the Chief Executive Officer of the Company, was nothing but a scrap of paper because no resolution was passed by the Board of Directors delegating its powers to Shri Raj K. Shukla to authorise another person to file a suit on behalf of the Company.
13. The Division Bench of the High Court did take cognizance of the fact that the Company had not summoned any witness from the office of the Registrar of Companies to prove that Shri Ashok K. Shukla was a Director of the Company and that the minute book of the Company had not been produced to prove the appointment of Shri Ashok K. Shukla as a Director, but reversed the finding of the trial court on Issue 1 on the basis of the authority letter issued by Shri Raj K. Shukla and resolutions dated 14-2-2001 and 19-4-2001, by which the Board of Directors of the Company had authorised some persons to operate the bank account.
42. However, in this case, this suit has been instituted on behalf of the plaintiff through PW1 Sweata Kumari, who is authorized through power of attorney Ex. PW1/1, which is disputed by the defendants on the ground that the executant of power of attorney has retired from his job way back prior to filing of this case, due to power of attorney has expired and suit is not maintainable.
43. Admittedly, power of attorney in favor of PW1 was executed by Mr. L. V. R Prasad, in the capacity of Chief General Manager, HR and if any power of attorney has been executed in official capacity, then that Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR Canara Bank Vs. Tina Sharma & Anr. DEVENDRA 31/36 Date:
KUMAR 2025.11.22
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power of attorney cannot cease to exist just by retirement of executing officer, until and unless power of attorney contains any such clause of ratification of power by subsequent officer. No doubt the defendants have cross examined PW1 on this aspect and PW1 has not denied retirement of GM, who executed power of attorney, whereas the defendants have filed merely certain photocopies of computer-generated documents to prove Mr. L. V. R Prasad, Chief General Manager, HR has retired on 31.03.2022, however they have not examined any witness to prove this fact. No doubt, if retirement of executant of power of attorney was not denied, then the defendants ought to be dispensed with this requirement to examine any witness to rebut a non-disputed fact, but the defendants have not shown any law that power of attorney issued by an office, or in official capacity shall expire or cancel with retirement of executing authority, especially when power of attorney Ex.PW1/1 is not containing any such clause that it shall come to an end after retirement of its executant.
44. Admittedly, power of attorney Ex.PW1/1 was authenticated before Notary public and such power of attorney has presumption of genuineness under Section 84 of BSA, which is as under:
Section 84 Presumption as to powers-of-attorney.
The Court shall presume that every document purporting to be a power-of-attorney, and to have been executed before, and authenticated by, a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative of the Central Government, was so executed and authenticated.
In view of abovesaid provision, it is clear that there is presumption of authenticity of a power of attorney if it is duly executed and authenticated.Digitally signed
CS (Comm) No. 79/2025 by DEVENDRA
Canara Bank Vs. Tina Sharma & Anr. DEVENDRA KUMAR 32/36
KUMAR Date:
2025.11.22
16:22:28 +0530
45. The presumption of power of attorney was considered in case titled Indian Bank v. Gawri Construction Udyog Ltd., 2011 SCC OnLine Del 4418 and relevant observations are as under:
8. In Jugraj Singh v. Jaswant Singh, (1970) 2 SCC 386 : AIR 1971 SC 761, the Power of Attorney attested by a Public Notary was disputed on the ground that it did not show on its face that the Notary had satisfied himself about the identity of the executant. Supreme Court held that there was a presumption of regularity of official acts and that the Notary must have satisfied himself in the discharge of his duties that the person who was executing it was the proper person.
In Rajesh Wadhwa v. Sushma Govil, AIR 1989, Delhi 144, it was contended before this Court that till it is proved that the person who signed the said power of attorney was duly appointed attorney, the court cannot draw a presumption under Section 57 and 85 of the Evidence Act. Repelling the contention, it was held by this Court that the very purpose of drawing presumption under Sections 57 and 85 of the Evidence Act would be nullified if proof is to be had from the foreign country whether a particular person who had attested the document as a Notary Public of that country is in fact a duly appointed Notary or not. When a seal of the Notary is put on the document, Section 57 of the Evidence Act comes into play and a presumption can be raised regarding the genuineness of the seal of the said Notary, meaning thereby that the said document is presumed to have been attested by a competent Notary of that country.
46. In another case titled Grafitek International v. K.K. Kaura, 2002 SCC OnLine Del 3, it has held that;
9. Merely because the power of attorney is not duly notarised does not mean that the concerned person was not authorised to institute the suit. Notarization raises presumption as to its authentication and no more. Notarisation of power of attorney is a matter of procedure and raises the presumption of authority of the person to institute the suit. In other words it does not mean that power of attorney executed in favour of a particular person but not duly notarised does not confer power upon the person to institute the suit. The objection taken by the learned counsel is that the said power of attorney does not bear any authentication by a Notary Public and therefore Mr. Maggon had no authority to file the present suit and as a consequence such a suit was never properly instituted.
