Applicability of provisions of limitation act on agreement governing financial assistance to neighbo

KAMAL KUMAR (Querist) 29 August 2011 This query is : Resolved
Dear Sir,

I live at Ghaziabad. My next door house belonged to one Mr Goel and, upon his demise, was in the possession of two of his 4 sons. In the year 2005,the elder son requested me to extend Financial Assistance of about Rs 12.33 lacs to him to enable him to purchase his younger brother's share in the house, so that he becomes the sole owner of the house.I extended the assistance in May 2005 by cheques and he got the house registered in his name. The payment was made under terms of an Agreement, executed by me and him on 10.05.2005, creating various financial & other obligations on the part of the loanee.

For about 3years, the loanee kept me in good humour, kept on assuring me that the money due as per terms of the agreement, would be paid shortly and maintained good relations.After expiry of 3 years his stance changed.He became totally un-responsive/incommunicado and even mis-behaved with me.

He has been violating various provisions of the Agreement. In response to my first written notice he conceded that he had taken the money but said that it was only a friendly deal and I had subsequently got the Agreement signed by fraud etc, which he had signed in good faith without reading the contents thereof. He has not responded to my subsequent letters, including the Legal Notice.

A copy of the Legal Notice sentto him, which very clearly brings out all major relevant provisions of the Agreement and other facts of the case, is attached herewith.

As filing of a Civil Suit would attract a huge amount of money running into lacs of rupees, I have consulted several lawyers in order to have clarity asto whether the case is time-barred under provisions of Limitation Act.Their views are divergent.While all other lawyers have said that the case is not yet time barred as it is not a simple case of money being loaned, but is a case of a complicated agreement entered into by two persons for sharing various benefits including appreciation in value of the Property (in lieu of extension of financial assistance to facilitate purchase of the Property by the loanee)and repeated breaches of the Agreement by the loanee(04 nos), which have taken place in 2008, 2009, 2010 and 2011 respectively (less than 03 years back)and is as such covered by Clause 55 of Limitation Act.However, one of the lawyers is of the view that as the underlying transaction is of loaning of money,the Limitation Period kicks in upon expiry of 3 year period from the date of the Agreement, and the case is as such now time barred.

As I am contemplating to file a plaint shortly, I solicit opinion and advice of the legal luminairies through your forum as to i)Under which Clause of the Limitation Act my matter gets covered; ii) What course of Action I should adopt to ensure compliance with various provisions of the Agreement by the loanee; and iii) Can a Summary Suit under Order 37 can be filed in this case for quick closure of the matter, as the quantum of the amount to be recovered has been got worked out through a Government Approved Valuer, in terms of provisions of the Agreement.

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Raj Kumar Makkad (Expert) 30 August 2011
It is better to take services of some local lawyer and sit with him with entire relevant documents so that proper advice may be given.

Guest (Expert) 30 August 2011
I endorse the views of Shri Raj Kumar makkad ji, as without verifying the leaghalities including vidlity in compliance with the Limitation Act, any advice may get side tracked, which may not be in your own interest. So, better adhere to the advice of Shri Raj Kumar Makkad.