Central Bank Of India vs Prakash Digambar Adhao And Ors.
2004 Latest Caselaw 414 Bom

JUDGMENT

S.T. Kharche, J.

1. This appeal is directed against the judgment dated 4-12-1989 passed by the Additional District Judge (Mr. J. H. Bhatia) in Regular Civil Appeal No. 161 of 1989, whereby the appeal was allowed and the suit filed by the respondent/Central Bank of India for recovery of loan amount was dismissed against the appellant/defendant No. 2.

2. Brief facts arc required to be stated as under :

The plaintiff filed a suit for recovery of Rs. 39,131.85 against the defendants on the contentions that the defendant No. 1 borrowed the loan of Rs. 51,000/- for purchase of matador on 22-94979 by executing a deed of hypothecation (Ex.45) on the date day. The defendants No. 2 and 3 stood guarantors to the said loan and had executed a deed of guarantee (Ex.47). The defendant No. 2 is the real brother of defendant No. 1. The loan amount was disbursed to defendant No. 1 who agreed that the repayment would be by way of instalments. He stopped paying the instalments since 1981. On 21-9-1982, the defendants No. 1 and 2 acknowledged the liability and executed fresh documents in favour of the bank. Demand notice was served, but the outstanding amount remained unpaid and, therefore, the bank had filed suit for recovery of the outstanding amount against the defendants.

3. The appellant/defendant No. 2 resisted the claim of the bank by filing his separate written statement specifically pleading that even the name of the Officer who had signed the plaint was not disclosed and therefore the suit was not duly signed by the authorities of the bank. Defendant No. 1 also pleaded that the loan was actually borrowed by defendant No. 2 who is his elder brother and according to him the defendant No. 2 was a medical practitioner and could not obtain the loan for the purchase of matador in his own name and, therefore, he obtained the loan in the name of defendant No. 1 who was educated unemployed. It was contended that defendant No. 1 was not liable to pay the amount and that the defendant No. 2 did not acknowledge the liability by execution of any valid document. On the aforesaid pleadings, the trial Court framed several issues and thereafter the parties had examined the witnesses. The trial Court on consideration of the evidence adduced by the parties and on hearing the learned counsel for the parties, recorded the finding that the defendant No. 1 had borrowed the loan from the bank and negatived the contention of defendant No. 2 that he had signed on the blank printed stamp papers and that the loan amount was borrowed by defendant No. 1 and he did not stand as guarantor. The trial Court also recorded the finding that the liability has been acknowledged by defendants No. 1 and 2 by virtue of the renewed documents dated 21-9-1982 and that the suit was within limitation. Consistent with these findings, the trial Court decreed the suit and directed the defendants No. 1 and 2 to pay the outstanding amount with interest and costs. The defendant No. 2 being aggrieved by the judgment and decree passed by the trial Court carried appeal to the District Court. The learned Additional District Judge by his judgment dated 4-12-1989 allowed the appeal and dismissed the suit with costs against defendant No. 2. This judgment is under challenge in this second appeal.

4. Mr. Sohoni, learned counsel, for the plaintiff/bank contended that the appellate Court did not frame the points for determination in the judgment and has committed an error of law in arriving at the conclusion that the defendant No. 2 did not acknowledge the liability by putting his signatures on the renewed documents dated 21-9-1982. He contended that no issue was framed by the trial Court as to whether the suit is maintainable for want of signature of the authorized Attorney of the Bank and, therefore, it was not open for the appellate Court to consider this issue merely on the basis of the pleadings. He contended that the appellate Court was wrong in its approach in recording the finding that the plaint is not duly signed and verified by the authorized person especially when the said point was not in issue at the trial stage. He contended that the evidence of the defendant No. 2 was not sufficient to draw the conclusion that he has signed on the blank papers when he is a qualified doctor and no specific evidence has been brought on record by him to show that he has signed on the blank stamp papers. He contended that the appellate Court was not justified in dismissing the suit on the ground that the defendant No. 2 had signed on the blank renewal forms and that the suit itself was not maintainable as it was not duly signed and verified by the duly constituted Attorney of the bank. Mr. Sohoni, therefore, contended that the impugned judgment passed by the appellate Court cannot be sustained in law and the appeal may kindly be allowed.

5. Mr. Bapat, learned counsel, for defendant No. 2 contended that it has been specifically pleaded in the written statement by defendant No. 2 that even the name of the Officer who signed the plaint was not disclosed and, therefore, the suit was not duly signed by the duly constituted Attorney of the Bank and the appellate Court was perfectly justified in drawing the conclusion that the plaintiff/bank had examined three of its employees to prove the claim but none of them deposed that who had signed and verified the plaint and, therefore the plaintiff/bank has failed to establish that the plaint was signed and verified by an Officer who was duly constituted attorney of the plaintiff/bank. He contended that the defendant No. 2 had signed the renewal form which was a blank form and, therefore, the appellate Court was perfectly justified in rejecting the contents of the blank form for recording the finding that the defendant No. 2 did not stand guarantor for the repayment of loan borrowed by defendant No. 1. Mr. Bapat, therefore, contended that the appellate Court was perfectly justified in dismissing the suit against the guarantor/defendant No. 2 as the suit was barred by limitation because there was no valid acknowledgment of liability by defendant No. 2 on 21-9-1982. He, therefore, contended that no substantial question of law is involved in this appeal and the same may kindly be dismissed with costs.

