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2007 DIGILAW 1244 (AP)

Madishetti Shekar v. Puliyala Komurelli

2007-12-28

G.ROHINI

body2007
JUDGMENT :- The defendants are n the appellants in this second appeal. The t] plaintiff (respondent herein) filed O.S. No.159 b of 2002 in the Court of II Additional Senior Civil Judge, Warangal, for recovery of a sum of Rs.2,72,000/- allegedly due from the p defendants and the same was decreed by C judgment dated 24.1.2006. The appeal I preferred by the defendants, being A.S. No.51 of 2006 on the file of the IV Additional District Judge, Warangal, was dismissed by judgment dated 8.2.2007. Hence, this second appeal. 2. The case of the plaintiff, in brief, is as follows: The plaintiff advanced a sum of Rs. 2,25,000/- to the 1st defendant during May 1977 without executing any document. The 1st defendant postponed the repayment of the said amount for a long time and ultimately on the intervention of the elders and well-wishers, the 1st defendant executed an agreement dated 10.12.2000 agreeing to repay the amount due within six months; in default, he would handover his house bearing No.I-9-559 to the plaintiff as per the market value prevailing as on 10.6.2001. The first defendant though did not make the payment within the time agreed, issued a cheque dated 30.6.2001 drawn on Vijaya Bank Limited, Extension Counter, Hanumakonda, for a sum of Rs.2,25,000/in favour of the plaintiff. However, even the said cheque was returned for want of sufficient funds. In the circumstances, the plaintiff got issued a notice calling upon the 1st defendant to repay the amount. Since there was no response, O.S. No.l59 of2002 was filed on 22.4.2002 seeking a decree against the 1st defendant as well as his wife who was made a party as defendant No.2. 3. The defendants filed a written statement pleading that they have not borrowed any amount from the plaintiff. Thus, it was contended that there was no cause of action for filing the suit and that at any rate the suit itself was barred by limitation. 4. It was further alleged that the plaintiff, who was the Director of a Finance Company, trespassed into the house of the 1st defendant on 2.3.2001 along with some anti-social elements and on the basis of some documents allegedly executed by the 1st defendant, got him illegally detained in the police station. Subsequently, on 13.7.2001 the 1st defendant noticed that a signed blank cheque was missing from his cheque-book. Subsequently, on 13.7.2001 the 1st defendant noticed that a signed blank cheque was missing from his cheque-book. On 14.7.2001, the said fact was intimated to the Manager of the Bank and immediately thereafter the 1st defendant filed O.S. No.926 of 2001 in the Court of the II Additional Junior Civil Judge, Warangal, seeking an injunction against the plaintiff herein. 5. On the basis of the said pleadings, the trial Court settled the following issues: (1) Whether the plaintiff advanced Rs.2,25,000/- during May, 1997 to defendant No.1? (2) Whether defendant No.1 executed agreement on 10.12.2000 acknowledging his liability of Rs.2,25,000/- and agreeing to repay the same within six months and in default agreed to handover House No.l-9-559 to the plaintiff? (3) Whether defendant No.1 issued cheque dated 30.6.2001 for Rs.2,25,000/- in favour of plaintiff? (4) Whether the plaintiff is entitled for recovery of amount as claimed? (5) To what relief? 6. Before the trial Court, four witnesses were examined on behalf of the plaintiff and Exs.Al to All documents were marked to substantiate the suit claim. The 1st defendant got himself examined as D.W.l and Exs. B1 to B4 documents were marked on behalf of the defendants. 7. On appreciation of the evidence, both oral and documentary, the trial Court found that the plaintiff had advanced a sum of Rs.2,25,000/- to the 1st defendant and that the 1 st defendant having executed EX. A1 agreement dated 10.12.2000 acknowledging the liability, failed to pay the same within six months as agreed. It was also found that the cheque issued by the 1st defendant in favour of the plaintiff was dishonoured on account of insufficient funds. Accordingly, the suit was decreed for a sum of Rs.2,25,000/- with exemplary cost". The lower appellate Court on re-appreciation of the evidence available on record, confirmed the findings recorded by the learned trial Judge and dismissed the appeal by judgment dated 8.2.2007. 8. Having heard the learned Counsel for the appellants as well as the respondent and having perused the material on record, I do not find any justifiable reason to interfere with the concurrent findings of fact recorded by the Courts below that the 1st defendant having borrowed Rs.2,25,000/- from the plaintiff had executed EX.A 1 agreement dated 10.12.2000 acknowledging his liability and that the 1st defendant failed to repay the same. 9. 9. However, the learned Counsel for the appellants contended that since admittedly EX.A1 agreement was executed after expiry of the period of limitation prescribed for suit for recovery of money, there was no subsisting liability, which can be enforced through Court of law. 10. The learned Counsel. while submitting that the trial Court committed a grave error in not framing a specific issue with regard to the question of limitation and that both the Courts below failed to consider the crucial fact that Ex. A1 acknowledgment by the 1st defendant was made beyond the period of limitation, contended that the decree granted in favour of the plaintiff was a nullity and liable to be set aside on that ground alone. In support of his contentions the learned Counsel for the appellants placed I reliance upon the decisions in Tilak Ram and others V. Nathu and others, AIR 1967 SC 935 and Esakki Palpu and others v. Cherian Kochan and others, AIR 1976 Mad. 142 . 11. On the other hand, the learned Counsel for the respondent contended that the suit transaction is saved by subsection (3) of Section 25 of the Contract Act, 1872 and, therefore, the decree granted in favour of the plaintiff, as confirmed by the lower appellate Court, is in accordance with law and warrants no interference by this Court. 