1997 Supreme(Del) 142

High Court Of Delhi
LARSEN AND TOUBRO LIMITED - Appellant
Versus
COMMERCIAL ELECTRIC WORKS - Respondent
Suit 1447 of 1981
Decided On : 02/04/1997

A balance sheet wherein the defendants itself had shown that particular amount is due to the plaintiff would constitute an acknowledgment of liability within the meaning of Section 18 of the Limitation Act, 1963.

Headnote:

LIMITATION ACT, 1963 - SECTION 18 - ACKNOWLEDGEMENT OF LIABILITY - BALANCE SHEET - SUIT FOR RECOVERY OF MONEY - GOODS SUPPLIED - ADMISSION OF LIABILITY - INTEREST - RATE OF INTEREST - COMMERCIAL TRANSACTIONS.

Fact of the Case:

Plaintiff, an incorporated company, filed a suit against the defendants, a partnership firm, for the recovery of Rs. 1,18,492.66 with interest @ 18% per annum. The defendants were acting as stockists of the plaintiff's switchgears and had a mutual open and current account. The plaintiff stopped supplying goods after 20.7.76. The defendants issued cheques, which were dishonored, and the amounts were debited to their account. The plaintiff raised two debit notes towards interest and debited the said amount to the first defendant's account. The defendants acknowledged the receipt of the statement of account sent by the plaintiff and admitted the dues to the extent of Rs. 1,17,768.33 as against the actual amount due of Rs. 1,90,054.56. The defendants made payments through cheques, which were adjusted in seriatum towards the purchases made earlier. The last payment was made on 1.8.80. The plaintiff issued a notice to the defendants calling upon them to pay Rs. 95,054.56 with interest @ 18% per annum until payment, but there was no response. The defendants filed a written statement repudiating the claim of the plaintiff and filed a counterclaim for Rs. 1,57,935.70.

Finding of the Court:

The court found that the plaintiff had proved its claim and that the defendants had admitted the supply of goods from the plaintiff. The court also found that the defendants had not produced any document to prove their case in the counterclaim. The court held that the suit was not barred by time as the last payment by cheque by the defendants was on 1.8.80, and the plaint was presented on 14.12.81. The court also held that the plaintiff was entitled to charge interest because the defendants without any justification denied the claim of the plaintiff.

Issues: 1. Whether the plaintiff is duly incorporated under the Indian Companies Act and the suit is instituted and the plaintiff's pleadings signed and verified by a duly authorized person? 2. Whether the plaintiff supplied goods relating to Bill No. 283560 dated 24.3.76 to the defendants? 3. Whether the plaintiff is entitled to charge interest? If so, at what rate and to what extent? 4. Whether a sum of Rs. 68,287.95 is due to the defendants from the plaintiff as alleged in Clauses (a) to (h) of para 27 of the written statement? 5. Whether the defendants are entitled to a sum of Rs. 20,000.00 from the plaintiff as alleged in para 28 of the written statement? 6. Whether the defendants are entitled to a commission of Rs. 60,000/- as alleged in para 29 of the written statement? 7. Whether the defendants are entitled to a sum of Rs. 7,988.00 as alleged in para 30 of the written statement? 8. Whether the defendants are entitled to a sum of Rs. l,652.00 as alleged in para 32 of the written statement? 9. Whether the defendants are entitled to the amount mentioned in pare 33 of the written statement? 10. What amount, if any, is the plaintiff entitled to recover from the defendants? 11. Relief.

Ratio Decidendi: The court held that the balance sheet wherein the defendants itself had shown that particular amount is due to the plaintiff would constitute an acknowledgment of liability within the meaning of Section 18 of the Limitation Act, 1963. The court also held that the plaintiff was entitled to charge interest because the defendants without any justification denied the claim of the plaintiff.

Final Decision: The court decreed that the defendants pay to the plaintiff a sum of Rs. 1,18,492.66 with interest @ 12% per annum from the date of suit till the date of realization and the costs of the suit. The court dismissed the counterclaim filed by the defendants with no costs.