State Bank of India vs Ramkrishna Jairamji Sakharkar

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2006 Supreme(Bom) 194

IN THE HIGH COURT OF BOMBAY
(NAGPUR BENCH)
Naik V.A. (Smt.), J.
State Bank of India ... Appellant.
Versus
Ramkrishna Jairamji Sakharkar & another ... Respondents
Second Appeal No. 386 of 1991,
Decided on 13-2-2006.
Advocates appeared:
Agrawal, M.G. Bhangde, for appellant.
A.S. Bang, J.T. Gilda, for respondents.

Headnote:Limitation Act (36 of 1963) - Article 62 - Applicability - A suit to enforce the payment of money secured by a charge upon immovable property is covered by Article 62 of the Limitation Act, 1963 if the recovery is sought against the charged properties - Prescribed period of limitation for such suit would be twelve years - As suit was filed for personal decree against defendant and not for recovery of money, trial as well as the appellate Court were, therefore, justified in holding that the provisions of Article 62 of the Limitation Act, 1963 did not apply to the facts of the case as no relief was claimed by the plaintiff as against the immovable proper ties charged. - Defendant No. 1 applied for loan on 29.6.1978 and the loan was sanctioned on 13.7.1978. The charge was not created on the immovable properties belonging to defendant No. 1 for securing the loan advanced on 13.7.1978 as admitted the loan was sanctioned on 13.7.1978 and the charge was created much earlier, in July, 1977. The plaintiff had wrongly relied on a document creating charge so as to bring the suit filed by the plaintiff-Bank within the prescribed period of limitation. The plaint also refers to the registration of the document creating charge on 1.8.1977 i.e. much prior to the date on which the loan was sanctioned. Thus, the suit of the plaintiff for recovery of amount could not be based against the charged properties. It was casually pleaded in the plaint that the suit was filed within the limitation prescribed under Article 62 of the Limitation Act as charge was created on the immovable properties. The entire plaint showed that the suit was a suit simpliciter for recovery of amount based on accounts. The title of the plaint as well as the prayer clause made it abundantly clear that the suit was not for an enforcement of payment of money secured by a charge created upon the immovable property. The pleadings in the plaint showed that the suit was mainly based on the accounts. There was a mere mention of the creation of charge on the immovable properties in plaint along with a mention about the declaration-cum-undertaking, the deed of hypothecation and the execution of the deed of guarantees. The trial as well as the appellate Court were, therefore, justified in holding that the provisions of Article 62 of the Limitation Act, 1963 did not apply to the facts of the case as no relief was claimed by the plaintiff as against the immovable properties charged and the suit was for personal decree against the defendants. A suit to enforce the payment of money secured by a charge upon immovable property is covered by Article 62 of the Limitation Act, 1963 if the recovery is sought against the charged properties and the prescribed period of limitation would be twelve years no relief could be granted to the plaintiff as the suit was not one for recovery of loan against the properties charged but was a suit seeking a personal decree against the defendants. ILR 1885 Vol. VII All 502; AIR 1962 SC 633 - Referred.
Limitation Act (36 of 1963) - Article 62 - Suit for recovery of money - Limitation for - Money secured by charge created upon immovable property - Suit covered by Article 62 of Act - Period of limitation 12 years - Charge created one year prior to loan advanced by Bank to its owner - Suit for recovery of loan cannot be based against charged properties - Provisions of Article 62 of Act not attracted. - Even on the facts of the instant case, it cannot be said that the charge was created on the immovable properties belonging to defendant No. 1 for securing the loan advanced on 13.7.1978 as admittedly the loan was sanctioned on 13.7.1978 and the charge was created much earlier in July, 1977. The plaintiff had wrongly relied on Exh. 18, a document creating charge so as to bring the suit filed by the plaintiff Bank within the prescribed period of limitation. The plaint paragraph 3 also refers to the registration of the document creating charge on 1.8.1977, i.e. much prior to the date on which the loan was sanctioned. Thus, the suit of the plaintiff for recovery of amount could not be based against the charged properties. The trial as well as the appellate Court were, therefore, justified in holding that the provisions of Article 62 of the Limitation Act, 1963 did not apply to the facts of the case as no relief was claimed by the plaintiff as against the immovable properties charged and the suit was for personal decree against the defendants. Thus, even though the question of law is answered in the affirmative to hold that a suit to enforce the payment of money secured by a charge upon immovable property is covered by Article 62 of the Limitation Act, 1963 if the recovery is sought against the charged properties and the prescribed period of limitation would be twelve years, in the instant case, no relief could be granted to the plaintiff as the suit was not one for recovery of loan against the properties charged but was a suit seeking a personal decree against the defendants.
Maharashtra Provisions of Facilities for Agricultural Credit by Bank Act - Section 5(1) - CPC, Section 100 - Limitation Act, Article 62 - Limitation for recovery of secured debt. - Since Article 62 deals with suits relating to immovable property and not to suits for recovery of secured debt hence limitation period of shorter period of 3 years is applicable and not period of 12 years.

