Delhi District Court
Chandrahas Kuchya vs M/S Acme Cleantech Solutions Ltd on 6 December, 2024
IN THE COURT OF SH. RAHUL BHATIA, DJ-01, SOUTH-
EAST, SAKET COURTS, NEW DELHI
CS DJ 678-2019 Old Case of Year 2015
MR. CHANDRAHAS KUCHYA
Sole Proprietor, M/s. Cine India,
H-63, Harkesh Nagar,
Okhla, Phase-II,
New Delhi-110020.
.....Plaintiff
VS.
M/S. ACME CLEANTECH SOLUTIONS LTD.
1. Acme Cleantech Solutions Ltd.
Plot No. 152, Sector-44,
Gurgaon-122 002,
Haryana.
2. Mr. Manoj Kumar Upadhyay
C.M.D. Acme Tele Power Ltd,
Plot No. 152, Sector-44,
Gurgaon-122002, (Haryana).
Also at:-
R/o. Plot No. 301, Diamond Court,
Essel Tower,
M.G. Road, Gurgaon,
(Haryana),
3. Mrs. Mamta Upadhyay
Director,
Acme Tele Power Ltd.
Plot No. 152,
Sector-44,
Gurgaon-122002, (Haryana).
.....Defendants
CS No. 678/19 Page No. 1 of 22
Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally
signed by
RAHUL
RAHUL BHATIA
BHATIA Date:
2024.12.06
16:12:31
+0530
Date of institution of case : 31.05.2013
Date of Reserving Judgment : 21.10.2024
Date of Judgment : 06.12.2024
JUDGMENT
1. The present suit has been filed by the plaintiff for recovery of an amount of Rs.1,57,67,482/- as on 28.02.2013 along with interest.
2. The case of the plaintiff is that plaintiff is the sole proprietor of his proprietorship firm M/s. Cine India and is engaged in the business of manufacturing and trade of nuts, bolts, washers etc. Defendant no. 1 is a public limited company and is engaged in the manufacture sales and maintenance of passive infrastructure equipment used by the telecom sector. That the parties had frequent business dealings with each other since 2004- 05 and the same continued till 2009. The Defendant no. 1 used to place day to day orders for supply of various goods by way of purchase order. The plaintiff relying upon the purchase/supply order from the Defendant no. 1 delivered material to various units of Defendant no. 1 at different points of time in Pant Nagar, Uttrakhand, Manesar Haryana and Parwanoo, Himachal Pradesh. Plaintiff used to raise invoices for supply of material at various units and the Defendant no. 1 used to make on account, irregular and untimely payments to the plaintiff. The plaintiff used to adjust the payments on behalf of Defendant no. 1 against the unpaid liability of the Defendant no. 1.
3. It is the case of the plaintiff that the plaintiff supplied goods to the Manesar unit to various invoices ranging from CS No. 678/19 Page No. 2 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHUL RAHUL BHATIA
Date:
BHATIA 2024.12.06
16:12:38
+0530
07.04.2008 to 26.07.2008 and total outstanding for Manesar units stands at Rs.4,42,717/-. Similarly, the goods were supplied to Pant Nagar unit through invoices dated 26.05.2008 to 29.09.2008 totaling to Rs.43,46,933/-. In around 2008, the Defendant no. 1 started defaulting on the payments and the plaintiff made various representations to the Defendant no. 1 for release of the due amounts in favour of the plaintiff. The plaintiff received the last payment with respect to the goods supplied to the Pant Nagar unit on 05.01.2009 and for the Manesar unit on 19.02.2009.
4. On 07.08.2010, the plaintiff received a communication from the Defendant no. 1 whereby the Defendant no. 1 acknowledged its liability towards the plaintiff and specifically acknowledged that outstanding dues amounting to Rs. 16 lacs and offer to pay an amount of Rs. 20 lacs on account of supply of materials by the plaintiff to the various units of the Defendant no. 1 were due. Thereafter, on 04.02.2011, in reply to legal notice issued by the plaintiff, the Defendant no. 1 t tried to retract from its earlier admission but admitted and specifically acknowledged that a sum of Rs.61,679/- was outstanding and due from the Defendant no. 1 to the plaintiff. Thereafter, vide e-mail dated 19.06.2012, the Defendant no. 1 reiterated the stand taken on 04.02.2011 and stated that only an amount of Rs.61,679/- is pending. Thereafter, on 25.10.2012, the Defendant no. 1 sent a demand draft to the plaintiff for an amount of Rs.61,679/-.
