1 RFA No.2190 of 2007 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF JULY, 2025 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE T.M.NADAF REGULAR FIRST APPEAL NO.2190 OF 2007 (MON) BETWEEN: STATE BANK OF INDIA A BODY CORPORATE CONSTITUTED UNDER THE STATE BANK OF INDIA ACT, 1955 (ACT NO.23/1995), SUCCESSOR STATE BANK OF MYSORE AND HAVING, INTER-ALIA, A BRANCH OFFICE KNOWN AS CHIKKABALLAPURA BRANCH AT B.B.ROAD, CHIKKABALLAPUR, REPRESENTED BY ITS MANAGER ...APPELLANT (BY SRI. VARADARAJ R HAVALDAR , ADVOCATE) AND 1. SMT B KRISHNAVENI W/O B JAISIMHA PROPRIETOR JAY-TEE PLASTO GROUPS, MAJOR, R/O UPSTAIRS, ANNAPURNESHWARI VIDYA MANDIR, 2ND CROSS, CHAMARAJPET, CHIKKABALLAPUR. 2. H R MANJUNATHA RAO S/O H.RAMACHANDRA RAO, MAJOR, R/O NO.717, BSK 1ST STAGE, 2 RFA No.2190 of 2007 6TH CROSS, BANGALORE-50, TERRITORY MANAGER, STALIN PHARMACEUTICAL 2222, 12TH MAIN, 3RD BLOCK, JAYANAGAR, BANGALORE - 11. 3. H RAMA RAO MAJOR, NO.717, BSK 1ST STAGE, 6TH CROSS, BANGALORE - 50. …RESPONDENTS (BY SRI B.S. VENKATESH, ADVOCATE FOR R2; NOTICE TO R1 SERVED; V.O.D. 24.09.2016 NOTICE TO R3 IS HELD SUFFICIENT) THIS RFA IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE AFORESAID JUDGMENT AND DECREE DATED 16.07.2007 BY ALLOWING THIS APPEAL WITH COSTS THROUGH – OUT AND DECREE THE SAID SUIT O.S.NO.20/2005 OF THE APPELLANT / PLAINTIFF AS PRAYED FOR IN THE PLAINT, AND b) AWARD SUCH OTHER RELIEFS AS THIS HON’BLE COURT MAY DEEM FIT AND PROPER IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 24.06.2025 AND COMING ON FOR ‘PRONOUNCEMENT OF JUDGMENT’ THIS DAY, T.M. NADAF J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE S.G.PANDIT AND HON'BLE MR. JUSTICE T.M.NADAF 3 RFA No.2190 of 2007 CAV JUDGMENT (PER: THE HON’BLE MR JUSTICE T.M.NADAF ) This Regular First Appeal filed by the plaintiff under Section – 96 of Code of Civil Procedure calling in question the judgment and decree dated 16.07.2007 in O.S. No. 20/2005, passed by the Civil Judge (Senior Division) and JMFC, Chikkaballapur, whereby, the suit for recovery filed by the plaintiff was dismissed. 2. The parties shall be referred to as per their ranking before the Court below, for easy reference. 3. A brief outline of the facts leading to the filing of the present appeal are as follows: At the earlier point of time, the plaintiff filed a suit seeking against the Defendants for the Recovery of Rs.09,80,816/- with interest at the rate of 15.5% p.a. However, during the pendency of the suit, the plaintiff also enforced the security of mortgage created on 25.01.1999 in respect of suit schedule property. 4 RFA No.2190 of 2007 4. The plaintiff is a Scheduled Bank. On 25.01.1999, defendant No.1 has barrowed a sum of Rs.9,00,000/- from the plaintiff-bank for the purpose of business agreeing to repay the same with the interest at the rate of 15.5% p.a., defendant Nos.2,3 and B.Jayasimha husband of defendant No.1 stood as sureties for the same and they have also executed concerned documents in favour of the plaintiff bank. 5. Defendants have mortgaged the suit schedule properties in favour of plaintiff bank by depositing the title deeds. Defendants are in due of Rs.9,80,816-67 in favour of plaintiff bank, despite several demands and issuing of notices to the defendant by the plaintiff-bank defendants have not cleared the debt. Hence, a suit for recovery was filed. 6. After filing of the suit, in pursuance of the service of summons defendant No.2 appeared through his counsel and defendant No.1 and 3 have remained as Ex- parte. Defendant No.4 is the husband of the Defendant No.1. It was stated further in cause-title that Defendant 5 RFA No.2190 of 2007 No.4 - B.Jaysimha was represented by his only legal heir the 1st defendant, which means plaintiff-bank has filed the suit against Smt.B.Krishnaveni, the defendant No.1. 7. It is further contended that the Counsel for the second defendant filed the written statement, and contended that the suit is not maintainable in law, facts and circumstances of the case. He further contended that the suit of the plaintiff is barred by limitation He has denied that he stood as surety for the loan borrowed by defendant No.1 and he further contended that he had not mortgaged the suit schedule property in favour of the plaintiff-bank by equitable mortgage by deposit of title deeds and he had not signed any documents for the alleged transactions. He contended that he was not aware of the alleged transaction and therefore he was not liable to pay any amounts to the plaintiff-bank. He further stated that he has not acknowledged the liability to the plaintiff- bank therefore he prayed for dismissal of the suit. 6 RFA No.2190 of 2007 8. The trial court subsequent to completion of the pleadings, framed the following issues and additional issues, which reads as follows: ISSUES 1. Whether the plaintiffs bank proves that defendant No.1 availed loan of Rs.9,00,000/- (Nine lakh) from the plaintiff-bank agreeing to repay the same with the interest at the rate of 15.5%p.a.compounded quarterly? 2. Whether the plaintiff-bank further proves that defendant No.2 to 4 have stood has sureties for the loan availed defendant No.1 by mortgage in the suit schedule e property? 