TMI Blog2022 (5) TMI 1582X X X X Extracts X X X X X X X X Extracts X X X X ..... ecame successful bidder on 4-7-1997; amount was paid to successful bidder on 15-9-1997 on which date defendants executed promissory note and agreement of guarantee and defendant No. 1 committed default in payment of installments from 4-4-1998. In this case after the default, the prized subscriber did not pay a single instalment and hence the limitation to recover the amount reckons from 4-4-1998. However, an amount of Rs. 5,000/- was paid on 29.04.2002 under Ex. A-9 i.e. after expiry of three years from the date of default - Since the appellants committed default in payment of installments from 4-4-1998, the suit is to be filed within three years from the date of default. However, the plaintiff presented the suit on 29-4-2005 seeking recovery of amount beyond the period of three years prescribed under Article 37 of the Limitation Act. It is settled principle of law that when the pleadings of both parties are available and each party knows about the case of other and adduces evidence in support of the same, non-framing of an issue, is of no consequence. The very purpose of framing the issue is to know as to what is the lis involved in the suit. The parties went to trial knowing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility is Rs. 4,50,000/-; that the defendants executed agreement of guarantee on 15.09.1997 and defendants 2 to 6 stood as guarantors; that all the defendants executed promissory note on 15.09.1997; that defendant No. 1 committed default in payment of installments from 04.04.1998; that the defendants failed to pay the amount in-spite of repeated demands of the plaintiff; that defendants paid Rs. 5,000/- against receipt dated 29.04.2002 i.e. before expiry of limitation period and prayed the Court to decree the suit. 5. Defendants 1 to 4 and 6 jointly filed written statement and admitted that defendant No. 1 was successful auction bidder for the chit amount; that defendant No. 1 paid installments regularly; that the plaintiff did not mention dividend amount; that the receipt dated 29.04.2002 is forged for the purpose of saving limitation; that chit commenced in the year 1997 and it was terminated in 2001, however, the suit was filed in the year 2005, hence it is barred by limitation and eventually prayed Court to dismiss the suit. 6. Defendant No. 5 filed separate written statement reiterating the stand taken by the other defendants. 7. Basing on the above pleadings, the tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 25(3) of Indian Contract Act? (3) Whether the suit is barred by limitation? (4) To what relief? POINT NOS. 1 to 3 Since all these points are inter-connected, they are all dealt with together. 14. Undisputed facts are that, defendant No. 1 joined as subscriber on 21.04.1997 in chit series JCC-A in plaintiff firm, he was allotted ticket No. 40, had to pay Rs. 10,000/- per month for 50 months and value of the chit is Rs. 5,00,000/-. Defendant No. 1 signed the chit agreement on 21.04.1997, emerged as successful bidder in the auction conducted on 04.07.1997 and agreed to forgo Rs. 2,00,000/-, out of Rs. 5,00,000/-. All the defendants executed agreement of guarantee and promissory note on 15.09.1997. Defendant No. 1 committed default in payment of installments from 04.04.1998. 15. Though defendants paid Rs. 5,000/- on 29.04.2002 towards part payment, by filing written statement, they denied the payment and further pleaded forgery. 16. Having pleaded forgery qua Ex. A-9, none of the defendants choose to enter into witness box. No steps were taken to send Ex. A-9 to handwriting expert to compare the signature appearing on Ex. A-9 with that of admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Private) Limited Vs. Madala Benarjee and others 2005(2) ALT 405 it was held as under: 10. The first respondent herein is a prized subscriber, and therefore, penalty of 6 paise per rupee or part thereof will be charged for the first month. If the default continues over a month, such a person will not be entitled for the dividend in addition to the penalty charges of 6 paise per rupee or part thereof. If the default is continued consecutively for a period of three months, the prized subscriber and the executants of the security bonds or sureties lose the future dividends and the benefit of paying the future subscriptions in instalments with interest at the rate of 12% per annum from the date of default. Therefore, this clause makes it abundantly clear that if the prized subscriber commits default in payment of instalments, the plaintiff Chit company is entitled to impose penalty of 6 paise per rupee or part thereof for the first month, if the default continues over a month the subscriber will not be entitled to dividends also, in addition to the aforesaid penalty at 6 paise perrupee or part thereof. If the default is continued for more than three months, the prized subscriber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of installments from 4-4-1998, the suit is to be filed within three years from the date of default. However, the plaintiff presented the suit on 29-4-2005 seeking recovery of amount beyond the period of three years prescribed under Article 37 of the Limitation Act. 27. Though defendants pleaded that suit is barred by limitation, no issue was framed by the Lower Court to that effect. However, evidence was let in by the plaintiff and P.W. 1 was cross examined by defendants. Thus, as parties to the suit were aware of plea taken by each other, Non-framing of issue with regard to limitation is of no consequence. 28. It is settled principle of law that when the pleadings of both parties are available and each party knows about the case of other and adduces evidence in support of the same, non-framing of an issue, is of no consequence. The very purpose of framing the issue is to know as to what is the lis involved in the suit. The parties went to trial knowing fully well what they were required to prove. 29. In Kunju Kesavan v. M.M. Philip Others [1964] 3 SCR 634, the Hon'ble Apex Court held that: The parties went to trial, fully understanding the central fact whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The nature of an acknowledgment, such as that we are now considering, came before Bose J., in ILR (1940) Nag 441 and his reasoning in that case appears to us to be unanswerable: Unless a promise to pay is in writing it cannot fall within the purview of Sec. 25(3), Contract Act. The implied promise to pay which is contained in all acknowledgments does not attract the provisions of S. 25(3) of the Act, because the promise to pay is not in writing. 35. It is clear from perusal of Ex A-9 that it doesn't contain any specific promise as mandated under Section 25(3) of Contract Act. It is only a simple receipt evidencing making of payment of Rs. 5,000/-. There is no separate agreement between the parties in connection with payment of balance amount. Thus, even the part payment made under Ex A-9 without any specific agreement may not be useful to the plaintiff in saving limitation. 36. In view of the legal position, this Court came to conclusion that the suit filed for recovery of amount is barred by limitation and hence is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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