Adjustment of alleged payment does not constitute acknowledgment under the Limitation Act, barring recovery of debt.

1. The Defendant in OS.No.14336 of 2010, on the file of VII Additional City Civil Court, Chennai is the Appellant in this appeal.

2. The Defendant filed the suit originally in CS.No.1003 of 1999, before this Court. Later, the same was transferred to the VII Additional City Civil Court, Chennai and renumbered as OS.No.14336 of 2010.

3. The Respondent / Plaintiff filed the said suit for recovery of a sum of Rs.19,91,471/-, with interest at 25% p.a. from the Appellant / Defendant. The Plaintiff is a Government Company. The Defendant is also a Company registered under the Companies Act, 1956. The Plaintiff has been carrying on the business of export and import trade, as a canalising agent under the export and import policy of Government of India. The Plaintiff used to book purchase orders for shredded scraps of various parties abroad to customers who intended to purchase from abroad.

4. It is admitted that as between the Plaintiff and the Defendant, there is a contract, the Defendant is liable to pay price for the quantity of the goods purchased by it. In addition to the price, it is also stated that the Defendant is liable to pay the Plaintiff bank charges and service charges at 1.1% to 2% per tonne. It is further stated that as part of the arrangement, for the quantity booked by the Defendant, the Plaintiff used to arrange bill of lading equivalent to the quantity booked by the Defendant or any other Indian customers so that the ship on arrival could deliver the Defendant identified quantities intended for the customer.

5. It is the case of the Plaintiff that the Defendant, who is one of the customers of the Plaintiff, purchased 4150 MT covered by various bills of lading. The Plaintiff has granted 175 days interest free time credit after delivery of the materials to the Defendant. It is also stated that the customer, like the Defendant, is liable for the price agreed and the difference calculated at the prevailing exchange rate as on the date of such payment. Stating that the Defendant has to pay an amount of Rs.23,59,408/- towards the purchase of materials through the Plaintiff, the suit came to be filed for recovery of a sum of Rs.19,91,471/- with interest at 24% p.a on the sum of Rs.12,01,942.88/- as the Plaintiff admitted payment of Rs.7,49,064/- on 06.07.1996. The suit was filed on 21.01.2000.

6. Though the Defendant filed a detailed written statement, raising several grounds, including a counter claim for a sum of Rs.15,66,705.70/-, one of the main grounds raised in the written statement is that the suit for recovery of money is barred by limitation, as the suit itself is laid three years after the cause of action arose for recovery of money. It is seen that the Defendant though seriously disputed the liability, the quantity of material purchased by the Defendant through the Plaintiff and the money due as per the terms of the contract between the Plaintiff and the Defendant, are not in dispute. The counter claim is based on the allegation that the Plaintiff had received excess amount towards change in Dollar value and the amount lying with the Plaintiff as provisional demurrage deposit.

7. As seen from the pleadings, the claim is based on actual transaction. The Trial Court, despite the fact that a specific plea is raised by the Defendant in the written statement, raising the question of limitation, did not frame an issue. However, the Trial Court found that as per the ledger account, which is marked as Ex.A10, the last credit made towards the amount due was on 06.07.1996. Accepting the said payment as a payment made by the Defendant towards the liability, the Trial Court held that the suit filed by