CANARA BANK Vs. ALLAHABAD LAW JOURNAL CO LTD

JUDGEMENT

(1.) THIS case is on the ,,Regular Board of this Court since 17.1.2011. Today, it is effective item No.9 and though it is 12.20 P.M. nobody has chosen to appear for the parties. I have, therefore, perused the record and am proceeding to dispose of the appeal.

(2.) THE challenge by means of this Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned judgment and decree dated 15.9.2001 whereby the suit of the appellant/plaintiff was dismissed only on the ground of limitation. THEre was no dispute of any substance before the trial Court that the credit facilities were in fact granted to the defendant No.1/respondent No.1 and with respect to which the respondent Nos.2 and 3/defendant Nos.2 and 3 stood as guarantors. Two facilities were granted namely the overdraft facility and credit facility against discounting of supply bills. Demand promissory note was executed by the respondent No.1 on 8.6.1976 and liability was said to be acknowledged by the respondents/defendants on 20.11.1978 and 5.11.1981 on acknowledgments of debts signed by the Managing Director of the principal borrower/defendant No.1/respondent No.1. As on 17.8.1983, a sum of Rs.1,01,276.07/- was due and payable by the defendants/respondents to the plaintiff in the current account and a sum of Rs.50,000/- was payable in the "Advance against Supply Bills" account. THE basic defence of the respondent in the trial Court was that the suit was time barred and which was accepted dismissing the suit as time barred.

(3.) I am afraid, the trial Court has clearly fallen into an error and thereby committed an illegality and perversity in dismissing the suit as being barred by time. The trial Court has without valid reasons held that the acknowledgment of debt was signed in blank. A reference to the acknowledgment of debt shows that the same in fact even contains the seal of the respondent No.1 company. There is no personal interest of any individual when a bank files a suit for recovery, and therefore, I am not inclined to believe the case that the acknowledgment of debt dated 5.11.1981 cannot be looked into inasmuch as the same was blank. The suit was filed on 31.10.1984 and therefore the same is within three years of the acknowledgment of debt dated 5.11.1981, Ex.PW2/2 and consequently, the suit was very much within limitation and was not time barred. One important aspect, I may note is that there is a very good reason to hold that the acknowledgment of debt dated 5.11.1981 as not having been signed in blank inasmuchas at the end of typed portion there is an acknowledgment in hand, which appears to be clearly on behalf of the respondent No.1/defendant No.1 and which states "this is subject to our letter dated 17.12.1980". Another reason to hold that the suit has been filed within limitation is that it is not disputed that the respondent No.1 asked the appellant bank to prepare a pay order in name of Sh. H.K. Jain by encashing the fixed deposit receipt No.125/82. This was admittedly done by the bank by first making the credit entry in the current account and then making a debit entry in the said account in order to prepare the pay order. The bank in law and as per banking practice necessarily operates by means of an entry in the account and I do not find that any illegality was committed by the bank in first creating a credit entry for encashing of the FDR in the current account of the defendant No.1/respondent No.1 and thereafter debiting the amount for issuing pay order of Rs.1850/- in favour of Sh. H.K. Jain. These entries in the account are dated 15.11.1983. The current account of the bank in which overdraft limit is granted is an open mutual and current account in terms of Article 1 of the Limitation Act,1963 and limitation for filing of the suit is three years from the end of the financial year in which the last entry is admitted or proved. The last proved entry in the account is dated 15.11.1983 when the credit and debit entries were put in the account for issuing of the pay order in favour of Sh. H.K. Jain. The end of the financial year with respect to the entry dated 15.11.1983 shall be 31.3.1984 and thus in terms of Article 1 of the Limitation Act the suit could have been filed till 31.3.1987 whereas the suit has been filed on 31.10.1984. For this reason also the suit can be said to have been filed within limitation.