IMPORTANT POINT
The court established that the limitation period for recovery of loans starts from the date of the loan agreement, with the first day excluded in the computation.

JUDGMENT :

H.P. Sandesh, J.

This second appeal is filed questioning the judgment and decree dated 12.12.2017 passed in R.A.No.29/2017 setting aside the judgment and decree dated 06.03.2017 passed in O.S.No.11/2016 and granting the relief in favour of the plaintiff.

2. The factual matrix of the case of the plaintiff before the Trial Court is that the defendant had borrowed loan of Rs.5,00,000/- from the plaintiff on 19.03.2013 and agreed to repay the same with interest at 2% per month. It is also the case of the plaintiff that the defendant had executed an on demand promissory note for having availed the loan and agreed to repay whenever he demands. Inspite of demand, he did not pay the principal amount or the interest. Hence, he issued legal notice on 10.12.2015 and the same was served and untenable reply was given and hence he filed a suit for recovery of Rs.8,61,000/- with interest. In pursuance of the suit summons, the defendant appeared and admitted that he had borrowed loan of Rs.5,00,000/- from the plaintiff and at the time of borrowing, the plaintiff had collected three cheques drawn on SBM Bank, Mandya. It is also contended that the plaintiff had taken a blank stamp paper signed by the defendant. As agreed, the defendant had paid the interest regularly and he also paid the entire principal amount to the plaintiff on 05.05.2013 in the presence of two witnesses, namely Sri N. Raju and Sri Ramesha T.L., residents of Agasanapura Village and Talagavadi Village respectively. When the amount was repaid, the plaintiff did not return the blank cheque and promissory note saying that he has misplaced them. It is also contended that the plaintiff had misused the cheque, which he had collected and filed a case against him in C.C.No.910/2015 and the same is pending adjudication. It is also contended that the plaintiff has misused the promissory note and filed a frivolous suit and hence prayed the Court to dismiss the suit.

3. The Trial Court having considered the pleadings of the parties, framed the following issues:

1. Whether the plaintiff proves that, the defendant has borrowed a loan of Rs.5,00,000/- from him on 19.03.2013 for his legal necessities agreeing to pay interest at the rate of 2% per month by executing promissory note before the witnesses?

2. Whether the defendant proves that the plaintiff has misused the promissory note and issued legal notice on 10.12.2015 calling upon him to pay the principal amount of Rs.5,00,000/- along with interest?

3. Whether the plaintiff is entitled for the relief sought for?

4. What order or decree?

4. In order to prove his case, the plaintiff examined himself as P.W.1 and examined two witnesses as P.W.2 and P.W.3 and got marked the documents at Exs.P.1 to 4. On the other hand, the defendant examined himself as D.W.1 and examined one witness as D.W.2 and got marked the documents at Exs.D.1 to 10. The Trial Court having considered both oral and documentary evidence placed on record, answered issue Nos.1 and 3 in the negative and issue No.2 in the affirmative and dismissed the suit.

5. Being aggrieved by the judgment and decree of the Trial Court, the plaintiff filed an appeal in R.A.No.29/2017. The First Appellate Court having considered the grounds urged in the appeal memo and the application filed under Order 41 Rule 27 of CPC to produce the bank statement and other documents, formulated the following points for consideration:

1. Whether I.A.No.1 filed by appellant/plaintiff under Order 41 Rule 27 of CPC deserves to be allowed?

2. Whether the plaintiff has proved that the defendant had borrowed a sum of Rs.5,00,000/- from him agreeing to repay the same with interest at 2% per month by executing a pronote on 19.03.2013?

3. Whether the defendant has proves that he has repaid the entire loan of Rs.5,00,000/- with interest as pleaded in para No.5 of the written statement?

4. What order?

6. The First Appellate Court having considered the grounds urged in the application filed under Order 41 Rule 27 of CPC c