[Cites 4, Cited by 0]
Madras High Court
Textile Connection vs M/S.Burlington’S Exports on 13 March, 2026
Author: C.V. Karthikeyan
Bench: C.V. Karthikeyan
2026:MHC:1070
OSA No. 262 of 2017
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 16.02.2026 Pronounced on : 13.03.2026
CORAM
THE HON'BLE MR JUSTICE C.V. KARTHIKEYAN
AND
THE HON'BLE MR.JUSTICE K.KUMARESH BABU
OSA No. 262 of 2017
Textile Connection
149, Poonamallee High Road,
Chennai – 600 010.
A Partnership Firm,
Rep. by its Managing Partner, Sri.C.P.Vikas
..Appellant(s)
Vs
1. M/s.Burlington’s Exports
B-75, Wagle Industrial Estate, Thane,
Maharashtra,
Rep by its Partner, Sri.Andre Kapoor (died)
The Firm was continued with remaining
Partners/children of late Andre Kappoor viz.,
Rudra Kapur (R3) and Shai Kapoor (R5)
2. Sri. Andre Kapoor (died)
3. Sri. Rudra Kapoor (deleted)
4. Sri.Kershaw Colabawala
5. Ms.Shai Kapoor (deleted)
__________
Page1 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
OSA No. 262 of 2017
R3 and R5 are deleted from the Cause Title vide
Court order dated 09/01/2025 in
CMP.No.21220 of 2017 (CVKJ and KBJ)
..Respondent(s)
This Appeal filed under Order XXXVI Rule 1 of O.S.Rules and Clause
15 of Letters Patent against the judgement and decree dated 01.09.2016 made in
CS NO.29 of 2000 & allow the suit as prayed for.
For Appellant(s): Mr.R.Bharanidharan
For M/s.Sampathkumar & Associates.
For Respondent(s): Mr.C.Mohan
for Ms.A.Rexy Josephine Mary
for M/s.King and Partridge for R1, R2, R3 & R5
R4- No such person
JUDGMENT
(Judgment of the Court was delivered by C.V.Karthikeyan J.)
The plaintiff in C.S.No.29 of 2000 aggrieved by the judgment dated
01.09.2016 passed by a learned Single Judge of this Court, on the Original Side
dismissing the said suit, has filed the present appeal.
2.C.S.No.29 of 2000 had been filed seeking a judgment and decree
against the defendants jointly and severally to pay a sum of Rs.39,67,144/-
together with interest at 24% per annum from the date of the plaint till date of
realization and for costs of the suit.
__________
Page2 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
3.It had been contended in the plaint that the plaintiff, a registered
Partnership Firm was a regular supplier of cotton fabrics to the 1 st defendant
which was also a Partnership Firm carrying on business at Thane, Maharashtra.
The defendant would convert the fabrics into garments and export such
garments. The 2nd, 3rd and 4th defendants were partners of the 1 st defendant. The
5th defendant who was yet another partner was subsequently impleaded during
the pendency of the suit.
4.It had been stated in the plaint that the 1 st defendant used to send to the
plaintiff the details of the fabrics required, the construction, colour and other
points of specification. The plaintiff would get the samples ready and send the
same to the 1st defendant. If the 1st defendant were to indicate changes /
modifications in the samples, the plaintiff would have to obtain fresh samples
and send them for final approval. After the samples had been approved, the
plaintiff would quote the price for acceptance by the 1st defendant.
5.The arrangement between the parties was that the 1 st defendant would
first place a trial order for about 100 meters which would be supplied by the
plaintiff. Thereafter, the 1st defendant would place bulk orders and issue
purchase orders setting forth the terms and conditions for the supply. The
purchase orders would be countersigned by the plaintiff. This was the usual /
normal practice. There would be occasions when there would be considerable
__________
Page3 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
time interval between the trial order and the bulk order to about four to five
months. But the plaintiff did not alter the quoted price even if there had been
increase in input prices. The plaintiff never claimed the price which prevailed
on the date of the supply but raised invoice only on the contracted price.
