IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA RSA No. 68 of 1998. Date of decision: 18.8.2010 UCO Bank …. Appellant Versus Sh.Shashi Kant Joshi and ors. ….. Respondents Coram: The Hon’ble Mr. Justice Deepak Gupta, J. Whether approved for reporting? Yes. For the appellant: Shri J.L.Kashypa, Advocate. For the respondents: Sh.K.D.Sood, Advocate for respondents No.1 and 2. Mr.Neeraj Gupta, counsel for respondent No.3(a). Ms.Devyani Sharma, counsel for respondent No.3(b). _____________________________________________________ Deepak Gupta, J.(Oral) The short question which arises in this appeal is whether the suit filed by the plaintiff was within limitation or not? Briefly stated the facts of the case are that the defendant No.1, Sh.Shashi Kant Joshi who is a proprietor of defendant No.2-M/s.Joshi Coal Company was given the facility of cash credit limit by the plaintiff-Bank. This facility 2 was extended to the defendants on their request and the limit was fixed at Rs.30,000/-. The father of defendants No.3(a) and 3(b) who was the original defendant No.3 stood guarantee for repayment of the aforesaid amount. The facility was granted on the condition that the outstanding balance would carry interest @ 18% per annum to be charged on monthly basis. It is also proved on record that this cash credit facility was enhanced from Rs.30,000/- to Rs.70,000/- and after enhancement also, the defendant No.3 stood guarantee for repayment of the amount. Since the amount was not repaid within time, the plaintiff filed a suit for the recovery of Rs.63,102/- alongwith cost and future interest which was decreed by the learned Trial Court vide judgment and decree dated 27.5.1993. Thereafter, an appeal was filed by the defendants. The sole point urged in the appeal was that the suit was not within limitation. The appeal was accepted by the learned District Judge, Shimla, and the suit of the plaintiff was dismissed on this short ground. I have heard Sh.J.L.Kashyap, learned counsel for the Bank and Sh.K.D.Sood, Ms.Devyani Sharma and Sh.Neeraj Gupta, learned counsel for the respondents. 3 It has been strongly contended by Sh.J.L.Kashyap that Article 1 of the Limitation Act is applicable to a cash credit facility. He submits that allegations regarding the acknowledgement of the debt by part payment of the debt within the period of limitation were specifically made in para 6 of the plaint and according to him, there is no specific denial to the allegation and, therefore, it should be presumed that the allegations made by the plaintiff have been admitted. On the other hand, learned counsel for the respondents have supported the judgment of the learned Lower Appellate Court. As far as the first point is concerned, Article 1 of the Limitation Act is applicable when the claim is for the balance due on a mutual, open and current account where there have been reciprocal demands between the parties. The limitation in such an eventuality is three years and shall began from the close of the year in which the last item admitted or proved is entered in the account. In support of his contention, Sh.Kashyap has placed reliance on a judgment of the learned Single Judge of the Punjab and Haryana High Court in State Bank of India Vs. M/s.Kashmir Art Printing Press, Sirsa and 4 others AIR 1981 (68) Punjab and Haryan 188 wherein it was held as follows:- “Where a person who was allowed the benefit of Cash Credit Account had been withdrawing and repaying amounts upto the limit of Rs.5000/- from time to time and on the debit balance, interest was accruing, the limitation would be that provided under Art. 1 of the 1963 Limitation Act. According to Art.1, the limitation is three years, which starts from the close of the year in which the last item admitted or proved is entered in the account, such year to be computed as in the account; meaning thereby that the year in which the last entry is made would be excluded in computing the period of limitation and thereafter i.e. from the following January, the limitation of three years would start.” On the other hand, the learned counsel for the respondents rely upon two judgments of this Court but it is only necessary to make reference to the judgment of a Division Bench of this Court in M/s.Roshan Lal Kuthiala and another Vs. Raja Rana Yogendra Chandra and others AIR 1996 Himachal Pradesh 14 wherein it was held as follows:- “An account is mutual, open and current when it is an account between two parties, having mutual dealings which is running or current, that is, not closed, and open, that is, not settled. Thus, where one person supplies to other person one kind of goods or work and obtains from him another kind, debiting him with the cost of the former and crediting him with the cost of the latter, the account is mutual. There must, as such, 5 be a mutual credit founded on a subsisting debt on the other side or an express or an implied agreement for a set off of mutual debts. Where there was obligation only on one side and at no time was there over payment, it cannot be said that there was mutual, open and current account. Thus, in order that the account liability was mutual, there must be transactions on each side, creating independent obligations on the other and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations.” A bare reading of Article 1 of the Limitation Act clearly shows that this Article will apply when there is an account between the parties; the account should be current and it should be open; and there should be mutuality