2022 (1) TMI 1462 - HC - Indian Laws

Suit for recovery of laon - defendant No.2, as Director of defendant No.1 borrowed loan or not - suit barred by time limitation or not - HELD THAT - A careful reading of the plaint, would go to show that nowhere in his plaint, the plaintiff has whispered or stated about the defendants executing an on demand Promissory Note in his favour while obtaining the alleged loan from him. As such absolutely, there is a doubt about the defendants executing the Promissory Note in favour of the plaintiff, much less, at Ex.P-1. The plaintiff as PW-1 also has nowhere in his examination- in-chief has stated about the defendants executing an on demand Promissory Note in his favour while obtaining the loan. In paragraph No.8 of his examination-in-chief in the form of affidavit evidence, the plaintiff has only stated that all the documents pertaining to suit loan transaction are produced with the plaint and the same are marked as exhibits by the plaintiff and the plaintiff's bank statement will be produced in the next date of hearing. At the end of his examination-in-chief, in a table showing the alleged exhibits, the plaintiff has shown an on demand Promissory Note dated 19.04.2013 as a document at Ex.P1. Thus, nowhere in his examination-in-chief i.e., in his evidence in its entirety, the plaintiff has stated about the defendants executing an on demand Promissory Note while availing the loan from him. The post dated cheque, even if it is assumed that the said cheque was issued by the plaintiff on 19.04.2013, though would not matter, but what matters is if the loan is given through cheque, the plaintiff had sufficient materials, more particularly, the documentary proof like his bank pass book, statement of account, register, etc., to show the transaction of loan with the defendants. Admittedly, the plaintiff has not produced any one of them. Even though the plaintiff as PW-1 on his own in his examination-in-chief has stated that he would produce his bank statement, but he failed to produce the said bank document. In the absence of any evidence to show that the cheques at Ex.P2 to Ex.P4 were presented for realisation and the dishonour of the same by the drawee bank, it cannot be held that the plaintiff as a payee in the cheque had charged the drawer, as per Section 72 of the Negotiable Instruments Act and consequently, since he has not presented the cheque and attempted to encash them, it cannot be held that the defendants have acknowledged the debt as such, the limitation has been extended under Section 18 of the Limitation Act. Therefore, when Exhibits-P2 to P4 do not go to show that the limitation has been extended, then, even according to the plaintiff, the alleged loan being of the date 19.04.2013 and admittedly the date of filing the original suit in the trial Court is on 22.03.2017, which is beyond three years from the date of arisal of cause of action, the suit is hopelessly barred by limitation. Even though the trial Court for other reasons dismissed the suit by holding that the plaintiff could not able to prove the alleged loan transaction, there are no reason to interfere in the finding given by the trial Court in dismissing the suit of the plaintiff. The Regular First Appeal stands dismissed.

Issues Involved:
1. Whether the plaintiff proves that the defendants borrowed a loan of Rs. 20,00,000/- on 09.04.2013.
2. Whether the plaintiff proves that the defendants availed the loan through an Account Payee cheque.
3. Whether the plaintiff proves that the defendants repaid part of the loan and interest.
4. Whether the plaintiff proves that the defendants issued cheques for repayment, which were dishonored.
5. Whether the plaintiff is entitled to the relief claimed.
6. Whether the suit filed by the plaintiff was barred by limitation.
7. Whether the judgment and decree under appeal warrant interference.

Issue-wise Detailed Analysis:

1. Borrowing of Loan:
The plaintiff alleged that the defendants borrowed Rs. 20,00,000/- on 09.04.2013 for business purposes, agreeing to repay with interest at 1.90% per month. The plaintiff produced an on-demand Promissory Note dated 19.04.2013 (Ex.P1), but it was unstamped. The trial court dismissed the suit, stating the Promissory Note was not properly stamped. The appellate court noted that the trial court should have impounded the document or imposed a penalty for non-payment of stamp duty before admitting it as evidence.

2. Availing Loan Through Cheque:
The plaintiff claimed the loan was given through an Account Payee cheque drawn on Vijaya Bank, but failed to produce any bank statement or documentary proof to substantiate this claim. The absence of such evidence cast doubt on the plaintiff's contention.

3. Partial Repayment of Loan:
The plaintiff asserted that the defendants repaid Rs. 10,00,000/- in installments of Rs. 2,00,000/- each from May to September 2013, and Rs. 1,98,000/- towards interest. However, the plaintiff did not specify whether these repayments were made in cash or by cheque and did not provide any bank records to support these transactions.

4. Issuance and Dishonor of Cheques:
The plaintiff claimed the defendants issued three cheques totaling Rs. 10,00,000/- for repayment, which were dishonored. The plaintiff produced these cheques (Ex.P2 to Ex.P4) but failed to provide evidence of their presentation for realization or any cheque return memo. The court found no sufficient proof that these cheques were presented and dishonored.

5. Entitlement to Relief:
Given the lack of corroborative evidence, including the absence of bank statements and the non-mention of the Promissory Note in the plaint or examination-in-chief, the court concluded that the plaintiff failed to prove the loan transaction.

6. Limitation:
The suit was filed on 22.03.2017, beyond the three-year limitation period from the alleged loan date of 19.04.2013. The plaintiff argued that the issuance of cheques extended the limitation period under Section 18 of the Limitation Act, 1963. However, the court found no evidence that the cheques were presented and dishonored, thus not extending the limitation period.

7. Interference with Judgment:
The appellate court found no reason to interfere with the trial court's judgment, agreeing that the plaintiff failed to prove the loan transaction and that the suit was barred by limitation.

Conclusion:
The Regular First Appeal was dismissed as devoid of merits. The registry was directed to transmit a copy of the judgment along with trial court records to the concerned trial court without delay.

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