S. Palanivelu, J.@mdashThis appeal is filed against the judgment and decree passed in O.S. No. 1350 of 2000, dated 16.04.2003 on the file of the Additional District Judge, Fast Track Court V, Chennai.
2. The following are the allegations in short available in the plaint:
2a) The Plaintiff deals with welded mesh. The Defendant placed an order over phone at Madras for purchase of wire mesh and as per the request, the goods were supplied as per purchase order No. 330 dated 07.03.1996 on 11.05.1996. The Defendant requested the Plaintiff to reduce the quantity of supply of goods and accordingly the goods were supplied to the value of Rs. 6,05,247.50.
2b) By means of Bill No. 018 dated 15.04.1996, the Defendant made payment for a sum of Rs. 41,072/- by Cheque No. 272238 dated 27.04.1996 and for the Bill No. 037 dated 26.04.1996 for a sum of Rs. 1,33,407.50. He also made payment for bill No. 37 for Rs. 1,33,407.50 by Cheque No. 328149 dated 24.12.1996. The Defendant owed a sum of Rs. 4,30,768/- to the Plaintiff. The Plaintiff is keeping the running account for the supply of goods to the Defendant.
2c) As per terms and conditions, since the Defendant has not issued "C" Form, he is also liable to pay 10% of the goods supplied i.e., Rs. 65,247.50. The Plaintiff has sent several letters dated 07.06.1997, 23.06.1997, 30.08.1997 and 30.09.1997 even though he received the same, the Defendant has not paid any amount. On 05.09.1996 by a fax message he informed the Plaintiff to wait for one or two weeks before being requested for apology for delayed payment made for Bill Nos. 18 and 37. On 22.09.1998 the Plaintiff issued legal notice for which the Defendant sent reply on 09.10.1998 denying his liability. On 30.10.1998, again, the Plaintiff issued lawyer''s notice for which he issued reply on 16.11.1998 requesting the Plaintiff''s counsel to provide the copy of purchase orders and proof of delivery of materials on 12.12.1998. The Plaintiff''s counsel sent a notice enclosing copies of purchase order and letter dated 05.09.1996. On 23.12.1998, the Defendant issued reply stating that the enclosed copies were not received. Hence the Plaintiff''s counsel has also issued a legal notice on 22.02.1999, for which there was no reply.
2d) As per the terms of purchase order, if the amounts were not paid within three days, the Defendant is liable to pay interest at the rate of 24% p.a.
2e) The suit is not barred on account of the Defendant''s payment on 24.12.1996 of a sum of Rs. 1,33,407.50 under Cheque No. 328149. Hence the suit has been filed for recovery of Rs. 8,66,437/- being principal for payment for non-issuing of "C" form and interest.
3. In the written statement the Defendant has alleged as follows:
3a) The Plaintiff used to raise bills towards the supplies effected and payments were made in respect of each bill. Separate Invoice Nos. 18, 37, 58 and 84 were raised for each supply. Even according to the Plaintiff the Defendant has paid separately in respect of last Invoice No. 18 and 37. It is denied that the Plaintiff is maintaining a running account and the last bill has been raised by the Plaintiff on 04.06.1996. The suit has been filed in December 1999, beyond the prescribed period of three years. Hence the suit is barred by limitation.
3b) The Defendant has its registered office at Thane, Maharastra State and the factory premises are in Pune, Maharastra. Hence the Court in Chennai does not have jurisdiction to entertain the suit, since no part of cause of the action has arisen in Chennai.
3c) It is denied that the orders were made over phone. The Defendant denies the receipts of the letters dated 07.06.1997, 23.06.1997, 30.08.1997 and 30.09.1997. It is denied that the amounts due under Bill Nos. 58 and 84 have not been settled. Hence the suit may be dismissed with exemplary cost.
4. On scrutiny of the pleadings, evidence, documents on record the learned First Appellate Judge, Fast Track Court V, Chennai has decreed the suit directing to pay with subsequent interest from the date of plaint till the realisation at 6% per annum on the principal of Rs. 4,30,678/-. Hence the Defendant in the suit has carried the judgment in appeal before this Court.
5. The following points are framed for determination in this appeal:
1) Whether the suit is barred by limitation?
2) Whether the Respondent is entitled to get Rs. 65,247.50/- towards non-issue of "C" Form by the Appellant?
3) Whether the Court in Chennai has got jurisdiction to try the suit?
Point No. 1
6. It is conceded that for the purchase of Welded Mesh, the Appellant placed an order over phone with the Respondent and the goods were supplied under purchase order No. 330 on 07.03.1996. The quantity of goods were reduced and the goods to the value of Rs. 6,05,247.50/- was supplied. It is also admitted that for Bill No. 18, a cheque for Rs. 41,072 under Cheque dated 15.04.1996 and for the bill No. 37 Rs. 1,33,407.50/- was paid by cheque dated 24.12.1996; For Bill No. 58 and 84 the amount was not settled and Rs. 2,13,444/- and Rs. 2,17,324/- respectively for the said two bills totaling Rs. 4,30,768/-was outstanding. It is also not denied by the Appellant.
