Delhi District Court
State Bank Of Patiala vs Sh. Prashant Kumar on 15 December, 2014
IN THE COURT OF SH. AASHISH GUPTA, CIVIL JUDGE
EAST, KARKARDOOMA COURTS, DELHI
Suit no.: 290/2013
Unique case ID no.: 02402C0 330902013
State Bank of Patiala
a body corporate constituted under the
State Bank of India (Subsidiary Banks) Act, 1959
having its Head Office at
"The Mall" Patiala (Punjab)
and amongst others a Branch at
SARC, IInd Floor, NBCC Building,
Bhishm Pitamah Marg, Lodhi Road, New Delhi
through its Chief Manager
Shri Trilok Chand
........Plaintiff
Versus
Sh. Prashant Kumar
S/o Sh. Srikant Prasad Singh
R/o D128, 3rd Floor, Near Jain Mandir,
Delhi110092.
Also at:
a) M/s. Almondz Global Securities Ltd.
105106, 1st floor, Nipur Tower,
Plot No. 15, Community Centre,
Karkardooma, Delhi.
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b) 168, Barhetta Road,
Bahairiya Sarai, Bahadurpur,
Dharbanga846001,
Bihar.
........Defendant
Date of Institution of suit : 10.10.2013
Date of reserving the judgment : 03.12.2014
Date of pronouncement of judgment : 15.12.2014
JUDGMENT:
1. This is a suit of recovery for a sum of Rs. 2,82,949.19/ with expenses, pendente lite and future interest at the rate of 13.50% p.a. The present suit was filed on 09.10.13.
2. Plaintiff is a body corporate with perpetual succession and it can sue and be sued in its own name. It is the case of the Plaintiff that a loan for purchase of car was taken by the Defendant.
3. It is the case of the Plaintiff that the Plaintiff had given a car loan for purchase of Wagaon R LXI Duo Car registration no. DL5CF 2028 for a sum of Rs. 3,67,200/ on 16.01.2008. The loan was to be repaid in 84 equal Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 2 of 17 monthly instalments for a sum of Rs. 6,385/ each.
4. After the disbursement of the loan a loan account was opened by the Plaintiff in the name of the Defendant with the Patparganj Branch of the Plaintiff Bank. It is the case of the Plaintiff that after availing the loan facility, the Defendant defaulted in payment of monthly instalments and hence the present suit seeking recovery of the sum due with costs and expenses as per the account statement maintained by the Plaintiff bank in the usual course of business for the amount mentioned therein.
5. The Defendant was duly served in this matter who entered appearance but thereafter failed to file any written statement or defend the matter. Thus his right to file written statement, after due opportunity was closed and matter was heard in his absence.
6. Thereafter, in support of the claim in the suit, the Plaintiff has produced one Jai Singh Nimberia as PW1 who is working as Manager with the Plaintiff and is posted at State Bank of Patiala, SAARC, IInd floor, NBCC Building, Bhishm Pitahmah Marg, Lodhi Road, New Delhi. He has proved on record the following documents.
Ex.PW1/1 Sanction letter dated 12.08.13.
Ex.PW1/2 Minutes of meeting of board of directors held on
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30.04.2003
Ex.PW1/3 Scheme of Delegation of Financial powers
Ex.PW1/4 Minutes of the executive committee dated
15.03.1986
Ex.PW1/5 Loan application dated 31.12.2007
Ex.PW1/6 Letter of arrangement dated 16.01.2008 in respect
of said loan duly acknowledged by Defendant.
Ex.PW1/7 Hypothecation agreement dated 16.01.2008.
Ex.PW1/8 The proforma invoice dated 30.12.2007.
Ex.PW1/9 True copy of registration certificate of the
hypothecated car.
Ex.PW1/10 True copy of the insurance of the car
Ex.PW1/11 Retail invoice of the car
Ex. PW1/12 Statement of Account of the Defendant's account
Ex. PW1/13 Legal notice dated 14.06.2013.
Since the Defendants chose not to appear to contest the case therefore the evidence was closed and arguments were heard.
7. Arguments heard. Record perused.
8. Now before going in the merits of the claim set up by the Plaintiff in this matter, section 3 of the Limitation Act, 1963 casts a duty on the court to look into the fact as to whether the claim of the Plaintiff is within the period of limitation or not. Thus before I go on the merits, I deem it appropriate to consider the issue of limitation in this matter.
