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IN THE HIGH COURT AT CALCUTTA
SHIVAKANT PRASAD, J.
M/s. Kherapati Vanijya Limited - Plaintiff
Versus
M/s. Longview Tea Co. Limited - Defendant
CS No. 21 of 2011
Decided On : 09-12-2016
MONEY SUIT - INTER CORPORATE DEPOSIT - INTEREST - LIMITATION - [ARTICLE 19, LIMITATION ACT] - Whether the suit for recovery of money lent as inter-corporate deposit along with interest is barred by limitation? - HELD, YES
Fact of the Case:
Plaintiff, a Non-Banking Financial Company, lent Rs. 25,00,000/- to the defendant company as inter-corporate deposit at 15% interest per annum compoundable every 90 days. The defendant company acknowledged the loan and made interest payments initially. However, later, the defendant company defaulted on the loan repayment. The plaintiff sent a legal notice to the defendant company demanding the dues, but the defendant company failed to pay. Hence, the plaintiff filed a suit for recovery of the loan amount along with interest.
Finding of the Court:
The court found that the defendant company had acknowledged the loan and had made interest payments initially. However, the court also found that the plaintiff had failed to prove the existence of a written agreement granting a moratorium period of four years for repayment of the loan. The court further found that the plaintiff's claim was barred by limitation as the suit was filed more than three years after the last payment was made by the defendant company.
Issues: 1. Whether the plaintiff lent and advanced a sum of Rs.25,00,000/- to the defendant as inter corporate deposit? 2. Whether any interest was payable by the defendant to the plaintiff on account of this inter corporate deposit? If so, at what rate? 3. Is the claim of the plaintiff barred by limitation? 4. To what relief or reliefs is the plaintiff entitled to?
Ratio Decidendi: 1. The court held that the plaintiff had proved the existence of the loan agreement and the defendant company's acknowledgment of the loan. 2. The court also held that the plaintiff had proved that the defendant company had made interest payments initially. 3. However, the court held that the plaintiff had failed to prove the existence of a written agreement granting a moratorium period of four years for repayment of the loan. 4. The court further held that the plaintiff's claim was barred by limitation as the suit was filed more than three years after the last payment was made by the defendant company.
Final Decision: The court dismissed the suit as barred by limitation.
This is a suit for money claim valued at Rs. 46,57,024/-.
2. Plaint case in brief is that at all material times the plaintiff company has been and is still carrying on non-Banking business and is a Non-Banking Financial Company registered with Reserve Bank of India.
3. The defendant company is also carrying on various types of commercial business.
4. The defendant company approached the plaintiff company for grant of financial assistance of a sum of Rs.25,00,000/- as Inter corporate Deposit on compound interest at the rate of 15% per annum compoundable on every 90 days.
5. Analysing the credibility of the defendant company the plaintiff company lent and advanced a sum of Rs. 25,00,000/- through Cheque No. 784804 dated 27th May 1998 which was encashed by the defendant company on 08.6.1998.
6. The defendant duly acknowledged the receipt of the said sum of money being Rs.25,00,000.00 (Rupees twenty five lakhs only) as loan vide letter dated 27.5.1998 issued by the plaintiff company and accepted by the defendant company, showing said the amount and rate of interest duly accepted by the defendant company.
7. From time to time the plaintiff company in terms of the said agreement used to issue interest bill as and when the same was due and payable by the defendant company to the plaintiff company and the defendant used to acknowledge the same by endorsing on the respective bills and also used to pay the same.
8. The defendant duly confirmed the dues of the plaintiff company by endorsing their confirmation on the letter of confirmation of accounts issued by the plaintiff company showing said rate of interest and payment of the same, being accepted by the defendant company.
9. After sometimes passed, the repayment of the loan by defendant company became irregular and the principal balance due as on 19th October 2001 was 24,00,000.00 (Rupees Twenty four lakhs only) as per the statement of accounts maintained by the plaintiff company and the defendant company stopped paying regular and agreed amount of interest and repayment of the said loan on some or other pretext.
10. The plaintiff states that after repeated requests from the plaintiff company the defendant again started making payment of the dues of the plaintiff company, the first of which was paid on 28th January 2006 for Rs.1,00,000.00 (Rupees one lakh only).
11. So, the plaintiff company sent a legal notice dated 28th of January 2011 to the defendant company demanding the said dues but the defendant company failed and neglected to pay to the plaintiff company its legitimate dues.
12. Hence, the suit for a money decree of Rs. 46,57,024/- with cost.
13. The defendant contested the suit by filing written statement denying all material particulars made in the plaint and contended inter-alia, that the plaintiff had no legitimate or legal claim against the defendant. Claim of the plaintiff is also barred by law of limitation. Accordingly, the defendant company prayed for dismissal of the suit with costs.
14. On the above pleadings following issues have been framed to resolve the dispute between the parties:-
1. Whether the plaintiff lent and advanced a sum of Rs.25,00,000/- to the defendant as inter corporate deposit?
2. Whether any interest was payable by the defendant to the plaintiff on account of this inter corporate deposit? If so, at what rate?
3. Is the claim of the plaintiff barred by limitation?
4. To what relief or reliefs is the plaintiff entitled to?
Issue no. 1
15. It is submitted on behalf of the plaintiff, the plaintiff company carries on business of granting financial assistance to entities and registered with Reserve Bank of India as a Non-Banking Financial Company as depicted from Certificate of Registration with RBI Ext-G. The defendant company approached for grant of financial assistance of a sum of Rs.25,00,000/- as Inter corporate Deposit on compound interest at the rate of 15% per annum compoundable on every 90 days at the office of the plaintiff company and the plaintiff
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