6.It had been further stated that the supplies were made either directly or
by signing documents by the bank. When documents were sent through the
bank, the payments were cleared within a reasonable time. But when supplies
were made directly, the payments for the bills were always belated, with the
delay being anywhere between three to twelve months though in the invoices it
had been stated that the payments should be effected within thirty days. It had
been further stated that though the payments were delayed by the 1 st defendant,
the plaintiff still continued to honour its commitment to supply the fabrics in
accordance with the purchase order.
7.In June 1998, the 1st defendant wrote to the plaintiff that they had
obtained quotations from other suppliers and found that the prices quoted by the
plaintiff over the last two years had been 20% to 30% higher than the other
suppliers. The 1st defendant wanted the plaintiff to issue credit note at 10% of
all supplies for the period from 01.04.1996 to 30.06.1998. The plaintiff issued a
reply denying the allegations. The 1st defendant again addressed a letter stating
that they proposed to debit the plaintiff with Rs.16/- lakhs to be adjusted at the
rate 10% of the future supplies.
__________
Page4 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
8.The plaintiff replied on 20.10.1998 that the bills could be worked out by
taking into account the overhead expenses, profit and other such aspects and
that the 1st defendant can deduct 5% on future bills but that the plaintiff would
not agree for debit of 10%. It was contended that the 1 st defendant, however,
sought credit for 10% value of the supplies made between 01.04.1996 to
30.06.1998 and stated that it could be adjusted against future supplies.
9.The 1st defendant then issued a debit note for Rs.8,00,994/-. The
plaintiff rejected the same stating that they would agree for reduction at the rate
of 5% in future supplies, provided the 1st defendant gave an assurance to clear
the pending payments. The 1st defendant replied that the Managing Director was
out of India and they would revert back on his arrival. The plaintiff did not
receive any further communication from the 1st defendant except repeated
statements about the absence of the Managing Director. It was contended that
the 1st defendant did not place any purchase order from 01.04.1999. The
plaintiff claimed that after adjusting the amounts received, a sum of
Rs.39,67,144/- was due as on that date payable by the 1 st defendant to the
plaintiff. It was under those circumstances that the suit had been filed seeking
the said amount together with interest and costs.
10.The defendants filed a written statement denying and disputing the
claim made and further pointing out that the calculation as to how the amount
__________
Page5 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
claimed was arrived at was not provided by the plaintiff. It had been contended
that the 1st defendant was a garment manufacture and export company situated
at Thane in Maharashtra. They purchase cloth from various suppliers for their
manufacture of garments. It had been contended that the defendants had been
purchasing cloth from the plaintiff for several years regularly. The 1 st defendant
used to place orders with the plaintiff giving time to supply. It was contended
that the defendant could clear the goods only after inspection but there were
instances when the payment had already been made and goods were rejected
and in those circumstances, the defendants used to raise debit notes for the value
of the goods rejected. It was contended that the plaintiff often failed to supply
the goods within the specific time limit. The plaintiff would supply the goods
directly to the defendants which was termed as direct supplies. If the defendants
agreed to accept the goods, they would inspect the same and return the rejected
the goods and pay for the balance. Since this procedure took time, the payments
were delayed.
11.It was further contended that the bills were cleared not independently
but in a lot and debit notes were also not issued immediately after rejection of
goods but only when a bunch of bills of the plaintiff were cleared. The
payments were made through demand draft and when the same were encashed,
the defendant presumed that the plaintiff had accepted the debit notes. It was
contended that as per the books of accounts after reconciliation as on
__________
Page6 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
18.03.2000 a sum of Rs.2,42,995.40/- was due for payment. It had been
contended that over a period of time, the defendant had paid more than
Rs.1,73,73,853.40/-. They had not paid the amount demanded since they waited
for clarification of the accounts from the plaintiff. It had been contended that the
other claims by the plaintiff were imaginary and not sustainable. The plaintiff
had not given the bifurcation to show the actual amount due from the
defendants. It was therefore contended that the suit may be dismissed with
costs.
12.On the basis of the above pleadings, the following issues were framed:
“i).Whether the plaintiff is not entitled to recover the suit amount?
ii).Whether the plaintiff is not entitled for interest on the suit claim
at the rate of 24%?
iii).To what relief?”
