Delhi State Industrial ... vs Shri Prakash Sethi And Anr.
2007 Latest Caselaw 172 Del

JUDGMENT

Swatanter Kumar, J.

1. The appellant, Delhi State Industrial Development Corporation has questioned the correctness of the judgment and decree passed by the learned Additional District Judge, Delhi, dated 24.5.1982 in Suit No. 143/1980 with a further prayer that the suit of the appellant be decreed in terms of the prayer made in the plaint. This appeal which was filed on 12.8.1983 had been on the 'Regular Board' of the Court for a considerable time and when it came up for hearing on 11.1.2007, the court passed the following order:

This appeal was listed for hearing yesterday on which date nobody was present on behalf of the respondent and at the request of the counsel appearing for the appellant, the case was adjourned for today. Even today, nobody is present on behalf of the respondent. The respondent has not been appearing in this case for quite some time though he had been served earlier in accordance with law. We direct the respondent to be proceeded against ex parte in the present appeal.

Ex parte arguments heard. Order reserved.

2. The only question involved in the present appeal relates to the application of the provisions of Section 19 of the Limitation Act, in regard to the acknowledgment of debt. The Corporation filed a suit for recovery of Rs. 34,000/-. It is stated that the defendant No. 1 in the suit approached and requested the Corporation for grant of loan of Rs. 10,000/- for running his industry. The loan was granted in terms of the agreement and indemnity bond dated 1.4.1975. The said party was also granted loan for an additional sum of Rs. 10,000/- on different occasions and lastly on 28.6.1975. The defendants in the suit paid a sum of Rs. 1525/- on 19.12.1975 and another sum of Rs. 968/- on 24.6.78. Thereafter, he defaulted. The other defendant was the guarantor and as per the accounts maintained by the Corporation, a sum of Rs. 34,000/- was the balance which was claimed by the Corporation in the suit.

3. The defendants had raised preliminary objections including that the suit was barred by time and stated that the loan was taken for purchase of machinery which was hypothecated to them and according to them no amount was due and the claim of the plaintiff was false. On pleadings of the parties, the learned Trial Court framed the following issues:

1. Whether the suit has been signed, verified and filed by a duly authorised person? OPP

2. Whether the suit of the plaintiff is barred by time? OPD

3. Whether there is no privity of contract between the plaintiff and defendants? If so, to what effect? OPD

4. To what amount, if any, the plaintiff is entitled? OPP

5. Whether the plaintiff is entitled to interest? If so, at what rate and for what period? OPP

6. Relief.

4. While answering issues No. 1 and 3 in favor of the plaintiff/against the defendants, the learned Trial Court partly decreed the suit of the plaintif for recovery of Rs. 14,507/- with proportionate costs and interest @ 16% per annum till realisation.

5. Except Issue No. 2, no other issues require any discussion, as the appellant before us is aggrieved from the findings recorded by the learned Trial Court upon that issue. The issue relates to the plea of limitation. The learned Trial Court holding that exhibit P4 does not amount to acknowledgment would render the claim of the appellant partially barred by time. While relying upon the judgment in the case of Ar. Ramanathan Chettiar and Ors. v. V.K.M.O.N.M. Sonasunderan Chettiar , the Court held that if a debt becomes barred by applying the three years rule of limitation contained in Article 115, subsequent acknowledgment or any suspension of any cause of action by the Statute will not have the effect of reviving the date. In the present case, the loan was admitted and the defendants in the suit had not proved by any evidence on record, the complete discharge of debt. The Court held that the loan extended on 1.4.1975 was barred by time.

6. It will be necessary to refer to the documents which are relied upon by the appellants for the purposes of claiming acknowledgment of debt. The appellant had served a notice upon the respondents claiming that the entire loan amount which was disbursed in terms of the agreement dated 9.4.1974 and 27.6.1974 for the purchase of machinery and the loan was repayable in Installments w.e.f. 1.4.1975 to 1.4.1977 and 16.6.1975 to 15.6.1977 respectively claiming a total sum of Rs. 42,270/-. This notice was replied to vide letter dated 14.3.1977 which reads as under:

We have for acknowledgment registered notice of your Advocate Sh. Anil K. Kher, of the 22nd Ultimo, actually registered letter posted on 8th March vide Registration No. 1807 received by us on 9th instant and have noted the contents. As you are aware Sir, that again on 19th Feburayr, 1977 there has been a fire incidence in my factory destroying entire stock of finished products, raw materials, electrical fittings and office furniture etc. and the loss is estimated over Rs. 30,000/-.

