Eva Seth vs Bank Of Maharashtra

The Court :- The appeal is not only unmeritorious but it borders on the absurd. It is incomprehensible as to how two sets of parties engaged in an adversarial litigation without the defendant asking the plaint to be thrown out since it did not disclose any claim which could be pursued and was ex facie barred by the laws of limitation.

It was a complete waste of time that two witnesses were examined by the plaintiff and another two by the defendant bank before the money claim was defeated on the ground of limitation.

The voluminous plaint runs into some 50 pages or so. Paragraph 37 of the plaint is of relevance:

"37. No part of the plaintiff's claims and/or causes of action herein is barred by laws and limitation in as much as the disputes, claims and entitlements of the plaintiff made herein were made subjudice by the defendant in the year 1997 in O.A. No. 37 of 1997 filed before the Learned Debts Recovery Tribunal, Kolkata - II which terminated only on 18.12.2008 when the Learned Tribunal by a Judgment dismissed defendant's T.A. No. 601 of 2001 arising out of O.A. No. 37 of 1997 and upon such dismissal claims and entitlements of the plaintiff have since crystalised and stood admitted by and against the defendant entitling the plaintiff to recover the claims made herein. Further by reasons of findings of this Hon'ble Court made in W.P. No. 2980 (W) of 1997 and by the Learned Tribunal in T.A. No. 601 of 2001 arising out of O.A. No. 37 of 1997, amount of claims made by the plaintiff herein are held by the defendant in trust for and on behalf of the plaintiff and the defendant is liable to pay reimbursed (sic.) the same to the plaintiff upon demand made by the plaintiff under Advocate's notice on 16.05.2008. Further by exchange of notice of demand of the plaintiff dated 16.05.2008 and reply thereto of the defendant dated 09.06.2008, there existed a jural relationship between the defendant and plaintiff as debtor and creditors respectively. Thus the suit I filed well within the period of limitation."

Nothing in paragraph 37 of the plaint saves limitation. No case of trust could have been made out in view of the relationship between the parties. No jural relationship of debtor and creditor was established by the exchange of letters, particularly, since in response to the notice of May 16, 2008, the defendant denied the entirety of the claim by its letter of June 9, 2008.

The earlier paragraphs from the plaint may be noticed to assess the nature of the claim and the timeline involved.

The second paragraph of the plaint refers to packing credit facilities being obtained by the plaintiff from the defendant bank since or about 1986. The credit facility obtained was under the Packing Credit in Foreign Currency (PCFC) Scheme. The third paragraph of the plaint makes for interesting reading:

` "Between 1986 and 1995 the defendant granted packing credit facility to the plaintiff against confirmed orders received by the plaintiff from overseas buyers. Those orders were accompanied by letter of credit opened by the buyers in favour of the plaintiff."

The paragraphs that follow immediately refer to the quantum of credit facilities granted from time to time, the enhancement of the credit limits, the quantum of security furnished by way of fixed deposit receipts and the number of consignments exported. There is, however, no mention of any transaction between the parties after the year 1996. There is no reference to any acknowledgement of indebtedness by the defendant, nor even the acknowledgement of the jural relationship. There is also no promise to pay on behalf of the defendant for Section 25 of the Contract Act, 1872 to be pressed into service.

Paragraph 10 of the plaint refers to the debit balance in the PCFC account in April, 1993 and there is a statement that from April, 1986 till September, 1996, the defendant purported to adjust a sum of Rs.87,95,000/- in rupee value from the plaintiff. According to the plaintiff, as asserted in the 11th paragraph of the plaint, the adjustments made by the defendant in the packing credit amount and cash credit were wrongful and illegal. However, as evident from paragraph 10 of the plaint, such adjustments were made between April 1986 and September, 1996. The suit was filed in the year 2009. Paragraphs 12 and 13 refer to the perceived wrongful acts on the part of the defendant. At paragraph 14 of the plaint, there is a reference to a letter dated January 27, 1996 addressed by the plaintiff to the Rashbehari Branch of the defendant. At paragraph 15, there is a reference to a letter received from the central office of the defendant in Pune in 1996. Paragraph 17 of the plaint records that the defendant "wrongfully stopped granting credit facility to the plaintiff." According to the plaintiff, at the relevant time, the plaintiff had "lucrative export orders in hand for execution." The plaintiff claims that time was of the essence in executing such orders and the refusal by the defendant to continue with the credit facilities caused immense loss and prejudice to the plaintiff. Indeed, in 1996, the plaintiff filed a writ petition in this Court upon the defendant's failure to issue a no-objection certificate to the plaintiff for the plaintiff to obtain credit facilities from other banks or like institutions. The initial writ petition was disposed of by directing the defendant bank to pass a speaking order. A speaking order followed but the no-objection certificate was declined. In 1997, as paragraph 18 of the plaint recounts, WP No.2980(W) of 1997 was filed in this Court upon the defendant's refusal to issue the no-objection certificate. It may be remembered that without such no-objection certificate, the plaintiff could not have gone to any other bank or like institution for obtaining credit facilities. Though by 1996 liberalisation of the economy was well under way in this country, yet there were only a few private banks or financial institutions available and once a party had obtained credit facilities from a nationalised bank and such nationalised bank refused to issue a no-objection certificate, it was very difficult for the party to obtain credit facilities from any other.

