M/S MONGIA REALTY AND BUILDWELL PRIVATE LIMITED versus MANIK SETHI

Citation: [2022] 1 S.C.R. 998 · Decided: 31-01-2022 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 1 S.C.R.
[2022] 1 S.C.R. 998
998
M/S MONGIA REALTY AND BUILDWELL PRIVATE LIMITED
v.
MANIK SETHI
(Civil Appeal No. 814 of 2022)
JANUARY 31, 2022
[DR DHANANJAYA Y CHANDRACHUD AND
SURYA KANT, JJ.]
Limitation Act, 1963 – Issue of Limitation – Preliminary issue
– Disputed question of facts – The case of the appellant was that
the respondent had requested appellant to grant a business loan
from time to time and the request was acceded – Respondent partly
discharged the liability, however, failed to pay outstanding amount
– The appellant instituted a suit for recovery against the respondent–
The respondent filed written statement – The respondent denied that
there were any loan transactions, and on the contrary, set up the
plea that the transactions between the parties pertain to the payment
of commission by the appellant to the respondent in connection with
real estate transactions – An application u/Or. 7 r.11 of the CPC
was also filed by the respondent or the rejection of the plaint on the
ground that the suit was barred by limitation – Pursuant to which,
the trial Court framed a preliminary issue on whether the suit was
barred by limitation – The trial Court held that the last payment was
made on 20.06.2013 by the appellant and since the suit was instituted
on 01.04.2017, three years nine months and ten days there after, it
is barred by limitation – High Court dismissed the appeal filed by
the appellant against the order passed by the trial court – On appeal,
held: The appellant has specifically set up a plea in the plaint that
the loans were to be repaid within one year from the date of the
payment of the last installment – The case of the appellant has to be
proved on the basis of evidence adduced in the suit – Such an issue
could not have been decided purely on the basis of oral arguments
urged on behalf of the contesting parties – The trial Judge had
heard the preliminary issue only on the basis of the arguments at
the Bar – There are two conflicting versions on the nature of the
business transactions between the parties – The issue of limitation
in the instant case would require evidence to be adduced – Since
the determination of the issue of limitation in this case is not a pure
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question of law, it cannot be decided as preliminary issue u/Or.XIV
r.2 – The issue of limitation which was framed by the trial Judge
may be decided, along with other issues at trial – Therefore, the
judgment of the trial Judge and the Single Judge of the High Court
are set aside – Code of Civil Procedure, 1908 – Or.XIV r.2.
Allowing the appeal, the Court
HELD: 1. The appellant has specifically set up a plea in the
plaint that the loans were to be repaid within one year from the
date of payment of the last installment. The case of the appellant
has to be proved on the basis of evidence adduced in the suit.
Such an issue could not have been decided purely on the basis of
oral arguments urged on behalf of the contesting parties. The
respondent has denied the existence of loan transactions and
has set up the plea that the payments made by the appellant were
on account of commission. There are two conflicting versions on
the nature of the business transactions between the parties, the
appellant alleging that it was a loan, while the respondent alleges
that it was in the nature of a commission for real estate services.
The issue as to whether the claim of the appellant is barred by
limitation cannot be isolated from the nature of the transactions
between the parties. In any event, whether the plea of the
appellant as set up in the plaint is proved would depend upon
evidence adduced at the trial. The course of action which was
followed by the trial Judge of directing the parties to address
arguments on the issue of limitation was irregular. The issue of
limitation in the present case would require evidence to be
adduced. Since the determination of the issue of limitation in this
case is not a pure question of law, it cannot be decided as
preliminary issue under Order XIV Rule 2 of the CPC. Hence,
this Court allow the appeal and set aside the judgment of the trial
Judge dated 16 August 2018 and of the Single Judge of the High
Court dated 4th September 2019. The issue of limitation which
has been framed by the learned trial Judge may be decided,
along with other issues at trial. [Paras 11, 12 & 15][1003-D-G;
1005-D-F]
Nusli Neville Wadia v. Ivory Properties (2020) 6 SCC
557: [201

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