SHAKTI BHOG FOOD INDUSTRIES LTD. versus THE CENTRAL BANK OF INDIA & ANR. on 5 June 2020

538

SUPREME COURT REPORTS

[2020] 6 S.C.R.

ASHAKTI BHOG FOOD INDUSTRIES LTD.

v.

THE CENTRAL BANK OF INDIA & ANR.

(Civil Appeal No. 2514 of 2020)

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JUNE 05, 2020

[A. M. KHANWILKAR, INDIRA BANERJEEAND DINESH MAHESHWARI, JJ.]

Code of Civil Procedure, 1908 – Or.7, r.11(d) – LimitationCAct, 1963 – Art.113 – The appellant filed suit on 23.02.2005 for adecree for rendition of true and correct accounts in respect of theinterest/commission charged and deducted by the respondent-Bank– The plaint was rejected by the Trial Court u/Or.7, r.11(d) of CPCon the ground that it was barred by law of limitation as it was filedbeyond the period of three years prescribed u/Art.113 of theDLimitation Act – It held that right to sue accrued in favour of plaintiffin October, 2000 and plaintiff could have filed the present suit tillOctober, 2003 as the excessive charging by the Bank was till October,2000 – The First Appellate Court and the High Court affirmed thedecision of the Trial Court – On appeal, held: The appellant noticedEthe discrepancy in July, 2000 and immediately took the matter withofficials of the Bank – The Bank wrote on 09.07.2001 thatappellant’s representation was being examined – Thereafter, a letterwas received on 08.05.2002 from bank informing appellant thatthe cheques were purchased at the prevailing rates and anotherletter was received on 19.02.2002 from bank informing appellantFthat all actions taken by the bank were as per rules and therefore,the appellant need not pursue the matter any further – The appellanthad sent legal notice on 28.11.2003 and 07.01.2005 and then finallyproceeded to file suit on 23.02.2005 – The Article 113 uses theexpression ‘when the right to sue accrues’ and not ‘when the rightto sue “first” accrues’ – Reckoning these dates, the plaint filed onG23.02.2005 was within limitation – Resultantly, the question ofrejecting plaint u/Or.7, r.11 of CPC does not arise and the decisionsof the Trial Court, the First Appellate Court and the High Courtcannot be sustained.

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Allowing the appeals, the Court

HELD: 1. It is well established position that the cause ofaction for filing a suit would consist of bundle of facts. Further,the factum of suit being barred by limitation, ordinarily, would bea mixed question of fact and law. Even for that reason, invokingOrder VII Rule 11 of the CPC is ruled out. In the present case,the assertion in the plaint is that the appellant verily believedthat its claim was being processed by the Regional Office and theRegional Office would be taking appropriate decision at theearliest. That belief was shaken after receipt of letter from theSenior Manager of the Bank, dated 8.5.2002 followed by anotherletter dated 19.9.2002 to the effect that the action taken by theBank was in accordance with the rules and the appellant neednot correspond with the Bank in that regard any further. Thisfirm response from the respondent-Bank could trigger the rightof the appellant to sue the respondent-Bank. Moreover, the factthat the appellant had eventually sent a legal notice on 28.11.2003and again on 7.1.2005 and then filed the suit on 23.2.2005, is alsoinvoked as giving rise to cause of action. Whether this plea takenby the appellant is genuine and legitimate, would be a mixedquestion of fact and law, depending on the response of therespondents. [Para 13][556-F-H; 557-A]

2. Reverting to the argument that exchange of letters orcorrespondence between the parties cannot be the basis to extendthe period of limitation, in opinion of this Court, for the viewtaken by us hitherto, the same need not be dilated further.Inasmuch as, having noticed from the averments in the plaintthat the right to sue accrued to the appellant on receiving letterfrom the Senior Manager, dated 8.5.2002, and in particular letterdated 19.9.2002, and again on firm refusal by the respondentsvide Advocate’s letter dated 23.12.2003 in response to the legalnotice sent by the appellant on 28.11.2003; and once again onthe follow up legal notice on 7.1.2005, the plaint filed in February,2005 would be well within limitation. Considering the formerevents of firm response by the respondents on 8.5.2002 and inparticular, 19.9.2002, the correspondence ensued thereafterincluding the two legal notices sent by the appellant, even ifdisregarded, the plaint/suit filed on 23.2.2005 would be withinlimitation in terms of Article 113. [Para 14][557-B-D]

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Ram Prakash Gupta v. Rajiv Kumar Gupta & Ors.(2007) 10 SCC 59 : [2007] 10 SCR 520; Church ofChrist Charitable Trust & Educational CharitableSociety v. Ponniamman Educational Trust (2012) 8 SCC706 : [2012] 6 SCR 404; Madanuri Sri Rama ChandraMurthy v. Syed Jalal (2017) 13 SCC 174 : [2017] 5SCR 294; Union of India & Ors. v. West Coast PaperMills Ltd. & Anr. (2004) 2 SCC 747 : [2004] 2 SCR145; Khatri Hotels Private Limited & Anr. v. Union ofIndia & Anr. (2011) 9 SCC 126 : [2011] 15 SCR 299 –relied on.

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Hardesh Ores (P) Ltd. v. Hede and Company (2007) 5SCC 614 : [2007] 6 SCR 608; The East and WestSteamship, Georgetown, Madras v. S.K. RamalingamChettiar AIR 1960 SC 1058 : [1960] 3 SCR 820; BootaMal v. Union of India AIR 1962 SC 1716 : [1963] 1SCR 70; S.S. Rathore v. State of Madhya Pradesh(1989) 4 SCC 582 : [1989] 1 Suppl. SCR 43 –inapplicable.

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Venkappa Gurappa Hosur v. Kasawwa C/o RangappaKulgod (1997) 10 SCC 66 : [1997] 3 SCR 579;Kandimalla Raghavaiah & Company v. NationalInsurance Company & Anr. (2009) 7 SCC 768 : [2009]10 SCR 870; Fatehji And Company & Anr. v. L.M.Nagpal & Ors. (2015) 8 SCC 390 : [2015] 6 SCR 389– referred to.

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C.P. Kapur v. The Chairman & Ors. (2013) 198 DLT56 – referred to.