3. Whether the plaintiff-bank is entitled to the relief as prayed for? 4. For What decree or order? ADDITIONAL ISSUE 1. Whether the suit of the plaintiffs bank is barred by time? 9. The plaintiff - Bank examined its Manager as PW-1 and got marked the documents as Exs.P.1 to P.11. The witness was not cross-examined either denying the oral or documentary evidence. The defendant No.2 7 RFA No.2190 of 2007 neither entered the witness box nor produced any document. 10. The trial court answering additional issue No.1 holding that the claim is barred by limitation though the plaintiffs tried to extend the limitation by producing acknowledgment of debt under Section 18 of Limitation Act, 1963 (for short, ‘the Act of 1963’) in writing by defendant No.1 on 17.01.2002 stating that she will clear the debt. However, the suit came to be filed on 01.02.2005. Even after three years, 13 days, from the date of acknowledgment at Exhibit-P8.Under those circumstances held that the suit is barred by limitation. It is this judgment and decree passed by the trial court which is called in question, in the present appeal. 11. Heard Sri.Varadharaj R. Havaldhar learned counsel is appearing for the appellant, respondent No.1 is served who is unrepresented and B.S. Venkatesh, learned counsel appearing for respondent No.2, Respondent No.3 service is held sufficient. 8 RFA No.2190 of 2007 SUBMISSIONS OF SRI.VARADHARAJ R. HAVALDHAR : 12. Sri.Varadharaj R. Havaldhar, taking us through the judgment and decree and the evidence on the record of the trial court in addition to the grounds urged in the memorandum of appeal would submit that the trial court fell in error in non-suiting the appellant answering additional issue No.1 in affirmative and against the plaintiff holding that the suit filed by the appellant is barred by limitation. 13. He has further submitted that the trial Court committed a serious error in answering issue Nos.1 and 2 as redundant and issue No.3 in the Negative. He has also submitted that the defendants except filing written statement have not chosen to enter the witness box and produced any document to substantiate their claim. 14. On the other hand, plaintiff - Bank has produced substantial documents i.e., sanction letter, on demand pro note, letter of guarantee, letter of confirmation, equitable mortgage by deposit of title deed and account extract to show the cash credit loan 9 RFA No.2190 of 2007 sanctioned to an extent of Rs.9,00,000/- which the defendants have agreed to pay with interest at the rate of 15.5% p.a. Acknowledging the due, the defendant No.1 has given revival letter under Section 18 of the Limitation Act, 1963. Though all these documents produced before the trial Court vide Exs.P.1 to P.11, the trial Court failed to consider these documents. In the circumstances, the judgment and decree passed by the trial Court non-suiting the plaintiff suffers from legal infirmity and so also perversity. He has further submitted that there is no cross-examination by the defendants to PW-1, an officer of the Bank examined on behalf of the plaintiff to substantiate the claim of the Bank by way of oral as well as documentary evidence. In the absence of cross- examination, the trial Court committed serious error in answering additional issue No.1 and other issues against the plaintiff. He has further contended that the trial Court has failed to consider the fact that there is equitable mortgage by deposit of title deeds at Ex.P.9. As such, limitation prescribed is 12 years rather than 3 years as held by the trial Court. 10 RFA No.2190 of 2007 15. He has further submitted that even if limitation is taken as three years, there is one more acknowledgment issued by defendant No.1 dated 26.07.2002 wherein, the defendant No.1 had stated acknowledging the debt, stating that the same would be repaid within 05.08.2002. The said document was not available before the trial Court to produce and the same was found after thorough search subsequent to judgment and decree passed by the trial Court. As the said document was not available and not within the reach, despite all due diligence on the part of the plaintiff - Bank, the same could not be produced before the trial Court. Further stated that had it been produced before the trial Court, it has got a bearing on the judgment and decree passed by the trial Court. As such, said document is very much necessitated for complete adjudication of the lis between the parties so also substantiate the claim of the plaintiff. Accordingly, document dated 26.07.2002 is produced along with an application under Order 41 Rule 21 of CPC as an additional evidence with a prayer to take the same on record. He has also stated that the loan 11 RFA No.2190 of 2007 amount being public money and the Bank being public sector Bank, the claim of the Bank having been declined on the ground of limitation in the absence of the document now sought to be produced requires consideration. As such, sought to allow the application permitting the plaintiff - Bank to produce the additional document i.e., the letter of acknowledgment dated 26.07.2002 wherein, the defendant No.1 clearly stated that the loan would be repaid within 05.08.2002, which brings the suit well within time. 16. To buttress his arguments, on the application filed under Order-41, Rule-27 of CPC, learned counsel Sri.Havaldar relied on two judgments of the Hon'ble Apex Court in the case of (i) GANAPATI UDYOG AND ANOTHER vs. PUNJAB NATIONAL BANK AND OTHERS1 and in the case of (ii) UNION OF INDIA vs. IBRAHIM UDDIN AND ANOTHER2. 