Kerala High Court
Canara Bank vs Sreekumari K on 2 April, 2025
RFA NO. 338 OF 2015
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA, 1947
RFA NO. 338 OF 2015
AGAINST THE JUDGMENT DATED 30.10.2014 IN OS NO.236 OF 2012
OF SUB COURT, MAVELIKKARA
APPELLANT/PLAINTIFF:
CANARA BANK
BRANCH OFFICE, KAYAMKULAM, KAYAMKULAM.P.O.
BY ADV SRI.A.SHAFEEK (KAYAMKULAM)
RESPONDENTS/DEFFENDANTS:
1 SREEKUMARI K
W/O.ANILKUMAR S, KOLLAT THEKKETHIL, KANNAMPALLY
BHAGAM,. KAYAMKULAM.P.O. 690 502.
2 MAJEEDKUTTY
S/O.ASANARUKUNJU, CHALAYIL VEEDU, KANNAMPALLY BHAGOM,
KAYAMKULAM.P.O. 690 502.
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON
02.04.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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CR
A. BADHARUDEEN, J
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R.F.A. No. 338 of 2015
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Dated 02nd day of April, 2025
JUDGMENT
This regular first appeal has been filed under Section 96 read
with Order XLI Rule 1 of the Code of Civil Procedure, 1908.
2. The plaintiff in O.S. No.236 of 2012, on the files of the
Sub-Court Mavelikkara, has preferred this appeal, arraying the
defendants as the respondents herein, while challenging the decree
and judgment dated 30.10.2014 therein.
3. Heard in detail. Perused the verdict under challenge as
well as the records of the trial court.
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4. For effective and easy discussion, the parties in this appeal
will be referred to as 'plaintiff' and 'defendants' hereafter.
Short facts:-
5. The plaintiff is a Nationalised bank constituted and
functioning under the Banking Companies (Acquisition and
Transfer of Undertaking) Act 1970 with its head office at
Bangalore, having branches at several places, including one in
Kayamkulam. The Manager of Kayamkulam branch Sri. Hari. N,
who was duly authorized to represent the plaintiff to sign and
verify the plaint for and on behalf of the plaintiff, filed the suit.
According to the plaintiff, the 1st defendant availed a loan of
Rs.2 lakh from the plaintiff on 23.06.2005 to improve her
business. The 2nd defendant stood as co-obligant for the loan
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transaction. On the date of availing the loan the 1st defendant
executed an agreement - cum - deed of hypothecation in favour of
the plaintiff bank. Similarly, the 2nd defendant executed and
delivered a covenant of co-obligation in favour of the plaintiff
bank. The 1st defendant had undertaken to repay the loan
amount in 35 instalments @ Rs.6,610/- starting from 23.7.2005,
but she could not repay the same within the stipulated time. On
24.09.2007, she admitted the liability and executed an
acknowledgement of debt, and again on 24.07.2010, she executed
another acknowledgement of debt in favour of the plaintiff bank.
The 1st defendant failed to repay the amount as agreed, and the
plaintiff sent notice to the defendants to repay the entire amount
due to the bank. Even after notice, the defendants did not repay
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the loan amount. As per the statement of accounts pertaining to
the loan transaction, an amount of Rs.2,14,572/- together with
future interest @ 15.25% was claimed by the plaintiff.
6. Defendants filed written statement raising contentions as
follows:-
7. The Suit is not maintainable and is barred by limitation.
The defendants signed in blank printed forms. No collateral
security was executed by the 2nd defendant as alleged.
Defendants had no transaction with the plaintiff. The signatures
of the defendants were obtained by the organization of Vyapari
Vyavasayi Ekopana Samithi. Plea of non-joinder was raised
contending that Vyapari Vyavasayi Ekopana Samithi not arrayed
as a party in the suit. The documents relied on by the plaintiff
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were signed at the time of availing the loan in 2005. The
statement of accounts was disputed. The interest claimed also
alleged as exorbitant. Thus, the defendants prayed for dismissal of
the suit with their cost.
