This appeal arises out of a suit in the Court of the Assi­stant District Judge No. 2 at Gaubati for recovery of price of goods sold and delivered by the plaintiff to the defendant. The suit was dismissed as being barred by limitation.

2. The only point that arises for consideration is whether the suit was governed by Article 1 of the Limitation Act,, 1963 hereinafter 'the Act' or not.

3. The plaintiff-appellant is a manufacturer of cloth. It used to supply cloth from time to time to the defendant -respondent and the defendant used to make payments for price of the cloth so supplied. An account was maintained for the purpose by the plaintiff. The last date when the defendant made certain payment on account of the price of the goods was 3-5-72. No further payment was made. On adjustment of the same, a sum of Rs. 26, 465,04 remained due from the defendant to the plaintiff which was not paid, Accordingly, a suit was filed on 30-3-76 for recovery of the said amount along with interest.

4. The defendant contested the suit on the ground inter alia, that it was barred by limitation. The case of the defe­ndant was that the suit was for recovery of price of goods sold and the limitation of three years would run from the date of delivery of the goods or from the date of last payment i.e. 3-5-72. If the limitation is so computed, admittedly the suit was barred by limitation. The case of the plaintiff was that the case was covered by Article 1 of the Act as, accor­ding to it, it was a suit for recovery of balance due on a mutual, open and current account and as such, the limitation would run from the close of the year in which the last item was entered in the account. Accordingly the suit was claimed to be within time. The learned Trial Court held the suit to be barred by limitation. Hence the present appeal.

5. Heard Mr. P. Kalita, the learned counsel for the appellant. His sole contention is that the case falls under Article 1 of the limitation Act and as such the suit as filed was within time.

6. To properly appreciate the contention, the relevant provisions of the Limitation Act, 1963 may be referred. Arti­cles 1 and 14 are set out below:

Description of suit

Period of limitation

Time from which period begins to run.

1. For the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties.

Three years

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;

14. For the price of goods sold and delivered where no fixed period of credit is agreed upon.

Three years.

The date of the delivery of the goods,

7. Section 19 of the Act deals with effect of payment of debt or of interest. It provides ;

"19. Effect of payment on account of debt or of interest on legacy-Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf; a fresh period of limitation shall be computed from the time when the payment was made.

8. From a reading of Article 1 it is clear that in order to attract this article the suit should be for recovery of the balance due "on a mutual, open and current account, where there have been reciprocal demands between the parties." In order to constitute mutual demands there must be transactions on each side, creating independent obligations on the other, and net merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations. Both things, namely "mutual account" and ''reciprocal demands between the parties" must be present. There must be dual relationship between the; parties. If independent dealings between the parties giving rise to independent obligations are absent, it cannot be said that there was a mutual, open and current account. In addition to mutual account, the existence of reciprocal

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