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Delhi High Court

Netrapal Singh vs Ravinder Kumar Kalyanai & Anr. on 25 March, 2019

Equivalent citations: AIRONLINE 2019 DEL 554

Author: Vinod Goel

Bench: Vinod Goel

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*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                        Judgment Reserved on : 20.02.2019
                                        Judgment Pronounced on : 25.03.2019

+              C.R.P. 37/2019 & C.M. No.6334/2019 (for Stay)


        NETRAPAL SINGH                                          ..... Petitioner
                         Through:       Ms. Preeti Singh, Dr. Swati Jindal &
                                        Mr. Shivam Jaiswal, Advocates.
                                   Versus
        RAVINDER KUMAR KALYANAI & ANR. ..... Respondents

        CORAM:
        HON'BLE MR. JUSTICE VINOD GOEL


VINOD GOEL, J.

1. Impugned order dated 05.12.2018 passed by the Court of learned Additional District Judge-03, South District, Saket Courts, New Delhi ('ADJ') granting an unconditional leave to defend to the respondents/defendants in Civil Suit No.192/2018 CNR No.DLST01-001337-2018 under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) for recovery of Rs.10,00,000/- filed by the petitioner/plaintiff, is the subject matter of challenge in this revision petition.

2. The brief facts of the case are that the petitioner advanced a loan of Rs.10,00,000/- by cash on 01.08.2013 to respondent no.1 through respondent no. 2. The petitioner started asking the respondents to return the amount and finally on 08.10.2017, the respondents agreed to repay the principal amount of Rs.10,00,000/-. In pursuance of the same, respondent no.1 handed over a cheque bearing No.786855 for Rs.10,00,000/- drawn at Syndicate Bank, B.G.M. Sangh Hostel Sheikh Sarai, Phase-1, New Delhi - 110017 to the petitioner. The petitioner deposited the said cheque with his banker on 01.02.2018, which was dishonoured for the reason "account closed".

3. An application under Order XXXVII Rule 3(4) of the CPC was filed by the petitioner for issuance of the summons for judgment on 09.04.2018. Instead of filing application for leave to defend, the respondents filed their reply to the application filed by the petitioner under Order XXXVII Rule 3(4) of the CPC.

4. After hearing both the learned counsel for the parties, the Ld. 'ADJ' found that as per the kacha grocery account maintained by the petitioner, there is an entry of advancing Rs.10,00,000/- to Respondent No. 2 on 01.08.2013, which was to be paid back on 01.11.2013. The Ld. 'ADJ' observed that the suit has been filed on 24.02.2018 whereas the limitation of three years to file the suit expired on 31.10.2016. The Ld. 'ADJ' noticed that the respondents have disputed the payment receipt and the issuance of the cheque being a security cheque. Finding a triable issue C.R.P.37/2019 & C.M.No.6334/2019 Page 2 of 8 indicating reasonable defence, the Ld. 'ADJ' granted them an unconditional leave to defend.

5. The Ld. counsel for the petitioner contended that since no application for leave to defend was filed by the respondents, there was no occasion for the Trial Court to grant an unconditional leave to defend to the respondents. He emphasized that rather the suit of the petitioner should have been decreed by the Trial Court for not filing any application for leave to defend.

6. During the course of arguments, this Court asked the learned counsel for the petitioner as to how the suit for recovery could have been filed after the expiry of the period of limitation (i.e. three years) and why this Court should not exercise its power under Section 115 of the CPC to dismiss the suit being barred by time in light of the Ld. ADJ's failure to exercise the jurisdiction vested in her by not dismissing the suit in view of the admitted facts. She addressed her arguments on 20.02.2019 and relied upon the judgment of this Court in IFCI Factors Limited Vs. Maven Industries Limited & Ors. 2015 SCC Online Del 13519; and the two judgments of the Bombay High Court in Rajesh Laxmichand Udeshi @ Bhatia Vs. Pravin Hirala Shah 2013 AIR CC 1178 and Mour Marbles Industries Private Limited Vs. Motilal Laxmichand Salecha HUF & Ors. (2018) 4 Bom CR 777.

7. I have heard the learned counsel for the petitioner.

8. This Court in Rajinder Valecha & Anr. Vs. Satpal & Anr., in RFA No.590/2016, decided on 2nd of February 2018 has dealt with the implications of Section 18 of the Limitation Act, 1963 in light of the judgment of the Hon'ble Supreme Court in J.C. Budh Raj case Vs. Chairman Orissa Mining Corporation Ltd. 2008 (2) SCC 444 and Section 19 of the Limitation Act, 1963. Paras 7,8,9,10 and 11 of the judgment reads as under :-

"7. Learned ADJ found that admittedly the receipts filed by the appellants mentioned the date of transactions of loan from time to time starts from 06.11.2003 till 25.02.2009. As per these receipts, the last payment of Rs.1 lac was made on 25.02.2009 leaving a balance outstanding amount of Rs.15,00,000/-. The respondents have allegedly signed the balance confirmation of Rs.15,00,000/- on 25.02.2009 but the respondents have denied having executed these receipts and documents. The learned ADJ observed even if for the sake of arguments, it is presumed that respondent No.1 has acknowledged outstanding balance amount of Rs.15 lacs, this being the last acknowledgment allegedly executed on 25.02.2009 and the suit having been filed on 16.02.2016 is barred by time.