5. The plaintiff has claimed that as the last invoice was raised by the plaintiff on 29.09.2008 and the last payment was received on 19.02.2009, therefore, the cause of action last arose on CS No. 678/19 Page No. 3 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHUL RAHUL BHATIA
Date:
BHATIA 2024.12.06
16:12:45
+0530
19.02.2009. When the limitation period for filing the suit was still subsisting, the Defendant no. 1 through communication dated 07.08.2010 admitted its liability towards the plaintiff, thereby, extending the limitation period for a further period of 3 years w.e.f. 07.08.2010. Thereafter, again within the limitation period, the Defendant no. 1 admitted its liability vide communication dated 04.02.2011, 19.06.2012 and lastly on 25.10.2012, thereby extending the period of limitation and the limitation would start running from 25.10.2012. As the present suit was listed for the first time before the Hon'ble High Court of Delhi on 11.09.2015, the same was filed within the period of limitation from the acknowledgment dated 25.10.2012.
6. Summons of the suit were issued to the Defendant no. 1 and the Defendant no. 1 filed its written statement. The primary preliminary objection taken by the Defendant no. 1 was that the present suit has been filed after the period of limitation expired and therefore, present suit cannot be entertained.
7. Record of the case reveals that initially, the suit was filed on 31.05.2013 and certain objections were noted. However, the suit was re-filed only on 30.05.2015 when new objections were noted and finally, the suit got listed before the Hon'ble High Court for issuance of notice on 11.09.2015. The suit was accompanied with two applications for condonation of delay of 511 days and 251 days in re-filing the present suit. Vide order dated 20.12.2018, the plaintiff stated that as the demand draft was issued by the Defendant no. 1 on 25.10.2012 and the suit was first listed on 11.09.2015, the same is within limitation. In view of this CS No. 678/19 Page No. 4 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA Date:
BHATIA 2024.12.06 16:12:51 +0530 submission, the Hon'ble High Court of Delhi was pleased to dismiss the two applications for condonation of delay as not pressed. Thereafter, the plaintiff moved an application under Order VI Rule 17 CPC to incorporate changes in the cause of action so as to reflect the factum of issuance of demand draft by the Defendant no. 1 on 25.10.2012 as a cause of action for filing the present suit.
8. Vide order dated 03.04.2019, the present suit was transferred from the Hon'ble High Court to the Principal District Judge (Tis Hazari Courts) and finally got assigned to the present Court on 30.05.2019. Vide order dated 21.11.2022, the application under Order VI Rule 17 CPC was allowed and amended plaint was taken on record.
9. The Defendant no. 1 filed CM(M) No. 1186/2023 challenging the said order and vide order dated 27.07.2023, the Hon'ble High Court of Delhi disposed of the said petition with the direction that after the framing of issues, the issue of limitation shall be framed separately and be decided as a preliminary issue. Thereafter, issues were framed vide order dated 01.02.2024 and the issue of limitation was taken as a preliminary issue.
10. Ld. Counsel for the plaintiff has submitted that initially the cause of action for filing the present suit arose in November 2008 when an accumulated amount of Rs. 50,00,000/- became due from the Defendant no. 1 towards the plaintiff. It is submitted that when the period of limitation was still subsisting, a meeting was held on 28.06.2010 when the Defendant no. 1 acknowledged its CS No. 678/19 Page No. 5 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:12:59 dues towards the plaintiff and only the issue of reconciliation of accounts between the parties was pending. Thereafter, vide letter dated 07.08.2010, the Defendant no. 1 offered the plaintiff to settle all the pending dues by paying a lump-sum amount of Rs. 20,00,000/- thereby starting a fresh period of limitation w.e.f. 07.08.2010. When the limitation period was still subsisting, the Defendant no. 1, vide reply dated 04.02.2011 to the legal notice issued by the plaintiff, further acknowledged a jural relationship between the parties and gave a false and frivolous reply stating that only an amount of Rs. 61,679/- was pending. Further, the Defendant no. 1 again acknowledged its liability and the existence of jural relationship between the parties by e-mail dated 19.06.2012. The same got acknowledged and extended when the Defendant no. 1 sent a demand draft dated 25.10.2012 for a sum of Rs. 61,679/-. Thus, it is submitted that each extension of limitation was done by way of acknowledgment under Section 18 of the Limitation Act within the period of limitation and as such, the date to calculate the period of limitation has to be taken as 25.10.2012. It is submitted that as the matter was first listed before the Hon'ble High Court on 11.09.2015 i.e. within 03 years from the last acknowledgment, as such, the present suit is within limitation.
