Rashtriya Mahila Kosh vs Society For Rural Development & ...
2012 Latest Caselaw 5610 Del

                IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment delivered on : September 18, 2012
+      CS(OS) No. 445/2004

       RASHTRIYA MAHILA KOSH                                           ..... Plaintiff
                   Through: Mr. Ankur Goel, Adv.

                    versus



       SOCIETY FOR RURAL DEVELOPMENT & ANR.                              ..... Defendants

                             Through:    None.

CORAM:
HON'BLE MR. JUSTICE V.K.JAIN

                             JUDGMENT

V.K.JAIN, J. (ORAL)

1. This is a suit for recovery of Rs.34,92,475/-. The plaintiff is a registered society

controlled by Department of Women and Child Development, Ministry of Human

Resources Development, Government of India and one of its activities is to advance loan

to the poor women through Non-Governmental Organizations(NGOs). Defendant No.1 is

a registered society and defendant No.2 is its Secretary-cum-Executive Director.

Defendant No.1 society was sanctioned a loan of Rs.10 lakhs under Main Loan Scheme

of the plaintiff Society. Pursuant to sanction of loan, defendant No.1 through defendant

No.2 executed various documents including Memorandum of Agreement, Guarantee

Letter and demand promissory note in favour of the plaintiff, on the basis of a resolution

passed by defendant No.1. Defendant No.2 stood as guarantor for repayment of loan

advanced to defendant No.1. The loan extended to defendant No.1 was to carry interest at

the rate of 8% per annum. It was also stipulated in the sanction that in case of default in

repayment of loan, penal interest would be charged by the plaintiff, at the rate of 8% per

annum.

It is alleged that the plaintiff disbursed Rs.5 lakhs to defendant No.1 vide

disbursement advice dated 08.11.1995 and another Rs.5 lakhs vide disbursement advice

dated 26.02.1996. The payment was made vide two separate demand drafts one dated

08.11.1995 and the other dated 26.02.1996. Thereafter, defendant No.1 again approached

the plaintiff No.2 for grant of additional loan and was sanctioned a repeat loan of Rs.30

lakhs vide sanction letter dated 27.08.1996, out of which Rs.25 lakhs was sanctioned as

short-term loan and Rs. 5 lakh as Medium Term Loan. Defendant No.1 through

defendant No.2 executed a Memorandum of Agreement dated 14.09.1996 and defendant

No.2 stood as guarantor for defendant No.1 in favour of the plaintiff. The interest agreed

between the parties was the same as was agreed at the time of the first loan. The plaintiff

disbursed Rs.15 lakhs vide two demand drafts dated 18.11.1996. It is alleged in the

plaint that the defendant became irregular in making payment of the loan taken by it and,

therefore, the second instalment of the second loan was not disbursed by the plaintiff. A

sum of Rs.16,66,680/- is stated to be due from the defendants towards principal sum of

Rs.18,25,795/- towards interest and penal interest upto 31.12.2003, thereby making a total

sum of Rs.34,92,475/-.

3. Vide order dated November, 24, 2005, the suit was treated as an ordinary suit and

the suit summons were issued to the defendants accordingly. Since the defendants did not

appear despite service, they were proceeded ex-parte vide order dated 25th August, 2008.

The plaintiff has filed the affidavit of.K.V.R.Murthy, Deputy Director, by way of

evidence. In his affidavit, Mr.K.V.R.Murthy, has supported on oath the case set out in

the plaint and has proved various documents filed by the plaintiff. He has stated that

defendant No.1 was sanctioned a loan of Rs.10 lakhs vide sanction letter dated

25.08.1995 and the said amount was disbursed in two instalments of Rs.5 lakhs each. He

has further stated that a repeat loan of Rs.30 lakhs was also sanctioned to the defendant

vide sanction letter dated 27.08.1996 and out of that amount, a sum of Rs.15 lakhs was

disbursed of to the defendant on 18.11.1996. He has further stated that the amount

advanced by the plaintiff and the interest accrued thereon was duly debited in the account

of defendant No.1 and the amount received from the defendant No.1 was also duly

credited in that account which the plaintiff was maintaining in the regular course of its

business.

4. Ex.PW-1/5 is the sanction letter dated 25.08.1995 whereby financial assistance of

Rs.10 lakhs was sanctioned to defendant No.1. The rate of interest stipulated in the

sanction letter was 8% per annum. One of the special conditions stipulated in Annexure

II to the sanction letter provided for payment of penal interest at the rate of 8% per annum

in case of any delay in refund of the amount taken from the plaintiff. Ex.PW-1/6 is the

agreement executed by defendant No.1 with the plaintiff through defendant No.2 who is

its Secretary-cum-Executive Director. Ex.PW-1/7 is the guarantee letter executed by

defendant No.2 whereby he stood as guarantor for the loan extended by the plaintiff to

defendant No.1 and he became liable jointly with defendant No.1 for repayment of the

loan taken from the plaintiff society. Ex.PW-1/9 is the demand promissory note of Rs.5

lakhs executed by defendant No.2 on behalf of defendant No1, in favour of the plaintiff

society. Ex.PW-1/10 is the disbursement advice whereby Rs.5 lakhs were released to

defendant No.1 and Ex.PW-1/12 is the receipt acknowledging payment of Rs.5 lakhs

from the plaintiff vide demand draft dated 26.02.1996. Ex.PW-1/13 is the second

disbursement advice dated 08.11.1995. Ex.PW-1/15 is the receipt of payment of

Rs.5 lakhs by defendant No.1 by a demand draft dated 26th February, 1996 and this

receipt was submitted with forwarding letter Ex.PW-1/14. Ex.PW-1/8 is the second

Memorandum of Agreement between the parties. Ex.PW-1/20 is the demand promissory

note of Rs.5 lakhs executed by defendant No.2 on behalf of the defendant No.1 in favour

of the plaintiff whereas Ex.PW-1/19 is the second guarantee letter executed by defendant

