Vipin Bansal Sole Proprietor Om ... vs Exquisite Decor Pvt. Ltd
2018 Latest Caselaw 6775 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  RFA No. 67/2015

%                                              15th November, 2018

VIPIN BANSAL SOLE PROPRIETOR
OM PRAKASH FATEHCHAND & CO.                                ..... Appellant

                          Through:       Mr. Jagjit Singh, Advocate.
                                         (9810152774)
                          versus

EXQUISITE DECOR PVT. LTD                                 ..... Respondent

                          Through:       Mr. Pradeep Dhingra, Ms.
                                         Shalini Dhingra and Ms.
                                         Hitendha,       Advocates
                                         (9667939822)

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 the Civil Procedure, 1908 (CPC) is filed by the plaintiff in the suit

impugning the judgment of the trial court dated 09.01.2015 by which

the trial court has rejected the plaint Under Order VII Rule 11 CPC by

holding that the suit is barred by limitation. In fact, when a suit is

dismissed on admitted facts as being barred by time, the suit is

dismissed actually under Order XII Rule 6 CPC. Dismissal of a suit

on limitation is if the court has jurisdiction and thereafter because of

having jurisdiction it decides the issue on merits, and as held by the

Supreme Court in the case of Prem Lata Nahata and Another Vs.

Chandi Prasad Sikaria (2007) 2 SCC 551. Therefore, the impugned

judgment will be treated as a judgment dismissing the suit under Order

XII Rule 6 CPC as barred by limitation.

2. The facts of the case are that the appellant/plaintiff filed

the subject suit for recovery of Rs. 20,00,000/- by pleading that the

appellant/plaintiff was the seller and the respondent/defendant was the

buyer of goods being timber and timber products. As per para 5 of the

plaint, dealings between the parties are said to have commenced even

much earlier than 01.04.2000, and that as on 01.04.2000 the debit

balance brought forward against the respondent/defendant was a sum

of Rs. 4,13,933/-. The chart in para 5 of the plaint thereafter proceeds

till the debit entries upto 03.05.2005, and which is the last bill being

Bill No.078 dated 03.05.2005 which was raised by the

appellant/plaintiff upon the respondent/defendant. As per the chart

given in para 5, the last entry is the entry dated 15.03.2007 which

shows that by a cheque, the payment of Rs. 50,000/- was made by the

respondent/defendant to the appellant/plaintiff and the debit balance

against the respondent/defendant and in favour of the

appellant/plaintiff came to be a sum of Rs. 13,70,035.26/-. The

subject suit has been filed on 24.05.2011.

3. In a suit for recovery of money, the period of limitation is

three years. The issue with respect to limitation can be looked into

from two points of view in the present case. One is as to whether

there was an open, mutual and current account maintained between the

parties as a result of which the suit can be said to be a suit under

Article 1 of the Limitation Act, 1963, whereby limitation will

commence from the last date of the financial year in which a particular

transaction is admitted or proved. The second point of view with

respect to limitation would be the date of the last bill or the date of the

last payment and these factors will be an acknowledgment to extend

the limitation under Section 19 of the Limitation Act or as per

Sections 18 and 19 of the Limitation Act. As regards the second

aspect, it is to be noted that an acknowledgment if is one which falls

under Sections 18 and 19 of the Limitation Act, such an

acknowledgment must necessarily be falling within the limitation

period for filing of the suit, i.e. an acknowledgment of debt/payment

after the period of limitation does not extend the limitation.

