Chitturi Visweswara Rro vs Akella Satyanarayana

Umamaheswaram, J.—This is an application to revise the judgment and decree of the Subordinate Judge of Vijayawada lismissing S, C. No. 625 of 1952 for recovery of money due to the Plaintiff on Khata in respectyof articles purchased by the Respondent on the khata dealings started from 26-9-45. At/the end of each year, the balance due under the khata was being carried over to the next year''s account. The amount carried over to account of 1948-49 was Rs. 455-14-0 and this Hint had again been carried over to the next year''s account i.e., 1949-50. On 26-10-1949 a sum of Rs. 5/- was paid by the Defendant and a receipt was passed by the Plaintiff therefore The suit was instituted on 27th October 1952. The plea of the Defendant was that the payment of Rs. 5/- was not true and that the debt had become barred by limitation. He also contended that the Plaintiff had to pay a sum of Rs. 450/- as commission and that he agreed to credit that amount to the khata dealings. The Subordinate Judge held that the payment of Rs. 5/- was true and was made towards the khata dealings and that the Defendant was not an agent of the Plaintiff and was not entitled to set off any commission. But, on point No. 2 he upheld the plea of limitation and dismissed the suit. The Plaintiff has consequently filed the Civil Revision Petition.

The learned advocate for the Plaintiff, Sri Trlambakam, contended that the Subordinate Judge erred in holding that the suit was barred by limitation. The account shows that the three debit entries dated 17-2-48, 18-2.48, and'' 15-3-1948 are within three years of the payment dated 26-10-1949 but are beyond three years from the date of the filing of the suit. If the payment of Rs. 5/- and the receipt Ex. A-8 do not constitute a valid payment or acknowledgment within the meaning of Sections 20 and 19 of the Limitation Act, the claim will be barred by limitation. The Subordinate Judge took the view: that each of the debit items should be regarded as a distinct debt and that the payment of Rs. 5/- not having been specifically made towards any one of the debit items or debts, all the items are barred by limitation. It is therefore necessary to examine whether the view taken by the Subordinate Judge is right. While the debit items dated 17th and 18th of February were in respect of certain spare parts supplied by the Plaintiff to the Defendant, the debit entry dated 15-3-48 was in respect of cash paid by the Plaintiff to the Defendant.

The short question for decision is, whether there is a separate cause of action in respect of each item when there is a continuous account between the parties. In Bonsey v. Wordsworth, (1850) 18 CB 325 at P. 334 (A), it was hold on the strength of the previous authorities as follow.:

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.

The principle underlying the statement was explained by Manning in his note to 7 C. B. New Series 106 at p. 114 in the following terms:

Where goods are ordered of a tradesman on The 1st of January, and distinct orders for other goods are given on the 2nd, 3rd, 4th, 5th, etc. if from the previous dealings between the parties," or from general usage, or otherwise, it is to be inferred that it was contemplated by the parties, that, in the event of the dealing continuing, the several items should be included in weekly, monthly, quarterly or yearly bills, the result of such an arrangement, and the legal position of the parties, seems to, be this, upon the delivery and acceptance of the first parcel of goods, delivered on the 1st of January, an entire contract is created, and a complete cause of action accrues, the tradesman being under no engagement to sell other goods, or to Rive credit beyond the price of the articles then delivered: When, on a subsequent clay, oilier goods are delivered and accepted a new contract arises, not simply a contract to pay for the goods then delivered, but a new entire contract by which the tradesman waives his existing right to payment for the Roods delivered, on the 1st of January, and the purchaser agrees to pay for both parcels as upon one entire sale, et sic toties quoties. After the successive waiver and extinguishment of each preceding contract, the only subsisting contract and cause of action ex contract will be the last.

The decision in (1856) 18 CB 325 at p. 334 (A), referred to supra was followed by a Bench of the Calcutta High Court in Kedar Nath v. Deno-bandhu Shaha. ILR 42 Cal 1043 : AIR 1916 Cal 580 ) (B). Jenkins C.J. repelled the argument that there was a separate cause of action in respect of each item in a continuous account. This decision was not followed by the Allahabad High Court in (Firm) Puttu Lal Kunji Lal Vs. (Firm) B. Jagannath, at p. 54 (C). The learned Judges regarded the observations of Jenkins C. J. as obiter. They distinguished the decision in 1856 18 CB 325 (A) in the following words:

The English case is 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 ciuestion 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. We are not prepared to extend the principle contained therein to a question of limitation more especially when we And that we have got to decide the case on the basis of a legislation which was enacted in the year 1877 long, after 1856.

They also refused to follow, for the same reasons the decision of the Bombay High Court in Najan Ahmed Haji Ali Vs. Salemahomed Peermahomed, . The decision referred to supra was again followed by the Allahabad High Court in Gulabrai Narain Das Finn v. Firm Ilahi Bux Mohamad Ayub, AIR 1945 AH 185 (E). An additional reason was given by Sinha J. for refusing to follow the decision of the English Court. The learned Judge relied upon the terms of section 32 of the Sale of Goods Act as holding that each delivery by the seller constitutes an independent cause of action. The principle laid down by Manning as to successive waiver and extinguishment of each preceding contract" was not referred to.