7. Ex.A13 is the statement of accounts produced by the Respondent which is extract of the ledger. It is pleaded in the plaint that for the Bill No. 37, a sum of Rs. 1,33,407.50/- was paid by the Defendant under Cheque No. 328149 dated 24.12.1996. The suit was filed on 20.12.1999. Hence, it is contended that within three years from 24.12.1996, the suit has been filed and it is not out of time. But it is pleaded by the Appellant/Defendant that only on 04.06.1996 the Plaintiff has raised the Bill No. 37 and hence the suit has been filed beyond the period of three years, which is barred by limitation.
8. While the above said factors are taken note of, incidentally it transpires that the transaction between the parties is on the basis of running account as evident from the payment of cheque dated 15.04.1996 for Rs. 41,072/-, by cheque dated 26.04.1996 for Rs. 1,33,407.50/-and it is to be noted that there was no single payment after the delivery of goods and by means of the payment on various dates, both the parties intended to maintain running transaction. It is conceded in the plaint itself.
9. The learned Counsel appearing for the Appellant relies upon a Constitution Bench decision in
There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Halloway A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations.
10. The learned Counsel appearing for the Appellant also cited a Division Bench decision of this Court reported in V.K. Abraham v. N.K. Abraham AIR 1978 Mad 56 : (1977) 90 L.W. 686 in which is it held as under: -
10. We may note in passing that this Court again applied the dictum of Holloway Ag.C.J. And followed the decision of the Supreme Court in
11. Briefly stated in order that an account may be called a mutual, open and current account, there must be independent transactions resulting in possibility of reciprocal demands and shifting balances. The entries should not be mere repayments of advances already received. The accounts must be open and continuing. Examined in this light, we consider that the account between the Plaintiff and the Defendant here can be said to be a mutual, open and current account.
11. The learned Senior Counsel Mr. T.L. Rammohan, appearing for the Respondent would garner support from a decision of this Court reported in
Shapoor Freedom Mazda v. Durga Prosad Chamaria AIR 1961 SC 236
6. It is thus clear that acknowledgment as prescribed by Section 19 merely renews debt; it does not create a new right of action. It is a mere acknowledgment of the liability in respect of the right in question; it need not be accompanied by a promise to pay either expressly or even by implication.
13. It is seen from the above judgment that the acknowledgment as prescribed u/s 19 merely renews debt. It does not create a new right of action and it is a mere acknowledgment of liability in respect of the right in question and it need not be accompanied by promise to pay either expressly or even by implication.
12. In this regard the learned Counsel appearing for the Appellant Mr. V. Nataraj would rely upon a Division Bench decision of Karnataka High Court wherein after referring to a decision of the Supreme Court it is held in
The scope of Section 20 of the Limitation Act, 1908 (for short ''Old Act'') is considered by the Supreme Court in
13. In the above said case before the Karnataka High Court, the transaction pertains to the supply of beer and its delivery to the Defendant for which no period for payment was fixed or agreed to. It is observed therein that there is no doubt that Article 14 of the Limitation Act was attracted because there was no fixed period of credit agreed upon by the parties for the price of the goods sold and delivered and in such a case, the limitation commences from the delivery of goods. Therefore the date on which the beer was last sold and delivered has to be taken and the suit ought to have been filed within three years from the date of delivery.
14. Article 1 & 14 of the Limitation Act read thus:
|
Article No. |
Description of suit |
Period of limitation |
Time from which period begins to run |
|
1 |
For the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties. |
Three years |
The close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account. |
|
14. |
14 For the price of goods sold and delivered where no fixed period of credit is agreed upon. |
Three years |
The date of the delivery of the goods. |
15. In the above said case, the Karnataka High Court is of opinion that Article 14 of the Act was attracted and on the basis of Section 19 the payment on account of a debt or of interest before the expiration of the prescribed period of limitation should be followed by an acknowledgment in writing signed by the person making the payment. The relevant provisions are Section 18 and 19 of the Limitation Act which read as follows:
18. Effect of acknowledgment in writing: (1) where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such propperty or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
2. Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation: For the purpose of this Section-
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;
(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf; and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.
"19. Effect of payment on account of debt or of interest on legacy.- Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:
Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
16. In the above said case, it was contended that the account maintained was mutual, open and current and where there have been reciprocal demands between the parties, there was no other independent transaction in respect of which the payments were made by the Defendant.
