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2025 Supreme(Online)(Chh) 18428

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Ravindra Kumar Agrawal, J
Ajit Tex – Appellant
Versus
Sankhla Brothers – Respondent
FA No. 286 of 2015

Advocates:
For the Appellants/Petitioners: Anurag Dayal Shrivastava
For the Respondents: V.S. Mishra, Prakash Mishra

An acknowledgement of liability in writing initiates a fresh period of limitation. Furthermore, mere admission of a signature on a document does not prove its contents or the total indebtedness; the plaintiff must independently prove the accuracy of the underlying financial claims and the voluntary execution of the document.

Headnote:(A) Code of Civil Procedure, 1908 - Section 96, Order 6 Rule 15(4), Order 7 Rule 11, Order 7 Rule 13, Order 30 Rule 1 - Limitation Act, 1963 - Sections 9, 18 and 19 - Indian Evidence Act, 1872 - Section 58 - Suit for recovery of money - Period of limitation - Defendant acknowledged the liability of a specific sum in writing - Acknowledgement of liability in writing under Section 18 of Limitation Act provides a fresh period of limitation from the time of such acknowledgement - Signing a document does not automatically equate to execution of its contents - Contents must be proven independently. (Paras 12, 14, 15, 16, 29)

(B) Appellate Jurisdiction - Power of Appellate Court - Order 41 Rule 33 - Appellate Court has the power to pass any decree which ought to have been passed, including passing a decree in favour of a respondent even in the absence of a cross-appeal, to serve the interests of justice. (Paras 30, 31, 32)

Facts of the case:
Parties were engaged in cloth business transactions. A suit was filed for recovery of outstanding amounts based on ledger entries and a disputed promissory note. The trial court decreed the suit for a partial amount, which was challenged in appeal on grounds of limitation, maintainability for lack of proper proprietorship proof, and the absence of voluntary execution of the promissory note.

Findings of Court:
The court held that the suit was within the limitation period due to the acknowledgement of liability in writing by the defendant. It further clarified that while the defendant's signature was admitted, the document's contents were not proved as the defendant alleged execution under coercion. Consequently, only the amount explicitly admitted by the defendant as outstanding could be decreed.

Issues: Whether the suit was barred by limitation; whether the suit was maintainable as a proprietary concern; and whether the promissory note was voluntarily executed for the full claimed amount.

Ratio Decidendi: Execution of a document implies understanding and assenting to its terms, not merely the act of signing. Merely admitting to a signature does not constitute proof of the contents or the total liability claimed therein. Appellate courts may exercise extraordinary powers to ensure justice and rectify errors in the lower court's decree even if not specifically challenged by cross-objection.

Result: Appeal partly allowed; lower court decree modified for a lesser amount with interest.

Table of Content
1. admission of partial liability overrides disputed claims and unproven documents. (Para 3 , 4 , 20 , 21 , 22 , 23 , 24 , 25 , 26)
2. limitation period is extended through written acknowledgment of debt under section 18. (Para 9 , 10 , 12 , 13 , 14 , 15 , 16)
3. proprietorship firms may be represented in litigation by the proprietor. (Para 17 , 18 , 19)
4. proof of signature is distinct from proving the document's contents. (Para 27 , 28 , 29)
5. appellate courts may adjust decrees to ensure substantial justice. (Para 30 , 31 , 32 , 33 , 34)

1. The present first appeal under Section 96 of the CPC has been filed by the defendants against the impugned judgment and decree dated 14-08-2015 passed by the learned Second Additional District Judge, Bastar, Place Jagdalpur, in Civil Suit No. 3-B/2014, whereby the suit filed by the plaintiff for recovery of Rs.2,60,000/- has been partly decreed in his favour and a decree for recovery of Rs. 2,00,000/- has been passed in favour of the plaintiff.

2. For the sake of convenience, the status of the parties shown in the suit is being taken to refer to the respective parties in the present appeal.

3. The original plaintiff Sankhla Brothers, Prop. Munna Lal Jain had filed a civil suit against the defendants for recovery of Rs. 2,60,000/- as the outstanding amount in the cloth business between the plaintiff and the defendants. During the pendency of the Civil Suit, Munna Lal Jain died, and the other plaintiffs have been substituted in his place. It is pleaded in the plaint that the plaintiff is a proprietary firm run by its proprietor, Munna Lal Jain. The plaintiff firm is engaged in the wholesale and retail cloth business, and the defendants are also engaged in the cloth business at Jagdalpur. There was a frequent business relationship between them. In the year 1999-2000 and 2000-2001 the defendants had purchased the clothes total amounting to Rs. 2,63,072/- on various dates in between 01-04-1999 to 27-01-2001, out of which the defendants had paid Rs. 63,072/- in various dates in between 10-11-1999 to 31-01-2001 and Rs. 2,00,000/- was outstanding upto 31-01-2001 and the defendants had executed a pro-note in favour of the plaintiff. The plaintiff has served a legal notice to the defendants on 14-07-2001 with respect to the remaining outstanding amount and interest payable thereon, which was replied to by the defendant No.1, and he denied the pro-note and sent his reply on 21-07-2001 stating that only 75,179/- is the remaining amount. The plaintiff again sent a legal notice on 08-08-2001, which was served upon defendant No.1 on 09-08-2001, yet the outstanding amount has not been paid to the plaintiff, and then the plaintiff filed a civil suit for recovery of his outstanding amount on 19-01-2004 with respect to the principal amount and interest accrued thereon. The said civil suit was registered as Civil Suit No. 4-B/2004; however, for want of an affidavit required under Order 6 Rule 15(4) of the CPC, the said plaint was rejected under Order 7 Rule 11 of the CPC vide order dated 22-11-2005. It is also pleaded in the plaint by way of amendment that the defendant No.1 is engaged in the cloth business in the premises owned by himself and his wife, Smt. Pista Devi. He alienated the said property on 10-07-2009 to Smt. Arti Dulhani and Smt. Asha Dulhani to defeat the fruits of the decree and intended to go to Rajasthan, and therefore, the property of the defendant No.1 is liable to be attached. He claimed Rs. 2,60,000/- from the defendants along with interest at the rate of 18% per annum.

4. The defendants contested the claim of the plaintiff, filed their written statement, denied the plaintiff’s averments and pleaded that the plaintiff has not pleaded as to under which law their firm is registered. The defendant firm had last made business transaction on 07-02-2000 and purchased the clothes for Rs.13,776/-, and thereafter no transaction was made between them. There was a cash c

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2025 Supreme(Online)(Chh) 18428

IN THE HIGH COURT OF CHHATTISGARH AT BILASPURRavindra Kumar Agrawal, JAjit Tex – AppellantVersusSankhla Brothers – RespondentFA No. 286 of 2015

Cases Referred (5)

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Ravindra Kumar Agrawal, J
Ajit Tex – Appellant
Versus
Sankhla Brothers – Respondent
FA No. 286 of 2015