Delhi District Court
Syndicate Bank vs (1) Shri Ram Sarup Choudhary on 23 December, 2011
IN THE COURT OF SH. PITAMBER DUTT; ADJ (CENTRAL)17,DELHI
Suit No.54/2011
Unique Case ID No.02401C0126672003
Syndicate Bank,
(A Body Corporate Constituted
Under the Banking Companies
(Acquisition and Transfer of
Undertaking) Act, 1970) having
its Head Office at Manipal, represented by
Shri K. Vaman Nayak, Branch Manager
and Principal Officer at 1-1A, Old Rajinder
Nagar, New Delhi-110 060 .........Plaintiffs
Versus
(1) Shri Ram Sarup Choudhary
S/o Late Shri Bhagwan Das
R/o B-33, Lawrence Road
New Delhi
(2) Shri Pishori Lal Suri (deceased)
represented through LRs
(a) Smt. Avinash Rani Suri
W/o Late Shri Pishori Lal Suri
R/o B-33, Lawrence Road Industrial Area
New Delhi
(b) Shri Santosh Suri
S/o Late Shri Pishori Lal Suri
R/o B-33, Lawrence Road Industrial Area
New Delhi
(3) Shri Santosh Suri
S/o Late Shri Pishori Lal Suri
R/o B-33, Lawrence Road Industrial Area
New Delhi ...........Defendants
Suit No.54/2011 Page no. 1 of 26
Date of Institution of Suit : 10.09.1980
Date when reserved for orders : 17.12.2011
Date of Decision : 23.12.2011
JUDGMENT
Vide this judgment I shall decide a suit for recovery or Rs.6,59,951.35/- filed by the plaintiffs against the defendants. Brief facts necessitated in filing the present suit are given as under-:
2 That plaintiff is a nationalized bank constituted under Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970. The defendant no. 1 & 2 are the brothers and carrying on business jointly. They approached the plaintiff sometime in November, 1975 and requested for a loan of Rs.2 Lac as well as another loan of Rs.90,000/-. The plaintiff agreed to grant both these loans on 25.11.1975. The defendants jointly executed various documents on 25.11.1975 with respect to the above loan sanctioned by the plaintiff. The defendant no. 1 also created a mortgage of his joint property in favour of the plaintiff. The defendant no. 3 stood as guarantor with respect to the loan advanced to defendant no. 1 and 2 and executed the deed of guarantee in favour of the plaintiff to the extent of Rs. 2,90,000/- along with the interest.
3 The defendant no. 2 made an acknowledgment in writing thereby acknowledged their liability to the extent of Rs.3,44,143.45/- with respect of the loan of Rs.2 Lac on 27.12.1978. He also acknowledged their liability qua another loan of Rs.90,000/- on 26.12.1978. Despite the acknowledgment of their liability towards the plaintiff, the defendants failed to pay any amount Suit No.54/2011 Page no. 2 of 26 either towards the principle or towards the interest. The plaintiff repeatedly demanded the repayment of the amount but they failed to pay the said amount. As per the statement of account a sum of Rs.6,59,951.35/- was due and recoverable against the defendant as on 21.08.1980. On the basis of above averment, present suit has been filed by the plaintiff against the defendants.
4 Initially the suit was filed under Order 37 CPC. Pursuant to the service, defendants appeared and filed their appearance, thereafter summons for judgment were served upon them, pursuant to which they filed their leave to defend application which was heard by the Hon'ble High Court. The said application has been allowed by the Hon'ble High Court vide order dated 24.05.1988 and the defendants have been granted unconditional leave to defend the suit.
5 The defendants thus filed their written statement taking preliminary objections that the suit is barred by time, that there is a mis-joinder of the parties, that the statement of account filed by the plaintiff is incorrect.
6 On merit it is stated that agreement, dated 25.11.1975 have been signed by the defendants but these were blank when their signatures were obtained. It is stated that defendant no.2 has not signed any acknowledgment and his signatures are forged. Moreover, defendant no. 2 is nobody to represent defendant no. 1. It is stated that limit of Rs.2,90,000/- was sanctioned for defendants no. 1 but defendant no. 1 had not utilized the limit of Rs.2,90,000/- fully. All other averments have also been denied. It is prayed that suit be dismissed with cost.
Suit No.54/2011 Page no. 3 of 26 7 The plaintiff filed the replication to the written statement thereby
reiterated the averment made in the plaint and denied the averment made in the written statement.
