M/S Fresh & Healthy Enterprises Ltd vs M/S R.K.Brothers

Total Sales,"Rs.2,80,32,224/-

Less: Discount Given,"Rs.4,07,555/-

Less: Discount Given,"Rs.4,02,863/-

Less: Credit Note issued,"Rs.10,29,950/-

Less: Amount received,"Rs.2,35,20,000/-

Less:   Credit  Â

for   Penalty

Income","Rs.8,000/-

Balance Amount Due from

the

Party","Rs.26,63,856/-

account under Article 1 of the Limitation Act because that is an inference or a finding of fact which has to be arrived at from the statement of,

account which is filed. When we see the statement of account which is filed with respect to transactions entered into, Annexure P-3 to the plaint at",

page 223 of the trial court record, it is seen that within the first few transactions itself there are shifting balances. Once there are shifting balances",

clearly therefore the suit will be on the basis of an open, mutual and current account.",

As per Article 1 of the Limitation Act, a suit filed on the basis of an open,mutual and current account, limitation commences at the end of the",

financial year for which the transactions are entered into. The transactions entered into show that the last invoice entered into the ledger account,

maintained by the appellant/plaintiff of the respondent/defendant is dated 14.5.2013. Limitation therefore will commence as per Article 1 of the,

Limitation Act on 1.4.2014. The suit has been filed on 26.7.2016 i.e within three years of commencing of limitation on 1.4.2014, and therefore, the suit",

was clearly within limitation. Trial court has committed a gross illegality in dismissing the suit as time barred without reference to the statement of,

account and without reference to the law under Article 1 of the Limitation Act and which states that once a suit is filed on the basis of an open,",

mutual and current account, then limitation commences from the end of the financial year and which last transaction is proved or admitted, with the",

last transaction as stated above being dated 14.5.2013 when Invoice no.8130 for an amount of Rs.1,73,040/- was raised by the appellant/plaintiff upon",

the respondent/defendant.,

Learned counsel for the respondent/defendant wanted to cite various judgments, however, no judgments need to be cited on the proposition of law",

which is not disputed, and the undisputed position of law is that the account relied upon by the appellant/plaintiff must be an open, mutual and current",

account. The meaning of an open,mutual and current account has been dealt with by the Supreme Court in the judgments in the cases of Hindustan",

Forest Company Vs. Lal Chand & Others, AIR 1959 SC 1349 and Kesharichand Jaisukhlal Vs. Shillong Banking Corporation AIR 1965 SC 1711, and",

the law is that shifting balances will create an open,mutual and current account.",

In view of the aforesaid discussion, the defence taken by the respondent/defendant of the suit being barred by time was a completely frivolous",

defence, and that too without filing of a written statement. Trial court has committed a complete illegality in allowing the application under Section 3 of",

the Limitation Act filed by the respondent/defendant as discussed above.,

The impugned order/judgment of the Trial Court dated 20.10.2016 is therefore set aside with costs of Rs.25,000/- payable by the",

respondent/defendant to the appellant/plaintiff, and which payment of costs shall be a condition precedent for the respondent/defendant to contest the",

suit in the trial court.,

Parties to appear before the District and Sessions Judge, North, Rohini Courts, Delhi on 24.9.2018 and the District and Sessions Judge will now",

mark the suit for disposal to a competent authority in accordance with law. Trial court record be sent back.,