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HIGH COURT OF DELHI
Date of Decision: 16th December, 2024
SAPAN DHAWAN .....Petitioner
Through: Mr. Abhay Narula, Advocate (Mobile No. 9999821737).
Through: Mr. Kamal Sethi & Mr. Anubhav Rana, Advocates.
JUDGMENT
1. The Revision Petition under Section 115 of the Code of Civil Procedure, 1908 (hereinafter referred to as “CPC, 1908”) has been filed against the Order dated 19.03.2024 vide which the Application under Order VII Rule 11 of CPC, 1908 filed on behalf of the Revisionist/Defendant seeking rejection of the Suit of the Respondent/Plaintiff, has been dismissed.
2. Learned counsel for the Revisionist/Defendant submits that admittedly the parties had entered into a Memorandum of Settlement dated 02.06.2016 (hereinafter referred to as the “said Settlement”), pursuant to which three Cheques dated 30.09.2016, 31.12.2016 and 31.03.2017, in the total sum of Rs.11,19,000/- were given to the Respondent/Plaintiff. However, the said Cheques were never presented by the Respondent/Plaintiff for encashment. Subsequently, another Cheque dated 20.01.2020 in the sum of Rs. 4,00,000/- was issued by the Revisionist/Defendant in favour of the Respondent/Plaintiff, which was dishonoured on presentation.
3. The plaintiff thus, filed a Suit for Recovery of Rs. 11,19,000/- along with interest @ 3% per month w.e.f. 31.03.2017 by the Respondent/Plaintiff against the Revisionist/Defendant.
4. The Defendant filed an Application under Order VII Rule 11 CPC, 1908 for rejection of the Suit on the ground that the Cause of action arose on 02.06.2016 when the parties arrived at a settlement and not the date on which the Cheque dated 20.01.2020 has been issued as it relates back to the date of Settlement, However, even if it is held that the Cause of action in regard to the Cheque dated 20.01.2020 in the sum of Rs. 4,00,000/- is within limitation, the other amount is patently barred by limitation and the Suit of the Respondent/Plaintiff is liable to be rejected.
5. In support of his assertions that such part of the Suit which is severable, can be rejected, reliance has been placed on the decision in Rajan Singh vs. Roshan, MANU/DE/0427/2020 decided by the Co-ordinate Bench of this Court.
6. It is argued that the date of the Settlement is, in fact, the actual date for calculating the date of limitation, for which reference is made to the case of Ashok Kumar Tiwari vs. Rajesh Kumar Yadav, MANU/DE/1511/2016.
7. It is, therefore, submitted that the Suit Claim of the Respondent/Plaintiff is barred by the limitation and the Application under Order VII Rule 11 of CPC, 1908 has been erroneously rejected by the learned Trial Court vide Order dated 19.03.2024.
8. Learned counsel for the Respondent/Plaintiff has, however, contended that the date to reckon is the date on the Cheque and not the date of the Settlement, for which reliance has been placed on Anil Kumar Sawhney vs. Gulshan Rai, MANU/SC/0578/1993 and M. Balaji vs. Perim Janardhana Rao and Ors., MANU/TN/3133/2020 and Raj Kamal Misra vs. Anil Khanna, 2018 0 Supreme (Del) 1125.
9. It is further contended that there was complete chain of transactions giving rise to the Cause of action and the grounds on which the rejection of the Suit have been sought, are not tenable. The learned Trial Court has rightly dismissed the Application under Order VII Rule 11 of CPC, 1908 filed on behalf of the Revisionist/Defendant.
10. Submissions heard and the record perused.
11. The Respondent (Plaintiff) had filed a Suit for Recovery of sum of Rs.11,19,000/- along with interest @ 3% per month w.e.f. 31.03.2017.
