A^- APPELLANT PLAINTIFF RESPONDENTS DEFENDANTS HIGH COURT OF CHHATTISGARH AT BILASPUR First Appeal No. 170 of 2003 DENA BANK Versus SMT. CHAMELI BAI AND OTEHRS A^ JUDGMENT FOR CQNSIDERATiON Sd/- Dhirendra Mislira Judge HON'BLESHRI R.N. CHANDRAKAR. J °> ^.c&A^ejz_ o Sd/- R.N. Chandrakar Judge ^ POST FOR JUDGMENT ON }1 -4-2010 Sd/- Dhirendra Mishra Judge HIGH COURT OF CHHATTISGARH AT BILASPUR D.B. HON'BLE 8HRI DHIRENDRA M18HRA. & HON'BLE SHRI R.N. CHANDFWKARAI First Appeal No. 170 of2003 Pre^enh Shri B.P. Sharma, counsel fortheappellant. None for the re^ondente. thoi^h served. JUDGMENT (Deliveredon ^9 April,2010) PerDhifieneh'aMfshfa. J 1. This firet appeal under Section 96 of the Code of Civil Procedure, 1908 is directed against the judgment and decree dated 23"^ AjMil, 2003 passed in CMI Suit No.3-8/02 whereby the leamed 11 Additional Distrtet Judge (FTC), Bemetera has dismissed the suit Qf the plaintiff/Bank as barred by limitation. (Parties shall APPELLANr PLAINTIFF DENA BANK, A PRtVATE COMPANY. CONSTtTUTED UNDER THE RELEVANT PROVISIONS OF THE BANKING COMPANIES (ACQUISITIION AND TRANSFER OF UNDERTAKING) ACT, 1970, HAVING ITS HEAD OFRCE MAKER TOWER8 "E" CUF PARADE BAMBAI AND INTER ALIA AMONTHEST OTHER BRANCHES, BRANCH OFFICE AT TEHSIL BERLA DISTT. DURG. Vwmw 1; 8MT. CHAMELI BA< AGED 52 YEARS, WIFE OF SHREE RAM VISHAL SHARMA, AGRICULTURIST, RESIDENT OF VILLAGE BAHERGHAT P.0. BEEJAMATH, TBHSIL BERLA D18TT. DURG. DEFENDANTS 27 SMT. 8UMINA DEBA/ANW1FE OF SANJAY DEEWAN, R/0 BRAHMANPARA, NEAR KANKAU TALAB, RAIPUR, D»STT. RAIPUR. 37 SMT. MEENA SHARMA W(FE OF SHRI GIRISH KUMAR SHARMA R/0 BALCO NAGAR, SECTION 5, QUARTER N0. 90004, TEHSIL & DISTT. KORBA 4. 1MILU BAt MISHRA WIFE OF GOPENDRA KUMAR MISHRA R/0 M.E. 16 PADUMNAGAR, BHILAI 3, TEHSIL PATAN, DISTT. DURG. .,^^5^.. hereinafter be referred to as per thejr description before ie trtal Court.) 2. The plairrtiff/Bank flled a civil suit for recovery of loan of Rs.3,11,880/-advanced to defendant No.1 for purchase ©ftractor & trdley with the averment that the loan was advanGed on 8.7.1985after defendant No.1 executeda demand ofpromissory note; letter of guarantee by sureties-defendants No. 2; 3 & 4; Term Loan Agreement of Hypothecation of Movable Properties; hypothecation of standing crops, as detailed in Para 4 (A) (B) (C) & (D) of the plaint. The loan was repayabte in half yeariy installments in seven years wtth interest @ 12.50% on slx monthly rests. On failure of defendant No.1 in timely repayment of the installments with Interest and expenditure, notices were served. However, when the defendants failed to repay the installments even after receipt of notices, recovery proceedings were initiated before the Tehsildar jn the year 1993 as per provisjons oftheM.P. Public Money Recovery Act and the same were, subsequently, withdrawn. It was also averred that defendant No.1 executed a promissory note promising to repay the entire loanamount in lump sum as per loan account aeknowledgSng balance of loan vide acknowtedgements dated 14.8.1995, 24.7.1996 & 3Q.1.1997. Defendant No.1 had mortgaged her 29.45 acres of agricuttural land in favour of the Bank by depositing the documents described in Schedule B annexed with the plaint as additional security against the loan. DefendantsNo. 3 & 4 had ateo equitably mortgaged their property described in Schedule C & D. Defendant No.1 had executedan Acknowledgmentof D®l3tat the time of disbursal of loan and renewed the Acknowledgment of Debt in the year 1991 & 12th May, 1994 and accepted her tiability towards the Bank as per her toan account with the Bank. 3. The defendants, denying the averments in the plaint, averred in their written statement that the plaintiff/Bank had jnstjtuted recovery proceedings before the Tehsildar. The defendants had submitted their legal objection against initiating recavery proceedings without Sssue of revenue recovery certificate. When €^%. ^ ^, iW '^"' •V? their objection was rejected by the Tehsfldar, they had flted a writ petitton before the High Court of Madhya Pradesh, however, after receiving notice from the High Court, the ptaintiff irr collusion with the Tehsildar, got the proceedings dfemtesed as withdrawn and flled the instant suit during pendeney ofthe writ petitlon. 4. On the basis of pleadings of the respectwe parties, issues were framed. Three witnesses namely Vtjay Govind Goverdhan - Branch Manager, Sarjuram Yadav - Peon arrd Silva^o Toppo - another Branch Manager of the plaintiff/Bank were ^eamtned by the plaintjff. The defendants did not examine any wltness. 