Tradewel Spares (I) Pvt. Ltd vs Scl Infratech Limited

S.N

o.",Bill no.,Date,"Challa n

No.",Bill Amt.,"C Form

Sr. No.

1,1615,19.05.08,1662,"64,147.00",533503

2,1616,19.05.08,1663,"27,305.00",533503

3,1617,19.05.08,1664,"21,012.00",533503

4,1624,24.05.08,1671,"11,361.00",533503

5,1676,19.06.08,1725,"3,514.00",533503

6,1776,01.09.08,1827,"57,000.00",533504

7,1893,14.11.08,1947,"1,17,130.0

0",533505

8,1978,22.12.08,2037,"2,10,600.0

0",533505

9,1984,24.12.08,2043,"88,506.00",533505

10,1992,29.12.08,2051,"1,836.00",533505

11,1997,01.01.09,2056,"1,17,130.0

0",1419526

12,2064,30.01.09,2124,"7,824.00",1419526

13,2078,05.02.09,2142,"26,760.00",1419526

14,2121,21.02.09,2186,"39,602.00",1419526

15,2122,21.02.09,2187,"65,155.00",1419526

16,2138,26.02.09,2203,"9,684.00",1419526

That the copies of all the bills, transport receipts and C-Forms as above mentioned have been annexed along with this plaint. Furthermore, the plaintiff",,,,,

company is in the custody, care and control of the originals of all the above mentioned bills, transport receipts and C-Forms and shall produce the same",,,,,

before this Hon‟ble Court at the time of plaintiff evidence in order to prove the above mentioned documents.â€​ Â,,,,,

The appellant/plaintiff pleaded that the respondent/defendant issued the necessary C-Forms with respect to all the bills. The parties entered into an,,,,,

Agreement on 24.11.2012, whereby, the respondent/defendant admitted its liability and took time for payments in equal installments within four months",,,,,

on or before 24.03.2013. The appellant/plaintiff pleads that it wrote six letters to the respondent/defendant requesting payment of the amount due of,,,,,

Rs. 3,26,075/- being the Letters dated 24.11.2012, 24.02.2013, 09.03.2013, 18.03.2013, 05.02.2014 and 31.07.2014, but all of them were of no avail,",,,,,

and therefore, the subject suit for recovery was filed on 13.03.2015. Â",,,,,

The respondent/defendant did not appear in the suit proceedings. Hence, the respondent/plaintiff was proceeded exparte.",,,,,

There is no dispute that exparte proceedings against the respondent/defendant are final and there is no application moved for setting aside the exparte,,,,,

proceedings against the respondent/defendant. Â,,,,,

The appellant/plaintiff led evidence by deposition of Mr. Dinesh Bhalla of the appellant/plaintiff company who deposed as PW1. He proved the,,,,,

necessary invoices, transport challans, C-Forms, statement of accounts and the Agreement dated 24.11.2012 entered into between the parties. These",,,,,

aspects are recorded in para 7 of the impugned judgment and this para 7 reads as under:-,,,,,

“7. Shri Dinesh Bhalla - PW1, has proved copy of Board Resolution of the Plaintiff as Ex.PW1/1 (in the affidavit of evidence, it has been exhibited",,,,,

as Ex.CW1/1), PW1 has tendered his affidavit of evidence as Ex.PW1/A in which he has reiterated the averments made in the Plaint in his",,,,,

examination in chief. He has proved the carbon copies of invoices, vide which the Plaintiff has sold the goods to the Defendant Co. as Ex.PW1/2 to",,,,,

Ex.PW1/22; transport challans as Ex.PW1/23 to Ex.PW1/43, photocopies of five C-forms, as Ex.PW1/44 to Ex.PW1/48, Statements of Account from",,,,,

the Books of the Plaintiff as Ex.PW1/49 to Ex.PW1/53. PW1 has also exhibited Ex.PW1/54 which is an agreement arrived at between the parties,,,,,

dated 24.11.2012, whereby the Plaintiff and Manager (Accounts) of the Defendant Co. decided and settled that Rs.3,26,075/- is payable to the",,,,,

Plaintiff in 3 equal instalments within a period of 4 months i.e. on or before 24.03.2013. He has deposed that it was agreed that in case full payment is,,,,,

not received by 24.03.2013 then interest @ 24% would be borne by the Defendant Co. He has further stated that agreement Ex.PW1/54,,,,,

acknowledges payment of Rs.1,00,000/- vide cheque No.829706 dated 30.11.2012 drawn on State Bank of Hyderabad out of the outstanding amount",,,,,

of Rs.4,26,075/-. He has also proved the copy of the legal notice sent to the Defendant No. 2, alongwith postal receipt and Courier receipt as",,,,,

Ex.PW1/55 (Colly.).â€​,,,,,

The Trial court has, however, dismissed the suit as being barred by limitation by observing that the last bill for supply is dated 17.07.2009 and the",,,,,

