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2025 Supreme(Online)(Del) 7004
IN THE HIGH COURT OF DELHI AT NEW DELHI
Purushaindra Kumar Kaurav, J
VIJAY ANAND KUMAR – Appellant
Versus
DELHI FINANCE CORPORATION & OTHERS – Respondent
CS(OS) 3628/2014
For the Appellants/Petitioners: Mr. Ramesh Kumar, Mr. Ashutosh Prakash
For the Respondents: Mr. D. Bhattacharya, Mr. Shobhit Malik, Mr. Avadh Bihari Kaushik, Mr. Rishabh Kumar
The court ruled that the suit for rendition of accounts is not barred by limitation as it was filed within three years from the last active date of the loans, affirming the need for trial.
Headnote:(A) Limitation Act, 1963 - Article 113 - The plaintiff sought renditions of accounts and declaration against the sale of property, challenging the excessive interest rates charged by the defendant. The court analyzed the limitation period related to the rendition suit and ruled that the suit was not barred by limitation. The sale of property as part of the loan recovery was also scrutinized. (Paras 9, 10, 11, 14)
(B) Civil Procedure Code, 1908 - Order VII Rule 11 - The doctrine of res judicata cannot be considered at the application stage under Order VII. The court emphasized that the adjudication on such issues involves consideration of pleadings and previous judgments, thus deferring the matter to trial. (Paras 12, 13)
Facts of the case:
The plaintiff alleged unlawful actions by the defendant in auctioning his property over an excessive loan agreement and sought the court's intervention. The amounts claimed were exorbitant compared to payments made. The earlier suit was dismissed on technical grounds and the plaintiff contended for active loan accounts until 2012.
Findings of Court:
The court found that while the prayer for declaration regarding the sale may be barred by limitation, the plea for a rendition of accounts is not, and the defendants are granted the liberty to raise objections at trial.
Issues: The main issues were the limitation period for claiming renditions of accounts and the applicability of res judicata at the application stage.
Ratio Decidendi: The plaintiff's claims were held valid as the suit was filed within the proper timeframe and should be addressed at trial regarding merits despite the earlier suit's dismissal on technicalities.
Result: The application is disposed of, allowing the suit to proceed.
| Table of Content |
|---|
| 1. plaintiff seeks account reconciliation and property sale declaration. (Para 2 , 3 , 4 , 5) |
| 2. defendants argue limitation and prior suit dismissal. (Para 6 , 7 , 8) |
| 3. court assesses suitability of limitations for accounts. (Para 9 , 10 , 11) |
| 4. res judicata cannot be decided at this application stage. (Para 12 , 13) |
| 5. court allows suit to proceed while disposing of application. (Para 14 , 15) |
HON’BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
O R D E R
% 01.09.2025 I.A. 8044/2015 (under Order VII Rule 11 filed by defendant nos. 1 and
2)
1. Heard learned counsel appearing for the parties.
2. The instant suit is for rendition of account and declaration that the sale of suit property is void.
3. The suit is for the following principal reliefs:-
i. Rendition of the accounts in respect of the Term Loan/Working Capital Loan Accounts of the plaintiff at the defendant no. 1-
institution.
ii. Declaration that the sale of the suit property by defendant no. 1 to defendant no. 3 vide order dated 20.09.2010 is illegal and void.
4. It is the case of the plaintiff that he had availed a loan from defendant no.1 institution, but was charged exorbitant interest in violation of the agreed terms and conditions. He, therefore, is seeking rendition of accounts in respect of the said loan.
5. The plaintiff further alleges that, despite correspondence exchanged with defendant no. 1 regarding the settlement of dues, defendant no. 1 arbitrarily proceeded to auction the suit property for recovery of the alleged dues, and issued an order dated 20.09.2010 confirming its sale to defendant no. 3. The plaintiff is, accordingly, challenging the said sale.
6. The plaint and the documents relied upon therein indicate that the plaintiff had earlier filed a suit against defendant no. 1, wherein one of the reliefs sought was rendition of the same accounts. That suit, however, was dismissed on technical grounds for want of pecuniary jurisdiction. The defendants have therefore contended that the present suit is barred by: (i)
limitation and (ii) res judicata.
7. It is pertinent to note that in paragraph 87 of the plaint, the plaintiff has averred that the Term Loan/Working Capital Loan accounts remained active and that defendant no. 1 continued to add interest on the dues until the year 2012. Paragraph 87 of the plaint is extracted below:
“The Plaintiff submits that Defendant No.l at all material times has charged interest in his two loan accounts at aggregate rates varying between 24% and 28% compounded quarterly, with the result that though the Plaintiff had already paid a sum of Rs.26,93,643.20 against a loan of Rs.21,13,357.00, the outstanding claimed in the notice dated 11/15.06.2009 was a whopping figure of Rs. 1,28,78,605.60. Thereafter, during the pendency of the writ petition the Plaintiff had further paid a sum of Rs.8,00,000.00 to Defendant No.l by way of part payment of the OTS amount by way of post-dated cheques duly encashed by the Defendant. Defendant No.l has sold the Plaintiffs industrial unit of their own admission valued at Rs.2,46,36,250.00 for a paltry sum of Rs.66,00,000.00 to Defendant No.3, out of which a sum of Rs.16,50,000.00 was allegedly received by them on 21.05.2010 and a further sum of Rs.49,50,000.00 on 28.08.2010. However Defendant No.l DFC has given credit of only a sum of Rs.40,86,370.00 in the Working Capital account on 01.02.2011, and after deduction of the said amount, continue to show an outstanding of Rs.38,56,670.00 in the said account as on 01.02.2011. Similarly, in the term loan account, an outstanding of Rs.75,75,109.00 is shown as on 01.05.2012, to which the Defendant has added interest upon interest, so as to continue to claim huge and exorbitant amounts illegally against the Plaintiff, hanging as a Damocles sword on his head to haunt him for the remaining days of his life, particularly when he has been thrown out on the road, having lost his house and factory due to the illegal and criminal acts of the officials of Defenda
