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Navnitlal Girdharlal Contractor Vs. Avdhut Transport Co. - Court Judgment

LegalCrystal Citation
SubjectCivil;Limitation
CourtGujarat High Court
Decided On
Judge
Reported in(1983)2GLR1461
AppellantNavnitlal Girdharlal Contractor
RespondentAvdhut Transport Co.
Cases ReferredHindustan Forest Company v. Lal Chand and Ors.
Excerpt:
- - 2, 457. 72. the defendant appeared in the suit and resisted the same on facts as well as on law points. 4. from the accounts produced during the course of evidence and a copy of which has been shown to me by the counsel for the petitioner, it clearly transpires that the account of the defendant started from december 22, 1970 and the last item sold to the defendant was on april 15-1977. 5. the defendant made payments towards the aforesaid dues on the following dates: --in this connection it may be stated that the lower appellate court did refer to the decision of the supreme court in hindustan forest company case (supra), but failed to apply the principles laid down therein......description of the suit period of time from whichno. limitation period begins to run--------------------------------------------------------------------------------14 for the price of goods sold three the date of theand delivered where no fixed years delivery of theperiod of credit is agreed goodsupon.--------------------------------------------------------------------------------in the instant case the suit has been filed on april 2, 1974. therefore the items of goods sold and delivered within three years prior to the date of filing of the suit, i.e. april 2, 1974, would be within the period of limitation. now, as per the accounts produced and relied upon by the plaintiff, the only item which falls within.....
Judgment:

A.P. Ravani, J.

1. Would the part-payment, without anything more, made towards the dues for the goods sold and delivered extend the period of limitation from the date of making such part-payment? This short question arises in this revision application.

2. The opponent-plaintiff filed a suit being Regular Civil Suit No. 404 of 1974 in the court of Civil Judge (SD), Vadodara, for the recovery of Rs. 2,457.72 from the defendant. The plaintiff is a carting contractor and is doing business of commission agent. It was the case of the plaintiff that the defendant had purchased certain building materials from the plaintiff to the tune of Rs. 4,307.72 and towards this amount he paid Rs. 2,500/- and an amount of Rs. 1,807.72 remained due towards the principal amount. According to the plaintiff, an amount of Rs. 650/ as and by way of interest calculated at the rate of 12 per cent per annum also fell due.

3. The plaintiff contended that even after the notice of demand was served upon the defendant, he did not pay the dues and hence the suit was filed for the recovery of the amount due, i.e. Rs. 2, 457. 72. The defendant appeared in the suit and resisted the same on facts as well as on law points. He inter alia contended that the suit filed by the plaintiff was beyond the period of limitation under the provisions of the Limitation Act. The trial court negatived the contention of the defendant on this score on the ground that the account was a running account and the period of limitation will start to run from the date of payment of the last amount and decreed the suit of the plaintiff in its entirety. The defendant preferred an appeal being Regular Civil Appeal No. 405 of 1980 in the court of District Judge, Vadodara. The learned 2nd Extra Assistant Judge, Vadodara. who heard the appeal, partially allowed the same inasmuch as he held that the plaintiff was entitled to get 6 per cent interest per annum and not 12 per cent interest on the amount due and he confirmed the judgment and decree passed by the trial court to the aforesaid extent by his judgment and order dated December 4, 1981. The aforesaid judgment and decree of the courts below is challenged in the revision application by the original defendant.

4. From the accounts produced during the course of evidence and a copy of which has been shown to me by the counsel for the petitioner, it clearly transpires that the account of the defendant started from December 22, 1970 and the last item sold to the defendant was on April 15-1977.

5. The defendant made payments towards the aforesaid dues on the following dates:

Date of Payment Amount5-2-1971 Rs. 1,000.0012-2-1971 Rs. 1,000.0010-4-1971 Rs. 500.00Total Rs. 2,500.00

Now it is clear that the present suit was for the recovery of the price of goods sold and delivered and it was not the case of the plaintiff that the parties agreed for a fixed period of credit. Hence the provisions of Article 14 of Schedule to the Limitation Act will be applicable to the facts and circumstances of the case. The said provisions read as follows:

--------------------------------------------------------------------------------Article Description of the suit Period of Time from whichNo. Limitation period begins to run--------------------------------------------------------------------------------14 For the price of goods sold Three The date of theand delivered where no fixed years delivery of theperiod of credit is agreed goodsupon.--------------------------------------------------------------------------------

In the instant case the suit has been filed on April 2, 1974. Therefore the items of goods sold and delivered within three years prior to the date of filing of the suit, i.e. April 2, 1974, would be within the period of limitation. Now, as per the accounts produced and relied upon by the plaintiff, the only item which falls within the period of limitation is that of April 15, 1971 on which date the goods worth Rs. 112. 50 had been sold and delivered to the defendant.