8 On the basis of the pleadings of the parties vide order dated 30.04.1990 following issues have been framed for adjudication:
1. Whether the suit is within limitation?OPP
2. Whether the alleged acknowledgments dated 26.12.1978 and 27.12.1978 were signed by defendant no. 1?OPP
3. Whether any deed of guarantee was executed by defendant no. 3?OPP
4. Whether the plaintiff got any blank document signed by the defendants? If so, which are those documents and what is the effect thereof? OPD
5. Whether the statement of account produced by the plaintiff is incorrect as alleged in para-9 & 10 of the written statement? OPD
6. What amount of money, if any, is due to the plaintiff and from which of the defendants?OPP
7. Whether the plaintiff is entitled to payment of interest? If so, on what amount, at what rate for which period and from whom?OPP
8. Relief.
9 In order to prove its case, plaintiff has examined Sh. B. S. Khosla, Sub-
Manager as PW-1, who reiterated the averment made in the plaint in his examination in chief. He exhibited the Loan Agreement dated 25.11.1975 for Rs.2 Lac as PW1/1, Agreement dated 25.11.1975 for Rs.90,000/- as PW1/2, Acknowledgment dated 27.12.1978 made by defendant no. 2 Ex.PW1/3, Another Agreement dated 26.12.1978 is Ex.PW1/4, Deed of guarantee signed by defendant no. 3 dated 25.11.1975 as Ex.PW1/5, Statement of account as Ex.PW1/6 to 9.
Suit No.54/2011 Page no. 4 of 26 10 During cross-examination, PW-1 deposed that at the time of transaction
he was dealing with accounts division also. He knew about the SB account No. 13097 at the time of said transaction and thereafter he does not know whether the said account was in the name of defendant no. 1 and 2 jointly or in the name of defendant no. 1 alone. He further stated that the amount of Rs. 2 Lac and Rs.90,000/- were deposited in SB account No. 13097 which is mentioned in the ledger as well as in receipt acknowledged by defendants. He denied that document Ex.PW1/1 was not signed by defendant no. 3. He admitted that this agreement is not signed by anybody on behalf of the bank. He further stated that Ex.PW1/1 and Ex.PW1/2 were signed at the same time. He denied that defendant no. 3 was not present at the time of execution of Ex.PW1/2. He admitted that loan documents have not been filled by the defendants in this case. He denied that the loan documents were filled in after the defendants had put their signatures on the blank forms. He denied that SB account No. 13097 was held and operated only by defendant no. 1 and it was not a joint account. He admitted that Ex.PW1/3 & 4 are signed by Sh. P.L. Suri, defendant no 2 only. According to him, loan was advanced to defendant no. 1 & 2 as it is not necessary to obtain the signatures of both the borrowers on Ex.PW1/3 & 4, the signatures of defendant no. 1 was not obtained even though the account was credited with the loan amount. He denied that defendants were made to sign blank documents at the dotted point.
11 In order to answer the claim of the plaintiff, defendant no. 3 examined himself as DW1. In his examination in chief, defendant no. 3 deposed that he never stood as guarantor for defendant no. 1. The guarantee agreement Ex.PW1/5 is not signed by him anywhere. In cross-examination, DW-1 deposed that defendant no. 2 was his father. He never took any loan from the Suit No.54/2011 Page no. 5 of 26 bank. Written statement does not bear his signatures at point A and B. Application under Order 9 Rule 7 CPC Ex.D3W1 bears his signatures. Affidavit accompanying the application also bears his signatures. Vakalatnama Ex.D3/1W does not bears his signatures at point A. He further deposed that signatures of his father is at point B. Vakalatnama Ex.D3W1/2 bears his signatures at point A. He denied that he stood as guarantor in this case and Ex. PW1/5 bears his signatures. The defendant no. 3 also examined himself as one of the LRs of defendant no. 2 who died during the pendency of the present suit as D3/W1.
12 After completion of the evidence of both the parties the matter was posted for the final argument. At that stage, plaintiff filed an application under Section 151 CPC mentioning that some interpolation has been done with the document Ex.PW1/1 to PW1/4. It is further averred that when PW1, Sh. B. S. Khosla was examined on 23.11.1995 and 24.11.1995 these documents were the same as per the set of documents list. However, later on the above document have been interpolated during the proceedings of the suit after completion of the examination of PW-1 by the interested parties. By way of the said application the plaintiff sought permission to lead additional evidence in order to prove the above document as per the law.
13 The defendants filed their reply to the said application and disputed the averment. As per the defendants, these documents were filed in the same condition as they are in the file and no interpolation has been done with these documents by any one. They prayed that application be dismissed.
14 The Ld. Predecessor of this court heard the argument on the said application and passed order dated 10.02.2009 whereby plaintiff has been Suit No.54/2011 Page no. 6 of 26 directed to lead additional evidence in order to clarify the question of interpolation of the documents. Pursuant to the said order plaintiff has examined Sh. B. S. Khosla PW-1, who reiterated the averment of the application in his examination in chief. He has been thoroughly cross- examined by the defendants. The defendants has also examined, Sh. Santosh Suri as DW1 on the point of interpolation.
15 I have heard ld. Counsel for the parties and perused the material available on record. The plaintiff has taken a plea that document Ex.PW1/1 to PW1/4 have been interpolated by the interested parties after recording the statement of PW1, Sh. B. S. Khosla before the Hon'ble High Court. As per the plaintiff, these documents were intact during the examination of B. S. Khosla, PW-1 which was recorded before the Hon'ble High Court and have been subsequently interpolated. In order to prove the said averment, plaintiff has examined the said B. S. Khosla as PW-1, during cross-examination the said witness has deposed that first time he came to know about the interpolation and discrepancies in the documents when he was examined for the first time. He admitted that he was examined on 23.11.1995, 24.11.1995 and 12.01.1996. He does not remember the exact date when he came to know about the discrepancies. He further deposed that he informed the court about the interpolation but he did not informed the bank.
