Ghulam Mohammad Ganai and Others vs J and K Bank Ltd.

Mansoor Ahmad Mir, J.—This Civil 1st Appeal is directed against the judgment and decree dated 10.9.2001 passed by the Addl. District

Judge, Srinagar, whereby suit for recovery, titled as J&K Bank v. Ghulam Mohd. Ganie & others, came to be decreed in favour of plaintiff-

respondent bank and against the defendants-appellants, on the grounds taken in the memo of appeal (hereinafter, for short, impugned judgment).

Brief Facts

Defendant-appellant No. 1 approached the plaintiff-respondent bank on 9.10.1975 for grant of loan facility for purchase of Tata Diesel Vehicle

and loan facility to the extent of Rs. 95,000/- was sanctioned in his favour. He availed the facility after executing the documents viz., DP Note

dated 9.10.1975 for Rs. 95,000/-, Trust Receipt, Deed of Hypothecation and Irrevocable Power of Attorney. Defendants-appellants 2 & 3

executed the Deed of Guarantee and undertook to indemnify the plaintiff-respondent bank. It is also averred in the plaint that defendant-appellant

No. 1 executed DP Note dated 9.10.1981 for Rs. 77,996.77 in favour of plaintiff-respondent bank and also executed DP Note dated 30.9.1987

for an amount of Rs. 1,25,895.67. The said DP notes were executed to save the period of limitation. Defendant-appellant No. 1 failed to make the

payment and committed defaults, constrained the plaintiff-respondent bank to file a suit for recovery of Rs. 3,17,693.00. Defendants-appellants

filed the written statement and following issues came to be framed:

Whether the suit is time barred and as such not maintainable? OPD

Whether the defendant Gh. Mohd. Ganie has not signed the D/P note dated 9.10.81 and 10.09.1987? OPD

Whether the defendant has repaid the loan availed by him from the plaintiff bank in instalments along with agreed interest after a settlement with

the plaintiff bank? OPD

Whether the plaintiff has no-cause of action to institute the suit? OPD

In case the issues struck hereinabove are replied in negative, whether the plaintiff is entitled to a decree for recovery of an amount of Rs.

3,17,693 along with interest at the ruling rate from the date of institution of the suit till the final realization of the decretal amount and the costs of the

suit? OPP

Relief?

Defendants-appellants examined three witnesses, namely, Abdul Salam Ganie, Abdul Rehman Mir and Ghulam Rasool Zargar.

Plaintiff-respondent bank examined three witnesses, namely, Muneer Ahmad Khan, Ghulam Nabi Sheikh and Mir Azad Ahmad.

Trial court after hearing learned counsel for the parties passed the judgment and decided all the issues in favour of plaintiff-respondent bank and

against the defendants-appellants. Learned counsel for appellant argued that plaintiff-respondent bank has failed to prove execution of DP Notes

dated 9.10.1981 and 30.9.1987, thus the suit was barred by limitation and was to be dismissed as such. It is apt to reproduce operative part of

the findings returned by the trial court, vis-a-vis issue No. 2.

It has therefore, to be taken that defendant side has not proved the issue, even if plaintiff too has not disproved the same. Gh. Nabi Sheikh, a

witness of the plaintiff has no doubt referred to the execution of the said document by defendant No. 1, but his statement can't be considered, as

being in part only, the witness having not been subjected to any cross-examination by the defendants. Therefore, despite plaintiff side too having

not succeeded in establishing the fact of execution of D.P. Note dated 09.10.1981, by defendant No. 1, issue has to be held as to be decided

against the defendants, they having failed to discharge the onus placed upon them. Issue is as such decided against the defendants.

Trial court has held that plaintiff-respondent bank has failed to prove the execution of DP Note dated 9.10.1981. None of the witnesses

examined by the plaintiff-respondent bank have proved the execution of both DP Notes. I deem it proper not to reproduce the statements of said

witnesses because those have been discussed in the trial court judgment.

It is also apt to mention herein that plaintiff-respondent bank has not questioned the findings returned by the trial court, thus the findings returned

to the extent that plaintiff-respondent bank has failed to prove the execution of DP Note dated 09.10.1981 have attained finality. It is worthwhile

to record herein that the plaintiff has failed to prove the execution of DP Note dated 30.09.1987. Even proof of its execution can not extend the

period of limitation unless execution of DP Note dated 09.1 0.1981 is proved.

The suit of plaintiff was barred by time in terms of provisions of Limitation Act, it is for the plaintiff-respondent bank to prove that the suit was

within time, which it has failed to do so. It pains me to record herein that the learned District Judge-trial court has wrongly placed the onus of issue

No. 1 on defendants-appellants. It was for the plaintiff-respondent bank to discharge onus. However, parlies were knowing their case and have

led evidence.

In J.C. Budhraja v. Chairman, Orissa Mining Corporation Ltd., AIR 2008 SCW 800; Sampuran Singh and Others Vs. Smt. Niranjan Kaur and

Others, and State Bank of India Vs. Hari Datt Sharma and Others, , it has been held that it is for the plaintiff to prove execution of DP Notes in

order to come out of rigor of limitation. If it fails to do so, the suit becomes time barred and has to be dismissed as such. Section 18 of the

Limitation Act deals with the effect of acknowledgement in writing. A fresh period of limitation shall be counted from the time when the

acknowledgement was made/signed. It is apt to reproduce relevant portion of para-15 in case J.C. Budhraja and para-8 in case State Bank of

India (supra).

AIR 2008 SCW 800

It is now well settled that a writing to be an acknowledgement of liability must involve an admission of a subsisting jural relationship between

the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability.

State Bank of India Vs. Hari Datt Sharma and Others,

It is, therefore, undisputably gatherable from (he evidence on record and rightly appreciated by the learned single judge that unless the

execution of the revival letter dated 16.6.1987 is proved, the execution of the letters dated 15.4.1993 and 15.5.1993 do not extend the period of

limitation. Section 18 of the Limitation Act, 1963 clearly contemplates that the acknowledgement must be prior to the debt becoming time-barred.

It is only during the subsistence of the period of limitation if any, document is executed, limitation would be revived afresh from the said date of

acknowledgement as is laid down by the Supreme Court of India in Sampuran Singh and Others Vs. Smt. Niranjan Kaur and Others, . It is,

therefore, follows that the essence of acknowledgment can be drawn only if the necessary facts constituting the liability are admitted, which is not

the position in this case. Defendant/respondent No. 1 Hari Dutt Sharma when confronted with the document dated 16.6.1987 has admitted only

his signatures. The acknowledgement of liability, therefore, must be within substantive period of limitation. The acknowledgment, if any, has to be

prior to the expiry of the prescribed period for filing the suit, in other words if the limitation has already expired it would not revive under this

section. It is only during the subsistence of period of limitation, if any, such document is executed then the limitation would be revived afresh.

Having glance of the above discussion, the impugned judgment and decree need to be set aside. Ordered accordingly. Thus, issue No. 1 is

decided in favour of defendants-appellants and against the plaintiff-respondent bank holding that the suit filed by the plaintiff-respondent bank was

barred by time and is dismissed as such. Registry to prepare decree sheet and send down the trial court file along with copy of judgment and

decree.