4. On the aspect of there being an open, mutual and current

account, admittedly there is not even a single averment in the plaint

that the appellant/plaintiff is suing for the balance due on the open,

mutual and current account. Even if this Court overlooks the fact that

there is no such averment and examines as to whether there was an

open, mutual and current account, it is found that in fact there is no

open, mutual and current account because an open, mutual and current

account requires either shifting balances or reciprocal obligations vide

Hindustan Forest Company v. Lal Chand & Others, AIR 1959 SC

1349 and Kesharichand Jaisukhal v. Shillong Banking Corporation,

AIR 1965 SC 1711. In the present case, there is only one obligation

and one contract between the parties of the appellant/plaintiff being

the seller and the respondent/defendant being the buyer, and

consequently the issue to be examined is as to whether there are

shifting balances. A reference to para 5 of the plaint wherein the chart

is given of the amount due in the form of an account, shows that there

is always a debit balance against the respondent/defendant and in

favour of the appellant/plaintiff. Therefore, once there are no shifting

balances the account in question is not an open, mutual and current

account and Article 1 of the Limitation Act will not apply. Even if we

take Article 1 of the Limitation Act to apply, the last entry which is

said to be in the account is dated 15.03.2007 and if limitation therefore

commences from 01.04.2007, the limitation period of three years will

expire on 31.03.2010, whereas the subject suit has been filed on

24.05.2011. The subject suit is therefore clearly time barred.

5(i). On the next aspect as to whether the limitation is

extended by acknowledgment either under Section 18 or Section 19 of

the Limitation Act, let us examine each of these aspects of Sections 18

and 19 of the Limitation Act in the facts of the present case.

(ii). So far as Section 18 of the Limitation Act is concerned,

the same requires that there need not be a specific acknowledgment of

a specific amount but there can be acknowledgment of debt once there

is otherwise an admission of a jural relationship of a debtor and

creditor. This is held by the Supreme Court in the case of J.C.

Budhraja v. Chairman, Orissa Mining Corporation Ltd. and Anr.

(2008 )2 SCC 444. In order to prove the filing of the suit within

limitation under Section 18, the learned counsel for the

appellant/plaintiff has placed reliance upon the Reply dated

18.03.2009 given on behalf of the respondent/defendant, and para 4

thereof to argue that limitation is extended and the suit is within

limitation. This para 4 of the para-wise reply given by the

respondent/defendant in its Reply dated 18.03.2009 reads as under:

"4. It is accepted that total amount outstanding as on 1.04.2004 was for the sum of Rs.2,51,799/-. It is accepted that bills were made on 1.04.2004, 2.04.2004, 3.04.2004, 21.03.2005 & 3.05.2005, the value amount payable against bills and terms of payment of such invoices are disputed. It is denied that the value of goods purchased and duly invoiced in the account of our client was Rs.17,70,035.26. It is further denied that any such amount of Rs.17,70,035.26 became payable.

The payments made were always according to terms mentioned in para 2 of statement of facts as explained above. It is denied that they were part payments or running payments. It is further denied that they were the only payments. It is denied that the payments alleged above were credited and appropriated. It is denied that after appropriation of amount, the balance sum payable by our client was Rs.13,70,035.26 towards Principle amount. On the other hand, rather our client has to recover the amount from your client and your client in order to wriggle out of the above liabilities have misrepresented and made you issue this notice on false and misleading facts."

(iii). I cannot agree with the argument urged on behalf of the

appellant/plaintiff that the aforesaid para 4 will help in extending the

limitation because the acknowledgment of debt must be within the

period of limitation. The date which is talked of in para 4 of the Reply

dated 18.03.2009 sent by the respondent/defendant is for various bills

with the last bill being dated 03.05.2005, and the acknowledgement is

of a sum of Rs. 2,51,799/- as on 01.04.2004. If what is acknowledged

is the debt as on 01.04.2004 or for that matter even on 03.05.2005,

then the acknowledgment had to be before 01.04.2007 or 03.05.2008

whereas the Reply is dated 18.03.2009 i.e. beyond the limitation

period of three years. Once therefore, the so called acknowledgment of

debt in terms of the Reply dated 18.03.2009 is beyond the period of

limitation, the same cannot help in extending limitation in view of the

categorical language of Section 18 of the Limitation Act which

requires acknowledgment to extend limitation has to be given within

the prescribed period of limitation. Therefore, it is held that the suit

cannot be held to be within limitation in view of the acknowledgment

of debt by the respondent/defendant in its Reply dated 18.03.2009.

6. So far as the aspect of payment extending the period of

limitation is concerned, and therefore, Section 19 of the Limitation

Act applying, it is seen that the last payment which is made, and as

stated in para 5 of the plaint, is of 15.03.2007. Limitation therefore

would expire on 15.03.2010. Suit however has been admittedly filed

on 24.05.2011. Therefore, even on the basis of Section 19 of the

Limitation Act, the suit will not be within limitation.

7. In view of the aforesaid discussion, there is no merit in

the appeal. Dismissed.

NOVEMBER 15, 2018/ib                          VALMIKI J. MEHTA, J