16 The above testimony of PW-1 goes to the root of the matter as in the application the plaintiff has averred that these document were intact in the file when the testimony of PW-1 was recorded before the Hon'ble High Court, however, the said witness has deposed in his cross-examination that those documents were interpolated at that stage as well and the said fact was brought to the notice of the court in the presence of the counsel. However, the Suit No.54/2011 Page no. 7 of 26 order sheet of those dates do not support the testimony of this witness as no such submission made by the PW-1 has been recorded. It is also relevant to mention that the defendants have placed on record certified copy of the document Ex.PW1/5 & PW1/4 as Ex.DW1/P1 & DW1/P2. These certified copy of the acknowledgments have been issued by the registry of the High Court on 05.11.1982. A perusal of these certified copy of the acknowledgment clearly shows that there is no interpolation, as alleged, because the certified copy is similar to the documents which is available in the file.
17 In view of the above facts and circumstances, I am of the considered view that the plaintiff has not produced any material which could substantiate its plea that the document Ex.PW1/1 to PW1/4 have been interpolated by the interested parties subsequently. The record shows that no interpolation has been carried out with the documents placed in the file and same are in the same condition. The plaintiff has thus could not substantiated its allegation of alleged interpolation. Therefore, the additional evidence and documents placed by the plaintiff cannot be considered and are taken out of the record.
18 I have heard both the Ld. Counsels for the parties and perused the pleadings, evidence, documents and material placed on record. My issue wise findings is as under:-
ISSUE NO. 1 Whether the suit is within the limitation?OPP ; and ;
ISSUE NO.2 Whether the alleged acknowledgments dated 26.12.1978 and 27.12.1978 were signed by defendant no. 1?OPP
19 Issue No. 1 & 2 are taken together as they are interconnected. The onus to prove both these issues is upon the plaintiff. The plaintiff has filed a present suit for recovery of the loan amount which was advanced to the Suit No.54/2011 Page no. 8 of 26 defendant no. 1 & 2 vide loan agreement Ex.PW1/1 and Ex.PW1/2 on 25.11.1975 for which defendant no. 3 stood as guarantor. The plaintiff has further pleaded that defendant no. 2 made acknowledgment of liability dated 26.12.1978 & 27.12.1978 on behalf of defendant no No. 1 &2.
20 The defendants have taken a plea that the loan transaction purported to be of 25.11.2975 cannot be enforced by way of this suit which has been filed after the expiry of limitation period. As per the defendant the suit is barred by limitation and the acknowledgment relied upon by the plaintiff are forged one. Both the parties have led their respective evidence in support of their respective pleas.
21 The present suit has been filed for recovery of the loan amount advanced by the plaintiff to the defendants on 25.11.1975 vide loan agreement EX. PW1/1 & PW1/2. The above loan agreement do not stipulate as to how the said loan was to be repaid by the defendants. The suit for the recovery of the loan amount can be filed within 3 years from the date when the loan has been advanced as per entry 19 of Schedule-I of Limitation Act 1963 In the instant case, as per the plaintiff, the loan was advanced on 25.11.2975 thus the present suit could have been filed up till 25.11.1978. However, the suit has been filed on 10.09.1980 i.e. after the expiry of 3 years from the date of sanction of the loan to the defendants.
22 The plaintiff has taken a plea that defendant no. 2 has acknowledged their liability vide acknowledgment dated 26.12.1978 and 27.12.1978 EXPW1/3& PW1/4. The defendants have controverted the said plea and pleaded that defendant no. 2 has not signed any such acknowledgment at any point, Moreover, defendant no. 2 had no authority to make such Suit No.54/2011 Page no. 9 of 26 acknowledgment on behalf of the defendant no. 1.
23 In order to substantiate its plea plaintiff has examined Sh. B.S. Khosla as PW-1 who reiterated the above fact in his examination in chief. During cross-examination, PW-1admitted that Ex.PW1/3 & PW1/ 4 are signed by Sh. P.L. Suri defendant no.2 only. The ramification of the above suggestion given by the defendants to PW-1 is that defendants have admitted that acknowledgments Ex.PW1/3 & PW1/4 have been signed by defendant no. 2. According to PW1 the loan was advanced to defendant no. 1 & 2 and it was not necessary to obtain the signatures of both the borrowers on Ex.PW1/3 & PW1/4.
The plaintiff has taken a plea that said acknowledgment was signed by defendant no. 2 on behalf of the defendant no. 1 as well. However plaintiff has not placed any material on record which can show or suggest that defendant no. 2 was having any authority on behalf of defendant no. 1 to make any such acknowledgment on his behalf. In the absence of any material, the plea of the plaintiff that defendant no. 2 made the acknowledgment Ex.PW1/3 & PW1/4 on behalf of the defendant no. 1 as well cannot be accepted.
