Shri Mahinder Kumar vs Shri Anil Kumar

Rajiv Sahai Endlaw, J.—The defendant in this suit instituted under Order 37 of the CPC, besides applying for leave to defend (I.A. No. 5256/2008) has also applied for rejection of the plaint (I.A. No. 5255/2008) on the ground of the claim in suit as per the averments in plaint itself being barred by time.

The plaintiff as proprietor of M/s. Kalu Ram Mahinder Kumar claims that the defendant between 1st April, 2002 and 31st March, 2003 purchased goods from the plaintiff of the total value of Rs. 57,49,414.20 p. The details of the 41 bills i.e. the date, bill number and the amount, by which the plaintiff claims to have supplied goods to the defendant are set out in para 4 of the plaint. The last bill of the plaintiff is dated 25.11.2002. It is further the case of the plaintiff that the defendant has made payment of the total sum of Rs. 33,64,453.60p till 31.3.2003 to the plaintiff. The details of the said 35 payments, i.e. the cheque number, date and amount are set out in para 5 of the plaint. The dates of the cheques commence from 9th August, 2002 till 15th March, 2003. The plaintiff has also shown a payment of Rs. 1,22,401.60p on 29th March, 2003 but neither any cheque number has been given thereof nor the mode of payment thereof has been disclosed. It is further the case of the plaintiff in para 6 of the plaint that even thereafter, the defendant made payments to the plaintiff on 27.9.2003 of Rs. 25,000/- and on 10.7.2004 of Rs. 1,50,000/- by two cheques of Rs. 75,000/- each. A perusal of the amount of the said payments would show that they are all in round figures, save for payments of Rs. 62,032/- on 15th March, 2003 vide cheque No. 470757 and Rs. 1,22,401.60p aforesaid. On the contrary, the amounts of the bills are not in round figures.

This suit for recovery of the balance amount of Rs. 22,09,980.60p together with interest accrued thereon of Rs. 21,97,340/- i.e. for a total sum of Rs. 44,07,320/- has been filed.

The defendant in his application for leave to defend besides challenging the maintainability of the suit under Order 37 of the CPC has denied delivery of goods/sale transactions under as many as 23 out of the 41 bills relied upon by the plaintiff in the plaint. It is alleged that no goods under the said bills were delivered to the defendant and the said bills are forged and fabricated. The defendant admitted only 17 bills and claimed to have made the payment thereof. In the application under Order 7 Rule 11 of the CPC, it is merely stated that even as per the plaintiff no sale of goods, had taken place after 25th November, 2002 and thus, the suit filed on 7th July, 2007 was barred under the Limitation Act. It is significant that the defendant neither in the application under Order 7 Rule 11 CPC nor for leave to defend denied the payments as set out by the plaintiff in the plaint.

To take up the application under Order 7 Rule 11 CPC first, since if the plaint from the averments therein, itself is barred by law of limitation the need for considering the application for leave to defend will not arise.

As per the averments in the plaint, the goods were sold vide bills from 20th May, 2002 to 25th November, 2002. The plaint nowhere states any agreed period of credit between the parties. Article 14 of Schedule 1 to the Limitation Act applicable to suits for the price of goods sold and delivered where no fixed period of credit is agreed upon, provides for a limitation of three years commencing from the date of delivery of goods. Since the plaint nowhere specifies the date of delivery of the goods, the same has to be presumed to be the same as the date of the bill. Undoubtedly, the said period of three years has expired from the date of each of the bills.

However, the plaint also sets out the payments made by the defendants to the plaintiff and which are from 9th August, 2002 till 10th July, 2004, always, save twice, in round figures of 50,000/-, 60,000/-, 70,000/-, 1,00,000/- etc. This part, as aforesaid is not disputed.

The plaint claims the cause of action to have accrued to the plaintiff last on 10th July, 2004, i.e., on the date of the last payment. Section 19 of the Limitation Act provides that where payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay the debt, a fresh period of limitation shall be commuted from the time when the payment was made. Similarly, Article 1 of Schedule 1 of the Limitation Act, for a suit for the balance due on a mutual open and current account where there have been reciprocal demands between the parties provides for a limitation of three years from the close of the year in which last item admitted or proved is entered in the accounts, such year to be commuted as in the account.

Though, undoubtedly, there is no express averment in the plaint that the payments were on account or that there was any such mutual open and the current account having reciprocal entries between the parties, but in my view, in the face of the defendant neither disputing the said payments nor explaining as to why, if the supplies ceased on 25th November, 2002, the defendant continued to make payments till 10th July, 2004 in round figures from a reading of plaint, it cannot be definitely said that the claim is barred by time. I may notice that the defendant has in his application for leave to defend also claimed to have made the payments for the bills admitted, together with interest at 24% per annum. This seems to indicate that the defendant is claiming payments of amounts more than the amount of the bills admitted.

Pleadings are drafted by advocates. The drafting of the plaint in the present case does not appear to be astute. However, it does certainly convey that payments on account were being made by the defendants to the plaintiff. If that be the position, then the plaintiff cannot be non-suited in the summary manner for the lack of astuteness in drafting of his advocate. If, ultimately, the plaintiff is able to prove that the payments were on account, since they were admittedly in writing by cheque, then the plaintiff may be able to establish that the claim in suit is within time. I, therefore, do not find that the plaint, from the averments therein can be said to be barred by the law of limitation. I.A. No. 5255/2008 of the defendant under Order 7 Rule 11 of the CPC is thus rejected.

I, however, find that the suit to be not maintainable under Order 37 of the CPC. Though undoubtedly, the suit under Order 37 of the CPC has been held by this Court to be maintainable on the basis of bills but the present is not a suit for recovery of the amount of any bill. The present is a suit for a balance due on a running account between the parties. Except for repeating parrot like, the requirements of order 37 of the CPC, the plaint does not disclose as to how it is maintainable under Order 37 of the CPC. It is nowhere even stated that the bills are signed by the defendant or by anyone on his behalf in acknowledgement of supply of goods there under. The plaintiff has in the very first paragraph of plaint claimed to be registered with the sales tax laws but no proof of transactions alleged with the defendant with reference to sale tax also is pleaded or filed. The defendant as aforesaid has denied 23 out of 41 bills. In the said circumstances, not only do I find, the suit to be not maintainable under Order 37 of the CPC but also I am of the opinion that the defendant has disclosed such defence as to entitle him to unconditional leave to defend.

Thus, I.A. No. 5256/2008 of the defendant for leave to defend is allowed. Unconditional leave to defend is granted to the defendant to contest the suit.