GHANSHYAM DAS AGARWAL Vs. OM PRAKASH AGARWAL

JUDGEMENT

(1.) Heard for confirmation of stay order dated 14.7.2004 in these three connected appeals, by which recovery of money from defendant appellant was stayed by this Court.

(2.) Mr. R.K. Agrawal, learned counsel for the appellant urged that in the present appeal, the appellant mainly challenges the impugned decree and judgment on the ground of suit being barred by limitation and secondly by the principles of res judicata because for the same loan transactions there was already an arbitration award in favour of the plaintiff which was subject matter of Section 34 application under the Arbitration and Conciliation Act, 1996 in the competent Court. Mr. Agrawal firstly submitted that the learned trial Court while deciding issue No. 5 e.k facie exercised fallen into error in holding the suit to be within limitation on the basis of part payment of loan made in February, 1999 whereas the suit was filed on 30.10.2002, after expiry of prescribed period of limitation of three years in February, 2002, still the Court held the suit to be within limitation which was an error in law. He submitted that Ex.3 cheque given to the plaintiff at the time of advance of loan was dated in different ink (black ink) to be 28.12.2001 though the remaining writings were in blue ink and, therefore, the said date was apparently put by the plaintiff to bring the suit within limitation as the said cheque was dishonoured. The second submission made by the learned counsel for the appellant is that the learned trial Court itself has noticed while deciding the issue No. 6-A that arbitration proceedings initiated by the agent Prem Chand Modani which included also the loan which is subject matter of present suit, was with full authority and consent of the plaintiff and, therefore, once an award was passed under the Arbitration and Conciliation Act, 1996, separate suit at the instance of plaintiff was not maintainable and was barred by the principles of res judicata. He relied upon the following judgments in support of his submission relating to limitation.

(3.) Countering these submissions, Mr. G.P. Sharma, learned counsel appearing for the respondent plaintiff submitted that Ex.3 cheque dated 28.12.2001 clearly brought the suit within limitation of three years though the said date has not gone into computation of limitation of three years by the learned trial Court while giving its finding on issue No. 5 relating to limitation. Drawing attention of the Court towards Section 118 of the Negotiable Instruments Act, he submitted that the said date 28.12.2001 will be presumed to have been written by the defendant while giving the said cheque. Regarding arbitration award, he submitted that the said arbitration proceedings were on account of agreement between Prem Chand Modani, the agent and the defendant and plaintiff was not bound by the said arbitration agreement nor he was a party in the arbitration proceedings, therefore, the present suit cannot be barred on the principles of res judicata. In Rajesh Kumari v. Prem Chand Jain, AIR 1998 Delhi 80, Hon'ble justice R.C. Lahoti (as his Lordships then was) held that issuance of cheque by debtor extends the period of limitation by further three years from the date of such payment even though such cheque was dishonoured during the pendency of the suit and such a dishonour of cheque cannot undo the advantage of extension of limitation earned by the creditor. Therefore, Mr. Sharma submitted that on account of this cheque dated 28.12.2001 having been dishonoured, there was an acknowledgment of debt due by the defendant and the period of limitation stood extended by three years.