5. Leamed trial Court, while dismissjng the sutt by the tmpugrtect judgment and decree, hetdthat the suit has been fitod by an authorized person; the pialntiff advanced loarr of Rs. 1 laG cash on 227.1985 to defendant No.1, which was payabte with interest @ 12.50% p.a. on six monthly rests; defendant No.1 had enterect into an agreement to repay the loan »n seven yeare in six mont^y installments and falted to repay the six monthly installments; the defendant-deceased Ram Vishal was Go-loanee antf defendante No. 3 & 4 stood surety for repayment ofthe loan; defendant No.1 had hypolheoated the tractor and trdtey with the Bank for the loan, and the plainttffjs entitled to recover the loan by sate of the hypothecated property; defendant No.1 had atso execyted an equitable mortgage of her standtog crop agatnst the agrfeutoFat loan and the Bank is entitled for a deeree of Rs.3,11,880/- jolntly and severally against the defendants with interest @ 14% on six monthly rests. It has Iseen further held that the plalntiff/Bank has failed to prove that the defendants had equitably mortgaged their lands described in SGhedules B, C & D for the security of the loan in favour of the Bank, and the suit has been dismissed as barred bylimitation. 6. Shri B.P.Sharma, tearned counsel for the appellant/platntlff, argued that the leamed trial Court has dismissed the suit on the ground of limitation whtie deciding thelssue No. 17 Irr the afflrmative. Finding on jssue No. 17 is not in accordanee with law. ^: From perusal of the loan account statement of the traetor loan No.110/85, flted and proved by theplaintiffbyexMbJtmg itthrough the Branch Manager, itwould be evldent that the defendant No.1 had deposited various amounts towards repayment of loan in her loan account and thus, on each payment, limitation got extended by three years as per provisions ofArtide 1 read with SeGUons 18 & 19 ofthe Limitation Act, 1963 (in short "Act, 196aB). Arttele 1 of the Act, 1963 provides that in a suit relating to accounts for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties, the period of jjmitation is three years 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 In the instant case, the last payment of Rs.19,000/- has been made on 16.4.1996 and thesuit has been filed on 12.2.1997 and therefore, the limitation for flling the suit got extended for a period of three years from 16.4.1996. It was further argued that the amount of ioan isseeured by the deposit of title deed as revenue papers B-1 & Khasra etc. which are treated as Utle documents, were deposited and acknowtedged by defendant No.l/loanee and the loanee in her letter to the Bank admitted the acknowledgement in categoncal terms that these documents were being deposited wlth an intent to create an equitable mortgage and in case of mortgage suit, the prescribed period of limitation is 12 years and the trtal Court was not justified in not treating it as a mortgage suitand not decreeing the suit under Order 34 ofthe CPC. 7. He ftirther argued that indlsputably, the loan was repayable jn seven years with intere^ @ 12.5% per annum on hatf yeariy rests as per agreement executed by defendant No.1 on 22.7.1^5 and thus, up to the year 1992, the suit could not be held to be barred by Jimitation even if no payment is made by the loanee and therefore, the reasons assigned in the impugned judgment against Issue No.T7 that the suit has been filed after three years from the ^^.% J \^y r~ ^rr- • date of taking loan and as such, barred by limitatfon, are erroneous and not sustainable in law. Lastly, it was argued that since the ptaintiff had advanced agricultural loan for the purchase of tractor, the Bank had proceeded under the provisions of M.P. Public Money Recovery Act before the Tehsildar concemed. The defendants diallenged the above recovery proceedings in the Hlgh Court by way of filing writ petition and an interim order was passed in fevour of the defendants staying the proceedings before the Tehsildar and In these cjrcumstances, the plalntiff had withdrawn the recovery proceedings from the Court of Tehsildar and immedlately, thereafter the instant suit was filed. Thus, the plainttff/Bank was bonafldely prosecuting the recovery proceedings under the provisions of M.P. Pubjic Money Reccvery Actamd as such, the time spent in prosecuting the proceedlngs before th@ Tehsilcter was liable to be excluded as per Section 14 ofthe Act. 8. ReHance is placed on the judgment In the matter of KesffariehaRel Jalaukhalal Va. Shilfeng Banking Corpora^wf L^,ShWong[. 