Delhi High Court
State Bank Of India vs Khushal Singh Tanwar & Another on 7 December, 2010
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No. 331/1997
% 7th December, 2010
STATE BANK OF INDIA ...... Appellant
Through: Mr. S.N. Relan,
Advocate.
VERSUS
KHUSHAL SINGH TANWAR & ANOTHER .... Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
1. The present appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed against the impugned judgment and decree dated 26.3.1997 whereby the trial court dismissed the suit filed by the appellant bank for recovery of Rs.2,28,746.77.
2. The respondent no.1 approached the appellant bank for grant of medium term loan for purchasing a bus. The respondent no.1 executed the necessary security documents being Ex.P-1 to P-5 on RFA NO. 331/1997 Page 1 of 5 19.5.1983. The defendants thereafter also signed the acknowledgment of debt forms on different dates which have also been proved and exhibited being 31.12.1983 (Ex.P-10), 31.12.1984 (Ex.P-11), 20.10.1985 (Ex.P-12) and revival letters dated 6.5.1986 by the principal borrower and the guarantor respectively (Ex.P-13 and P-
14). The statement of account has been proved in this case as Ex.P-22. On account of default of the respondent no.1 to maintain financial discipline and failing to pay the amount on the due date, the amount became was transferred to the recalled debt account on 22.10.1985. As from this date, there are two accounts which were being maintained, the first being the main loan account which contains the entries in the credit side and the corresponding debit entries in the recalled debt account. Meaning thereby, there is only one debit entry for different transactions from 22.10.1985 although there are two separate accounts but there is no duplication of the debit entries. There are certain other debit entries in the recalled debt account by which credit of Rs.30,000/- deposited by the borrower in cash on 23.5.1987 has been shown and debits have been shown towards Deposit Insurance Credit Guarantee Corporation fees, legal notice fee, court fee etc. The total of this amount was claimed in the suit.
3. By the impugned judgment and decree the suit has been dismissed on the ground of limitation and that there is no cause of RFA NO. 331/1997 Page 2 of 5 action.
4. In the opinion of this court, the trial court has gravely erred in arriving at both the conclusions. Firstly, merely because two accounts were being maintained because of administrative reasons cannot mean that the statement of account cannot be looked into. The perusal of statement of account shows that there is no duplication of the debit entries. The statement of account in fact can be said to be a running account in terms of Article 1 of the Schedule of the Limitation Act and as per which, the limitation would commence from the end of the financial year in which the last entry is proved in the account. The last admitted entry in the account is the deposit of cash of Rs.30,000/- on 23.5.1987. The suit could therefore be filed up to 31.3.1991 or at least up to 22.5.1990. The suit has in fact been filed on 5.5.1989 and therefore was well within limitation. In fact, the learned trial court has further erred because limitation in the present case would be a period of 12 years and not three years because there is a mortgage in favour of the appellant bank and in terms of Article 65 of the Limitation Act, the suit for enforcing of a mortgage has to be within a period of 12 years. Accordingly, in view of the balance confirmation letters and the revival letters being Ex. P-10 to P-14 and the statement of account Ex.P-22 and the fact that there is mortgage in the accounts, the suit filed is well within limitation.
RFA NO. 331/1997 Page 3 of 5
5. So far as the dismissal of the suit on account of no cause of action is concerned, the same is also clearly without any basis. Merely because no legal notice has been served would not mean that the cause of action does not accrue. The cause of action accrues on the disbursal of the loan and the failure of the borrower and the guarantor to pay the same. Some discrepancies in the plaint of stating an amount of Rs.2,28,746.77 instead of the amount of Rs.2,28,246.77 as shown in the statement of account cannot mean that there is no cause of action. Further, an amount due which is shown in the balance confirmation letter need not be reflected in the statement of account because statement of account will only contain entries pertaining to actual debits and credits. A balance confirmation is the amount due on the particular date which is written on the balance confirmation letter and on which date no entry need be made in the statement of account. The learned trial court has therefore erred on this account also.
6. In view of the above, the impugned judgment and decree is set aside since the plaintiff has proved the loan documents being Ex.P-1 to Ex.P-5, the sale deeds Ex.P-6 and P-7, memorandum of mortgages as Ex.P-8 and P-9, acknowledgement and revival letters Ex.P-10 to P-14 and the statement of account Ex.P-22, the suit of the plaintiff for a sum of Rs.2,28,246.77 is decreed being the figure as mentioned in the statement of account. The counsel for the appellant states that there RFA NO. 331/1997 Page 4 of 5 is a typing mistake in the plaint as the amount has been stated as 2,28,746.77 instead of the correct amount of Rs.2,28,246.77. I am not allowing any costs to the appellant inasmuch as the statement of account filed shows that amount has already been debited towards court fee, legal notices and so on.
7. The suit of the plaintiff is therefore decreed for Rs.2,28,246.77 along with pendente lite interest and future interest till realization of the decretal amount @ 14% per annum simple. Decree sheet be drawn up accordingly. The decree sheet will be drawn up in terms of Order 34 CPC whereby six months time will be granted for payment to the respondents, with liberty to the appellant to apply for the final decree in case the borrowers fail to pay the due amount. The appeal is accordingly disposed of as allowed by passing of preliminary decree as stated above.
CM No. 1681/1997 & CM No.1305/98 No orders are required in these applications as the main petition itself is disposed of and which be accordingly disposed of.
DECEMBER 07, 2010 VALMIKI J. MEHTA,J
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RFA NO. 331/1997 Page 5 of 5