12. According to the averments made in the Plaint, the Revisionist (Defendant) had taken a friendly loan, but he failed to pay the same. A Civil Suit No.169/2015 was filed before the Court of the learned ADJ. While the case was pending, the Parties arrived at a Settlement and an Application under Order 23 Rule 3 CPC, 1908 was filed. The learned Court vide Order 02.06.2016 recorded the statements of the parties.
13. Pursuant to the Compromise, Revisionist (Defendant) issued three cheques for a total sum of Rs.11,19,000/- on 02.06.2016, but on account of his financial difficulties, he post-dated the cheques for 31.03.2017. He also agreed to pay the interest for the delayed payment @ 3% per month. Though the cheques were issued by the Defendant pursuant to the Settlement, the Plaintiff failed to withdraw the Suit, which was dismissed in default on 22.11.2016.
14. According to the Plaintiff, the son of the Defendant was diagnosed with Spine Cancer, and so the Defendant contacted the Plaintiff to make a request for non-presentation of the cheques on account of his financial difficulties. The Plaintiff asserted that because of the requests made by the Defendant, the cheques were not presented for encashment. Ultimately, the son of the Defendant left for heavenly abode in the year 2019.
15. The Defendant again approached the Plaintiff in the month of January, 2020. In order to win the trust of the Plaintiff for availing another loan facility, he handed over one cheque amounting to Rs.[4] lakhs with the assurance that he would hand over the other two cheques for the balance amount with the request that the same be presented after March, 2020 by which time he would be able to arrange the requisite funds. The Plaintiff presented the said cheques for encashment with the Bank but the cheque was dishonoured as the account has already been closed.
16. The Plaintiff thus, filed the Complaint under Section 138 of the Negotiable Instruments Act, 1881 and also filed the present Suit for Recovery of Rs.11,19,000/- along with interest @ 3% per month.
17. The sole ground taken by the Defendant seeking rejection of the Plaint was that the Cause of action arose from the date of handing over of the three cheques i.e. 02.06.2016, while the present Suit has been instituted on 30.09.2020, which is clearly beyond the period of three years and is barred by limitation.
18. The first aspect is that there was a Compromise entered into between the parties on 02.06.2016 during the pendency of the earlier Civil Suit, pursuant to which three cheques totalling to Rs.11,19,000/- were issued. However, the Plaintiff had made specific averments that the last cheque was dated 31.03.2017 and he did not present the cheques purely on the humanitarian grounds, on the request of the Defendant as his son was suffering from cancer.
19. Much has been contended on behalf of the Defendant that no Cause of action arose as the three cheques never got presented. Reference in this regard may be made to Section 76 of the Negotiable Instrument Act, 1881 which provides that no presentment for payment is necessary in case the drawer, maker or acceptor intentionally prevents the presentment of the instrument.
20. The learned counsel on behalf of the Defendant/Revisionist has contended that the Cause of action arose on 02.06.2016 when the cheques were handed over to the Plaintiff and not from 31.03.2017 which was the date of presentation put on the last cheque.
21. In the case of Raj Kamal Mishra (supra), it was observed that in the case of cheques which are blank, the date of handing over of cheque may be the relevant date, but in the case of post-dated cheques, the date mentioned in the cheque is the relevant date for calculating the period of limitation. It was further observed that even if it is held that “a cheque unless dishonoured is payment” would be significant only when the Plaintiff of its own volition chooses not to present the cheque. However, where he is prevented from putting the cheques for encashment on a request to not present the cheques till a certain date, then the Defendant cannot take advantage of his own conduct i.e. firstly handing over the cheque and then asking the Plaintiff not to present the same or by issuing post dated cheques and thereafter, to contend that the cheque was not presented and thus, the limitation period has run out.
22. Likewise, in the case of M. Balaji (supra), it was observed that under the Negotiable Instrument Act, 1881, the issuance of cheque is to be presumed to be issued for discharge of a debt and whether said cheque on presentation is honoured or not, is immaterial. If the cheque is not presented in time and becomes stale, but it is proved that the cheque was issued with the intention to discharge the debt of part of the debt, the limitation has to be reckoned from the date of cheque and the limitation would be calculated three years from the date mentioned on the cheque.
