Delhi District Court
State Bank Of India vs Sh. Prakash Masiwal on 8 August, 2016
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In the Court of Ms. Kaveri Baweja:Addl. District Judge03 (West)
Tis Hazari Courts: Delhi
RCA No. 23/15 (New No. 60803/16)
In the matter of:
State Bank of India
.... Plaintiff
Versus
1. Sh. Prakash Masiwal
S/o Sh. R. S. Masiwal
H22, Sector11
Noida
UP201301
2. Sh. Madan Mohan Pandey
S/o Sh. Devki Nandan Pandey
Flat No. 817, BlockA
Sector17, Vasundhara
Ghaziabad, U.P.
2nd Address:
KEIHIN PANALFA LTD
A1&2, Sector81
PhaseII, Noida, UP .... Defendants
Date of Institution of Suit : 01.03.2012
Judgment reserved on : 04.08.2016
Judgment pronounced on : 08.08.2016
RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
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JUDGMENT
1. The present appeal assails the order dated 07.12.2011 passed by Ld. Trial Court whereby the suit of the Plaintiff was dismissed on the ground that it was barred by limitation.
2. The brief facts of the case relevant for disposal of this appeal are that Plaintiff/Appellant filed the suit against Defendants contending inter alia that a loan for Rs. 2,50,000/ had been taken by Defendant No. 1 and that Defendant No. 2 had stood guarantor. The loan was advanced on 19.02.2007. The Defendants had executed and delivered the relevant documents i.e. loan agreement, loan/hypothecation agreement and an undertaking, all dated 15.02.2007 to the Plaintiff Bank. As per the agreed terms and conditions, the loan was to be paid in Equated Monthly Installments (EMI's) of Rs. 4,347/ each.
3. It is the case of the Plaintiff/Appellant that Defendants failed to maintain the financial discipline and did not pay EMIs regularly towards repayment of the loan. The Plaintiff Bank recalled the entire outstanding loan by serving the Defendants with a legal notice dated 11.10.2011 through RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
3registered AD post, despite which Defendants failed to clear the outstanding loan amount. Hence, the suit for recovery of the loan amount along with interest.
4. Ld. Trial Court, as aforesaid, dismissed the suit of the Plaintiff/Appellant holding that the same is barred by limitation.
5. When the appeal came up for hearing, notice was issued to the Respondents. However, despite several efforts, none appeared on behalf of Respondents despite service of notice and the Respondents were accordingly proceeded against exparte.
6. I have heard the submissions of Ld. Counsel for Appellant and gone through the record in its entirety.
7. It is contended that Ld. Trial Court erred in holding that acknowledgment of liability made on behalf of Defendant No. 1 by virtue of his legal notice dated 22.02.2011 does not amount to acknowledgment of liability within the purview of Section 18 of Limitation Act. It is further submitted that Ld. Trial Court erred in concluding that mere mentioning of the liability does not amount to acknowledgment thereof and Ld. Trial Court also wrongly held that the acknowledgment in the present case pertains to a past liability.
RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
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8. Ld Counsel for Appellant vehemently argued that as per the terms mentioned in the loan document, loan was to be repaid after one year of the completion of the course by Defendant No. 1. The course period commenced from 14.01.2007. As per the loan application, the duration of the course was for six months. It is submitted that after completion of aforesaid period of six months and one year moratorium the loan was due and payable on 14.07.2007. Limitation for filing of the suit thus commenced on 14.11.2007. It is submitted that though admittedly the suit was filed on 16.11.2011 i.e. after the period of limitation, however, in view of the acknowledgment of liability made by the Defendant by virtue of his legal notice dated 22.02.2011, which was sent well within the period of expiration of period of limitation, the suit of the Plaintiff was within time the limitation having been extended by virtue of Section 18 Limitation Act and it is prayed that impugned order be set aside.
9. I have considered the aforesaid submissions. Before proceedings to decide the issue in hand, it would be relevant to revisit the provisions of Section 18 of the Limitation Act 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 RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
5liability 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, 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 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 RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
6deemed to be an application in respect of any property or right.
10. A bare perusal of the aforesaid statutory provision reveals that any acknowledgment of liability in respect of 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 derived his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
11. Explanation (b) appended to the aforesaid Section also clarifies that the word "signed" means signed either personally or by an agent duly authorised in this behalf. On the other hand, Explanation (a) appended to the Section also clearly shows that 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 setoff, or is addressed to a person other than a person entitled to the property or right.
12. It is submitted by Ld. Counsel for Plaintiff that in the present case, Defendant has acknowledged his liability to repay the loan by way of RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
7his legal notice dated 22.02.2011 sent on his behalf wherein he has admitted the factum of taking education loan from the Plaintiff Bank. It is submitted that in view of the said acknowledgment made on behalf of Defendant and signed on his behalf by his counsel, there is a clear acknowledgment of liability of part of the Defendant within the prescribed period of limitation and thus the suit of the Plaintiff is not time bar, as hold by Ld. Trial Court.
13. I have considered the aforesaid submissions and perused the legal notice dated 22.02.2011 relied upon by Ld. Counsel for Plaintiff. A careful perusal of the said notice stated to have been sent on behalf of Defendant, reveals that though the Defendant has acknowledged availing the loan facility from the Plaintiff Bank in the year 2007. However, there is not even a whisper in the entire legal notice regarding acknowledgment of his liability to repay the said loan. It is apparent on going through the contents of the legal notice dated 22.02.2011 that Defendants rather claims that he had submitted PDCs[Post Dated Cheques] from his personal account with ICICI Bank for repayment of the said loan during the process of getting loan. The notice further states that Plaintiff Bank did not get encashed the said post dated cheques and on the contrary they have pressurized him to repay the loan.
RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
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14. In view of the aforesaid averments made in the legal notice dated 22.02.2011, it apparent that it cannot be termed as "acknowledgment of liability" as stipulated under Section 18 of the Limitation Act.
15. Therefore, though the legal notice dated 22.02.2011 on behalf of Defendants was sent within the prescribed period of limitation for filing the present suit, but cannot be said to be a valid acknowledgment of debt.
16. In view of the above discussion, I find that the notice dated 22.02.2011 cannot be said to disclose any acknowledgment of liability on behalf of Defendant as postulated under Section 18 of the Limitation Act.
17. Accordingly, in view of the above discussion, I find that there is no merit in the appeal, which is accordingly dismissed. TCR be sent back to the concerned court along with copy of judgment.
18. Appeal file be consigned to Record Room.
Announced in the Open Court on 08.08.2016 (Kaveri Baweja) Additional District Judge03 (West) Tis Hazari Courts: Delhi.
RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.
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New No. 60803
08.08.2016
Present: None.
Vide separate judgment announced in open court today, appeal is dismissed. TCR be sent back to the concerned court along with copy of judgment.
Appeal file be consigned to Record Room.
(Kaveri Baweja)
ADJ03(West), THC, Delhi
08.08.2016
RCA No. 23/15 SBI Vs Prakash Masiwal & Ors.