* IN THE HIGH COURT OF DELHI AT NEW DELHI RESERVED ON :
20. h NOVEMBER, 2014 DECIDED ON :
16. h DECEMBER, 2014 + CS (OS) 1402/2010 NEPAL AIRLINES CORPORATION Through : ..... Plaintiff Mr.Ramashankar, Advocate with Mr.Shivam Garg, Advocate. versus GIRISH KUMAR SINGH Through : ..... Defendant. None. CORAM: HON'BLE MR. JUSTICE S.P.GARG S.P.GARG, J.
1. The plaintiff – Nepal Airlines Corporation formerly known as Royal Nepal Airlines Corporation has instituted the instant suit for recovery of ` 80,18,000/- with interest pendente-lite and future.
2. As per averments in the plaint, the plaintiff carries on its business in India having its principal office at 44, Janpath, New Delhi. The defendant established an enterprise known as Nepal Travel Information Centre, based in Bombay. Subsequently, offices were established in other cities including Delhi at 13/29, East Patel Nagar, New Delhi. The plaintiff is an international airline carrying on its business operations in India. In December, 1995, the defendant became its Passenger Sales Agent for expansion of selling of air tickets in its operating routes by an agreement dated 15.12.1999 on the terms and conditions described therein. Under the agreement, the defendant collected tickets from the plaintiff for sale on different operating routes of the plaintiff in India. In May, 2000, the defendant defaulted in submitting the Periodic Sales Return (PSR) and remitting payments against tickets sold. Vide letter dated 19.05.2000, the defendant admitted that the net amount payable to the plaintiff was ` 40,76,506/-. By another letter dated 08.06.2000, the defendant stated that he had used all the tickets and confirmed the amount payable to the plaintiff at ` 38,54,811/-. He requested the plaintiff to give him some time to arrange the funds for payment. In confirmation to the assurances, the defendant signed and delivered a personal bond undertaking to pay ` 38,54,811/- ‘on account’ of payments against Passengers Sales Report. He also signed, issued and delivered a blank and undated cheque No.775601 in the name of the plaintiff. The defendant vide letter dated 22.06.2000, requested to keep the validity of his engagement. On 27.09.2000, the defendant submitted an undertaking that the amount would be paid in installments at regular intervals. In view of the defendant’s undertaking, the legal action was deferred and the defendant was allowed to transact business during the validity period of agreement dated 15.12.1999 till 30.06.2003 to enable it to clear the dues.
3. Grievance of the plaintiff is that the defendant failed to pay the outstanding dues despite various assurances given. The defendant even stopped carrying on business under the name and style of Nepal Travel Information Centre and started a new business ‘Indo Nepal Travel Group’. He also started a travel agency by the name of M/s. Fun Plannet Tours in Indore. With great difficulty, the defendant was contacted in June, 2005. He faxed a letter dated 20.10.2005 confirming that he would pay the entire outstanding amount. On 20.12.2006 finally a Memorandum Of Understanding was executed between the parties and a sum of ` 1,000/was paid by the defendant. He promised to pay the remaining balance in installments. However, no further payment was made by the defendant. Hence, the present suit.
4. The defendant could be served only by way of publication under Order V Rule 20 CPC. None appeared on behalf of the defendant despite service by publication and he was proceeded ex-parte by an order dated 03.01.2014.
