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TMI Blog2015 (12) TMI 1903X X X X Extracts X X X X X X X X Extracts X X X X ..... witness had been partially cross-examined. 1.3 A perusal of the impugned judgement shows that the trial court has taken recourse to Section 3 of the Limitation Act, 1963 (in short the 1963 Act) in deciding the issue pertaining to limitation. 2. The appellant being aggrieved, has approached this court by way of the instant appeal. 3. In order to adjudicate upon the appeal, the following brief facts are required to be noticed. 3.1 The respondent had approached ICICI Bank Ltd. in July, 2007, for grant of credit facility to purchase a TATA INDICA Vehicle. The respondent‟s request was considered and, accordingly, on 13.07.2007, he was sanctioned a loan in the sum of Rs. 3.28 lacs. The respondent, in this behalf, executed a credit facility application form, on even date i.e. 13.07.2007 (hereafter referred to as the loan agreement). 3.2 As per the loan agreement, the respondent was required to repay the sum borrowed, in 59 Equated Monthly Instalments (EMIs), amounting to Rs. 7544/- each. The first due date, as stipulated in the loan agreement, was 10.08.2007, with the date of maturity indicated as 10.06.2012. 3.3 The repayment clause contained in the loan agreement provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mi (PW1). Mr Vipin Goswami (PW1), was partially cross-examined by the respondent. Since the respondent chose, albeit midway, not to participate in the trial of the suit, vide order dated 22.08.2013, he was proceeded ex-parte. 3.9 The learned ADJ, however, decided issue no.1, pertaining to limitation, in favour of the respondent, and thus, logically, decided issue nos. 2 to 4 also against the appellant. 4. A perusal of the written statement would show that the respondent had, inter alia, contended that the suit was barred by limitation under the provisions of Article 37 of the 1963 Act, as the last default took place on 13.08.2008. 4.1 However, before this court, despite service, the respondent has not entered appearance. The respondent was, therefore, proceeded ex parte vide order dated 18.08.2015. 5. Arguments on behalf of the appellant have been advanced by Ms Rungta. Learned counsel has submitted that the learned ADJ has erred in dismissing the suit on the ground of limitation. It is the learned counsel‟s submission that since the last EMI was payable on 10.06.2012, the limitation for filing a suit for recovery would commence only from that date. The learned counsel, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gins to run 19. For money payable for money lent. Three years When the loan is made. 20. xxxx xxxx Xxxx 21. For money lent under an agreement that it shall be payable on demand Three years When the loan is made. 9. A closer scrutiny of Article 19 would show that it relates to an action for recovery of money which has been lent (i.e. loaned) without prescription of any period of repayment. Therefore, Article 19 would relate to those loans which are repayable forthwith, that is, as soon as they are disbursed. 9.1 Article 21, on the other hand, would cover that transaction where money is lent under an agreement which is payable on demand. As noticed in the case of Jailebdeen vs Mohammed Basheer 1991 (1) KLJ 574, by the Kerala High Court, the expression "on demand" is used in a legal sense, that is, the amount is payable "forthwith and without demand". The other possible way in which the expression "on demand" can be understood, is that the demand has to be made within a period of three years of the loan being made. Article 19 and Article 21, in that sense, overlap and, therefore, appear to have no applicability to a loan agreement where time is fixed for repayment. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term compensation used in Article 115, Mookerjee, J. has made the following observations in the decision reported in Md. Mozaharal Ahmad v. Md. Azimaddin, AIR 1923 Cal 507 at page 511: "......the term used in Article 115 and Article 116 is not damages but compensation, which also occurs in Section 73 of the Indian Contract Act. As Lord Esher observed in Dixon v. Calcraft (1892) 1 QB 458 the expression compensation is not ordinarily used as an equivalent to damages, although as remarked by Fry, L.J. in Skinner's Co. v. Knight (1891) 2 QB 542 compensation may often have to be measured by the same rule as damages in an action for the breach. The term compensation as pointed out in the Oxford Dictionary, signifies that which is given in recompense, an equivalent rendered. Damages, on the other hand; constitute the sum of money claimed or adjudged to be paid in compensation for loss or injury sustained; the value estimated in money, of something lost or withheld. The term compensation etymologically suggest the image of balancing one thing against another; its primary signification is equivalence, and the secondary and more common meaning is something given or obtained as an equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid an initial amount of Rs. 7544/- as an advance. The suit, admittedly, was instituted on 20.07.2012. 12. Having said so, there is, as stated above, another aspect of the matter, as regards this case, which is that, under the loan agreement, the appellant, in terms of clause 481, is conferred with the power, in an event of a default, to give a notice in writing to the borrower(s) [in this case the respondent], without prejudice to other rights and remedies that may be available to it under the said agreement or any other transaction document or otherwise. By way of such a notice, the appellant is empowered, inter alia, to call upon the borrower(s) [in this case the respondent], to pay all dues in respect of the facility given. In addition, the appellant is also empowered to declare the security, if any created, enforceable. 12.1 Quite clearly, in terms of clause 48, the appellant had discretion to decide when to trigger the recall of loan upon occurrence of an event of default. The fact that EMIs were to be paid over a period spanning from 10.08.2007 till 10.06.2012, gave the appellant, under clause 48 the right to treat any of the defaulted EMI"s (that is, after the due date f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmences proceedings in the matter. 15. The appeal is, accordingly, disposed of. There shall be, however, no orders as to cost. NOTE:- 1 48. On the happening of any of the Events of Default, ICICI Bank may, by a notice in writing to the borrower/s and without prejudice to the rights and remedies available to ICICI Bank under the Loan Terms or any other Transaction Document or otherwise: (a) call upon the Borrower/s to pay all the Borrower/s' Dues in respect of the Facility and otherwise, and/or (b) declare the security, if any, created in terms of/ pursuant to the Loan Terms and/or the other Transaction Documents to be enforceable, and ICICI Bank, its representatives and/or such other person in favour of whom such security or any part thereof is created shall have, inter alia, the following rights (notwithstanding anything to the contrary in the Loan Terms and/or the other Transaction Documents and irrespective of whether the entire Facility or Borrower/s' Dues has/ have been realised) namely:- i. to enter upon and take possession of the Asset(s) in accordance with the provisions of the Loan Terms; and/or ii. to transfer or deal with the Asset(s) by way of lease, leave and li ..... 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