Delhi District Court
Kamaljeet Singh vs Kamal Garg on 17 September, 2022
IN THE COURT OF MS. SHALINDER KAUR
PRINCIPAL DISTRICT & SESSIONS JUDGE,
SHAHDARA DISTRICT, KARKARDOOMA, DELHI
RCA No. 99/18
KAMALJEET SINGH
S/o Shri Mukhtiyar Singh
R/o 1/10522, Mohan Park,
Naveen Shahdara, Delhi-32. .....APPELLANT
Versus
1. KAMAL GARG
2. AMIT GARG
Both S/o Sh. Kailash Chand Garg
R/o H.No. 1/7559, East Gorakh Park,
Gali No. 3, Babar Pur, Shahdara,
Delhi-110032. .....RESPONDENTS
Date of Institution : 04.07.2018
Date of Judgment : 17.09.2022
JUDGMENT
1. This is an appeal, filed by the appellant challenging the impugned order dated 10.05.2018, passed by Ld. ACJ/CCJ/ARC, Shahdara, Karkardooma Courts, Delhi (in short 'Ld. Trial Court) whereby the suit for recovery for an amount of Rs.3,00,000/- filed by appellant/ plaintiff against the respondents/ defendants was rejected under Order 7 Rule 11 CPC being barred by limitation.
2. The facts of the case in brief are; the respondent no. 1 and 2 are real brothers and respondent no.1 is doing the work of property dealer. The respondent no.1 on 06.03.2014 RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 1/8 entered into an agreement to sell with the appellant in the presence of witnesses namely Sh. Praveen Chauhan R/o 1/11043, Subhash Park, Naveen Shahdara, Delhi-110032 and Sh. Amrit Pal Singh R/o 10840A, Gali No.3, Subhash Park, Delhi-110032 for selling a built up property bearing No.1/10713-B situated at Subhash Park, Gali No.1, Shahdara, Delhi-110032 of one Shri Suresh Gupta. The said agreement to sell was attested by Sh. Dinesh Chandra, Notary Public. It was pleaded that as per the said agreement the appellant gave Rs.3,00,000/- as earnest money to the respondent no.1 for handing over the same to Sh. Suresh Gupta and it was also decided that if Sh. Suresh Gupta denies to sell the property, then respondent no.1 would return the aforesaid amount to the appellant. In this regard, respondent no.2 issued a cheque bearing no. 407679 dated 25.10.2014 for a sum of Rs.3,00,000/- to the appellant. It is further the case of the appellant that Sh. Suresh Gupta refused to sell the aforementioned property and hence, the appellant presented the aforesaid cheque in the bank. The cheque was dishonoured and returned unpaid. The appellant served a legal notice dated 24.12.2014 to the respondents. As the respondents failed to comply with the legal notice, the appellant filed a complaint under Section 138 of Negotiable Instruments Act against the respondents which is pending trial in the Court of Ld. CMM, Karkardooma Courts, Delhi. It was also pleaded that within a period of three years, the appellant issued a fresh legal notice dated 17.10.2017 to RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 2/8 the respondents for recovery of amount of Rs.3 Lacs alongwith interest @18% per annum. Even after due service of the said legal notice, the respondents did not comply with the same and failed to make payment of amount due to the appellant. As left with no other alternative, the appellant instituted the present suit against the respondents.
3. The appellant had also preferred an application under Section 5 of The Indian Limitation Act, 1963 (in short 'the Act') for condonation of delay of 23 days in filing the suit for recovery. The Ld. Trial Court listed the suit as well as the application for hearing arguments on the question of limitation without issuing any summons of the suit to the respondents. Vide the impugned order, the Ld. Trial Court came to the conclusion that the suit is barred by limitation and the application moved under Section 5 of the Act is not maintainable as Section 5 of the Act is not applicable to condone the delay in filing a suit. Therefore, the Ld. Trial Court rejected the plaint under Order 7 Rule 11 CPC.
4. Being aggrieved by the said order, the present appeal is filed on the grounds that while delivering the impugned order the Ld. Trial Court has misread the facts of the case did not give proper appreciation and interpretation according to the provisions of law. Sh. Shiv Kumar, Advocate submitted that the entire order of the Ld. Trial Court is based on presumptions. The Ld. Trial Court has not considered the fact that the respondents had entered RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 3/8 into an agreement with the appellant with respect to above mentioned property in the presence of two witnesses. Since, the prospective seller Sh. Suresh Chand had refused to sell his property and the respondent had failed to return the earnest money, the appellant presented the cheque for Rs.3 Lacs which was bounced and the respondents failed to comply with the legal notices dated 24.12.2014 and 17.10.2017. The appellant had applied for certified copy of the cheque in question from the Court of Ld. CMM which was was received by him on 05.12.2017 and thereafter he instituted the present suit. Therefore, the suit is not time barred.
5. Ld. Counsel Sh. Shiv Kumar, to impress upon the arguments, relied upon the judgment in RFA No.153/2014 titled Virender Kumar vs. M/s Alumate (India) Pvt. Ltd. and submitted that the period of limitation is to run from the date of issuance of legal notice as the period of limitation starts from the date when appellant had raised the demand for return of earnest money and not as observed in the impugned order by the Ld. Trial Court. Thus, the Ld. Trial Court has not appreciated the law laid down by the Hon'ble Delhi High Court in the aforementioned judgment in correct perspective.
