Ram Gupta vs Icici Bank Limited
2012 Latest Caselaw 4950 Del

       *      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                        Judgment delivered on: 23.08.2012

+      CS(OS) 101/2010 & IA No. 13884/2011, 4363/2011, IA No.18843/2011,
       18844/2011 and 788/2010

       RAM GUPTA                                                   ..... Plaintiff
                             Through:    Mr. Manish Raghav and Mr. Nikhil Singh,
                                         Advocates

                    versus


    ICICI BANK LIMITED                             ..... Defendant
                   Through: Mr. Rishi Kapoor and Mr. Mukesh Kumar,
                   Advocates
CORAM:
HON'BLE MR. JUSTICE V.K.JAIN

                             JUDGMENT

V.K.JAIN, J. (ORAL)

1. This is a suit for declaration. It is alleged in the plaint that in mid, 2006, the

plaintiff, who had earlier obtained a Housing Loan from Punjab National Bank,

required home loan for completing construction of his house and for taking over

the home loan, which he had taken from Punjab National Bank. It is further alleged

in para 4.5 of the plaint that on 29.06.2009, defendant agreed to grant home loan

and agreed to sanction a total loan of Rs.74,87,746/-. It is alleged that though the

parties had agreed to grant of Home Loan but what was granted to the plaintiff was

Home Equity Loan or Loan against Property (LAP) at floating interest of 11% per

annum, instead of Home Loan which was to be granted at floating interest of

8.25% PA. An agreement to that effect was entered between the plaintiff and

defendant bank, at Green Park Branch, New Delhi and the EMI to be paid under

this loan agreement was Rs.85,106/- per month for a period of 15 years. It is further

alleged that on 3.7.2006, the defendant bank made disbursement from the loan

account of the plaintiff mentioned in para 4.6 of the plaint. On 4.7.2006, the

plaintiff received a copy of the agreement from the defendants and pointed out that

Home Equity was not Home Loan, as agreed between the parties and requested the

defendant through its agent to make necessary correction in the documents and

adjust the rate of interest. It is further alleged that on 10.7.2006, the plaintiff paid

Rs.13,540/- as interest on advance as he was assured that the loan will be changed

into Home Loan from Home Equity. It has been alleged in para 4.9 of the plaint

that on 10.8.2006, EMI on the loan taken became due for period of 10.7.2006 to

9.8.2006 to be paid by the plaintiff. The plaintiff however, did not make the

payments under protest for the EMI for month of July since his loan was not

converted to Home Loan and correct EMI was not re-determined. The plaintiff has

sought declaration that the loan taken by him from the defendants was a Home

Loan and not a Home Equity Loan. He has also sought injunction directing the

defendants to charge interest as applicable to Home Loan.

2. IA 4363/2011 is an application filed by the defendant under Order 7 Rule 11

of the Code of Civil Procedure for rejection of the plaint on the ground that the suit

is barred by limitation.

3. The suits for declaration are governed by Article 56 and 58 of the Limitation

Act. Articles 56 and 57 deals with specific declaration which are not applicable in

this case. Article 58 deals with other declarations not covered by Article 56 & 57

and the period of limitation prescribed thereunder is three years from the date when

the right to sue first accrues. This is plaintiff's own case that copy of the agreement

was received by him on 4.7.2006 wherefrom he discovered that the agreement was

for Home Equity and not for Home Loan. This is also the case of the plaintiff that

on 10.8.2006 the EMI for the period from 10.7.2006 to 9.8.2006 became payable

but he did not make payment since the loan had not been converted into Home

Loan and correct EMI had not been determined. Thus, the right to sue first accrued

to the plaintiff on 4.7.2006. In case the agreement between the parties was not for

grant of Home Loan, attracted floating interest @ 8.25% per annum and not 11%

per annum, he could have come to the Court the moment he received the copy of

the agreement and came to know that the interest rate mentioned in the agreement

was not as per his first settlement with the defendant. The suit having been filed on

16.01.2010 is, therefore, clearly barred by limitation.

4. Article 58 of the Limitation Act, 1965 came up for consideration before the

Supreme court in Khatri Hotels Pvt. Ltd. and another vs. Union of India and another

[2011 (9) SCC 126]. The Apex Court in that case, noted that while enacting Article 58 of

1963 Act, the legislature designedly had made a departure from the language of Article

120 of 1905 Act which provided the limitation of six years from the date when the right

to sue accrues. The Apex Court held that if a suit is based on legal cause of action, the

period of limitation will begin to run from the date when the right to sue first accrues and

that successive violation of the right will not give rise to a fresh cause of action and the

suit will be liable to be dismissed, if it is beyond the period of limitation, counted from

the date when the right to sue first accrued.

5. The learned counsel for the plaintiff contended that on 12.9.09, the defendant

had sent a fresh letter whereby they carried out corrections in the nomenclature of

the loan, though the interest rate was not changed. In my view, a fresh sanction

letter alleged to have been executed on 12.3.2009 does not save the limitation since

Article 58 of the Limitation Act prescribes limitation period of three years from the

date when the right to sue first accrues. If the right to sue accrues again, on account

of some further developments, that does not extend the period of limitation in a suit

for declaration of this nature. The period of limitation, once it begins to run in

terms of Article 58 of the Limitation Act, does not get extended on account of such

further developments. Therefore, the suit for declaration is barred by limitation

being beyond the period prescribed in Article 58 of the Limitation Act.

6. The plaintiff has also sought a mandatory injunction for directions to the

defendant to charge interest rate as applicable under home loans. No such relief can

be granted to the plaintiff without grant of declaration. In any case, even with

respect to mandatory injunction, the right to sue accrued to the plaintiff when he

got a copy of the agreement stipulating higher rate of interest.

For the reasons stated hereinabove, the plaint is rejected. The suit as well as

all pending IAs stand disposed of.

V.K.JAIN, J AUGUST 23, 2012 RD////