Gujarat High Court
Sajjan India Limited vs Murlidhar Tiwari on 6 August, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/FA/533/2018 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 533 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be allowed to
see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law
as to the interpretation of the Constitution of India or any
order made thereunder ?
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SAJJAN INDIA LIMITED
Versus
MURLIDHAR TIWARI
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Appearance:
MR DIPAK R DAVE(1232) for the PETITIONER(s) No. 1
MR RAXIT J DHOLAKIA(3709) for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 06/08/2018
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Appellantoriginal plaintiff has challenged the Page 1 of 7 C/FA/533/2018 JUDGMENT judgment and decree dated 24.11.2017 passed by the learned Additional Senior Civil Judge, Ankleshwar, in Special Civil Suit No.22 of 2016. By such judgment, the learned Judge was pleased to reject the plaint of the appellantoriginal plaintiff in exercise of powers under Order 7 Rule 11 of Civil Procedure Code on the ground that the suit was barred by limitation.
2. Brief facts are as under.
3. Appellant is a registered company. The respondent was appointed by the appellant as a supervisor at its factory at Ankleshwar under an appointment order dated 19.02.2001. In course of time, he was promoted as manager. According to the plaintiff, as per the averments made in the suit, during his tenure as an employee, the defendant was granted various amounts by way of advance. By the end of calender year 2012, the total lending by the plaintiff to the defendant reached Rs.19 lakhs. As per the understanding between the parties, such amount would carry interest at the rate of 6% per annum. There would be penal interest at the rate of 18% per annum. The defendant had agreed that such Page 2 of 7 C/FA/533/2018 JUDGMENT advances and the interest would be recovered out of the salary and other emoluments of the employee. The plaintiff maintained a mutual current account in the books of account in respect of advances made to the defendant and the interest and the repayment of the advances were adjusted out of the salary and other emoluments of the defendant. As on the close of accounting year 201213, aggregate Rs.16,97,534/ was due and payable by the defendant to the plaintiff. The defendant tendered his letter of resignation to the plaintiff on 22.02.2013. Such resignation was accepted under a letter dated 15.03.2013 making the resignation effective from 22.02.2013. Under the same letter, the plaintiff had also conveyed to the defendant that sizable sum of advances and interest was outstanding due and payable by the defendant to the plaintiff. Subsequently, the plaintiff also issued a legal notice to the defendant on 11.04.2013 seeking recoveries of the outstanding amounts. The defendant did not make the payment thereof and the plaintiff therefore filed the said suit on 01.04.2016 for a recovery of sum of Rs.22,26,331/ which included the calculation of interest till the date of Page 3 of 7 C/FA/533/2018 JUDGMENT the suit and prayed for a decree to the tune of the said sum to be paid by the defendant with interest.
4. The defendant appeared and filed application Exh.13 urging the Court to reject the plaint under Order 7 Rule 11 of Civil Procedure Code on two grounds. One that the suit was insufficiently stamped, and two; that it was barred by limitation. It was pointed out that the suit was filed on 01.04.2016 whereas the notice for recovery of outstanding dues was issued on 15.03.2013. The suit was therefore beyond a period of limitation of three years prescribed for filing such a suit.
5. The Trial Court by the impugned judgment negated the first ground raised by the defendant but accepted the second. The plaint came to be rejected on the ground that the same was barred by limitation. Curiously, the Trial Court referred to the entry 19 to the schedule to the Limitation Act, 1963, to come to the conclusion that the plaintiff had filed the suit beyond the period of limitation. The Trial Court was of the opinion that suit which is filed after the period of limitation has expired, would be Page 4 of 7 C/FA/533/2018 JUDGMENT barred by law and therefore, required to be rejected.
6. We have heard learned advocates for the parties and perused the documents on record. Short question is whether in facts of the case, the Trial Court could have rejected the plaint on the ground that the suit was barred by limitation. According to the plaintiff, as averred in the plaint, the defendant had received large amounts of advances while he was in employment. Such advances would be repaid with 6% interest from the salary and other emoluments of the employee. A running open account was maintained for such purpose. The employee resigned with effect from 22.03.2013. However, sizable amount of advances with interest remained unpaid. As on the close of the year, such amount with interest has swelled to more than Rs.16 lakhs.
7. Entry 19 of the schedule to the Limitation Act, prescribes the period of limitation for money lent. Limitation for filing the suit for such purpose is three years and the time from which the period begins to run is when the loan is made. Such entry would obviously apply in a case where one time loan is Page 5 of 7 C/FA/533/2018 JUDGMENT given and there is no further modality of repayment thereof agreed between the parties. The advances made by the employer to the employee in the present case was spread over a period of time with mutual understanding that the same would be recovered from the salary and other emoluments of the employee with interest at the rate of 6% per annum. For such purpose, on mutual agreement, the employer maintained a current account in the books of accounts which would be revised from time to time. Clearly the Trial Court erred in applying the prescription of entry 19 to the schedule to the Limitation Act. As correctly argued by the learned counsel for the appellant, entry1 which forms part of PartI pertaining to suit relating to accounts has applied.
PART ISUITS RELATING TO ACCOUNTS
Description of suit Period of Time from which period begins
limitation to run
1 For the balance due on a Three years The close of the year in which
mutual, open and current the last item admitted or proved
account where there have is entered in the account; such
been reciprocal demands year to be computed as in the
between the parties. account.
8. The suit was for balance due for the open current account. The period of limitation is three years but most significantly, the time from the Page 6 of 7 C/FA/533/2018 JUDGMENT period would begun to run is the close of the year in which the last item admitted or approved is entered in the account, such year to be computed as a year in the account. For all purposes therefore the year in question happened to be the accounting year 201213 and the close of the year would be on 31.03.2013. The Trial Court therefore committed a serious error in rejecting the plaint on the ground of limitation. We have, for the purpose of this order proceeded on the basis of averments made in the suit. Nothing as noted in this order will prevent the defendant from contesting such averments during the trial, and establishing all his defenses.
9. Impugned judgment and decree are therefore set aside. First Appeal is allowed. Suit is restored to the Trial Court.
(AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH Page 7 of 7