Under the present circumstances we are not in a position to pay immediately the loan. However, we shall try to repay something on getting claims from the Insurance Company. We very much are onliged (sic) for timely assistance in every respect given to us from time to time. Keeping in view the hardship being suffered in the event of fire incidence, you will kindly bear with us and allow us to repay the loan to some extent on getting the claim amount from the Insurance Co.

Thanking you in anticipation Yours faithfully for PRAKASH Chemical INDUSTRIES. (P. Sethi.)

7. Another letter of the appellant was replied to by the respondents/defendants in the suit vide their letter dated 22.8.1977. The relevant part of the said letter reads as under:

We may also write for your sympathetic consideration that the undersigned had a HEART ATTACK on 7th-8th July night and was admitted in G.B. Pant Hospital for treatment (medical certificate attached for your perusal). Keeping in view the circumstances explained above, we at present not at all in a position to repay the loan. When DSIDC has given us financial aid for the repair/construction of the shed. It will take some time when we go into production of other product that the one we were manufacturing earlier and are able to pay you the Installments. We trust you will please consider our request on humantarian grounds and oblige.

Thanking you, Yours faithfully, for PRAKASH Chemical INDUSTRIES.

8. A bare reading of the above two letters show that the facts like taking of loan for machinery, inability to repay timely because of a fire incident in the factory destroying the stock and machinery and assuring the repayment of the amounts, the details of which were given in the notice are completely admitted. The respondents also appreciated the grant of financial aid for repairing the shed, machinery etc. and unequivocal commitment to repay the debt (in Installments). The acknowledgment has to be read in conjunction with the notices and letters written by the appellant. The financial assistance was granted in terms of the documents executed on 4.1.1975 which was disbursed subsequently, including the letter dated 28.7.1975. The letters were executed in the year 1977 within the period of limitation. The ingredients of acceptance of liability, assurance to repay the debt were unambiguously stated in those letters. The suit was instituted in the year 1980 within the period of limitation/extended limitation. We are not able to accept the reasoning given by the learned Trial Court for rejecting the case of the appellant on the ground of limitation. It was a cumulative amount of loan which was disbursed on different dates and Installments for both the loans as stated in the plaint and the notice was payable between 1975 to 1977. There is no dispute to the fact that the respondents in the appeal had failed to repay the said amount despite notice and their own assurance given to the plaintiff. The essentials of acknowledgment are completely satisfied in the present case. In the case of Sant Lal Mahton v. Kamla Prasad , the Supreme Court clearly stated the principle that it is not necessary that writing and acknowledging the payment must be simultaneous with the payment. It could be at a different time. The acknowledgment is to be signed by the debtor or his authorised person. In the present case, letters of acknowledgment have been signed by the debtor himself. In these letters they have clearly admitted that payments were made by them towards discharge of their debt, but they could not fully and finally discharge their liability. The payment was made even on 7.2.1975. The cumulative effect of the letters of acknowledgment and the payments received by the appellant from time to time clearly shows that the suit of the plaintiff could not have been dismissed by the learned Trial Court on the grounds of limitation.

9. All the other issues have already been answered in favor of the appellant. While answering the issue of limitation also in favor of the plaintiff, we set aside the judgment and decree passed by the learned Trial Court to that extent and decree the suit of the plaintiff for the prayed amount.

Relief:

10. Consequently, we decree the suit of the plaintiff for a sum of Rs. 34,000/- with interest, however, at the same rate as has been awarded by the learned Trial Court i.e. @ 16% per annum from the date of filing of the suit till realisation. In the facts and circumstances of the case, we leave the parties to bear their own costs of the appeal.