23. Similarly, in Anil Kumar Sawhney (supra), similar facts as in hand were involved wherein pursuant to the Settlement, post dated cheques were issued. The dates on which the cheques were issued, were not the dates as were mentioned on the cheques which were post-dated. It was held that the Bank is not under any legal obligation to honour a post-dated cheque before the said date. The post-dated cheque may be drawn on the date it is handed over to the other party, but that is not the date to reckoned the period of limitation which has to be calculated only from the date of presentation or the date mentioned on the cheque.
24. It is, therefore, evident that even if the cheques were handed over in pursuant to an Agreement on 02.06.2016, but the last cheque was encashable only on 31.03.2017. The Plaintiff could not have presented the cheque before the said date or be aware that the said cheque would be honoured or dishonoured till the date of presentation. Clearly, the Cause of action would arise only when on presentation, the cheque is dishonoured. Therefore, the limitation would commence from 31.03.2017.
25. It is pertinent to observe that the COVID-19 Pandemic struck the world from 15.03.2020. The limitation for filing the Suit on the basis of the cheques, was 31.03.2020 i.e. three years from the date on the last cheque. Because the Suit had been filed in September, 2020, which is well within the limitation since the Supreme Court in the case of Suo Motu Writ Petition (C) No. 3 of 2020 [In Re: Cognizance for Extension of Limitation] excluded the period from 15.03.2020 till 28.02.2022 in calculating the limitation.
26. Admittedly, not only were the cheques issued pursuant to a Settlement in 2016, but also one cheque got issued in the sum of Rs.[4] lakhs in 2017. This cheque definitely gives a Cause of action and its recovery of this amount is well within the period of limitation.
27. It may be further observed that even if the contention of the Revisionist/Defendant is accepted that some cheque amount is barred by limitation, but it is a moot point whether these cheques were part of one transaction. It is also pertinent to observe that a cheque of Rs.[4] lakhs was issued on 31.03.2017, in furtherance of the earlier Agreement between the parties and if so, then the Cause of action would arise on 31.03.2017 and the Suit is filed is well within the limitation. These are mixed questions of fact and law in regard to the limitation and the same cannot be considered under Order VII Rule 11 CPC, 1908.
28. In this regard, the learned Counsel for the Revisionist had contended that in order to be valid as an acknowledgement, the same has to be in writing and also within a period of Limitation, as per Section 18 of the Limitation Act, 1963. However, the last Cheque was dated 31.03.2017 and as already observed, the Plaintiff has been able to establish in his Plaint that the Suit has been filled within a period of three years of the Cause of action.
29. In this context, it would be pertinent to refer to Section 25(3) of the Indian Contract Act, 1872 which is reproduced as under: “25(3) An Agreement made without consideration is void unless it is a promise made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorised on that behalf, to pay, wholly or in part, a debt of which the creditor might have enforced payment but for the law for the limitation of suits.”
30. The Cheque in the sum of Rs. 4,00,000/- was issued on 20.01.2020. In terms of Section 25(3) of the Contract Act, a document admitting a time barred debt, gives a fresh Cause of action.
31. In the end reference may be made to the judgment of Rajan Singh vs. Roshan, MANU/DE/0427/2020 relied upon by the Revisionist who has asserted that if the Cause of action are severable, then part rejection of the Plaint can be effected. However, in the present Case, according to the Plaintiff it was one transaction and, therefore, the Cause of action cannot be termed as severable, and therefore, there cannot be any part rejection of the Suit.
32. The learned ADJ has rightly rejected the Revisionist/Defendant’s Application under Order VII Rule 11 CPC, 1908. Observations made herein are not an expression on the merits of the case.
33. There is no merit in the Petition, which is hereby rejected and is accordingly disposed of along with the pending Application(s), if any.
JUDGE DECEMBER 16, 2024 S.Sharma/va