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9. It is pertinent to note that the loan in this matter was repayable in 84 equal instalments by the Defendant. As per the Plaintiff, the loan was disbursed on 16/01/08 and the loan was to be paid thereafter. Now under the Limitation Act, 1963 money repayable under a bond in instalments find mention under Article 36 and Article 37 of the said Act. Thus, in my opinion, it shall be either of the said articles which shall apply to the present case. No other Article was brought to my notice or was argued by the Ld. Counsel for the Plaintiff to apply to the present matter.
10. Before proceeding further it may be noted herein that the present suit has been filed on 09/10/2013 before this court. Now the question that first falls for consideration is whether Article 36 or Article 37 of the Limitation Act, 1963 applies to the present case? And when did the period of limitation begin to run in either of the case to compute the period of limitation?
11. Now in order to reach the said conclusion, the documents placed on record are relevant. The Plaintiff has placed on record an Arrangement letter Ex. PW1/6 and a Hypothecation Deed Ex. PW1/7 both dated 16/01/2008 to prove the factum of disbursement of loan by the Plaintiff bank.
12. As per the arrangement letter Ex. PW1/6 clause 4, the first instalment for the repayment of loan the was to commence "from the month following Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 5 of 17 the month of purchase" of the above said vehicle in which the loan was taken. As per the Plaintiff, the loan was disbursed on 16.01.08 and as per their claim in the plaint, the amount was paid directly to the concerned seller of the vehicle. Thus it appears that the vehicle was purchased in the month of January and the instalments were payable from February onwards. This follows from the aforesaid clause 4 of the Arrangement letter Ex PW1/6.
13. The aforesaid fact of repayment of loan commence from Feb 2008, is supported by the statement of account Ex. PW1/12. As per the said statement of Account, the repayment of loan started from February 2008. Thus loan in this case appears to have commenced from 16.01.08 where from it was repayable in 84 equal instalments.
14. Now Article 36 of the Limitation Act, 1963 applies to suits "on a promissory note or bond payable by instalments." Article 37 of the said Act applies to suits " on a promissory note or bond payable by instalments, which provides that, if default be made in payment of one or more instalments, the whole shall be due". Thus while inter alia under Article 36 those suits are covered where the amount sought is based on a bond payable under instalments simplicitor; where a specific provision/clause exists in the said bond that in case of default the entire sum shall become due, Article 37 applies.
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15. Now, a perusal of the documents placed on record and in particular Ex. PW1/7 which is the hypothecation agreement shows that one such clause 14 exists wherein it was agreed between the parties that in case of default of payment of any instalment the whole balance of the loan amount which remained unpaid at the date of default shall immediately become due to the bank. In this regard clause 14 of the said hypothecation agreement is reproduced herein for easy reference:
"14. The Borrower agrees that if any instalment due hereunder shall not be paid on due date in the manner set out in clause 6 hereinabove the agreement of the Bank to accept repayment of the said loan by instalments shall at the option of Bank forthwith determine and the whole balance of the said loan unpaid at the date of such default shall immediately thereupon become to the Bank".
16. A bare perusal of the said clause shows that as per the said clause in case of default of payment of instalment, the Plaintiff bank has the option to refuse to accept repayment of loan by way of instalments thereafter and also on such default the whole balance of unpaid loan due at the date of such Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 7 of 17 default was to become payable by the defendant immediately. Thus in my opinion Article 37 of the Limitation Act, 1963 shall cover the case of the Plaintiff in this case to determine as to from when the period of limitation has to be calculated.
17. Before proceed further I may reproduce Article 37 of Limitation Act, 1963 which reads as under:
Description of suit Period of limitation Time from which period begins to run On a promissory note or bond Three years When the default is made, payable by instalments, which unless where the payee or provides that, if default be obligee waives the benefit made in payment of one or of the provision and then more instalments, the whole when fresh default is shall be due. made in respect of which there is no such waiver.
As per the Article 37, reproduced above, limitation in the case of a suit based on bonds, which provides for a clause of the entire payment becoming due in case of the default, the period of limitation is prescribed as three (03) years.
