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2022 DIGILAW 366 (CHH)

Indu Patni W/o Late Sohanlal Patni v. Kamal Kishore S/o Late Kanhaiya Lal Agrawal

2022-08-23

GOUTAM BHADURI, RADHAKISHAN AGRAWAL

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JUDGMENT : Goutam Bhaduri, J. 1. Challenge in this appeal is to the judgment and decree dated11-9-2017 passed by the Fourth Additional District Judge, Durg, in civil suit No.680-B/2013 whereby the money suit was decreed forRs.11.00 lacs in favour of the plaintiff. The present appeal is by the defendant. 2. The facts, in brief, are that the respondent/plaintiff filed a suit on 9-4-2013 claiming Rs.11.00 lacs from the appellant/defendant. In the plaint, the plaintiff pleaded that prior to 5-6 years from the date of filing of the suit, a demand of Rs.15.00 lacs towards loan was made by the appellant/defendant. Accordingly, the said amount of Rs.15.00 lacs was given by the plaintiff to the defendant with a promise that it would be returned in 2-3 years. The plaintiff further pleaded that no receipts were taken for such grant of loan, as the relationship between them was cordial like brother and sister. The plaintiff also pleaded that when the amount was not returned, a demand was made in the year 2010 and the defendant promised to return the same during the month of March, 2010. Having not returned the same till March, 2010 again demand was made. At that point of time the defendant stated that she would be selling her certain property and immediately after such sale she would return the amount of Rs.15.00 lacs. It is stated that since the date of sale of property was uncertain as such on 10-4-2010 the defendant agreed to return the amount and executed a document that after the sale of property she would return the amount. According to the plaintiff, in the month of March, 2012 one of the property was sold by the defendant and a cheque of Rs.4.00 lacs was given by her to the plaintiff in lieu of payment of loan, which was deposited in the account of the plaintiff on 31-3-2012. In respect of the remaining amount of Rs.11.00 lacs, despite promise, the amount was not paid. Hence, the suit was filed for recovery of amount of Rs.11.00 lacs along with interest. 3. The defendant denied the plaint averments and stated that she had never availed the loan of Rs.15.00 lacs from the plaintiff. It was further stated that they have not suffered any loss in the business, therefore, there was no question of availing of loan to discharge their liability. 3. The defendant denied the plaint averments and stated that she had never availed the loan of Rs.15.00 lacs from the plaintiff. It was further stated that they have not suffered any loss in the business, therefore, there was no question of availing of loan to discharge their liability. The defendant also stated that the plaintiff got executed a document in the year 2010 by committing fraud with an assurance that certain landed properties would be purchased and since the relationship between them was cordial, she signed the document. According to the defendant, a cheque of Rs.4.00 lacs was received by the plaintiff on the assurance that the same would be given as advance for purchase of land for which a document was initially executed and thereby committed fraud. On the said background the defendant contended that the suit was wrongly decreed by the Court below in favour of the plaintiff, which needs interference of this Court. 4. Learned Court below has framed an issue as to that whether the document was executed on 10-4-2010 in lieu of payment of loan and the finding was given in favour of the plaintiff. The Court also held that the defendant agreed to discharge the loan of Rs.11.00 lacs. The Court further held that an amount of Rs.4.00 lacs was paid by the defendant to the plaintiff to discharge the part of liability and subsequently the remaining amount of Rs.11.00 lacs was never paid and it was held that the plaintiff is entitled for a decree of Rs.11.00 lacs. 5. Learned counsel appearing for the appellant/defendant would submit that first of all, no loan was availed by the defendant and the plaintiff has failed to prove the fact that the loan was ever advanced to the defendant. He would further submit that even otherwise according to the averments of the plaint the suit was barred under Article 19 of the Limitation Act. Referring to the statement of PW-1 Kamal Kishore (plaintiff), learned counsel for the defendant would submit that the plaintiff in his statement has made averments though he was an income tax payee the loan was not reflected in account. Further referring to the statement of Handwriting expert he would submit that the evidence would show that interpolation in the document (Ex.P/1) was made, therefore, a criminal case was also filed against him. Further referring to the statement of Handwriting expert he would submit that the evidence would show that interpolation in the document (Ex.P/1) was made, therefore, a criminal case was also filed against him. It is also stated that on vague ground the amount of loan was shown to be given to her, which never happened. The trial Court erred in holding that loan transaction was proved. 