Kollipara Suryanarayana vs State Bank of India

M.N. Rao, J.—Against the judgment and decree of the learned Subordinate Judge, Vijayawada, in O. S. No. 100 of 1976, this appeal was brought by the unsuccessful defendant, K. Suryanarayana. The respondent-plaintiff laid a suit for recovery of Rs. 14,977.55, the outstanding balance due from the defendant as per the khata copy filed along with the plaint. It was averred by the plaintiff that the defendant was given overdraft facility to the extent of Rs. 25,000 during May, 1971, and the same has been fully utilised by him and the ''last payment made into the bank for the amount due from him was on April 3, 1973, "by way of a cheque for Rs. 20,000 drawn in favour of Kollipara Sri Ramulu and Co. The suit amount was credited to the account of the defendant "with his consent and concurrence." Subsequently, the defendant did not operate the account and when the bank demanded payment, he failed to respond.

Resisting the suit, the defendant contended in his written statement that the plaint averments were contrary to the understanding between the parties at the time of State Bank of India Co-operative Housing Society Ltd. placing an order with the firm of Kollipara Sreeramulu and Co. for supply of some material for preparing door frames, window frames, etc. He denied the entry dated April 3, 1973, and contended that it would not save limitation.

On the aforesaid pleadings, the learned Subordinate Judge framed appropriate issues and after considering the evidence on record, decreed the suit, The plea of the defendant, that exhibit A-2, cheque, dated April 3,1973, and exhibit a-3, pay-in-slip, bearing the same date, would not save limitation since he did not sign on them, was rejected on the ground:

"Generally in banks, when payment is made by way of a cheque, the signature of the debtor is not insisted. But, only in cases where payment is made by the bank to the debtor, such signature is insisted."

Aggrieved by that, the present appeal was brought.

Shri Veerabhadrayya, learned counsel for the appellant, contends that the view taken by the learned trial judge was erroneous. Unless the defendant acknowledges payment, limitation cannot be saved.

I am inclined to agree with him. exhibit A-2 ia a cheque dated April 3, 1973, for Rs. 20,000 drawn on State Bank of India, Vijayawada, in favour of Kollipara Sree Ramulu and Co. of which the defendant is a partner. The cheque, exhibit A-2, does not contain any endorsement that the contents therein should be paid to the defendant nor does it contain the endorsement of the defendant that the contents may be credited to his account. Exhibit A-3 is the pay-in-slip. Neither of the two bears the signature of the defendant. There is absolutely no evidence to believe that the appellant defendant presented the cheque, exhibit A-2, at the bank for crediting the same to his account. PW-1, the manager of the bank, although he claimed in the chief-examination that the cheque was presented personally by the defendant, admitted in the cross-examination that he had no personal knowledge about the presentation of the cheque and that his evidence was based only on the records available in the bank. There is also no basis to infer that a copy of the accounts was, at any time, supplied to the appellant defendant. It must also be noticed in this context that for a long time prior to April 13, 1973, the date of exhibit A-2, there was no transaction between the bank and the appellant-defendant. Where a rubber stamp acknowledgment was taken without the signature of the debtor, it was held by this court in Union Bank of India v. Mohd. Yousuf [1986] 2 APLJ 521 that the same would not save the limitation.

Section 19 of the Limitation Act, in its material particulars, reads:

"Effect of payment on account of debt or of interest on legacy.- Where payment on account of debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made: Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the hand writing of, or in a writing signed by the person making the payment."

The section clearly lays down that the acknowledgment of payment should be in the handwriting of, or in a writing signed by, the person making payment: otherwise, limitation would not be saved. The mandatory provision of the section cannot be disregarded. The view taken by the learned judge that when payments are made into banks by way of cheque, the signatures of the debtors are not insisted upon and, therefore, exhibit A-2 saves limitation is clearly unsustainable. If that view is accepted, section 19 of the Limitation Act becomes otiose. It is not difficult to visualise the situations in which, without the knowledge of the debtor, money can be credited into his account to save limitation. A contrived situation, seemingly in favour of the defendant, might defeat the mandatory provisions of the law and work to the disadvantage of the debtor depriving him of the valuable right under the Limitation Act. Dealing with the scope of exemption u/s 20 of the limitation Act, the Supreme Court held in Sant Lal Mahton Vs. Kamala Prasad, :

"To claim exemption u/s 20, Limitation Act, the plaintiff must be in a position to allege and prove not only that there was payment of interest on a debt or part payment of the principal, but that such payment had been acknowledged in writing in the manner contemplated by that section. The ground of exemption is not complete without this second element, and unless both these elements are proved to exist at the date of the filing of the plaint the suit would be held to be time-barred."

for these reasons, the appeal is allowed without costs. The judgment and decree of the court below are set aside and the suit O.S.No. 100 of 1976 is dismissed with costs.