The Delhi High Court in the suit for recovery of advance money paid for the delivery of goods, opines that the period of limitation is not extended by merely demanding repayment or sending a legal notice to the other party. It is also not extended by sending reminders or exchanging communications as then, the limitation would never come to an end.
Brief Facts:
The Plaintiff filed a suit (herein “Respondent”) claiming that an advance sum was paid to the Defendant (herein “Appellant”) for the supply of electronic conductors. For some of the amount, the Defendant neither supplied the goods nor refunded the said amount. The suit was decreed ex-parte against the Defendant.
The present appeal has been filed on the grounds of limitation alleging that the claim of the Plaintiff is barred by limitation.
Contentions of the Appellant:
The Appellant argued that even if the claims asserted in the Plaint are assumed to be true, the claim would still be barred by Limitation and that none of the facts indicate that the suit was within the period of limitation. It was contended by the Appellant that the cause of action if at all arose in 2015 and therefore, the suit should have been filed within 3 years from 2015.
Contentions of the Respondent:
The contention of the Respondent was that the cause of action does not start from the date of last payment in this case as the Appellant had admitted the liability towards the Respondent via an email and therefore, that is the date from which limitation shall be reckoned.
Observations of the Court:
The Court observed that in the entire pleadings the Respondent did not plead specific dates or months as to when goods were due for delivery. It is Section 13 of the Limitation Act, 1963 that governs the limitation of suit for recovery of the balance amount paid in advance for goods to be delivered and the limitation is 3 years from the date when goods are due for delivery. It was remarked that in such cases a presumption can be made that the goods were to be delivered within 4 weeks of manufacturing clearance.
The High Court reiterated that neither mere demand for repayment nor sending a legal notice to repay the amount extends the limitation period. With respect to the Appellant admitting to the pending amount, that communication happened in 2019 i.e., 5 years after the order for the said goods was placed. Even if the admission is assumed to be correct and true, the same would not extend the limitation as acknowledgement is beyond the period of 3 years from the date of cause of action.
It was further observed that the correspondence between the parties also does not extend the period of limitation. Sending reminders or communication between the parties does not extend the limitation period as if such a contention is accepted then the period of limitation would never come to an end. It was opined that a litigant has to be vigilant of its rights and avail remedies before expiry of the statutory period of limitation.
With respect to the admissions by the Appellant, the Division Bench observed that the Appellant has only admitted to the money being received, there is no acknowledgment of the refund as such. The Delhi High Court expounded that even if such evidence is taken on record, the same would neither extend the limitation nor prove that the cause of action to file the suit arose on the date when the emails were exchanged.
Decision of the Court:
Therefore, based on the aforementioned reasons, the Division Bench of the Delhi High Court held that the suit is barred by limitation. Accordingly, the appeal was allowed.
Cause Title: M/S Rakman Industries Ltd. V. M/S Sumaja Electro Infra Pvt. Ltd.
Bench: Hon’ble Mr. Justice Vibhu Bakhru, Hon’ble Mr. Justice Amit Mahajan
Decided on: November 09th, 2022
Read Judgment @LatestLaws.com:
Picture Source :