13.During trial, the Managing Partner of the plaintiff examined himself as
PW-1 and marked Exs.P1 to P308. On the side of the defendants, the authorized
representative and the Accountant of the 1st defendant firm were examined as
DW-1 and DW-2. They marked 18 documents as Exs.D1 to D18.
14.The learned Single Judge while examining the issues framed held that
the total purchase made by the defendants was for a sum of Rs.1,99,27,851.60/-
__________
Page7 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
and the total payments made by the defendants was Rs.1,73,73,853.40/-. It was
thus observed that the balance amount payable was Rs.25,53,998.20/- which
was close to the suit claim of Rs.26,21,139.00/-. The defendant had deducted
debit notes for a sum of Rs.23,11,002.80/-. It was further noticed that the case
of the plaintiff was that the payments had not been made for the supplies
effected between 01.04.1996 and 30.06.1998. However, it was further observed
that under Ex.P11, ten invoices for a sum of Rs.1,56,899/- were for a period
between 15.05.1995 and 17.11.1995 which were clearly outside the claim
period in the suit had been included. It was further observed that each invoice
reflected an independent transaction providing for interest, if payment was not
made within 30 days.
15.It was further noticed that an outstanding of Rs.2,42,995/- was paid to
the plaintiff after the filing of the suit. It was further held that in Ex.P11,
Statement of Accounts, item Nos.1 to 10 were prior to the claim in the suit and
item Nos.11 to 17 were barred by limitation. It was also contended that Exs.P12
– P303 were only invoices issued during regular business and would not reflect
non-payment. The learned Single Judge further noted that the plaintiff had not
produced any evidence to challenge the correctness of the Statement of
Accounts filed by the defendant. It was also noted that the defendant had filed
Exs.D2, D3 and D4 which were marked during cross examination of PW-1
which would indicate that the debit notes were not considered.
__________
Page8 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
16.It was further observed that during cross examination of DW-1, the
plaintiff had only questioned the competency of the witness. The statement of
Accounts produced by the defendant were not countered. It was finally held
that the plaintiff had to prove their case on the basis of their documents and that
they had failed to substantiate the pleadings. The suit was therefore dismissed.
17.The plaintiff has filed this appeal challenging the said judgment.
18.Heard arguments advanced by Mr.R.Bharanidharan learned counsel
for the appellant for M/s.Sampathkumar and Associates and Mr.C.Mohan,
learned counsel for the 1st, 2nd and 3rd and 5th respondents for Ms.Rexy Josephine
Mary for M/s.King and Partridge
19.Notice issued to the 4th respondent had been returned with
endorsement that there is no such person.
20.Mr.R.Bharanidharan, learned counsel for the appellant pointed out that
the appellant had filed the Suit before the Original Side of this Court seeking a
judgment and decree against the defendants to jointly and severally to pay a
sum of Rs.39,67,114/- together with interest and costs. The learned counsel
pointed out that the appellant, a Partnership Firm registered under the
__________
Page9 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
Partnership Act had been a regular supplier of cotton fabrics to the 1 st
respondent / Burlington’s Exports, who would convert the fabrics into garments
and export them. The 1st respondent used to send details of the fabrics required
including their construction, colour and other points of specification. The
appellant would organize samples and forward the same to the 1st respondent.
There were occasions when the 1st respondent would suggest further changes /
modifications. The appellant would then have to make fresh samples and
forward the same for approval. After the samples had been approved, the
appellant would quote the prices for acceptance by the 1 st respondent.
Thereafter, the 1st respondent would place a trial order for 100 meters of cloth. It
was only thereafter they would place bulk orders.
21.The learned counsel stated that when the clothes were sent in
accordance with the purchase orders placed by the 1 st respondent, the terms and
conditions of the supply would be stated. These purchase orders would be
countersigned by the appellant. This was the normal course of business
transaction carried on between the appellant and the 1 st respondent. The learned
counsel pointed out that at every stage there was a check by the 1 st respondent
over the quality of the clothes supplied by the appellant. Initially, samples
would be sent and if modifications were made, the samples would be again sent
after carrying out the modifications. When the samples were approved, the 1 st
respondent would place only a trial order for 100 meters. It was only after that
__________
Page10 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
would they place bulk orders and issued purchase orders, which would be
countersigned by the appellant. Even though, bulk orders were placed with a
delay of a few months from the date of supply of the trial order / 100 meters, the
appellant retained the same price which had been quoted when the samples were
initially sent and never factored the increase in the price.
