M/s G.R. Industries Pvt. Ltd. vs Punjab Financial Corporation

Vijender Singh Malik, J.

CM No. 24073-CII of 2011 The application for exemption from filing certified copies of Annexures P-1 to P-5 is allowed.

CR No. 6045 of 2011

This is a revision petition brought by the defendant under the provisions of Article 227 of the Constitution of India for setting aside the order dated 22.07.2011 (Annexure P-5) passed by learned Additional Civil Judge (Senior Division), Chandigarh.

In the suit brought by Punjab Financial Corporation, the respondent, for recovery of Rs. 42,97,908/-, the defendant filed an application under Order 7 Rule 11 CPC for rejection of the plaint on the ground that the suit brought by the plaintiff is barred by limitation. It has been claimed by the defendant-petitioner in his application that the sale agreement is dated 31.3.1997, vide which the petitioner was to pay a total sale consideration of Rs. 5,75,000/-. According to the petitioner, a sum of Rs. 2,87,500/- had been paid to the plaintiff at the time of signing of the sale agreement on 31.3.1997 and the remaining sale consideration was to be paid in two equal installments on 11.7.1997 and 15.9.1997. It is claimed that the defendant-petitioner has already paid the entire sale consideration. According to the petitioner, even if he has failed to pay the said amount, the suit for recovery of that amount had become time barred on the date of filing of the suit. The cause of action to file the suit is said to have arisen in favour of the respondent on 15.9.1997 and the suit having been filed only on 15.9.2007. which is barred by limitation. The respondent, on the other hand, has claimed that the defendant as per the terms of the sale agreement had to hold the property i.e. the subject matter of the agreement as a trustee and the respondent was entitled to claim interest thereon. It is claimed that the defendant has defaulted in making payment and the suit is still within limitation.

Hearing learned counsel for the parties, learned Additional Civil Judge (Senior Division), Chandigarh, has dismissed the application, vide the impugned order.

Aggrieved by the aforesaid order, the defendant has brought this revision petition.

I have heard Shri. Rahul Sharma-I, learned counsel for the revision-petitioner and have gone through the record.

Learned counsel for the petitioner has submitted that the plea of the plaintiff in pars. No. 15 of the plaint has been very vague. According to him, it was mentioned therein that the cause of action arose to the plaintiff on the defaults of the defendant and is still continuing. He has drawn my attention to the contents of the sale agreement (Annexure P-1). According to him, the property had been purchased by the petitioner for a sum of Rs. 5,75,000/-, vide this agreement, against which the petitioner paid Rs. 2,87,500/- on the said date itself. According to him, the remaining amount of Rs. 2,87,500/- was to be paid in two equal installments on 11.07.1997 and 15.09.1997. According to him, as is claimed by the plaintiff, the defendant did not pay this amount. The cause of action to sue the petitioner for recovery of this amount arose to the plaintiff-respondent on 15.09.1997 and the suit brought on 15.09.2009 is barred by limitation. He has submitted that the entry of accrual of interest alone would not slop the time from running because such entries are not based on mutual transactions. He has drawn my attention in this regard to a decision of a Coordinate Bench of this Court in Today Stationers and Gift Centres v. Allahabad Bank, 2004(1) L.J.R. 380 where on the question of limitation, it was held as under:-

"Reliance of the learned Civil Judge on Article 25 of the Schedule would not be attracted to the facts of the present case because mere entry of interest as observed by the Supreme Court in Chander Dhar''s case (supra) would not stop the time from running because such entries are not based on mutual transactions and are result of unilateral action by the plaintiff-respondent. The civil Judge also committed another legal error by computing the period of limitation as 12 years by relying on the principles concerning recovery of possession of mortgage immovable property as envisaged by Articles 62 to 65 of Schedule of the Act. These principles do not apply to the moveable property like the bank accounts. Therefore, the impugned order passed by the Civil Judge does not deserves to be accepted and the same is liable to be set aside.

I have gone through the contents of the sale agreement. It is specifically mentioned in para no. 4 of the sale agreement that so long as the said sum or a part thereof shall remain unpaid, the purchaser shall pay to the corporation interest on the said sum from time to time on the sum that shall remain unpaid. It is mentioned in para No. 5 (ii) thereof that in the event, the purchaser failing to make the balance payment of Rs. 2,87,500/- or any part thereof together with interest in the manner mentioned above, the amount already paid to the transfer shall stand forfeited. In the event of non-payment of the balance sale consideration, the liability on the part of the defendant was to be of paying interest on the amount left unpaid. It follows therefrom that liability was to continue and had not to be crystalized on the date of nonpayment of the last installment. In Today Stationers and Gift Centres'' case (supra), the facts were otherwise. It was a case of overdraft facility granted by the bank in favour of the petitioner and the last entry of payment in the same was of Rs. 3007- on 31.3.1987. Thereafter there were entries of interest and they were unilateral entries made by the bank in the accounts and they were not to govern the limitation. Here the case is otherwise. The interest would be payable in this case only because the defendant failed to pay the balance sale consideration and, therefore, the limitation cannot be held to start from 16.09.1997 as is the claim of the defendant-petitioner. 9. Learned trial court has, therefore, been right in holding that the suit is within limitation and has consequently dismissed the application of the defendant-petitioner under Order 7 Rule 11 CPC. Finding no fault with the Impugned order, I dismiss the revision petition.