IMPORTANT POINT
Partners' liability for acts done before dissolution of a partnership firm and the admissibility of a defense based on a dishonored cheque reflecting admitted liability.

JUDGMENT

Neena Bansal Krishna, J. -

I.A.6958/2018 (for leave to defend by D2 and D3)

1. An application has been filed on behalf of defendant No.2 and 3 under Section XXXVII Rule 3(5) of Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC) seeking Leave to Defend the suit for Recovery, filed on behalf of the plaintiff.

2. It is submitted in the application that the suit is not maintainable as it is hopelessly barred by time. The suit for recovery of the alleged amount pertains to the period 09.06.2012 to 24.01.2014 for the goods that were supplied by the plaintiff to the defendant during this period. The accounts were settled for the aforesaid period between the parties on 02.02.2014 and after minor deductions, an amount of Rs.3,34,60,548/- was found due for which defendant No.2 issued a cheque which was dishonored due to 'insufficiency of funds' on 19.02.2014. It is asserted that the suit has been filed on 02.03.2017 after a lapse of three years of limitation and is, therefore, barred.

3. The defendants have further asserted that the suit under Order 37 CPC can be maintained for 'a debt or liquidated amount' for which there is 'an Agreement' in writing showing the admitted liability or the liquidated debt. The present suit is based primarily on the Bills, Memos generated by the plaintiff for the alleged sale and delivery of goods. Each transaction is a separate and distinct transaction for which separate Memo/ Bill was issued. The Invoices cannot be taken as Agreement containing liquidated demands. The plaintiff has not produced any delivery challan receipts of the goods showing delivery of goods, as claimed by him. Plaintiff is relying on documents/ VAT returns issued by Sales/ VAT Authority for showing delivery of goods. These documents are nothing but the reproduction of the entries and returns filed by the plaintiff with the Authority and therefore, do not prove delivery of goods in any case. There being no Agreement, or any admitted liability or debt on the part of the defendants, the present suit is not maintainable under Order 37 of CPC.

4. It is further claimed that the present suit is not based on Invoices but for the recovery of the balance due. Defendant No.2 and Shri Jagdish Kumar used to make payments against all transactions within the credit period of two to five days from the date of supply of goods. A 'hand written account' was being maintained to reflect all the transactions actually entered by the parties and the payment of the dues. The handwritten 'Statement of Account' has been concealed by the plaintiff who has annexed only a computer generated 'Statement of Account' which has false and frivolous entries.

5. Further, as per the practice prevalent in the Trade and Food Grain market, Shri Jagdish Kumar, father of defendant No.3, also maintained a Statement of Account/ Ledger Account reflecting the original transactions that were entered into between the parties and the details of the payments. The defendants further submitted that as per the entries of 'Statement of Account' maintained by Shri Jagdish Kumar and acknowledged by the plaintiff and his father, defendant No.2 was liable to pay Rs.20,31,784/- on 26.1.2013, which subsequently came down to Rs.9,50,418/- by February, 2014. The said account can be tallied with 'Hand Written Statement of Accounts' maintained by the plaintiff, to confirm that accounts were settled between the parties, and that no such alleged dues were payable by the defendants.

6. It is further claimed that defendant No.2 had neither signed the subject cheque nor issued and handed over the same to the plaintiff or his father. In fact, the plaintiff had taken away the subject cheque fraudulently from the possession of defendant No.2 without any intimation and consent; had forged the signatures and got the same dishonoured. The truth is that the cheque was lost from the possession of defendant No.2 for which he lodged a Police Complaint vide DD No.1359/7 dated 09.11.2013. When defe