1 (1996) 113 PLR 437 2 (2012) 8 SCC 148 12 RFA No.2190 of 2007 SUBMISSION OF SRI B.S.VENKATESH, LEARNED COUNSEL FOR THE RESPONDENT NO.2:- 17. Sri.B.S.Venkatesh, with all vehemence submits that the trial Court after considering the documents placed on record with a well reasoned judgment dismissed the suit answering additional issue No.1 against the plaintiff - Bank holding that the suit for recovery of money as prayed for in the plaint has been barred by limitation. When the contention has been taken by the defendants and an issue has been framed to that effect and on perusal of the documents even in the absence of any contest by the defendants, the Court is on guard under Section 3 of the Limitation Act, 1963 which says even in the absence of any defence/statement by the defendant or other party, the Court is duty bound to answer the issue of limitation after going through the averments made in the plaint and the documents submitted in support of the contention. In the case on hand, a specific contention has been taken that there is no acknowledgment of debt as contended by the plaintiff – Bank in its plaint and the trial 13 RFA No.2190 of 2007 Court has framed additional issue on the basis of the pleadings. 18. The trial Court having found that the issue on limitation was not framed, on the basis of the pleadings, framed an additional issue on limitation and having found that even the acknowledgment produced at Ex.P.8 fall short to substantiate the claim of the plaintiff – Bank to bring the suit within the time, as the acknowledgment is dated 17.01.2002 and the suit having been filed on 01.02.2005 i.e., after lapse of three years and 13 days. In those circumstances, the suit is hit by limitation. The respondent No.2 has taken a specific stand that he is not a signatory to any of the documents much less the guarantee letter, confirmation letter, revival letter and equitable mortgage by deposit of title deed, of debt due at Exs.P.6 to P.9. The trial Court having taken the documents on record had categorically given a finding that in view of limitation, the claim became stale claim which cannot be enforced in law and dismissed the suit, which does not require any interference at the hands of this Court and sought to dismiss the appeal. 14 RFA No.2190 of 2007 19. Having heard the learned counsel for the parties, perused the entire trial Court record and the appeal papers, the following points arise for our consideration:- i. Whether the trial Court is justified in answering additional issue No.1 in Affirmative and against the plaintiff? ii. Whether the trial Court is justified in answering issue Nos.1 and 2 as redundant and issue No.3 in the Negative against the Bank? iii. Whether the appellant/plaintiff - Bank has made out a case to allow application - I.A.No.1/2016 filed to produce additional evidence? 20. Our answer to the above points Nos.1 and 2 are in the ‘Affirmative’ and point No.3 is in the ‘Negative’ for the following reasons:- 21. The case of the plaintiff - Bank is that defendant No.1 borrowed a cash credit loan on 25.01.1999 to an extent of Rs.9,00,000/- from the plaintiff - Bank for the purpose of business agreeing to repay the same with 15 RFA No.2190 of 2007 interest at the rate of 15.5% p.a. by executing documents and defendant Nos.2, 3 and 4 stood as sureties and guarantor. The defendants have mortgaged the suit schedule property in favour of the plaintiff - Bank by way of deposit of title deeds. The defendant No.1 vide revival letter dated 17.01.2002, acknowledged the debt under Section 18 of the Limitation Act, 1963 and had stated that she is liable to pay the entire outstanding amount before the time of three years expired from the date of amount borrowed i.e., on 25.01.1999. The suit was filed as the defendant No.1 has not honoured the acknowledgment said to have given by her to the Bank. The Bank instituted suit in O.S.No.20/2005, on 01.02.2005 for the following reliefs:- “a) Pass a judgment and decree in its favour against the defendant for recovery of a sum of is. 9,80,816.67 with court costs together with interest at 15.55% per annum compounded quarterly from the date of suit till realisation, b) That in default the property described in the schedule may be ordered to be sold and the amount appropriated towards satisfaction of the suit claim with liberty to apply for a personal decree in case of default against the defendants, 16 RFA No.2190 of 2007 c) Pass such other reliefs as the Hon'ble court may deem fit to grant in the interest of justice.” 