RFA NO. 338 OF 2015 1 2025:KER:29430 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A. BADHARUDEEN WEDNESDAY, THE 2ND DAY OF APRIL 2025 / 12TH CHAITHRA, 1947 RFA NO. 338 OF 2015 AGAINST THE JUDGMENT DATED 30.10.2014 IN OS NO.236 OF 2012 OF SUB COURT, MAVELIKKARA APPELLANT/PLAINTIFF: CANARA BANK BRANCH OFFICE, KAYAMKULAM, KAYAMKULAM.P.O. BY ADV SRI.A.SHAFEEK (KAYAMKULAM) RESPONDENTS/DEFFENDANTS: 1 SREEKUMARI K W/O.ANILKUMAR S, KOLLAT THEKKETHIL, KANNAMPALLY BHAGAM,. KAYAMKULAM.P.O. 690 502. 2 MAJEEDKUTTY S/O.ASANARUKUNJU, CHALAYIL VEEDU, KANNAMPALLY BHAGOM, KAYAMKULAM.P.O. 690 502. THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 02.04.2025, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: RFA NO. 338 OF 2015 2 2025:KER:29430 C R A. BADHARUDEEN, J ============================ R.F.A. No. 338 of 2015 ============================== Dated 02nd day of April, 2025 JUDGMENT This regular Ξrst appeal has been Ξled under Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908. 2. The plaintiΛ in O.S. No.236 of 2012, on the Ξles of the Sub-Court Mavelikkara, has preferred this appeal, arraying the defendants as the respondents herein, while challenging the decree and judgment dated 30.10.2014 therein. 3. Heard in detail. Perused the verdict under challenge as well as the records of the trial court. RFA NO. 338 OF 2015 3 2025:KER:29430 4. For eΛective and easy discussion, the parties in this appeal will be referred to as ‘plaintiΛ’ and ‘defendants’ hereafter. Short facts:- 5. The plaintiΛ is a Nationalised bank constituted and functioning under the Banking Companies (Acquisition and Transfer of Undertaking) Act 1970 with its head oΜce at Bangalore, having branches at several places, including one in Kayamkulam. The Manager of Kayamkulam branch Sri. Hari. N, who was duly authorized to represent the plaintiΛ to sign and verify the plaint for and on behalf of the plaintiΛ, Ξled the suit. According to the plaintiΛ, the 1st defendant availed a loan of Rs.2 lakh from the plaintiΛ on 23.06.2005 to improve her business. The 2nd defendant stood as co-obligant for the loan RFA NO. 338 OF 2015 4 2025:KER:29430 transaction. On the date of availing the loan the 1st defendant executed an agreement - cum - deed of hypothecation in favour of the plaintiΛ bank. Similarly, the 2nd defendant executed and delivered a covenant of co-obligation in favour of the plaintiΛ bank. The 1st defendant had undertaken to repay the loan amount in 35 instalments @ Rs.6,610/- starting from 23.7.2005, but she could not repay the same within the stipulated time. On 24.09.2007, she admitted the liability and executed an acknowledgement of debt, and again on 24.07.2010, she executed another acknowledgement of debt in favour of the plaintiΛ bank. The 1st defendant failed to repay the amount as agreed, and the plaintiΛ sent notice to the defendants to repay the entire amount due to the bank. Even after notice, the defendants did not repay RFA NO. 338 OF 2015 5 2025:KER:29430 the loan amount. As per the statement of accounts pertaining to the loan transaction, an amount of Rs.2,14,572/- together with future interest @ 15.25% was claimed by the plaintiΛ. 6. Defendants Ξled written statement raising contentions as follows:- 7. The Suit is not maintainable and is barred by limitation. The defendants signed in blank printed forms. No collateral security was executed by the 2nd defendant as alleged. Defendants had no transaction with the plaintiΛ. The signatures of the defendants were obtained by the organization of Vyapari Vyavasayi Ekopana Samithi. Plea of non-joinder was raised contending that Vyapari Vyavasayi Ekopana Samithi not arrayed as a party in the suit. The documents relied on by the plaintiΛ RFA NO. 338 OF 2015 6 2025:KER:29430 were signed at the time of availing the loan in 2005. The statement of accounts was disputed. The interest claimed also alleged as exorbitant. Thus, the defendants prayed for dismissal of the suit with their cost. 8. On scrutiny of the pleadings as above, the trial court raised necessary issues and tried the case. PWs 1 and 2 were examined, Exts. A1 to A8 and X1 are marked on the side of the plaintiΛ. No evidence let in by the defendants. 