IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE WEDNESDAY, THE 2ND JULY 2008 / 11TH ASHADHA 1930 AS.No. 139 of 1997() -------------------- OS.244/1994 of ADDL.SUB COURT, KOCHI .................... APPELLANT/PLAINTIFF: ----------- UNION BANK OF INDIA, MATTANCHERRY, KOCHI-2. BY ADV. SRI.ASP.KURUP SMT.JAYASREE MANOJ RESPONDENT/DEFENDANT: ------------- C.D.LAZER, AGED ABOUT 73, SON OF DEVASSY, CHALAKKAL HOUSE, MAMMIYUR, GURUVAYOOR, THRISSUR DISTRICT. BY ADV. SRI.P.SANTHALINGAM (SR.) SMT.JEENA JOSEPH ADV.SRI.K.G.BALASUBRAMANIAN, AMICUS CURIAE THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 02/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PIUS C. KURIAKOSE, J. ----------------------------------------------- A.S.No. 139 of 1997 ----------------------------------------------- Dated this the 2nd day of July, 2008 J U D G M E N T Mattancherry Branch of the Union Bank of India, a nationalised bank is the appellant. They are aggrieved that the money suit filed by them was dismissed by the trial court holding that the suit is barred by limitation. The facts as averred in the plaint are that a partnership firm by name “ M/s. Alleppey Vegetables” was maintaining a current account with the plaintiff bank. The defendant C.D.Lazar and Sri.V.V.Sasidharan were the partners of that firm. The current account was being operated by them jointly. During the period from 19.1.1981 and 26.5.1982, Sri. Lazar withdrew a total amount of Rs.77,030/- from the current account of the firm as per 12 cheques. The Bank honoured those cheques on the bona fide belief that they were issued in the course of the trade and business of the firm. The plaintiff bank came to know that the first defendant had unauthorisedly withdrawn the amounts without knowledge of the other partner Sri.P.V.Sasidhraarn only when he made enquiries regarding the balance in the current account. Sri. Sasidharan sued the bank and the defendant. The Suit O.S. No.11/1985 was dismissed by the trial AS. N0. 139/97 -2- court. But the appeal preferred by Sri.Sasidharan was allowed and this court directed the bank to credit the sum of Rs.77,030/- to the current account of the firm. Accordingly, the amount was credited and the present suit is instituted against the defendant seeking reimbursement of the amounts with interest at the rate of 18.5% from the date on which the bank credited the amount into the account. 2. The defendant filed a written statement contending that the cheques referred to in the plaint were issued by him with the knowledge of Sasidharan and that Sasidharan challenged the withdrawal only in the wake of certain dispute which arose between the partners subsequently. It was contended that the plaintiff, after having honoured the cheques, has no locus standi to sue the defendant. The defendant is not be penalised for the inactions of the bank. The bank ought to have preferred S.L.P. before the Supreme Court against the decree in the suit filed by Sri.Sasidharan. Lastly it was contended that the suit is barred by limitation. The learned subordinate judge framed the following issues for trial on the basis of the pleadings raised. 1. Whether the defendant had unauthorizedly AS. N0. 139/97 -3- withdrawn Rs. 77,030/- from the account of the firm M/s. “ Alleppey Vegetables” ? 2. Is he defendant liable for the plaint claim ? 3. Reliefs and costs ? 4. Is the suit barred by limitation ? 3. The evidence at trial on the plaintiff's side consisted of Ext.A1, which is a certified copy of the judgment of the High Court in A.S. No.467/1986 allowing the appeal filed by Sasidharan against the decree of the trial court in the suit filed by him against a bank and Ext.A2 is certified extract of the accounts maintained in the name of the firm M/s. Alleppey Vegetables, apart from the oral evidence of PW1, the branch manager of the Bank. On the side of the defendants, the evidence consisted of Exts.B1 and B2, testimonies of DW1 defendant and DW2; another witness. On appreciating the evidence the learned subordinate judge would hold under issue No.1 that a sum of Rs.77,030/- has been unauthorisedly withdrawn from the account of Alleppey Vegetables. Further it was held under issue No.2 that the defendant is not entitled to have unlawful enrichment despite the negligence of the bank in honouring the cheques issued by him. It was found that since court fee is paid only for the principal amount of Rs.7,703/- the bank can aspire for only future interest at the rate of 6 AS. N0. 