Limitation period for independent friendly loan transactions applies individually to each transfer absent a composite agreement.

The Plaintiff (Respondent) filed a suit for recovery of ₹4,38,100, alleging she advanced a friendly loan totaling ₹5,88,100 to the Defendant (Appellant) between 2016 and 2017

The Defendant had repaid ₹1,50,000 in October 2020 but failed to pay the balance

The Defendant contested the suit, claiming the transfers were company funds for business expenses and filed a counter-claim for ₹1,50,000, asserting that his 2020 payment was actually a loan to the Plaintiff

The Trial Court decreed the Plaintiff’s suit for ₹4,38,100 and dismissed the counter-claim

The Appellant challenged this on grounds of limitation and lack of a composite loan agreement

1. Whether the Plaintiff is entitled to recovery of the suit amount and interest

2. Whether the Defendant's counter-claim for ₹1,50,000 is sustainable

3. Whether a substantial portion of the Plaintiff's claim was barred by the Law of Limitation

The court applied the Limitation Act, 1963, specifically the three-year period for recovery of money, and Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908, regarding appeals from original decrees

Supreme Court’s directions in Suo Motu Writ Petition (Civil) No. 3 of 2020, which excluded the period from 15.03.2020 to 28.02.2022 from limitation calculations due to the COVID-19 pandemic

Evidentiary standards regarding "admission" under the Indian Evidence Act, 1872, noting that admitted facts need not be strictly proved by summoning bank witnesses

The Court observed that while the Defendant admitted receiving ₹4,88,100, his explanation—that an accounts employee (Plaintiff) routed company funds through her personal account to a Director (Defendant)—lacked "common sense" and was unsupported by evidence

Regarding limitation, the Court rejected the Plaintiff's argument that all transfers formed one "composite loan". It determined that the initial ₹1,00,000 (02.06.2016) and subsequent February 2017 transfers (₹40,000) were independent transactions.

Since the suit was filed on 24.09.2021, these amounts were barred by the three-year limitation period as they expired before the COVID-19 extension took effect. However, the remaining amounts transferred from 03.04.2017 onwards were saved by the Supreme Court’s Suo Motu extension order.

The Defendant's counter-claim was dismissed as "uninspiring," given he claimed to lend money to a person who had already transferred significantly larger sums to him

The final decretal amount was reduced from ₹4,38,100 to ₹2,98,100, maintaining the interest rate at 5% per annum. The dismissal of the Defendant’s counter-claim was upheld.