The main legal point established in the judgment is the application of the limitation period for filing a counter claim under the Limitation Act, and the rejection of a counter claim that is barred by time.

YOGESH KHANNA, J.

1. The plaintiff has filed this suit for recovery of Rs.2,18,66,439/- on the plea they had supplied to the defendant Maplitho paper and hard board for printing of books and it was agreed the defendant shall not make any default in payment of the said material. An order to purchase the Maplitho paper and hard board was placed on 18.10.2013 by the defendant directing the plaintiff to supply 700 MT of Maplitho paper @ 57,250 per MT along with 34 MT of cover stock @ 65,500 per MT. The purchase order dated 18.10.2013 was amended and sent via email dated 21.10.2013. The goods were supplied as per the terms and conditions. The invoices and challans to the defendant company were duly acknowledged. The details of invoices is given in para 13 of the plaint. The C-forms were sent after the receipt of the ordered goods by the defendant.

2. As per the terms and conditions of the purchase order the defendant company was obliged to make payment within 5 days from the date of the receipt of the paper by their nominated printing press. Admittedly the entire stock was received by the defendant by December 2013 however despite various requests made by the plaintiff, the defendant did not release the payment and hence this suit was filed on 17.10.2016.

3. The defendant filed its written statement on 26.04.2017 and rather raised a counter claim stating interalia they had placed an order upon the plaintiff company wherein the plaintiff had to supply the requisite paper for printing of the books within 4/5 days of the purchase order dated 18.10.2013 and even advance payment was made on 23.10.2013. It was urged the entire printing paper was to be supplied strictly as per the time schedule by 20.11.2013 but the plaintiff company though started delivering the paper from 06.11.2013 and continued till 29.11.2013 but thereafter did not supply any paper till 10.12.2013 and as there was a delay in supply of the requisite paper, the printers had further delayed the printing of books which culminated into delay in shipment of books to Ministry of Education, Government of Ethiopia. The Ministry thus retained 20% of the total contract amount and also invoked the bank guarantee furnished to them. Moreso the paper supplied was of inferior quality. Further there is a mismatch of amount as the total purchase price was only Rs.3,45,48,391/- but the invoice for Rs.3,65,48,391/- was raised.

4. Nonetheless the defendant admits the invocation of the bank guarantee was stayed by this Court on an application under Section 9 of the Arbitration and Conciliation Act but it is stated till date the Bank of Baroda has not released the bank guarantee and has also kept the property documents of directors of defendant company as an equitable mortgage, though the Sole arbitrator had directed the bank to release such property documents.

5. It is alleged due to delay and short supply of printing paper by the plaintiff firm and consequently withholding of 20% of invoice amount by the Ethiopian Government, the packing credit limit account of defendant company with Bank of Baroda was declared NPA, and the defendant company is facing recovery proceeding before DRT Chandigarh.

6. On 01.05.2018 the counter claim on these very grounds was filed by the defendant.

7. The question is if the counter claim is within time or beyond limitation as alleged by the learned counsel for the plaintiff. Though the learned counsel for the defendant argued the counter claim can be filed even after the filing of the written statement but it is not an issue here. The issue is if the counter claim filed on 01.05.2018 is barred by limitation. Admittedly the goods were purchased on an order dated 18.10.2013 and were supplied by 20.12.2013, i.e. beyond the date of stipulated delivery. The counter claim is thus premised on compensation for a breach of such condition of contract.

8. Article 55 of the Schedule of Limitation Act 1963 gives a period of limitation as three years from the time when s