11. Ld. Counsel for the plaintiff has relied upon judgment of "Food Corporation of India Ltd. Vs. Assam State Co-operative Marketing And Consumer Federation Ltd. & Ors." to state that once the Defendant no. 1 has acknowledged the existence of jural relationship between the parties and the existence of the liability, CS No. 678/19 Page No. 6 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA Date:
BHATIA 2024.12.06 16:13:05 +0530 it is immaterial whether the same is accompanied by an assertion that nothing would be found due from the person making the acknowledgment and the period of limitation would be extended from the last such acknowledgment if it is made within the period of limitation. Ld. Counsel for plaintiff has further relied upon the following judgments:
A. DCM Financial Services Ltd. Vs. M/s. New Holland Tractor (India) Pvt. Ltd., ILR (2008) supp. (1) Delhi 75 B. R.V. Ahila Vs. M/s. VXL Realtors Pvt.
Ltd. 210 (2014) DLT 42 C. Manoj Kumar Goyal Vs. Jagdish Prashad Modi 2014 (3) ILR (Del) 1595 D. State Bank of India Vs. Kanhaiya Lal & Anr., 2016 (157) DRJ 403 E. Jiwan Lal Achariya Vs, Rameshwar Lal Agarwalla, (1967) 1 SCR 190 F. Bhajan Singh Samra Vs. Wimpy International Ltd., 185 (2011) DLT 428
12. Per contra, Ld. Counsel for Defendant no. 1 has opposed the plea of the plaintiff on the following grounds:
A. Each separate order was a separate contract with its own period of limitation and acknowledgment if any, was not within the original period of limitation of all the invoices.
CS No. 678/19 Page No. 7 of 22
Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed
by RAHUL
RAHUL BHATIA
Date:
BHATIA 2024.12.06
16:13:17
+0530
A.1 Ld. Counsel for the Defendant no. 1 t has submitted that there was no open, running and mutual account between the parties and in the absence of open, running and mutual account, each invoice has to be taken as a separate contract for which, there would be an independent period of limitation based upon the date of the invoice. It is submitted that the last invoice with respect to the Manesar plan was dated 26.07.2008 and the last invoice for the Pant Nagar plant was dated 29.09.2008. Similarly, the last payment with respect to the Manesar Plant was received on 19.02.2009 and for Pant Nagar plant on 05.01.2009. As such, the period of limitation would at best extend till 18.02.2012 for the Manesar Plant and 04.01.2011 for Pant Nagar plant. On the aspect of separate limitation period, the Defendant no. 1 has relied upon the following judgments:-
1. Micrographics India Vs. The Govt. of NCT of Delhi & Anr. 2018 SCC OnLine Del 8448.
2. Aghore Nath Ray Vs. Bisnu Chandra Das ILR 1950 (Cal.) 578.
B. The alleged acknowledgment are not covered under Section 18 of the Limitation CS No. 678/19 Page No. 8 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHULRAHUL BHATIA Date: BHATIA 2024.12.06 16:13:24 +0530 Act. B.1 It is submitted that for an effective acknowledgment under Section 18 of
Limitation Act, the acknowledgment has to be within the original limitation period. As the plaintiff has relied upon the purported acknowledgment dated 25.10.2012, the same will not extend the period of limitation as the original period of limitation expired on 18.02.2012. Further, it is submitted that the cause of action to extend the limitation period is shown to be the acknowledgment by way of demand draft dated 25.10.2012. However, the letter through which the demand draft was sent, is not placed on record by the plaintiff and only the demand draft dated 25.10.2012 has been placed on record. Thus, the Defendant no. 1 has submitted that neither the acknowledgment dated 25.10.2012 is within the original limitation period nor can it take the effect of payment under Section 19 of Limitation Act as the plaintiff did not accept the said payment.