22. The trial Court on the basis of the available record especially Ex.P.8 – the acknowledgment of debt under Section 18 of the Limitation Act, 1963 said to have been issued in writing by the defendant No.1 during the subsistence of the claim i.e., within three years acknowledging the debt as well as confirmation that are liable to pay the loan amount of Rs.9,00,000/- on 17.01.2002. However, the suit came to be filed on 01.02.2005 i.e., beyond three years from the date of acknowledgment of debt i.e., beyond the period of limitation even from the date of Ex.P.8. Having found that the suit is barred by limitation, the trial Court proceeded to answer other issue Nos.1 and 2 as redundant and issue No.3 in Negative. 23. The findings of the trial Court on issue Nos.1 to 4 and additional issue No.1 commenced from paragraph Nos.9 to 13 which we reproduce as under:- 9. Issue No.1&2: Since issue No.1 & are connected each other and they are decisive in the 17 RFA No.2190 of 2007 matter, I have taken up those issues, together for the discussion, so as to avoid the repetition. It is the specific case of the plaintiff that defendant No. 1 availed loan of Rs.9,00,000/- from the plaintiff-bank by agreeing to repay the same with the interest at the rate of 15.5% р.а. Defendant No. 2, 3 and husband of defendant No. 1 (B.Jayasimha who is cited as defendant No. 1 though he is dead) stood us sureties for the same. PWI Manager of the plaintiff bank has reiterated the contents of the plaint and therefore it is not necessary to reproduce the same, Admittedly though defendant No.2 has filed his written statement denying that he stood as surety and further denying that he is aware of the loan transaction, he has not cross-examined PW1. However we have to look into the matter as to whether the plaintiff bank has proved its case, on it's own. Ex.P1 and P2 agreement for hypothecation and guarantee bond, Ex. P3 terms and conditions letter, Ex. P1 on Demand Pronote, Ex.P5 take delivery letter. Ex.P1 guarantee letter clearly indicate that defendant No.1 has availed loan of Rs.9,00,000/- from the plaintiff-bank on 25.1.1999 and defendant No.2 and 3 and her husband have stood as surety for the same. I have perused Ex.P11 account extract produced by the plaintiff-bank. From Ex.P11, it cannot be made out as to what extent defendant No.1 has availed loan from the plaintiff bank. As per Ex.p11 defendant No.1 has 18 RFA No.2190 of 2007 deposited an amount of Rs.88,25,871.33 paise, with respect to the loan availed by her. It is un- understandable, as to how defendant No. 1 has deposited such a huge amount of Rs.88,25,871.33 in the plaintiff bank, towards the discharge of loan, though she has availed loan only to the extent of Rs.9,00,000/ from the plaintiff bank on 25.1.1999. It is not clear as to whether Ex.p11 account extract pertaining to the loan of Rs.9,00,000/- availed by defendant No.1 or the loan To put it in other words, the availed by any other persons. account extract Ex.p11 might be pertaining to some other loan availed by defendant No. 1 from the plaintiff-bank or it might be pertaining to the loan availed by some other persons from the plaintiff bank. Therefore in this case, in view of the deposit of huge amount of Rs.88,25,371.33 by defendant No.1, with respect to the loan and in view of the fact that there is a doubt extract as to whether Ex. P11 account, pertaining to defendant No.1 or to some other person, issue as to whether defendant No.1 availed loan of Rs.9,00,000/- on 25.1.1999 or whether she is in due of Rs.9,80,816.67, cannot be decided at all. Apart from this plaintiff-bank has filed suit against B.Jayasimha defendant No.1 who is already dead, Thus suit of the plaintiff-bank is not maintainable. Hence issues 1 and 2 have become redundant. Accordingly I answer issue Nos.1 and 2 that they have become redundant. 19 RFA No.2190 of 2007 11. Additional Issue No.1: Defendant No. 1 availed loan of Rs.9,00,000/- on 25.1.1999 as claimed by the plaintiff-bank Ex. P7 and P8-balance confirmation letter and acknowledgment of debt respectively reveal that defendant No.1 has acknowledged to repay the debt on 17.1.2002. That means defendant No.1 has executed Ex P7 and 8 on 17.1.2002 in favour of the plaintiff-bank by agreeing to pay the balance loan amount. Plaintiff-bank has filed this suit on 31.1.2005 after the lapse of 3 years and 13 days and therefore as per the provisions of the Limitation Act suit of the plaintiff- bank is barred by time. Therefore suit of the plaintiff -bank is not maintainable. Accordingly I answer additional No.1 in the affirmative. 12. Issue No.3: In view of the above discussion, Plaintiff-bank is not entitled to the relief as prayed for in this case. Accordingly I answer issue No.3 in the negative. 13. Issue No.4: -In the result I proceed to pass the following:- ORDER The suit of the plaintiff-bank is hereby dismissed. Under the circumstances of the case, no order as to costs. Draw Decree accordingly.” 