Glaze Advertising & Anr v. Mahinder Kumar Gandhi

JUDGMENT ARUNA SURESH. J. (Oral)

¶1Respondentfiled a suit for recovery of Rs.2,03,000/- against the appellants on the grounds that there were business dealings betweenthe parties and an accountwas maintainedby the respondentfor the said businesstransactions. Appellantshad been making payment in account on differentdates. After adjusting part RSA No.39/2009 Page 1 of10 payments, a sum of Rs.1,35,785/- remained payable, which appellants failed to pay despite repeated requests. Appellants had been issuing various cheques of different amount which on presentation were dishonoured. Appellants contested the suit and one of the defence raised by the appellants was that the suit was barred by period of limitation. Trial Court framed following issue beside others;- "Whether the suit is barred by the law of limitation? OPD"

¶2After appreciating evidence of the parties and statement of accounts filed by respondent's counsel. Trial Court concludedthat the suit was filed on 20^*^ May, 2005 and sales made by the respondentto the appellantswithin three years prior to filing of the suit were within period of limitation and the sales made prior to said three years were barred by period of limitation. In view of this. Trial Court passed a decree for Rs.9,962/- only with interest.

¶3Appellate Court vide impugned judgment and decree dated 24*'' January,2009 reversedthe findings of the Trial Court on the said issue and concluded that suit of the respondent was within the period of limitation as payments were made from time to time and respondent was within his right to adjust the payments against Page 2 of10 previousdues,whichhe did as reflectedin statementof accountsand passed a decree for the amount claimedin the suit with interest.

¶4Aggrieved by the said judgment and decree of the Appellate Court, this second appeal has been filed invoking Section 100 CPC.

¶5Learned counsel for the appellants has submitted that Appellate Court went wrong in holding that the suit was within period of limitation speciallywhen respondentfailed to prove that account is on a running basis, he was not entitled to seek recourse to the provisionsof Section60 of the Indian ContractAct (hereinafter referred to as 'Act') by-passingthe provisionsof Section 59 of the Act. He further argued that Appellate Court did not consider that Section 19 of the Limitation Act was not attracted to the facts and circumstances of the case whereas Article 14 of the Limitation Act has applicationin the present case as payment was made on 2""^ August,2002 againsta specificdebt amountamongstmany distinct debts and therefore, payment made on 2"'' August, 2002 did not extend the period of limitation. •6. Learned counsel for the appellants also urged that appellants have been making payment against specific bills and therefore, under the circumstances a substantial question of Page 3 of10 law arises for consideration 'whether this suit falls within the ambit of provisions of Section 59 of the Indian Contract Act or under Section 60 of the Indian Contract Act read with Section 19 of the Limitation Act.'

¶7Learned counsel for the respondent while refuting submission of the learned counsel for the appellants has argued that respondentwas maintaining a running account and payments were being receivedin accountand not againstany specificbill. Some of thechequeswere dishonouredagainstwhichpaymentswere made by the appellantsspecificallywhereassome ofthe dishonouredcheques were still lying with the respondentagainstwhich no payment was made by the appellants^he submittedthat thereforeAppellateCourt rightly held that suit was within period of limitationand passed a decree in favour of the respondent. He emphasizedthat under the facts and circumstances of the case, no substantial question of law need formulationwhen the appellatecourt had decidedthe question of limitation on facts of the case.

¶8There is no dispute that parties were having business transactionsfor quite some time and appellantshad beenpurchasing goods from respondentagainstvariousinvoicesand bills and used to make paymentfrom time to time. AppellateCourt while deciding Page 4 of10 thequestionof limitationplacedrelianceon"FCC ProjectsPvt. Ltd, Vs. Ashish Bhardwaj", 145 (2007)DLT457 (DB), and observed - " It was also a suit for recovery of the amount wherein the statement of accounts was showing 'balance due.' The plea of limitation was raised and was rejected by the trial court. In this case the case set up was that the respondent had supplied the shuttering material to the appellant from time to time for some project through invoices and challans. The payments given by the appellant from time to time were also given due credit. The balance of the suit amount was outstanding for which a claim was made. The facts of the present case under appeal is close by to the facts of the aforesaid case decidedby the Hon'bleHigh Court (Supra ). In the entire evidence nowhere it has been disputed that part paymentof Rs.12,250/-was not made by the respondent. This payment was made by the respondenton 2.8.2002. The suit was filed on 20.5.2005 and was within three years from the date of thispart payment. The suit is to be considered not bill wise as sought to have been made by the trial court. Document Ex.PWl/4 rather negativate this aspect that respondentswere dealing with the appellant on 'bill wise' transactions. It was more like a running accountwhere payment made by the respondentsfrom time to time were being adjusted and the appellant was maintaining account of balance outstanding amount. Accordingly in view of this position the dismissal of the claim of the appellant by the trial court with respectto the bills falling before three years from the date of filing of the suit Page 5 of10 was not legally correct. Article 14 of the Limitation Act, 1963 dealing with a suit of price of the goods sold and delivered where no fixed period of credit has agreed upon giving limitation of three years from the date of delivery of the goods would have no apphcation in the facts of the present case. The period of limitation in the present case would commence from 2.8.2002 when the respondent admittedly had made this payment to the appellant and suit since has been filed within three years thereafter on 20.5.2005, the claim of the appellant cannot be dismissed on the ground of the same being barred by time." ^

