The main legal point established in the judgment is the application of the Indian Limitation Act, 1963, Article 85, and the requirement for a written agreement to support claims of loan repayment terms.

JUDGMENT :

YOGESH KHANNA, J.

1. This appeal is against the judgment dated 16.08.2018 passed by ADJ-2, West, Tis Hazari Courts, New Delhi, in suit being No.76/2017. This suit was dismissed on account of limitation.

2. The case of the appellant/plaintiff is he has granted loans on various dates to the defendants/respondents, as mentioned in para 11 of his plaint, as under :

3. The account also show some re-payments were made on 02.05.2013, 14.05.2013 and last on 24.10.2013 of 3 lakhs. Admittedly, the suit was filed on 31.03.2017 clearly beyond three years of last repayment.

4. It is alleged by learned counsel for the appellant the accounts were open, current and mutual, hence, per Article 1 of the Limitation Act, the limitation would start from the close of the year in which last item admitted or proved is entered in the account; such year to be computed as in the account.

5. An account is said to be open, mutual and current account if it satisfy the conditions as in Kesharichand Jaisukhal v. The Shilling Banking Corporation, (1965) AIR SC 1711 viz.:

10. The next point in issue is whether the proceedings are governed by Art. 85 of the Indian Limitation Act, 1908, and if so, whether the suit is barred by limitation. The argument before us proceeded on the footing that an application under s. 45(D) of the Banking Companies Act is governed by the Indian Limitation Act, and we must decide this case on that footing. But we express no opinion one way or the other on the question of the applicability of the Indian Limitation Act to an application under s. 45(D). Now, Art. 85 of the Indian Limitation Act, 1908 provides that the period of limitation for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties is three years from the close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account. It is not disputed that the account between the parties was at all times an open and current one. The dispute is whether it was mutual during the relevant period.

11. Now in the leading case of Hirada Basappa v. Gadigi Muddappa, 1871 6 Madras High Court Reports 142, 144] Holloway, Acting C. J. observed:

"To be mutual there must be transactions on each side creating independent obligations on the other, and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations."

6. The statement of account, as is in para 11 of the plaint would reveal the repayments were only partial discharge of obligations, thus the plea of the appellant that accounts so maintained with the respondent were open, current and mutual has no basis.

7. The second limb of argument of the appellant is envisaged in para 5 of the plaint as under :

The aforesaid loans have been given by the plaintiff to the defendant always with an understanding that aforesaid loans shall be returned along with interest@18% p.a. That the aforesaid loans were repayable within one year from the date of payment of the last installment of the loan i.e. latest by 9th of April, 2014. However, the defendant was to pay interest