M/S Jay Shree Tea & Industries Ltd. vs Mrs. Dropti Devi (Proprietor) & ...
2009 Latest Caselaw 3524 Del

                                                                 REPORTABLE

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                  RFA No. 174/99

                                  Date of Decision :September 3, 2009

      M/S JAY SHREE TEA & INDUSTRIES LTD.
                                                               ..... Appellant
                             Through :       Mr. Nitin Gupta and Ms. Kiran
                                             Dharam, Advocates
                     versus

      MRS. DROPTI DEVI (PROPRIETOR) & ANR
                                                          ..... Respondents
                    Through None
      CORAM:
      HON'BLE MISS JUSTICE REKHA SHARMA

1.    Whether the reporters of local papers may be allowed to see the
      judgment? Yes
2.    To be referred to the reporter or not? Yes
3.    Whether the judgment should be reported in the 'Digest'? Yes

REKHA SHARMA, J. (Oral)

The short question which arises for consideration in this appeal is

whether the suit filed by the appellant for the recovery of

Rs. 4,16,081.07 paise was barred by the law of limitation. The learned

Additional District Judge who tried the suit has held the same to have

been instituted after the expiry of the period of limitation. The

appellant feels it was filed within the period of limitation.

Before I come to the point in issue it is necessary to refer to a

few facts:

The appellant company grows, processes and sells tea

throughout India. It has been supplying the same to respondent No.3

also which is a sole proprietorship concern of respondent No.1 against

orders placed on it through respondent No.2 who is the attorney of

respondent No.1 and 3. The appellant says that till December 1997 it

has been receiving payments from the respondents but thereafter no

payment was received. Hence, a legal notice dated March 17, 1998

was sent to the respondents demanding outstanding payment to which

no response was received. That led the appellant to file the suit for the

recovery of the aforementioned sum of Rs.4,16,081.07 paise alongwith

interest @ 18% per annum. The respondents were served with the

summons of the suit but they chose not to respond to the suit as well.

The appellant in support of its case had filed affidavit of its

Vice President Shri O.P.Kedia and had also relied upon four documents

which were proved as Ext.PW1/3 to PW1/6.

The document Ext.PW1/3 is a letter dated April 9,1997 from the

Manager of the respondents to the appellant. It was accompanied by a

demand draft of a sum of Rs.1 lac and contained the details of the

accounts indicating that as on April 9,1997 the balance due to the

appellant from the respondents was Rs.9,80,012/-. The document

Ext.PW1/4 is also a letter from the respondents. This letter begins with

an acknowledgement from the respondents that as on May 13, 1997 a

sum of Rs.7,30,012/- was due to the appellant from them. The

document Ext.PW1/5 is again a letter from the respondents and with it

also was sent a demand draft of Rs.50,000/-. This letter also contained

the details of the accounts showing an outstanding balance of

Rs.4,80,012/- as on August 6, 1997. As regards Ext.PW1/6, it is a

'Statement of Account' maintained by the appellant in the regular

course of its business. The first entry in the `Statement of Account' is

of April 1997 and the last of March 2,1998. It also contains an entry of

April 10,1997 showing that as on April 9,1997 the balance amount due

to the appellant was Rs.9,80,012/-. This entry corresponds to the

contents of letter Ext.PW1/3, wherein as noticed above, the

respondents had acknowledged that a sum of Rs.9,80,012/- was due

from them as on April 9,1997. The `Statement of Account' also

contains another entry of May 15,1997 indicating that as on

May 13,1997 the amount due was Rs.7,30,012/-. This entry

corresponds to the contents of letter Ext.PW1/4 wherein the

respondents had admitted that as on May 13,1997 a sum of

Rs.7,30,012/- was due to the appellant from the respondents. The last

entry of March 2, 1998 showed an outstanding balance of

Rs.4,03,962.20paise and this exactly was the principal amount claimed

in the suit besides interest. The suit was filed on June 1,1998.

As noticed above, none had appeared for the respondents in the

trial Court. Even before me none has appeared. Hence, I have

proceeded to hear the matter in the absence of the respondents.