24 As per the plaintiff defendant no:2 made acknowledgment of the liability on 26.12.1978 & 27.12.1978 and the present suit has been filed within 3years from the said acknowledgment therefore same is within limitation Section 18 of the limitation Act speaks about the effect of acknowledgment in writing which reads as under:
"(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 Suit No.54/2011 Page no. 10 of 26 derived his title or liability, a fresh period of limitation shall be computed from the time 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 purpose 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 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 singed either personally or by an agent duly authorized 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. "
25 Section 18(1) of the limitation act itself starts with the word "where before the expiration of the prescribed period for a suit or application in respect of any property or right of acknowledgment of liability in respect of the suit property or right has been made". Thus the acknowledgment, if any, has to be made prior to the expiration of the prescribed period of filing the suit. In other words, if the limitation has already expired it would not been revived under this section. It is only during the subsistence of the period of limitation, if any such acknowledgment is made, in that case, limitation would be revived for same period afresh from the date of such acknowledgment. The acknowledgment of debt as provided under Section 18 and 19 of the Limitation Act are therefore required to be made before the expiry of the period of limitation for filing of the suit and not afterwards.
The Hon'ble Supreme Court of Indian in Sampooran vs. Niranjan K. reported as AIR SLW 683 has held that "acknowledgment should be made during the subsistence of period of limitation. Acknowledgment of Suit No.54/2011 Page no. 11 of 26 liability after expiration of prescribed period of limitation for filing suit does not revive period of limitation ".
26 In the instant case, the acknowledgment Ex.PW1/3 & PW1/4 have been made by defendant no. 2 on 27.12.1978 & 26.12.1978 respectively. Thus same have been made after the expiry of the period of limitation for filing the suit which could have been filed up to 25.11.1978. The acknowledgment Ex.PW1/3& PW1/4 have been made after the expiry of the period of Limitation prescribed for filing such suit same are thus not a valid acknowledgment as per section 18 of the limitation act, therefore it cannot revive the period of Limitation under section 18 of Limitation Act.
27 Ld. Counsel for the plaintiff has contended that acknowledgment Ex.PW1/3 &PW1/ 4 are not the mere acknowledgment but a promise to pay in writing within the meaning of Clause 3 of Section 25 of Indian Contract Act 1872, therefore plaintiff is entitled to recover the suit amount on the basis of the said acknowledgment. In support of his contention, Ld. Counsel for the plaintiff relied upon judgment titled Hiralal & Ors. vs. Badkulal and Ors. AIR 1953 Supreme Court 225, M/s. R. Sureshchandra & Co. vs. M/s Vadnare Chemical Works and Ors. Reported as AIR 1991 Bombay 44, South Eastern Roadways Bombay vs. UP State Agro Industries Corporation AIR 1993 Bombay 300, Business Forms Ltd. vs. Ashoka Agencies AIR 1996 Calcutta
153. 28 On the other hand, Ld. Counsel for the defendants contended that Section-25(3) of the Indian Contract Act is not attracted in the facts and circumstances of the case as there is no promise by any of the defendant to pay the time barred debt which is preconditioned for invoking Section 25(3) of Suit No.54/2011 Page no. 12 of 26 Indian Contract Act.
29 The present suit has been filed on 10.09.1980, the suit would be within time if it is held that the acknowledgment Ex.PW1/3 & PEW1/4 are a promise to pay within the meaning of clause 3 of Section 25 of the Indian Contract Act which reads as under:-
Section 25:- An agreement made without consideration is void unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law. --- An agreement made without consideration is void, unless---
(1) it is expressed in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other, or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
Explanation 1.-- Nothing in this Section shall effect the validity, as between the donor and donee, of any gift actually made. Explanation 2.-- An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given.
30 The plaintiff claimed that its case falls in clause 3 of Section 25 of the Act. This clause requires that there should be a promise in writing, that it should be signed by the debtor or his agent and that this promise should be to Suit No.54/2011 Page no. 13 of 26 pay wholly or in part a debt barred by time. If these conditions are fulfilled an agreement made without consideration amounts to a contract The Contract that are made in words are known as express contract and if they are made otherwise than in words such contracts are known as implied contract. Clause 3 of Section 25 of the Act uses the word promise made in writing to pay thus it seems that there should be an express promise to pay any time barred debt to constitute the contract which may be the basis of the suit. The question which needs to be ascertained is as to whether the acknowledgment Ex.PW1/3 & PW1/4 tantamount to promise to pay time barred debt as prescribed under Section 25(3) of the contract Act.
