Anil Kumar Sunil Kumar vs Asha Rastogi
2011 Latest Caselaw 5527 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA 594/2002

%                                                 17th November, 2011

         ANIL KUMAR SUNIL KUMAR                             ..... Appellant
                        Through :     Mr. Ateev Mathur, Mr. Kanishk
                                      Ahuja and Mr. S. Anand, Advocates.
                    versus

         ASHA RASTOGI                                  ..... Respondent

Through : Ms. Rachna Agrawal and Ms. Payal Jain, Advocates.

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. The challenge by means of this Regular First Appeal filed under

Section 96 of Code of Civil Procedure, ('CPC') is to the impugned

judgment of the trial Court dated 28th May, 2002. By the impugned

judgment, the suit for recovery of loan granted with interest was

dismissed, though, the appellant/plaintiff proved the claim of loan and

interest, inasmuch as the trial Court held that the suit was barred by

limitation and also because the provision of Section 69 of the

Partnership Act, 1932 was held to be not complied with.

2. The facts of the case are that the appellant/partnership firm gave

a loan to the respondent/defendant of Rs. 5 lakhs by means of a

cheque dated 25th November, 1989. The loan was to carry interest

@12% per annum simple. There was no specific period fixed for the

loan, and it is pleaded that the respondent/defendant from time to

time only postponed payment of loan but made various payments

towards interest. The plaintiff was forced to serve a legal notice dated

21st April, 1994, which failed to invoke the desired response. The

subject suit thus came to be filed.

3. In the written statement, the respondent/defendant did not deny

receipt of the loan but however claimed that it was agreed that no

interest was payable. It was also contended, at the time of final

arguments in the suit, though there was no such issue, that the suit

was barred by limitation.

4. There are three main issues, therefore, to be decided in the

present appeal. One is as to whether the suit is barred by limitation.

The second issue is as to whether the suit is barred by Section 69 of

the Partnership Act, 1932. The third issue is as to whether there was

any agreement to pay interest.

5. So far as, the second issue of the suit being barred under Section

69 of the Partnership Act, 1932 the Trial Court has held that though,

the appellant/plaintiff filed an exhibited, proof of registration of the

firm under Section 69 of the Partnership Act, 1932 by virtue of Form B

Ex.PW1/1, however, there was no Form A which was filed which

showed that Sh. Anil Kumar Jain, the partner of the appellant/plaintiff

firm through whom the suit was filed, was a partner in the firm.

6. Along with this appeal, the appellant has filed an application

under Order 41 Rule 27 CPC for taking on record the certified copy of

Form A to show that Sh. Anil Kumar Jain was the partner in the firm.

7. In my opinion, the present is a fit case in the interest of justice to

allow the application under Order 41 Rule 27 CPC inasmuch as

otherwise it was proved that the firm was registered. Infact, additional

evidence is also required for this Court to have clarity on the issue as

to whether Sh Anil Kumar Jain was shown or not shown as a partner in

the firm which was otherwise registered under Section 69 of the

Partnership Act, 1932. Therefore, I allow the application under Order

41 Rule 27 CPC being C.M. No. 1474/2002 and take on record the

certified copy of Form A which shows that Mr. Anil Kumar Jain was a

partner in the firm. This document is a public document and therefore

the same need not be proved.

8. The finding of the trial Court is accordingly set aside that the suit

is barred by Section 69 of the Partnership Act, 1932 and it is held that

Sh. Anil Kumar Jain was a partner in the firm and through whom the

suit is thus properly filed/instituted.