20 RFA No.2190 of 2007 24. A perusal of the document produced by the Bank clearly shows that defendant Nos.2 to 4 are made liable to pay the amount on demand being the sureties and the guarantors for the loan. The document at Ex.P.9 said to be an equitable mortgage by deposit of title deed dated 25.01.1999. However, no documents stated in the said exhibit are produced to substantiate that there is an equitable mortgage created on deposit of title deed. The wordings used in the said document contemplates that the title deeds have been deposited with the Bank with an intention to create an equitable mortgage by way of collateral security for the amounts due to the Bank borrowed by defendant No.1 i.e., Jay-Tee Plasto Graphs under the credit facilities extended by the Bank i.e., cash credit limit of Rs.9,00,000/-. As could be seen from the documents produced, there is nothing forthcoming as to when demand was made against the guarantors for payment of the loan borrowed by defendant No.1. Though in the plaint, the plaintiff has stated that they have made several demands and issued notices, none of such demand 21 RFA No.2190 of 2007 letters are produced before the trial Court to substantiate their claim. 25. Before dwelling on point Nos.1 and 2 it would be safe to decide point No.3 on additional issue. The plaintiff - Bank has filed an application seeking to produce additional evidence i.e., letter dated 26.07.2002. The stand taken now is that, the letter dated 26.07.2002 could not be produced before the trial Court as the same was not traced. As per the affidavit in support of the application, the plaintiff - Bank had stated through one of its official by name Sri.H.N.Ashoka, Branch Manager of Chikkaballapur Branch, specifically at paragraph No.4 that, to answer the limitation aspect propounded in the judgment of the trial Court, after thorough search was made with reference to the correspondence made between Borrower and the Bank and other related documents they found letter dated 26.07.2002 addressed by defendant No.1 to the appellant – Bank categorically promising to repay interalia her dues to the Bank within 05.08.2002. This letter could not be produced as the same was not 22 RFA No.2190 of 2007 traced during the pendency of case before the trial Court was due to bonafide over-looking. The said letter brings the suit within the period of limitation. The appellant has produced a photo copy of the letter. However, there is nothing forthcoming in the affidavit in support of the application that what happened to the original letter dated 26.07.2002. This statement on oath by the Bank required disbelieved and rejected for the reason, the document which the Bank now sought to be produced was already available in the trial Court records. A photocopy of the said document was available in the record but the same was not marked. 26. Having perused the photocopy of the letter, the plaintiff – Bank now cannot be permitted to contend that the said letter was not available during the trial before the trial Court. Order 41 Rule 27 of CPC is very specific and can be exercised only in exceptional cases wherein, the party intends to produce additional evidence has to satisfy the requirements contemplated under Order 41 Rule 27 of CPC. For easy reference, Order 41 Rule 27 of CPC is reproduced as under:- 23 RFA No.2190 of 2007 “27. Production of additional evidence in Appellate Court.- (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if- (a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or 2[(aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or] (b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the Appellate Court may allow such evidence or document to be produced, or witness to be examined. (2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission.” 27. The Rule contemplates that the parties to an appeal shall not be permitted to produce additional evidence whether oral or documentary in the Appellate 24 RFA No.2190 of 2007 Court but subject to certain exceptions contemplated under clause (a), clause (aa) and clause (b). A Co- ordinate Bench of this Court in RFA No.96/2013 dated 31.03.2016 in the case of PUNNY AKAT PHILIP RAJU, SINCE DEAD BY HIS LRS VS. SRI.DINESH REDDY had an occasion to deal with production of additional evidence under Order 41 Rule 27 of CPC. The Bench framed point No.2 on production of additional issue and elaborately considered the same referring the judgments of the Hon'ble Apex Court, held that an application for additional evidence filed under Order 41 Rule 27 of CPC cannot be allowed as a matter of course, as allowing an application is an exception. Until and unless requirements of the said provisions are met, the Court has no jurisdiction to allow the application for additional evidence. The Bench has also clarified that, the inadvertence of the party or his inability to understand the legal issues involved or the wrong advice of a pleader or the negligence of a pleader or that of the party or that the party did not place reliance on the importance of a document, does not constitute a substantial cause within the meaning of the Rule to enable 25 RFA No.2190 of 2007 the Court to allow additional evidence. The finding of the Court is culminated at paragraph No.48, which we reproduce as under:- “48. In view of the aforesaid authoritative pronouncements of the Apex Court, the application filed under Order XLI Rule 27 r/w