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2018 Supreme(Del) 1527
IN THE HIGH COURT OF DELHI AT NEW DELHI
PRATHIBA M. SINGH, J.
JAGMOHAN BEHL - Appellant
Versus
COL K.S. GUPTA & ANR. - Respondents
RFA 94 of 2011 & CM APPL.4097 of 2015 (Delay)
Decided On : 04-07-2018
For the Appellant :Mr. D.K. Rustagi & Mr. Vikrant Yadav, Advocates.
For the Respondent:Mr. N. Prabhakar & Mr. Dhruv Sharma, Advocates.
The main legal point established in the judgment is the application of Section 14 of the Limitation Act, 1963 in determining the period of limitation for a loan recovery suit, and the court's authority to draw adverse inferences based on the credibility of evidence.
Headnote:
Loan - Recovery - Limitation Act, 1963 - Section 14, Articles 21 & 22 - The judgment discusses the loan recovery suit filed by the Plaintiffs against the Defendant for a sum of Rs.14,27,000/- along with interest. The court analyzed the evidence of loan and interest payments, the issue of limitation, and the credibility of the Defendant's evidence. The court upheld the Trial Court's decree in favor of the Plaintiffs, directing the Defendant to pay the decretal amount within four weeks and costs of Rs.50,000/- to the Plaintiffs.
Fact of the Case:
The Plaintiffs filed a suit for recovery of a loan amount and interest against the Defendant. The Defendant contested the suit on the grounds of inadmissible cash receipts, limitation, and lack of evidence for loan repayment.
Finding of the Court:
The court found that the loan and interest payments were established by the Plaintiffs' evidence, and the Defendant's contradictory statements and lack of evidence undermined his credibility. The court upheld the Trial Court's decree in favor of the Plaintiffs.
Issues: The issues involved the admissibility of cash receipts, the applicability of limitation under Section 14 of the Limitation Act, and the credibility of the Defendant's evidence.
Ratio Decidendi: The court held that the loan and interest payments were proven by the Plaintiffs, and the Defendant's lack of evidence and contradictory statements led to the adverse inference. The court also ruled that the suit was within the limitation period based on the demand made by the Plaintiffs.
Final Decision: The court dismissed the appeal, upheld the Trial Court's decree in favor of the Plaintiffs, directed the Defendant to pay the decretal amount within four weeks, and ordered the Defendant to pay costs of Rs.50,000/- to the Plaintiffs.
Prathiba M. Singh, J.
1. In this appeal preferred against the judgment dated 12th October, 2010 the Appellant/Defendant (hereinafter ‘Defendant’) challenges the decree passed by the Trial Court in favour of the Plaintiffs decreeing the suit for recovery in the following terms. “In view of the above findings, suit is decreed in favour of the plaintiffs and against the defendant for an amount of Rs.14,27,000/- with interest @ 12% w.e.f. 01.01.03 till the realization of decretal amount. Decree sheet be prepared accordingly. File be consigned to R/R after due compliance.”
2. The suit for recovery was filed by the Respondents/Plaintiffs (hereinafter ‘Plaintiffs’) Colonel Retired K.S. Gupta and his wife Smt. Sharda Gupta for a sum of Rs.14,27,000/- against the Defendant. It is the case of the Plaintiffs that the Defendant was an exporter of garments with a garment factory located in Kotla, New Delhi. He had approached the Plaintiffs for a loan for supporting his business, accordingly, the Plaintiffs had given a loan of Rs.7,50,000/- to the Defendant between the period of 1st August, 1989 to 1st November, 1989 to be paid back with interest @ 12% per annum which was to be split in four instalments in a year payable on quarterly basis. Thus, the Defendant had to pay 12% interest on Rs.7,50,000/- i.e. Rs.90,000/- per annum in four equal instalments after each quarter. The amount of Rs.7,50,000/- was given on the following dates.
Date Amount Mode of payment
(a) 1.8.1989 75,000.00 By Cheque No.533862 dt.1.8.1989 of Oriental Bank of Commerce, Saket, New Delhi A/c No.6206 of the Plaintiff No.1
(b) 1.8.1989 75,000.00 By Cheque No.958203 dt.1.8.1989 of Oriental Bank of Commerce, Saket, New Delhi Account No.5026 of plaintiffs.
(c) 30.9.1989 4,37,000.00 By Cheque No.848833 dt.30.9.1989 of Oriental Bank of Commerce, Saket, New Delhi Account No.3007 (now Computarised as 17007) of Plaintiff No.1.
(d) 30.9.1989 13,000.00 By Cheque No.958206 dt.30.9.1989 of Oriental Bank of Commerce, Saket, New Delhi Account No.5026 of plaintiffs.
(e) 1.11.1989 1,50,000.00 By Cheque No.958209 dt.1.11.1989 of Oriental Bank of Commerce, Saket, New Delhi Account No.5026 of plaintiffs.
Total 7,50,000.00
3. According to the Plaintiffs, the Defendant used to pay the interest on the loan mainly in cash though on two occasions two cheques dated 7th August, 1990 were issued for some part of the interest. Apart from these two cheque payments, till 31st December, 1992, the entire interest amount was paid in cash. Apart from the said amounts, various other amounts of interests were paid in cash between 25th February, 1995 to November, 2001. Though these amounts were paid in cash, a large amount of interest remained outstanding. Despite several reminders the principal amount and the remainder of the interest amount was not being paid. Accordingly, the Plaintiff got notice dated 9th September, 2002 issued to the Defendant. No response was received to the said notice. The Plaintiff then filed the present suit under Order XXXVII CPC.
4. Vide order dated 30th October, 2004, the Defendant was granted unconditional leave to defend. Thereafter, the Defendant filed his written statement. The basic contention of the Defendant is that the cash receipts which were the basis of the suit, are not admissible in evidence since the Defendant did not admit the payment of interest by cash. The last amount paid by cheque being in 1993 and the suit having been filed in 2003, the same is barred by limitation. The Defendant categorically stated in his written statement that after 1993, no payment was made by him. The averment, that no receipt was given and no cash payment was made, was rebutted by the Plaintiffs in his replication by stating that one of the typographical errors in the name of Plaintiff No.2 in the cash receipt, was in fact, corrected by the Defendant by his own hand writing and was initialed by him as well. This showed that the Defendant was paying interest in cash and was receiving