When the same question came up for consideration before the Bombay High Court in Atmaram Vinayak Kirtikar Vs. Lalji Lakhamsi, . it was held, following the decision in ILR 42 Cal 1043 : AIR 1916 Cal 580 ) (B) that there was a single cause of action'' and that the principle laid down in the English decisions was right. But still, the learned Judges held that for the purpose of limitation Article 52 applied and that the period of limitation is three years from the date of delivery of the goods and the decision of Mulla J. in Najan Ahmed Haji Ali Vs. Salemahomed Peermahomed, was wrong. I And it rather difficult to follow the reasoning of the learned Judges. . If, as a result of the successive waiver and extinguishment of each preceding contract, the only subsisting contract is the last contract, the period of limitation will have to be computed only from the date of the last contract and not from the date of each delivery of the goods.

In S.T.K.M. Lakshmanan Chettiar and Others Vs. Nalla Sevugam Servai alias Nalla Sivan Servai, , the same point came up for consideration before Abdur Rahman, J. In the first portion of the judgment, the learned Judge held that the decision in ILR 42 Cal 1043 : AIR 1916 Cal 580) (B). was not applicable as there was nothing on record in the particular case to suggest that the dealings between the parties were intended to be continuous and the various items debited to the Defendant were so united as to form part of one item of one demand. Lower down, the learned Judge observed:

Whatever the English law on the basis of which the learned Judges came to the decision in ILR 42 Cal 1043 : AIR 1916 Cal 580) (B5, there is nothing in the Limitation Act that would warrant, in my judgment, that conclusion." In my opinion, the effect of the English decision and the decision in ILR 42 Cal 1043 : AIR 1916 Cal 580) (B), has not been properly considered by the High Court of Allahabad, Bombay and Madras. But it is. however, unnecessary for me to express my final view or to refer the matter to a Bench of solving the conflict as I am clearly of opinion that there is a valid acknowledgment of the several debit items or debts in the account by the Defendant. When the sum of" Rs. 5/- was paid, the Plaintiff passed the following receipt:

Received from Akella Satyanarayana the sum of Rs. 5/- only on account of towards account Rs. 5/-.

On the counter foil of the receipt'' marked as Ex. A-8. there are the following words signed by, the Defendant, viz., "received the duplicate." It is

clear from this document that the sum of Rs. 5/-was paid towards the account relating to the three debit items . It has been held by the Pull Bench of the Madras High Court in Kannepalli Chinna Venkata Chelamiah Sastri Vs. Meduru Annapoornamma and Another, , that the use of the word "towards" in itself implies that more remains to be paid and that this amounts to a valid acknowledgment of liability within the meaning of section 19 of the Limitation Acl. To (lie .same effect is the decision of Siring in Friend v. Young, 18.97-2 Oh 421 (I). Following these decisions. I hold that when the Defendant paid Rs. 5/- towards the account, it amounts to a valid acknowledgment of three debts items comprising the account.

It is no doubt true that the Plaintiff did not rely upon this payment and the endorsement on the counterfoil of the receipt, as amounting to a. valid acknowledgment, This point was however aised in the grounds of revision and being a pure question of law, I see no reason why it should not to be entertained in revision.

The Court below held that the payment of Rs. 5/- did not operate as a valid payment and in support of it, it relied upon the passage in U. N. Mitra''s Law of Limitation and Prescription 1949 edition, Volume 1 at page 22G which runs in the following terms:

If there are several debts, and if the payments made more specially towards the later ones, the earlier ones will not be saved. But when there are several debts, and the debtor, makes a payment without specifying anything, difficulties may arise. If the creditor relies upon the payment to save all the debts, then the payment or payments must be sufficient so as reasonably to be attributable to all the debts.

As I felt some difficulty in understanding the pas-page "the payment or payments must bo .sufficient so as reasonably to be attributable to all the debts." I looked into the decision cited in .support of the proposition, namely, the decision in Hingu Miya v. Hebanba Chandra. 13 Cal LJ 139 (J), Mukherjea J. stated that if the payment was sufficient to cover the interest in respect of the debts the payment might reasonably be attributed to all the debts. The passage in Mitra''s book does not clearly set out the effect of the judgment of Mukherjea J. in 13 Cal LJ 139 (J). As the sum of Rs. 5/- paid in this case is not sufficient to cover the interest due on the three debt items, I hold, following the decision referred to supra, that the payment does not save limitation u/s 20 of the Limitation Act. But as I have held that there is a valid acknowledgment of the three debit items viz., Rs. 133-0-3, Rs. 77-4-3 and Rs. 70/- there must be a decree for ., those sums.

In the result I decree the suit for a sum of Rs. 240-4-8 with interest at 6 per cent p.a. from the date of plaint i.e., 25-10-1952 till payment. The k Plaintiff will have the costs of suit on the amount i decreed. As the Plaintiff has succeeded on a new f point of acknowledgment raised in tin''s Court, I r direct each party to bear his own costs in this Court.