NAIK V.A. (Smt.), J.: - When this second appeal came up for admission before this Court on 8-8-1991, this Court admitted the appeal on the substantial question of law formulated as under:

"Whether a suit for recovery of loan which is secured by creation of registered charge on the property of debtor, is governed by Article 62 of the Limitation Act, 1963, if the recovery is based on the charged properties?"

2. In order to deal with the controversy in this second appeal as well as the substantial question of law involved therein, it is necessary to narrate a few facts which give rise to the substantial question of law, in this second appeal.

The appellant-State Bank of India is the original-plaintiff. The plaintiff filed a suit for recovery of Rs. 16,179.49 against the respondents-defendants. The plaintiff pleaded that defendant No.1, namely Ramkrishna · approached the plaintiff-Bank and requested for advancement of loan for agricultural development purposes with the limit of Rs. 8,000/-. The advance was to be guaranteed as to its repayment by two solvent sureties. Defendants Nos. 2 and 3 namely; Himmatrao and Janrao were the guarantors for the amount advanced to defendant No.1, and therefore, according to the plaintiff, defendants Nos. 1 to 3 were jointly and severally liable to repay the dues to the bank. The advance was to carry interest@ 13.5% per annum. It was then pleaded by the plaintiff that m defendant No.1 executed an agreement of hypothecation in favour of the plaintiff on 13-7-1978. Defendants Nos. 2 and 3 also executed a deed of guarantee in favour of the plaintiff-bank on the same day. Defendant No. 1 further executed a declaration cum undertaking under section 5(1) of the Act No. V of 1975 thereby creating a charge on his immovable property. It was the case of the plaintiff that the property mentioned in the declaration had been registered with the Sub-Registrar camp Amravati on 1-8-1977 and was subject to charge for the amount outstanding on account of loan. It is the case of the plaintiff that on completion of all the requirements and on execution of the aforesaid documents, defendant No.1 was allowed to avail the advance and accordingly he had withdrawn the total amount of sanctioned limit. The plaintiff also filed along with the plaint a ledger extract of loan account which gave details of the disbursement of the loan, interest and other charges. The advance was repayable, according to the plaintiff by March, 1979. That, since the defendants did not repay as per the schedule and had committed defaults, the plaintiff served a notice dated 18-4-1983 on the defendants. That, since the defendants failed to comply with the notice, the plaintiff instituted the suit for recovery of amount which came to be registered as regular Civil Suit No. 407 of 1983. In the plaint it was further mentioned that the cause of action for the suit arose initially on 13-7-1978 when the documents were executed and the loan was advanced and in view of the charge on the immovable property, the suit was filed within prescribed period of limitation of 12 years in view of Article 62 of the Limitation Act, 1963. The plaintiff, therefore, claimed an amount of Rs. 16,179.49 ps. with future interest from the defendants. The defendants filed joint written statement denying the claim of the plaintiff. The defendants denied that defendant No. 1 approached the plaintiff bank for the loan and that a limit of Rs. 8,000/- was granted. The defendants then denied that defendant Nos. 2 and 3 stood as sureties/ guarantors for the amount advanced to defendant No. 1. Almost every pleading in the plaint was denied by the defendants. It was submitted in para 10 of the written statement that defendant No.1 approached plaintiff bank for a loan for development of agricultural land and the plaintiff bank, from time to time advanced the loan of Rs. 8,000/- to the defendant. It is further stated in paragraph 10 that the interest charged by the plaintiff was excessive a

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