17. It was held that as per the decision of the Supreme Court in Santlal''s case supra that, apart from the payment, there must be an acknowledgment in writing of the payment by the person making the payment to attract Section 19 of the Limitation Act. In a subsequent decision of the Supreme Court in
18. But in
To calim exemption u/s 20, the Plaintiff must be in a position to allege and prove not only that there was payment of interest on a debt or part payment of the principal, but that such payment had been acknowledged in writing in the manner contemplated by that section. The ground of exemption is not complete without this second element, and unless both these elements are proved to exist at the date of the plaint the suit would be held to be time barred. Where non of the payments were endorsed on the bond itself and there was no acknowledgment either in the handwriting of or signed by the debtors prior to the institution of the suit, but in the written statement filed in the suit the Defendants admitted the payments specified in the plaint as made on the respective dates and the written statement was signed by Defendants it would not fulfil the requirements of a signed acknowledge as is contemplated by the proviso to Section 20.
19. Section 20 of the earlier Limitation Act (9/1908) is analogous to Section 19 of the new Act in verbatim. What Section 20 of the old Act says, has been reiterated in Section 19 of the new Act. There is no difference at all. Hence, the principles laid down u/s 20 of the old Act would be applicable to the debts which are governed by the present Section 19 of the new Act. In the present case on hand, concededly the Plaintiff was maintaining a running account. By means of Ex.A-5 the Defendant sent a fax message on 5.9.1996 admitting the debt and stated that they are in a position to clear all the debts and requested the Plaintiff to wait for one more week or two. It can be treated as an acknowledgment u/s 18 of the present Act. Worthwhile it is to say that contents in Section 19 of the old Act No. 9/1908 are being reproduced in Section 18 of the present Act. So Section 18 of the new act is Section 19 of the old Act.
20. Ex.A-5 could be treated as an acknowledgment of debt. Even though if there were not any payment, the suit should have been filed three years from 5.9.1996, the date of Ex.A-5. But the suit has been filed on 20.12.1999. As per the guidelines laid down in Sant Lal Motion''s case (supra), mere payment of interest or part of the principal is not sufficient to the said payment has to be acknowledged in writing in the manner contemplated by Section 19 of the Act. In this regard, the learned Senior Counsel appearing for the Plaintiff would contend that as required by law, both the acknowledgment and repayment of debt are available in this case and hence the suit is well within time. But the acknowledgment under Ex.A-5 precedes the payment made on 24.12.1996.
21. As per the decision in Sant Lal Mahton''s case (supra), the legal requirement is that the payment should have been made within the period of limitation and the said payment should also be acknowledged by the borrower in writing and performance of one act alone without other act will not save limitation. In the present case, the payment on 24.12.1996 has not been acknowledged in writing by the Defendant. The acknowledgment had been on an earlier date. Such acknowledgment is of no avail. The legal requirement is, payment within the period of limitation shall be acknowledged in writing by borrower and from the date of such acknowledgment time would begin to run. In the absence of such acknowledgment, mere payment alone would not serve limitation. To put it differently in clear terms, mere payment made on 24.12.1996 by the Defendant, sans acknowledgment of such payment will not save limitation and even if the suit was filed on 20.12.1999, within 3 years from 24.12.1996 it will not save limitation.
22. In view of the above said observations recorded, following the Full Bench decision of the Supreme Court in Sant Lal Mahton''s case (supra), it is held that the suit is barred by time. The point is answered in the affirmative. In view of the findings and conclusions taken up under point No. 1, it is held that the suit is barred by time.
Point No. 2
23. From the evidence of P.W.1 it transpires that it is the business practice that the purchaser has to issue "C" Form in order to get the sale exemption. But the Appellant did not issue any such form. Hence, the Respondent had to pay Rs. 65,250/- towards Sales Tax to the Government. Even though, the liability is denied in the written statement, P.W.1 was not put to any suggestion with regard to this. The Appellant did not examine himself to say that he is not liable to pay such amount. Hence, the obligation has not been fulfilled by the Appellant, he has to pay as claimed towards the sales tax. This point is answered in affirmative.
Point No. 3
24. It is pleaded that the Court in Chennai has no territorial jurisdiction to try the case. But it has to be borne in mind that major course of cause of action occurred in Chennai. The Respondent''s office is in Chennai and the Appellant placed order with them and after accepting the same, the Respondent delivered the goods. Hence, it cannot be contended that the Court in Chennai has no territorial jurisdiction to try this case. This point is answered in affirmative.
25. In view of the above, the judgment and decree of the trial Court have necessarily to be interfered with, which deserve to be set aside and they are, accordingly set aside. The Appeal deserves to be allowed.
26. In the result, the Appeal Suit is allowed. No costs. O.S. No. 1350 of 2000 on the file of the Additional District Judge, Fast Tract Court V, Chennai, is dismissed without costs. Connected C.M.P. is closed.
