IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 159 of 2001 Date of decision: 16.09.2010 _________________________________________________________ H.P. Financial Corporation … Appellant. Versus Vinod Kumar & Others … Respondents. _________________________________________________________ Coram The Hon’ble Mr. V.K. Ahuja, J. Whether approved for reporting? _________________________________________________________ For the Appellant : Mr. Ajay Kumar, Advocate For respondents No.1 to 3. : Mr. Neeraj Gupta, Advocate _________________________________________________________ Justice V.K. Ahuja, J. 1. This is an appeal filed by the appellant against the judgment and decree of the court of learned District and Judge, Shimla, dated 30.06.1997 dismissing the suit of the appellant/ plaintiff for recovery of a sum of Rs.2,77,701/- 2. Briefly stated the facts of the case are that Late Shri Amar Nath Malhotra, the predecessor in interest of respondents No. 1 to 3 (hereinafter referred to as defendants No. 1 to 3) took a loan of Rs.1,88,500/- from the appellant (hereinafter referred to as plaintiff) for the purchase of a truck. It was agreed that the interest would be charged on the loan amount at the rate of 4 ½ % above the Bank rate, subject to a minimum of 14 ½ percent. The principal amount and the interest accruing thereon were agreed to be paid in eighteen quarterly instalments beginning from10.12.1981 and ending on 9.3.1986. Respondent No.4 (hereinafter referred to as defendant No.4) guaranteed the repayment of loan and executed a guarantee deed. The original loanee Amar Nath Malhotra executed a deed of hypothecation besides other requisite 2 documents. The defaults were committed by the loanee Amar Nath Malhotra in payment of instalments and vide notice dated 1.8.1987 his legal representatives were required to pay the entire amount due in the loan account in lump sum. The defendant did not respond to the notice. The suit was filed on 28.02.1989 and was alleged that it was within time. It was alleged that the last instalment was due on 9.3.1986. and the limitation is to be counted from that date. The amount was not paid inspite of the recall notice sent to defendants No.1 to 3, hence the suit filed by the plaintiff for recovery of the principal amount and interest thereon. 3. Defendants No. 1 to 3 took various pleas, including that they are not personally liable to pay the amount as they have not inherited any assets of Late Shri Amar Nath Malhotra. It was also pleaded that the loanee had died on 19.9.1983 and the plaintiffs took no steps for the recovery of the loan and thus, the claim was barred by limitation. It is also alleged that the truck was operated by defendant No.4 after the death of Late Shri Amar Nath Malhotra to the knowledge of the plaintiff as defendant No.1 had brought this fact to the notice of the plaintiff, but the plaintiff took no steps for recovery of amount from the defendant No.4, as such, defendants No. 1 to 3, are not liable to pay anything. Defendant No.4 did not file any written statement or contested the case. 4. From the pleadings of the parties, the following issues were framed by the Court: “1) Whether the suit has been filed by the plaintiff Corporation through a competent person to do so? OPP. 2) Whether the suit is within limitation? OPP. 3 3) Whether the plaintiff Corporation is estopped from filing the instant suit on account of their act and conduct as alleged? ..OPD 1 to 3. 4) To what rate of interest and from whom, the plaintiff is entitled to recover? ..OPP 5) Whether the plaintiff is entitled to recover the suit amount or any other amount from the defendants ?..OPP. 6) Relief.” 5. On conclusion of the trial, the learned trial Court decided issues No. 2,3 and 5 as against the plaintiff and in favour of the defendants and consequently, dismissed the suit of the plaintiff in full. 6. I have heard the learned counsel for the parties and have gone through the record of the case. The submissions made by the learned counsel for the appellant were that the said amount became due to the plaintiff after the last date of payment of instalment and as such the suit of the appellant was well within time and the plaintiff Corporation is not stopped from filing the suit because of their act and conduct. On the other hand learned counsel for respondents had supported the impugned judgment for the reasons given therein. 7. Defendants No. 1 to 3 have not denied the fact that Shri Amar Nath Malhotra had raised loan for the purchase of truck and he executed the necessary documents and the defendant No.4 was the guarantor who has also not contested the case that he did not file any guarantee deed or was not liable to pay the amount. The only dispute raised by the respondents was that the suit was not within time and those findings have to be considered by this Court. 8. A perusal of the record shows that the amount was payable in 18 quarterly instalments starting from 10.12.1981 and ending on 9.3.1986. 4 According to the terms of the agreement Ext. PD, on default in any of the instalment in time the whole amount became due. Clause 5 of hypothecation deed Ext. PD dated 23.09.1981 reads as under:- “(5) That if default shall be made in payment of all or any part of the said principal sum or interest or in the performance or observance of any other covenants, conditions or provisions contained in these presents and on the part of borrower/s to be observed and performed then it shall be lawful for the Corporation or any person authorized by it to take over the possession of the vehicle and after due notice sell the vehicle for the realization of the debt, without intervention of the court.” 9. It is therefore, clear from the perusal of this clause that in case default is made in any of the instalment in time, the whole amount shall become due to the plaintiff corporation who was at liberty to realize the amount after issuing a recall notice. The first instalment was due in November, 1981 but inspite of the fact that no amount was paid of any of the instalment, the suit was filed in November, 1986 by the plaintiff Corporation. The limitation is not to be counted from the last instalment due on 9.3.1996 but is to be counted from the first instalment for which default was committed by the defendants. 10. Learned trial court has referred to a decision in H.P. Financial Corporation versus Smt. Man Mohan Kaur Anand and another, 1991 (1) Sim. L.C. 120 and applying the decision in the above case it was concluded by the learned trial Court that in case the default is committed, in the payment of the first instalment, limitation starts from that date. The plea of the waver is a mixed question of law and fact and the 5 plaintiff must allege and prove it. Inspite of the default having been committed of all the instalments including the one which was due in 1981, no suit was filed till the year, 1986. It is also in record that the defendant had intimated to the plaintiff corporation that one of the defendant namely defendant No.1 that the original loanee has died and the truck in question has been taken by the guarantor on the death of the original loanee and therefore, the corporation was requested to attach the vehicle for recovery of its dues after seizing and auctioning of the vehicle. This letter has been proved in evidence as Ext. PH dated 18.7.1984. It is, therefore, clear that inspite of the default committed in the payment of instalment and the intimation given by one of the defendant no steps were taken by the plaintiff corporation for recovery of the realization of the amount due to them and as such the learned trial court had rightly concluded relying upon the decision of this Court that the suit was not within time and there was a waiver and the plaintiffs are estopped from filing the suit. The findings recorded on these issues are based upon correct appreciation of evidence and law and these do not call for an interference by this Court. 11. In view of the above discussion, I accordingly hold that there is no merit in the appeal filed by the appellant, which is dismissed accordingly. Parties are left to bear their costs. (V.K. Ahuja) Judge. September 16, 2010 Pritam