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Chandra Nath Vs. Pahlad Narain - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 108 of 1954
Judge
Reported inAIR1961Raj154
ActsLimitation Act, 1908 - Sections 20; Contract Act, 1872 - Sections 60
AppellantChandra Nath
RespondentPahlad Narain
Appellant Advocate Krishna Murari, Adv.
Respondent Advocate R.A. Gupta, Adv.
DispositionAppeal partly allowed
Cases ReferredCory Bros. and Co. v. Owners of
Excerpt:
.....had received the price for the whole amount, he could have kept it and if he had got a lien to secure the price, he could retain that lien, but he cannot bring a suit to enforce the cause of action relating to goods delivered more than three years before the filing of the suit......these :prahalad plaintiff is a dealer in lime which he used to supply chandra nath defendant from time to time. the defendant purchased lime from the plaintiff on different dates between 2-11-43 and 7-7-44. the total price of the lime so supplied was rs. 3119/1/9. payments were made by the defendant from time to time and in the beginning of november, 1946 a sum of rs. 1284/4/- was due to the plaintiff. thereafter, the defendant made a payment of rs. 200/- on 17-12-46. this payment bears his signatures and has been relied upon for saving limitation under section 20. the present suit was instituted on 29-10-48.3. the case is admittedly governed by article 52 of the limitation act being a suit for the price of goods sold and delivered where no fixed period of credit is agreed upon. the.....
Judgment:

Jagat Narayan, J.

1. This is a civil second appeal by the defendant in a suit for recovery of money which was decreed by both the courts below.

2. The facts, which have been found by the lower appellate court, are these :

Prahalad plaintiff is a dealer in lime which he used to supply Chandra Nath defendant from time to time. The defendant purchased lime from the plaintiff on different dates between 2-11-43 and 7-7-44. The total price of the lime so supplied was Rs. 3119/1/9. Payments were made by the defendant from time to time and in the beginning of November, 1946 a sum of Rs. 1284/4/- was due to the plaintiff. Thereafter, the defendant made a payment of Rs. 200/- on 17-12-46. This payment bears his signatures and has been relied upon for saving limitation under Section 20. The present suit was instituted on 29-10-48.

3. The case is admittedly governed by Article 52 of the Limitation Act being a suit for the price of goods sold and delivered where no fixed period of credit is agreed upon. The period of limitation prescribed under the Article is three years. Time runs from the date of the delivery of the goods. The lower appellate court held that there was one cause of action in respect of the entire amount due and that limitation was extended in respect of the entire amount due by the payment of Rs. 200/- on 17-12-46. He accordingly decreed the entire principal sum claimed.

4. On behalf of the appellant, it is contended that limitation for each item would run from the date of the delivery of goods and that the payment of Rs. 200/- should be appropriated in paying off the earliest of the demands and that the plaintiffwas not entitled to credit the payment of Rs. 200/-towards the entire balance due on the dealings in the sense of saving limitation for each and everyitem. The cases of Abdul Aziz v. Munnalal, AIR1921 All 325, Firm Puttulal Kunjilal v. Firm B. Jagannath, AIR 1935 All 53 and Firm GulabraiNaraindass v. Firm Ilahi Bux Mohammed Ayub, AIR 1945 All 185 were relied on.

5. On behalf of the respondent, it was contended that the decision of the lower appellate court was correct. Reliance was placed on Kedarnath v. Denobandhu Shaha, AIR 1916 Cal 580, Atmaram Vinayak v. Lalji Lakhamsi, AIR 1940 Bom 158 and Sukhdeo Prasad Baldeo Prasad v. J. Michael, AIR 1938 Nag 266.

6. In AIR 1916 Cal 580, Jenkins, C. J. quoted with approval the following passage from the decision in Bonsey v. Wordsworth, (1856) 18 CB 325 -

'Where a tradesman has a bill against a party for any amount in which the items are so connected together that it appears that the dealing is not intended to terminate with One contract, but to be continuous, so that one item, if not paid, shall be united with another, and form one continuous demand the whole together forms but one cause of action and cannot be divided,'

7. It was held that a cheque given to the tradesman in part payment of the bill saved limitation so far as the entire demand was concerned.

8. It was pointed out in AIR 1935 All 53 that Bonscy v. Wordsworth case was not an authority for the proposition that for purposes of limitation, in the case of a continuous demand the whole forms but one cause of action. The question there was a question of jurisdiction and it was held that in a case like this although a part of the cause of action might arise in a different place for purposes of jurisdiction, the entire cause of action must be deemed to be one. Their Lordships, who decided the case, saw no reason to extend the principle to a question of limitation.

The earlier decision of the same court in AIR 1921 All 325 was referred to wherein it was held that the plaintiff in a case like this was entitled to appropriate the payments to the earlier items in the account, but was not entitled to credit them to the entire balance due up to date in the sense of saving limitation for each and every item. This decision was followed in AIR 1945 All 185.

9. With all respect, I fail to understand why the plaintiff cannot appropriate a payment towards all the items outstanding on a particular date. Section 60 of the Contract Act provides that 'where the debtor has omitted to intimate and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred by law in force for the time being as to the limitation of suits.' This right the creditor may exercise until the very last moment and need not declare his intention in express terms -- see Cory Bros. and Co. v. Owners of the 'Mecca', 1897 AC 286 at p. 289.