of dealings between the parties. The question as to what amounts to mutuality of dealings was not addressed by the learned Punjab and Haryana High Court in its decision. This part of the Article has been specifically dealt with by the Division Bench of this Court. Merely because a cash credit facility has been extended which at any given time may show some credit in favour of the person to whom such facility has been granted will not make the cash credit facility a mutual dealing between the Bank and the borrower availing 6 cash credit facility. This is because the borrower has no dealings where he has to pay some amount to the Bank other than the amount which he has borrowed and the interest thereupon. Mutuality of dealings arises when two parties deal with each other in such a manner that at any given time one party may owe some amount on the other for goods or services rendered by it and on the other hand, at the same time, the second party owes to the first party an amount on account of services or goods supplied. This principle in my opinion cannot be applied in the case of a cash credit limit where the borrower only borrows and keeps repaying amount to the Bank. There is no mutuality of dealings in such a case. Therefore, this case is covered by the judgment of the Division Bench of this Court referred to above. Coming to the second aspect of the matter, the plaintiff-Bank alongwith its suit had filed the statement of account duly certified under the Bankers Book Evidence Act. The suit, in question, was filed on 29th April, 1989. Therefore, any acknowledgment to bring the suit within limitation had to be made on or after 30th April, 1986. There are only two transactions after the said date in the statement of account Ext.P/13. The first is of an 7 amount Rs.5319.20 paisa allegedly credited to the account of the defendants by transfer on 1st May, 1986 and the second is an amount of Rs.419/- credited to the account of the borrower/defendant by transfer on 19th August, 1986. The plaintiff relies upon these transactions to bring its suit within limitation. In para 6 of the suit while dealing with the cause of action and the issue of limitation, the plaintiff had given the backdrop of the case, i.e., date of advance of the cash credit facility, its enhancement, various dates on which transactions took place etc. In denial thereto the averment was that para 6 of the plaint is wrong and denied. It is contended by Sh.Kashyap relying upon the judgment of the Apex Court in M.Venkataramana Hebbar Vs. M.Rajagopal Hebbar and others, 2007, 6 SSC 401 that the denial is evasive and is not denial in the eyes of law. He has made specific reference to paras 12 and 13 of the said judgment. In my considered opinion, this judgment is not applicable because a reading of para 4 of the judgment clearly indicates that the averments made in the plaint which have been reproduced in para 6 of the aforesaid judgment were not denied or disputed by the 8 defendants. This is not the case here. The authority, in question, does not deal with the question of evasive denial. Be that as it may, once the denial took place and the parties led evidence, the burden was upon the plaintiff to prove that the amounts on the basis of which it claimed limitation to be extended had actually been deposited by the defendants. Section 19 of the Limitation Act reads as follows:- “19.Effect of payment on account of debt or of interest on legacy.- 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. Provided that, save in the case of payment of interest made before the 1st day of January, 1982, an acknowledgment of the payment appears in the handwriting of, or in the writing signed by, the person making the payment.” A bare perusal of Section 19 shows that for a payment to amount to amount to acknowledgement of a debt to extend limitation, the same should be in the writing of the person making the payment or a duly authorized agent. Therefore, it was incumbent upon the 9 plaintiff to show that the payments had been made at the instance of the defendant(s) and in their handwriting. In this behalf, reference may be made to a judgment of a learned Single Judge of this Court in The Kangra District Whole Sale Cooperative Supplies and Marketing Society Ltd. Vs. M/s. Buta Mal Sohan lal, 1996 (4) SLJ 2574 wherein after dealing with a number of judgments, it was held as follows:- “In order to claim the benefit of extension of period of limitation under Section 19, Limitation Act, 1963, the onus was heavily on the plaintiff to prove the acknowledgment of part payment having been made by the defendant.” In the present case, as far as the payment of Rs.5319.20/- is concerned, even according to the statement of PW/2, this amount was transferred to the account of the plaintiff by transfer from some other bank and this witness did not produce the record of this amount in Court. As far as the second amount of Rs.478/- is concerned, the documents relied upon by the defendants are Ext.PW2/X and PW2/Y which are vouchers showing that an amount of Rs.458/- was credited to the account of the plaintiff. It has not been proved that these vouchers are in the handwriting or singed by any of the 10 defendants. It cannot, therefore, be said that it was the defendants who deposited this amount. Therefore, these documents do not, in any manner, help the plaintiff. In view of the above discussion, I find no merit in the appeal which is accordingly rejected. No order as to costs. August 18, 2010 ( Deepak Gupta ) (m) Judge