6. Learned counsel appearing for the respondent/plaintiff, per contra, would submit that an amount of Rs.4.00 lacs, which was paid in lieu of loan is admitted by the defendant. Under the circumstances, the presumption under Sections 118 & 139 of the Negotiable Instruments Act would come into play. He would further submit that since the relationship between the parties was cordial as such no written document was executed when the initial loan was advanced, therefore, on the law of preponderance of probability, the conduct of the parties is required to be seen. He would next submit that the facts would show that out of loan of Rs.15.00 lacs, an amount of Rs.4.00 lacs was paid by the defendant, as such the suit was filed only for the remaining amount of Rs.4.00 lacs. The Court below has rightly come to a finding that the defendant has availed the loan from the plaintiff and failed to repay, as such, the finding is well merited, which do not call for any interference. 7. We have heard learned counsel appearing for the parties, perused the pleadings and the evidence available on record. 8. The plaint was filed on 9-4-2013. According to the plaint averments, prior to 5-6 years from the date of filing of suit an amount of Rs.15.00 lacs was advanced to the defendant and the oral agreement was drawn that the return of the amount would be made within 2-3 years. PW-1 Kamal Kishore deposed at para 16 of his statement that no agreement was entered while the loan was granted. According to the deposition the loan was granted in 2005-06 and he deposed that no documents were executed. He further deposed that in respect of advancement of loan of Rs.15.00 lacs, it was not shown in his income tax return and also receipt of Rs.4.00 lacs was not shown in the income tax return. According to the deposition the loan was granted in 2005-06 and he deposed that no documents were executed. He further deposed that in respect of advancement of loan of Rs.15.00 lacs, it was not shown in his income tax return and also receipt of Rs.4.00 lacs was not shown in the income tax return. He also deposed at paras 17 & 18 that from where the arrangement of Rs.15.00 lacs was made was not shown and also the particulars of date and year of advancement of such loan was not pleaded. It was stated that in respect of the return of the amount only talks were going on. Therefore, reading of the pleading and the statement of plaintiff (PW-1) together, would show that the alleged so called loan was granted in 2005-06 and the suit was filed in 2013. 9. According to Article 19 of the Limitation Act the suit was required to be filed within three years from the date of loan. Admittedly, in the case at hand, the suit was not filed within three years. However, the plaintiff relied on the document (Ex.P/1) dated 10-4-2010 to show that the defendant agreed to pay Rs.15.00 lacs. As per the averments of the defendant the said document was executed on the assurance of the plaintiff for purchase of an immovable property and not for repayment of loan. 10. Be that as it may, the issue which falls for consideration is as to whether the document (Ex.P/1) would extend or revive the limitation. As per Section 18 of the Limitation Act the same having not been acknowledged within three years it would not extend limitation, however, when we refer to the provisions of Section 25(3) of the Indian Contract Act, the promise to pay a debt, barred by limitation law can be considered as a good consideration. The question would fall for consideration whether the document Ex.P/1 would be saved by the provisions of Section 25(3) of the Indian Contract Act. 11. For the sake of brevity, Section 25(3) of the Indian Contract Act is quoted below : 25. The question would fall for consideration whether the document Ex.P/1 would be saved by the provisions of Section 25(3) of the Indian Contract Act. 11. For the sake of brevity, Section 25(3) of the Indian Contract Act is quoted below : 25. Agreement without consideration void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt, barred by limitation law.-- An agreement made without consideration is void, unless – (1) xxx xxx xxx (2) xxx xxx xxx (3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised 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. 12. In order to invoke the provisions of Section 25(3), the following conditions must be satisfied : (i)it must refer to a debt which the creditor but for the period of limitation, might have enforced; (ii) there must be a distinct promise to pay wholly or in part such debt (iii) the promise must be in writing signed by the person or by his duly appointed agent. 