9. The defendants remained unrepresented, desptte servlce of notices. 10. The short question for our consicleratlon is - whether the leamed trial Court was justified in dtemisstng the suit as barred by HmitatiorT whilegivjng finding against Issue No.17? 11. We have heard leamed counsel for the appellant/ptajntiff and perused the oral & documentary evidence available on record, includingthe impugned judgment ofthetrial Court. 12. From the pleadings in the plaint and orat & documentary evidence available on record, we find that defendant No.1 applled for loan of Rs. 1 lac for the purchase of tractor & trolley and other agricultural accessories vide Ex.P/1. She also ^f~) submitted Search Report with respect to 29.4S acres of her agricultural land vide Ex.P/2. Revenue papers (copy of B-1 and map) of the land i.e. Ex.P/4, P/5 & P/6, were also filed by the loanee with her application for loan. Her husband had submitted his consent vide Ex.P/7. Defendants No. 1 & 2 had executed a deed of hypothecation of standing crops over their agricultural land on 22.7.1985 vide Ex.P/10. Defendants No. 3 & 4 had executed a deed of guarantee to secure the loan ach^nced to the principal debtorvide P/12. As per Clause 5 of the Term Loan Agreement of Hypothecation (Ex.P/11), loan of Rs. 1 tac advanced to defendant No.1 was repayable within seven years in half yeariy installments of Rs.7150/- each with interest @ 12.50% per annum or at the rate or rates as may at any time and from time to time be fixed in that behalf by the Bank. Term Loan Agreement is executed by defendants No. 1 & 2. Defendant No.1 had executed an Acknowledgement of Debt of Rs.1,45,234/- as on 14.5.1991 with interestpayabje @ 14% p.a. on halfyeariy rests. The plaintiff/Bank has alsofiled andproved certifled true copy of the statement of traGtor loan account No.110/85 ofthe defendant No.1 from 22.7.1985 to 17.12.1996 vide Ex.P/16. A dose examination of the document of Ex.P/16 reveals that defendant No.1 had deposited the following amounts towards repayment of loan: 81.No. 01. 02. 03. 04. 05. 06. 07. 08. 09. Dale 10.7.1986 22.9.1986 7.8.1987 12.4.1990 30.3.1991 8.5.1992 5.6.1993 20.1.1994 31.3.1&94 Deposits (InRupws) 8,716 10,000 6,000 19,000 10,000 500 5,000 15,00© 4,000 10. 7.1.1996 1,235 11. 4.4.1996 4,000 12. 16.4.1996 19,000 13. The period of limitation for sults relattng to accounts for the balance due on a mutual, open and current aGcount, where there have been reclprocal demands between the parties, is three years and the time from which period begjns torun is to be computed from the close of the year, in whfch the last jtem admitted or proved is entered in the account; such year to be computedas in the account as perArticle 1 oftheAct, 1963. 14. Section 19 ofthe Act, 1963 provides as under: "19. Effect of payment on aecount of ddat or of interest on legacy. - VWiere payment on account ®fadebt or of interest on a tegacy is made befor®th©expirationofthe prescribed period by the person liable to pay the debt or legacy or by his agent duly authorized in this behaff, a fresh period of limitation shall be computed from ttie t»me^Mien the payment was made: Provldedthat, save inthe case of payment of Jiiterest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person maMng thepaymen*. 15. In the instant case, indisputably, deposits were made by defendant No.l/loanee as indtcated in the document of Ex.P/16 and proved by PW-3 and not Gontroverted by the defendants. Entries in the document of Ex.P/16 are duly certified by the Branch Manager and an endorsement to this effect is present at the foot ofthe statement ofaccount. "Certified copy" is defined imder the provisions of fehe Banker's Books Evidence Act, 1891 (in short "Act, 1^1°), whlch reads as under: \\ "2(8) "Certified copy" means a copy of any entry in the bootes of a bank together with a certificate written at the foot of such \ copy that it is a true copy of such entry. that such entry js 8 a contained in one ofthe ordinary books of the bank and was made In the usual and ordinary courae of business, andthat such book is still in the custody ofthe bank and where the copy was obtained