Nepal Airlines Corporation vs Girish Kumar Singh
2014 Latest Caselaw 6852 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

                            RESERVED ON : 20th NOVEMBER, 2014
                             DECIDED ON : 16th DECEMBER, 2014

+                         CS (OS) 1402/2010

      NEPAL AIRLINES CORPORATION                           ..... Plaintiff

                          Through :    Mr.Ramashankar, Advocate with
                                       Mr.Shivam Garg, Advocate.


                          versus



      GIRISH KUMAR SINGH                                   ..... Defendant.

                          Through :    None.


       CORAM:
       HON'BLE MR. JUSTICE S.P.GARG

S.P.GARG, J.

1. The plaintiff - Nepal Airlines Corporation formerly known

as Royal Nepal Airlines Corporation has instituted the instant suit for

recovery of ` 80,18,000/- with interest pendente-lite and future.

2. As per averments in the plaint, the plaintiff carries on its

business in India having its principal office at 44, Janpath, New Delhi.

The defendant established an enterprise known as Nepal Travel

Information Centre, based in Bombay. Subsequently, offices were

established in other cities including Delhi at 13/29, East Patel Nagar, New

Delhi. The plaintiff is an international airline carrying on its business

operations in India. In December, 1995, the defendant became its

Passenger Sales Agent for expansion of selling of air tickets in its

operating routes by an agreement dated 15.12.1999 on the terms and

conditions described therein. Under the agreement, the defendant

collected tickets from the plaintiff for sale on different operating routes of

the plaintiff in India. In May, 2000, the defendant defaulted in submitting

the Periodic Sales Return (PSR) and remitting payments against tickets

sold. Vide letter dated 19.05.2000, the defendant admitted that the net

amount payable to the plaintiff was ` 40,76,506/-. By another letter dated

08.06.2000, the defendant stated that he had used all the tickets and

confirmed the amount payable to the plaintiff at ` 38,54,811/-. He

requested the plaintiff to give him some time to arrange the funds for

payment. In confirmation to the assurances, the defendant signed and

delivered a personal bond undertaking to pay ` 38,54,811/- 'on account'

of payments against Passengers Sales Report. He also signed, issued and

delivered a blank and undated cheque No. 775601 in the name of the

plaintiff. The defendant vide letter dated 22.06.2000, requested to keep the

validity of his engagement. On 27.09.2000, the defendant submitted an

undertaking that the amount would be paid in installments at regular

intervals. In view of the defendant's undertaking, the legal action was

deferred and the defendant was allowed to transact business during the

validity period of agreement dated 15.12.1999 till 30.06.2003 to enable it

to clear the dues.

3. Grievance of the plaintiff is that the defendant failed to pay

the outstanding dues despite various assurances given. The defendant even

stopped carrying on business under the name and style of Nepal Travel

Information Centre and started a new business 'Indo Nepal Travel Group'.

He also started a travel agency by the name of M/s. Fun Plannet Tours in

Indore. With great difficulty, the defendant was contacted in June, 2005.

He faxed a letter dated 20.10.2005 confirming that he would pay the entire

outstanding amount. On 20.12.2006 finally a Memorandum Of

Understanding was executed between the parties and a sum of ` 1,000/-

was paid by the defendant. He promised to pay the remaining balance in

installments. However, no further payment was made by the defendant.

Hence, the present suit.

4. The defendant could be served only by way of publication

under Order V Rule 20 CPC. None appeared on behalf of the defendant

despite service by publication and he was proceeded ex-parte by an order

dated 03.01.2014.