22.The learned counsel pointed out that the appellant had raised invoices
whenever supplies were made in response to the purchase orders issued by the
1st respondent. It was contended that the 1st respondent had not effected payment
for the fabrics supplied by the appellant. It was contended that after adjusting
the payment received, a sum of Rs.26,21,139/- was due and payable by the 1 st
respondent and together with interest at 24% per annum, the aggregate came to
Rs.39,69,144/- payable for the period between 01.04.1996 to 30.06.1998. It was
under those circumstances that the suit had been filed seeking a judgment and
decree in the said amount.
23.The learned counsel, pointed out the aforementioned facts and stated
that the disputes were with respect to the supplies made directly to the 1 st
respondent. He contended that a running account was maintained. A further
dispute arose over the debit note at 10% on future orders while the appellant
insisted 5% on future supplies. It was contended by the learned counsel that the
debit notes were not marked during the course of trial. Further, except for three
__________
Page11 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
or four debit notes none of them correlated to the statement produced by the
appellant under Ex.P11.
24.The learned counsel further pointed out that a notice to produce
documents had been issued to the 1st respondent to produce the statement of
bank accounts and payments alleged to have been made to foreign importers for
their alleged claim on account of supply of poor materials / delayed supply by
the appellant during the period 01.04.1996 to 30.06.1998. Documents as
demanded were not produced by the 1st respondent. The learned counsel further
pointed out that the 1st respondent themselves by their letter dated 15.09.1999
which had been marked as Ex.P305 had admitted that the amount payable by
them was about Rs.17/- lakhs approximately. He therefore contended that the
learned Single Judge had omitted to consider this admission and had proceeded
to dismiss the suit in entirety. The learned counsel contended that the order
under appeal should be set aside and the appeal should be allowed and the suit
decreed prayed for.
25.Mr.C.Mohan, learned counsel for the 1 st, 2nd, 3rd and 5th respondents
pointed out that the appellant who had instituted the suit had the burden to prove
the claim. The learned counsel pointed out that among the invoices produced
the invoices from Ex.P12 till Ex.P23 were prior to the claim period which
commenced from 01.04.1996. The learned counsel further contended that the
__________
Page12 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
claim of the appellant was based on Ex.P11. The said document contained
several discrepancies and had been correctly rejected by the learned Single
Judge. It was contended that the appellant had not produced revised statement
of accounts after deleting the invoices which were outside the period for which
the claim was made in the plaint. The learned counsel further stated that there
were several discrepancies in the statement of accounts. He also pointed out that
though in the invoice it had been stated that the interest would be 18% if the
payment is delayed by 30 days, the appellant had claimed interest at 24% per
annum. The learned counsel stated that each invoice will have to be examined
independently and disputed the contention that there was a running account and
pointed out that if the invoices were examined independent of each then the
invoices for the period between 01.04.1996 to 30.09.1996 would be barred by
limitation.
26.Pointing out the above facts, the learned counsel argued that the
judgment of the learned Single Judge did not warrant any interference and urged
that the Court should dismiss the appeal.
27.We have carefully considered the arguments advanced and perused the
material records.
__________
Page13 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
28.The following points arise for consideration:
i).Whether the invoices marked as Exs.P12, P13, P15, P17
to P23 have to be rejected since they were prior to the suit claim
which commenced from 01.04.1996?
ii).Whether the claim under the invoices marked as Exs.P24
to P29 and P31 were barred by the law of limitation?
iii).Whether the Court can take note of the debit notes said to
have been issued by the respondents particularly when copies of
the same had not been produced during the course of trial?
iv)Whether the reasoning of the learned Single Judge in
dismissing the suit has to be upheld by this Court or interfered by
this Court?
29.Since the discussion with respect to each one of the four points framed
for determination overlap and the pleadings and the evidence are interrelated, all
the four points are taken up for consideration and for determination together.
