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2022 Supreme(Chh) 272

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
GOUTAM BHADURI, RADHAKISHAN AGRAWAL, JJ.
Smt. Indu Patni W/o Late Sohanlal Patni – Appellant
Versus
Kamal Kishore S/o Late Kanhaiya Lal Agrawal
FA No.568 of 2017{Arising out of judgment and decree dated 11-9-2017 passed by the Fourth Additional District Judge, Durg, in civil suit No.680-B/2013}
Decided on : 23-08-2022

Advocates:
Advocate Appeared:
For the Appellant :Mr. Amit Soni, Advocate appears on behalf of Shri Sunil Otwani, Advocate
For the Respondent:Mr. B.P. Sharma, Advocate with Shri Arpit Agrawal, Advocate

The main legal point established in the judgment is the interpretation and application of Section 25(3) of the Indian Contract Act in relation to the recovery of a time-barred debt and the requirement of a distinct promise to pay the debt in writing.

Headnote:
Loan - Recovery - Limitation Act - Section 25(3) of the Indian Contract Act - [25. Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt, barred by limitation law.] - The court discussed the application of Section 25(3) of the Indian Contract Act in relation to the recovery of a loan and the effect of a document executed in lieu of payment of a time-barred debt. The court analyzed the conditions that must be satisfied to invoke Section 25(3) and referred to relevant case law to determine the validity of the document in extending or reviving the limitation period.
Fact of the Case:

The plaintiff filed a suit for recovery of Rs.11.00 lacs from the defendant, claiming that a loan of Rs.15.00 lacs was advanced to the defendant, of which Rs.4.00 lacs was repaid, and the remaining amount was not returned. The defendant denied availing the loan and alleged fraud by the plaintiff.
Finding of the Court:

The court found that the suit was barred under Article 19 of the Limitation Act as it was filed after the expiration of three years from the date of the alleged loan. The court analyzed the document (Ex.P/1) executed in lieu of payment of the time-barred debt and held that it did not satisfy the conditions of Section 25(3) of the Indian Contract Act to extend or revive the limitation period. The court set aside the judgment and decree in favor of the plaintiff.
Issues: The issues involved the validity of the loan, the applicability of the Limitation Act, and the effect of the document (Ex.P/1) in extending the limitation period.
Ratio Decidendi: The court's decision was based on the interpretation of Section 25(3) of the Indian Contract Act and relevant case law, which established the conditions for invoking the provision and the requirement of a distinct promise to pay a time-barred debt. The court also considered the admissibility of the document (Ex.P/1) and the responsibility of the court to adjudicate on such objections.
Final Decision: The appeal was allowed, and the judgment and decree in favor of the plaintiff were set aside. Each party was ordered to bear their own costs.

JUDGMENT :

Goutam Bhaduri, J.

1. Challenge in this appeal is to the judgment and decree dated11-9-2017 passed by the Fourth Additional District Judge, Durg, in civil suit No.680-B/2013 whereby the money suit was decreed forRs.11.00 lacs in favour of the plaintiff. The present appeal is by the defendant.

2. The facts, in brief, are that the respondent/plaintiff filed a suit on 9-4-2013 claiming Rs.11.00 lacs from the appellant/defendant. In the plaint, the plaintiff pleaded that prior to 5-6 years from the date of filing of the suit, a demand of Rs.15.00 lacs towards loan was made by the appellant/defendant. Accordingly, the said amount of Rs.15.00 lacs was given by the plaintiff to the defendant with a promise that it would be returned in 2-3 years. The plaintiff further pleaded that no receipts were taken for such grant of loan, as the relationship between them was cordial like brother and sister. The plaintiff also pleaded that when the amount was not returned, a demand was made in the year 2010 and the defendant promised to return the same during the month of March, 2010. Having not returned the same till March, 2010 again demand was made. At that point of time the defendant stated that she would be selling her certain property and immediately after such sale she would return the amount of Rs.15.00 lacs. It is stated that since the date of sale of property was uncertain as such on 10-4-2010 the defendant agreed to return the amount and executed a document that after the sale of property she would return the amount. According to the plaintiff, in the month of March, 2012 one of the property was sold by the defendant and a cheque of Rs.4.00 lacs was given by her to the plaintiff in lieu of payment of loan, which was deposited in the account of the plaintiff on 31-3-2012. In respect of the remaining amount of Rs.11.00 lacs, despite promise, the amount was not paid. Hence, the suit was filed for recovery of amount of Rs.11.00 lacs along with interest.

3. The defendant denied the plaint averments and stated that she had never availed the loan of Rs.15.00 lacs from the plaintiff. It was further stated that they have not suffered any loss in the business, therefore, there was no question of availing of loan to discharge their liability. The defendant also stated that the plaintiff got executed a document in the year 2010 by committing fraud with an assurance that certain landed properties would be purchased and since the relationship between them was cordial, she signed the document. According to the defendant, a cheque of Rs.4.00 lacs was received by the plaintiff on the assurance that the same would be given as advance for purchase of land for which a document was initially executed and thereby committed fraud. On the said background the defendant contended that the suit was wrongly decreed by the Court below in favour of the plaintiff, which needs interference of this Court.

4. Learned Court below has framed an issue as to that whether the document was executed on 10-4-2010 in lieu of payment of loan and the finding was given in favour of the plaintiff. The Court also held that the defendant agreed to discharge the loan of Rs.11.00 lacs. The Court further held that an amount of Rs.4.00 lacs was paid by the defendant to the plaintiff to discharge the part of liability and subsequently the remaining amount of Rs.11.00 lacs was never paid and it was held that the plaintiff is entitled for a decree of Rs.11.00 lacs.

5. Learned counsel appearing for the appellant/defendant would submit that first of all, no loan was availed by the defendant and the plaintiff has failed to prove the fact that the loan was ever advanced to the defendant. He would further submit that even otherwise according to the averments of the plaint the suit was barred under Article 19 of the Limitation Act. Referring to the statement of PW-1 Kamal Kishore (plaintiff), learned counsel for the defendant would submit that the plaintiff in his statement has made averments