M. Harish Babu vs Smt. K. Prabhavati
2023 Latest Caselaw 131 Tel

     THE HONOURABLE SMT. JUSTICE P.SREE SUDHA

                 APPEAL SUIT No.832 of 2003

JUDGMENT:

This appeal is filed against the Judgment and Decree of

the trial Court in O.S.No.77 of 2001 dated 17.02.2003.

2. Plaintiff filed suit for recovery of Rs.3,04,000/- with

interest at the rate of 24% p.a on the principle amount of

Rs.1,00,000/- against the defendant . Plaintiff was examined as

P.W.1 and her husband was examined as P.W.2 and marked

Ex.A1 to A3 on their behalf. The defendant was examined as

D.W.1, but no documents were filed on his behalf. The trial

Court considering the entire evidence on record decreed the suit

with interest at the rate of 12% p.a on the principal amount

from the date of the suit till the date of decree and 6% p.a from

the date of decree till the date of realization. Aggrieved by the

said Judgment, defendant in the suit preferred the present

appeal.

3. He mainly contended that though he disputed the

execution of Ex.A1, plaintiff failed to take any steps to send the

disputed document to the handwriting expert. The trial Court

presumed the execution of Ex.A1 receipt in favour of the

plaintiff as it was executed on his letterhead. In fact, Ex.A1 is

the forged document. He also stated that plaintiff has no

financial capacity to pay such a huge amount in the year 1992

and also contended that the suit is hopelessly barred by

limitation. The trial Court erred in holding that Article 22 of the

Limitation Act is applicable to the present case. The said Article

22 is applicable only in cases where the deposit amount is

repayable on demand. Under Ex.A1 the alleged deposit of

Rs.1,00,000/- was made only for one year, as such the Article

22 is not applicable. He also stated that there is no relationship

of banker and customer between him and the plaintiff and thus

the question of deposit does not arise. The plaintiff has kept

quiet for more than 9 years from the date of payment of

Rs.1,00,000/- to the defendant though he was not paying any

interest every month. She ought not to have kept quiet if she

really paid such substantial amount. The legal notice was

issued on 23.02.2001, in which she stated that recently she

demanded the amount from the defendant, but he was seeking

time on one or other pretext. She also stated that she made oral

demand for several times, but it cannot be considered as a

qualified demand. The trial Court misinterpreted the reported

Judgment of the Apex Court. Therefore, requested the Court to

set aside the Judgment and Decree of the trial Court in

O.S.No.77 of 2001 dated 17.02.2003.

4. Heard arguments of both sides and perused the entire

record.

5. The learned Counsel for the respondent/plaintiff filed the

written arguments. He stated that period of limitation for a suit

to recover a deposit is three years from the date of demand. The

demand was made through legal notice dated 23.02.2001, it

was served upon the defendant on 01.03.2001 under Ex.A3

postal acknowledgment and the suit was filed on 23.07.2001

and it is well within the time and is not barred by limitation.

The trial Court observed that the signature of the defendant

under Ex.A1 is tallied with that of the signature on his written

statement and deposition and it was also held that plaintiff has

enough financial capacity to deposit Rs.1,00,000/- under Ex.A1

as her brother was residing in USA and another brother was

doing business. He also relied upon the decision of the Hon'ble

Supreme Court in the case of Kashinath Sankarappa Wani

Vs. New Akot Cotton Ginning and Pressing Co., Ltd.,1 in

which it was held as follows:

"Limitation Act (9 of 1908), Art.60 - Receipt evidencing deposit of money for twelve months, after due date is the starting point of limitation.

It was sufficient to establish that the amount due at the foot of the deposit receipt became due and payable on the due date mentioned therein and that there was no question of the amount being payable at any time thereafter, on demand being made in that behalf by the creditor. The limitation for its recovery therefore started from the due date namely 31.07.1940 and not from 17.05.1940, the date of alleged demand."