30.The appellant filed C.S.No.29 of 2000 for recovery of a sum of
Rs.39,67,144/- together with interest at 24% per annum from the date of the
plaint till the date of realization and also for costs of the suit.
__________
Page14 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
31.It is the case of the appellant, a Partnership Firm that they supplied
cotton fabrics to the 1st defendant, also a registered Partnership Firm, who
would later convert the fabric into cloths and export them. The normal practice
adopted by the appellant and the 1st respondent was that the 1st respondent used
to send details of the fabrics required including their construction, colour and
other points of specification. The appellant would organize and make samples
and forward the same to the 1st respondent. There were some occasions when
the 1st respondent suggested further changes and modifications. The appellant
then had to carry out the modifications and re-forward the samples for approval.
The appellant quoted the prices which prevailed on the date when the samples
were approved.
32.Thereafter, the 1st respondent would place a trial order of 100 meters
of cloth. This would also be sent by the appellant. After that, the 1 st respondent
placed bulk orders and issued purchase orders which would be countersigned by
the appellant. There would be a time interval between the trial and bulk orders
but the appellant always adhered to the price which was quoted at the time when
the samples were approved. The appellant would then supply the bulk orders
and forward the invoices. There were two methods in which the bulk orders
were supplied. One method was forwarding the documents through banks which
were cleared within a reasonable time. The other was direct supply to the 1 st
respondent. There was considerable delay in effecting payment.
__________
Page15 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
33.The disputes arose between the appellant and the 1 st respondent when
the 1st respondent, in June 1998 stated that on enquiry with other suppliers they
found that the prices quoted by the appellant were about 20% higher than the
prices which were informed by the other suppliers. The 1 st respondent therefore
sought a debit note at 10% to be issued for all the supplies from 01.04.1996 to
30.06.1998. The appellant stated that they would issue such note at 5% and not
at 10%. It was also stated that for the supplies made during that period,
payments had not been issued. Disputes had arisen over the price determined by
the appellant.
34.The 1st respondent also raised an issue of the quality of the products
forwarded by the appellant. They raised debit notes at 10% of the value. Since
there was total failure of communication and understanding between the parties,
the appellant filed the suit seeking a sum of Rs.26,21,139/- as the amount due
under the invoice and a further sum of Rs.13,46,005/- towards interest which
was due and payable till the date of the plaint also sought further interest from
the date of the plaint till date of realization at 24%.
35.The 1st respondent, in their written statement, had claimed that the
quality of the cloth supplied by the appellant was of inferior quality and were
rejected by the customers. It was also stated that the appellant supplied the
clothes well beyond the delivery date. The clothes had to be immediately
__________
Page16 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
cleared and there was no possibility of the 1st respondent checking the clothes
for quality. It was contended that since payment had already been made for such
rejected goods, the 1st respondent used to raise debit notes for the goods which
had been rejected. In the written statement, the 1st respondent had stated that the
total purchasers till 18.03.2000 on and from 1996 – 1997 was a sum of
Rs.1,99,27,851.60/-. They deducted the debit notes which they had raised for a
sum of Rs.23,11,022.80/-. The 1st respondent claimed that they had paid a sum
of Rs.1,73,73,853.40/-. It was their contention that they had to pay a sum of
Rs.2,42,995.40/-.
36.On the basis of these pleadings, the parties had tendered evidence.
During trial, the appellant had marked Exs.P1 to P308. Among those
documents, Exs.P12 – P303 were either invoices or delivery notes from the
appellant to the 1st respondent. Ex.P11 was the statement of accounts filed by
the appellant export of the invoices and delivery notes. A perusal of Ex.P11,
would show that ten invoices were for the period from 15.05.1995 to
17.11.1995. It is to be noted that the suit claim was for the period 01.04.1996 to
30.06.1998. The plaint was dated 30.09.1999. Even though it could be
reasonably argued that the account was a running account between the appellant
and the 1st respondent, the last invoice raised for which the payment was due
should be within a period of three years. Any invoices which beyond the period
of three years from the date of filing of the plaint would only be barred by
limitation.