139/97 -4- % p.a. On considering the additional issue No. 4 regarding limitation, the learned subordinate judge held that Article 113 of the Limitation Act, applies to the suit which is for realisation of the amounts unauthorisedly withdrawn by the defendant. The period of limitation was three years and the time begins to run when the right to sue accrues. The court would highlight certain passages in paragraph 3 of the plaint and hold that admittedly the plaintiff discovered the mistake of honouring the cheques when Sri.Sasidharan enquired about the balance in the account. The court, therefore, concluded that discovery of the mistake by the bank should have been on or before 1984 since the suit was filed against the bank by Sri.Sasidharan in 1985. The present suit filed in 1994, it was held, is long after the expiry of the period of limitation. Ext.A1 judgment cannot give rise to any fresh cause of action for the plaintiff to sue the defendant. It was found that the averments in the plaint that cause of action arose on the date of Ext.A1 is wrong. Thus the issue was answered against the plaintiff and the suit was dismissed without cost. 4. I have heard the submissions of Sri.Sajith P.Kurup, learned counsel for the appellant and also those of K.G.Balasubramanian, learned counsel who assisted me as Amicus Curiae at my request. I AS. N0. 139/97 -5- felt like seeking the assistance of Mr.Balasubramanian since the respondent in the appeal had not entered appearance despite service of notice. Addressing me on the various grounds raised in the memorandum of appeal Mr.Sajith P.Kurup would submit that the court below went wrong in applying Article 113 of the Limitation Act in its true sense to the facts and circumstances of this case. He submitted that sections 14 and 17 of the Limitation Act ought to have been applied and the suit should have been found to be filed within the period of limitation provided under Article 113. The learned counsel submitted that the appellant plaintiff became obliged to credit the sum of Rs.77,030/- to the current account of M/s. Alleppey Vegetables only on 25-10-1991 when this court rendered judgment in A.S.467 of 1986 filed by the partner of the respondent. The suit was filed on 29-8- 1994, within three years of the date of the judgment and therefore the finding that the suit is barred by limitation is incorrect. Mr.Kurup further submitted that though it is true that the bank had come to know that the respondent defendant had withdrawn the amount much earlier the bank was not in a position to proceed against the respondent in view of suit O.S.11 of 1985 filed by the respondent's partner. The issue which was being tried in that suit was whether the AS. N0. 139/97 -6- amount was withdrawn by the respondent on behalf of the firm to the knowledge of the plaintiff in that suit. That suit was initially dismissed upholding the defence of the bank that the plaintiff therein has no cause of action against the bank. The bank became liable to credit the amount to the account of the partnership and the liability became enforceable against the present defendant only on 25-10-1991 when the appeal A.S.467/86 was allowed. 5. Mr.K.G.Balasubramanian, the learned amicus curiae submitted that the court below appears to have gone wrong in holding that for the purpose of limitation the suit is governed by the residuary article, Article 113. The apposite article for the present suit is Article 101 of the Limitation Act, according to him. Analysing the averments in the plaint Mr.Balasubramanian would submit that the suit is essentially based on the judgment of this court in A.S. No. 467/86. Mr.Balasubramanian referred to the judgment of the Division Bench in KSEB v. Chacko Pillai, 1982 KLT 76, the judgment of the Madras High Court in Ramaswami v. Muthayya Chetti, AIR 1925 Mad. 279 (MLJ (XLVII) 829 as well as on the judgment of Nagpur High Court in Yeswantrao v. Bhaskerrao, AIR 1956 Nagpur 250 in support of his submissions. AS. N0. 