by a mechanicat or other process which in itself ensuredthe acGuracyofthe copy, afurther eertffiGate to that effect, but where the book froin whteh such copy was prepared has been destroyed in the usual cowrse af the bank's business after thedate on whteh the eopy had been so prepared, a further certificate to that effect, each sueh certificate being dated and subscribed by the principal accountant or managerofthebankwAhhisname and offlcial title." Section 4 oftheAct, 1891 reads thus: "4. Subject to the provisions of this Act, a certified copy of any entry in the banker's book shall in all tegal proceedings be recewed as prima facie evidence ofthe exj^ence of such entry, and shatl be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to same extent as, the original entry itseffis now bylawadmlssible, butnotftirther or otherwtee." 16. The Hon'bte Supreme Court In the matter of KQsharichand Jaisukhafa^- while dealing with Articte 85 of the tndian Limitation Act, 19Q8, which provides that the period of limltatton for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties, te three years 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, has referred to the leading case of HiradQ Basappa Vs. G. Mucfdappa, (70-71) 6 Macf WC 142, wherein it was held that Bto be fnutuaf there must be transactions on each side creating independent obligatfons on the othor and not merefy transactions which create obfigations on the one side, those on the other being merely corryfete or partial disciisvges of such obfigations", with approval. 17. In the present case also, it is not in dispute thatjhe account between the parties was at all time an open and current ©ne. From the transactions reflecting fr^om the statement of account of Ex.P/16, it is clear that It was mutual during the relevant period. As perSection 4 oftheAct, 1891, the ptaintiff/Bank has submitted statement of account duly certifted by the Bank oticer and the same may be received as prima facie evidence oftheexi^ence of such entries, and the same may be treated as sufRcient evidence to hold that defendant No.1 deposited a sum of Rs.6,000^ on 7.8.1987 and thereafter, within three yeare i.e. on 12.4.1990 she again deposited Rs.19,OOOA towards repayment of loan; on 30.3.1991, Rs.10,000/-; on 5.6.1993, Rs.5,000/-; on 20.1.1994, Rs.15,000/-; on 31.3.1994, Rs.4,000/-; and finaljy, on 16.4.1996, Rs.19,000/-. Thus, by vrtu^ of Seetion 19 read with Articte 1 of the Act, 1963, fresh extended period of limitation of three years is to be computed from the close of the year in which last item admitted or proved as entered in the account. 18. The leamed Additional District Judge, whlle dealing wlth Issue No.17 regarding limitation, has not considerecl the effect df document of Ex.P/16, which has not been controverted by the defendants, either by way of cross-examination of the plaintMfs witness, who has proved the said document, or by examining any witness insupport of their contention that the suit is barred by limitation. 19. On the basis of aforesaid discussions, we have no hesitation in setting aside the finding recorded bythe leamed Additional Dtetrict Judge against Issue No.17 and consequently, djsmi^ing the suit as barred by limitation. Since leamed Additional District Judge has already declded the other issues and held that the plaintiffis entitled for a decree of Rs.3,11,880/- with interest @ 14% p.a. on six monthly rests from the date of institution ofthe suit, and the defendants have not preferred any appeal against the aforesatd findings, the said findinas have attained finalitv and therefore: we do not deem it /y^ \ r^-s;.;^ ^;^."iytt<-yir"^'! 10 necessary to consider other legal issues raised by the plaintiff in the factsand clrcumstances ofthe case. 20. Consequently, for the foregdng reasons, appeal preferred by the appellant is allowed. The finding recorded by the trtal Court against Issue No.17, dismissing the suitas bsured by limitatton; is set aside, and it is heldthat the suit was withfn time. Accordingly, the plaintiff/Bank's suit is decreed with cost throughout and it is held that the plaintiff/Bank is entitled to recover an amount of Rs.3,11,880/- with interest @ 14% per annum on slx monthly rests and the defendants are jointly and severally Hablelo pay the aforesaid amount to the plaintiff/Bank. A decree be drawn accordingly. Sd/- Dhirendra Mishra Judge Sd/- R.N. Chandrakar Judge Khan \