__________
Page17 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
37.Viewed from that angle, it has to be stated that Exs.P12, P13, P15, P17
to P23 are barred by law of limitation and the appellant can never seek a relief
with respect to those invoices.
38.A perusal of Ex.P11 indicates that the invoices mentioned in
SL.Nos.11 to 17 were between the dates 08.04.1996 and 13.08.1996. The suit
claim was for the period from 01.04.1996 to 30.06.1998. These invoices had
been raised prior to that particular time period.
39.In view of this fact, the said invoices under Exs.P24 to 29 and 31 will
also have to be rejected as they were prior to the claim period as stated in the
plaint.
40.It had been the consistent stand of the respondents that they had
protested against the quality of the cloth and had therefore raised debit notes. It
had been contended that as per Ex.D2, the appellant had admitted to 5%
discount which was required to be debited and which was found in Ex.D3 and
had not been taken into account by the appellant. It was also stated that the
reasons for raising the debit notes had been communicated by Ex.D4 dated
24.11.1998 which had been acknowledged by the appellant.
__________
Page18 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
41.It had been however pointed out on behalf of the appellant that the
respondents have not produced even one debit note as a document during trial.
The witness for the respondents gave evasive answers when confronted with the
fact that the respondent had not produced even one debit note. With respect to
the issue that the price quoted by the appellant was more than the prices offered
by other supplies, DW-1 had answered as follows:
“Qn:Did you at any point of time raise your little finger that
the goods were over priced?
Ans: It was not raised because of the good faith with the
plaintiff Mr.C.P.Nair.
Qn:Did you at any point of time write letters to plaintiff
stating that such invoices were over priced?
Ans:No letters were written.”
42.It is thus seen that the respondents had not protested about the alleged
increased price.
43.It is also seen that even in the written statement there has been no
mention about raising of debit notes.
44.With respect to the allegations that the quality of the fabrics were
substandard and raising of the debit notes, DW-2 had answered as follows:
__________
Page19 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
“Qn: Were you the competent person to speak about
whether the goods were sent according to the specification and
also about rejection of goods ?
Ans: No
Qn: You can't comment because you were not competent
to speak about rejection?
Ans: Yes.
Qn: Does your firm have a separate book for debit
notes?
Ans: I cannot say if it was separate book but we were
maintaining it systematically.
Qn: Do you keep debit notes in loose sheets or bound
volumes?
Ans: It was kept in debit note pads.
Qn: I put it to you that none of the debit notes have been
sent by the defendant to the plaintiff?
Ans: Sending of debit note was not handled by accounts
department.
Qn: Do you have the copies of debit notes?
Ans: Yes
Qn: Can you produce it now?
Ans: If all the copies are available we can try to produce.
This has been already submitted to this Hon'ble Court.”
45.It must however be pointed out that even one debit note had not been
produced during trial.
__________
Page20 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
46.The learned counsel for the 1st respondent placed reliance on the
following observations of the Hon’ble Supreme Court in a matter relating to
Section 13 of the Hindu Marriage Act, 1955 wherein, divorce was sought on the
ground of desertion and cruelty. In the judgment reported in 2008 10 SCC 497,
Jagdish Singh Vs. Madhuri Devi, in paragraph 28, it had been observed as
follows:
“28. At the same time, however, the appellate court is
expected, nay bound, to bear in mind a finding recorded by the trial
court on oral evidence. It should not forget that the trial court had an
advantage and opportunity of seeing the demeanour of witnesses and,
hence, the trial court's conclusions should not normally be disturbed.
No doubt, the appellate court possesses the same powers as that of
the original court, but they have to be exercised with proper care,
caution and circumspection. When a finding of fact has been
recorded by the trial court mainly on appreciation of oral evidence, it
should not be lightly disturbed unless the approach of the trial court
in appraisal of evidence is erroneous, contrary to well-established
principles of law or unreasonable.”
47.In the instant case, it is to be noted that the learned Single Judge had
not referred even once in the judgment to the evidence recorded. The fact that
the debit notes had not been produced was also neither stated by the learned
Single Judge nor addressed by the learned Single Judge in the course of the
judgment.