Agreement dated 24.11.2012 which was relied upon to extend the limitation is beyond three years from 17.07.2009, and therefore, since the",,,,,

acknowledgment had to be within the limitation period and could not be beyond the limitation period of three years commencing from 17.07.2009,",,,,,

therefore, the Agreement dated 24.11.2012 could not be used by the appellant/plaintiff to extend the limitation. Suit was therefore dismissed as being",,,,,

barred by limitation. Â,,,,,

Counsel for the appellant/plaintiff has rightly argued that the Agreement dated 24.11.2012 is not an acknowledgment for increasing limitation but the,,,,,

Agreement is an agreement enforceable by law because by this Agreement dated 24.11.2012/Ex.PW1/54, the respondent/defendant agreed to pay the",,,,,

time barred debt as provided in Section 25(3) of the Contract Act, 1872. Section 25 of the Contract Act reads as under:-",,,,,

“Section 25. Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a",,,,,

promise to pay a debt barred by limitation law.â€"An agreement made without consideration is void, unlessâ€"",,,,,

(1) it is expressed in writing and registered under the law for the time being in force for the registration of 1[documents], and is made on account of",,,,,

natural love and affection between parties standing in a near relation to each other ; or unless,,,,,

(2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the",,,,,

promisor was legally compellable to do; or unless.,,,,,

(3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to",,,,,

pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.,,,,,

In any of these cases, such an agreement is a contract.",,,,,

Explanation 1.-Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made.",,,,,

Explanation 2.-An Agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the,,,,,

inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely,,,,,

given.â€​,,,,,

The agreement dated 24.11.2012/Ex.PW1/54 reads as under:-,,,,,

 “Ref. No.TSIPL/2012-13/3755 Dated 24.11.12,,,,,

To,",,,,,

The Executive Director M/s. SCL Infratech Ltd.,,,,,

(Foremerly Srinivasa Constructions Ltd.),,,,,

Plot No.30, Sector-32,",,,,,

GURAON-(Haryana),,,,,

 Kind Attn:- Mr. D. Srinivas,,,,,

 Sub: Regarding Payment,,,,,

Dear Sir,",,,,,

With reference to our outstanding payment & Legal Notice served by M/s. D.K. Kaushik & Asociates vide dated 15.11.2012, we hereby",,,,,

acknowledge to receive the payment of Rs.1,00,000 (Rupees One Lac only) vide cheque no.829706 dt. 30.11.12 drawn on State bank of Hyderabad",,,,,

out of our outstanding amount of Rs.4,26,075/- (Rupees Four Lac Twenty-Six Thousand Seventy-Five Only).",,,,,

Further we agree to receive the balance payment of Rs.3,26,075/- in 3 equal instalments within a period of Four Months i.e. on or before 24.03.13. In",,,,,

case the full payment is not received by 24.03.13 then interest from date of bill till realization @ 24% and legal charges will have to borne by M/s.,,,,,

SCL Infratech Ltd.,,,,,

We also request you to issue the pending „C‟ Form at the earliest.,,,,,

 Thanks & Regards       For M/s SCL Infratech Ltd.,,,,,

Tradewel Spares (I) Pvt. Ltd.,,,,,

 Sd/-                            Sd/-,,,,,

 D.K. Bhalla                Mr. Anupam Bose,,,,,

 M:-99531-44831           (Manager Accounts),,,,,

                         (Gurgaon Office) Cc:- 1. Hyderabad officeâ€​,,,,,

 In my opinion, the Agreement dated 24.11.2012/Ex.PW1/54 squarely falls within Section 25(3) of the Contract Act and this agreement can be",,,,,

said to be an agreement to pay the time barred debt by the respondent/defendant, and therefore, the same is legally enforceable as per Section 25(3)",,,,,

of the Contract Act. The subject suit therefore could have been filed within three years from 24.11.2012, and since the subject suit has been filed on",,,,,

13.03.2015 i.e. before expiry of three years from 24.11.2012, therefore, the subject suit filed was very much within limitation. Â",,,,,

In view of the aforesaid discussion, this appeal is allowed. The impugned Judgment of the trial court dated 06.04.2016 is set aside. The suit of the",,,,,

appellant/plaintiff is decreed for Rs. 3,26,075/- alongwith interest @ 14% per annum simple from 24.11.2012 till filing of the suit and the same rate of",,,,,

interest, pendente lite and future till payment. This Court may note that, though, the Agreement dated 24.11.2012 fixes the liability of the",,,,,

respondent/defendant for interest @ 24% per annum simple, however, in my opinion, interest @ 14% per annum simple will suffice in the interest of",,,,,

justice, taking into consideration the fact that the transaction is a commercial transaction and in such a commercial transaction for sale of goods,",,,,,

interest has to be paid as per the provision of Section 61 of the Sale of Goods Act, 1930. The appellant/plaintiff will also be entitled to costs of the suit",,,,,

as also costs of the appeal. Decree sheet be prepared. Appeal is allowed and disposed of in terms of the aforesaid observations.,,,,,