No.2 in favour of the plaintiff executed on 14.09.1996. Ex.PW-1/17 is the sanction letter

in respect of the repeat loan of Rs.30 lakhs sanctioned to defendant No.1. This loan also

carried interest at the rate of 8% per annum as is stipulated in the sanction letter. Special

condition No.4 which forms part of Annexure II to the plaintiff stipulate that any delay in

refund of the demand would attract penal amount at the rate of 8% per annum. Ex.PW-

1/23 is the disbursement advice dated 22.11.1996 vide which plaintiff disbursed the first

instalment of loan i.e. Rs.15 lakhs in favour of the defendants and Ex.PW-1/24 is the

receipt acknowledging the payment of the said amount. Ex.PW-1/13 is the statement of

accounts evidencing the transaction between the plaintiff and defendant No.1.

5. It has come in the affidavit of Mr.K.V.R.Murthy, Deputy Director of the plaintiff,

that all the payments received from the defendants were duly entered in the account of

defendant No.1 maintained by the plaintiff society. The statement of account shows

payments of Rs.25 lakhs to defendant No.1 between 08.11.1995 to 22.11.1996. It further

shows that defendant No.1 continued to make payments either towards part-payment of

the principal sum or towards interest from 23.01.1996 to 07.17.1999. For the purpose of

this suit, it would be sufficient to take note of the payments made towards the interest

between 1997 to 1999 by defendant No.1:-

S.NO.                      INTEREST     RECEIVED INTEREST RECEIVED(in
                           DATE                  Rs.)
                1                07.04.1997              5774/-

                2                    12.03.1998                        31250/-

                3                    12.05.1998                         572/-

                4                    10.06.1998                       20,000/-

                5                    15.02.1999                       10,000/-

                6                    16.02.1999                       10,000/-

                7                    08.03.1999                       10,000/-

                8                    06.07.1999                       15,000/-

As noted earlier, the first disbursal to defendant No.1 was made on 08.11.1995.

Section 19 of the Limitation Act to the extent it is relevant provides that where payment

on account of a debt or of interest on a legacy is made before the expiration of the

prescribed period by the person liable to pay the debt or legacy or by his agent duly

authorized in this behalf, a fresh period of limitation shall be computed from the time

when the payment was made. The learned counsel for the plaintiff states that since the

plaintiff is a society formed by the Government, all payments by the defendants means to

be made only by way of cheque/pay order/demand draft. A fresh period of limitation

started from the date on which payments were made towards principal sum or towards

interest. The period of limitation in respect of the first loan expired on 08.11.1998. The

defendants made a number of payments to the plaintiff before the date on which the

period of limitation was expired, one such payment being on 07.04.1994 and another such

payment being on 06.07.1999.

6. Section 18 of the Limitation Act to the extent it is relevant provides that where,

before the expiration of the prescribed period for a suit or application in respect of any

property or right, an acknowledgment of liability in respect of such property or right has

been made in writing signed by the party against whom such property or right is claimed,

or by any person through whom he derives his title or liability, a fresh period of limitation

shall be computed from the time when the acknowledgment was so signed.

Ex.PW-1/25 is the letter dated 18.01.2001 sent by defendant No.1, through

defendant No.2, to the Executive Director of the plaintiff company, stating therein that the

amount sent by them was being adjusted towards interests and requesting that the interest

part may be deleted. A specific promise was made in this letter to repay the principal

amount within one week. The letter, therefore, constitutes an acknowledgment of liability

on the part of the defendants. Ex.PW-1/27 is another letter written by defendant No.2 to

the plaintiff on behalf of the defendant No.1 seeking deletion of the interest part. It is

further stated in the letter that if commitment letter was sent in this regard, they will start

repayment of principal amount and then for repayment of interest amount. This letter is

yet another acknowledgment of liability on the part of the defendants not only in respect

of principal sum but also in respect of interest. Both these acknowledgments were made

within three years of making last payment to the plaintiff society. A fresh period of

limitation, therefore, starts from the date these acknowledgments were made. Computed

from 23rd September, 2001 when the second acknowledgment was made by the

defendants in writing, the period of limitation would expire on 23rd September, 2004.

Having been filed on 22nd January, 2004, the suit is, therefore, well within limitation.

7. The undemanded deposition of Mr.K.V.R.Murthy, Deputy Director, coupled with

various documents executed by the defendants when read with the statement of the

account show that a sum of Rs. 16,66,680/- was payable to the plaintiff from defendant

No.1 as principal sum, when this suit was filed. Since defendant No.1 did not re-pay the

loan in time, it also became liable to pay penal interest at the rate of 8% per annum in

addition to normal interest at the same rate. The defendant No.1, therefore, also became

liable to pay Rs.18,25,795/- to the plaintiff towards penal interest upto 31.03.012. Since

defendant No.2 has stood as guarantor for defendant No.1 for repayment of loan

advanced to defendant No.1, he is jointly liable with defendant No.1 for the loan extended

to defendant No.1 society.

8. For the reasons stated hereinabove, a decree of Rs.34,92,475/- with costs and

pendente lite and future interest at the rate of 6% is hereby passed in favour of the

plaintiff and against both the defendants.

Decree sheet be drawn accordingly.

V.K.JAIN, J SEPTEMBER 18, 2012 'sn'///