__________
Page21 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
48.The learned counsel for the 1st respondent placed further reliance on
the judgment reported in AIR 1967 SC 181, Gordon Woodroffe and Company
(Madras) Ltd., Vs. Sheikh M.A. Majid & Co. The facts of the case were as
follows:
“1. The respondent was a trader at Madras in hides and
skins. The appellant was a firm, Gordan Woodroffe and Company
(Madras) Ltd., doing business among other things as exporters of
hides and skins. For the period of 8 months commencing from
January 1949 there were as many as 101 contracts entered into
between the appellant and the respondent.
2. The case of the respondent was that he entered into an
agreement with the appellant to act as agents for shipping the
goods (hides and skins) to the United Kingdom and for finding
purchasers there. It is alleged that the appellant used to make
payment to the respondent in respect of the goods sent to it for
shipment in the nature of advances and he used to set off these
advances when payment was made to the respondent after the
goods were shipped. The respondent will hereinafter be referred to
as "the plaintiff" and the appellant as "the defendants".
3. The plaintiff tentatively claimed a sum of Rs 56,564 and
odd as due to him as balance of the price of the goods and a
further sum of Rs 40,275 as representing the loss sustained by him
by reason of the defendants' conduct in not shipping his goods
under the "Shaik mark". The plaintiff accordingly prayed that an
__________
Page22 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
account should be taken of the dealings between the parties for the
period in question.
4. The defendants contested the suit on the ground that it was
not an agent of the plaintiff but it purchased hides from the plaintiff
for export and for resale in the United Kingdom. The case of the
defendants was that there was an outright purchase of the goods
from the plaintiff for the purpose of resale in the United Kingdom.
The defendants also contended that a sum of Rs 4351 and odd was
due to it from the plaintiff and it prayed for a decree against the
plaintiff for that amount by way of counterclaim.”
49.The trial Judge dismissed the suit and decreed the counter claim of the
defendants. On appeal, the High Court reversed the judgment of the trial Court
and decreed the suit and directed taking of accounts. The counter claim was also
allowed. The Hon’ble Supreme Court while examining the issue of separate
contract notes being sent by the defendants to the plaintiff and the statement of
accounts with a covering letter as well as cheque for the balance due to the
plaintiff being sent to the plaintiff from time to time and that there were 101
contract forms and several statement of accounts sent to the plaintiff to none of
which the plaintiff had raised any objection had held as follows:
“37. It is admitted in this case that for almost every shipment
the defendants prepared a statement of account and sent it to the
__________
Page23 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
plaintiff giving full particulars of the amount due to him together
with the deduction and showing the net balance payable to him and
enclosing a cheque for such balance or giving a credit for the sum in
the accounts. Copies of such accounts are Exts. P-1A, P-2A and
P-3A corresponding to the contracts Exts. P-1, P-2 and P-3. Copies
of other accounts have been filed by the defendants in the Court and
marked Ext. D-18 series.
38. The plaintiff in his evidence did not deny the receipt of these
accounts. On the contrary, he admitted in cross examination that for
every shipment he was getting accounts and cheques for the balance
due. It is an admitted fact that to these statements of account no
objection was raised by the plaintiff at any time. Nor a single
document has been produced on his side to show that he ever wrote
to the defendants raising an objection to the statements of account.
Not only the plaintiff failed to raise objection to the several
statements of account but at one stage sent a memorandum to the
defendants accepting the accuracy of the accounts.
41. The legal position is that the accounts are settled or stated
if they are submitted and accepted as correct by the other side to
whom the accounts have been rendered. Such a statement of
accounts need not be in writing, nor is it necessary that before the
accounts are settled, they should be gone into by the parties and
scrutinised and supported by vouchers. It is sufficient if the accounts
are accepted and such acceptance may be inferred by conduct of
parties. …….”
__________
Page24 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
50.It was thereafter held in paragraph No.45 as follows:
“45. The contention on behalf of the defendants is that there
has been a "stated" or "settled" account in this case and in the
absence of fraud, mistake or any other sufficient equitable ground
it is not liable to be reopened at the instance of the plaintiff. In this
connection it is necessary to state that the expression "account
stated" has more than one meaning. It sometimes means a claim to
payment made by one party and admitted by the other to be
correct. An account stated in this sense is no more than an
admission of a debt out of court; while it is no doubt cogent
evidence against the admitting party, and throws upon him the
burden of proving that the debt is not due, it may, like any other
admission, be shown to have been made in error. Where the
transaction is of this character, it makes no difference whether the
account is said to be "stated" or to be "stated and agreed"; the so-
called agreement is without consideration and amounts to no more
than an admission.”
