JUDGMENT S.U. Kamdar, J.
1. The present suit is filed by the plaintiffs for the recovery of a sum of Rs. 3,08,650/- with interest on Rs. 1,75,256/-. The claim in the present case arises in the background of following facts.
2. The plaintiffs are a company and are inter alia carrying on business of supply of various machineries. It is the case of the plaintiffs that sometime in or about 20-1-1975 the defendant issued a tender notice and pursuant to the said tender notice the plaintiffs submitted an offer for supply of 2 numbers design, manufacture and supply of 70 ton capacity Hoist having 12 metres lift conforming to the defendant's technical specifications for the price of Rs. 4,22,370/-. The said offer was given by the plaintiffs on 11-2-1975 to the defendant. According to the plaintiffs, under the terms and conditions of the said offer it was inter alia pointed out that the payment in respect of the said supply would as under :--
15% of the total price was to be paid to the plaintiff as advance against submission of the bank guarantee.
10% of the ordered value was to be paid to the plaintiff on the defendant's approval of the drawings and in any case not later than 45 days from the date of submission of the drawings.
70% payment was to be made against despatch of individual consignment documents through bank. Documents to be negotiated through the bank.
It was further provided that the last instalment of balance 5% was to be paid to the plaintiff on receipt of the material at site and in any case not later than 30 days from the date of despatch.
3. It is the case of plaintiffs that after some clarification a meeting was held and the offer of the plaintiff was accepted by the defendant by their letter dated 13-6-1975.
4. On 19-6-1975, the plaintiff addressed a letter providing for revised terms and conditions of payments which provided as under :--
15% value of the order as advance against bank guarantee, 10% value of the order on approval of drawings, 70% on proof of despatch documents through bank; and 5% on completion of erection and commissioning.
By the said letter dated 19-6-1975 the plaintiffs also agreed not to charge any interest to the defendant in respect of the delayed payment for the supply of the said machinery.
5. In pursuance of the aforesaid contract entered into the plaintiff sold, delivered and supplied the said machinery to the defendant under three invoices, namely, (i) invoice No. EQUIP/0/76-77/294 dated 11-9-1976 for a sum of Rs. 4,60,254,26 out of which Rs. 4,18,817.26 is received by the plaintiff and the balance outstanding is Rs. 41,437.00. Similarly second invoice bearing No. EQUIP/0/76-77/296 dated 30-9-1976 was issued for a sum of Rs. 4,60,254.26 out of which Rs. 4,18,817.26 is received by the plaintiff and the balance outstanding is Rs. 41,437.00. Thereafter third invoice bearing No. EQUIP/0/76-77/330 dated 13-12-1976 was issued for a sum of Rs. 50,500.00 towards the labour charges for erection and commissioning of the machine.
6. The plaintiffs have filed the present suit for recovery of the amounts mentioned in the aforesaid three invoices aggregating to Rs. 1,75,256/-. The plaintiffs have also claimed the security deposit amount as due and payable by the defendants of a sum of Rs. 20,941/- in respect of each of the said two bills which has been withheld under bill Nos. 294 and 296. Thus, the plaintiffs have made total claim for Rs. 1,75,256/-
7. On 6-6-2005, by my order I had directed that the issue No. 3 pertaining to limitation should be tried as a preliminary issue. Pursuant thereto, the learned counsel for the plaintiffs has tendered compilation of documents. The defendant has no objection for the same to be taken on record. The said compilation of documents is taken on record and marked Exhibit P-1 collectively. Both the parties to the present suit do not desire to lead any oral evidence in respect of the said preliminary issue.
8. I have heard the parties. The learned counsel for the plaintiff contends that the present suit is not barred by law of limitation. He drew my attention to the letter dated 19-6-1975 at page 9 of the compilation Exhibit P-1, particularly Clause 6 thereof wherein the revised terms of payment are set out. The said revised terms inter alia indicate 95% to be paid on or before delivery of the goods and the 5% is to be paid on completion of erection and commissioning.