It is submitted by learned counsel for the appellant that in view

of 'Statement of Account' Ext.PW1/6 read alongwith Ext.PW1/3,PW1/4

& PW1/5, the Article of limitation which is attracted to the case was

Article 1 of the Limitation Act 1963 and that if the limitation is

computed on the basis of entries made in the 'Statement of Account',

Ext.PW1/6, then the suit was within limitation.

The aforementioned submission of the appellant did not find

favour with the trial Judge. He has held that it is not Article 1 but Article

14 of the Limitation Act which is applicable to the facts of the case.

Before I proceed further let me reproduce the said two Articles of

the Limitation Act.

     Description of Suit      Period of      Time from which period
                              Limitation     begins to run
1.  For the balance due on Three             The close of the year in
    a mutual, open and year                  which the last item admitted
    current account, where                   or proved is entered in the
    there      have      been                account; such year to be
    reciprocal      demands                  computed as in the account.
    between the parties.
14. For the price of goods Three              The date of the delivery of
    sold    and     delivered years          the goods.
    where no fixed period
    of credit is agreed upon

It has been held by the trial court that the appellant was claiming

the price of goods sold and delivered and therefore its case was

covered not by Article 1 but by Article 14 of the Limitation Act as per

which the period of limitation is three years from the date of delivery of

goods. The trial court has further held that the appellant in its plaint

gave no details of when the goods were delivered and that in the

absence of those details the suit could not be said to be within

limitation. As regards Ext.PW1/3, PW1/4 and PW1/5 which as noticed

above were acknowledgments from the respondents, the trial court

has observed that those acknowledgments were of no help to the

appellant because acknowledgment of a debt in view of Section 18 of

the Limitation Act has to be before the expiry of the period of limitation

and as the appellant furnished no dates of when the goods were

delivered, mere reference to acknowledgments made by the

respondents was of no consequence. As regards Ext.PW1/6 the trial

Judge declined to place reliance on the same on the ground that it was

not a complete 'Statement of Accounts'.

Having heard learned counsel for the appellant I am of the view

that the learned Additional District Judge went wrong in invoking

Article 14 of the Limitation Act. I see no reason why Article 1 of the

Limitation Act was not attracted to the facts of the case. The

`Statement of Account' Ext.PW1/6 on the basis of which the appellant

filed the suit cannot be said to be an incomplete statement. It contains

all the entries from the year the respondents stopped making payment

to the appellant till the filing of the suit. And what is of significance is

that the `Statement of Account' contains entries which corresponds to

the acknowledgments of debt by the respondents vide Ext.PW1/3,

PW1/4 and PW1/5 referred to hereinabove. There could be no better

proof of the authenticity of the 'Statement of Accounts' maintained by

the appellant than the fact that the entries made therein were in

consonance with the letters containing acknowledgments of debt by

the respondents and those were letters which were received by the

appellant along with the demand drafts prior in point of time than the

dates on which the entries were made. Even otherwise, owing to the

absence of the respondents there was no challenge to the correctness

of the documents Ext.PW1/3 to PW1/6 and yet the learned Additional

District Judge chose to discard the said documents. It is true that the

appellant in effect was claiming the price of goods delivered by it to

the respondents but as per paragraph 10 of the plaint it had based its

case on the books of accounts being maintained by it on the basis of

mutual open and current account and I see no reason why the

appellant could not rely on the `Statement of Account' maintained by it

and invoke Article 1 of the Limitation Act.

In view of the above, I hold that the suit filed by the appellant

before the Additional District Judge was within limitation.

In so far as the merits of the case are concerned as already

noticed above, the appellant had filed affidavit by way of evidence of

Shri Om Prakash Kedia. It has through his affidavit proved the

contents of its plaint. As there is no opposition from the respondents to

the case set up by the appellant, I accept the correctness of the

averments made in the plaint which have been authenticated by

Sh.Om Prakash Kedia and accordingly pass a decree for a sum of

Rs.4,16,081.07 paise in favour of the appellant and against the

respondents. The appellant shall also be entitled to interest @6% per

annum from the date of the suit till realisation.

The appeal is disposed of. No order as to costs.

REKHA SHARMA,J SEPTEMBER 03, 2009 mr