The court ruled that a plaintiff can challenge payment rates despite prior acceptance if the final bill is not settled, and limitation cannot be determined without notice to the plaintiff.

JUDGMENT :

Sathish Ninan, J.

The suit for money was dismissed by the trial court. The plaintiff is in appeal.

2. The defendant Kerala State Electricity Board (Board) invited tenders for the supply of concrete poles with the specifications mentioned therein. The plaintiff was the successful bidder. From the year 1985-86 onwards the plaintiff had been supplying the poles as per the stipulations and specifications. Various agreements were executed between the parties, with regard to the same. The allegation of the plaintiff is that the agreement between the parties provided for grant of escalation in the price of goods and transport to be in accordance with the PWD schedule of rates. However, but for granting nominal/minimal revision and that too unilateral, which was much lower than the PWD rates, the plaintiff was not granted the rates entitled for. The suit was filed claiming the amounts alleged to be payable by the Board based on such calculation.

3. The defendants admitted the contract with the plaintiff. It was contended that the supply of poles by the plaintiff was based on separate agreements entered into between the parties. With regard to the claim for escalation of rates, it was contended that the plaintiff was granted the escalation to which it was entitled for, and the plaintiff had accepted such payment. In the year 1997 the Board noticed that the method of calculation that was being adopted with regard to escalation was not correct, and hence directions were issued to rectify the mistake and to recover the excess amounts from the plaintiff. Demands were issued to the plaintiff to refund the excess amounts paid under the wrong calculation. It was contended that the plaintiff is not entitled to any amounts from the defendants.

4. The trial court held :-

(i) That the suit is barred by limitation.

(ii) That the plaintiff having accepted amounts at the enhanced rates, as granted by the defendants, without any demur, is not entitled to raise any further claim.

5. We have heard Sri. P. B. Subramanyan, the learned counsel for the appellant-plaintiff, and Sri.Raju Joseph, the learned senior counsel on behalf of the respondents-defendants.

6. The correctness of the findings of the trial court, as noticed above, are the points for determination.

7. The trial court held that the suit is barred by limitation. At paragraph 15 of the plaint, it was pleaded thus: -

“The suit claim is not barred by limitation as the defendants made several on account payments, and as the time will start running only from the day the defendants prepare the final bills, on proper revision of rates according to the PWD rates.

A reading of the written statement of the defendants shows that there is no denial or even a reference to the averments in paragraph 15 of the plaint. Of course, Section 3 of the Limitation Act obliges the Court to consider the issue of limitation even if it is not set up as a defence. However, in the present case, not even an issue was raised with regard to limitation. The parties went to trial without any plea or issue of limitation. In spite of the same, the Court has held that the suit is barred by limitation.

8. As contended by the learned counsel for the appellant-plaintiff, if the plaintiff was put on notice that he is required to answer the plea of limitation, it would have been open for the plaintiff to produce documents if any and also raised such contentions as may be available to him, to substantiate that suit is well within the period of limitation. In the light of the specific and uncontroverted plea of the plaintiff regarding limitation and its non-denial in the written statement, and the nature of the transactions involved, we are of the opinion that there is some force in the contention. Lim