B.3 Defendant no. 1 has relied upon
following judgments:-
(i) Kotak Mahindra Bank Ltd. Vs. KEW
Precision Parts Pvt Ltd Civil Appeal No. CS No. 678/19 Page No. 9 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:13:30 +0530 2176/2020.
(ii) Kalpana Trading Company Vs. Executive Officer Town Panchayat & Ors. AIR 1999 MAD 371.
C. The plaintiff has not placed on record any documentary proof or evidence to show that acknowledgment as per Section 18 of the Limitation Act was ever made by the Defendant no. 1.
C.1 The plaintiff has not placed on record the acknowledgment letter dated 25.10.2012. Even if the best case of the plaintiff is taken and it is presume that the Defendant no. 1 t vide e-mail dated 19.06.2012 acknowledged the liability to be effective under Section 18 of the Limitation Act, the present case will still be beyond limitation as it got first listed in Court on 11.09.2015.
D. That the negotiations that were going on between parties do not extend limitation until and unless they fall within the parameters of Section 18 of the Limitation Act.
D.1 Ld. Counsel for Defendant no. 1 has submitted that the contention of the plaintiff that since negotiations were going on till October 2012, the period of limitation shall start from November 2012 can also not be CS No. 678/19 Page No. 10 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:13:37 +0530 accepted as negotiations do not extend the period of limitation. Ld. Counsel for Defendant no. 1 has relied upon the judgment of Hon'ble Supreme Court in "Geo Miller & Company Pvt. Ltd. Vs. Rajasthan Vidyut Utpadan Nigam Ltd. (2020) 14 SCC 643" to substantiate that limitation period commences from the moment cause of action accrues and not when the negotiations failed.
13. Heard and Perused.
14. The present case was initially filed on 31.05.2013, however, the defects pointed out by the Registry of Hon'ble High Court of Delhi were not cured in time and the case was re-
filed on 30.05.2015. Thereafter, the defects were finally cured and the case was filed on 03.09.2015. The case came to be listed for the first time on 11.09.2015. Initially two applications under Section 5 of the Limitation Act were filed for condonation of delay in re-filing of the present case. On 20.12.2018, the plaintiff sought to withdraw the said two applications stating that the plaintiff was entitled to benefit of Section 18 of Limitation Act as the demand draft was issued on 25.10.2012 and the present suit is within limitation. As such the said two applications were dismissed as withdrawn. Thereafter, the plaintiff filed an application under Order VI Rule 17 CPC for amendment of plaint to claim that the cause of action arose on 25.10.2012 and the suit is within limitation. The said application was allowed vide order dated 21.11.2022.
CS No. 678/19 Page No. 11 of 22Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHUL RAHUL BHATIA
Date:
BHATIA 2024.12.06
16:13:43
+0530
15. In an appeal against the said order, the Hon'ble High Court of Delhi has directed to treat the issue of limitation as a preliminary issue.
16. The crux of the case is that the plaintiff has supplied various materials to different plants of Defendant no. 1 on various dates. To better understand the time-line of transactions between the parties, the following dates are important.