Section 151 of the Code of Civil Procedure, cannot be allowed as a matter of course as allowing an application is an exception. Until and unless the requirements of the said provisions are met, the Court has no jurisdiction to allow the application for additional evidence. Therefore, unless the conditions stipulated in the aforesaid provision exists, the additional evidence should not be admitted in appeal, as a party guilty of remissness in the Lower Court is not entitled to the indulgence of being allowed to give further evidence under this Rule. A party, who had ample opportunity to produce certain evidence in the Lower Court had failed to do so or elected not to do so, cannot be permitted to adduce additional evidence in appeal. The inadvertence of the party or his inability to understand the legal issues involved or the wrong advice of a pleader or the negligence of a pleader or that of the party or that the party did not place reliance on the importance of a document, does not constitute a substantial cause within the meaning of the Rule 26 RFA No.2190 of 2007 to enable the Court to allow additional evidence. As held by the Apex Court, the words "for any other substantial cause" has to be read with the word "requires" in the beginning of the sentence, so that it is only where, for any other substantial cause, the Appellate Court requires additional evidence, then the Appellate Court can allow such application.” 28. As could be seen from the averments made on oath in the affidavit filed in support of the application, the appellant – Bank has pleaded that the document was not available during the pendency of the suit and was found subsequent to the suit. As such, the same could not be produced. On the point of the limitation, as we have already noted supra, the photocopy which the Bank now sought to be produced has already been placed on record before the trial Court but the same was not marked. The very production of the document during the trial, falsifies the statement of the Bank. The appellant–Bank being Public Sector Bank should have been very careful before making a statement on oath. The application is filed without any application of mind. The Bank being Public Sector Bank and the money borrowed being the public 27 RFA No.2190 of 2007 money, we have gone through the document purported to be produced. The said document is dated 26.07.2002. There is nothing forthcoming as to why there are two acknowledgements one dated 17.01.2002 and another dated 26.07.2002. Even there is nothing mentioned in the subsequent acknowledgment regarding the acknowledgment dated 17.01.2002 so as to say that the limitation period is further extended from the date of the said document. Section 18 of Limitation Act, 1963 is very specific. It says about effect of acknowledgement in writing. The provision of Section 18 of the Limitation Act, 1963 is reproduced for easy reference:- “18. Effect of acknowledgment in writing.- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be 28 RFA No.2190 of 2007 given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation. For the purposes of this section,- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word "signed" means signed either personally or by an agent duly authorized in this behalf; and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.” 29. Section 18 of the Limitation Act, 1963 is very specific, in the opening words of sub-section (1), it states that "Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party", clearly stipulates that before the expiration of the period of 29 RFA No.2190 of 2007 limitation, the acknowledgment in writing be made by a party against whom the right is claimed. 30. Applying Section 18 of the Limitation Act, 1963 to Ex.P.8 – Revival letter, the document now sought to be produced does not fall under Section 18 of the Limitation Act, 1963 so as to further extend the time of limitation to file the suit, the reason being the loan was borrowed on 25.01.1999. The acknowledgment at Ex.P.8 is dated 17.01.2002 which was within three years acknowledged in writing by the defendant No.1 in favour of the appellant - Bank. However, the document now sought to be produced and already on record before the trial Court is dated 26.07.2002, there is no mention of the earlier acknowledgment dated 17.01.2002 so as to bring it the same within Section 18 of the Limitation Act. 31. In other words, the said Xerox copy of document now sought to be produced and already found in the record of trial Court clearly shows that the said document though said to have been issued by the defendant No.1 in writing, acknowledging the amount borrowed and also 30 RFA No.2190 of 2007 stating that the loan amount borrowed would be cleared within 05.08.2002 is beyond expiration of time to sue for recovery of money against the defendant No.1, as the amount was borrowed on 25.01.1999 and three years for filing suit expires on 24.01.2002. The document now sought to be produced is admittedly dated 26.07.2002 and in the absence of the earlier acknowledgment of debt dated 17.01.2002, the same is beyond period of limitation. As such, the same is hit by Section 18 of the Limitation Act and cannot be considered having effect of extending the time of limitation to file the suit for recovery. 