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2012 Supreme(Del) 2180
DELHI HIGH COURT
Valmiki J.Mehta, J.
Naraingarh Suger Mills Ltd. - Appellant
Versus
Krishna Malhotra, Tilak Raj Malhotra - Resopndent
RFA Nos. 144/2004 and 145/2004
Decided On : 12-03-2012
For the Appellant :Mr. O.P. Verma, Advocate.
For the Respondent:Mr. J.K. Chopra, Advocate.
The main legal point established in the judgment is the application of Section 19 of the Limitation Act, 1963 in the context of a recovery suit, and the interpretation of the concept of mutual, open, and current account.
Headnote:
Limitation - Recovery Suit - Code of Civil Procedure, 1908 - Section 96 - Limitation Act, 1963 - Section 19 - [RFA] - [Recovery Suit] - [CPC, 1908 - Section 96, Limitation Act, 1963 - Section 19] - The court discussed the applicability of Section 19 of the Limitation Act, 1963 and the concept of mutual, open, and current account in the context of a recovery suit. The court held that a fresh period of limitation commences once payment is made on account of the debt due, and the suit was within the limitation period. The court also emphasized that unless there are reciprocal demands or shifting balances, the account cannot be considered mutual, open, and current.
Fact of the Case:
The appellant/defendant purchased electrical and machinery goods from the respondent/plaintiff during 1997-99. The respondent/plaintiff filed a suit for the balance due on the supplies, along with the claim towards sales tax. The appellant/defendant contested the suit on grounds of limitation and the quality of goods supplied.
Finding of the Court:
The trial Court decreed the suit in favor of the respondent/plaintiff, holding that the suit was not barred by limitation and that the appellant/defendant failed to prove the substandard quality of goods or the return of defective goods.
Issues: The issues included the maintenance of a running account, limitation, supply of goods as per specifications, entitlement to recover the suit amount, and future pendentelite interest.
Ratio Decidendi: The court held that a fresh period of limitation commences once payment is made on account of the debt due, and emphasized the concept of mutual, open, and current account in the context of a recovery suit. The court also noted that the appellant/defendant failed to prove the substandard quality of goods or the return of defective goods.
Final Decision: The appeal was dismissed, and the trial Court's judgment decreeing the suit in favor of the respondent/plaintiff was upheld.
RFA 144/2004
1. The challenge by means of this Regular First Appeal (RFA) filed under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the impugned judgment of the trial Court dated 27.9.2003 decreeing the suit of the respondent/plaintiff/seller against the appellant/defendant/buyer. The appellant/defendant bought various electrical and machinery goods from the respondent/plaintiff, and for the balance due on which supplies, the subject suit was decreed along with the claim towards sales tax.
2. The facts of the case are that during the years 1997-99, the appellant/defendant purchased various electrical and machinery goods from the respondent/plaintiff and made various part payments on account. The last payment which was made was of Rs. 1,99,600/- by cheque No. 461486 dated 1.3.1999 and whereafter there was the balance due of Rs. 2,12,142.64/-, for recovery of which the subject suit came to be filed along with the claim of interest and the claim of sales tax, totaling to Rs. 5,78,111.22/-.
3. The suit was contested by the appellant on various grounds including of the suit being barred by limitation and the moneys not being payable as the goods which were supplied were defective.
4. The trial Court after completion of pleadings, framed the following issues:-
“1. Whether the plaintiff was maintaining a running account of the defendant in his books of account or not?
OPP.
2. Whether the suit is barred by limitation?
3. Whether the plaintiff has not supplied the goods to the defendant as per specifications?
OPD.
4. Whether the plaintiff is entitled to recover the suit amount?
OPP.
5. Whether the plaintiff is entitled to recover the future pendentelite interest? If yes at what rate?
OPP.
6. Relief.”
5. On the issue of limitation, the trial Court has held as under:-
“ISSUE No. 2
11. The counsel for the defendant in his written arguments has contended that as per the admission of the plaintiff, the last payment was made by the defendant amounting to Rs. 2 Lakhs through an account payee cheque on 6.2.1999 and the suit has been filed by the plaintiff on 21.2.2002 thus suit of the plaintiff is barred by time. The counsel for the defendant in support of his contention has referred to case of Attadi Venketi v. M/s Bharatam Ramuly and Sons, AIR 1984 Orissa 226, The Hindustan Forest Company v. Lal Chand and others. This authority cited by the learned counsel for the defendant is not applicable for the simple reason the counsel for the defendant has failed to show as to where the plaintiff has made this admission that last payment was made by the defendant of Rs. 2 lakhs through an account payee cheque on 6.2.1999./ The case of the plaintiff in the plaint is that after the encashment of the last cheque No. 461486 for Rs. 1,99,600 on 1.3.99, balance amount of Rs. 2,12,142.64 still remained unpaid. In reply, the defendant has denied that after encashment of cheque No. 461486 for Rs. 1,99,600/- a balance amount of Rs. 2,12,142.64 remained unpaid by the defendant. Meaning thereby that the issuance of the cheque No. 461486 for Rs. 1,99,600/- is admitted. PW-1 and PW-2 in evidence by way of affidavit have both stated in one voice that after the last payment of Rs. 1,99,600/- vide cheque No. 461486 dated 1.3.99, balance amount of Rs. ,12,142.64 remained unpaid by the defendant. There is no cross examination on this point that cheque No. 461486 dated 1.3.99 was never issued nor there is any suggestion to this effect. Even otherwise, V.K. Puri DW-1 in evidence by way of affidavit has no where deposed that cheque dated 1.3.99 was never issued by them. It is well settled that in a recovery suit, period of limitation for filing a suit is three years from the last payment. In the present case, the defendant has admittedly issued cheque No. 461486 dated 1.3.99 for sum of Rs. 1,99,600/-, the present suit has been field on 21.2.2002, thus the present suit is well within the period of three years from the date of the cheque dated 1.3.99.
