Kotha Dhanalakshmi Vs. Bandi Sreenivasulu Reddy - Court Judgment

Excerpt:

- - 5. it may be a fact that the suit claim is the subject matter of the proceedings initiated under the act by the respondent and that the same ended in dismissal before the trial court as well as the lower appellate court......an objection is not raised by the defendants. it was in this context that the trial court examined the matter and rejected the plaint.5. it may be a fact that the suit claim is the subject matter of the proceedings initiated under the act by the respondent and that the same ended in dismissal before the trial court as well as the lower appellate court. however, mere filing of i.p. does not save the limitation vis-a-vis a promissory note, though the suit as such may not be proceeded as long as the proceedings under the act are pending. a plaintiff cannot remain oblivious and wake up to file the suit only after the proceedings under the act terminate. in allampati gopalareddy's case, this court discussed this aspect at length. reference was made to a judgment rendered by a division bench of madras high court in sambayya v. pedda subbayya air 1938 madras 19. the observation of the division bench was extracted in the judgment in allampati gopalareddy's case. it reads as under:the statute of limitation for the maintenance of an action at law, once it has commenced to run, will continue to run in spite of the presentation of the petition in insolvency. if the order of adjudication is.....

Judgment:

ORDER

L. Narasimha Reddy, J.

1. The petitioner presented a plaint on 26.09.2003, in the Court of the Senior Civil Judge, Kadapa against the respondent for recovery of a sum of Rs. 1,46,200/- on the strength of two promissory notes, dated 18.02.1998 and 10.05.1998. It was given S.R. No. 6059 of 2003. The trial Court, through its order, dated 14.10.2003, rejected the plaint on the ground that the suit claim was barred by limitation. Aggrieved thereby, the petitioner filed C.M.A. No. 16 of 2004 in the Court of the III Additional District Judge, Kadapa. The C.M.A. was dismissed on 19.04.2005. Hence, this civil revision petition.

2. Sri S.V. Bhatt, the learned Counsel for the petitioner, submits that the respondent initiated proceedings under the Provincial Insolvency Act, 1920 (for short 'the Act') by filing I.P. No. 13 of 1999 in the Court of the Senior Civil Judge, Kadapa. He contends that on dismissal of the I.P., A.S. No. 65 of 2003 was filed in the Court of the Principal District Judge, Kadapa and as soon as the appeal was dismissed, the present suit was filed. He contends that not only the claim was shown in the schedule of the I.P., but also the petitioner was impleaded as party to the proceedings under the Act. According to the learned Counsel, the period during which the proceedings under the Act were pending deserves to be excluded in the context of computation of limitation.

3. Sri A. Manohar Reddy, the learned Counsel for the respondent, on the other hand, submits that though the pendency of the proceedings under the Act may hinder the progress of the suit for recovery of amount, it cannot arrest the limitation vis-avis the promissory note. He places reliance upon a judgment of this Court in Allampati Gopalareddy v. Ponnavolu Raghava Reddy 1984 (2) ALT 14.

4. The promissory notes on the basis of which the suit is filed are dated, 18.2.1998 and 10.05.1998. The period of limitation of three years expires by 18.02.2001 and 10.05.2001. Admittedly, the plaint was presented on 26.09.2003. Section 3 of the Limitation Act places an obligation on a civil Court to examine the matter presented before it, with reference to the question of limitation, even if such an objection is not raised by the defendants. It was in this context that the trial Court examined the matter and rejected the plaint.

5. It may be a fact that the suit claim is the subject matter of the proceedings initiated under the Act by the respondent and that the same ended in dismissal before the trial Court as well as the lower appellate Court. However, mere filing of I.P. does not save the limitation vis-a-vis a promissory note, though the suit as such may not be proceeded as long as the proceedings under the Act are pending. A plaintiff cannot remain oblivious and wake up to file the suit only after the proceedings under the Act terminate. In Allampati Gopalareddy's case, this Court discussed this aspect at length. Reference was made to a judgment rendered by a Division Bench of Madras High Court in Sambayya v. Pedda Subbayya AIR 1938 Madras 19. The observation of the Division Bench was extracted in the judgment in Allampati Gopalareddy's case. It reads as under:

The statute of limitation for the maintenance of an action at law, once it has commenced to run, will continue to run in spite of the presentation of the petition in insolvency. If the order of adjudication is made, the operation of statute of limitation is suspended till the date of the annulment and if the adjudication is annulled, the period between the date of the adjudication and that of annulment is excluded and the statute begins to run immediately on annulment. If no order of adjudication is made, the insolvency does not save the claim from being barred by limitation. So, under the law as it stands a prudent creditor in order to keep his debt alive, will be obliged to file a suit to save it from the bar of limitation in spite of insolvency. No doubt, it may in a sense be futile, if an order of adjudication takes place; but he runs the risk of losing the claim altogether if no adjudication is made.

6. A perusal of it discloses that the mere pendency of the proceedings under the Act would not save the limitation and a creditor under a promissory note would run the risk of losing the claim, if he does not file the suit before expiry of limitation, despite pendency of the proceedings under the Act. The Court below has taken the correct view and this Court is not inclined to interfere with the same.

7. Hence, the civil revision petition is dismissed. There shall be no order as to costs.