10. In AIR 1940 Bom 158 referring to the principle laid down in (1856) 18 CB 325, it was observed:

'The principle was accepted in India by Sir Lawrence Jenkins in AIR 1916 Cal 580 and it has been applied also in other cases in India. Therefore I accept the argument of Mr. Hathi that his cause of action is a single cause of action for the price of all the goods delivered down to the date of the last delivery. But, then we have to see now limitation affects the question ..... In my opinion, the case falls within Article 52,which provides that for the price of goods sold and delivered, where no fixed period of credit is agreed upon, the period of limitation is three years from the date of the delivery of the goods.

Now, I cannot agree with Modi J. that you can read Article 52 as applying to the date of the delivery of the last consignment ..... Thesegoods were not delivered on the date of the last delivery; they were delivered on various dates during the preceding year and one cannot alter that fact, nor can one read Article 52 as if the starting point of time was the accrual of the cause of action. The starting point of time is the date of the delivery of the goods, and it seems to me that, although the cause of action is one for the price of all the goods delivered, the court is bound to check the various items which go to constitute that cause of action and to apply Article 52 to deliveries which took place more than 3 years before the filing of the suit.....'

SirDinshah Mulla dealt with the question in these terms :

'As regards the question whether the plaintiff's claim in respect of the items prior to 7th June, 1917 is barred by limitation, I have no doubt that it is not. Both the plaintiff and tbe defendants kept only one account of the transactions.'

11. Then, after quoting the passage from the decision in (1856) 18 CB 325, Sir Dinshah goes on:

'It is clear from the passage cited above that if all the items form but one cause of action, it is idle to suggest that a part of it can be barred by limitation, and that the rest may not be so barred. In fact counsel for the defendants at a later stage of the proceedings, gave up the contention as to limitation.'

Now, I am unable to agree with the view of Sir Dinshah Mulla. I think that for the moment he forgot the principle with which no one was more familiar than he, viz. that limitation, in the absence of express enactment, does not destroy the right; it only bars the remedy. No doubt, you cannot have a cause of action which is good in part, and bad in part. But it seems to me that you may have, and frequently do have, for example in claims for mesne profits, a cause of action which is enforceable in part and unenforceable in part. Here there is one cause of action for the price of all the goods delivered. It is a perfectly good cause of action, and if the plaintiff had received the price for the whole amount, he could have kept it and if he had got a lien to secure the price, he could retain that lien, but he cannot bring a suit to enforce the cause of action relating to goods delivered more than three years before the filing of the suit. That seems to me to be the plain effect of Article 52..... I thinkthe plaintiff's claim is barred in respect of all goods delivered more than three years before the filing of the suit.

12. With all respect, I agree with these observations. That, in my opinion, is the correct view. If a payment within the meaning of Section 20 is made and appropriated towards a number of items, the claim to which is not barred by limitation, a fresh period of limitation shall run from the date of payment.

13. In AIR 1938 Nag 266, it was held that :

'If more debts than one are due and a payment is made which is not specifically appropriated, it is a question of fact in respect of which debt the payment was made. This appropriation need not be proved by any express declaration of the debtor at the time of the payment, but any expression used by him either before or after that time, or any other circumstances from which it may he inferred that the payment was intended to be appropriated to any particular debt or debts or was made on account of all the debts collectively will be sufficient for the purpose. If the evidence shows that the payment was made on account of all, it will prevent any of the debts being barred by statute.'

14. Exhibit I is the receipt for the payment of Rs. 200/-. This receipt shows that appropriation was made towards all items outstanding as it is written in it that the payment was made towards 'part payment of lime accounts.' This receipt bears the signatures of the defendant. In the circumstances of the present case, I am of the opinion that the payment of Rs. 200/- was appropriated by the creditor towards all the items which were outstanding on that date and he was entitled to do so.

It gave a fresh period of limitation to items which were not barred by limitation on 17th December, 1946. The suit of the plaintiff is therefore within limitation so far as items after 17th December, 1943 are concerned. The plaintiff has not proved all the items. A large number of items have been proved by the production of vouchers which were admitted by the defendant. The total of these items comes to Rs. 2004/4/3. The total payments made by the defendant come to Rs. 1219/13/6. The balance, which! was within limitation on the date of the suit, thus comes to Rs. 794/6/9. The plaintiff is entitled to a decree for Rs. 794/6/9 as principal amount.

15. Further he is entitled to interest on the items which have been proved by the vouchers under the Interest Act and not by way of damages. Each voucher constitutes a demand for payment in writing. It is printed on these vouchers that if payment is not made on presentation, 12 per cent per annum interest will be charged. This is a notice to the debtor that interest will be claimed from the date of such demand until the payment is made. The plaintiff is, however, only entitled to interest at the current rate under the Interest Act. That rate is 6 per cent per annum simple.

16. I accordingly allow the appeal in part, modify the decree of the lower appellate court asindicated above and decree the suit of the plaintiff for the recovery of Rs. 794/6/9 principal together with interest at 6 per cent per annumsimple upto the date of the institution of the suit.In the circumstances of the case, I direct thatparties shall bear their own costs throughout.


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