9. Thus, next issue is the first issue as to whether the suit was

barred by limitation. The trial Court has referred to Article 19 of the

Limitation Act, 1963 to hold the suit as barred by limitation because it

was held that the suit for recovery of loan has to be filed within three

years from the date when the loan is granted. In my opinion, this

finding of the trial Court is also incorrect inasmuch as it is not that in all

cases of loan the suit has to be filed within three years of grant of the

loan inasmuch as a loan can be given for more than three years and

therefore it cannot be urged that suit for recovery of loan has

necessarily to be filed only within three years. What has to be seen

are the facts and circumstances of each case as to the period for which

the loan is granted. In the present case, it has come on record that the

loan was not granted for any fixed period, and therefore, recovery of

such loans would fall under Article 113 of the Limitation Act, 1963

because cause of action for such loan arises when the cause of action

accrues and the cause of action accrues when a demand for payment

is made.

10. In the present case, a legal notice of demand was sent on 21st

April, 1994 and the suit was filed on 15th February, 1996. The suit is

therefore filed within three years of the demand having been made.

The suit has therefore very much been filed within limitation. In any

case, the suit is not barred by limitation because the

respondent/defendant has made payments towards the debt/interest

and which is an acknowledgment in terms of Section 19 of the

Limitation Act. The appellant/plaintiff exhibited the statement of

account as Ex.PW1/10 in the trial Court, and which statement of

account shows various entries from the years 1991 to 1995. All these

entries are payments by cheques by the respondent towards the debt

due/interest. There is no cross-examination on any entry of the

statement of account by the respondent/defendant and therefore I hold

that the suit is within limitation also on account of the payments

having been made towards the amount due by means of cheques as

reflected in the statement of account, Ex.PW1/10.

11. The final issue is as to whether the respondent/defendant agreed

to pay interest. No doubt there is no written agreement, however,

admittedly the parties are not in such close relations, such as father

and son or in-laws or very close friends, that the loan would not have

carried interest. The appellant plaintiff has deposed that interest was

infact payable. A civil case is decided on balance of probabilities and

balance of probabilities show that there was an agreement to pay

interest, which in any case is most reasonable @12% per annum

simple. I, therefore, hold that there was an agreement to pay interest

@ 12% per annum simple.

12. Finally, it is also argued by learned counsel for the respondent

that the payments which were made as have been reflected in the

statement of account, are infact towards the principal amount. When

asked whether the respondent/defendant while making the payment

had said that the amount paid should first be taken towards principal,

learned counsel for the respondent/defendant was unable to point out

and nor is there any such letter on the trial Court record that the

payments made will be first taken towards principal amount. Ordinarily

in law, as per the provisions of Sections 59 to 61 of the Contract Act,

1872, unless otherwise specified, payments which are made by a

debtor to a creditor can be taken by the creditor towards accrued

interest and only when the accrued interest is exhausted would the

payments be taken towards the principal due. I thus hold that the

appellant is entitled to adjust the payment first towards the accrued

interest. Reference in this behalf is also invited to the judgment of the

Supreme Court in the case of Gurpreet Singh v. Union of India

2006(8)SCC457.

13. I, therefore, hold that the respondent/defendant was liable to pay

interest @12% per annum.

14. Before proceeding to pass the operative portion of this appeal I

must note that there was a part decree on admissions against the

respondent/defendant for an amount of Rs.1,15,000/-, and which

amount has been paid to the appellant/plaintiff during the pendency of

the suit. Accordingly, while passing a decree for a sum of Rs.4,99,000/-

along with pendente lite and future interest @ 12% per annum simple,

it is also observed that the appellant/plaintiff will be bound to give

adjustment of the amount paid of Rs.1,15,000/- by adjusting it against

the total amount of principal and interest due on the date when the

payment was made by the respondent/defendant by first adjusting the

payment towards accrued interest if any. It is informed that the

amount of Rs.1,15,000/- has been paid in installments and therefore

when each installment was paid, the same will be adjusted towards the

total amount due on that date from the respondent/defendant in terms

of the present judgment and decree. Appeal is allowed. Impugned

judgment is set aside. Parties are left to bear their own costs. Decree

sheet be prepared. Trial Court record be sent back.

VALMIKI J. MEHTA, J.

NOVEMBER 17, 2011/AK