12. The suit being a suit for recovery of money, it is not in dispute that the period of limitation is three years from the date when the loan was advanced. In the plaint itself, it was pleaded that the loan amount was advanced in the month of May 1997 and Ex.Al agreement acknowledging the debt was executed by the 1 st defendant on 10.12.2000. 13. Having regard to the admitted facts, the learned Counsel for the appellants contended that by the date of EX. A1 the liability did not survive and therefore the limitation cannot be saved under Section 18 of the Limitation Act. 14. It is true that Section 18 of the Limitation Act, 1963 provides that a fresh period of limitation shall be computed from the date when the acknowledgment is signed. However, such acknowledgment should have been made before the expiration of the prescribed period for a suit so as to give the benefit of computation of a fresh period of limitation from the date of acknowledgment. However, such acknowledgment should have been made before the expiration of the prescribed period for a suit so as to give the benefit of computation of a fresh period of limitation from the date of acknowledgment. Section 18 of the Limitation Act, 1963 may be extracted hereunder: “18. Effect of acknowledgment in writing :(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. 15. While interpreting the scope and object of Section 18 of the Limitation Act, 1963 (corresponding to Section 19 under the repealed Limitation Act, 1908), the Supreme Court in Tilak Ram's case (supra), held as under: (7) "The section requires (i) an admission or acknowledgment (ii) that such acknowledgment must be in respect of a liability in respect of a property or right, (iii) that it must be made before the expiry of the period of limitation, and (iv) that it should be in writing and signed by the party against whom such property or right is claimed. Under the Explanation such an acknowledgment need not specify the exact nature of the property or the right claimed. It is manifest that the statement relied on must amount to an admission or acknowledgment and that acknowledgment must be in respect of the property or right claimed by the party relying on such a statement. (10) The right of redemption no doubt is of the essence of and inherent in a transaction of mortgage. But the statement in question must relate to the subsisting liability or the right claimed. Where the statement is relied on as expressing jural relationship it must show that it was made with the intention of admitting such jural relationship subsisting at the time when it was made. It follows that where a statement setting out jural relationship is made clearly without intending to admit its existence an intention to admit cannot be imposed on its maker by an involved or a far-fetched process of reasoning." 16. It follows that where a statement setting out jural relationship is made clearly without intending to admit its existence an intention to admit cannot be imposed on its maker by an involved or a far-fetched process of reasoning." 16. Thus, it is clear that the mere fact that the liability is acknowledged by the party by itself does not save the limitation if such acknowledgment is made after the expiry of the period of limitation. 17. However, as rightly contended by the learned Counsel for the respondent Section 25(3) of the Contract Act, 1872 operates as an exc~ption to the law of limitation and where there is an agreement between the parties under which there is an express promise to pay the time barred debt, the suit cannot be held to be barred by limitation. 18. Section 25(3) of the Contract Act, 1872 runs as under: 25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something dane, or is a promise to pay a debt barred l7y limitation law:-An agreement made without consideration is void, unless- (1)............ (2) ....... ..... (3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. 19. A plain reading of Section 25(3) of the Contract Act, 1872 shows that an agreement containing a promise with regard to a time barred debt falls within the exception provided under Section 25 of the Contract Act and makes it a valid transaction which can be enforced by law. 20. In the circumstances, the question that arises for consideration is whether EX.A 1 agreement contained any such promise to pay a time barred debt so as to fall within the exception provided under subsection (3) of Section 25. 21. A perusal of EX.Al agreement placed before this Court shows that under the said agreement the 1st defendant had not only acknowledged the receipt of Rs.2,25,000/- advanced by the plaintiff, but also promised to pay the said amount within six months i.e., on or before 10.6.2001. 21. A perusal of EX.Al agreement placed before this Court shows that under the said agreement the 1st defendant had not only acknowledged the receipt of Rs.2,25,000/- advanced by the plaintiff, but also promised to pay the said amount within six months i.e., on or before 10.6.2001. It is true that EX.A 1 agreement did not refer to the fact that the debt was already barred by limitation by that date. However, the recitals in the said document contained an express promise to pay the debt due to the plaintiff. 22. Hence, the finding of fact recorded by the Courts below that EX.Al agreement is an acknowledgment of the liability of the 1st defendant in respect of the debt availed by him in the year 1997 does not suffer from any infirmity. Consequently the suit cannot be held to be barred by limitation. Though no specific issue was framed, the trial Court as well as the lower Appellate Court for different reasons held that the suit was not barred by limitation. The said conclusion being in accordance with the settled principles of law warrants no interference by this Court. 23. Accordingly, the second appeal is dismissed. No costs.