Ashok Kumar vs Kartar Singh
2017 Latest Caselaw 3155 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RSA No.172/2017

%                                                     11th July, 2017

ASHOK KUMAR                                               ..... Appellant
                          Through:     Mr. Pradeep       Kumar Saini,
                                       Advocate.
                          versus

KARTAR SINGH                                            ..... Respondent

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not? YES

VALMIKI J. MEHTA, J (ORAL)

1. This Regular Second Appeal under Section 100 of Code

of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit

impugning the judgment of the first appellate court dated 7.2.2017 by

which the first appellate court has set aside the judgment of the trial

court dated 15.3.2016. The trial court by its judgment dated 15.3.2016

had dismissed the suit for recovery of Rs.2 lacs filed by the

respondent/plaintiff against the appellant/defendant as being time-

barred. The first appellate court has held that the suit is within

limitation and therefore the suit was decreed. I may note that the

appellant/defendant though was served in the suit but he did not file his

written statement nor did he lead any evidence.

2. The facts of the case are that the subject suit was filed by

the respondent/plaintiff seeking recovery of Rs.2 lacs and which the

respondent/plaintiff pleaded was taken by the appellant/defendant for

engagement and marriage of his two daughters. A sum of Rs.1,40,000/-

was given by the respondent/plaintiff to the appellant/defendant on

23.9.2010 and a sum of Rs.60,000/- was given on 27.9.2010. The loan

given was repayable after five months without interest and in this

regard a document dated 23.9.2010 was duly executed between the

parties i.e signed by both the parties. The appellant/defendant is

pleaded to have issued a cheque bearing no.106452 dated 2.12.2013 for

a sum of Rs.1.50 lacs in discharge of his liability. This cheque was

dishonored and hence the subject suit was filed.

3. As already stated above, the appellant/defendant in spite

of service failed to appear in the trial court and failed to file the written

statement. The appellant/defendant was therefore proceeded ex-parte.

Respondent/plaintiff has led evidence and proved the various

documents including the document dated 23.9.2010 as Ex.PW1/1. The

evidence led by the respondent/plaintiff is referred to in para 7 of the

judgment of the trial court and which para 7 reads as under:-

"7. In support of his case, the plaintiff has examined himself as PW-

1. PW-1 stated and reiterated on oath the contents of the plaint. He has exhibited certain documents on record which are marked as under:-

i) Ex.PW-1/1 is the original receipt-cum-halafnama

ii) Ex.PW-1/2 is the original cheque bearing no.106452 dtd.02.12.2013

iii) Ex.PW-1/3 is the original postal receipt dt.27.08.2015

iv) Ex.PW-1/4 is the original reply to RTI dt. 19.09.2015

v) Ex.PW-1/5 is the envelop of RTI

vi) Ex.PW-1/6 is the copy of legal notice dt.31.08.2015

vii) Ex.PW-1/7 & PW-1/8 is the original postal and courier receipt

viii) Ex.PW-1/9 is the original returned AR card

ix) Ex.PW-1/10 is the certified copy of order dt.15.07.2015

x) Mark "B" is the complaint dt.20.01.2014 After recording the evidence, the matter was fixed for ex-parte final arguments."

4. Trial court dismissed the suit by observing that since the

loan was given on 23.9.2010, therefore the cheque given by the

appellant/defendant dated 2.12.2013 is beyond the limitation period of

three years from 23.9.2010, and therefore, such an acknowledgment

has to be ignored and consequently once there is no acknowledgment

the suit filed on 3.10.2015 with respect to loan given on 23.9.2010 is

time barred. The first appellate court has set aside the judgment of the

trial court by observing that the document dated 23.9.2010 itself

categorically mentions that the loan is granted as an interest free loan

of five months and therefore loan would be repayable five months from

23.9.2010 and consequently the cheque dated 2.12.2013 is within the

period of three years commencing after five months of the document

dated 23.9.2010, and therefore the cheque issued by the

appellant/defendant and which was dishonored, serves as an

acknowledgment under Section 18 of the Limitation Act, 1963 thereby

extending the period of limitation to three years beyond 2.12.2013 and

resultantly the suit filed on 3.10.2015 would be within limitation.

5.(i) Learned counsel for the appellant/defendant has argued

that the first appellate court has wrongly held the suit to be within

limitation inasmuch as the loan was given on 23.9.2010 and therefore

the cheque given on 2.12.2013 cannot be treated as an

acknowledgement as it was given after three years of 23.9.2010.

Learned counsel for the appellant/defendant places reliance upon

Article 19 of the Limitation Act to argue that period of limitation for

recovery of money is three years when the loan is given.

(ii) I cannot agree with the argument urged on behalf of the

appellant/defendant. The first appellate court has rightly held that the

cheque dated 2.12.2013 is within three years period of limitation for

recovery of loan. In law the limitation period for recovery of loan

which is payable on a specific date then the limitation period

commences from the date from which the loan is repayable.

Limitation in such a case does not commence from the date of grant of

loan. Article 19 of the Limitation Act which is relied upon by the

appellant/defendant deals with the situation where there is no date

fixed for repayment of the loan. Appellant/defendant therefore cannot

place reliance upon Article 19 of the Limitation Act. What would

actually apply in the facts of this case is Article 113 of the Limitation

Act and which provides that limitation of three years commences from

the date of arising of the cause of action i.e it is when the cause of

action arises then the limitation period of three years starts for the loan

to be repayable. Since in the present case loan was repayable after five

months from 23.9.2010 i.e on 23.2.2011, hence the cheque given on

2.12.2013 is within three years of 23.2.2011 and therefore the

dishonored cheque had the effect of acknowledgment of the liability

under Section 18 of the Limitation Act. Accordingly the subject suit

filed on 3.10.2015 i.e within three years from 2.12.2013 was within

limitation.

6. This Court with reference to applicability of Article 113

of the Limitation Act relies upon the judgment delivered by this Court

in the case of Shri Satish Kumar Vs. Smt. Reena Bhoumik in RFA

No.684/2006 decided on 18.4.2012 wherein this Court by reference to

Article 113 of the Limitation Act has held that limitation to recover

loan will arise on the cause of action arising and which arises when

there is non-payment on the date when the loan is to be repaid. The

relevant paras of this judgment read as under:-

"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. There is no merit in the appeal. Dismissed.

JULY 11, 2017                                       VALMIKI J. MEHTA, J
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