9. My attention has also been drawn to a letter dated 18-11-1977 being part of Exhibit P-1 and it has been contended that the erection was not completed and thus the cause of action for recovery of the said claim for the balance amount did not arise till November, 1977 and, therefore, the present suit is not barred by law of limitation. Alternatively, it has been contended that even if it is assumed that the erection was complete still since there were disputes between the parties about the quality of the machineries supplied by the defendant and therefore the cause of action to recover the said amount towards price of machineries sold and delivered stood extended till 1983. In support of the aforesaid argument my attention was drawn to a series of correspondence exchanged between the parties contending that the machineries supplied by the plaintiff was defective. It is therefore contended by the plaintiff that the cause of action to recover the said amount did not arise till and until the defendant addressed a letter being a letter dated 8-2-1983 when the defendant has sought to forfeit the said deposit of Rs. 1,75,256/- and thus immediately thereafter the suit has been filed by the plaintiffs on or about 7-10-1983. According to the plaintiff the period of limitation commences only from 8-2-1983 and, therefore, the suit is within the period of three years from the date on which the said cause of action arose on 8-2-1983. On the other hand, the learned counsel for the defendant has contended that the cause of action to recover the price of the machinery sold and delivered arose as on the date of completion of erection of the machinery as per the revised terms of payment. It has been further contended that the erection of the machineries was complete in October, 1976 as admitted by the plaintiff in para. 1 of the letter dated 18-7-1977 being part of Exhibit P-I. According to the learned counsel for the defendant in view of the fact that no claim is filed within a period of three years from October, 1976, the present claim is barred by law of limitation. It has been contended by the learned counsel for the defendant that the claim cannot be extended unless there is an acknowledgment of liability or part payment under Section 18 or 19 of the Limitation Act and in the absence thereof the present suit should be dismissed as barred by law of limitation.
10. I have heard the parties at length and perused the records before me. I am of the opinion that the suit is clearly barred by law of limitation. As per the terms and conditions, each of the invoice has become due and payable much prior to the date of installation of the machinery. Under letter dated 19-6-1975 which has been addressed by the plaintiff and which has been produced by the plaintiff himself as an evidence in the present matter, the revised terms and conditions provide that 90% of the amount should be paid on or before the despatch or delivery of the goods and only 5% to be paid on completion of the erection and commissioning. I have also perused the three invoices which are at page Nos. 31, 34 and 35 of the compilation of documents. The invoice No. 294 dated 11-9-1976 pertains to the balance claim of 10% of Rs. 41,437/-. The said amount does not pertain to balance 5% payable on completion of the erection and commissioning of the machinery. Similarly is the situation in invoice No. 296 dated 30-9-1976. The third invoice bearing No. 330 dated 13-12-1996 pertains to the payment of the amount of erection and commissioning charges of Rs. 50,500/-. However, my attention is drawn by the learned counsel for the plaintiff that in fact the claim also pertains to the amount of security deposit which has been withheld by the defendant. The said security deposit was also due and payable prior to the commissioning and erection of the said machine. The plaint does not anywhere state when the work of erection was completed. However the said letter dt. 18-11-1977 states that the erection work was completed sometime in or about the October, 1976 therefore the claim if any has become due and payable within a period of three years from October, 1976. In the present case the contention advanced by the learned counsel for the plaintiff that the amount has not become due and payable because there were disputes about the quality of the goods supplied and there was correspondence exchanged in that behalf and therefore period of limitation stands extended. In my opinion, the aforesaid contention cannot be accepted because any such dispute cannot extend the period of limitation. In my opinion, for extension of period of limitation there has to be either a part payment or acknowledgment of liability as contemplated under Sections 18 and 19 of Limitation Act. In absence of any such eventuality, the limitation period prescribed cannot be extended. The cause of action for recovery of the amount arose prior to October, 1976. The suit is filed in 1983. The suit is clearly barred by law of limitation. The same is therefore required to be dismissed. The suit is accordingly dismissed. However, there shall be no order as to costs.