Polar Industries Ltd. vs Arihant Communications & ...
2012 Latest Caselaw 299 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No.662/2003

%                                                         16th January, 2012

POLAR INDUSTRIES LTD.                                     ..... Appellant
                  Through:               Ms. Meera Mathur, Adv.

                      versus


ARIHANT COMMUNICATIONS & MARKETING COMPANY
                                     ..... Respondent

Through: None.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. This case is on the Regular Board of this Court since 2.1.2012,

and today the matter is effective item no.11 on the Regular Board. No one

appears for the respondent although it is 1.00 P.M. I have therefore heard

counsel for the appellant and after perusing the record am proceeding to

dispose of the appeal.

2. The challenge by means of this Regular First Appeal filed under

Section 96 of the Code of Civil Procedure, 1908 is to the impugned judgment

of the Trial Court dated 13.3.2003 dismissing the suit of the appellant/plaintiff

for recovery of `4,95,026/-, and which amount was claimed from

the respondent/defendant/distributor of the goods of the appellant/plaintiff-

company who was the supplier of electrical home appliances.

3. The suit has been dismissed by the Trial Court without giving

any findings on merits inasmuch as the suit has been held to be barred by

limitation. It has been held that the suit was governed not by Article 1 of the

Limitation Act, 1963 (hereinafter referred to as 'the Act') which deals with an

open, mutual and current account but by Article 14 of the Act. A reference

has been made by the Trial Court to the judgment of the Supreme Court in the

case of Hindustan Forest Company vs. Lal chand & Ors. AIR 1959 SC

1349.

4. A reference to the impugned judgment shows that there is

absolutely no discussion as to why the statement of accounts in the present

case is not an open, mutual and current account in terms of the ratio of the

judgment of the Supreme Court in the case of Hindustan Forest Company

(supra). As per the ratio of the judgment in the case of Hindustan Forest

Company (supra) once there are shifting balances, there is an open, mutual

and current account. The statement of accounts has been filed and exhibited

by the appellant/plaintiff before the Trial Court as Ex.PW1/11 to Ex.PW1/13,

which really is only one document of three pages, though three separate

exhibit marks have been given. A reference to the first page, Ex.PW1/11

shows that there were credit balances in favour of the respondent/defendant

and against the appellant/plaintiff. Thereafter, there are debit balances against

the appellant/plaintiff-company. Clearly in the facts of the case, it has been

established that there was an open, mutual and current account on account of

shifting balances in terms of the ratio in the case of the Hindustan Forest

Company (supra). The Trial Court therefore fell into an error in holding that

the suit was governed by Article 14 of the Act and not by Article 1 of the Act.

5. The admitted and proved last bill by which the goods were

supplied to the respondent/defendant by the appellant/plaintiff is Ex.PW1/6

dated 30.7.1998. Limitation as per Article 1 begins from end of the financial

year in which the last entry is proved or admitted. The last entry being

proved/admitted being dated 30.7.1998, limitation commences on 1.4.1999.

The suit against the respondent/defendant could therefore have been filed upto

31.3.2002. The suit was however filed well before on 21.8.2001. Clearly

therefore, the suit is within the limitation. The findings of the Trial Court

therefore with respect to issue no. 2 are set aside by which it was held that the

suit was barred by limitation.

6. Since the Trial Court has not given any findings on merits, the

suit is therefore remanded back to the Trial Court to decide the case on merits

treating the suit to have been filed within limitation. Since

the respondent/defendant has not been represented in this appeal, the Trial

Court before hearing final arguments, will issue notice to the

respondent/defendant. Accordingly, the impugned judgment and decree is

set aside and the suit is held to be within limitation.

7. Appellant to appear before the District and Sessions Judge, Delhi

on 15.2.2012, on which date, the District and Sessions Judge, Delhi will mark

the suit for decision to a competent Court in accordance with law. Trial Court

record be sent back so as to be available to the District and Sessions Judge,

Delhi on 15.2.2012.

VALMIKI J. MEHTA, J JANUARY 16, 2012 ak