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Case Law Reference

SHAKTI BHOG FOOD INDUSTRIES LTD. v. THE CENTRALBANK OF INDIA & ANR.

CIVIL APPELLATE JURISDICTION: Civil Appeal No.2514 of2020.

From the Judgment and Order dated 02.01.2017 of the High Courtof Delhi at New Delhi in RSA No.391 of 2016.

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WITH

Civil Appeal No.2515 of 2020

Nischal Kumar Neeraj, Adv. for the Appellant.

Yash Pal Dhingra, Adv. for the Respondents.

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The Judgment of the Court was delivered by

A. M. KHANWILKAR, J.

CIVIL APPEAL NO. 2514 OF 2020(Arising out of SLP (C) No. 30209/2017)

1. Leave granted.

2. This appeal takes exception to the judgment and order dated2.1.2017 passed by the High Court of Delhi at New Delhi (for short,“the High Court”) in R.S.A. No. 391/2016, whereby the High Courtaffirmed the decision of the Court of Civil Judge–05, Central District,Tis Hazari Courts, Delhi, dated 6.1.2016 in C.S. No. 950/2014 allowingthe application filed by the respondents/defendants for rejection of theplaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (forshort, “the CPC”), instituted by the appellant/plaintiff. The AdditionalDistrict & Sessions Judge, Central, Tis Hazari Courts, Delhi, vide orderdated 23.7.2016 in R.C.A. No. 61794/2016 had also affirmed the orderof rejecting the plaint. The appellant had filed the stated suit on 23.2.2005for a decree for rendition of true and correct accounts in respect of theinterest/commission charged and deducted by the respondent-Bankrelating to current account No. CCM 20225 of the appellant for the F

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Aperiod between 1.4.1997 and 31.12.2000 and also for recovery of theexcess amount charged by the respondent-Bank consequent to renditionof accounts with interest at the rate of 18% per annum from the date ofdeduction including interest pendente lite realization of the amount andfuture interest.

B3. The plaint came to be rejected by the trial Court under OrderVII Rule 11(d) of the CPC on the ground that it was barred by law oflimitation, as it was filed beyond the period of three years prescribed inArticle 113 of the Limitation Act, 1963 (for short, “the 1963 Act”), asapplicable to the present case, from the date when the right to sue accruedto the appellant in October, 2000. The entire discussion of the trial CourtCin that regard can be traced to paragraphs 10 and 11, which read thus: - ‘‘10. As stated above the plaintiff by way of present suit hassought two reliefs i.e. rendition of account and repayment of excessmoney. Limitation Act, 1963 does not provide any specific articlewith regard to time period within which accounts can be soughtDby party from its bank. As such, Article 113 of Limitation Actcame into picture which provides a limitation period of three yearsfor suits for which no limitation period is provided, from the datewhen right to sue accrues.

11. In the present case in hand, as per averments made by theEplaintiff in his plaint, the facility was availed by the plaintiff fromthe defendants till October 2000. Further as per averments madein the plaint the alleged amount so charged by the defendant fromthe plaintiff, in excess from agreed amount, was till October, 2000.As such, at best can be said right to sue accrues in favour of theFplaintiff in October, 2000. Considering the law as stated in aboveparagraph, plaintiff could have filed the present suit i.e. for renditionof account and repayment of excess amount till October 2003....”

After so observing, the trial Court considered the submission ofGthe appellant that the cause of action had accrued to the appellant onlyupon rejection of the representation by the respondent-Bank entailing inrefusal or denial of liability, communicated to the appellant vide lettersdated 19.9.2002 and 3.6.2003 and after the final legal notice was servedupon the respondents on 7.1.2005. That contention has been rejected byadverting to the decision of the same High Court in C.P. Kapur vs. TheH

Chairman & Ors.[1], wherein it is held that exchange of correspondencebetween the parties cannot extend the limitation period for institution ofa suit, once the right to sue had accrued, which in this case had accruedin October, 2000, as has been asserted even in the plaint. Whereas, thesuit was filed in February, 2005 beyond the period of three years fromthe date on which right to sue accrued to the appellant, as prescribed inArticle 113 of the 1963 Act. The view so taken by the trial Courtcommended to the District Court in first appeal and also the High Courtin second appeal, which judgment is the subject matter of challenge inthe present appeal.

4. We have heard Mr. Nischal Kumar Neeraj, learned counselfor the appellant and Mr. Anuj Jain, learned counsel for the respondents.

5. Be it noted that the appellant had relied on Articles 2, 3 and 22of the 1963 Act to urge that the suit filed in February, 2005 was withinlimitation. This plea, however, did not impress the trial Court, the firstappellate Court or the High Court. The Courts proceeded on the basisthat Article 113 is attracted in the facts of the present case, as the reliefsclaimed by the appellant were not covered under any specific Articlewith regard to time period within which accounts can be sought by partyfrom its bank, as noted by the trial Court in paragraph 10 of its judgmentreproduced above.

6. The central question is: whether the plaint as filed by theappellant could have been rejected by invoking Order VII Rule 11(d) ofthe CPC? Indeed, Order VII Rule 11 of the CPC gives ample power tothe Court to reject the plaint, if from the averments in the plaint, it isevident that the suit is barred by any law including the law of limitation.This position is no more res integra. We may usefully refer to the decisionof this Court in Ram Prakash Gupta vs. Rajiv Kumar Gupta & Ors.[2].In paragraph Nos. 13 to 20 of the reported decision, the Court observedas follows: - “13. As per Order 7 Rule 11, the plaint is liable to be rejected inthe following cases:

“(a) where it does not disclose a cause of action; 1 (2013) 198 DLT 56

2 (2007) 10 SCC 59

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(b) where the relief claimed is undervalued, and the plaintiff, onbeing required by the court to correct the valuation within a timeto be fixed by the court, fails to do so;

(c) where the relief claimed is properly valued but the plaint iswritten upon paper insufficiently stamped, and the plaintiff, onBbeing required by the court to supply the requisite stamp paperwithin a time to be fixed by the court, fails to do so; (d) where the suit appears from the statement in the plaint to bebarred by any law; (e) where it is not filed in duplicate; C

(f) where the plaintiff fails to comply with the provisions of Rule9.”