31 Learned counsel for the plaintiff referred to Hiralal v. Badkulal, AIR 1953 SC 225, wherein the observation has been made that an acknowledgment operates as fresh cause of action. The issue before his Lordships of Hon'ble Supreme Court was that an unqualified acknowledgment contained in the entry and the statement of account under which the entry was made were sufficient to furnish a cause of action to the plaintiff for maintaining the suit. The question as to whether an acknowledgment tantamount to promise under Section 25(3) of the Contract Act was not the issue before the Hon'ble Supreme Court in the above case The Bombay High Court in M/s R. Sureshchandra & Co. vs. M/s Vadnare Chemical Works and Ors. (Supra) has held that promise to pay time barred debt may be express or implied . Balance sheet of firm signed by partner stating that firm is liable to P in certain sum amounts to promise within the meaning of S.25[3].
Suit No.54/2011 Page no. 14 of 26 In South Eastern Road Ways Bombay vs. UP States Agro Industries Corporation Ltd. (Supra) a division bench of Bombay High Court has held that " Mere fact that amount to be settled was not quantified or clarified in reply letter did not render it any the less an acknowledgment - Assuming it did not constitute acknowledgment of liability, S. 25(3) of Contract Act was attracted. The Hon'ble Calcutta High Court in Business Forms Limited vs. Ashoka Agencies Petitioner (Supra) has held that "Amount due and payable by company therefor Company duly acknowledging bills raised and admitting its liability and promising to pay said amount by way of letter to creditor. It amounts to a promise to pay and not a mere acknowledgment of a time barred debt."
32 A division bench of Madras High Court in Rethirajulu Naidu vs. K. R. Chennai U. Chettair reported as AIR 1975 Madras 333 has held that "No doubt, under Section 25 (3) of the Indian Contract Act, a promise to pay a time-barred debt would be valid and enforceable provided it is made in writing and signed by the person to be charged therewith or by his agent generally or specially authorized in that behalf, to pay whole or in part a debt of which the creditor might have enforced payment, but for the law for the limitation of suits. But there is no such promise contained in 'Ex. A. 1. Learned counsel for the respondent wants us to construe Ex. A. 1 as embodying an implied promise to pay a time-barred debt, What the section requires is an express promise made in writing and signed by the person to be charged therewith. Nothing short of an express promise, therefore, will provide a fresh period of limitation. It is settled law that an implied promise is not sufficient. In fact, in Govinda Nair v. Achutan Nair, AIR 1940 Mad 678, this court held as follows-
"The promise referred to in S. 25, sub-sec. (3) Contract Act, must be Suit No.54/2011 Page no. 15 of 26 an express one and cannot be held to be sufficient if the intention to pay is unexpressed and has to be gathered from a number of circumstances. In other words, there must be a distinct promise to pay before the document could be said to fall within the provisions of this section .
Privy Council in Maniram Seth v. Seth Rupchand, (1906) ILR 33 Cal 1047 observed that an unconditional acknowledgment implies a promise to pay. In that case the acknowledgment was made before the expiry of the period of limitation. Such an acknowledgment was held to be a sufficient acknowledgment within the meaning of Section 19 of the Limitation Act.
In Gobind Das v. Sarju Das, (1908) ILR 30 All 268 it was held, under Section 25 sub-section (3) of the Indian Contract Act "a promise made in writing and signed by the person to be charged therewith to pay a barred debt is a good consideration, but there must be a distinct promise and not a mere acknowledgment". Again in Maganlal Harjibhai v. Amichand Gulabji, ILR 52 Bom 521: (AIR 1928 Bom 319) it was held that an implied promise to pay, inferred from an acknowledgment which contains no express promise to pay a time-barred debt, cannot be made the basis of a suit under Section 25 (3) of the Indian Contract Act. In Ganeshprasad v. Mt. Rombati Bai, AIR 1942 Nag 92, a receipt by the debtor was executed after understanding the account. It stated that a certain amount was justly due from the debtor. It was held that although the words meant an implied promise to pay, certainly they did not amount to an express promise in writing such as S. 25 (3) of the Contract Act required. In Basheshar Nath Goela v. Baij Nath, AIR 1938 Lah 264 it was observed that mere acknowledgment of liability without any express promise to pay or without any reference to the future liability to pay does not fall within the meaning of Section 25 of the Act. The writing was in the following form:
"The bahi account having been checked and understood, the sum of Suit No.54/2011 Page no. 16 of 26 Rupees 6459-1-6 was found due from me and my minor sons whose lawful guardian I am, to the firm Gobind Parshad Shibban Lal and I admit the amount to be due from me".
On the basis of this writing it was contended that it was an express promise to pay. It was held by the Division Bench that this writing cannot be read to contain an express promise to pay. There was no reference to the future liability to pay the amount. It was merely an acknowledgment of liability. It does not fall within Section 25 of the Act.
In Shadi Ram v. Prabhu, AIR 1953 Punj 28 it was held that simple acknowledgment of the form of 'Baqi rahe' does not amount to promise to pay and does not give fresh cause of action under Sec.25 (3) of the Act. It is further observed that the words 'the promise to pay', necessary to bring a case within Section 25 (3) of the Indian Contract Act, must be in writing and under Section 9 of the Contract Act, such a promise is an express promise and the document must bear words like 'I promise to pay' or 'I undertake to pay' must appear in the document.
