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Attadi Venketi Vs. Bharatam Ramulu and Sons - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtOrissa High Court
Decided On
Case NumberCivil Revn. No. 66 of 1980
Judge
Reported inAIR1984Ori226; 57(1984)CLT227; 1984(I)OLR270
ActsLimitation Act, 1963 - Schedule - Articles 1, 14 and 26
AppellantAttadi Venketi
RespondentBharatam Ramulu and Sons
Appellant AdvocateY.S.N. Murty, Adv.
Respondent AdvocateP.K. Misra, ;L. Mohapatra and ;N.C. Pati, Advs.
DispositionRevision allowed
Cases ReferredKesharichand Jaisukhalal v. Shillong Banking Corporation Led.
Excerpt:
.....is made and for this purpose the court has the discretion either to grant time to make the deposit or not. no formal order condoning the delay is necessary, an order of adjournment would suffice. the provisions of limitation embodied in the substantive provision of the sub-section (1) of section 173 of the act does not extend to the provision relating to the deposit of statutory amount as embodies in the first proviso. therefore an appeal filed within the period of limitation or within the extended period of limitation, cannot be admitted for hearing on merit unless the statutory deposit is made either with the memo of appeal or on such date as may be permitted by the court. no specific order condoning any delay for the purpose of deposit under first proviso to sub-section (1) of section..........a dealer in ready-made garments used to purchase cloths from him on credit and make payments from time to time in due discharge of the credit account. last purchase was made by the defendant on 16-8-73 and the last payment was made by him on 28-9-73. thereafter the defendant discontinued his business transaction with the plaintiff. a sum of rs. 1,476.67 paise was left unpaid by the defendant. he did not pay up the dues despite demands. hence the suit for recovery of rs. 1.474.67 paise with interest at 12 p. c. p. a. 3. the defendant admitted that he had business transactions with the plaintiff and that he was making payments towards the total dues from time to time, but contended that he had discontinued his business transaction with the plaintiff after 1972. the allegation that last.....
Judgment:
ORDER

P.K. Mohanty, J.

1. This Civil Revision arises out of a suit for recovery of money.

2. The plaintiff is a wholesale dealer in cloth. He filed the suit on the allegation that the defendant who is a dealer in ready-made garments used to purchase cloths from him on credit and make payments from time to time in due discharge of the credit account. Last purchase was made by the defendant on 16-8-73 and the last payment was made by him on 28-9-73. Thereafter the defendant discontinued his business transaction with the plaintiff. A sum of Rs. 1,476.67 paise was left unpaid by the defendant. He did not pay up the dues despite demands. Hence the suit for recovery of Rs. 1.474.67 paise with interest at 12 p. c. p. a.

3. The defendant admitted that he had business transactions with the plaintiff and that he was making payments towards the total dues from time to time, but contended that he had discontinued his business transaction with the plaintiff after 1972. The allegation that last purchase of cloth was made on 16-8-73 and last payment was made on 28-9-73 was denied and the suit was resisted on the ground of limitation.

4. The trial court, on a consideration of the evidence on the record, held that the plaintiffs case that the last transaction was made in August. 1973 and the last payment was made in Sep. 1973 is true, but it held that there being no open, mutual and current account between the parties Article I of the Limitation Act could not apply and that the suit was governed by Article 14 of the Limitation Act. Accordingly he found that the different transactions between the parties being distinct and separate all the items of suit claim except the one for Rs. 98.25 paise under Dill No. 300 dated 16-8-73 were barred by limitation and that the plaintiff was not entitled to any interest. Upon such findings, the plaintiff's suit was decreed in part for a sum of Rs. 98.25 paise with proportionate costs.

5. On appeal, the learned Additional District Judge held that the parties were taking all the transactions to be a continued whole and that payment were made by the defendant and appropriated by the plaintiff from time to time towards the total balance dues, but not towards the particular item of transaction. Accordingly he differed from the finding of the trial Court and held that this was an open, mutual and current account to which Article 1 did apply and on such findings he decreed the suit claims but dismissed the claim for interest.

6. The main question for consideration in this revision is whether Article 1 or Article 14 of the Limitation Act, 1963, is applicable to the facts of this case. Article 1 applies to suits for the balance due on the mutual, open and current account, where there have been reciprocal demands between the parties. In such a case limitation is three years computed from the close of the year in which the last admitted or proved is entered in the account.