14. In Saleem Bhai v. State of Maharashtra [(2003) 1 SCC 557]it was held with reference to Order 7 Rule 11 of the Code that D

D“9. … the relevant facts which need to be looked into fordeciding an application thereunder are the averments in theplaint. The trial court can exercise the power … at any stageof the suit — before registering the plaint or after issuingsummons to the defendant at any time before the conclusionof the trial. For the purposes of deciding an application underEClauses (a) and (d) of Rule 11 of Order 7 CPC, the avermentsin the plaint are germane; the pleas taken by the defendant inthe written statement would be wholly irrelevant at thatstage,…” (SCC p. 560, para 9).

15. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal [(1998)2 SCC 70] it was held that the basic question to be decided whiledealing with an application filed under Order 7 Rule 11 of theCode is whether a real cause of action has been set out in theplaint or something purely illusory has been stated with a view toget out of Order 7 Rule 11 of the Code.

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16. “The trial court must remember that if on a meaningful—noformal—reading of the plaint it is manifestly vexatious and meritlessin the sense of not disclosing a clear right to sue, it should exerciseits power under Order 7 Rule 11 CPC taking care to see that theground mentioned therein is fulfilled. If clever drafting has createdHthe illusion of a cause of action, [it has to be nipped] in the bud at the first hearing by examining the party searchingly under Order10 CPC.”

(See T. Arivandandam v. T.V. Satyapal [(1977) 4 SCC 467], SCCp. 468.).

17. It is trite law that not any particular plea has to be considered,and the whole plaint has to be read. As was observed by thisCourt in Roop Lal Sathi v. Nachhattar Singh Gill [(1982) 3 SCC487], only a part of the plaint cannot be rejected and if no causeof action is disclosed, the plaint as a whole must be rejected.

18. In Raptakos Brett & Co. Ltd. v. Ganesh Property [(1998)7 SCC 184] it was observed that the averments in the plaint as awhole have to be seen to find out whether Clause (d) of Rule 11of Order 7 was applicable.

19. In Sopan Sukhdeo Sable v. Asstt. Charity Commr. [(2004)3 SCC 137] this Court held thus: (SCC pp. 146-47, para 15)

“15. There cannot be any compartmentalisation, dissection,segregation and inversions of the language of variousparagraphs in the plaint. If such a course is adopted it wouldrun counter to the cardinal canon of interpretation accordingto which a pleading has to be read as a whole to ascertain itstrue import. It is not permissible to cull out a sentence or apassage and to read it out of the context in isolation. Althoughit is the substance and not merely the form that has to be lookedinto, the pleading has to be construed as it stands without additionor subtraction or words or change of its apparent grammaticalsense. The intention of the party concerned is to be gatheredprimarily from the tenor and terms of his pleadings taken as awhole. At the same time it should be borne in mind that nopedantic approach should be adopted to defeat justice on hair-splitting technicalities.”

20. For our purpose, Clause (d) is relevant. It makes it clear thatif the plaint does not contain necessary averments relating tolimitation, the same is liable to be rejected. For the said purpose, itis the duty of the person who files such an application to satisfythe court that the plaint does not disclose how the same is in time.In order to answer the said question, it is incumbent on the part of A

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the court to verify the entire plaint. Order 7 Rule 12 mandateswhere a plaint is rejected, the court has to record the order to thateffect with the reasons for such order.”

On the same lines, this Court in Church of Christ CharitableTrust & Educational Charitable Society vs. PonniammanBEducational Trust[3], observed as follows: - “10 … It is clear from the above that where the plaint does notdisclose a cause of action, the relief claimed is undervalued andnot corrected within the time allowed by the court, insufficientlystamped and not rectified within the time fixed by the court, barredby any law, failed to enclose the required copies and the plaintifffails to comply with the provisions of Rule 9, the court has noother option except to reject the same. A reading of the aboveprovision also makes it clear that power under Order 7 Rule 11 ofthe Code can be exercised at any stage of the suit either beforeregistering the plaint or after the issuance of summons to thedefendants or at any time before the conclusion of the trial.

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11. This position was explained by this Court in Saleem Bhai vs.State of Maharashtra, (2003) 1 SCC 557, in which, whileconsidering Order 7 Rule 11 of the Code, it was held as under:(SCC p. 560, para 9)

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“9. A perusal of Order 7 Rule 11 CPC makes it clear that therelevant facts which need to be looked into for deciding anapplication thereunder are the averments in the plaint. Thetrial court can exercise the power under Order 7 Rule 11 CPCat any stage of the suit — before registering the plaint or afterissuing summons to the defendant at any time before theconclusion of the trial. For the purposes of deciding anapplication under clauses (a) and (d) of Rule 11 of Order 7CPC, the averments in the plaint are germane; the pleas takenby the defendant in the written statement would be whollyirrelevant at that stage, therefore, a direction to file the writtenstatement without deciding the application under Order 7 Rule11 CPC cannot but be procedural irregularity touching theexercise of jurisdiction by the trial court.”

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It is clear that in order to consider Order 7 Rule 11, the court hasto look into the averments in the plaint and the same can beexercised by the trial court at any stage of the suit. It is also clearthat the averments in the written statement are immaterial and itis the duty of the Court to scrutinize the averments/pleas in theplaint. In other words, what needs to be looked into in decidingsuch an application are the averments in the plaint. At that stage,the pleas taken by the defendant in the written statement arewholly irrelevant and the matter is to be decided only on the plaintaverments. These principles have been reiterated in RaptakosBrett & Co. Ltd. vs. Ganesh Property, (1998) 7 SCC 184 andMayar (H.K.) Ltd. vs. Vessel M.V. Fortune Express, (2006) 3SCC 100.

12. It is also useful to refer the judgment in T. Arivandandam vs.T.V. Satyapal, (1977) 4 SCC 467, wherein while considering thevery same provision i.e. Order 7 Rule 11 and the duty of the trialcourt in considering such application, this Court has reminded thetrial Judges with the following observation: (SCC p. 470, para 5)

“5. … The learned Munsif must remember that if on ameaningful – not formal – reading of the plaint it is manifestlyvexatious, and meritless, in the sense of not disclosing a clearright to sue, he should exercise his power under Order 7, Rule11 C.P.C. taking care to see that the ground mentioned thereinis fulfilled. And, if clever drafting has created the illusion of acause of action, nip it in the bud at the first hearing by examiningthe party searchingly under Order 10, C.P.C. An activist Judgeis the answer to irresponsible law suits. The trial courts wouldinsist imperatively on examining the party at the first hearingso that bogus litigation can be shot down at the earliest stage.The Penal Code is also resourceful enough to meet such men,(Chapter XI) and must be triggered against them.”

