STATE BANK OF HYDERABAD versus THE JOINT FAMILY OF M/S. MUKUNDAS RAJA BHAGWAN DAS AND ORS.

Citation: [1995] 2 S.C.R. 947 · Decided: 22-03-1995 · Supreme Court of India · Bench: K. RAMASWAMY, S. SAGHIR AHMAD · Disposal: Appeal(s) allowed

Judgment (excerpt)

STATE BANK OF HYDERABAD 
v. 
THE JOINT FAMILY OF MIS. MUKUNDAS 
RAJA BHAGWAN DAS AND ORS. 
MARCH 22, 1995 
(K. RAMASWAMY ANDS. SAGHIR AHMAD, JJ.] 
A.P. Jagirdar Debt Settlement Act, 1952/Limitation Act, 1963: Sections 
A 
B 
3, 11, 22, 25, 30, 57/Section 14--Scaling down of debt-Time taken in tlte 
proceedings--Whether gets excluded under s.14 of the Limitation Act and the C 
suit filed was within the limitation period-Held: Yes. 
Respondents had executed a promissory note on 20.5.1953 for a sum 
of Rs. 37,000 in favour of the appellant-Bank with a letter to transfer the 
demand loan. Thereafter certain amounts were paid from time to time upto 
3.9.1953 in a sum of Rs. 37,000 in favour of the appellant with a letter to D 
transfer the demand loan. Even thereafter certain amounts were paid upto 
3.9.1959. 
In March 1960, Respondents made an application under Section 11 
of the A.P. Jagirdar Debt Settlement Act, 1952 for scaling down the debts. E 
The Debt Settlement Board issued notice to the appellant-Bank to submit 
the statement of account and the Bank submitted the same stating that a 
sum of Rs. 74,062.05 with interest at 9% was due from the Respondents. 
However, the Board held that it had no jurisdiction to entertain the claim 
for scaling down in view of the-Full Court Judgment of A.P. High Court in 
ft. Family of Mukund Das Raja Bhawan Dass & Sons etc. v. Strite Bank of F 
Hyderabad, (1963) 2 AWR 147. 
The appellant-Bank filed a suit for recovery of the amount due from 
the Respondents. The trial Court dismissed the suit on the ground that it 
was barred by limitation. The High Court confirmed it. Hence this appeal G 
by the Bank. 
· 
Allowing the appeal, this Court. 
HELD : 1. It is true that the benefit of s.14 of the Limitation Act 
would be extended only to the plaintiff who has instituted the suit in a H 
947 
.948 
SUPREME COURT REPORTS 
(1995] 2 S.C.R. 
A wrong form;. and had prosecuted the proceedings in good faith in that 
co.urt which ultimately found to have defect of jurisdiction or other cause 
of a like nature. The period during which such proceedings were 
prosecuted, would be excluded in computing limitation. The Scheme of the 
Act would indicate that all claims relating to a debt involving a Jagirdar 
B are to be considered and adjudicated upon by the authorities including the 
Board constituted under the Act. When a Jagirdar files ~n application for 
scaling down the debt. and the creditors file their claims, the position of 
the latter, namely, the creditors is that of the plaintiff, as their claim would 
be considered and appropriate orders for payment of the amount, though 
not necessarily the full amount due from the Jagirdar, would be paid. But 
C this does not change their status and for purpose of Section 14 of the 
Limitation Act, they would, notwithstanding that the proceedings were 
initiated under the Act on an application made by the Jagirdar would be 
that of a plaintiff in a civil suit. [952-E-F) 
2. When the Jagirdar himself made an application under s.11 
D together with an application under s.30 read with s.22 of the A.P. Jagirdar 
Debt Settlement Act, 1952 until the proceedings are determined the 
creditor bas no right to lay the suit by operation of s.25 of the Act. The 
necessary implication is that the jurisdiction of the civil court under s.9 
of the CPC stands excluded. Consequently, the appellant could lay the suit 
E in 1962 tho,ugb it was partly paid by the respondents. Since the application 
was held to be not maintainable by the Board on October 25, 1967, the suit 
was clearly within limitation when it was laid on February 10, 1970. The 
High Court, therefore, was not right in its conclusion that there should be 
a finding recorded by the Board that the respondent is not a debtor to get 
the benefit of s.57. That view does not help the respondents. In the light of 
F the scheme of the Act, the time ta)cen in the proceedings under the Ac't, 
gets excluded under s.14 of the Limitation Act. [952-G-H, 953-A) 
G 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 772 of 
1979. 
From the Judgment and Order dated 3.11.78 of the Andhra Pradesh 
"r 
High Court in C.C.CA No. 82 of 1974. 
C.Sitramiah, A Ranganadhan and AV. Rangam with him for the 
H Appellant. 
J 
. -+-
STATE BANK v. MUKANDAS R.BHAGWAN DAS 
949 
S. Markandeya, Ajay Singh, H.P. Sharma and Ms. C. Markandeya A 
for the Respondents. 
The following Order of the Court was delivered : 
This appeal by special leave is 

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