51.The Hon’ble Supreme Court set aside the judgment and decree of the
High Court and restored the judgment and decree of the trial Court dismissing
the suit of the plaintiff and granted counter claim.
52.In the instant case, the respondents had not produced any debit note as
document before this Court. The invoices raised by the appellants have been
produced before the Court and marked as documents. While answering the issue
__________
Page25 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
of a part of claim being barred by limitation and another part of the claim being
outside the purview for the period which the claim made, this Court had
examined the invoices and had rejected such of those invoices which were
barred by limitation and which were outside the time period for which the claim
was made. Very significantly, the 1st respondent in their communication which
was marked as Ex.P305 had admitted as follows:
“Dear Sir,
While I was in Madras you had given me a statement of A/C
showing the outstanding is Rs.24 Lakhs, but according to us it is only
Rs.17 Lakhs approximately. Please note although you have received
the enclosed payment i.e. of Rs.4,85,952.70 as under:
1) 4th Sept. 98 Rs. 18,791.00
2)24th Sept. 98 Rs.3,91,008.00 (with Debit Note)
3)22nd Dec. 98 Rs. 76,153.10 (with Debit Note)
Your A/C has not taken this. So please go over your A/C and resent the
corrected one to tally.
Thanking you,
Yours faithfully,
for, BURLINGTONS’ EXPORTS
MANAGER”
53.It is thus seen that at the earliest point of time on 15.09.1999, there has
been a categorical admission by the 1 st respondent that they were liable to pay,
at that time, a sum of Rs.17/- lakhs to the appellant. It is thus evident that even
though the appellant had challenged and disputed Ex.P11, the invoices which
__________
Page26 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
were barred by limitation and which were outside the period of claim alone can
be deleted, and the respondents will have to be made liable for payment on the
other invoices.
54.When viewed from that angle, the total amount under Exs.P12, P13,
P15, P17 to P23 for a sum of Rs.1,56,899/- and the amount under the invoices
in Exs.P24 to 29 and 31 for a sum of Rs.102,078/- will have to be deducted
from the principle amount claimed in the plaint. This would leave a balance of
Rs.23,62,162/-.
55.With respect to the interest component, a perusal of the plaint shows
that clarity had not been given as to how the interest was calculated on the
principle sum of Rs.26,21,139/- and the period for which such interest was
determined.
56.We would therefore, partly decree the suit to a sum of Rs.23,62,162/-
and grant interest from the date of plaint till the date of realization at 24% per
annum which was the agreed rate of interest mentioned in the invoice forwarded
by the appellant to the 1st respondent.
__________
Page27 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
57.In the result, the points framed for consideration are answered as
follows:
i).The total amount under the invoices in Exs.P12, P13, P15, P17 to P23
for a sum of Rs.1,56,899/- are held to be barred by limitation.
ii).The amount under the invoices in Exs.P24 to 29 and 31 for a sum of
Rs.1,02,078/- are rejected since they were prior to the suit claim.
iii).The claim of the respondents regarding debit notes are rejected since
the debit notes had not been produced and filed as documents before the Court.
iv).The appeal is partly decreed with costs granting a judgment and
decree for a sum of Rs.23,62,162/- [26,21,139 – 1,56,899 – 1,02,078] together
with interest at 24% from the date of the plaint till date of decree and @ 6% p.a
from the date of decree till the date of realization.
(C.V.K.,J.) (K.B.,J.)
13-03-2026
smv
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
__________
Page28 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
C.V.KARTHIKEYAN, J.
AND
K.KUMARESH BABU, J.
smv
Pre-delivery Judgment made in
13-03-2026
__________
Page29 of 29
https://www.mhc.tn.gov.in/judis ( Uploaded on: 16/03/2026 06:06:38 pm )