8. On scrutiny of the pleadings as above, the trial court raised
necessary issues and tried the case. PWs 1 and 2 were examined,
Exts. A1 to A8 and X1 are marked on the side of the plaintiff. No
evidence let in by the defendants.
9. On appreciation of evidence, the trial court dismissed the
suit, holding that the execution of Exts.A3 and A4
acknowledgements of debt and security dated 24.09.2007 and
24.07.2010, respectively, were not proved by the plaintiff.
Accordingly, it was found that the suit, filed on 19.06.2012 in
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relation to a loan which was availed on 23.06.2005, is barred by
limitation. Holding so, the suit itself was dismissed.
10. The learned counsel for the plaintiff, while assailing the
trial court verdict, submitted that, even though the loan was
availed on 23.06.2005, the debt was acknowledged by the 1st
defendant as per Ext.A3 as on 24.09.2007 before expiry of the
period of limitation. Thereafter, the debt was again acknowledged
on 24.07.2010 as per Ext. A4 within the period of limitation. In
such view of the matter, the suit has been filed within the period
of limitation, and the trial court went wrong in non-suiting the
plaintiff on finding limitation. He also submitted that in order to
prove Exts.A3 and A4 documents, the present manager of the
Bank got examined as PW1, and he tendered evidence supporting
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execution of Exts.A1 to A4 documents as well as Ext.A5 to A8
documents. Therefore, the trial court went wrong in finding that
Exts.A3 and A4 acknowledgments of debt and security were not
proved by the plaintiff and also dismissing the suit as a sequel
thereof.
11. Addressing the contentions, the points that arise for
consideration are as follows:-
1. Whether the finding of the trial court that the suit
is barred by limitation is legally correct?
2. Whether the plaintiff discharged the burden of
proving Exts.A3 and A4 acknowledgments of debt
and security, as per law?"
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3. What is the mode of proof of documents in the
custody of a bank, where the provisions of the
Bankers Book Evidence Act, 1891 would apply?
4. What is meant by acknowledgment in writing,
embodied in Section 18 of the Limitation Act?
5. Whether the decree and judgment of the trial
court would require interference?
6. Reliefs and costs?
Point Nos.1, 3 & 4 :-
12. Here, the case of the plaintiff is that the 1st defendant
borrowed an amount of Rs.2 lakh from the plaintiff bank on
23.06.2005, and the 2nd defendant stood as a co-obligant for the
said loan transaction. In order to prove availing of loan, Exts. A1
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to A4, the agreement-cum-deed of hypothecation dated
08.04.2005, Guarantee agreement dated 23.06.2005,
acknowledgements of debt and security dated 24.09.2007, and
24.07.2010 were tendered in evidence.
13. In order to show the balance as on the date of filing of
suit, coming to the tune of Rs.2,27,084/-, PW2 was examined,
and Ext.X1, the statement of accounts, was tendered in evidence.
It is true that, if there is no acknowledgment of debt as canvassed
by the plaintiff relying on Exts.A3 and A4 dated 24.09.2007 and
24.07.2010, the suit is barred by limitation. However, Section 18
of the Limitation Act deals with the effect of acknowledgment in
writing. It has been provided that where, before the expiration of
the prescribed period for a suit or application in respect of any
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property or right, an acknowledgement 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
acknowledgement was so signed. Thus, the law is emphatically
clear on the point that an acknowledgment of liability has been
made in writing signed by the party before expiry of the period of
limitation, a fresh period of limitation shall commence from the
date of signing the acknowledgment in writing by operation of
Section 18 of the Limitation Act.
14. In the instant case, as per Ext.A3, the debt was
acknowledged on 24.09.2007 before expiry of the period of initial
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limitation. Again, before the expiry of the extended period on the
strength of Ext.A3 acknowledgment of debt and security, availing
of the loan and the debt were acknowledged as per Ext.A4
acknowledgment of debt and security.