It is clear that if the allegations are vexatious and meritless andnot disclosing a clear right or material(s) to sue, it is the duty ofthe trial Judge to exercise his power under Order 7 Rule 11. Ifclever drafting has created the illusion of a cause of action asobserved by Krishna Iyer J., in the above referred decision, itshould be nipped in the bud at the first hearing by examining theparties under Order 10 of the Code.”

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AWe may also advert to the exposition of this Court in MadanuriSri Rama Chandra Murthy vs. Syed Jalal[4]. In paragraph 7 of thesaid decision, this Court has succinctly restated the legal position asfollows: -

“7. The plaint can be rejected under Order 7 Rule 11 if conditionsBenumerated in the said provision are fulfilled. It is needless toobserve that the power under Order 7 Rule 11, CPC can beexercised by the Court at any stage of the suit. The relevant factswhich need to be looked into for deciding the application are theaverments of the plaint only. If on an entire and meaningful readingof the plaint, it is found that the suit is manifestly vexatious andCmeritless in the sense of not disclosing any right to sue, the courtshould exercise power under Order 7 Rule 11 CPC. Since thepower conferred on the Court to terminate civil action at thethreshold is drastic, the conditions enumerated under Order 7 Rule11 CPC to the exercise of power of rejection of plaint have to beDstrictly adhered to. The averments of the plaint have to be read asa whole to find out whether the averments disclose a cause ofaction or whether the suit is barred by any law. It is needless toobserve that the question as to whether the suit is barred by anylaw, would always depend upon the facts and circumstances ofeach case. The averments in the written statement as well as theEcontentions of the defendant are wholly immaterial whileconsidering the prayer of the defendant for rejection of the plaint.Even when the allegations made in the plaint are taken to be correctas a whole on their face value, if they show that the suit is barredby any law, or do not disclose cause of action, the application forFrejection of plaint can be entertained and the power under Order7 Rule 11 CPC can be exercised. If clever drafting of the plainthas created the illusion of a cause of action, the court will nip it inthe bud at the earliest so that bogus litigation will end at the earlierstage.”

GKeeping in mind the well settled legal position, we may nowproceed to analyse the averments in the plaint, as filed by the appellant,to discern whether it was a fit case for rejection of the plaint underOrder VII Rule 11(d) of the CPC. As noticed from the trial Courtjudgment, it is evident that the trial Court did not make any attempt to H4 (2017) 13 SCC 174

analyse the plaint in the manner predicated in the aforesaid decisions.Even the District Court dealing with first appeal and the High Court withsecond appeal omitted to do so. It is the bounden duty of the Court toexamine the plaint as a whole and not selected averments therein. Forthat, we need to advert to the averments in the plaint. Paragraphs 8 to15 of the plaint, which according to us, are the relevant averments, readas follows:- ‘‘8. That the facility as referred to in the foregoing paras wasextended with effect from 01.04.1997 and somewhere in the monthof July, 2000 it was noticed by the Plaintiff that the Defendantswere charging interest/commission @ Rs.4/- per thousand rupeeson local cheques and drafts in an arbitrary manner in violation ofthe assurance given to the Plaintiff.

9. That after the detection of the above overcharging ofinterest/commission the Plaintiff sent a letter to theDefendants on 21.07.2000 complaining about theovercharging and thereafter the interest/commission wascharged as per assurance given.

10. That the amount overcharged as commission/interest was notrefunded to the Plaintiff and the Plaintiff sent the following lettersaddressed to the Bank i.e. General Manager and Senior Managerindicating therein that amount overcharged should be refunded tothe Plaintiff with interest thereon: - Letter dated 12.10.2000, 24.10.2000, 30.10.2000, 7.11.2000,24.12.2000, 01.03.2001, 28.03.2001, 22.5.2001 and 20.06.2001.In all the above letters requests were made to clarify as to howthe commission were calculated and deducted from the Plaintiff.

11. That the Assistant General Manager, Sh. P.S. Bawa ofRegional Office-B, Delhi vide letter dated 9.7.2001 informedthe Plaintiff that the comments of the Branch Office havebeen invited on the representation of the Plaintiff in respectof the local cheques/DDs discounted during the relevantperiod and the matter will be decided as early as possible.No progress was made in the matter and the Plaintiff had tosubmit letter dated 31.10.2001 to the Hon’ble FinanceMinister, Govt. of India, New Delhi.

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12. That the Defendants have charged interest for some time forthe actual number of days for the Defendants remained out offunds.

13. That vide letter dated 08.05.2002, the Senior Managerinformed the Plaintiff that the cheques were beingpurchased at the prevailing rates. That reply was given tosidetrack the real issue in respect of which letter dated09.07.2001 was received from Shri P.S. Bawa, AssistantGeneral Manager of Regional Office as referred to in theforegoing paras.

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14. That, thereafter, the Plaintiff sent letters dated 12.07.2002,22.09.2002, 24.3.2003 alongwith which the details of the proposed/estimated excess amount charged were given and it was requestedthat a sum of Rs.31,57,484/- approximately appears to have beencharged in excess of what should have been actually charged andthe exact amount should be calculated and refunded to the Plaintiff.No reply was given by the Bank to these letters.

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15. That Senior Manager of the Defendant No. 2 vide letterdated 19.09.2002 had informed that everything was doneaccording to rules and the matters need not to be pursuedany further and thereafter the Plaintiff sent another letterdated 03.06.2003.”

