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HIGH COURT OF KERALA
B.KEMAL PASHA, J
P V SIVARAMAN – Appellant
Versus
SHAJAN ANTONY – Respondent
REGULAR SECOND APPEAL 1080/2014
Limitation - Borrowed Amounts - Limitation Act, 1963 Sections [3, 12(1), Article 19] - The court held that the period of limitation for filing a suit for recovery of borrowed money begins from the date the loan was taken, not from the date of dishonoured cheques.
Fact of the Case:
The plaintiffs lent ₹1,00,000 each to the defendant, who issued cheques for repayment that were subsequently dishonoured. The plaintiffs filed suits for recovery, but the defendant claimed the suits were time-barred.
Finding of the Court:
The court concluded that the suits were indeed time-barred as they were filed more than three years after the loans were given, and the dishonoured cheques did not reset the limitation period.
Issues: Whether the suits were barred by law of limitation and if the courts below erred in their rulings on this matter.
Ratio Decidendi: The court rested its decision on the interpretation of the Limitation Act, asserting that the reckoning of the limitation period for money recovery suits starts from the loan date, not from the date of related cheques, which were issued later.
Final Decision: The Regular Second Appeals are allowed, and the suits are dismissed as time-barred.
J U D G M E N T
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In a case wherein a suit is filed for the realisation of the amount borrowed, when the cheque subsequently issued in discharge of the liability stands dishonoured, does the period of limitation commence from the date on which the amount was borrowed or from the date on which the cheque was issued?
2. Challenging the concurrent findings entered by the Principal Sub Court, Thrissur in OS No.408/2002 followed by those of the IV Additional District Judge, Thrissur in AS No.40/2011, the defendant in the suit has filed RSA No.1080/2014. Challenging the concurrent findings entered by the Principal Sub Court, Thrissur in OS No.409/2002 followed by those of the IV Additional District Judge, Thrissur in AS No.38/2011, the defendant in the suit has filed RSA No.1130/2014. Even though the defendant in both the suits is the same, the plaintiff in OS No.408/2002 is the husband of the plaintiff in OS No.409/2002. Both the suits were jointly tried.
3. The case of the respondents is that the defendant had borrowed an amount of ₹1,00,000/- each from them. Thereafter, the plaintiffs demanded the said amount from the defendant. On such demand, the defendant issued Ext.A20 cheque as well as Ext.A1 cheque to the said plaintiffs. When the plaintiffs presented the said cheques for payment, it returned dishonoured for insufficiency of funds. Consequently, demand notices were issued within the statutory period covered by Section 138(b) of the NI Act. Reply notices were issued denying the claim forwarded in the demand notices.
4. The amounts were not paid. Consequently, it seems that the plaintiffs filed the suits in question as suits for money. The plaints were filed on 25.05.2002, thereby the institution of the suits was on 25.05.2002. After summer vacation, the civil courts were reopened on 25.05.2002 only. The summer vacation commenced from 13.04.2002 when the courts were closed for summer vacation in the evening of 12.04.2002. It is the case of the plaintiffs that the said cheques were issued on 12.04.1999.
5. Among other contentions, the defendant in the written statement has strongly contended that the suits were time barred. It seems that the trial court had made some exercise to deal with the question of limitation; but, one cannot make out anything from the discussions made by the trial court in the matter. The very same question was considered by the lower appellate court also. The lower appellate court has also not dealt with the said question properly, and simply addressed the question on an assumption that the last date on which the suits have to be filed fell on a day during vacation and therefore, the suits were not time barred when the suits were filed on the reopening date.
6. Disregarding the question of limitation, the trial court decreed the suits in terms of the plaint. Even though appeals were preferred, the lower appellate court was also not impressed with the contention of limitation, thereby the lower appellate court also concurred with the findings entered by the trial court and dismissed the appeals.
7. This Court admitted these Second Appeals on the following substantial questions of law raised in the Appeal Memorandum:-
“(i) Has not the lower appellate court erred in holding that the suit is not barred by the law of limitation?
(ii) Is not the lower appellate court in error in not affording an opportunity of hearing in the appeal to the appellant?
(iii) In the absence of evidence on record proving the consideration for the cheque, whether the lower appellate court was right in confirming the judgment of the trial court?
(iv) Is the lower appellate court justified in dismissing IA No.662 of 2013 the petition to receive additional documents which prove that the version of plaintiff with regard to the payment of money to the defendant and the issuance of cheques by him is unbelievable and baseless?
(v) Are the courts below right in decreeing the suit in the light of the fact that the criminal case file
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