9. On appreciation of evidence, the trial court dismissed the suit, holding that the execution of Exts.A3 and A4 acknowledgements of debt and security dated 24.09.2007 and 24.07.2010, respectively, were not proved by the plaintiΛ. Accordingly, it was found that the suit, Ξled on 19.06.2012 in RFA NO. 338 OF 2015 7 2025:KER:29430 relation to a loan which was availed on 23.06.2005, is barred by limitation. Holding so, the suit itself was dismissed. 10. The learned counsel for the plaintiΛ, while assailing the trial court verdict, submitted that, even though the loan was availed on 23.06.2005, the debt was acknowledged by the 1st defendant as per Ext.A3 as on 24.09.2007 before expiry of the period of limitation. Thereafter, the debt was again acknowledged on 24.07.2010 as per Ext. A4 within the period of limitation. In such view of the matter, the suit has been Ξled within the period of limitation, and the trial court went wrong in non-suiting the plaintiΛ on Ξnding limitation. He also submitted that in order to prove Exts.A3 and A4 documents, the present manager of the Bank got examined as PW1, and he tendered evidence supporting RFA NO. 338 OF 2015 8 2025:KER:29430 execution of Exts.A1 to A4 documents as well as Ext.A5 to A8 documents. Therefore, the trial court went wrong in Ξnding that Exts.A3 and A4 acknowledgments of debt and security were not proved by the plaintiΛ and also dismissing the suit as a sequel thereof. 11. Addressing the contentions, the points that arise for consideration are as follows:- 1. Whether the Ξnding of the trial court that the suit is barred by limitation is legally correct? 2. Whether the plaintiΛ discharged the burden of proving Exts.A3 and A4 acknowledgments of debt and security, as per law?" RFA NO. 338 OF 2015 9 2025:KER:29430 3. What is the mode of proof of documents in the custody of a bank, where the provisions of the Bankers Book Evidence Act, 1891 would apply? 4. What is meant by acknowledgment in writing, embodied in Section 18 of the Limitation Act? 5. Whether the decree and judgment of the trial court would require interference? 6. Reliefs and costs? Point Nos.1, 3 & 4 :- 12. Here, the case of the plaintiΛ is that the 1st defendant borrowed an amount of Rs.2 lakh from the plaintiΛ bank on 23.06.2005, and the 2nd defendant stood as a co-obligant for the said loan transaction. In order to prove availing of loan, Exts. A1 RFA NO. 338 OF 2015 10 2025:KER:29430 to A4, the agreement-cum-deed of hypothecation dated 08.04.2005, Guarantee agreement dated 23.06.2005, acknowledgements of debt and security dated 24.09.2007, and 24.07.2010 were tendered in evidence. 13. In order to show the balance as on the date of Ξling of suit, coming to the tune of Rs.2,27,084/-, PW2 was examined, and Ext.X1, the statement of accounts, was tendered in evidence. It is true that, if there is no acknowledgment of debt as canvassed by the plaintiΛ relying on Exts.A3 and A4 dated 24.09.2007 and 24.07.2010, the suit is barred by limitation. However, Section 18 of the Limitation Act deals with the eΛect of acknowledgment in writing. It has been provided that where, before the expiration of the prescribed period for a suit or application in respect of any RFA NO. 338 OF 2015 11 2025:KER:29430 property or right, an acknowledgement 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 acknowledgement was so signed. Thus, the law is emphatically clear on the point that an acknowledgment of liability has been made in writing signed by the party before expiry of the period of limitation, a fresh period of limitation shall commence from the date of signing the acknowledgment in writing by operation of Section 18 of the Limitation Act. 14. In the instant case, as per Ext.A3, the debt was acknowledged on 24.09.2007 before expiry of the period of initial RFA NO. 338 OF 2015 12 2025:KER:29430 limitation. Again, before the expiry of the extended period on the strength of Ext.A3 acknowledgment of debt and security, availing of the loan and the debt were acknowledged as per Ext.A4 acknowledgment of debt and security. 