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Again, in paragraph 28 of the plaint, it is stated as follows: - “28. That the cause of action to file the suit accrued in favour ofFthe Plaintiff and against the Defendants when the illegal recoverieswere noticed and letter dated 21.07.2000 was sent to theDefendants to clarify as to how the interest was being calculatedand recovered and on various other dates when the letters weresent to the Defendants with request for refund of the excessamounts charged and on 9.7.2001 when assurance for properGcalculation and refund was conveyed to the Plaintiff and on8.5.2002, 12.7.2002 and 22.9.2002 when requests were again madeto settle the matter on 19.9.2002, 3.6.2003 and the cause of actionarose on 23.12.2003 when the legal notice was served upon theDefendant and on 28.12.2003 when the reply to the notice wasHreceived and finally on 07.01.2005. When the legal notice for rendition of accounts was served upon the Defendants and thecause of action still subsists as the accounts have not been renderedso far nor the excess amount charged has been refunded by theDefendants.”

From the averments in the plaint, if read as a whole, it wouldappear that the assertion of the appellant is that the respondents hadextended financial facility with effect from 1.4.1997 till October, 2007,but somewhere in the month of July, 2000, the appellant noticed that therespondents were unilaterally charging interest/commission at the rateof Rs.4 per thousand rupees on local cheques and drafts in an arbitrarymanner in violation of the assurance given to the appellant. Immediatelythereafter, the appellant wrote to the respondent-Bank vide letter dated21.7.2000 for taking corrective steps in the matter. Then correspondenceensued between the parties in that regard and the appellant was assuredby the Regional Office of the respondent-Bank that an appropriatedecision will be taken at the earliest. The relevant assertion in that regardis found in paragraph 11 of the plaint, wherein it is mentioned that theAssistant General Manager - Shri P.S. Bawa of Regional Office-B,Delhi, vide letter dated 9.7.2001 informed the appellant that commentsfrom the concerned Branch Office have been invited and appropriatedecision will be taken on its representation as early as possible.Thereafter, on 8.5.2002, the Senior Manager of the respondent-Bankinformed the appellant that the cheques were being purchased at theprevailing rates; which plea, according to the appellant, was to deviatefrom the position stated by the Assistant General Manager of RegionalOffice in his letter dated 9.7.2001 referred to earlier. Resultantly, theappellant wrote to the officials of the respondent-Bank vide letters dated12.7.2002, 22.9.2002 and 24.3.2003. Notably, it is averred in paragraph15 of the plaint that the Senior Manager of the respondent-Bank videletter dated 19.9.2002 had informed the appellant that everything wasbeing done in accordance with the rules and the appellant need not pursuethe matter any further. It is asserted that despite this intimation, theappellant continued to correspond with the respondent-Bank with asanguine hope that the issue will be resolved at the appropriate level bythe Bank and finally issued a legal notice on 28.11.2003, which was dulyresponded to by the respondent-Bank vide Advocate’s letter dated23.12.2003. Nevertheless, the appellant gave another legal notice on7.1.2005 and thereafter, proceeded to file the subject suit in February,2005.

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A7. All these events have been reiterated in paragraph 28 of theplaint, dealing with the cause of action for filing of the suit. Indeed, thesaid paragraph opens with the expression “the cause of action to file thesuit accrued in favour of the plaintiff and against the defendants whenthe illegal recoveries were noticed and letter dated 21.7.2000 was sentto the defendants to clarify as to how the interest was being calculated.”BThis averment cannot be read in isolation. As aforesaid, on reading theplaint as a whole, it is seen that the gravamen of the case made out inthe plaint is that the appellant noticed the discrepancy in July, 2000 andimmediately took up the matter with the officials of the respondent-Bank at different levels and in response, the Assistant General ManagerCof Regional Office of the Bank had communicated in writing to theappellant vide letter dated 9.7.2001 that its representation was beingexamined and comments of the Branch Office have been invited andafter receipt thereof the matter will be decided as early as possible. Asno further communication was received by the appellant, it had to make

a representation to the Finance Minister, Government of India, vide letterDdated 31.10.2001 and presumably because of that, the appellant receiveda communication from the Senior Manager vide letter dated 8.5.2002informing the appellant that the cheques were being purchased at theprevailing rates. This stand taken by the Senior Manager was to side-track the issue pending consideration before the Assistant GeneralEManager, Regional Office referred to in his letter dated 9.7.2001. Thecase made out by the appellant is that no communication was receivedby the appellant from the Assistant General Manager, Regional Officeand instead, for the first time it was informed vide letter dated 19.9.2002sent by the Senior Manager of the respondent-Bank, that all actionstaken by the Bank are as per the rules and, therefore, the appellant needFnot correspond in this regard any further. This response of the Bankcould also be regarded as a firm denial or refusal by the authorisedofficial of the Bank, giving rise to cause of action to sue the Bank.

8. Thus understood, the letter dated 8.5.2002 sent by the Senior Manager of the respondent-Bank, at best, be reckoned as accrual of theGcause of action to the appellant to sue the respondent-Bank. It is thenstated that the appellant received a communication dated 19.9.2002,informing the appellant that it should not carry on any furthercorrespondence with the Bank relating to the subject matter. Until then,the appellant was having a sanguine hope of favourable resolution of itsHclaim including by the Regional Office of the respondents. The appellant, therefore, had to send a legal notice on 28.11.2003, to which the Bankresponded on 23.12.2003. Reckoning these dates, the plaint filed on23.2.2005 was within limitation, as stated in paragraph 28 of the plaint.Resultantly, the question of rejecting such a plaint under Order VII Rule11(d) of the CPC did not arise.

9. The expression used in Article 113 of the 1963 Act is “whenthe right to sue accrues”, which is markedly distinct from the expressionused in other Articles in First Division of the Schedule dealing with suits,which unambiguously refer to the happening of a specified event.Whereas, Article 113 being a residuary clause and which has been invokedby all the three Courts in this case, does not specify happening ofparticular event as such, but merely refers to the accrual of cause ofaction on the basis of which the right to sue would accrue.

10. Concededly, the expression used in Article 113 is distinct fromthe expressions used in other Articles in the First Division dealing withsuits such as Article 58 (when the right to sue “first” accrues), Article59 (when the facts entitling the plaintiff to have the instrument or decreecancelled or set aside or the contract rescinded “first” become knownto him) and Article 104 (when the plaintiff is “first” refused the enjoymentof the right). The view taken by the trial Court, which commended to thefirst appellate Court and the High Court in second appeal, would inevitablyentail in reading the expression in Article 113 as – when the right to sue(first) accrues. This would be re-writing of that provision and doingviolence to the legislative intent. We must assume that the Parliamentwas conscious of the distinction between the provisions referred to aboveand had advisedly used generic expression “when the right to sueaccrues” in Article 113 of the 1963 Act. Inasmuch as, it would alsocover cases falling under Section 22 of the 1963 Act, to wit, continuingbreaches and torts.