A full bench of Hon'ble Rajasthan High Court in Jeevraj vs. Lal Chand reported as AIR 1960 Rajasthan 193 has held that " it is a settled law that implied promise to pay involved in a mere acknowledgment would not be sufficient under Section 25 of Contract Act. It further held that in order that the case may fall under Section 25{3} of the Contract Act there must be an express promise to pay though the word express is not used in Section 25 (3) because there was no promise to pay in writing as required under the provision.
33 The question as to what amounts to promise under section 25{3} of contract Act came for consideration before the Hon'ble Delhi High Court in Tulsi Ram Vs. Same Singh. reported as AIR 1981 Delhi 165. The Lordship Suit No.54/2011 Page no. 17 of 26 of Hon'ble High Court in the above judgment has held that "Reading of Section 9 and Clause 3 of Section 25 of the Act it makes clear that though the word express is not used in clause 3 of Section 25, it is essential that the promise to pay must be clear and expressed. It also appears to me that otherwise there will be no promise to pay in writing as required under this clause. In other words an implied promise is not sufficient to satisfy the condition of clause 3 of Section 25 of the Act. What is required is a clear promise. The language of the document is to be studied to find out if there is a clear and fresh promise. The question thus is whether the writing in the suit amounts to an acknowledgment or a promise to pay. If it is only an acknowledgment it cannot be the basis of the suit but if it is a promise to pay the suit would be maintainable".
34 In view of the above, legal preposition ,in order to invoke Section 25 (3) of the Contract Act there shall be an expressed promise to pay time barred debt and not a mere acknowledgment. In the instant case, the plaintiff has contended that acknowledgment Ex.PW1/3 & PW1/4 tantamount to implied promise. A perusal of Ex.PW1/3 &PW1/ 4 shows that no indication has been given in the entire document and no word has been mentioned in the said acknowledgment which can give an impression that the defendant has made an express or implied promise to pay the time barred debt. At best these are acknowledgment of liability under section 18 of the limitation act however same are not the valid acknowledgment under the law because same have been made after the expiry of the limitation period for filing the suit.
35 The requirement for invoking Section 25(3) of the Contract Act is that the defendant must have made an express promise to pay a time barred debt as held by Hon'ble Delhi High Court in the above judgment however in the Suit No.54/2011 Page no. 18 of 26 instant case no such promise has been made by the defendant in EXPW1/3&PW1/4 which can be termed as an express promise to pay a time barred debt which is the pre-requisite for invoking Section 25(3) of Contract Act. The plaintiff has failed to place any material on record which can show or suggest that defendant at any point of time, made any express promise to pay the time barred debt.
36 From the above it is amply clear plaintiff has filed the present suit after the expiry of the limitation period as prescribed under the law. The acknowledgment EX PW1/3 & PW1/4 are not valid acknowledgment having been made after the expiry of the limitation period prescribed for filing the suit. The plaintiff has also failed to prove on record that .defendants have made any promise to pay the time barred debt as required under Section 25(3) of the Contract Act, consequently, the acknowledgment Ex.PW1/3 & 4 cannot be termed as promise to pay a time barred debt as per Section 25(3) of the Contract Act.
In view of the my above discussion, my issue wise findings is as under:-
37 ISSUE NO. 1 Whether the suit is within the limitation?OPP The loan was advanced by the plaintiff to defendant no:1&2 on 25.11.1975. As per the Limitation Act, a suit for recovery of the loan amount can be filed within 3 years from the advancement of the loan to the defendant. Thus it could have been filed by the plaintiff up to 25.11.1978, however, same has been filed on 10.09.1980. Therefore, same is barred by limitation. The acknowledgment EX PW1/3 & PW1/4 are not valid acknowledgment having been made after the expiry of the limitation period prescribed for filing the suit therefore it can not extend the period for filing the suit. The plaintiff has also Suit No.54/2011 Page no. 19 of 26 failed to prove on record that defendant made promise to pay the time barred debt as per Section 25(3) of the Contract Act. The plaintiff has thus failed to prove on record that the suit filed by it is within the period of limitation. The plaintiff has thus failed to discharge the onus of Issue No. 1, same is accordingly decided against the plaintiff.
38 ISSUE NO.2 Whether the alleged acknowledgments dated 26.12.1978 and 27.12.1978 were signed by defendant no. 1?OPP The acknowledgment Ex.PW1/3 &PW1/ 4 have been signed by defendant no. 2 only and the plaintiff has not produced any material on record on the basis of which it can be said the defendant no: 2 was having any implied or express authority of defendant no:1 to make any such acknowledgment on his behalf. The plaintiff has failed to prove that the acknowledgment dated 26.12.1978 and 27.12.1978 Ex.PW1/3 & 4 were signed by defendant no.1. The plaintiff has thus failed to discharge the onus of Issue No. 2, same is accordingly decided against the plaintiff.
39 ISSUE NO.3 Whether any deed of guarantee was executed by defendant no. 3?OPP The onus to prove Issue No. 3 is upon the defendants. The plaintiff has taken a plea that defendant no. 3 stood as guarantor for the repayment of the loan advanced to defendant no. 1 & 2. Vide agreement Ex.PW1/1 & PW1/2. The defendants have controverted the said plea and stated that defendant no. 3 is not concerned with the present suit.
