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PETITIONER:

PUNJAB NATIONAL BANK AND ORS.

Vs.

RESPONDENT:

SURENDRA PRASAD SINHA

DATE OF JUDGMENT20/04/1992

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

JEEVAN REDDY, B.P. (J)

CITATION:

1992 AIR 1815 1992 SCR (2) 528

1993 SCC Supl. (1) 499 JT 1992 (3) 46

1992 SCALE (1)926

ACT:

Limitation Act, 1963-Section 3-Whether bars the right

to which a remedy related-Right to enforce debt by judicial

process-Scope of-Time barred debt-Realisation of-Filing of

suit to recover debt-Creditor’s obligation.

Penal Code, 1860-Section 405-Action in terms of a

contract-Whether amounts to criminal breach of trust or

misappropriation-Creditor in possession of security-

Adjustment of debt due from security-Justification of.

Penal Code, 1860-Section 409, 109/114-Complaint

petition-Maintainability-Duty of Magistrate, indicated-

Accused to be legally responsible for the offences charged-

Magistrate’s satisfaction of prima facie case-Criminal

justice-Objects of.

HEADNOTE:

On 5.5.1984, the Bank-Appellant No.1, gave a loan of

RS.15,000 to one S.N. Dubey. The respondent and his wife

executed a Security Bond, as guarantors and handed over a

fixed Deposit Receipt for a sum of Rs. 24,000 which was

valued at Rs. 41,292 on its maturity on 1.11.1988.

The principal debtor defaulted marking payment of the

debt. When the respondent’s F.D. matured, the Manager of

the Bank (appellant No.5) adjusting a sum of Rs.27,037.60

due and payable by the principal debtor as on December 1988

and the balance sum of Rs.14,254.40 was credited to the S.B.

Account of the respondent.

The respondent filed a private complaint against the

appellants in the Court of Addl. Chief Judicial Magistrate

u/ss.409,109/114, IPC, alleging that the debt became barred

by limitation as on 5.5.1987; that the liability of the

respondent being co-extensive with that of the principal

debtor, his liability also stood extinguished as on

5.5.1987; that without taking any action to recover the

amount from the principal debtor within the period

529

of limitation, on 14.1.1989, the Branch Manager credited to

his S.B. Account only Rs.14,254.00 on the maturity of his

F.D.R. and thereby the appellants criminally embezzled the

amount.

The appellants filed this Criminal Appeal by special

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leave challenging the High Court’s order declining to quash

the complaint filed by the respondent u/ss.409, 109/114,

IPC.

Allowing the appeal of the Bank, this Court,

HELD : 1.01. The rules of limitation are not meant to

destroy the rights of the parties. Section 3 of the

Limitation Act only bars the remedy, but does not destroy

the right which the remedy relates to. The right to the

debt continues to exist notwithstanding the remedy is barred

by the limitation. Only exception in which the remedy also

becomes barred by limitation is the right is destroyed.

[532E-F]

1.02. Though the right to enforce the debt by judicial

process is barred, the right to debt remains. The time

barred debt does not cease to exist by reason of s.3. That

right can be exercised in any other manner than by means of

a suit. The debt is not extinguished, but the remedy to

enforce the liability is destroyed. [532G]

1.03. What s.3. refers is only to the remedy but not to

the right of the creditors. Such debt continues to subsists

so long as it is not paid. It is not obligatory to file a

suit to recover the debt. [532G-H]

2.01. Action in terms of the contract expressly or

implied is a negation of criminal breach of trust defined in

s.405 and punishable under s.409 I.P.C. It is neither

dishonest, nor misappropriation. [533C]

2.02. The credit