The said article lays down that the said period of 03 years shall begin to run when default in payment of instalment is made. It further gives an option Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 8 of 17 of "waiver" to the payee/obligee to waive the default made and then the period of limitation begins to run only on fresh default when no such waiver is made.
18. It is pertinent to note herein that the present Article 37 of the Limitation Act, 1963 corresponds with Article 75 of the Limitation Act, 1908.
The full bench of the Hon'ble Allahabad High Court of Delhi While dealing with article 75 of the Limitation Act 1908 in the case of Jawahar Lal vs. Mathura Prasad [AIR 1934 All 661] has laid:
"7. .........The starting point in the last mentioned article is "when the default is made" and in case the oblige waives the benefit of the position from the date of the fresh default. It is neither the date when the right to sue accrues, nor the date when the cause of action arises, nor the date fixed for the payment of the bond nor even the date of the bond, but it is the date of the first default and, in the case of waiver, further default. It therefore seems to me that if Article 75 were applicable, we have no option but to hold that the starting point of limitation is the date of the first default Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 9 of 17 or in case of waiver of its benefit, the next default no matter whether the creditor is given by a private contract an option to wait or not to wait. If the article applies, the starting point of limitation is fixed by column 3 irrespective of any private contract that the parties might have entered into..........."
(emphasis supplied)
19. Again The Hon'ble Allahabad High Court in the said matter at page 665 of the said decision has brought out the distinction between Article 74 (which corresponds with Article 36 of the 1963 Act) and Article 75 (which corresponds with Article 37 of the 1963 Act). The Hon'ble Court has laid as under:
"Now Article 74 is the article applicable to simple bonds payable by instalments, in which case, time begins to run from the expiration of the term of payment. Article 75 applies to suits on a bond payable by instalments which provides that if default be made in payment of one or more instalments, the whole shall be due. It is obviously intended to apply to the particular case of instalment bonds where there is a default clause of the nature Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 10 of 17 aforementioned. If there were no such default clause, the earlier article would apply".
20. Now, I have already reached the conclusion that in view of clause 14 in the Hypothecation Agreement Ex PW1/7, the present suit is covered under Article 37 of the Limitation Act, 1963. This is because in the present matter, clause 14 in Ex. PW1/7 lays that that in case the defendant defaulted in payment of the instalments, the bank has the option to refuse the payment of the loan in instalments and the whole balance of the unpaid loan was to be paid immediately by the defendant to the plaintiff's bank. Thus the present matter is covered under Article 37, Limitation Act, 1963.
21. Now as has been laid down in the judgment of Jawahar Lal (supra) and as is evident from the bare perusal of Article 37, the limitation in the present case for filing of the present suit began "from the date of default". Now the question is when was that default on the part of the Defendant?
From the statement of accounts Ex. PW1/12, the Defendant has defaulted in repayment of the loan amount in February 2010. A bare perusal of the said statement of Accounts shows that the Defendant made payment to the Plaintiff regularly till January 2010. Till that date there was no default. The first default occurred in February 2010. Since the loan commenced from Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 11 of 17 16/01/2008 and instalments [as per clause 4 of Ex PW1/6 : arrangement letter] was to be made from the month following such commencement of loan, the repayment of loan was to be made on every 16th day of the month till full repayment for the next 84 months. Thus since no instalment was paid in February 2010, in my opinion the date of default shall be 16/02/2010.
22. With 16/02/2010 being the date of default, under Article 37 of the Limitation Act, the period of limitation shall begin to run therefrom. The period of limitation was 3 years calculated therefrom and the suit herein should have been filed within the said period of 3 years. The present suit was filed only on 09/10/2013 i.e. after 16/02/2013 on which date the period of limitation has run its full course of 3 years. Thus, in my opinion, under article 37, the period of limitation of 03 years which began to run from 16/02/10 and ran its full course on 16/02/2013 and this suit having been filed only on 09/10/2013, the suit is barred by time.
23. Now the only thing that could have save the running of the period of limitation was in case the Plaintiff bank would have waived such default of the Defendant and in that case the period shall begin to run on fresh default.