6. The arguments were strongly refuted on behalf of the respondents by Sh. Sachet Sharma and Sh. Dishank, Advocates. It was submitted that by virtue of Section 5 of RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 4/8 the Act, the limitation period for instituting a suit cannot be condoned. It was further submitted that the period of limitation has to be computed in the present case on the day the cheque was presented in the bank by the appellant or at the most, from the date, when the same was received back unpaid by the appellant. As the suit was not instituted within a period of three years from the said dates, therefore, the suit filed by the appellant is barred by limitation. It was also submitted that the case law relied upon by the appellant is not applicable in the present case, as per the facts of that case, the date of repayment of loan amount was not fixed by the parties, therefore, the Hon'ble High Court had held that the demand for return of loan amount was made for the first time upon the respondent / defendant by the legal notice issued by the plaintiffs. Accordingly, the suit was held not to be barred by limitation as the same was covered within the period of limitation from the date of issuance of legal notice. It was submitted that it is not so in the present case as the period of payment of the amount was fixed between the parties and the Ld. Trial Court had rightly observed that the suit of the appellant is barred by limitation.
7. Apart from hearing the arguments, addressed on behalf of the parties, I have perused the record including the Trial Court Record as well as the written submissions filed on behalf of the parties.
8. The short question that arises for consideration in the RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 5/8 present appeal is that when actually the cause of action arose in the present case so as to ascertain whether the suit is barred by limitation or not?
9. At the outset, I would like to mention that Ld. Trial Court has correctly held that by virtue of Section 5 of the Act, the period of delay in filing a suit cannot be condoned and Section 5 of the Act does not apply to suits. Section 5 of the Act is applicable to appeal or any application, other than an application moved under any of the provisions of Order XXI of the Code of Civil Procedure 1908 (5 of 1908), which may be admitted after the prescribed period, if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period.
10. It is relevant to mention that in the judgment in the case Virender Kumar vs. M/s Alumate (India) Pvt. Ltd. (supra), the Hon'ble High Court had held :-
"5. In my opinion, the suit of the appellant/plaintiff cannot be said to be barred by limitation inasmuch as the averments in the plaint show that the loan was given without fixing any date of repayment. Once that is so, the loan would be a loan which would be repayable on demand. The demand in this case is alleged to have been made upon the respondent/defendant for the first time by the notice dated 14.12.2001. The period of limitation therefore will be three years from 14.12.2001, and therefore the suit which was filed on 8.2.2002 would be within limitation. Suit for recovery of loan without a fixed period or a date of repayment is a suit governed by Article 113 of the Limitation Act, 1963 RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 6/8 as per which the suit has to be filed within three years of arising of the cause of action. The cause of action in this case will arise on sending of the legal notice dated 14.12.2001. I therefore hold that the suit was not barred by limitation".
11. However, in the present facts, it is admitted case of the appellant that it was decided between the parties to the lis that in case, Sh. Suresh Gupta, the prospective seller will deny to sell the property then the respondent no.1 would return the earnest money of Rs.3 Lacs to him which was paid by the appellant to respondent no.1. This fact is supported with the agreement dated 06.03.2014 arrived between the appellant and respondent no.1. It is categorically mentioned in the agreement, in case, the deal will fizzle out with Sh. Suresh Gupta then Rs.3 Lacs shall be returned to the appellant by respondent no.1.
12. Admittedly, when Shri Suresh Gupta had flatly refused to sell the property then the appellant had presented the cheque bearing no. 407679 dated 25.10.2014 for Rs.3,00,000/- to recover the earnest money. Therefore, it is apparently clear that the parties had already decided and fixed the time period for demand of earnest money which was in the eventuality, in case, the prospective seller would refuse to sell the property, the respondent no.1 would pay back the earnest money to the appellant. Thus, the cheque in question was given as a security for earnest money by respondent no.2 to the appellant. When the respondent no.1 failed to honour the agreement dated RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 7/8 06.03.2014 to return Rs.3 Lacs to the appellant, the appellant was left with no choice except to present the cheque. Therefore, the cause of action for the first time arose when the appellant had presented the cheque before the bank on 25.10.2014. It further arose on 01.12.2014 when it was returned unpaid for the reason "account closed". The appellant/plaintiff had instituted the suit on 19.12.2017. Accordingly, the suit is barred by limitation as the suit was instituted after expiry of more than three years when the cause of action arose in favour of the appellant.
13. To sum up, in view of the facts & circumstances of the case, it is held that the Ld. Trial Court has rightly rejected the plaint under Order 7 Rule 11 CPC and hence, the impugned order dated 10.05.2018 does not require any interference. Accordingly, the appeal is dismissed. No order as to costs. Trial Court Record be sent back along with copy of this order. Appeal File be consigned to Record Room.
ANNOUNCED IN THE OPEN COURT ON THIS 17 th DAY OF SEPTEMBER 2022 (SHALINDER KAUR) PRINCIPAL DISTRICT & SESSIONS JUDGE SHAHDARA DISTRICT, KKD COURTS, DELHI RCA No. 99/18 Kamaljeet Singh vs. Kamal Garg & Anr. Page No. 8/8