6. The plaintiff stated that there was acquaintance between

her husband and the defendant. The defendant is a Chartered

Accountant and also running Karni Chits and Finance

Company at Karimnagar. She was acquainted with him in the

kitty parties, as such, she gave Rs.1,00,000/- to the defendant

as deposit and he agreed to pay interest at the rate of 24% p.a

and also issued a receipt to that effect. She deposited the said

amount on 09.10.1992, but defendant did not pay any interest

as agreed and promised, and she did not pressed him for the

payment of interest. She stated that she furnished her account

details to the defendant, but she has not furnished the said

details in the Court. It was suggested to her that word 'interest'

AIR 1958 SCC 437

was not mentioned in the Ex.A1, she admitted the same and

stated that he orally promised to pay the interest at the rate of

12% p.a. She further stated that her husband also deposited

another amount of Rs.1,30,000/- and it has no concern with

this transaction and she was getting Rs.575/- per month

towards her share of profits for the said amount and her

husband also getting Rs.575/- per months towards his share of

the profits, but the said transaction is no way concerned with

this transaction. She also admitted that receipt was executed

only for Rs.1,00,000/- and she never asked defendant to extend

the period beyond one year under Ex.A1. She stated that she

has not disclosed details of her savings account either in plaint

or in legal notice. Her husband also supported her version in

material particulars and stated that defendant is running the

Karni Chit Funds and Maithri Share Financiers. She is not the

partner in the Maithri Share Financiers capitals.

7. In the examination of D.W.1, It was suggested to the him

that receipt was executed on his own letter pad for an amount

of Rs.1,00,000/- and he executed the said receipt in his own

hand writing, but he denied it. He admitted his signature under

Ex.A3 acknowledgment. Perusal of the receipt reads as follows:

"Received Rs.1,00,000/- (Rs. One lakh only) and deposit for one year @ 24% p.a, payable every month, from Smt.K.Prabhavathi w/o.Dr.Bhagya Reddy at Karimnagar dated 09.10.1992."

8. The trial Court observed that the signature of the

defendant on the receipt was compared with that of his

signatures on the Written Statement and Valakalat and they

were tallied, as such it was found that receipt was executed only

by him. It was also argued before the trial Court that the word

'interest' was not found in the receipt, but as it was clearly

mentioned as 24% payable on Rs.1,00,000/- deposit. It was

presumed that 24% is the rate of interest per annum. The legal

notice was given by the plaintiff on 23.02.2001, in spite of

receipt of the same, he did not give any reply and a suit was

filed for recovery of amount. The main contention of the

defendant is that the amount was deposited in the year 1992

and the suit was filed in the year 2001 and thus it is barred by

limitation. The trial Court observed that as per Article 21 of the

Limitation Act the suit has to be filed within three years, but in

this case it is a case of deposit. Article 22 of the Limitation Act

is applicable to this case. As she issued notice on 23.02.2001, it

was served upon him on 01.03.2001 and the suit was filed on

23.07.2001 and is well within the period of limitation. P.W.1

clearly admitted that Ex.A1 receipt was issued for Rs.1,00,000/-

deposit. She also stated that though she furnished bank

account details to the defendant, he never deposited the interest

in her account. She has not issued any notice either for interest

amount or for the refund of the deposit for more than 3 years.

Even as per the citation relied upon by the plaintiff in the suit,

the limitation for the recovery starts from the due date, but not

from the date of demand.

9. In view of the acquaintance between the parties P.W.1

deposited Rs.1,00,000/- with the defendant as he was running

a Chit Fund, but she neither demanded for interest amount or

for refund of the deposited amount within 3 years and kept

quiet for nearly 7 years and later issued a legal notice and thus

filed the suit, as such Article 22 of the Limitation Act is not

applicable and the suit is not within the period of limitation.

Even as per the citation of the Hon'ble Supreme Court the

period of limitation starts from the due date and not from the

date of demand as such the trial Court erred in granting the

decree in favour of the plaintiff. Therefore, the Judgment and

Decree of the trial Court is liable to be set aside.

In the result, the appeal is allowed by setting aside the

Judgment of the trial Court in O.S.No.77 of 2001 dated

17.02.2003. There shall be no order as to costs.

Miscellaneous petitions pending, if any, shall stand

closed.

_________________________ JUSTICE P.SREE SUDHA DATED:06.01.2023

tri

THE HONOURABLE SMT. JUSTICE P.SREE SUDHA

APPEAL SUIT No.832 of 2003

DATED: 06.01.2023

TRI