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2011 DIGILAW 159 (DEL)

State Bank of Patiala v. Supreme Bulb Industries

2011-01-28

VALMIKI J.MEHTA

body2011
JUDGMENT Valmiki J. Mehta, J. 1. This case is item No. 22 on the 'Regular Board' of this Court since 3.1.2011 and today it is effective No. 1. No one is appearing for the parties and hence after going through the record I am disposing of the appeal. 2. The challenge by means of the present regular first appeal is to the impugned judgment and decree dated 18.7.2000 whereby the suit of the Appellant bank was dismissed on the ground that the same is barred by time although, the Appellant bank had otherwise proved the grant of loan, execution of the documents, creation of equitable mortgage and so on. 3. The only reason why the trial court dismissed the suit was that the suit was time barred because it was filed on 17.8.1988 whereas the loan was taken on 2.9.1983. It has been held that the acknowledgement of debt is dated 22.10.1986 i.e., 3 years after the original grant of loan and therefore, the same has no effect inasmuch as acknowledgment of debt has to be within a period of limitation which expired on 1.9.1986. 4. In my opinion, the impugned judgment and decree is clearly illegal and is bound to be set aside because the suit was a mortgage suit under Order 34 of the Code of Code of Civil Procedure and the period of limitation under Article 61 of the Limitation Act, 1963 with respect to a mortgage suit is 12 years. Clearly, therefore, the finding of the trial court is illegal and the suit is within limitation. I may also note that the suit even if, it was required to be filed within three years would be within limitation because two facilities were sanctioned to the Respondent, the first being a term loan account and the second being a cash credit facility. With respect to the cash credit facility, the statement of account has been filed and has been duly proved on record and exhibited . The suit on the basis of a mutual open and current account under Article 1 of the Limitation A Ctcan be filed within three years from the end of the financial year, in which, the last of the entry is admitted or proved. In this case, last of the admitted entry is in the financial year 1987-1988 and therefore, the suit which was filed on 17.8.1988 was well within limitation. In this case, last of the admitted entry is in the financial year 1987-1988 and therefore, the suit which was filed on 17.8.1988 was well within limitation. So far as the term loan is concerned, the limitation commences not on the date of grant of loan but from the date when default is committed and from which date the period of 3 years begins. Looking at the issue therefore from any angle, the suit was not barred by time. 5. Accordingly, I accept the appeal and set aside the impugned judgment and decree. The suit of the Appellant/plaintiff /bank is therefore decreed for a sum of Rs. 1,20,727.04 along with pendente lite and future interest till realization at 14% per annum simple. Decree sheet be prepared. Trial court record be sent back. Appeal allowed.