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IN THE HIGH COURT OF DELHI
Indermeet Kaur, J.
Sheila Enterprises And Another - Appellant
Vs.
Uco Bank And Another - Respondents
Regular Second Appeal No. 126 of 2004 and CM No. 6895 of 2004
Decided On : 17-02-2011
For the Appellant : Gaurav Bahl
For the Respondent: Rajesh Ratan
The acknowledgment of liability by a defendant can extend the period of limitation for filing a suit for recovery of money.
Headnote:
Limitation - Recovery of Money - Indian Limitation Act, 1963 - Section 3, Section 19 - AIR 1987 Karn 236, AIR 1997 Guj 24, (1967) 898 SCR Chandradhar Goswami and Ors. v. The Gauhati Bank Ltd.
Fact of the Case:
The plaintiff, UCO Bank, filed a suit for recovery of money against three defendants. The suit was initially dismissed, but the finding of the trial judge was later reversed, and the suit was decreed. The main issue revolved around the period of limitation for filing the suit.
Finding of the Court:
The court found that the suit was filed within the period of limitation, as the defendant had acknowledged his liability in a letter, which extended the period of limitation. The court also referred to legal precedents to support its finding.
Issues: The main issue was the period of limitation for filing the suit. Additionally, the court addressed the question of whether a mistaken credit entry in the defendant's account constituted an acknowledgment of liability.
Ratio Decidendi: The court held that the acknowledgment of liability by the defendant in a letter extended the period of limitation for filing the suit. The court also relied on legal precedents to support its interpretation of the law.
Final Decision: The court dismissed the appeal and upheld the decree in favor of the plaintiff, UCO Bank.
Indermeet Kaur, J.
This appeal has impugned the judgment and decree dated 05.2.2004 which has reversed the finding of the trial judge dated 17.3.1998. Vide judgment and decree dated 17.3.1998 the suit filed by the plaintiff i.e. UCO Bank had been dismissed. Vide the impugned judgment the finding of the trial judge was reversed and the suit of the plaintiff stood decreed.
2. plaintiff had filed a suit for recovery of Rs. 51,850/- against three Defendants. Defendant No. 2 was the proprietor of Defendant No. 1. His account was introduced by Defendant No.
3. Defendant No. 2 had requested for availing temporary over-draft facility which was permitted. Defendant No. 2 had pledged his FDR in the sum of Rs. 1,00,000/- which was jointly in his name and in the name of his wife in the account of Defendant No. 3 and requisite formalities had been completed by Defendants No. 2 and 3 in this regard. Defendant No. 3 availed over-draft facility on the strength of this FDR which was in the joint names of Defendant No. 2 and his wife. Since the account of the Defendant No. 3 was outstanding and he had failed to regularize it in spite of requests, the proceeds of the aforenoted FDR which was in the joint names of Defendant No. 2 and his wife were adjusted against outstanding account of Defendant No. 3. On 30.3.1992 the bank came to know that a wrong credit entry of Rs. 19,000/- dated 24.7.1990 had been made in the account of Defendant No. 1 Defendant No. 1 through Defendant No. 2 wrote a letter dated 28.3.1992 to the bank wherein he requested the Bank that the FDR which he had pledged be adjusted against his account. The contention of the bank was that the said FDR already stood adjusted against the outstanding against Defendant No. 3. On 8.3.1995 a legal notice (Ex.PW-1/16) was served upon the plaintiff informing him that since he had failed to regularize his account; he was called upon to pay a sum of Rs. 40,468.42/- which was outstanding as on 31.12.1993 along with interest failing which legal action would be taken against him. Present suit was accordingly filed. 3. In the written statement, the contention of the Defendant No. 1 was that he has pledged this FDR of Rs. 1,00,000/- against his own account; it was not pledged against the account of Defendant No. 3. The said FDR should have been adjusted against his account i.e. of Defendant No. 1; no amount is payable by the answering Defendants No. 1 and 2.
4. Defendant No. 3 has filed a separate written statement wherein he had stated that this FDR which was in the joint in the names of Defendants No. 1 and 2 had in fact been pledged against the account of Defendant No. 3.
5. On the pleadings of the parties issues were framed. No specific issue on the question of limitation was framed. Oral and documentary evidence was led by the respective parties. Suit of the plaintiff was dismissed.
6. In appeal, the impugned judgment was reserved and the suit of the plaintiff stood decreed.
7. This is a second appeal. After its admission on 04.5.2010, the following substantial question of was formulated; it reads as follows:
In the given case, when period of limitation would start running against the Appellants for filing a suit for recovery of money?
8. Admittedly no issue on limitation was framed by the Trial Court. However, since the question of limitation goes to the root of the matter and there is a mandate cast upon the courts u/s 3 of the Limitation Act, 1963 to examine this issue and in the eventuality of a legal proceeding being time barred it cannot be allowed to proceed the aforenoted substantial question of law was framed.
9. The averments in the plaint have to be necessarily examined to answer this query. Defendant No. 2 proprietor of Defendant No. 1 had opened a current account with the bank on 18.7.1989 on the introduction of Defendant No. 3. Overdraft facility was permitted to Defendant No. 2. On 01.4.1990 a debit of Rs. 10,596/- had been shown in the account of Defendant No. 1. On 16.4.1990
