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1965 Supreme(Pat) 108

PATNA HIGH COURT
H.Mahapatra and G.N.Prasad JJ.
Bibhuti Bhusan Bose
Versus
National Coal Trading Co.
Appeal from Original Decree No. 251 of 1960 ;
Decided On : OCTOBER 14, 1965

An acknowledgement of liability within the meaning of Sec.19 of the Limitation Act, 1908, can be inferred from an unconditional promise to pay the debt.

Headnote:

SALE OF GOODS - JURISDICTION - CAUSE OF ACTION - MISJOINDER - LIMITATION - ACKNOWLEDGEMENT - INTEREST - Dhanbad Court has jurisdiction to try the suit as the cause of action arose within its jurisdiction. No misjoinder of causes of action as the liability for the dues of the plaintiff up to December 1953 was the personal liability of the defendant, whereas the liability for the dues for the subsequent period was the joint liability of the defendant and Munilal Jha. The suit is not barred by limitation as the letter written by the defendant to the plaintiff in reply to its notice of demand constituted an acknowledgement of liability within the meaning of Sec.19 of the Limitation Act, 1908. The plaintiff is entitled to interest at a reasonable rate on the amount of the price under Sec. 61 (2) of the Sale of Goods Act.

Fact of the Case:

The plaintiff, a registered firm, instituted a suit against the defendant, a coal merchant, for recovery of a sum of Rs. 16,500. The plaintiff alleged that the defendant had transanctions with the plaintiff since July 1950 for the purchase of coal through the plaintiffs agency. It was agreed that the price of all coal supplied by the plaintiff to the defendant would be paid to the plaintiff at Katras on presentation of bills and that in case of non-payment, the plaintiff would be entitled to charge interest at the rate of 12 per cent per annum. The defendant admitted that he had transactions with the plaintiff in his individual capacity up to December 1953, but he alleged that with effect from January 1954, the transactions took place between the plaintiff and a firm established on the 19th January 1954 under the name and style of the defendant, namely, Bibhuti Bhusan Bose, Sealdah Railway Siding, Wood Gola No. 7.

Finding of the Court:

The court held that the Dhanbad Court had jurisdiction to try the suit as the cause of action arose within its jurisdiction. The court further held that there was no misjoinder of causes of action as the liability for the dues of the plaintiff up to December 1953 was the personal liability of the defendant, whereas the liability for the dues for the subsequent period was the joint liability of the defendant and Munilal Jha. The court also held that the suit was not barred by limitation as the letter written by the defendant to the plaintiff in reply to its notice of demand constituted an acknowledgement of liability within the meaning of Sec.19 of the Limitation Act, 1908. Finally, the court held that the plaintiff was entitled to interest at a reasonable rate on the amount of the price under Sec. 61 (2) of the Sale of Goods Act.

Issues: 1. Whether the Dhanbad Court had jurisdiction to try the suit? 2. Whether there was misjoinder of causes of action? 3. Whether the suit was barred by limitation? 4. Whether the plaintiff was entitled to interest?

Ratio Decidendi: 1. The cause of action arose within the jurisdiction of the Dhanbad Court, since, the deliveries took place when the consignments in question were booked by rail for transmission to the defendant. 2. There was no misjoinder of causes of action as the liability for the dues of the plaintiff up to December 1953 was the personal liability of the defendant, whereas the liability for the dues for the subsequent period was the joint liability of the defendant and Munilal Jha. 3. The suit was not barred by limitation as the letter written by the defendant to the plaintiff in reply to its notice of demand constituted an acknowledgement of liability within the meaning of Sec.19 of the Limitation Act, 1908. 4. The plaintiff was entitled to interest at a reasonable rate on the amount of the price under Sec. 61 (2) of the Sale of Goods Act.

Final Decision: The appeal was dismissed with costs.

Judgment

G.N.Prasad, J.

1. This is an appeal by the defendant. The plaintiff a registered firm carrying on business at Katrasgarh, in title district of Dhanbad, instituted the suit for recovery of a sum of Rs. 16,500 from the defendant, as per account given in Schedule A of the plaint.

2. The case of the plaintiff is that the defendant a coal merchant at Calcutta, had transanctions with the plaintiff since July 1950 for the purchase of coal through the plaintiffs agency. It was agreed that the price of all coal supplied by the plaintiff to the defendant would be paid to the plaintiff at Katras on presentation of bills and that in case of non-payment, the plaintiff would be entitled to charge interest at the rate of 12 per cent per annum. In pursuance of the above agreement, the plaintiff supplied coal to the defendant during the period 15th July 1950 to 26th June 1954 and also regularly submitted bills for all such despatches which were duly received by the defendant. The defendant used to make payments from time to time, either in cash or by cheque. The last payment was made by cheque on the 22nd January 1955. All supplies made to the defendant and all payments received from him were duly entered in the plaintiffs books maintained in the regular course of business. A sum of Rs. 15,365-6-3 was outstanding against the defendant, but it was not paid in spite of demand and pleaders notice. Hence the plaintiff instituted the suit on the 10th May 1957, claiming interest at the rate of 6 per cent per annum.

3. The defendant set up various pleas in defence. It was urged by him that the Dhanbad Court where the suit had been instituted had no jurisdiction to try the suit, inasmuch as no part of the cause of action arose within the jurisdiction of that Court. According to the defendant, the contract between the parties was entered into at Calcutta through Munilal Jha, who was admittedly one of the partners of the plaintiff firm. There was no agreement to pay the price at Katras and all payments had to be made at Calcutta on presentation of the relative bills and railway receipts. The defendant admitted that he had transactions with the plaintiff in his individual capacity up to December 1953, but he alleged that with effect from January 1954," the transactions took place between the plaintiff and a firm established on the 19th January 1954 under the name and style of the defendant, namely, Bibhuti Bhusan Bose, Sealdah Railway Siding, Wood Gola No. 7. There were two partners of this firm, namely, the defendant and Munilal Jha, who was also one of the partners of the plaintiff firm. The entire business of the defendants firm aforesaid was in charge of Munilal Jha and it was his responsibility to make payments for the coal supplied by the plaintiff. The partnership between the defendant and Munilal Jha was dissolved on the 9th August 1954 and the entire stock of coal belonging to the said firm, which was valued at Rs. 40,000, was taken over by Munilal Jha. Upon these allegations it was pleaded that the present suit was bad for mis-joinder of causes of action as also for non-joinder of Munilal Jha. The further defence put forward was that the account produced by the plaintiff was not correct and that, in any event, a substantial part of the plaintiffs claim was barred by limitation. The defendant also challenged the plaintiffs claim for interest.

4. The trial Court overruled all these defence pleas, except the plea as to interest, and decreed the plaintiffs claim for the principal amount of Rs. 15,365-6-3. As to the claim for interest, the trial Court held that there was no agreement for payment of interest, but it further held that the plaintiff was entitled to interest with effect from 23rd September 1954, which was the date on which the plaintiff had served a notice of demand (Ex. 2) upon the defendant. The suit having been decreed as aforesaid, the defendant has preferred, this appeal.,

5. The first question which has been agitated befor















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