11. We may usefully refer to the dictum of a three-Judge Benchof this Court in Union of India & Ors. vs. West Coast Paper MillsLtd. & Anr.[5], which has had an occasion to examine the expressionused in Article 58 in contradistinction to Article 113 of the 1963 Act. Wemay advert to paragraphs 19 to 21 of the said decision, which read thus:- “19. Articles 58 and 113 of the Limitation Act read thus:

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20. It was not a case where the respondents prayed for adeclaration of their rights. The declaration sought for by them asregards unreasonableness in the levy of freight was granted bythe Tribunal.

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21. A distinction furthermore, which is required to be noticed isDthat whereas in terms of Article 58 the period of three years is tobe counted from the date when “the right to sue first accrues”, interms of Article 113 thereof, the period of limitation would becounted from the date “when the right to sue accrues”. Thedistinction between Article 58 and Article 113 is, thus,apparent inasmuch as the right to sue may accrue to a suitorEin a given case at different points of time and, thus, whereasin terms of Article 58 the period of limitation would bereckoned from the date on which the cause of action arosefirst, in the latter the period of limitation would be differentlycomputed depending upon the last day when the cause ofaction therefor arose.”F

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12. Similarly, in Khatri Hotels Private Limited & Anr. Vs. Unionof India & Anr.[6], this Court considered the expression used in Article58 in contradistinction to Article 120 of the old Limitation Act (the IndianGLimitation Act, 1908). In paragraph 24, the Court noted thus: - “24. The Limitation Act, 1963 (for short “the 1963 Act”) prescribestime limit for all conceivable suits, appeals, etc. Section 2(j) ofthat Act defines the expression “period of limitation” to mean the H6 (2011) 9 SCC 126

period of limitation prescribed in the Schedule for suit, appeal orapplication. Section 3 lays down that every suit instituted, appealpreferred or application made after the prescribed period shall,subject to the provisions of Sections 4 to 24, be dismissed eventhough limitation may not have been set up as a defence. If a suitis not covered by any specific article, then it would fall withinthe residuary article. In other words, the residuary articleis applicable to every kind of suit not otherwise providedfor in the Schedule.”

The distinction between the two Articles (Article 58 and Article120) has been expounded in paragraphs 27 to 30 of the reported decision,which read thus: - “27. The differences which are discernible from the language ofthe above reproduced two articles are:

(i) The period of limitation prescribed under Article 120 of the1908 Act was six years whereas the period of limitationprescribed under the 1963 Act is three years and,

(ii) Under Article 120 of the 1908 Act, the period oflimitation commenced when the right to sue accrues. Asagainst this, the period prescribed under Article 58begins to run when the right to sue first accrues.

28. Article 120 of the 1908 Act was interpreted by the JudicialCommittee in Bolo v. Koklan [(1929-30) 57 IA 325: AIR 1930PC 270] and it was held: (IA p. 331)

“There can be no ‘right to sue’ until there is an accrualof the right asserted in the suit and its infringement, or at leasta clear and unequivocal threat to infringe that right, by thedefendant against whom the suit is instituted.” The same viewwas reiterated in Annamalai Chettiar v. MuthukaruppanChettiar [ILR (1930) 8 Rang 645] and Gobinda NarayanSingh v. Sham Lal Singh [(1930-31) 58 IA 125].

29. In Rukhmabai v. Lala Laxminarayan (AIR 1960 SC 335),the three-Judge Bench noticed the earlier judgments and summedup the legal position in the following words: (Rukhmabai case[AIR 1960 SC 335, AIR p. 349, para 33)

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A“33. … The right to sue under Article 120 of the [1908Act] accrues when the defendant has clearly orunequivocally threatened to infringe the right assertedby the plaintiff in the suit. Every threat by a party to sucha right, however ineffective and innocuous it may be,cannot be considered to be a clear and unequivocal threatBso as to compel him to file a suit. Whether a particularthreat gives rise to a compulsory cause of action dependsupon the question whether that threat effectively invadesor jeopardizes the said right.”

30. While enacting Article 58 of the 1963 Act, the legislature hasCdesignedly made a departure from the language of Article 120 ofthe 1908 Act. The word “first” has been used between the words“sue” and “accrued”. This would mean that if a suit is based onmultiple causes of action, the period of limitation will begin to runfrom the date when the right to sue first accrues. To put it differently,Dsuccessive violation of the right will not give rise to fresh causeand the suit will be liable to be dismissed if it is beyond the periodof limitation counted from the day when the right to sue firstaccrued.”

ENotably, the expression used in Article 113 is similar to that inArticle 120, namely, “when the right to sue accrues”. Hence, the principleunderlying this dictum must apply proprio vigore to Article 113.

13. It is well established position that the cause of action for filinga suit would consist of bundle of facts. Further, the factum of suit beingFbarred by limitation, ordinarily, would be a mixed question of fact andlaw. Even for that reason, invoking Order VII Rule 11 of the CPC isruled out. In the present case, the assertion in the plaint is that theappellant verily believed that its claim was being processed by theRegional Office and the Regional Office would be taking appropriateGdecision at the earliest. That belief was shaken after receipt of letterfrom the Senior Manager of the Bank, dated 8.5.2002 followed by anotherletter dated 19.9.2002 to the effect that the action taken by the Bankwas in accordance with the rules and the appellant need not correspondwith the Bank in that regard any further. This firm response from therespondent-Bank could trigger the right of the appellant to sue theHrespondent-Bank. Moreover, the fact that the appellant had eventually sent a legal notice on 28.11.2003 and again on 7.1.2005 and then filedthe suit on 23.2.2005, is also invoked as giving rise to cause of action.Whether this plea taken by the appellant is genuine and legitimate, wouldbe a mixed question of fact and law, depending on the response of therespondents.