In course of the second writ petition filed by the plaintiff, the plaintiff discovered that the defendant bank had carried a claim against the plaintiff to the Debts Recovery Tribunal in 1997 on the ground that a huge amount remained due and outstanding to the defendant. Paragraph 19 of the plaint refers to an order of September 4, 1997 by which WP No.2980 (W) of 1997 was allowed by issuing a writ in the nature of mandamus, directing the defendant to grant a no-objection certificate not later than four weeks from the date of the order.

According to the plaintiff, the order dated September 4, 1997 passed on the plaintiff's second writ petition, in effect, held that the bank had taken inconsistent stands and had purported to overcharge the plaintiff, particularly, on account of interest and the bank had not adhered to the norms and guidelines of the Reserve Bank of India that the defendant bank was obliged to follow.

However, despite the success that the plaintiff enjoyed upon obtaining the order dated September 4, 1997 and despite the plaintiff discovering that the bank had carried its claim to the appropriate Debts Recovery Tribunal, no immediate action followed from the plaintiff's side against the defendant bank. Indeed, for the next several years till or about 2008 or thereabouts, the plaintiff waited for the bank's claim before the DRT to be decided. There is no doubt that the bank's claim was dismissed upon the bank not being able to demonstrate that there was any amount due or owing from the plaintiff to the bank; but it was also observed that no counter-claim had been carried by the plaintiff herein against the bank. It may be noticed that by 2002, the Recovery of Debts due to Banks and Financial Institutions Act, 1993 had been overhauled and a provision had been incorporated in the Act of 1993 for a constituent to make a counter-claim against a bank before the DRT. In any event, it must also be noticed that no independent action by way of a suit or the like was instituted by the plaintiff herein within any reasonable time of 1997 when the order was passed on the plaintiff's second writ petition.

To return to the narration in the plaint, paragraphs 20 to 22 of the plaint and the several sub-paragraphs thereunder refer to the proceedings instituted by the defendant bank before the DRT culminating in the dismissal thereof by an order of December 18, 2008. Paragraphs 23 to 30 of the plaint refer to the perceived illegalities committed by the bank, but it does not appear that any of such illegalities were committed at any point of time after 1997 or after the transactions between the parties came to an end in 1996 or at any point of time within three years prior to the institution of the present suit in 2009. Paragraphs 31 and 32 of the plaint set out the particulars of the plaintiff's claims. Paragraph 33 pertains to the claim on interest. Paragraph 34 of the plaint refers to the notice of May 16, 2008 which is repeated again in paragraph 37 of the plaint and the reply of advocates for the defendant dated June 9, 2008. The essence of the reply is indicated at paragraph 34 of the plaint. Advocates for the defendant had asserted that the defendant was advised not to deal with the notice of demand since the matter was subjudice and pending before the tribunal. It may be recalled that it was only in December, 2008 that the bank's claim was dismissed by the tribunal.

Paragraphs 35 and 36 again refer to the perceived wrongful acts of the defendant without having any pointer as to any specific period of time. Paragraphs 38 and 39 are the formal and jurisdictional paragraphs. Paragraph 40, the last paragraph of the plaint, indicates the valuation.

Thus, it is evident, on a plain reading of the plaint, that the claim was ex facie barred by limitation and it was a complete waste of time for such a plaint to qualify to go to trial or witnesses be called in support of the claim. Nothing in paragraph 37 of the plaint makes out any exception to the general rule in the Limitation Act of 1963 for time to be excluded. Though it is asserted that the bank was in a position of a trustee, the nature of the relationship was that of a banker and constituent and the bank was never a trustee qua the plaintiff.

The suit was dismissed by a judgment and decree dated August 5, 2016. For similar reasons as indicated hereinabove, the trial court found that the documents and the material relied upon could not overcome the bar of limitation for the plaintiff's claim to be addressed or adjudged on merits.

For the reasons above, there was no merit in the plaint and, indeed, the plaint was liable to be rejected as being ex facie barred by limitation without calling for any trial. The appeal is utterly frivolous and devoid of any merit and the same is dismissed with costs.

APD No.1 of 2017 stands dismissed as above.

Urgent certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.