Article 115 of the Limitation Act applies to suits for compensation for breach of contract, including suits to recover loans repayable on a particular date.

( 1 ) THE petitioner is the defendant in a Small Cause suit filed by the respondent to recover a sum of Rs. 1,999-44ps. on the basis of two hand loans, Rs. 1,000 and Rs. 100. The petitioner admitted his liability for the loan of Rs. 100, but denied that he ever borrowed for himself or for the sake of anybody a sum of rs. 1,000 from the respondent. According to the case of the respondent a loan of Rs. 1,000 was taken in August, 1949, the petitioner having agreed to repay it on 31st July, 1950 and the second loan was taken in October, 1950. The suit was filed on 17 th December, 1958 after more than three years from the dates of borrowing. For the purpose of limittion, the respondent relied on three letters exhibits A-2 to A-4, which Were admittedly written by the petitioner to the respondent. Exhibit A-2 is dated 19th october, 1950, Exhibit A-3 is dated 3rd february,1953, and Exhibit A-4 is dated 2nd February, 1956. On the basis of these letters, the lower court found that the suit was within time. The lower Court, on evidence adduced also accepted the case of the respondent that he lent the two amounts to the petitioner and accordingly decreed the suit as prayed for.

( 2 ) MR. P. V. R. Sarma, learned Counsel for the petitioner has argued mainly on the question of limitation. With regard to the loan of Rs. 1,000 which was given in August, 1949 it is the case of the respondent that the defendant agreed to repay that amount on 31st July, 1950 and that therefore the period of limitation should run from that date only. The lower Court found that both the loans were acknowledged under Exhibits A-3 and A-4. If the three years period is to be reckoned not from August, 1949, but from 31st July, 1950 the acknowledgement under Exhibit A-3 would be within three years from that date and as Exhibit a-4 was within three years from Exhibit a-3 and as the suit Was filed within three years from the date of Exhibit A-4 there cannot be any bar of limitation for the suit. On evidence, the lower Court also accepted the case of the respondent that according to the agreement between the parties, the loan of Rs. 1,000 was repayable only on 31st July, 1950. But, Mr. Sarmae argued that under Article 57 of the old limitation Act, though according to the agreement between the parties the amount was repayable only on 31st July, 1950, the period of three years must be reckoned from the date of the loan in which case the letter. Exhibit A-3 under which the debt was acknowledged would be more than three years and by that time, the debt was already barred by time.

( 3 ) BAT, Mr. Veerabhadrayya, learned counsel for the respondent argued that the proper article that would be applicable to the facts of the present case is the residuary article 115 and not article 57. Therefore, the question for consideration is whether article 57 or article 115 of the old Limitation Act is the proper article which would apply to the facts of the case. According to article 57 of the old Limitation Act, for money payable, the period of limitation for a suit to recover money lent is three years when the loan is made. If this article is the proper article to be applied to this case, then the debt would be barred by limitation and therefore the debt would not be recoverable. According to article 115, for a suit to recover compensation for breach of any contract, the period of limitation is three years when the contract is broken. Mr. Sarma, has argued that this article cannot be applied to the facts of this case, because, the suit is not to recover any compensation for breach of any contract. For this purpose, he placed reliance on two decisions. The first decision relied upon by him is a decision of this Court is subbaraju v. Village Panchayaty, Gundugolanu. There, the suit was filed by a contractor for recovery of money with regard to excess work done by him for which there was no agreement between the parties. In that connection Gopal Rao Ekbote, J. who decided that case observed t

Click Here to Read the rest of this document