Delhi High Court
Allahabad Bank vs Shri Sunil Dutt & Ors. on 31 January, 2011
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.43/2001
% 31st January, 2011
ALLAHABAD BANK ...... Appellant
Through: None.
VERSUS
SHRI SUNIL DUTT & ORS. ...... 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. No one appeared for the parties on 19.11.2009 when adverse orders
were deferred in the interest of justice. This matter is on the 'regular
board' of this court since 3.1.2011 and today is effective item no.10. No
one appears for the parties although it is 12.25 pm. I have therefore
perused the record and am proceeding to dispose of the appeal.
2. The facts of the case are that the appellant bank filed a suit for
recovery against the respondents for credit facilities granted, and which
suit was dismissed as barred by time as per the finding on the issue of
RFA 43/2001 Page 1
limitation being issue no.5 and also by holding that certain documents are
forged, which was a finding with respect to issue no.6. I may note that
after holding the suit to be time barred, issues no.2,3 and 7 have not been
decided on merits.
3. The suit was filed on 24.12.1985. It has been held that the suit is
barred by time because the first acknowledgment of debt was dated
30.9.1979 and the second acknowledgement was dated 30.12.1982 i.e.,
beyond the period of three years of execution of the first acknowledgment
of debt. It was held that since the acknowledgement of debt has to form a
chain which has to be within three years of execution of earlier
acknowledgment of debt and therefore the suit has been held to be
barred by time.
Although, the finding of the trial court with respect to requirement
of subsequent acknowledgments to be within the period of limitation
cannot be disputed however, the finding of the trial court that the suit is
barred by time is clearly illegal and perverse. This is for the reason that
the suit which has been filed by the bank is one on the basis of running
account and thus falls under Article 1 of the Limitation Act, 1963. In terms
of Article 1 of the Limitation Act, when a mutual open current account is
maintained, limitation starts from the end of the financial year in which
the last entry is admitted or proved. This aspect has been sufficiently
pronounced upon by various courts including the Supreme Court. In the
present case, the appellant/bank proved its statement of account which
was duly certified under the Bankers Books Evidence Act, 1891 as
RFA 43/2001 Page 2
Ext.PW3/2. The last entry in the account is on 12.12.1985, and which is a
debit entry with respect to interest for the period from 1.10.1982 to
30.9.1985. There are also other entries of interest another one of which is
dated 8.10.1982. Interest is an entry which can be said to be an entry
which is proved in terms of Article 1 of the Limitation Act because a bank
is surely entitled to claim contractual interest with respect to credit
facilities granted. If we take the last entry of interest of December, 1985,
the suit which was filed on 24.12.1985 therefore is within limitation. Even
when we take the other earlier entry of interest dated 8.10.1982, the
limitation as per Article 1 would begin on 1.4.1983 and therefore the suit
could have been filed till 31.3.1986, whereas the suit has been filed on
24.12.1985. The suit is therefore clearly within limitation and the finding
of the trial court that the suit is barred by time while dealing with issue
no.5 is therefore clearly illegal and perverse and is set aside. I have also
noted above that the trial court has failed to discuss anything on merits
while dealing with issue nos. 2,3 and 7 on the ground that the suit has
been barred by limitation. This finding is also against the provision of
Order 14 Rule 2 CPC which requires that there should be a finding on all
issues. These findings are also set aside.
4. The suit has been dismissed also as per decision on issue no.6
because the appellant did not file replication which specifically denied the
allegations of alleged forgery made in the written statement with respect
to certain bank documents. Since I have already set aside the impugned
judgment and decree on the ground of limitation, it would be appropriate
RFA 43/2001 Page 3
therefore that this issue be also decided afresh. Mere non-traverse
cannot mean that a significant issue pertaining to forgery can be decided
on such basis, once the evidence was led. The finding on this issue is also
therefore set aside.
5. In view of the above, the impugned judgment and decree dated
4.11.2000 is set aside and the matter is remanded back to the trial court
for a fresh decision in accordance with law. The trial court will proceed
with the matter from the stage of final arguments. The appeal is
accordingly disposed of by remanding the same to the trial court. Trial
court record be sent back.
JANUARY 31, 2011 VALMIKI J. MEHTA, J.
ib
RFA 43/2001 Page 4
