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IN THE HIGH COURT OF KERALA
K. Ramakrishnan, J.
Mayilvahanam Funds (P) Ltd. – Petitioner
Versus
Sheena – Respondent
O.P. (C) No.1951 of 2011
Decided On : 28-09-2016
Limitation - Chitty Transaction - Article 227 - Order XIV, Rule 2(2) of Code of Civil Procedure - Article 36 and 37 of Limitation Act - Ext. A-l agreement - Preliminary issue on limitation - Evidence on limitation - Remittal to lower court
Fact of the Case:
The plaintiff filed a suit for recovery of amount due on a chitty transaction. The defendants contended that the suit was barred by limitation and that they had paid the entire amount due.
Finding of the Court:
The court found that the question of limitation cannot be decided as a preliminary issue and should be considered based on evidence. The court set aside the order on limitation and remitted the matter to the lower court for evidence on all issues.
Issues: The main issue was whether the suit was barred by limitation. The court also considered the applicability of Order XIV, Rule 2(2) of Code of Civil Procedure and the admissibility of Ext. A-l agreement.
Ratio Decidendi: The court held that the question of limitation is a mixed question of fact and law and should not be decided as a preliminary issue. The court also emphasized the need for evidence on the entire case before deciding the question of limitation.
Final Decision: The order on limitation was set aside and the matter was remitted to the lower court for evidence on all issues. The lower court was directed to expedite the disposal of the case within four months.
Certainly. Based on the provided legal document, here are the key points:
The core issue in the case concerns whether the suit for recovery of amount on a chitty transaction is barred by limitation. The court emphasized that the question of limitation involves both factual and legal considerations and should not be decided as a preliminary issue without examining evidence (!) (!) .
The court clarified that, according to procedural law, issues involving both law and fact should generally be decided after considering evidence, unless they fall under specific circumstances where they can be treated as questions of law only, such as jurisdiction or legal bar to the suit (!) (!) (!) .
The court highlighted that the question of limitation, especially in the context of a transaction like a chitty, is a mixed question and cannot be resolved solely on legal grounds without examining the facts and evidence, such as the date of default, payments made, and the interpretation of any agreement clauses (!) (!) .
The case involved an agreement that purportedly extended the limitation period, but the execution of this document was disputed by the defendants. Therefore, the court underscored the necessity of examining evidence regarding the execution and validity of such an agreement before deciding on limitation (!) (!) .
The procedural provision governing the trial of issues states that, even when a preliminary issue is decided, the court should pronounce judgment on all issues after considering evidence, unless the issue is purely legal and can be determined without factual inquiry (!) (!) .
The court found that the lower court's decision to treat the limitation issue as a preliminary matter was improper because it did not consider the need for evidence on the execution of the agreement and the factual circumstances affecting limitation. As a result, the order was set aside (!) .
The case was remitted to the lower court with instructions to allow parties to adduce evidence on all issues, including limitation, and to decide the case afresh based on the evidence. The court also directed expedited disposal within four months (!) .
Both parties were directed to appear before the lower court on a specified date to facilitate timely proceedings and avoid delays (!) .
In summary, the court emphasized the importance of evidence in determining limitation issues, the procedural requirements for trying mixed issues, and the need to avoid deciding such issues prematurely without proper factual inquiry.
The plaintiff in O.S No. 57 of 2009 on the file of the Sub Court, Ottappalam has filed this petition challenging the order passed on a preliminary issue on the question of limitation under Article 227 of the Constitution of India.
2. It is alleged in the petition that the petitioners filed Ext. P-l suit as O.S. No. 57 of 2009 before the Sub Court, Ottappalam for recovery of amount due on a chitty transaction. According to the petitioners, the first respondent joined a chitty on 3-9-2003 and he auctioned the chitty on 3-10-2003 and an amount of Rs. 5,25,000 was disbursed to him and respondents 2 and 3 are guarantors and all the respondents have executed an agreement dated 13-12-2003 agreeing to pay the future instalments and also agreed as per the terms of the agreement that the guarantee agreement will be in force for a period of three years from the date of last payment of the instalments. The first respondent paid up to ten instalments, thereafter committed default in payment of the amount. Notice has been issued on 5-11-2005 demanding the amount. But they did not pay the amount. So the suit was filed for realisation of the entire amount.
3. The respondent entered appearance and admitted the signatures in the documents and also receipt of the amount. But, according to them, their signatures were obtained in certain blank typed documents and they were not aware of the contents of the document and they also contented that the suit is not maintainable as the chitty was not registered in accordance with law and the amounts claimed is not proper. They also contended that the suit is barred by limitation. They also contended that they have paid 30 instalments and that was not properly accounted. So according to them, they discharged the entire amount and no amount is due to the plaintiff from them and the amount paid has not been properly accounted and they prayed for dismissal of the suit. The court below had framed an issue "whether the suit is barred by limitation" and it was taken as a preliminary issue and passed Ext. P-3 impugned order stating that except the last instalment other instalments are barred and directed the petitioner to produce the statement. This order is being challenged by the petitioner by filing this petition.
4. Heard Smt. Sumathi Dandapani, senior counsel appearing for the petitioner and Sri Santheep Ankarath, counsel appearing for the respondents.
5. Counsel for the petitioner submitted that this is not a case where the court ought to have disposed of the suit under Order XIV, Rule 2(2) of Code of Civil Procedure and after the amendment Act of 1976, court is expected to answer all issues framed unless it falls under Order XIV, Rule 2(2) where the court is of opinion that the case or any part there of may be disposed of either on the basis of question of law only, if it may try that issue first if that relates to (a) the jurisdiction issue or bar to the suit created by any law for the time being in force. In all other cases the court will have to decide the question on the basis of evidence. Question of limitation cannot be treated as a question of law alone as it is only a question of law and fact and in such circumstances that issue cannot be decided as a preliminary issue. The learned senior counsel has relied on the decisions reported in Panchanan Dhara and others v. Monmatha Nath Maity (Dead) Through LRs and another (2006) 5 SCC 340, Lufthansa German Airlines v. Vij Sales Corporation (1998) 8 SCC 623, Gunwanthbhai Mulchand Shah v. Anton Elis Farel and others (2006) 3 SCC 634, Gomes v. Manual Gomes and others 2012 (1) KLJ. 87, Taj Kerala Hotels and Resorts Ltd. v. Easytec India Pvt. Ltd. 2013 (4) KLT 621 Anil Kumar v. Boby Joseph 2014 (1) KLT 114 in support of her contentions.
6. On the other hand, counsel for the respondent submitted that the limitation for filing the suit on the basis of chitty transaction will arise depending on the date of default and not on the termination of the chitty and
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