The main legal point established in the judgment is the interpretation and application of the provisions of the Limitation Act, 1963, specifically Article 1 and Article 14, in the context of recovery of money on a non-mutual account between the buyer and seller.

PRADEEP NANDRAJOG, J.

1. The above captioned appeal arises out of a judgment and decree dated 29.08.2001 passed by the learned Single Judge whereunder the suit for recovery in sum of Rs.26,30,000/- filed by respondent M/s. Taneja Skin Company (P) Ltd. has been decreed against the appellant M/s. Bharat Skins Corporation.

2. Since arguments in the appeal were restricted to only whether the suit which was filed on 02.09.1985 was barred by limitation or not, we propose to note only such facts as would be relevant on the subject.

3. Claim in the suit was that commencing with the first supply made on 11.08.1978, hides were sold under 56 bills by the plaintiff to the defendant and for which a current, open and mutual account was maintained by the respondent in the name of the appellant and as and when goods were supplied, a bill was raised for the value of the goods supplied and correspondingly a debit entry was made in the account of the appellant and as and when payment was received the same was credited by making a credit entry in the account. Last supply being effected on 03.09.1982, on the balance struck Rs.19,42,982.26 was due and payable and that after legal notice was served Rs.7,000/- were received and after giving credit thereof Rs.19,35,982.26 remained outstanding.

4. In the written statement, relevant for the issue of limitation, was the plea taken that goods being supplied on credit, limitation would run for each supply and that the account between the parties was not a mutual account. Last supply being on 03.09.1982 as alleged in the plaint, it was pleaded that the suit would be barred by limitation qua all preceding bills, a plea which we note has not been urged in so many words, but is evidenced from an intelligent reading of the written statement.

5. The statement of account Ex.PW-1/59 to Ex.PW-1/70 would reveal that the bills Ex.PW-1/3 to Ex.PW-1/58 have been reflected in the said statement of account and a corresponding debit entry is made in the statement of account and as and when payments were received, a credit entry has been made.

6. Unfortunately, the learned Single Judge has not discussed, though he has noted the law as to when would an account be a current, open and mutual account, whether the instant account was of said category and we do not find that the learned Single Judge has expressly stated that for purposes of limitation, Article 1 of the Schedule to the Limitation Act 1963 would apply, but it is apparent from the reasoning of the learned Single Judge that he had applied Article 1 of the Schedule to the Limitation Act, 1963 while determining issue No.2, which Article provides that in case of a suit filed for recovery of balance due on a mutual, open and current account, where there have been reciprocal demands between the parties, the limitation period begins to run from the close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account, to hold the present suit was filed by the respondent company within the prescribed limitation period.

7. The question which has arisen for consideration in the appeal is: Whether the learned Single Judge is correct in applying Article 1 of the Schedule to the Limitation Act, 1963 in the present case?

8. In England, the Limitation Act of 1623 barred certain actions at Common Law after the period prescribed for such actions had expired. Actions on accounts relating to trade between the merchant and merchant were, however, excluded from the operation of the Act and there was no limitation for such suits. Actions on accounts between persons other than merchants were governed by the Act. But in such cases, every new item and credit in the account given by one party to the other was regarded as an implied acknowledgment of the prior existing debt, sufficient to take the case out of the statute. In the decision reported as (1795) 101 ER 504 Catling v Skoulding it was observed as under:-

“Here are mu