13. The rule is founded on the principle that a pre-existing liability is a good consideration for a new promise. A moral obligation may be sufficient to sustain a promise, where the moral obligation is one which has once been a valuable consideration, but has ceased to be binding from some supervent act of the law. A promise may be supported by a moral obligation, where the obligation grows out of an original legal obligation, that has been barred by the law of limitation without being performed. Where the consideration was originally beneficial to the party promising, but some provision of law confers upon him an advantage and protects him from liability, he may renounce the benefit of the law; and if he promises to pay such debt – what every honest man ought to do – he is bound by the law to perform it. The rule, however, has no application where the original right of action is extinguished not by the act of the law but by the act of the parties. 14. The rule, however, has no application where the original right of action is extinguished not by the act of the law but by the act of the parties. 14. The Karnataka High Court in the matter of Adivelu by L.Rs v. Narayanachari, AIR 2005 Karnataka 236, held that : 6) An acknowledgment under Section 18 of the limitation Act and a promise under Section 25(3) of the Contract Act are required to be in writing and signed by the debtor or his authorised agent and both have the effect of giving fresh start of limitation. But, there is a distinction between the two. While an acknowledgment under Section 18 of the Limitation Act must necessarily be made before the expiry of the period of Limitation, a promise under Clause 3 of Section 25 of the Contract Act is made after the expiry of the period of limitation. Where a promise falls under Section 25(3) of the Contract Act, it constitutes a valid agreement for the purpose of suing, whether or not there is a fresh consideration for the promise and the debt covered thereby is within the limitation. 12) Section 2(b) defines the term 'promise' as under: "when the person whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise". 15. It is a settled principle that once the period of limitation expires, nothing short of an express promise will provide a fresh period of limitation, an implied promise is not sufficient. A promise to pay a time-barred debt can be inferred by necessary implication, the promise nevertheless has to be clear and unconditional. 16. With such aforesaid principle when the document (Ex.P/1), which was executed on 10-4-2010, is examined it do not disclose any debt in an unambiguous terms and there is no distinct promise to pay the whole or part of the debt. How the debt came to fore in 2005-06, the document (Ex.P/1) is silent and it is only by inference on submission of the plaintiff 17. The document (Ex.P/1) reads that Rs.15.00 lacs is to be paid and the property which would be sold the first part would be liquidated. Consequently, when the debtor while acknowledging his liability should have made a promise and the language used must indicate that it is something more than an acknowledgment of debt. The document (Ex.P/1) reads that Rs.15.00 lacs is to be paid and the property which would be sold the first part would be liquidated. Consequently, when the debtor while acknowledging his liability should have made a promise and the language used must indicate that it is something more than an acknowledgment of debt. On the basis of past uncertain advancement of debt specially in the backdrop of the pleading and the statement that the loan was advanced in the year 2005-06, Ex.P/1 cannot be regarded as a document of promise to pay a time barred debt, which would be covered under Section 25(3) of the Indian Contract Act. 18. Perusal of the record would show that while the document Ex.P/1 was exhibited before the Court an objection was raised about such admissibility for want of stamp. The learned Court below observed while recording deposition at para 8 of the statement of PW-1, that such objection would be adjudicated at the time of final hearing. Perusal of the judgment at para 9 would show that the learned Court below simply said that since the plaintiff has paid the Court fees on the amount of recovery of Rs.11.00 lacs, therefore, such objection about inadequate stamp duty or its admissibility is overruled. The said finding by the Court below, prima facie, appears to be absurd, not in accordance with law and Court only shirked the responsibility to adjudicate. Had the issue would have been decided before the document was exhibited more clarity would have been there during the final adjudication. 19. Having regard to the fact and the finding which has been recorded by the Court that the loan was granted in the year 2005-06 and it was barred under Article 19 of the Limitation Act, subsequent acknowledgment cannot bridge the limitation on the basis of document Ex.P/1 and subsequent payment made in the year 2012. 20. Under the circumstances, we are of the view of that the finding arrived at by the learned Court below requires interference. Accordingly, the appeal is allowed and the impugned judgment and decree is set aside. 21. The parties shall bear their own cost(s). 22. A decree be drawn accordingly.