5. The plaintiff examined PW-1 (Bashu Dev Pandey) in its evidence. I have heard the learned counsel for the plaintiff and have examined the file. PW-1 (Bashu Dev Pandey) proved the averments of the plaint by filing evidence by way of affidavit (Ex.PW-1/A). He also relied upon various documents (Ex.PW-1/1 to Ex.PW-1/15). Adverse inference is to be drawn against the defendant for not appearing and contesting the present suit. The testimony of PW-1 (Bashu Dev Pandey) has remained unchallenged and unrebutted. Genuineness and validity of various documents whereby the defendant promised to pay the outstanding amount have not been questioned. Ex.PW-1/3 is the copy of the agreement; Ex.PW-1/5 and Ex.PW-1/6 are the letters dated 13.05.2000 and 19.05.2000 written by the plaintiff to the defendant; Ex.PW-1/7 and Ex.PW-1/8 are the copies of the letters written by defendant asking for some time to arrange funds to pay the balance amount ` 38,54,811/- along with interest; Ex.PW-1/9 is the copy of the letter dated 08.06.2000 and a blank cheque and blank signed receipt issued by the defendant; Ex.PW1/12 is the copy of the letter dated 27.09.2000, whereby the defendant gave an undertaking to make the payment in installments; Ex.PW-1/13 is the Memorandum Of Understanding dated 20.12.2006, whereby the defendant admitted his liability of ` 38,54,811/- and promised to pay the same; and, Ex.PW-1/5 is ‘admission’ in the handwriting of defendant No.1 on 21.12.2006 acknowledging the liability.
6. Apparently, the suit filed by the plaintiff is barred by limitation. However, the plaintiff has relied upon various documents, whereby the liability to pay the outstanding amount was acknowledged in writing within the prescribed period of limitation by the defendant in various letters exhibited above. Moreover, by Memorandum Of Understanding (Ex.PW-1/13) dated 20.12.2006, the defendant, in writing, categorically promised to pay the time barred debt.
7. Under Sections 18 / 19 of Limitation Act, the statement on which a plea of acknowledgment is based must relate to a present subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. However, the words must indicate the existence of jural relationship between the parties such as that of debtor and creditor and it must appear that the statement is made with the intention to admit such jural relationship. There must be a conscious affirmation of an intention of continuing such relationship in regarding to an existing liability.
8. Under Section 25(3) of Contract Act, following conditions must be satisfied in order to invoke the provisions : i) it must refer to a debt which the creditor but for the period of limitation, might have enforced; ii) there must be a distinct promise to pay wholly or in part such debt; and, iii) the promise must be in writing signed by the person or by his duly appointed agent. Under Section 25 (3), a debtor can enter into an agreement in writing to pay the whole or part of a debt, which the creditor might have enforced but for the law of limitation. Such a promise constitutes novation and can form a basis of a suit independently of the original debt. A promise to pay the time barred debt is a valid contract. For application of Section 25 (3) of Contract Act, the promise must be express and unequivocal.
9. In the instant case, the acknowledgment made by the defendant on various dates extend the period of limitation. Moreover, promise to pay the debt under Section 25 (3) is also a valid contract. The suit thus filed by the plaintiff is within limitation.
10. The plaintiff has claimed interest amounting to ` 41,63,195/- @ 12% per annum w.e.f. June, 2000 till the date of institution of the suit. In my considered view, the plaintiff cannot be permitted to claim the interest for the outstanding amount as there was no agreement in writing to pay any such interest on delayed payments. Moreover, claim for the interest is not within the period of limitation. As per Memorandum Of Understanding (Ex.PW-1/3), the liability admitted by the defendant was only to the tune of ` 38,54,811/-. There was no express acknowledgement of the defendant to pay ‘interest’ on the said outstanding amount at any specific rate. It merely records that M/s. Nepal Travel Information Centre had to pay ` 38,54,811/- excluding interest. There is, however, no mention as to what was the rate of interest and for what period, the defendant was liable to pay the same. In the undertaking (Ex.PW-1/15) dated 21.12.2006 again there is no whisper to pay any ‘interest’ on the outstanding amount of ` 38,54,811/-. Hence, claim of interest by the plaintiff is not permissible and is barred by limitation. A contract to pay a part of time barred debt would render the promise liable to pay only that part and not the whole debt.
11. In the light of above discussion, Suit of the plaintiff is decreed in the sum of ` 38,54,811/- with proportionate costs. The plaintiff shall, however, be entitled to interest @ 8% per annum from the date of filing of the suit till the date of recovery of the outstanding decretal amount. The suit is accordingly disposed of.
12. Decree-sheet be prepared.
13. Pending IA (if any) also stands disposed of. (S.P.GARG) JUDGE DECEMBER16 2014 / tr