S.No. Particulars Dates
1 Last invoice of Manesar Plant 26.07.2008
2 Last invoice of Pant Nagar Plant 29.09.2008
3 Last payment of Manesar Plant 19.02.2009
4 Last payment of Manesar Plant 05.01.2009
5 Period of limitation as per last 18.02.2012
payment
6 Defendant no. 1 communication 07.08.2010
regarding one time settlement of (within 03
Rs.20,00,000/- years of period
of limitation)
7 Reply to legal notice stating that 04.02.2011
only Rs.61,679/- are pending
8 E-mail confirming balance as 19.06.2012
Rs.61,679/-
9 Demand draft by defendant no. 1 25.10.2012
to plaintiff for Rs.61,679/-
17. Although the present suit was first filed on 30.05.2013, however, the same was not re-filed within time and the application for condonation of delay in re-filing the present suit were withdrawn. As such, the date of filing of the present case cannot be taken to be as 30.05.2013. As such, the date of filing of the present case has to be taken as 11.09.2015 when the matter was first listed or at best 09.09.2015, when the case was passed CS No. 678/19 Page No. 12 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA Date:
BHATIA 2024.12.06
16:13:48
+0530
for listing. Moreover, vide the amended plaint, the plaintiff has sought to establish the accrual of cause of action on 25.10.2012 and therefore, extended limitation till 24.10.2015.
18. Ld. Counsel for the Defendant no. 1 has submitted that as there is no open, running and mutual account between the parties, each invoice has to be taken as a separate contract and separate cause of action would accrue from each invoice. However, going through the pleadings of the case and the documents annexed with the plaint, what is evident is that although separate invoices were raised for each supply of goods, Defendant no. 1 through its letter dated 07.08.2010, has stated that on reconciliation of accounts, the outstanding amount as per the Defendant no. 1 was Rs.16,87,506/- and the Defendant no. 1 agreed to settle the whole dispute by paying a lump-sum amount of Rs.20,00,000/-. No breakup as to the invoices for which the said amount was offered has been mentioned in the said letter. The earliest invoice for which, the plaintiff is claiming in the present case is dated 07.04.2008. Thus, even if each invoice is taken as a separate contract, the period of limitation even for the earliest invoice was still subsisting on 07.08.2010. Thus, even if the contention of the Defendant no. 1 that each invoice is separate contract is taken at face value, the period of limitation for all the invoices would stand extended vide letter dated 07.08.2010.
19. It is noteworthy to observe that vide letter dated 07.08.2010, the Defendant no. 1 has mentioned that as per their account Rs.16,87,506/- was pending. It is also mentioned in the said letter that this is the amount as per the Defendant no. 1 CS No. 678/19 Page No. 13 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHUL RAHUL BHATIA
BHATIA Date:
2024.12.06
16:13:54 +0530
account and the Defendant no. 1 had on multiple occasions asked the plaintiff to provide documents with respect to plaintiff's account. Thus, going through this letter, it is clear that the Defendant no. 1 has admitted to the existence of some liability and jural relationship between the parties. As such, this letter would be covered by Section 18 of Limitation Act and would extend the period of limitation as held in the judgment of Food Corporation India Ltd. (supra).
20. Hon'ble High Court of Delhi in the case of Bharath Skins Corporation Vs. Taneja Skins Company Pvt Ltd has held as follows:-
20. In case of a running and non-mutual account between the buyer and seller, when goods are delivered by the seller to the buyer, the value of the goods is debited in the debit column and when amounts are paid by the buyer to the seller, they are entered in the credit column. The difference is continuously struck in the column for balance. In such a case, when the buyer defaults to make balance payment, the seller‟s action is not for the price of goods sold and delivered but for the balance due at the foot of an account. Thus, Article 14 would have no application in suits of recovery of money due on a running and a non-mutual current account between the buyer and seller.
21. In this regards, it is important to note the following observations made in the decision reported as (1849) 7 C. 3. 106 Dood v. Wigley when it was observed:-
"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 the 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 CS No. 678/19 Page No. 14 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:14:00 +0530 goods, or to give credit beyond the price of the articles then delivered : when, on a subsequent day, other 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 off the goods delivered on the 1st of January, and the purchaser agrees to pay for both parcels as upon one entire sale... After the successive waiver and extinguishment of each preceding contract, the only subsisting contract and cause of action ex contractu will be the last."
22. The observations in the decision reported as (1856) 18 C.B. 325 Bonsey v Woodsworth are also worthy of being noted; and are as under:-
"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."
23. The upshot of the above discussion is that Article 14 of the Schedule to the Limitation Act, 1963 does not apply to suits for recovery of money due on a running and current but a non-mutual account between the buyer and seller i.e. an account of the kind with which we are dealing.