5. The plaintiff examined PW-1 (Bashu Dev Pandey) in its

evidence. I have heard the learned counsel for the plaintiff and have

examined the file. PW-1 (Bashu Dev Pandey) proved the averments of the

plaint by filing evidence by way of affidavit (Ex.PW-1/A). He also relied

upon various documents (Ex.PW-1/1 to Ex.PW-1/15). Adverse inference

is to be drawn against the defendant for not appearing and contesting the

present suit. The testimony of PW-1 (Bashu Dev Pandey) has remained

unchallenged and unrebutted. Genuineness and validity of various

documents whereby the defendant promised to pay the outstanding

amount have not been questioned. Ex.PW-1/3 is the copy of the

agreement; Ex.PW-1/5 and Ex.PW-1/6 are the letters dated 13.05.2000

and 19.05.2000 written by the plaintiff to the defendant; Ex.PW-1/7 and

Ex.PW-1/8 are the copies of the letters written by defendant asking for

some time to arrange funds to pay the balance amount ` 38,54,811/- along

with interest; Ex.PW-1/9 is the copy of the letter dated 08.06.2000 and a

blank cheque and blank signed receipt issued by the defendant; Ex.PW-

1/12 is the copy of the letter dated 27.09.2000, whereby the defendant

gave an undertaking to make the payment in installments; Ex.PW-1/13 is

the Memorandum Of Understanding dated 20.12.2006, whereby the

defendant admitted his liability of ` 38,54,811/- and promised to pay the

same; and, Ex.PW-1/5 is 'admission' in the handwriting of defendant

No.1 on 21.12.2006 acknowledging the liability.

6. Apparently, the suit filed by the plaintiff is barred by

limitation. However, the plaintiff has relied upon various documents,

whereby the liability to pay the outstanding amount was acknowledged in

writing within the prescribed period of limitation by the defendant in

various letters exhibited above. Moreover, by Memorandum Of

Understanding (Ex.PW-1/13) dated 20.12.2006, the defendant, in writing,

categorically promised to pay the time barred debt.

7. Under Sections 18 / 19 of Limitation Act, the statement on

which a plea of acknowledgment is based must relate to a present

subsisting liability, though the exact nature or the specific character of the

said liability may not be indicated in words. However, the words must

indicate the existence of jural relationship between the parties such as that

of debtor and creditor and it must appear that the statement is made with

the intention to admit such jural relationship. There must be a conscious

affirmation of an intention of continuing such relationship in regarding to

an existing liability.

8. Under Section 25(3) of Contract Act, following conditions

must be satisfied in order to invoke the provisions : i) it must refer to a

debt which the creditor but for the period of limitation, might have

enforced; ii) there must be a distinct promise to pay wholly or in part such

debt; and, iii) the promise must be in writing signed by the person or by

his duly appointed agent. Under Section 25 (3), a debtor can enter into an

agreement in writing to pay the whole or part of a debt, which the creditor

might have enforced but for the law of limitation. Such a promise

constitutes novation and can form a basis of a suit independently of the

original debt. A promise to pay the time barred debt is a valid contract.

For application of Section 25 (3) of Contract Act, the promise must be

express and unequivocal.

9. In the instant case, the acknowledgment made by the

defendant on various dates extend the period of limitation. Moreover,

promise to pay the debt under Section 25 (3) is also a valid contract. The

suit thus filed by the plaintiff is within limitation.

10. The plaintiff has claimed interest amounting to ` 41,63,195/-

@ 12% per annum w.e.f. June, 2000 till the date of institution of the suit.

In my considered view, the plaintiff cannot be permitted to claim the

interest for the outstanding amount as there was no agreement in writing

to pay any such interest on delayed payments. Moreover, claim for the

interest is not within the period of limitation. As per Memorandum Of

Understanding (Ex.PW-1/3), the liability admitted by the defendant was

only to the tune of ` 38,54,811/-. There was no express acknowledgement

of the defendant to pay 'interest' on the said outstanding amount at any

specific rate. It merely records that M/s. Nepal Travel Information Centre

had to pay ` 38,54,811/- excluding interest. There is, however, no

mention as to what was the rate of interest and for what period, the

defendant was liable to pay the same. In the undertaking (Ex.PW-1/15)

dated 21.12.2006 again there is no whisper to pay any 'interest' on the

outstanding amount of ` 38,54,811/-. Hence, claim of interest by the

plaintiff is not permissible and is barred by limitation. A contract to pay a

part of time barred debt would render the promise liable to pay only that

part and not the whole debt.

11. In the light of above discussion, Suit of the plaintiff is

decreed in the sum of ` 38,54,811/- with proportionate costs. The

plaintiff shall, however, be entitled to interest @ 8% per annum from the

date of filing of the suit till the date of recovery of the outstanding decretal

amount. The suit is accordingly disposed of.

12. Decree-sheet be prepared.

13. Pending IA (if any) also stands disposed of.

(S.P.GARG) JUDGE DECEMBER 16, 2014 / tr