The court ruled that the existence of reciprocal obligations between the parties justified the applicability of Article 1 of the Limitation Act, supporting the Respondent's claim for recovery of the loan.

JUDGMENT

1. The only question that arises for consideration in this Appeal is, as to whether the suit filed by the Respondent was within limitation. According to the Respondent (original Plaintiff), the suit was filed within limitation by application of Article 1 of the Schedule to the Limitation Act, 1963 , while the Appellants claim that the suit was barred by limitation by applying Article 19 thereof.

2. The Respondent filed suit against the Appellants on 31.10.2002, for a Decree directing the Appellants to pay a sum of ₹4,20,538.61 along with interest at the rate of 17.5% per annum from 01.11.2022 till actual payment. According to the Respondent, the said amount was due towards loan amounts advanced to the Appellants on various dates between 1981 to 1997. It was the case of the Respondent that it had taken a house situated in Salcete, Goa, from the Appellants on rent, initially for a monthly rent of ₹ 300/- and after one year, for rent at the rate of ₹350/- per month. It was the case of the Respondent that the amounts advanced towards the loan to the Appellants were agreed to be repaid with interest at the rate of 17.5% per annum. The amount of monthly rent, which the Respondent was obliged to pay was being adjusted towards repayment of the loan amount. It was stated in the plaint that the last amount towards loan advanced to the Appellants was on 23.07.1997. The monthly rent of ₹ 350/- payable to the Appellants was being adjusted by the Respondent towards the amount due from the appellants and, in that context, the Respondent claimed to have maintained an account from 1981 till the date of filing of the suit.

3. It was the case of the Respondent that on 07.09.2001, the Respondent caused a notice to be issued through Advocate to the Appellants, stating the amount due towards the repayment of loan as on 31.08.2001. It was stated in the notice that since the amount of monthly rent credited to the account of the Appellants was insufficient to repay the loan and since the interest was mounting thereon, in the month of July 2000 itself, the Respondent had asked the Appellants to take some concrete steps to repay the loan along with interest. Yet the Appellants had neither given proposal for liquidating the loan under the loan account nor were the dues liquidated. On this basis, the Appellants were called upon to repay the loan amount along with interest within a period of one month, failing which, the Respondent would be constrained to initiate appropriate proceedings for recovery.

4. On 18.10.2001, the Appellants through their Advocate, sent reply to the aforesaid notice and denied that the Respondent had advanced loans to them. It was stated that no loan account existed and the claims of the Respondent were denied. Instead, it was stated that there were amounts due from the Respondent for occupation of the premises in question and if payment of the same was not made within 30 days, the Appellants would terminate the Agreement and initiate proceedings for evicting the Respondent.

5. It is in this backdrop, that on 31.01.2002, the Respondent filed the aforesaid suit for recovery of the amount specified herein above. In the plaint, the Respondent not only stated that specific amounts were advanced to the Appellants by way of loan and that there was an Agreement that the monthly rent would be adjusted towards the repayment of the loan amounts with interest, a detailed statement of the loan amounts was given in paragraph 7 of the plaint. The Respondent also filed statement of account as a document with the plaint, wherein it was specifically stated th