24. There being no Article in the Schedule to the Limitation Act, 1963 dealing with suits for recovery of money due on running and current but non-mutual accounts, in such circumstances, the residual article viz. Article 113 applies to such suits.
25. Under Article 113, the period for limitation for filing a suit is three years and the same begins to run when the right to sue would accrue when claim was denied in response to the legal notice dated 26.06.1985 on 13.07.1985 but since `7,000/- was paid on 13.07.1985 and 24.07.1985 (`2,000/- on the former date and `5,000/- on the latter date), limitation would commence from 24.07.1985. The suit being filed on 02.09.1985, governed for purposes of limitation by Article 113 the suit would be within limitation."
21. Thus, it is clear that in case there are various invoices raised by one party to another, the same shall constitute a suit for CS No. 678/19 Page No. 15 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA Date:
BHATIA 2024.12.06 16:14:06 +0530 recovery of money due on a running and current but a non-mutual account and the same shall be governed by Article 113 of the Schedule to the Limitation Act, 1963 and the period of limitation shall be three years from the last invoice or the last payment received.
22. Thereafter, the plaintiff issued a legal notice to the Defendant no. 1 claiming the balance amount of Rs.47,89,650/- as principal as per the accounts of the plaintiff. The legal notice was replied by the Defendant no. 1 vide reply dated 04.02.2011 and by the said reply the Defendant no. 1 gave item by item reply to the legal notice and gave the details of payment made on all the invoices mentioned in the legal notice. Further, the reply mentions that only an amount of Rs.61,679/- was pending in lieu of the invoices mentioned in the legal notice. The said position was reiterated vide e-mail dated 19.06.2012 by the Defendant no.
1. The Defendant no. 1 sought to make payment of this amount vide demand draft dated 25.10.2012, which the plaintiff refused to accept.
23. Thus what is clear from the above discussion, once the Defendant no. 1 admitted the jural relationship and liability vide letter dated 07.08.2010, the period of limitation stood extended from that day till 06.08.2013.
24. Thus what has to be seen in this case is whether the reply dated 04.02.2011, e-mail dated 19.06.2012 and the demand draft dated 25.10.2012 extend the period of limitation from the respective dates or not.
25. Plaintiff has submitted that each of these three CS No. 678/19 Page No. 16 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:14:11 +0530 communications by the Defendant no. 1 had an effect of extension of limitation from their respective dates as the existence of jural relationship and some liability was admitted and acknowledged by the Defendant no. 1. As all these three letters were within 03 years of letter dated 07.08.2010, they being within the period of limitation, would extend the period of limitation for a further period of 03 years. As such, the period of limitation in present case stood extended till 24.10.2015.
26. A careful perusal of letter dated 07.08.2010 would reveal that in the said letter jural relationship as well as existing liability of Defendant no. 1 have been admitted. The Defendant no. 1 has calculated an amount based upon his records and stated that despite repeated reminders, the plaintiff had not been able to substantiate the higher amount claimed by him and an offer of one time settlement at Rs.20,00,000/- was extended to the plaintiff.
27. The contents of this letter are in contrast with the reply to legal notice. In this letter, it has been mentioned by Defendant no. 1 that the amount offered by the Defendant no. 1 is as per the accounts of the Defendant no. 1. In this letter, the Defendant no. 1 has called for the plaintiff to provide relevant documents to clarify the excess amount be claimed by the plaintiff. Thus, vide this letter, the plaintiff had along with admitting the jural relationship between the parties has also sought the accounts of the plaintiff, thereby showing that some liability apart from the one calculated by the Defendant no. 1 may also be pending.
28. On the contrary in the reply of legal notice dated CS No. 678/19 Page No. 17 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:14:18 +0530 04.02.2011, the Defendant no. 1 has given a complete statement as to the various amounts claimed by the plaintiff. A perusal of the legal notice dated 22.12.2010 reveals that in the legal notice, the plaintiff has given the details of all the invoices which were pending on that date. Similarly, in the reply the Defendant no. 1 has given point by point answer/payment details as to each invoice and has also mentioned that certain material was rejected and returned. The details of the cheque payment qua each of the invoices mentioned in the legal notice have been mentioned in the reply based upon this point to point reply, the Defendant no. 1 has stated that only an amount of Rs. 61,679/- was pending as on that day. Thus, what appears from the reading of the reply is that after considering all the invoices by the plaintiff, the Defendant no. 1 was able to show the payments made against each of those invoices and based upon the invoices and payment, an amount of Rs.61,679/- was pending. This averment was reiterated by the Defendant no. 1 in e-mail dated 19.06.2012 and the Defendant no. 1 sought to repay the said amount vide demand draft dated 25.10.2012.