32. Though there is no dispute on the principle of law for considering the application filed under Order-41, Rule-27 of CPC, but the judgments are not applicable on the facts of the present case, as in the Affidavit filed in support of the application, it is contended that the document purported to be produced as additional evidence was not traceable during the course of the trial, however, after a thorough search in the office subsequent to the judgment, it was found in the case papers which has got a bearing on the point of limitation. The copy of the 31 RFA No.2190 of 2007 document now purported to be produced as additional evidence already available in the trial court record but not marked since it was a photocopy. This clearly falsifies the stand of the appellant-bank that the said document was not within their reach and despite due diligence, the bank could not produce during the course of trial, in these circumstances, the judgments relied on by the appellant- bank are not applicable to the facts of the case. 33. In these circumstances, the application filed is not justified, but the same is filed with an oblique intention with a false affidavit is not befitting within provisions of Order 41 Rule 27 of CPC. Accordingly, we answer point No.3 in the Negative. Regarding Point Nos.1 and 2:- 34. Since the answers to these points are interlinked to one another, both are taken for consideration together. The defendant No.1 had borrowed a sum of Rs.9,00,000/- as cash credit loan from the Bank on the basis of the records is not disputed. The suit filed with a simple prayer for recovery of money and in default 32 RFA No.2190 of 2007 to pay the amount, be recovered by putting the property, shown in the schedule, on sale. The plaintiff - Bank has produced Ex.P.8, the acknowledgment said to have been issued by the defendant No.1 under Section 18 of Act of 1963 acknowledging the debt and liability to pay, thereby, extending the period of limitation to file the suit which would expire on 24.01.2002 for further three years from 17.01.2002. However, as could be seen from the records, the suit for recovery jointly against all the defendants filed by the Bank on 01.02.2005 i.e., 13 days beyond the period of limitation i.e., 3 years 13 days. There is nothing forthcoming in the plaint as to when a demand is made against other defendants i.e., defendant Nos.2 to 4 sureties and guarantors seeking to pay the amount on demand against the defendant No.1. In view of Ex.P.8, the Bank has got extended period of limitation to institute a suit. However, despite the same, the Bank instituted the suit subsequent to the expiry of the period of limitation i.e., after years 13 days of period of limitation. The stipulations contended in the documents whereby, the guarantors and the sureties are bound states that on 33 RFA No.2190 of 2007 demand they are required to pay the amounts in default by defendant No.1. Neither in the pleadings nor in the evidence either oral or documentary, nothing is forthcoming as to whether there is any demand against the defendants No.2 to 4 when there is a default committed by defendant No.1. Even according to the Bank on 17.01.2002 i.e., letter of acknowledgment under Section 18 of the Limitation Act, there is no demand by the Bank to bind over defendants No.2 to 4 to pay the amount in default by defendant No.1. 35. Hon'ble Apex Court in the case of Syndicate Bank vs. Channaveerappa Beleri and others reported in (2006) 11 SCC 506 has held at paragraph No.14 as under:- “14. We have to, however, enter a caveat here. When the demand is made by-the creditor on the guarantor, under a guarantee which requires a demand, as a condition precedent for the liability of the guarantor, such demand should be for payment of a sum which is legally due and recoverable from the principal debtor. If the debt had already become time-barred against the principal debtor, the question of creditor demanding payment thereafter, for the first time, against the guarantor would not 34 RFA No.2190 of 2007 arise. When the demand is made against the guarantor, if the claim is a live claim (that is, a claim which is not barred) against the principal debtor, limitation in respect of the guarantor will run from the date of such demand and refusal/non- compliance. Where guarantor becomes liable in pursuance of a demand validly made in time, the creditor can sue the guarantor within three years, even if the claim against the principal debtor gets subsequently time-barred. To clarify the above, the following illustration may be useful: Let us say that a creditor makes some advances to a borrower between 10-4-1991 and 1-6-1991 and the repayment thereof is guaranteed by the guarantor undertaking to pay on demand by the creditor, under a continuing guarantee dated 1-4-1991. Let us further say a demand is made by the creditor against the guarantor for payment on 1-3-1993. Though the limitation against the principal debtor may expire on 1-6-1994, as the