Topline Shoes Ltd. And Anr. vs Punjab National Bank

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.2125 OF 2009

TOPLINE SHOES LIMITED AND ANOTHER APPELLANT(S)

VERSUS

PUNJAB NATIONAL BANK RESPONDENT(S)

JUDGMENT

B.R. GAVAI, J.

1. The appeal challenges the judgment dated 7th July 2008

passed by the Division Bench of the High Court of Bombay

thereby dismissing the Writ Petition Nos.207 and 1490 of

2005, filed by the present appellants arising out of the

concurrent orders passed by the learned Mumbai Debts

Recovery Tribunal­1 (for short “DRT”) in O.A. No.948 of 2000

Signature Not Verified Digitally signed by Dr. dated 31st October 2002 and the learned Debts Recovery Mukesh Nasa Date: 2022.07.28 17:10:44 IST

Appellate Tribunal at Mumbai (for short “DRAT”) in Appeal Reason:

1

Nos.152 of 2002 and 43 of 2004 dated 24 th November 2004.

2. The respondent–Bank had filed an O.A. No.948 of 2000

against the present appellants raising certain claims. In the

said proceedings, the appellants filed a counter­claim

claiming therein that certain amount deposited in the

current account opened by them with the respondent­Bank,

was illegally withheld by the respondent–Bank. The learned

DRT vide order dated 31st October 2002 dismissed both, the

claim of the bank as well as the counter­claim of the

appellants. Being aggrieved thereby, both the respondent­

Bank as well as the appellants had preferred appeals before

the learned DRAT. Both the appeals were dismissed. Being

aggrieved thereby, two writ petitions were filed, one by the

respondent­Bank and the other by the appellants. As far as

the writ petition of the respondent­Bank is concerned, the

same was disposed of as withdrawn since the respondent­

Bank did not press the same. The writ petition of the

appellants was, however, dismissed vide the impugned

judgment. Being aggrieved thereby, the present appeal.

3. Mr. S. N. Bhat, learned Senior Counsel appearing on

behalf of the appellants submitted that both the DRT and the

2 DRAT as well as the High Court have grossly erred in arriving

at the conclusion that the claim of the present appellants

was covered under Article 113 and not by Article 22 of the

Schedule to the Limitation Act, 1963 (for short “the

Limitation Act”).

3.1. Mr. Bhat further submitted that though the amount

deposited by the appellants was not a security or a fixed

deposit, still it was an amount which belonged to the

appellants and was illegally withheld by the respondent­

Bank. He therefore submitted that in view of Article 22 of the

Limitation Act, the cause of action to file a counter­claim

would begin from the date on which a notice was sent by the

appellants to the respondent­Bank, i.e., from September,

1999. He has submitted that since the counter­claim was

filed in the year 2000, i.e., within a period of three years from

the date of issuance of notice, the same was within

limitation.

3.2. Mr. Bhat submitted that in the present case, a clear

question of law has arisen as to whether in the facts of the

present case, Article 22 or Article 113 of the Limitation Act 3 would be applicable for consideration. He submitted that the

High Court, the DRT as well as the DRAT have erroneously

held that in the present case Article 113 of the Limitation Act

would be applicable and not Article 22 of the Limitation Act.

4. Mr. S. N. Bhat relies on the judgment of this Court in

the case of Jammu and Kashmir Bank Ltd. v. Attar­Ul­

Nissa & Others1.

5. Mr. Rajesh Kumar Gautam, learned counsel appearing

on behalf of the respondent–Bank has submitted that no

error could be noticed in the concurrent orders passed by the

DRT, the DRAT and the High Court. He submitted that in the

facts of the present case, the DRT, the DRAT as well as the

High Court have rightly held that the counter­claim would be

governed by Article 113 of the Limitation Act.

6. By now, it is a settled principle of law that the issue of

limitation is a mixed question of law and fact. The issue of

limitation cannot be decided by ignoring the factual scenario.

7. It will be relevant to refer to paragraph 41 of the order

dated 31st October 2002 in O.A. No.948 of 2000 passed by

the learned DRT:

“41. It is not the case of the Defendants that they

1 [1967] 1 SCR 792

4 had paid the amount to the Applicants by way of deposit as securities till the account was finally settled. On the contrary it is their case that the Applicant Bank had extracted the amount from them by exerting undue influence etc. While narrating their case the Defendants have specifically pleaded that in the Board Meeting, the possibility of approaching the Court against the Applicant Bank was also contemplated and considered. However, they thought it better not to drag the Applicant Bank to the court to avoid adverse publicity and mar their chance of receiving the loan even from other Banks. It is thus obvious that a conscious decision was taken by Defendant No.1 Company to pay off whatever demanded by Applicant Bank without joining the issue and they had accordingly paid the amount maybe much against their wishes.

Subsequently if the Defendants wanted to recover the said amount they ought to have taken out proper proceedings before proper forum within the statutory period of three years. This was admittedly not done. The said amount cannot be recovered by filing a counter claim after the period of six years.”

8. It could thus clearly be seen that in the factual position

as apparent in the present matter, the specific case of the

defendants­appellants was that the respondent­Bank had

extracted the amount from them by exerting undue

influence. It could further be seen that the Board of Directors

of the Appellant had contemplated and considered the

possibility of approaching the Court against the respondent–

Bank. However, it was thought fit not to drag the

5 respondent­Bank to the Court to avoid adverse publicity and

mar their chances of receiving loans from other banks. It

could thus be seen that the learned DRT has come to a

finding of fact that it was the conscious decision of the

appellants to pay off whatever amount was demanded by the

respondent–Bank without joining the issue and they had

accordingly paid the amount, may be much against their

wishes.

9. Admittedly, the said amount, which according to the

appellants, was paid under undue influence in the year

1994.

10. It appears that after waiting for a period of five years,

the appellants woke up from their deep slumber and issued a

notice on 22nd September 1999.

11. The DRT, the DRAT as well as the High Court have

concurrently held that the counter­claim of the appellants

was based upon the amount deposited in the year 1994,

which according to the appellants was paid under undue

influence. If that be so, no error could be noticed in the

finding of the fact as recorded by the DRT, the DRAT and the

High Court that the counter­claim was squarely covered

under Article 113 and not under Article 22 of the Limitation

6 Act.

12. We, therefore, find no merit in the appeal. The appeal is

dismissed.

...................J. (B.R. GAVAI)

………………………………...................J. (PAMIDIGHANTAM SRI NARASIMHA)

NEW DELHI;

JULY 20, 2022.

7