6. The trial court proceeded on the footing that the account of the defendant was a running account and therefore from the date of last payment of Rs. 500/-, i.e. of April 10, 1971, the time would commence to run. The trial court simply observed that the suit was for the goods supplied on credit and the account was a running account of the defendant with the plaintiff. On this basis only and without giving any other reason. the trial court held that the suit was within the period of limitation and decreed the suit of the plaintiff. The defendant preferred an appeal in the court of District Judge, Vadodara, which was heard by the 2nd Extra Assistant Judge, Vadodara. During the course of the judgment the learned 2nd Extra Assistant Judge referred to various decisions including the decision of the Supreme Court in the case of Hindustan Forest Company v. Lal Chand and Ors. reported in A.I.R. 1939 S.C. 1349. Still however, he confirmed the decree passed by the trial court on the footing that as per the pleadings of the plaintiff, the suit was within the period of limitation. A copy of the plaint has been shown to me by the counsel for the petitioner. Nowhere in the plaint it is pleaded that there was acknowledgment of the dues within the prescribed period of limitation. There is no issue as to whether there was valid, subsisting and binding acknowledgment of the dues. Therefore the finding given by the lower appellate court that on the basis of the pleadings of the plaintiff the suit was within the period of limitation is not correct and the same cannot be sustained.

7. Now the question remains to be answered is, can the transactions between the parties be said to be of mutual, open and current account where there have been reciprocal demands between the parties? If that be so, the provisions of Article I of the Schedule to the Limitation Act would apply. The Article reads as follows:

--------------------------------------------------------------------------------Description of suit Period of Time from which periodLimitation begins to run--------------------------------------------------------------------------------1. For the balance due on a mutual. Three The close of the year in openand current account, where years which the last item admittedthere have been reciprocal or proved is entered in thedemands between the parties account; such year to becomputed as in the account.--------------------------------------------------------------------------------

In this connection it may be stated that the lower appellate court did refer to the decision of the Supreme Court in Hindustan Forest Company case (supra), but failed to apply the principles laid down therein. The Supreme Court dealt with the provisions of Article 85 of the Limitation Act of 1908. In the new Limitation Act of 1963, the same provision has been verbatim made in Article I which has been reproduced herein above. The Supreme Court in the aforesaid case stated that the requirement of reciprocal demands involves 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. In the instant case there is no reciprocity whatsoever which created independent obligations on either side. The provisions of Article I and particularly the words, 'mutual, open and current account' mean that the transactions must be both on the debit and credit sides creating independent obligations. If there is an entry shown on one side which is set off by the payment of debt, it cannot be said to be mutual, open and current account. There must be existence of reciprocity of demands. The essence of mutual, open and current account is that there must be independent dealings between the parties which can be duly set off between each other. In the instant case the defendant made payment after the goods were delivered and the payments made were towards the price due. These part-payments were in discharge of obligations created on the buyer on account of the deliveries made to him. His obligation was to pay the price of the goods delivered. These part-payments did not create any obligation on the seller in favour of the buyer. Therefore it is clear that the provisions of Article I of the Schedule to the Limitation Act cannot be made applicable to the facts end circumstances of this case.

In view of the aforesaid position, it is obvious that the courts below have committed an error of law in holding that the suit of the plaintiff was within the prescribed period of limitation. As discussed hereinabove only the last item of Rs. 112.50 dated April 15, 1971 would be within the prescribed period of limitation since the suit was filed on April 2, 1974. In view of the aforesaid discussion it is clear that there is nothing in the Law of Limitation which provides that mere part-payment of certain amount without anything more indicating acknowledgment of the debts in writing would extend the period of limitation from the date of making of such part-payment.

8. In the result, the judgment and decree passed by the courts below will have to be modified as follows:

The revision application is partially allowed. The judgment and decree passed by the court of Civil Judge (SD), Vadodara, in Regular Civil Suit No. 404 of 1974 and partially confirmed by the court of 2nd Extra Assistant Judge, Vadodara, in Regular Civil Appeal No. 405 of 1980 are reversed and set aside and the suit of the plaintiff to the extent of Rs. 112.50 only is allowed. The plaintiff do recover the sum of Rs. 112.50 with 12 per cent interest from April 15, 1971 till the date of filing of the suit and thereafter with 6 per cent interest till its realisation with proportionate costs. The rest of the claim of the plaintiff is ordered to be dismissed. Rule is made absolute to the extent indicated hereinabove.


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