State Bank Of Patiala vs M/S Supreme Bulb Industries And ...
2011 Latest Caselaw 512 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                          RFA No.620/2000

%                                                     28th January, 2011

STATE BANK OF PATIALA                                          ...... Appellant

                                 Through:    None.


                           VERSUS

M/S SUPREME BULB INDUSTRIES AND OTHERS                         ...... Respondents

                       Through:  None
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    1.   Whether the Reporters of local papers may be
         allowed to see the judgment?
    2.   To be referred to the Reporter or not?
    3.   Whether the judgment should be reported in the Digest?

VALMIKI J. MEHTA, J (ORAL)

1.       This case is item no. 22 on the 'Regular Board' of this court since

3.1.2011 and today it is effective no.1. No one is appearing for the parties

and hence after going through the record I am disposing of the appeal.

2.       The challenge by means of the present regular first appeal is to the

impugned judgment and decree dated 18.7.2000 whereby the suit of the

appellant bank was dismissed on the ground that the same is barred by time

although, the appellant bank had otherwise proved the grant of loan,

execution of the documents, creation of equitable mortgage and so on.

3.       The only reason why the trial court dismissed the suit was that the suit

RFA-620-2000                                                             Page 1 of 3
 was time barred because it was filed on 17.8.1988 whereas the loan was

taken on 2.9.1983. It has been held that the acknowledgement of debt is

dated 22.10.1986 i.e., 3 years after the original grant of loan and therefore,

the same has no effect inasmuch as acknowledgment of debt has to be

within a period of limitation which expired on 1.9.1986.

4.    In my opinion, the impugned judgment and decree is clearly illegal and

is bound to be set aside because the suit was a mortgage suit under Order

34 of the CPC and the period of limitation under Article 61 of the Limitation

Act, 1963 with respect to a mortgage suit is 12 years. Clearly, therefore, the

finding of the trial court is illegal and the suit is within limitation. I may also

note that the suit even if, it was required to be filed within three years would

be within limitation because two facilities were sanctioned to the respondent,

the first being a term loan account and the second being a cash credit

facility. With respect to the cash credit facility, the statement of account has

been filed and has been duly proved on record and exhibited . The suit on

the basis of a mutual open and current account under Article 1 of the

Limitation ACtcan be filed within three years from the end of the financial

year, in which, the last of the entry is admitted or proved. In this case, last

of the admitted entry is in the financial year 1987-1988 and therefore, the

suit which was filed on 17.8.1988 was well within limitation. So far as the

term loan is concerned, the limitation commences not on the date of grant of

loan but from the date when default is committed and from which date the


RFA-620-2000                                                              Page 2 of 3
 period of 3 years begins. Looking at the issue therefore from any angle, the

suit was not barred by time.

5.    Accordingly, I accept the appeal and set aside the impugned judgment

and decree. The suit of the appellant/plaintiff /bank is therefore decreed for

a sum of Rs.1,20,727.04 along with pendente lite and future interest till

realization at 14% per annum simple. Decree sheet be prepared. Trial court

record be sent back.




JANUARY 28, 2011                                VALMIKI J. MEHTA, J.

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