The right to sue in recovery cases accrues at the time of default, not upon declaration as a defaulter, as per Article 113 of the Limitation Act.

JUDGMENT :

Advait M. Sethna, J.

1. This Commercial First Appeal is filed against the judgment dated 8 March 2022 passed by the City Civil Court, Dindoshi in Commercial Suit No.701 of 2020 (“Impugned Judgment” for short).

2. Considering the order passed by a co-ordinate Bench of this Court dated 13 November 2024 this appeal ought to be taken up finally at the stage of admission.

3. Admit. We have heard the learned counsel for the parties.

4. The appellant (plaintiff) is the Multi Commodity Exchange of India Limited (“MCX” for short) a company dealing with facility of online trading, clearing and settlement of commodity derivatives. The respondent no.1 (defendant no.1) is a registered member of the appellant-exchange who regularly used the online platform provided by the appellant-exchange for the purpose of trading and the remaining defendants are the Directors of respondent no.1.

5. By way of the present appeal, the appellant (plaintiff) has assailed the impugned judgment and order passed by the Commercial Court by which the commercial suit filed by the appellant (plaintiff) for recovery of a sum of Rs.12,12,980/- with further interest @ 18% p.a. from the date of filing of the suit, till the realization of the entire amount was dismissed, on the ground that it was filed beyond the period of three years under the provisions of the Limitation Act, 1963 (“Limitation Act” for short) and hence, was time-barred.

6. The issues framed by the trial Court for determination read thus :-

7. With the assistance of the learned counsel for the parties, we have perused the record.

8. Mr. Siddhesh Bhole, learned counsel for the appellant (plaintiff), at the very outset would refer to the plaint dated 7 October 2022 to contend that under the terms of membership, respondent no. 1 (defendant no.1) was required to pay annual fees, VSAT charges, User ID charges, penalty (as applicable), submit annual report as well as annual compliance report to maintain margins and fulfill other documents. However, with the passage of time, the respondents (defendants) began to default on such payments and submission of reports. Such defaults were in the nature of outstanding amounts of annual charges/dues/fees, payable to the appellant (plaintiff) by the respondents (defendants) towards membership fees and other charges pertaining to the year 2008-2009 to 2015-2016.

9. As averred in the plaint, the appellant (plaintiff) by its letter dated 7 April 2017, highlighted the default committed by the respondents (defendants) and called upon the respondents (defendants) to make payment and rectify such defaults. The appellant (plaintiff), however, did not receive any response from the respondents (defendants), because of which, the appellant (plaintiff) sent another letter dated 31 May 2017 calling upon the respondents (defendants) to make the payments. However, there was yet no response, pursuant to which the appellant (plaintiff) once again addressed another letter to the respondents (defendants) on 16 November 2017.

10. Mr. Bhole, referring to the plaint would point out that as the respondents (defendants) failed to respond to the above communication, the appellant (plaintiff), issued a show cause notice to the respondents (defendants) on 2 January 2018, to the effect that if the respondents (defendants) failed to reply/respond such show cause notice, respondents (defendants) would be declared as a ‘Defaulter’. There was no response to such show cause notice from the respondents (defendants). In view thereof, another notice dated 22 February 2018 was sent to the respondents (defendants) by the appellant (plaintiff), calling upon the respondents (defendants) to appear for a personal hearing. However, the respondents (defendants) did not attend