8. Here it would be profitable to refer Section 18 of the Limitation Act, 1973 (sic) which reads as under :-

"Section 18 Effect of acknowledgment in writing.--

(1) Where, before the expiration of the prescribed period for a suit of 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 C.R.P.37/2019 & C.M.No.6334/2019 Page 4 of 8 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.

...............................................

9. A bare perusal of the aforesaid provision reflect that the acknowledgment should be executed before the expiry of prescribed period for a suit in respect of any property or right and such acknowledgment of liability in respect of such property or right should be in writing signed by the party against whom such property or right is claimed. If both these requirements are met then a fresh period of limitation shall be computed from time when the acknowledgment was so signed. The Hon'ble Supreme Court in J.C. Budh Raja Vs. Chairman Orissa Mining Corporation Ltd. 2008 (2) SCC 444 has held that acknowledgment of liability under Section 18 of the Limitation Act must be made prior to the expiry of the period of limitation of suit.

10. Here it would also be relevant to refer Section 19 of the Limitation Act, 1963 as the appellants have claimed to have received payment by cash on 06.04.2010 and 13.12.2015 from the respondents. Section 19 of the Limitation Act, 1963 reads as under:-

"Section 19 Effect of payment on account of debt or of interest on legacy.--

Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment."

11. As per this provision where payment is made on account of interest or debt before the expiry of prescribed period of limitation, a fresh period of limitation shall be computed from time to time when the payment was so made. The proviso provides that there should be an acknowledgment of payment in the handwriting of the person making the payment."

9. The loan was allegedly advanced by the petitioner to respondent no.1 for Rs.10,00,000/- in cash on 01.08.2013, which was to be paid back by 01.11.2013. The limitation to recover the loan amount in cases where a date for repayment of the loan amount has been stipulated isn't explicitly provided for in the Limitation Act, 1963. In such a case, it would be relevant to refer to Article 113 of the Limitation Act, which is the residuary clause and provides for limitation in cases where no period of limitation has been provided for in the schedule of the Limitation Act. As per Article 113, period of limitation is three years from the date when the right to sue accrues. In the case at hand, the limitation period, therefore, would run from 01.11.2013, the date on which the loan amount became recoverable and the right to sue accrued.

10. The respondents have allegedly agreed to repay the loan on 08.10.2017, which is not in writing. Additionally, the alleged oral assurance is after the expiry of the period of limitation of C.R.P.37/2019 & C.M.No.6334/2019 Page 6 of 8 three years from the date of repayment of loan i.e. 01.11.2013. Therefore, the alleged promise dated 08.10.2017 to make the payment does not fulfill the requirement of Section 18 of the Limitation Act as neither the alleged promise is in writing nor was it made within the period of limitation i.e. 3 years from the date the loan amount became recoverable.

11. Further, respondent no.1 has allegedly repaid the loan by cheque, which was dishonoured on 01.02.2018. This payment is not made to the petitioner before the expiry of the period of limitation in terms of Section 19 of the Limitation Act. Further, in terms of the proviso of Section 19 of the Limitation Act, 1963, there is no acknowledgement of payment in the handwriting of the respondents who had allegedly made the payment. Therefore, the alleged payment made by cheque does not fulfill the requirement of Section 19 of the Limitation Act as the payment was neither made before the expiry of the limitation of the three years nor was it accompanied by any acknowledgement in writing in the handwriting of the respondents.

12. As discussed above, the present case is governed by Article 113 of the Limitation Act, which stipulates the period of limitation to be three years from the day the cause of action accrues. In the present case, the suit, filed on 24.02.2018, is beyond the prescribed period of limitation. Additionally, as discussed in paras 10 & 11, no case is made out in terms of Section 18 or Section 19 of the Limitation Act to extend the period of C.R.P.37/2019 & C.M.No.6334/2019 Page 7 of 8 limitation beyond the prescribed period of three years. Thus, the Ld. „ADJ‟, instead of granting the leave to defend to the respondents, should have exercised its jurisdiction to reject the plaint under Order VII Rule 11 of the CPC for being barred under the law of limitation.

13. As such, I do not find any merit in the revision petition, which is dismissed along with CM No.6334/2019 with no order as to costs. As a result, the Civil Suit bearing No.192/2018 filed by the petitioner and pending before the Ld. „ADJ‟ stands dismissed with directions that the parties shall bear their own costs.

(VINOD GOEL) JUDGE MARCH 25, 2019 "manjeet"