40 In order to substantiate their case, plaintiff has examined Sh. B.S.Khosla, who deposed in his examination-in-chief that both the transaction Suit No.54/2011 Page no. 20 of 26 were jointly guaranteed by defendant No.3 who executed a deed of guarantee dated 25.11.1975 for Rs.2,90,000/- which bears the signatures of defendant no. 3 who had put his signatures therein in his presence after the same was filled in by Mr. S.D.Mathur, the employee of plaintiff bank. Same is exhibited as Ex.PW1/5. PW-1 has been thoroughly cross-examined, however, the above testimony of PW1 remained unchallenged because defendants have not carried out any cross examination with respect of the above testimony. In the absence of the any cross-examination, the testimony of PW-1 deemed to have admitted by the defendants. To answer the claim of the plaintiff, defendant no. 3 examined himself as DW-1 deposed that he has not stood as guarantor for defendant no:1&2 . During cross examination defendant no:3 deposed that the written statement does not bear his signatures at point A & B. The above testimony of defendant no. 3 shows that he has not filed any written statement in the instant case, therefore, the averment of the plaint with regard to the fact that defendant no:3 stood as guarantor for the loan advanced to defendant no:1&2 remained unrebutted and unconverted because defendant no. 3 himself has deposed in his cross-examination that he has not filed the written statement. The defendants have also not placed any material on record which can show or suggest that the deed of guarantee Ex.PW1/5 was not executed by defendant no. 3 in favour of the plaintiff.
In view of the above facts and circumstances, I am of the considered view that the plaintiff has proved on record that defendant no. 3 stood as guarantor for the loan advanced to defendant no. 1 & 2 and executed a deed of guarantee Ex.PW1/5. The plaintiff has successfully discharge the onus of Issue No. 3, same is accordingly decided in favour of the plaintiff.
Suit No.54/2011 Page no. 21 of 26 41 ISSUE NO. 4 Whether the plaintiff got any blank document signed
by the defendants? If so, which are those documents and what is the effect thereto? OPD;
ISSUE NO. 5 Whether the statement of account produced by the plaintiff is incorrect as alleged in para-9 & 10 of the written statement?OPD;
ISSUE NO. 6 Whether that amount of money, if any, is due to the plaintiff and from which of the defendants?OPP;
; and ;
ISSUE NO.7Whether the plaintiff is entitled to payment of interest? If so, on what rate, at what period and from whom?OPP Issue No. 4 to 7 are taken together as they are interconnected. The plaintiff has set up a case that defendant no. 1 & 2 made a request for sanction of loan of Rs.2 lac as well as a loan of Rs 90000/- in November, 1975. the plaintiff agreed to sanction the said loan on 25.11.1975. The defendant no. 1 & 2 jointly executed the loan agreement and defendant no. 3 stood as guarantor for the said loan and execute a deed of guarantee in favour of the plaintiff. The defendant no. 2 also acknowledged their liability vide acknowledgment dated 26.12.1978 and 27.12.1978. However, defendants have failed to repay the said loan amount despite their assurance. As per the statement of account prepared by the plaintiff a sum of Rs. 6,59,851.35/- was due and recoverable against the defendant as on 21.08.1980. The plaintiff has also claimed interest over the said amount @ 18% from the date of suit till its actual realization.
42 The defendants have taken a plea that the agreement dated 25.11.1975 was signed by defendants along with certain other documents but these documents were blank at that time. They further pleaded that the loan transaction is only between the plaintiff and defendant no. 1 and defendant no.
Suit No.54/2011 Page no. 22 of 26 2 has nothing to do with the said transaction. It is further pleaded that although limit of Rs.2,90,000/- was sanctioned for defendant no.1 but he has not utilized the said limit fully. They further pleaded that statement of account of the plaintiff is not correct.
Both the parties have led their respective evidence in order to prove their case.
43 An examination of pleading, evidence and documents placed on record shows that defendants have not disputed the fact that the loan of Rs.2 lac and Rs.90,000/- was sanctioned by the plaintiff vide loan agreement Ex. PW1/1&PW1/2. However, they sought to raise a plea that same was sanctioned only in favour of defendant no. 1 and defendant no. 2 has no concern whatsoever with the said transaction. PW-1, during his examination- in-chief has deposed that defendant no. 1 and 2 approached the plaintiff in November, 1975 for grant of credit loan facility and on this regard the plaintiff extended two loans for Rs.2 Lac and Rs.90,000/- respectively. PW-1 has been thoroughly cross-examined by the defendants, however, the above testimony of PW-1 has not been challenged during his cross-examination. No cross-examination whatsoever has been carried out by the defendants qua the said deposition. In the absence of any cross-examination, the testimony of PW-1 that plaintiff sanctioned the loan of Rs.2,90,000/- in favour of both the defendant remained unrebutted and uncontroverted. The PW-1 has also proved on record the execution of loan agreement Ex.PW1/1 and Ex.PW1/2 which have been signed and executed by defendant no. 1 & 2 respectively. The plaintiff has also placed on record the receipt executed by defendant no. 1 and 2 qua the said loan advance by it to the defendant NO:1&2. The execution those receipts have been admitted by the defendants during the admission/ denial. The above fact clearly proves on record that the said loan Suit No.54/2011 Page no. 23 of 26 was sanctioned in favour of defendant no:1&2 .
