Shri Satish Kumar vs Smt. Reena Bhoumik
2012 Latest Caselaw 2497 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.684/2006

%                                                                18th April, 2012

SHRI SATISH KUMAR                                  ..... Appellant
                               Through :   None.


                      versus

SMT. REENA BHOUMIK                                 ..... Respondent
                 Through :                 None.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?                       Yes.


VALMIKI J. MEHTA, J (ORAL)

1.             This case is on the Regular Board of this Court since

26.3.2012. No one appears for the parties although it is 12.35 P.M. I have

therefore perused the record and am proceeding to dispose of the appeal.

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

under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the

impugned judgment of the trial Court dated 6.10.2006 dismissing the suit

on a preliminary issue by holding that the suit was barred by limitation.

3.             The facts of the case are that the appellant/plaintiff filed the

subject suit for recovery of Rs. 2 lacs alongwith interest @ 18% per annum

RFA No.684/2006                                                       Page 1 of 5
 on account of having given the loan to the respondent/defendant in

November, 1999. The respondent/defendant executed an undertaking dated

15.9.1999    acknowledging      Rs.   2   lacs   as   loan   amount.          The

appellant/plaintiff pleaded that the loan amount was repayable after five

years and since the same was not repaid, the subject suit came to be filed

for recovery of the amount alongwith interest, on 6.10.2005.

4.           Trial Court has dismissed the suit as barred by limitation by

making the following observations:-

     "7.      The case of the plaintiff is that he has advanced a loan of
     `2,00,000/- to the defendant for raising construction over the plot
     bearing no.A-45, Block-A, Utsav Vihar, Karala on execution of
     undertaking on 15.11.1999 and the said loan was to be repaid
     within a period of 5 years. The plaintiff also stated that the said
     undertaking was containing a conditional sale in favour of the
     plaintiff in case the loan is not repaid within a period of 5 years.
     On the other hand, the defendant stated that she has never taken the
     loan of `2,00,000/- on execution of undertaking dated 15.11.1999
     for the purposes of raising construction over the plot in question
     and also denied the execution of any undertaking or handing over
     of the title documents in favour of the plaintiff. The plaintiff in the
     present case has claimed recovery of ` 4,10,000/- which includes `
     2,00,000/- as principal amount and interest thereon @ 18% p.a.
     alongwith relief of permanent injunction.

     8.      Sh. Rajneesh Vats, ld. counsel for the defendant argued
     that the suit is barred by limitation in view of Article 19 of the
     schedule attached to the Limitation Act, 1963. Sh. Vats, further
     argued that if it is assumed that the undertaking dated 15.11.1999
     is a bond even then the suit is barred in view of Article 29 of the
     Limitation Act as no date is specified for the payment. On the
     other hand, Sh. Amarjeet Rai, counsel for the plaintiff argued that
     the undertaking dated 15.11.1999 is a promissory note and the
RFA No.684/2006                                                 Page 2 of 5
     cause of action for filing the suit has accrued after the expiry of
    period of 5 years from the date of advancement of loan. Sh. Rai
    further argued that the plaintiff did not file the suit earlier as it
    would have been a pre-mature suit. Sh. Rai argued that the suit is
    within the period of limitation.

    9.      I am not in agreement with the argument advanced by Sh.
    Amarjeet Rai, counsel for the plaintiff that the cause of action has
    accrued in favour of the plaintiff when the defendant failed to
    repay the loan after the expiry of period of limitation. The period
    of limitation cannot extended by mutual agreement of the parties.
    The period of limitation can be extended as per the provisions
    contained in the Limitation Act, 1963, particularly from section 4
    to 24.

    10.      As per the claim of the plaintiff, the loan was advanced on
    15.11.1999 on execution of undertaking. By said undertaking, the
    defendant allegedly undertook to repay the entire loan amount
    within 5 years alongwith interest @ 18% p.a. The actual date of
    repayment of loan is not mentioned in undertaking dated
    15.11.1999. If the suit is presumed to be a suit for recovery of loan
    amount then the period of limitation will start from the date of
    advancement of loan as per Article 19, for which the period of
    limitation is prescribed as 3 years when the loan is made. The loan
    was advanced on 15.11.1999 while the present suit was filed on
    06.10.2005 i.e. after the expiry of period of 3 years. If the
    undertaking dated 15.11.1999 is taken as a bond even then in view
    of Article 29, the period of limitation is prescribed as 3 years from
    the date of execution of the bond when the date is not specified in
    the bond. In the undertaking no date is specified for the return of
    loan.

    11.      The suit is covered by Article 19. In view of my above
    discussion, I am of the opinion that the plaintiff should have filed
    the suit within the period of 3 years from 15.11.1999 i.e. from the
    date of advancement of loan. The suit has not been filed within the
    period of limitation. The suit is barred by limitation. The suit is
    dismissed. No order as to costs. The decree sheet be prepared
    accordingly. File be consigned to record room."
                                             (underlining added)
RFA No.684/2006                                               Page 3 of 5
 5.           A reading of the aforesaid paras shows that the trial Court has

held that period of limitation of every loan granted is three years and the

suit has to be filed under Article 19 within three years of the loan being

granted. This reasoning of the trial Court is ex facie incorrect because loan

can be granted to be repayable after a particular period of time of, let us say

one year, two years, three years and so on. Limitation to recover the loan

on the cause of action will arise on the date when the loan is not repaid i.e.

not from the date of grant of the loan but after one year or two years or

three years of grant of loan when cause of action will arise to file the suit

for recovery of amount. The period of limitation will be three years from

the date of default i.e. the date when the loan ought to have been repaid but

is not repaid. Such suits for recovery of loan granted will not be governed

by Article 19 of the Limitation Act, 1963, and in fact will be governed by

Article 113 of the Limitation Act, 1963 which states that a suit has to be

filed within three years from arising of cause of action.

6.           In view of the above, the suit is held within limitation

inasmuch as the loan was repayable after five years from 15.11.1999 and

therefore cause of action begins from 15.11.2004. The suit was filed on

6.10.2005 and therefore cannot be said to be barred by limitation.

7.           In view of the above, the appeal is accepted.           Impugned
RFA No.684/2006                                                 Page 4 of 5
 judgment dated 6.10.2006 is set aside. Trial Court will now hear and

dispose of the suit in accordance with law. Trial Court record be sent back.




                                          VALMIKI J. MEHTA, J.

APRIL 18, 2012 Ne