6. This Court has given thoughtful consideration to the contentions canvassed by the learned counsel for the parties. It is not in dispute that the defendant No. 1 borrowed the loan amount of Rs. 51,000/- from the plaintiff/bank and executed deed of hypothecation on 22-9-1979 and the loan amount was borrowed for the purchase of the matador. The trial Court recorded the finding that defendant No. 1 had agreed to make the repayment of loan by way of instalments, but did not repay it and consequently acknowledged the liability by execution of the renewal forms dated 21-9-1982 and, therefore, the suit was within limitation. This finding of the trial Court has not been challenged by the borrower/defendant No. 1 by filing any appeal or cross-objections.

7. The defendant No. 2 had also signed the deed of guarantee and he has specifically stated in the cross-examination that "it is true that Exs.44, 45 and 47 bear my signatures and I had signed on behalf of Prakash." Prakash is the borrower and it appears that it is defendant No. 2 who had purchased the stamp papers on which the articles of agreement (Ex.44), deed of hypothecation (Ex.45) and renewal forms (Ex.47) were written. Defendant No. 2 is a doctor by profession, well educated and suppose to know the consequences of his signature and, therefore, it is not possible to accept his contention that he did not sign the guarantee-deed which was executed by the borrower and guarantors on the date when the loan was borrowed by defendant No. 1. Perusal of the articles of agreement would clearly reveal that it is defendant No. 1 who had borrowed the amount of Rs. 51,000/- for the purpose of purchasing the matador and he had signed the document. The loan-cum-hypothecation agreement (Ex.45) has been signed by defendant No. 1 and this is the document by which the vehicle was hypothecated in favour of the bank. The evidence adduced on record by the bank would clearly show that the defendant No. 1 had borrowed the loan amount for the purchase of the matador and agreed to make repayment by way of instalments. It would further reveal that it is the defendant No. 2 who had purchased the stamp papers which were tendered to the bank on which the documents of articles of agreement as well as the document of hypothecation- deed was scribed. However, the original guarantee-deed (Ex.48) also bears the signature of defendant No. 2 who stood guarantor for his own brother Prakash in whose name the loan was obtained on 22-9-1979. It would further reveal that the defendants 1 and 2 had also signed the renewal forms on 21-9-1982 acknowledging the liability and, therefore, the trial Court has recorded the finding that the suit was within limitation. The trial Court negatived the contention of defendant No. 2 that he is not guarantor for the loan amount borrowed by defendant No. 1 and that he did not acknowledge the liability. The trial Court, therefore, rightly answered issue No. 4 in affirmative and held that the suit was perfectly filed within the period of limitation.

8. Though the defendant No. 2 specifically pleaded that even the name of the Officer who had signed the plaint was not disclosed and therefore the suit was not filed by the duly constituted attorney of the bank and hence the suit was not maintainable, no specific issue has been framed by the trial Court on these pleadings. The defendant No. 2 also did not move the trial Court for framing of the said issue in view of this specific pleading and it is obvious that there was no issue framed by the trial Court on this pleading. In such a situation, it was not open for the appellate Court to go into that question for the first time at the appellate stage. The appellate Court was obviously wrong in its approach holding that the plaint was not signed by the duly constituted attorney of the bank and, therefore, the suit is not maintainable.

9. The appellate Court did not frame any point for determination while delivering the judgment and the finding on this point appears to be quite perverse and the reasoning given is obviously fallacious. The appellate Court quite hastily accepted the technical plea of Defendant No. 2, without there being an issue in controversy before the trial Court and without affording opportunity to the parties to adduce evidence on that issue, it was not at all open for the appellate Court to consider this point and, therefore, in the circumstances, it is not possible to accept the contention of the learned counsel for defendant No. 2 that the appellate Court was justified in dismissing the suit of the plaintiff against defendant No. 2 on the ground that the plaint is not duly signed by the constituted attorney of the Bank.

10. It is pertinent to note that defendant No. 2 admits his signature on the renewal form on which his name has been typed and simply because the amount of the loan borrowed by defendant No. 1 was not mentioned in that renewal form, it did not follow that the renewal form will not give any rise to the liability. Defendant No. 2 is doctor by profession and would not sign the blank document without knowing the consequences. The renewal form signed by defendant No. 2 was a valid acknowledgment of the liability under Section 18 of the Limitation Act, 1963 which contemplates that -

"(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 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(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 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 deemed to be an application in respect of any property or right.

11. A reading of explanation (a) would clearly reveal 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 set off or is addressed to a person other than a person entitled to the property or right; and therefore, in the present case though the bank has omitted to mention in the renewal letter the amount of loan borrowed, that by itself would not be sufficient to draw a conclusion that the said renewal letter was not an acknowledgment within the meaning of Section 18 of the Limitation Act. Therefore, it is quite clear that the appellate Court has committed an error in coming to the conclusion that defendant No. 2 was not liable and the suit is liable to be dismissed. What is pertinent to note is that the appellate Court has avoided to frame the points for determination on this specific issue as to whether the suit was within the period of limitation. The trial Court has framed the issue as to whether the suit was within limitation and answered the said issue in the affirmative, but the appellate Court without considering the evidence recorded the finding that the suit is barred by period of limitation and such a casual approach adopted by the appellate Court cannot be sustained in law. In this view of the matter, it is quite obvious that the impugned judgment by which the suit is dismissed has resulted into miscarriage of justice and, therefore, the same is liable to be set aside. In the result, the impugned judgment is set aside and the judgment and decree passed by the trial Court is restored. The appeal is allowed accordingly with costs throughout.