139/97 -7- 6. Having considered the submissions addressed at the Bar in the light of the various judicial precedents cited before me I am of the view that the court below erred in holding that it is Article 113 of the Limitation Act which governs the question of limitation of the suit. A careful reading of the plaint will reveal that the suit is instituted on the basis of the judgment of this court in A.S.467/86. It is in paragraphs 4 and 5 of the plaint that the essential facts constituting the cause of action for the suit are stated and in paragraph 7 the relevant dates for enabling the court to determine whether the suit has been instituted on time are stated as follows: “7. The cause of action for this suit has arisen on and after 25- 10-1991 when the Honourable High Court of Kerala held the plaintiff liable to credit the amount wrongly withdrawn by the defendant to the account of M/s.Alleppey Vegetables on and after 3-6-1994 being the date on which the plaintiff credited the amount to the account No.11112 of Alleppey Vegetables pursuant to the High Court's direction; and thereafter in Mattancherry Village within the jurisdiction of this Honourable Court, from where the amounts were withdrawn and the account is maintained by the plaintiff in the name of M/s. Alleppey Vegetables”. I have no doubt in my mind that the suit laid by the appellant-plaintiff was upon or on the basis of Ext.A1 judgment which significantly had been produced by the plaintiff along with the plaint itself as the suit document. Article 113 is the residuary Article which is to be applied AS. N0. 139/97 -8- only in cases where no period is provided elsewhere in the schedule to the Limitation Act. I shall now quote Article 101. ------------------------------------------------------------------------------- Description of suit Period of Time from which limitation. Period begins to run. ------------------------------------------------------------------------------- Upon a judgment The date of the including a foreign Three years judgment or judgment, or a recognisance. recognisance. ------------------------------------------------------------------------------- Since Article 101 quoted above does provide a period of limitation for suits based on judgments whether they be of Indian Courts or foreign Courts, Article 113 cannot have application. 7. The maintainability of suits based on judgment was considered by a Division Bench of the Madras High Court in Ramaswami v. MPM Muthayya Chetti, AIR 1925 Madras 279 wherein the learned Division Bench while endorsing an argument that no action lies in India on an executable judgment and the remedy of the judgment creditor is by execution also ruled that where a judgment creates a new obligation without providing for execution, a suit on the judgment is maintainable. Ext.A1 judgment creates new obligations from the point of view of the appellant bank to give credit for the AS. N0. 139/97 -9- amounts wrongfully paid by passing the cheques unauthorisedly drawn by the respondent and a corresponding obligation on the respondent to make good that amount to the appellant bank. Ext.A1 does not provide for execution of the obligation created on the respondent and therefore the suit which is filed essentially for enforcing that obligation is perfectly maintainable and rightly found to be so by the trial court. Division Bench of this Court in Kerala State Electricity Board v. Chacko Pillai, 1982 KLT 76 considered the question as to the date of which judgment governs – whether the date of the trial court judgment or the appellate court judgment, when suits are filed on the basis of judgments. The Bench held that for the purpose of Article 101 the judgment means the final judgment and if there was an appeal, it will be the appellate judgment. Ext.A1 is the appellate judgment and when the question of limitation of the suit is decided with reference to the date of Ext.A1 it will be seen that the suit was filed well within the period of limitation prescribed under Article 101. 8. The result of the above discussions is that the appeal will stand allowed. The findings of the court below on additional issue No.4 are set aside and it is found that the suit is not barred by limitation. Reversing the decree of the court below the suit will stand AS. N0. 139/97 -10- decreed as prayed for with costs. The parties will suffer their respective costs in this appeal. (PIUS C.KURIAKOSE, JUDGE) ksv/dpk The first two sentences in paragraph 4 of the judgment dated 02-07-2008 in A.S. 139/1997 are deleted and substituted by the following sentence: “I have heard the submissions of Sri.Sajith P.Kurup, learned counsel for the appellant, Sri.P.Santhalingam, learned senior counsel for the respondent and also those of Sri.K.G.Balasubramanian, learned counsel who assisted me as amicus curiae at my request.” Vide order dated 03-04-2009 in I.A. 992/2009. Sd/- Registrar (Judicial) AS. N0. 139/97 -11- PIUS C.KURIAKOSE, J. A.S. No. 139 of 1997 J U D G M E N T 2nd July, 2008