The main legal point established in the judgment is that the nature of the transaction must fit the requirements of the applicable article of the Limitation Act, and subsequent payment must comply with the provisions of the Act to save a suit from being time-barred.

GOPAL RAO EKBOTE, J.

( 1 ) THIS is a petition under Section 12 of the Hyderabad Small Cause Court Act against the Judgment and decree of the Court of Small Causes, Hyderabad, giving on 18-9-1961. The respondent plaintiff instituted the present suit for the recovery of Rs. 890 alleging inter alia that the defendant was purchasing from time to time medicines from the plaintiffs shop for which an account was maintained by the plaintiff. The transactions started on 8-10-1955 and ended on 9-5-1957. The defendant paid Rs. 50 on 3-9-1957. The suit was instituted on 26-7-1960.

( 2 ) THE main defence raised by the defendant was that the suit is time-barred. I am not concerned at the moment with the other objection of the defendant.

( 3 ) THE Court of Small Causes rejecting the contention of the defendant in regard to limitation decreed the plaintiffs suit holding that In view of the nature of the transaction Art. 85 of the Limitation Act applies and that the suit is therefore filed within three years from the end of the year in which the last transaction took place.

( 4 ) IT is contended by the learned counsel for the petitioner that Article 85 is not applicable to the facts of this case. I find sufficient strength in this contention. It is now fairly settled that in order to apply Article 85 or the Limitation Act the nature of the transaction must be reciprocal. There should be possibility of both the parties being debtors to each other. It is not However, necessary that they should actually be debtors to each in the course of such transaction. In cases however where there is no possibility of both the parties becoming debtors to each other, in other words, if one party alone continues to be the debtor and the other creditor, obviously Art. So cannot apply. In this case it is not seriously disputed that there was any possibility of the plaintiff becoming the debtor to the defendant. The simple character of the transaction was that the plaintiffs medical shop was selling the medicines to the defendant on credit on various dates. This transaction, therefore, cannot by any stretch of imagination be brought under Article 85, as it is not an open, current and mutual account. The lower Court, therefore, has obviously erred in applying Article 85 and declaring on that account the suit was filed within the time.

( 5 ) CONTENTION of the learned counsel for the respondent however is that the subsequent payment brings forward the previous items and it is only from the last entry that the limitation should be calculated. Although I do not agree with this contention, even then the suit becomes time-barred. As stated earlier, the last entry is of 9/05/1957, and the suit was filed on 26-7-1960. There is no substance in the contention that because Rs. 50 were paid on 3-9-1957 the suit would be within time as it is Instituted within three years from that date. In order to save limitation by such a payment the payment ought to be made in writing or under signature of the defendant. That it is not so made is not disputed. It is conceded and in my view fairly that Section 19 or Section 20 of the Limitation Act cannot be attracted on account of this payment. When once that is conceded I fail to see how merely because Rs. 50 were paid on 3-9-1957 the suit would be within time.

( 6 ) IT was lastly contended by the learned counsel for the respondent that this Court should not interfere under Section 12 of the Act because there has been no injustice done in this case. Section 3 of the Limitation Act places a statutory obligation on the Courts to examine whether the suit Is filed within limitation or not, and if the suit is filed beyond limitation, what must follow is that it must be dismissed. When the suit is clearly time-barred and when it cannot be decreed in the teeth of Section 3 of the Limitation Act, I fail to see how the lower Courts judgment which is obviously wrong, can be sustained. The moment Article 85 becomes inapplicable to the facts of the cas

Click Here to Read the rest of this document