Prathiba M. Singh, J.

1. Himanshu Foods Private Limited (hereinafter, ‘Plaintiff’) filed a suit for recovery of Rs.15,00,000/- under Order XXXVII of the Code of Civil Procedure, 1908 (hereinafter, ‘CPC’). Ajanta Raj Proteins Pvt. Ltd. (hereinafter, ‘Defendant’) filed two applications for leave to defend under Order XXXVII Rule 3 and under Order VII Rule 11 CPC. The said applications were dismissed by the Trial court. Leave to defend was refused. The suit of the Plaintiff was decreed for a sum of Rs.15,00,000/- with costs and pendente lite and future interest @ 18% per annum.

Plaintiff’s case

2. The Plaintiff claims to be a supplier of skimmed milk powder and allied products. The Defendants approached the Plaintiff for supply of the same. It was agreed that for the supplies made, invoices would be raised by the Plaintiff and payments would be made either through cash or by cheque at the time of delivery of the goods by the Defendants. Orders were placed from time to time by the Defendants and supply of the skimmed milk powder was made by the Plaintiff. Accordingly, various invoices were raised by the Plaintiff and the receipt of the goods were duly acknowledged by the Defendants. The Plaintiff states that it was agreed between the parties that the payment would be made at the time of delivery of goods and in case of any delay, interest @ 18% per annum would be liable to be paid.

3. One such cheque issued for payment by the Defendant to the Plaintiff was Cheque No. 438786 for a sum of Rs.15,00,000/- (Rupess Fifteen Lakhs) dated 21st November, 2010 drawn on Axis Bank Ltd. (hereinafter, ‘Axis Bank’). In view of certain supplies which were made and payments which were outstanding, the Plaintiff deposited the said cheque through its Banker-HDFC Bank Limited, Chandni Chowk Branch, Delhi (hereinafter, ‘HDFC Bank’). The same was dishonoured and received back by the Plaintiff with a cheque return memo dated 10th May, 2011 with the remarks ‘Insufficient funds’.

4. The Plaintiff issued a legal notice dated 24th May, 2011 through registered post but no reply was received. A complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter, NI Act’) was filed on the ground that the Defendants have neglected to pay the outstanding sums due to the Plaintiff. Thus, the Plaintiff filed a suit for recovery. On the question of limitation, para No. 19 and 20 of the plaint is important and the same is set out herein below:

“19. That the present suit is within limitation of time as per the provisions of the Limitation Act. The cheque in question was dishonoured on 10.05.2011 and the present suit has been filed before the expiry of 3 years time. Moreover, the plaintiff is maintaining a running account in its books of account. As per the said statement of account, the last transaction was made by the defendants on 06.12.2011 with the plaintiff company. Thus, the present suit is within limitation.

20. That the cause of action for filing the present suit firstly arose in favour of the plaintiff and against the defendants on 10.05.2011 when the cheque issued by the defendants in favour of the plaintiff got dishonoured. The cause of action further arose on various occasions when the plaintiff sent several reminders to the defendants to make the payment and the defendants avoided to clear their dues. The cause of action further arose on 06.12.2011 when the last transaction was made by the defendants with the plaintiff. Since till date no payment has been made by the defendants to the plaintiff w.r.t. the cheque in question, the cause of action is still subsisting and continuing.”

Defendant’s case

5. In their leave to defend, the Defendants raised the following defences:

(i) that the summons for judgment was issued only for a sum of Rs.4,09,089/- and not for a sum of Rs.15,00,000/-;

(ii) that the suit was beyond limitation as the period