24. It is the case of the Plaintiff, as per the plaint, that the Defendant was never regular with his payments. As per the statement of accounts placed on Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 12 of 17 record after the first default a number of defaults in payments took place. The Plaintiff bank, it appears did nothing about it. The Plaintiff though has placed on record a notice dated 10/09/2012 calling upon the Defendant to pay some part outstanding till the date of notice but the same has not been proved in evidence.
25. Now it is settled law that "waiver" is a mixed question of law and fact. While dealing with the term "waive" the Hon'ble Andhra Pradesh High Court in the case of Jillellamudi Dhanalakshmi vs The Union Bank Of India [1992 (1) ALT 696] has laid:
"Whether the creditor has waived his right of recovering the whole amount due to the default of the loanee in nonpayment of the instalment, is a mixed question of fact and law. Therefore, where the creditor has waived his right to recover the whole amount on default in payment of instalment, he will have to plead waiver. Waiver is an intentional act; it may be express or implied. The plea of waiver can be established either by leading positive evidence or having regard to the facts and circumstances of the case, it can also Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 13 of 17 be inferred. But mere inaction of the creditor in enforcing the bond for recovery of the whole amount which had become due on the default of the debtor in payment of the instalment cannot, in the absence of specific pleading, be regarded as waiver so as to postpone the ' starting point of limitation. (emphasis supplied) Thus from the above, it is clear that waiver has to be expressly pleaded in the pleadings thereafter proved. Mere inaction on the part of the Plaintiff bank to recover as per the agreement does not amount to waiver. In the absence of express pleadings and evidence to support the same, Waiver cannot be inferred and therefore in such a case waiver cannot be applied. Waiver has to be specifically pleaded and proved in evidence.
26. In the present case, the Plaintiff bank does not claim waiver. I have already stated upon that the loan was repayable in instalments commencing from 16.02.08. The first default took place on 16/02/2010. The present suit has been filed on 09.10.13 which is beyond the period of 03 years and hence the suit of the plaintiff is barred by limitation. Neither the waiver in the present case has been pleaded nor proved and thus the question of its Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 14 of 17 application to give a fresh start to the limitation at each default does not arise at all. Thus under article 37 Limitation Act, 1963, the period of limitation began to run from 16/02/2010 and ran its full course on 16/02/2013. Suit having been filed thereafter is barred by time.
27. Before parting with the judgment I may make reference to para 17 for the balance of the plaintiff wherein plaintiff has stated as under:
"17. That the present suit is within limitation since the defendant executed made payment of Rs. 40,000.00 on 31.03.2012 towards part liquidity of amounts outstanding against them."
As per para 17, the plaintiff claims that since the Defendant has made part payment of Rs. 40,000/ in cash to the Plaintiff therefore a fresh period of limitation has to be computed from 31.03.12 [the date of part payment].
28. I am not inclined to accept the said argument of the plaintiff in as much as u/s. 19 of the Limitation Act, 1963 any sum paid on account of debt by the Defendant gives a fresh start to the period of limitation to the plaintiff only if the same is acknowledged in some form of writing in the hand writing of the debtor or is signed by him. In the case in hand no such acknowledgment in the Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 15 of 17 manner aforesaid has been brought to my notice and as such contention of the plaintiff cannot be accepted.
29. The said point has already been settled by the Hon'ble Supreme Court of India in the matter of Sant Lal Mahton Vs Kamla Prasad [AIR 1951 SC 477] wherein while interpreting Section 20, Limitation Act, 1908 (the corresponding section to section 19 under Limitation Act, 1963) the Hon'ble Supreme Court of India has led as under:
"It would be clear, we think, from the language of section 20 of the Limitation Act that to attract its operation 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."
30. This is also evident from the bare perusal of the section 19 of the Limitation Act, 1963 also. Thus in view of the explicit wordings of the said section and also in view of the settled law led by the Hon'ble Supreme Court of India, the benefit of section 19 cannot be given to the Plaintiff in the Suit No. 290/13 State Bank of Patiala V/s. Prashant Kumar Page no. 16 of 17 present matter. I have already reached the conclusion that under article 37 of the Limitation Act, 1963, the suit of the Plaintiff is barred by time. The same is dismissed.
Decree sheet be prepared in the aforesaid terms.
Announced in the Open (AASHISH GUPTA)
Court on 15th of December, 2014 Civil Judge/East
KKD Courts, Delhi
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