¶9Appellanthas annexedhis statementof accountsto the appeal. Perusalofthis statementfor the periodfrom April,2001 to 3r' March, 2003, shows that appellants have been making paymentin accountfrom time to time and not against any specific bill. True that, some of the paymentsmade by the appellantstally with a particularbill amount but then the payments made are not shown against particularbills in the statementof accounts against any bill to any account. For example,first entry regardingsales is dated 31®^ October, 2001 for Rs.49,300.00but appellants could not substantiatepayment of a specified amount as having been made againstthe bill only. Thereis anotherentrydated 16^''February2002, wherebysales of Rs.31,400.00were made. Accordingto appellants, said sum of Rs.31,400.00 was paid in two installments. First RSA No.39/2009 Page 6 of10 q paymentofRs.15,400.00was made in cash on 14^March,2002 and balance amount of Rs.16,000.00was paid vide cheque dated 16^*^ March, 2002. In between there have been various transactions between the parties and appellants have been purchasing goods from time to time and making payment in account from time to time. Respondent, therefore, was within its right to adjust the payments made on 14^''March, 2002 and 16^'' March, 2002 in accountagainst previous sales. After 16^'' February2002, I find two entries in the accountdated 18^^February,2002 and 20^*^February2002, according to which Rs.50,000/-was paid against the amount of Rs.49,300/-. Fact remains that one of the cheques for Rs.25,000/- dated 20"^ February 2002 was dishonoured on presentation. Payment of dishonouredchequewas made on 26^*^ February,2002 againstwhich bill is not known. On 20^*" February2002, there is an entry of sales of Rs.36,100/-vide bill No.3690. There is another entry of sales of Rs.19,350/-vide bill No.3896 dated 22"*^ February,2002. Payments againstthese bills were not made as per the bill amount. There is another entry of sales of Rs.19,349/- on 26^*^ February, 2002. Appellants had purchased goods from the respondent on 21^^ February, 2002, 4^'' March, 2002, 5^^ March, 2002 and thereafter some payments were made. Some of the cheques were dishonoured RSANo.39/2.009 Page 7 of10 t w on presentation, against which subsequent payments were made in cash. Many of the amounts paid do not tally with the bill amount. Thus, it is clear that appellants were making payment in account from time to time. Appellate Court, therefore, was right when on appreciationof evidence of the parties and documents placed on record, it held that payments were being made by the appellants in account and not against any specific bill.

¶10As per Schedule First Division Article 1, period of limitation for filing a suit relatingto accountsfor the balance due on a mutual,openand currentaccount,wheretherehavebeenreciprocal demandsbetween the parties,period of limitationis three years and thisperiodstartsrunningfrom the close of theyearin whichthe last item admittedor proved is enteredin the accountand such year is to be computedas in the account. Therefore,period of limitationfor filing the suit startedrunningagainstthe appellanton closingof the year in which the last item admitted or proved was entered in the account.

¶11In this case, the last item entered into and admitted in the account by the appellant is dated 13^'^ November, 2002 vide cheque No.5291. This dishonoured cheque was issued by the appellantson ll"^ November,2002 for Rs.7,785.00. The statement Page 8 of10 r f-ofaccountplacedon recordby the appellants is for theyear from 1®' April 2002 to 31'^ March 2003. Presentsuitwas filed on 20^*" May, 2005.

¶12Article 14 of Schedule First Division is not applicable.

¶13Section 19 of the Limitation Act extends the period of limitation on account of a debt made before expiration of the prescribedperiod by the personliable to pay the debt. In this case, even if it is presumed that Article 1 cannot be invoked, every paymentmade in accountby the appellantsagainstthe due amount of various bills extended the period of limitation. Last payment was admittedlymade on 13^''August,2002. Lastpayment,inno manner, can be accepted as a payment made against a particular bill. Specificallyvide bill No.4024dated Xf" May, 2002, sales were for Rs.7,785/-andnot Rs.7,875/-. It is pertinentthat leamedcounselfor the appellantswas asked to relate the entries on payments made againstspecificbills;buthemiserablyfailedto assistthe Court.

¶14Under these circumstances, I conclude that question of limitationinvolved appreciationof facts and evidence adduced on record and does not raise any substantial question of law. Hence, I find no meritsinthis appealand thesameis accordinglydismissed. ESA No.39/2009 Page9 of10 r-CM No.4224/2009 (for delay)

¶15Since appeal has been dismissed, this application has become infructuous. The same is accordingly dismissed.

ARUNA SURESH, J. FEBRUARY 26, 2010 sb RSA No.39/2009 Page 10 of10

* IN THE HIGH COURT OF DELHI AT NEW DELHI + RSA NO. 39/2009 & CM No.4224/2009 Date of Decision: February 26, 2010 GLAZE ADVERTISING & ANR. Appellants Through; Mr.Sudershan Rajan, Advocate. versus MAHINDER KUMAR GANDHI Respondent Through: Mr.Varun Goswami Advocate. % CORAM: HON'BLE MS. JUSTICE ARUNA SURESH (1) Whetherreportersof localpapermaybe allowed to see the judgment? (2) To bereferredto the reporteror not? (3) Whetherthejudgmentshouldbereported in the Digest ?