demand was made on 1-3-1993 when the claim was "live" against the principal debtor, the limitation as against the guarantor would be 3 years from 1-3-1993. On the other hand, if the creditor does not make a demand at all against the guarantor till 1-6-1994 when the claims against the principal debtor get time-barred, any demand against the guarantor made thereafter say on 15-9-1994 would not be valid or enforceable. Be that as it may.” 35 RFA No.2190 of 2007 36. The Hon’ble Apex Court has observed that a demand is required to be made to bind a guarantor as a condition precedent for the liability of the guarantor for the payment of sum which is legally due and recoverable from the principal debtor. If the debt had already becomes stale/time barred against the principal debtor, the question of creditor demanding payment thereafter, for the first time against the guarantor would not arise. If the demand is made against the guarantor when the claim is alive against the principal borrower, the limitation in respect of guarantor will run from the date of such demand though the claim against the principal debtor subsequently becomes time barred. In other words, if the demand is made while it was alive is the starting point for limitation so far as guarantor is concerned. However, if the claim itself becomes time barred against the principal debtor and the demand having not been made against the guarantor before the claim becomes stale, the creditor looses his right against the guarantor. The same has been explained in Syndicate Bank supra by an illustration by the 36 RFA No.2190 of 2007 Hon'ble Apex Court in paragraph No.14 which we have already reproduced. 37. In the case on hand, there is nothing forthcoming as to when the demand has been made against the defendant Nos.2 to 4, whether it is made when the claim against the principal debtor is still alive or subsequently. As per the records, the claim is made by filing the suit subsequent to the expiry of 03 years 13 days from the date of acknowledgment at Ex.P.8 i.e., 17.01.2002. In other words, the suit is filed after 06 years 13 days including the time of 3 years extension. The trial Court having considered the document at Ex.P.8 had properly answered the additional issue No.1 against the Bank. We find no infirmities on the finding of the trial Court. 38. So far as the findings of the trial Court on the other issues are concerned, the trial Court after perusal of documents at Ex.P.11, the account extract produced by the plaintiff - Bank held that the plaintiff Bank has not made out as to what is the extent of liability of defendant 37 RFA No.2190 of 2007 No.1 i.e., loan availed from plaintiff – Bank. Ex.P.11 shows that defendant No.1 has deposited an amount of Rs.88,25,371.33 with respect to the loan availed by her. It is ununderstandable as to how the defendant No.1 has deposited a sum of Rs.88,25,371.33 towards discharge of loan, if she has availed loan to an extent of Rs.9,00,000/-. Nothing has been explained in the evidence as to what is the relevance of the said account extract to the loan borrowed by the defendant No.1. Having found these infirmities, the trial Court recording its finding that the suit of the plaintiff is not maintainable, as such, answered issue Nos.1 and 2 as Redundant and issue No.3 in the Negative and answering additional issue No.1 in the Affirmative and against the Bank proceeded to dismiss the suit. 39. Before departing, we place on record that, the Public Sector Banks, should be more vigilant and diligent in handling the money recovery suits as the amount involved is public money and they are responsible and answerable to the public, as any failure has got an repercussion on the economy of the nation. The present 38 RFA No.2190 of 2007 case is an example which shows the apathy on the part of the officials of the Bank in handling the matter. 40. The matter under appeal is prosecuted in a very cavalier manner which had casted severe financial setback in recovery of amount by default. It is for the Bank to take appropriate action against erring officials, to set an example in future while handling cases in respect of financial recoveries by the Bank. 41. We find no infirmities in the findings of the trial Court which warrants interference at the hands of this Court. The appeal sans merit. Accordingly, we pass the following:- ORDER i. The appeal filed calling in question the judgment and decree dated 16.07.2007 in O.S.No.20/2005 passed by the Civil Judge (Sr.Dn.) & JMFC, Chikkaballapur is dismissed with cost of Rs.25,000/- to be deposited by the Bank with the High Court Legal Services Authority within a period of four weeks, failing 39 RFA No.2190 of 2007 which, the Registry is directed to issue a certificate of recovery, as arrears of land revenue, the same be recovered and be deposited as ordered. ii. The application filed under Order 41 Rule 21 of CPC - I.A.No.1/2016 is dismissed. iii. The Bank is at liberty to recover the amount of cost from the erring officers, who are responsible for belated filing of suit and false affidavit. Sd/- (S.G. PANDIT) JUDGE Sd/- (T.M.NADAF) JUDGE MH CT: BRS