15. In this connection, it is relevant to address a pertinent question as to how documents in the custody of bank, where the Bankers Book Evidence Act would apply are to be proved? In order to prove documents in the custody of a bank, a certiΞed copy of any entry in the bankers book, along with a certiΞcate by the Branch Manager/principal accountant and the person in charge of the resource, would give evidence and the same is admissible. Section 4 of the Bankers Book Evidence Act provides the mode of proof of entries in bankers' books. It has been RFA NO. 338 OF 2015 13 2025:KER:29430 provided that subject to the provisions of this Act, a certiΞed copy of any entry in a bankers’ book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but no further or otherwise. The normal way of proof of acknowledgement of debt is by producing the same before the court, through an authorized oΜcer. An acknowledgement of debt need not be express, but it may be by necessary implication. Every acknowledgement aΛords a new proof of the existence of debt. Thus, in cases where documents of the bank are produced by an authorized oΜcer, the same would attach credibility unless RFA NO. 338 OF 2015 14 2025:KER:29430 the contrary is proved. Here, the case put up by the defendants is inconsistent. At one stage, they denied availing of loan and the execution of the documents in connection with the said transaction. Another contention is that they put signatures in papers produced by the Vyapari Vyavasayi Ekopana Samithi, and they were Ξlled by the bank oΜcials. At the same time, another contention is that the documents produced along with the suit were signed at the time of availing the loan. During cross-examination of PW1, even the issuance of registered notice also was denied by the learned counsel for the defendants despite the fact that legal notice as per Ext.A5 was returned with endorsement “unclaimed” on 18.02.2012. When PW1, the oΜciating manager of the bank, produces documents marked as RFA NO. 338 OF 2015 15 2025:KER:29430 Exts.A1 to A4 including the agreement for the loan, the guarantee agreement, and the acknowledgment of debt and security executed by the defendants, where the signatures therein are admitted by the defendants, the evidence of PW1 alone is suΜcient to prove the case of the plaintiΛ. That apart, PW2 also given evidence supporting the balance as on the date of the suit by producing Ext.X1. In such a view of the matter, the Ξnding of the trial court that Exts.A3 and A4 are not proved and therefore suit is barred by limitation is an erroneous Ξnding; and the same is set aside, and it is held that the suit has been Ξled within the period of limitation. RFA NO. 338 OF 2015 16 2025:KER:29430 Point Nos 2, 4 & 5- 16. As already discussed, in this matter, as per Exts.A1 to A8 and Ext.X1, coupled with the evidence of PWs 1 and 2, it is proved that, the 1st defendant availed loan of Rs.2 lakh on 23.06.2005 and later acknowledged the same as per Exts.A3 and A4. As per Ext.X1 the suit amount of Rs.2,27,084/- along with interest @ 15.25% per annum is due to the plaintiΛ. Therefore, there is no reason to disallow realisation of the said sum claimed by the plaintiΛ, in a case where, availing of loan and failure of the defendants to discharge the same are proved substantially. In view of the matter, the trial court went wrong in non suiting the plaintiΛ on Ξnding limitation and without decreeing the suit. Therefore, the verdict under challenge would require interference. RFA NO. 338 OF 2015 17 2025:KER:29430 17. In the result, this regular Ξrst appeal stands allowed after setting aside the decree and judgment of the trial court. Consequently, the suit is decreed as under:- (i) Defendants 1 and 2 jointly and severally do pay an amount of Rs.2,27,084/- with interest @ 15.25% to the plaintiΛ (being a commercial transaction) from the date of the suit till realisation forthwith, failing which the plaintiΛ is allowed to realise the same from the defendants personally and from all their assets. Further, the plaintiΛ is allowed to realise the entire cost throughout the proceedings from defendants 1 and 2. Sd/- A. BADHARUDEEN JUDGE RMV