14. Reverting to the argument that exchange of letters orcorrespondence between the parties cannot be the basis to extend theperiod of limitation, in our opinion, for the view taken by us hitherto, thesame need not be dilated further. Inasmuch as, having noticed from theaverments in the plaint that the right to sue accrued to the appellant onreceiving letter from the Senior Manager, dated 8.5.2002, and in particularletter dated 19.9.2002, and again on firm refusal by the respondents videAdvocate’s letter dated 23.12.2003 in response to the legal notice sentby the appellant on 28.11.2003; and once again on the follow up legalnotice on 7.1.2005, the plaint filed in February, 2005 would be well withinlimitation. Considering the former events of firm response by therespondents on 8.5.2002 and in particular, 19.9.2002, the correspondenceensued thereafter including the two legal notices sent by the appellant,even if disregarded, the plaint/suit filed on 23.2.2005 would be withinlimitation in terms of Article 113.

15. The respondents had relied on the exposition of this Court inBoota Mal vs. Union of India[7], S.S. Rathore vs. State of MadhyaPradesh[8], Venkappa Gurappa Hosur vs. Kasawwa C/o RangappaKulgod[9], and Kandimalla Raghavaiah & Company vs. NationalInsurance Company & Anr.[10 ]and of Delhi High Court in C.P. Kapur(supra), to buttress the above argument, which, as aforesaid, is unavailablein light of the averments in the plaint under consideration. Suffice it toobserve that going by the averments in the plaint, the argument of therespondents that the appellant had placed reliance on the correspondenceto get extension of the limitation period, is untenable. The averments inthe plaint, however, are very explicit to the effect that the grievance ofthe appellant about unilateral charging of interest/commission by therespondent-Bank was firmly denied or refused by the Senior Managerof the respondent-Bank vide letter dated 8.5.2002 and in particular letter 7 AIR 1962 SC 1716

8 (1989) 4 SCC 582

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10 (2009) 7 SCC 768

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Adated 19.9.2002 and again by Advocate’s letter on 23.12.2003, givingrise to cause of action and accrual of right to sue.

16. The respondents had also relied on the dictum of this Court inFatehji And Company & Anr. vs. L.M. Nagpal & Ors.[11]. Indeed, inthat case, this Court upheld the order of rejection of plaint on the findingBthat the suit was barred by limitation under Article 54 of the 1963 Act, inthe fact situation of that case. The Court was dealing with a suit forspecific performance of a written agreement of sale dated 2.7.1973 andas per the terms, the performance of the contract was fixed for 2.12.1973.In that background, the Court noted that the subsequent letters exchangedbetween the parties cannot be the basis to extend the period of limitation.CMoreover, the Court dealt with the case governed by Article 54 of the1963 Act, which stipulates the timeline for commencement of period oflimitation, being the date fixed for the performance, or, if no such date isfixed, when the plaintiff has notice that performance is refused. In casesgoverned by Article 113 of the 1963 Act, such as the present case,Dhowever, what is required to be noted is – “when the right to sue accrues”(and not when the right to sue “first” accrues).

17. Similarly, in the case of Hardesh Ores (P) Ltd. vs. Hedeand Company[12], this Court upheld the order of rejection of plaint underOrder VII Rule 11 of the CPC concerning a suit for injunction in referenceEto Article 58, which expressly postulates that time from which periodbegins to run is when the right to sue “first” accrues. The argument ofthe appellant therein to apply Article 113 of the 1963 Act has been notedin paragraph 33 and rejected. In that view of the matter, the exposition inthis decision will be of no avail to the respondents.

F18. Reverting to the decision in Kandimalla Raghavaiah (supra),the Court interpreted Section 24A of the Consumer Protection Act, 1986,which defines the period of limitation to be within two years from thedate on which the cause of action had arisen. In light of that provision,the Court noted that the cause of action in respect of subject insurancepolicy arose on 22/23.3.1988, when fire in the godown took place,Gdamaging the tobacco stocks hypothecated with the Bank in whoseaccount the policy had been taken by the appellant therein. In otherwords, the stipulation in Section 24A of the Consumer Protection Act,1986 is analogous to the time frame specified in other Articles covered11 (2015) 8 SCC 390H12 (2007) 5 SCC 614

under First Division of the Schedule to the 1963 Act regarding suitsrelating to accounts; and not similar to Article 113, which envisages threeyears’ time from the period when the right to sue accrues (and not whenthe right to sue “first” accrues).

19. As regards Boota Mal (supra) and The East and WestSteamship, Georgetown, Madras vs. S.K. Ramalingam Chettiar[13],the Court was dealing with a case relating to Article 31 of the old LimitationAct, which provided that the time from which period begins to run, iswhen the goods sought to be delivered. Even these decisions will be ofno avail to the fact situation of the present case, which is governed byArticle 113 of the 1963 Act and for the reasons already recordedhereinbefore.

20. Similarly, in S.S. Rathore (supra), the Court was dealing witha case governed by Article 58 of the 1963 Act, which specifically providesthat time begins to run when the right to sue “first” accrues. In Ramrakash Gupta (supra), the Court dealt with a case governed by Article59 of the 1963 Act, which provides that the suit could be filed when thefacts entitling the plaintiff to have the instrument or decree cancelled orset aside or the contract rescinded “first” become known to him. TheCourt opined that the knowledge mentioned in the concerned plaint couldnot be termed as inadequate and incomplete. The Court reversed thejudgment of the Civil Judge and the High Court rejecting the plaint. ThisCourt also noted that while deciding the application under Order VIIRule 11 of the CPC, few lines or passage from the plaint should not beread in isolation and the pleadings ought to be read as a whole to ascertainits true import. Even in that case, the trial Court and the High Court hadfailed to advert to the relevant averments, as stated in the plaint, whichapproach was disapproved by this Court. In the present case, as noticedearlier, the trial Court had failed to advert to and analyse the avermentsin the plaint, but selectively took notice of the assertion in the plaint inquestion that the appellant became aware about the discrepancies inJuly, 2000, and then proceeded to reject the plaint being barred by law oflimitation having been filed in February, 2005.