Digitally signedCS (Comm) No. 79/2025 by DEVENDRA
Canara Bank Vs. Tina Sharma & Anr. KUMAR 33/36
DEVENDRA
Date:
KUMAR 2025.11.22
16:22:33
+0530
10. The importance of power of attorney without notarisation cannot be undermined but at the same time if such a defect is removed subsequently during the pendency of the suit and that too. is followed by ratification of the authority of a person who has been authorized to institute the suit, it is not such a fatal infirmity that would hit at the maintainability of the suit itself.
47. In view of abovesaid cases, it stands proved that a duly authenticated power of attorney has a presumption of authentication and this presumption has to be rebutted by the defendants and a presumption may be rebutted by leading cogent evidence and not merely by filing computer-generated documents. Not only this, the plaintiff bank has not disowned authority of the then General Manager (HR) Mr. L. V. R Prasad and it may be duly ratified at any stage even at appellant stage, if not properly authenticated, due to this plea of the defendants taken during arguments has no force and this suit was duly instituted by PW1 through a valid power of attorney.
48. Another plea taken by the defendants is that PW1 has no personal knowledge about this case as loan was not advanced in her presence and she was also not posted there. However, this case is based upon documentary evidence and the bank advanced loan through loan documents and the defendants have not denied those documents. DW1 has admitted that the documents Ex.PW1/3 to Ex.PW1/2 bear her signatures and DW2 has also not denied his signatures on guarantee agreement Ex.PW1/12 and after this admission of execution of loan documents, it has no much relevancy that PW1 was not posted in the branch when loan was advanced by the plaintiff, especially when DW1 has admitted that she availed loan and also repaid EMIs for 3 years. As such, it is no defense.
Digitally signed by DEVENDRA CS (Comm) No. 79/2025 Canara Bank Vs. Tina Sharma & Anr.
DEVENDRA KUMAR
34/36
KUMAR Date:
2025.11.22
16:22:38
+0530
49. Further, the defendants have pleaded that loan was advanced by Laxmi Nagar Branch but said branch merged into Nirman Vihar branch of the bank, whereas no notice of merger was given to the defendants. However, merger is a normal procedure of the corporations and it is not necessary that every customer must be informed individually about every activity and procedure of the corporation / bank, whether it is relevant or not. No doubt no notice was given to the defendants but the defendants have also not explained what prejudiced they have caused by withholding of this information of merger. As such, it is no defense.
50. Another plea taken by the defendants is that there is a difference of sanctioned and disbursed loan amount. It is further argued that sanction letter proves that amount of Rs.11,68,000/- was sanctioned, whereas amount of Rs.10,88,671/-was disbursed. It is further argued that this difference of amount has also disputed amount of EMIs as well as rate of interest. Sanction letter Ex.PW1/4 has proved sanctioned amount of Rs.11,68,000/-, whereas statement of A/c Ex.PW1/22 has proved disbursed amount of Rs.10,88,671/-. No doubt sanctioned and disbursed amount ought to be similar but PW1 has explained that actual amount was of Rs. 10,88,671/- and EMIs were also fixed on the basis of same amount, which suggests that the defendants never suffered any financial losses by such difference of sanctioned and disbursed amount. Even otherwise there may be difference in sanctioned and disbursed amount, if value of loan was reduced like in this matter, as deposed by PW1 that disbursal amount depends upon actual cost of requirement of loan. As such, plea has no force to deny liability of the defendants. Plaintiff has discharged the onus to Digitally signed by DEVENDRA CS (Comm) No. 79/2025 KUMAR Canara Bank Vs. Tina Sharma & Anr. DEVENDRA 35/36 Date:
KUMAR 2025.11.22
16:22:43
+0530
prove issues nos. 4 & 5 and both issues are decided in favour of the plaintiff and against the defendants.
51. In view of my findings on issue nos. 2 & 3, it stands prove that housing loan of Rs. 10,88,671/- was availed by the defendant no.1 and the defendant no.2 stood guarantor to said loan amount. However, this suit is beyond the period of limitation, due to plaintiff is not entitled for recovery of suit amount or interest thereon. Since suit is barred by limitation, the plaintiff is not entitled for recovery of principal amount as well as interest and issues nos. 4 & 5 are hereby decided in favour of the defendants and against the plaintiff.
52. Relief: - Plaintiff has discharged the onus to prove issue no. 2 & 3 but has failed to discharge onus to prove issue nos. 1, 4 & 5, whereas the defendants have discharged the onus to prove issue nos. 1, 4 & 5 and this suit is barred by limitation, hence dismissed Decree sheet be prepared. No order as to cost.
53. File be consigned to Record Room after necessary compliance.
Digitally signed by DEVENDRA DEVENDRA KUMAR
KUMAR Date:
2025.11.22
ANNOUNCED IN OPEN COURT 16:22:48 +0530
ON 22nd day of November, 2025 (DEVENDER KUMAR)
District Judge (Commercial Court-01)
East District
Karkardooma Courts, Delhi
CS (Comm) No. 79/2025
Canara Bank Vs. Tina Sharma & Anr. 36/36