15. In this connection, it is relevant to address a pertinent
question as to how documents in the custody of bank, where the
Bankers Book Evidence Act would apply are to be proved? In
order to prove documents in the custody of a bank, a certified
copy of any entry in the bankers book, along with a certificate by
the Branch Manager/principal accountant and the person in
charge of the resource, would give evidence and the same is
admissible. Section 4 of the Bankers Book Evidence Act provides
the mode of proof of entries in bankers' books. It has been
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provided that subject to the provisions of this Act, a certified copy
of any entry in a bankers' book shall in all legal proceedings be
received as prima facie evidence of the existence of such entry, and
shall be admitted as evidence of the matters, transactions and
accounts therein recorded in every case where, and to the same
extent as, the original entry itself is now by law admissible, but no
further or otherwise. The normal way of proof of
acknowledgement of debt is by producing the same before the
court, through an authorized officer. An acknowledgement of
debt need not be express, but it may be by necessary implication.
Every acknowledgement affords a new proof of the existence of
debt. Thus, in cases where documents of the bank are produced
by an authorized officer, the same would attach credibility unless
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the contrary is proved. Here, the case put up by the defendants is
inconsistent. At one stage, they denied availing of loan and the
execution of the documents in connection with the said
transaction. Another contention is that they put signatures in
papers produced by the Vyapari Vyavasayi Ekopana Samithi, and
they were filled by the bank officials. At the same time, another
contention is that the documents produced along with the suit
were signed at the time of availing the loan. During
cross-examination of PW1, even the issuance of registered notice
also was denied by the learned counsel for the defendants despite
the fact that legal notice as per Ext.A5 was returned with
endorsement "unclaimed" on 18.02.2012. When PW1, the
officiating manager of the bank, produces documents marked as
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Exts.A1 to A4 including the agreement for the loan, the guarantee
agreement, and the acknowledgment of debt and security
executed by the defendants, where the signatures therein are
admitted by the defendants, the evidence of PW1 alone is
sufficient to prove the case of the plaintiff. That apart, PW2 also
given evidence supporting the balance as on the date of the suit by
producing Ext.X1. In such a view of the matter, the finding of
the trial court that Exts.A3 and A4 are not proved and therefore
suit is barred by limitation is an erroneous finding; and the same is
set aside, and it is held that the suit has been filed within the
period of limitation.
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Point Nos 2, 4 & 5-
16. As already discussed, in this matter, as per Exts.A1
to A8 and Ext.X1, coupled with the evidence of PWs 1 and 2, it is
proved that, the 1st defendant availed loan of Rs.2 lakh on
23.06.2005 and later acknowledged the same as per Exts.A3 and
A4. As per Ext.X1 the suit amount of Rs.2,27,084/- along with
interest @ 15.25% per annum is due to the plaintiff. Therefore,
there is no reason to disallow realisation of the said sum claimed
by the plaintiff, in a case where, availing of loan and failure of the
defendants to discharge the same are proved substantially. In view
of the matter, the trial court went wrong in non suiting the
plaintiff on finding limitation and without decreeing the suit.
Therefore, the verdict under challenge would require interference.
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17. In the result, this regular first appeal stands allowed after
setting aside the decree and judgment of the trial court.
Consequently, the suit is decreed as under:-
(i) Defendants 1 and 2 jointly and severally do pay an amount
of Rs.2,27,084/- with interest @ 15.25% to the plaintiff (being a
commercial transaction) from the date of the suit till realisation
forthwith, failing which the plaintiff is allowed to realise the same
from the defendants personally and from all their assets. Further,
the plaintiff is allowed to realise the entire cost throughout the
proceedings from defendants 1 and 2.
Sd/-
A. BADHARUDEEN
JUDGE
RMV