21. Taking overall view of the matter, therefore, we are of theconsidered opinion that the decisions of the trial Court, the first appellateCourt and the High Court in the fact situation of the present case, rejecting 13 AIR 1960 SC 1058

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Athe plaint in question under Order VII Rule 11(d) of the CPC, cannot besustained. As a result, the same are quashed and set aside.

22. In view of the above, this appeal succeeds and the plaint standsrestored to the file of the trial Court to its original number for beingproceeded in accordance with law. All contentions available to both partiesBare kept open including the issue of limitation to be decided alongwithother issues on the basis of plea taken in the written statement and theevidence produced by the parties in that behalf uninfluenced by theobservations made in the present judgment on factual matters. Thereshall be no order as to costs. Pending interlocutory applications, if any,shall stand disposed of.C

CIVIL APPEAL NO. 2515 OF 2020

(Arising out of SLP (C) No. 30210/2017)

1. Leave granted.

D2. In the present appeal, the factual narration in the plaint is similarin material respects, if not identical to the plaint in the companion appealarising from SLP(C) No. 30209/2017. To wit, it is apposite to reproducerelevant averments from the plaint in question, which read as follows: - “8. That the facility as referred to in the foregoing paras wasextended with effect from the month of November, 1997 toEDecember, 1999 and somewhere in the month of July, 2000 it wasnoticed by the plaintiff that the defendants were charging interest/commission @ Rs.4/- per thousand rupees on local cheques anddrafts in an arbitrary manner in violation of the assurance given tothe plaintiff.

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9. That after the detection of the above overcharging theinterest/commission the plaintiff sent a letter to thedefendants on 21.7.2000 complaining about theovercharging and thereafter the interest/commission wascharged as per assurance given.

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10. That the amount overcharged as commission/interest was notrefunded to the plaintiff and the plaintiff sent the following lettersaddressed to the Bank i.e. General Manager and Senior Managerindicating therein that the amount overcharged should be refundedto the plaintiff with interest thereon: - H

Letter dated 12.10.2000, 24.10.2000, 30.10.2000, 7.11.2000,24.12.2000, 01.03.2001, 28.03.2001, 22.05.2001 and 20.06.2001.

In all the above letters requests were made to clarify as tohow the commission was calculated and deducted from theplaintiff.

11. That the Assistant General Manager, Sh. P.S. Bawa ofRegional Office-B, Delhi vide letter dated 9.7.2001 informedthe plaintiff that the comments of the Branch Office havebeen invited on the representation of the plaintiff in respectof the local cheques/DDs discounted during the relevantperiod and the matter will be decided as early as possible.No progress was made in the matter and the plaintiff had tosubmit letter dated 31.10.2001 to the Hon’ble FinanceMinister, Govt. of India, New Delhi.

12. That the defendants have charged interest for some time forthe actual number of days for the defendants remained out offunds.

13. That vide letter dated 08.05.2002, the Senior Managerinformed the plaintiff that the cheques were beingpurchased at the prevailing rates. That reply was given tosidetrack the real issue in respect of which letter dated09.07.2001 was received from Sh. P.S. Bawa, AssistantGeneral Manager of Regional Office as referred to in theforegoing paras.

14. That, thereafter, the plaintiff sent letters dated 12.07.2002,22.07.2002, 24.03.2003 along with which the details of the proposed/estimated excess amount charged were given and it was requestedthat a sum of Rs.5,39,902/- approximately appears to have beencharged in excess of what should have been actually charged andthe exact amount should be calculated and refunded to the plaintiff.No reply was given by the bank to these letters.

15. That Senior Manager of the defendant No.2 vide letterdated 19.09.2002 had informed that everything was doneaccording to rules and the matters need not to be pursuedany further and thereafter the plaintiff sent another letterdated 3.06.2003.

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16. That the excess amounts have been recovered/charged fromthe plaintiff in an arbitrary manner, in utter violation of theassurances, rules, regulations and established cannons of businessdealings; and inspite of the protracted correspondence made from21.07.2000 to 03.06.2003, the defendants have failed to accountfor or to justify the recovery of amounts made in an arbitrarymanner by citing any rules, regulations or any other authority.

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18. That thereafter, the plaintiff got a legal notice served upon thedefendant vide registered letter No.6672 dated 03.12.2003containing all the details relating to the transactions as could begathered from the books of accounts of the plaintiff.

19. That reply to the above noted notice was sent by the defendantsthrough Sh. Sanjeev Kumar Gupta, Advocate, vide letter dated23.12.2003 wherein averments relating to the excess charges weredenied and it was stated that the interest was charged on DD/cheques as per Central Officer Circular No. C094-95; 233 upto01.12.1999 and thereafter as per Circular No. CO/OPR/SCHGS/CIR/LET/2000-2001 dated 18.08.2000.”

Again, in paragraph 28, it is stated as follows: - “28. That the cause of action to file the suit accrued in favour ofthe plaintiff and against the defendants when the illegal recoverieswere noticed and letter dated 21.07.2000 was sent to thedefendants to clarify as to how the interest was being calculatedand recovered and on various other dates when the letters weresent to the defendants with request for refund of the excessamounts charged and on 9.7.2001 when assurance for propercalculation and refund was conveyed to the plaintiff and on8.5.2002, 12.7.2002 and 22.9.2002 when requests were again madeto settle the matter on 19.9.2002, 3.6.2003 and their cause ofaction arose on 28.12.2003 where the legal notice was servedupon the defendant and on 23.12.2003 when the reply to the noticewas received and finally on 08.01.2005 when the legal notice forrendition of accounts was served upon the defendants and thecause of action still subsists as the accounts have not been rendered so far nor the excess amount charged has been refunded by theDefendants.”

3. We have considered the factual position in the present case,which is similar to the facts in the companion appeal. Therefore, for thereasons stated in the judgment in companion appeal arising from SLP(C)No. 30209/2017, even this appeal should succeed on the same terms.Accordingly, this appeal is also allowed and the impugned judgment andorder of the trial Court, the first appellate Court and the High Court insecond appeal are set aside and the plaint is restored to the file of thetrial Court to be disposed of on the same terms as indicated in thecompanion appeal (arising from SLP(C) No. 30209/2017). There shallbe no order as to costs. Pending interlocutory applications, if any, shallstand disposed of.

Ankit Gyan

Appeals allowed.

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