Delhi High Court
M/S Fresh & Healthy Enterprises ... vs M/S R.K.Brothers on 24 August, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.319/2017
% 24th August, 2018
M/S FRESH & HEALTHY ENTERPRISES LTD.
..... Appellant
Through: Mr. M.M.Kalra, Advocate
(9810135477)
versus
M/S R.K.BROTHERS ..... Respondent
Through: Mr. V.K.Diwan, Advocate and
Mr. Lalit Kumar, Advocate
(9811237371)
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This Regular First Appeal under Section 96 of the Code
of Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit
impugning the Judgment of the Trial Court dated 20.10.2016 by which
the trial court has dismissed the suit as barred by time. I may note that
the suit has been dismissed at the initial stage even before filing of the
written statement by the respondent/defendant. The suit was
dismissed because the respondent/defendant had filed an application
under Section 3 of the Limitation Act, 1963 for dismissing the suit as
time-barred.
2. The subject suit was a suit for recovery of monies filed by
the appellant/plaintiff. Appellant/plaintiff by the suit has claimed an
amount of Rs.26,63,856/-. Monies were claimed on account of
supply/sale and purchase of Apples by the appellant/plaintiff to the
respondent/defendant.
3. A reading of the suit plaint shows that in para 2 of the suit
plaint various invoices are mentioned totalling to a sum of
Rs.2,80,32,224/-. In para 3 of the plaint, the details of payments made
have been mentioned. Then in para 4 of the suit plaint, the amount due
in the suit has been arrived at, and this is with reference to the ledger
account of the appellant/plaintiff. This para 4 of the suit plaint reads
as under:-
"4. That the Defendant had only made part payment of
Rs.2,35,20,000/- towards the outstanding amount. As such, the
following amount came to be due and outstanding as on July 2013:
Total Sales Rs.2,80,32,224/-
Less: Discount Given Rs.4,07,555/-
Less: Discount Given Rs.4,02,863/-
Less: Credit Note issued Rs.10,29,950/-
Less: Amount received Rs.2,35,20,000/-
Less: Credit for Penalty Rs.8,000/-
Income
Balance Amount Due from the Rs.26,63,856/-
Party
(True copy of the ledger account maintained by Plaintiff for
Defendant for the period 2013-2015 duly reflected the sale-
purchase of applies is Annexure-P 3 colly. True copy of bank
statement of account of Plaintiff (relevant parts) is attached at
Annexure P-4 Colly) (underlining added)
4. The plaint thereafter makes reference to a cheque dated
19.7.2013 issued by the respondent/defendant which was dishonoured
as also to various reminders which were given by the
appellant/plaintiff as stated in para 10 of the plaint. Since the
respondent/defendant failed to pay the suit amount, therefore, the
subject suit was filed for claiming the amount which is the balance due
at the foot of the running account which has been annexed at
Annexure P-3 to the plaint.
5. The impugned order dismissing the suit as time barred
reads as under:-
"20.10.2016
Present: Counsel for parties.
Vakalatnama filed alongwith an application U/s 3 of
Limitation Act on behalf of defendant. Copy supplied to plaintiff.
The counsel for defendant has drawn the attention of the Court to
para No.13 of plaint and argued that suit is not within limitation. It
is settled law that as per Section 3 of Limitation Act even if
limitation point has not been raised by any of the parties, the Court
itself has to see whether the suit is within limitation or not and this
is dictate of Section 3 of the Limitation Act. In the present matter
as per plaintiff himself cause of action has arosen on 14.05.2013
and cheque discharging the liability issued by defendant allegedly
was dishonoured on 19.07.2013. So even if three years period is
taken from this date then suit should have been filed upto
18.07.2016. The present suit has been filed on 25.07.016 which is
clearly time barred. There cannot be any condonation of delay in
filing the suit. The counsel for plaintiff has nothing to rebut the
same.
Accordingly, this court has no option except to dismiss the
suit and file be consigned to record room."
6. In my opinion, the trial court has committed a gross
illegality in dismissing the suit as time barred without even adverting
to the fact that the suit is based on a statement of account. A suit
plaint does not have to contain a statement of law that the ledger
account was an open,mutual and current account under Article 1 of the
Limitation Act because that is an inference or a finding of fact which
has to be arrived at from the statement of account which is filed.
When we see the statement of account which is filed with respect to
transactions entered into, Annexure P-3 to the plaint at page 223 of the
trial court record, it is seen that within the first few transactions itself
there are shifting balances. Once there are shifting balances clearly
therefore the suit will be on the basis of an open, mutual and current
account.
7. As per Article 1 of the Limitation Act, a suit filed on the
basis of an open,mutual and current account, limitation commences at
the end of the financial year for which the transactions are entered
into. The transactions entered into show that the last invoice entered
into the ledger account maintained by the appellant/plaintiff of the
respondent/defendant is dated 14.5.2013. Limitation therefore will
commence as per Article 1 of the Limitation Act on 1.4.2014. The suit
has been filed on 26.7.2016 i.e within three years of commencing of
limitation on 1.4.2014, and therefore, the suit was clearly within
limitation. Trial court has committed a gross illegality in dismissing
the suit as time barred without reference to the statement of account
and without reference to the law under Article 1 of the Limitation Act
and which states that once a suit is filed on the basis of an open,
mutual and current account, then limitation commences from the end
of the financial year and which last transaction is proved or admitted,
with the last transaction as stated above being dated 14.5.2013 when
Invoice no.8130 for an amount of Rs.1,73,040/- was raised by the
appellant/plaintiff upon the respondent/defendant.
8. Learned counsel for the respondent/defendant wanted to
cite various judgments, however, no judgments need to be cited on the
proposition of law which is not disputed, and the undisputed position
of law is that the account relied upon by the appellant/plaintiff must be
an open, mutual and current account. The meaning of an open,mutual
and current account has been dealt with by the Supreme Court in the
judgments in the cases of Hindustan Forest Company Vs. Lal Chand
& Others, AIR 1959 SC 1349 and Kesharichand Jaisukhlal Vs.
Shillong Banking Corporation AIR 1965 SC 1711, and the law is that
shifting balances will create an open,mutual and current account.
9. In view of the aforesaid discussion, the defence taken by
the respondent/defendant of the suit being barred by time was a
completely frivolous defence, and that too without filing of a written
statement. Trial court has committed a complete illegality in allowing
the application under Section 3 of the Limitation Act filed by the
respondent/defendant as discussed above.
10. The impugned order/judgment of the Trial Court dated
20.10.2016 is therefore set aside with costs of Rs.25,000/- payable by
the respondent/defendant to the appellant/plaintiff, and which payment
of costs shall be a condition precedent for the respondent/defendant to
contest the suit in the trial court.
11. Parties to appear before the District and Sessions Judge,
North, Rohini Courts, Delhi on 24.9.2018 and the District and
Sessions Judge will now mark the suit for disposal to a competent
authority in accordance with law. Trial court record be sent back.
AUGUST 24, 2018/ib VALMIKI J. MEHTA, J