Article 14 applies to suits for the price ofgoods sold and delivered where no fixed period of credit is agreed upon. Period oflimitation in such a suit is three years fromthe date of the delivery of the goods.

7. Article 1 applies to a case where balance is due on mutual, open and current account and when there had been reciprocal demands between the parties. The distinctive features of a mutual account are that there should be two sets of independent transactions between the parties and in one transaction one of the parties should be debtor and the other creditor, whereas in the other transaction the parties should occupy reverse positions. The dealings should indicate independent obligation on both sides and not merely obligations on one side. The test of mutuality is that the dealings between the parties should be such that the balance is sometimes in favour of one party and sometimes in favour of the other. In the case of Hindusthan Forest Co. v. Lal Chand : AIR 1959 SC 1349, their Lordships while construing the provisions of Article 85 of the Limitation Act, 1908 (corresponding to Article I of the new Limitation Act, 1963) quoted with approval the observations of Rankin, C. J. in AIR 1931 Cal 359 at p. 368. The Tea Financing Syndicate Ltd. v. Chandra Kamal. The observations are in the following words :

'There can, I think be no doubt that the requirement of reciprocal demands involves, as all the Indian Cases have decided following Holloway, Ag. 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.......'

The same principle was followed in the case of Kesharichand Jaisukhalal v. Shillong Banking Corporation Led. AIR 1965 SC 1711.

8. In the present case, the plaintiff's suit is not based on mutual, open and current account so as to attract the provisions of Article 1 The averments in the plaint are to the effect that the defendant used to take cloths on credit and remit money towards the dues. There was no reciprocity of dealings and there are no independent obligations. What in fact had happened was that the plaintiff had supplied goods and the defendant had agreed to pay for them and had made payments towards the plaintiff's dues. Thus, it was a case of supply of goods for a price to be paid. Payments were made in discharge of the obligations created by the delivery of goods made to the defendant and did not create any obligation on the plaintiff in favour of the defendant. The trial Court was, therefore, justified in holding that there was no mutual, open and current account between the parties and Article 1 did not govern the suit.

9. The reasonings adopted by the learned additional District Judge would appear from the following observations made in para 5 of the appellate judgment :

'......In the instant case, the averments of the written statement in para 2 would indicate that the defendant used to borrow goods on credit on Khata-account and used to pay from time to time towards the dues of khata account. The last few words namely 'towards the dues on khata accounts' are significant which indicate in unequivocal term that the parties take the transactions as one unit and that too, in a continued khata account process, otherwise, payment towards the total dues could not have been incorporated in the written statement. Even apart from the written statement, we find from the catalogue of instance of borrowing of goods in khata running account not less than 30 to 35 transactions during the relevant period. Furthermore, we find payments at different points of time and the total number is not less than 20 or 25 during these transactions. These would indicate that the parties are taking different transactions from time to time in a continued process as we find in running current account on khata deal and further the defendant has been making payments not towards any particular item of transaction but towards the dues as a whole.'

Apparently the learned Additional District Judge has committed an error of record while referring to para 2 of the written statement. The defendant has not at all referred to any khata account in para 2 of his written statement. Para 2 is reproduced below :

'2. It is a fact that the plaintiff was doing business in cloth. It is also a fact that the defendant was dealer in readymade clothes. It is also correct to state that the defendant used to take cloth on credit from the plaintiff and used to repay the money towards the dues.'

In his plaint the plaintiff did not also rely on any khata account in support of his claim. He did not produce the account books at the time of filing the plaint, as required under Order 7 Rule 17, C. P. C.

Even assuming that the account between the parties was an open and current account yet there are no mutual dealings between the parties giving rise to independent obligations on both sides.

10. For the foregoing reasons. Article 1 of the Limitation Act, 1963 is not applicable to the facts of this case.

11. The plaintiff's suit is also not based on 'accounts stated' so as to attract the application of Article 26. There is absolutely no allegation in the plaint to show that the accounts were gone into by both the parties and a balance was struck. Where the plaintiff comes to Court for realisation of the balance of amount due without any allegation that there was settlement of accounts between the parties Article 26 will not be attracted.

12. The last credit bill for Rs. 98.25 paise is dated 16-8-73 and that was undoubtedly within the period of three years preceding the suit. The previous credit bills were beyond a period of three years from the date of suit. The trial Court was, therefore, justified in decreeing the suit for that amount.

13. In view of my above findings, I would allow the Civil Revision, set aside the decision of the appellate Court and restore that of the trial Court. Parties to bear their own costs incurred in this Court.


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