44 The plaintiff has proved on record the statement of account Ex.PW1/6 to PW1/9. As per the statement of account a sum of Rs.6,59,851.35/- is due against the defendants as on 21.08.1980. The defendants although disputed the correctness in the statement of account in their written statement, however, they have failed to point out any infirmity in statement of account maintained by the plaintiff. The defendants have not led any evidence on record to show that statement of account Ex.PW1/6 to PW1/9 have not been prepared correctly. In the absence of any material on record to the contrary the plaintiff has successfully proved that a sum of Rs 6,59,851.35/ was due and recoverable against the defendants.
45 The defendants have taken a plea that plaintiff obtained their signatures over the loan agreement Ex.PW1/1 &PW1/2 when these were blank and have been filled subsequently. The onus to prove the above facts was upon the defendants. However, they have not placed any material whatsoever on record in order to substantiate their above plea. The defendants have not made any complaint either to the bank or to the police till date to the effect that the official of the plaintiff had obtained their signatures on certain blank forms. Moreover the defendants have not led any evidence whatsoever in order to substantiate their plea that their signatures were obtained on blank form. The above fact clearly demonstrate that the documents have been executed by defendants as per the law and these documents were not blank at that time. The defendants have taken the above plea in order to wriggle out from the said transaction.
Suit No.54/2011 Page no. 24 of 26 In view of my above discussions, my issue wise findings is as under:-
46 ISSUE NO. 4 Whether the plaintiff got any blank document signed by the defendants? If so, which are those documents and what is the effect thereto? OPD;
The defendants have failed to prove on record that plaintiff obtained their signatures on blank papers and have subsequently filled those papers. The defendants have thus failed to discharge the onus of Issue No. 4, same is accordingly decided against them.
ISSUE NO. 5 Whether the statement of account produced by the plaintiff is incorrect as alleged in para-9 & 10 of the written statement?OPD;
The defendant have failed to point out any infirmity in the statement of account maintained by the plaintiff. On the other hand, plaintiff has proved on record that the statement of account Ex.PW1/6 to PW!/9 have been prepared as per the law. The defendants have failed to discharge the onus of Issue No. 5, same is accordingly decided against the defendant.
48 ISSUE NO. 6 Whether that amount of money, if any, is due to the plaintiff and from which of the defendants?OPP;
;and;
ISSUE NO.7 Whether the plaintiff is entitled to payment of interest? If so, on what rate, at what period and from whom?OPP The plaintiff has successfully proved on record that it advanced a loan of Rs.2 lac and Rs 90,000/- to the defendant no. 1 & 2 vide loan agreement Ex.PW1/1& PW1/2 to which defendant no.3 stood as guarantor and executed a deed of guarantee as Ex.PW1/5. The plaintiff has further proved that Suit No.54/2011 Page no. 25 of 26 defendants have failed to pay the said amount despite the request. As per the statement of account a sum of Rs.6,59,951.35/- is due and recoverable against the defendants as on 21.08.1980. The defendants have withheld the said amount of the plaintiff without any reasonable cause thus made themselves liable for interest as well. The Plaintiff has successfully proved on record that it is entitled to recover a sum of Rs.6,59,951.35/- along with interest from the defendants. The plaintiff has successfully discharge the onus of Issue No. 6 & 7, same is accordingly decided in favour of the plaintiff.
49 Relief In view of my findings on Issue No. 1, the suit filed by the plaintiff is dismissed being barred by limitation. However, both the parties shall bear their cost respectively. Decree sheet be accordingly prepared. File be consigned to record room after due compliance.
Announced in the open court (PITAMBER DUTT)
On the 23rd of December, 2011 Additional District Judge
Delhi
Suit No.54/2011 Page no. 26 of 26
Suit No. 54/11
17.12.2011
Present: None
No clarifications required.
Put up for orders on 22.12.2011.
(PITAMBER DUTT)
ADJ; DELHI
17.12.2011
Suit No.54/2011 Page no. 27 of 26
Suit No. 54/2011
22.12.2011
Present: None
No time left.
Put up for orders on 23.12.2012.
(PITAMBER DUTT)
ADJ; DELHI
22.12.2011
23.12.2011
Present None for the plaintiff
None for the defendant
Vide separate judgment dictated and announced in the open court the suit filed by the plaintiff is dismissed being barred by limitation. Decree sheet be accordingly prepared. File be consigned to record room.
(PITAMBER DUTT)
ADJ; DELHI
23.12.2011
Suit No.54/2011 Page no. 28 of 26