29. The plaintiff has sought to extend the period of limitation based upon the acknowledgment mentioned in the reply dated 04.02.2012, e-mail dated 19.06.2012 and demand draft dated 25.10.2012. Case of the plaintiff is that the limitation got extended vide letter dated 07.08.2010 and within 03 years of the said letter, the limitation again got extended on 04.02.2011, 19.01.2012 and finally by the demand draft dated 25.10.2012.
30. A perusal of the letter dated 07.10.2010 and reply dated CS No. 678/19 Page No. 18 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA BHATIA Date:
2024.12.06 16:14:24 +0530 04.02.2011 would reveal the contrast between the two letters. On the one hand, vide letter dated 07.08.2010, the Defendant no. 1 had, while admitting liability left the question of accounts of the plaintiff as open and the amount to be subject to reconciliation.
As such, the said letter would definitely be considered as an acknowledgment as per Section 18 of Limitation Act.
31. However, a perusal of the reply dated 04.02.2011 would reveal that although the plaintiff has admitted to the jural relationship between the parties, the liability of the Defendant no. 1 has been restricted to an amount which has been calculated on the basis of invoices raised by the plaintiff and subsequent payments made to him. Thus what appears from the reading of the reply dated 04.02.2011 is that on that date, after taking into the invoices of the plaintiff and giving the details of payment against each such invoice, the Defendant no. 1 came to a conclusion that only an amount of Rs.61,679/- was pending.
32. Since vide this reply, the liability of the Defendant no. 1 ant was defined and admitted to a certain amount, the said letter would extend the period of limitation only for the amount acknowledged in the said letter.
33. The reliance of the plaintiff on Food Corporation of India (supra) is misplaced as in that case, the Defendant no. 1 therein had admitted to the receipt of the amount and only the nature of the receipt was sought to be contested. As such, the Hon'ble Supreme Court in that case has held that as the Defendant no. 1 therein had admitted jural relationship and existence of liability, the limitation was extended in that case. However, the facts in the CS No. 678/19 Page No. 19 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
Digitally signed by RAHULRAHUL BHATIA Date:
BHATIA 2024.12.06 16:14:30 +0530 present case are distinguishable as in the present case, the Defendant no. 1 has not admitted to any existing liability beyond Rs. 61,679/- vide letter dated 04.02.2011. Similarly, as the admission of liability is limited to an amount of Rs. 61,679/-, it cannot be said that vide this letter the Defendant no. 1 has acknowledged financial liability towards the plaintiff beyond the said amount.
34. Thus what can be inferred from the above discussion is that the letter dated 07.08.2010 can be taken to have extended the period of limitation being acknowledgment of Section 18 of Limitation Act. As such, the plaintiff would have been entitled to extension of limitation for 03 years from 07.08.2010.
35. However, the same cannot be said with respect to 04.02.2011 or e-mail dated 19.06.2012. As such, these two letters cannot be considered to have extended the period of limitation.
36. This leaves us to consider the demand draft dated 25.10.2012 and its effect on the extension of limitation. The demand draft was only Rs.61,679/- and cannot be taken as an acknowledgment under Section 18 of Limitation Act. Section 19 of the Limitation Act deals with the effect of payment during the period of limitation. It is claimed that vide the demand draft 25.10.2012, the Defendant no. 1 sought to make payment with respect to the present dispute within the period of extended limitation, thereby extending the period of limitation from 25.10.2012 for a further period of 03 years.
37. It is noteworthy that no covering letter to the demand draft dated 25.10.2012 has been placed on record. Moreover, the CS No. 678/19 Page No. 20 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd. Digitally signed by RAHUL RAHUL BHATIA Date:
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plaintiff has not encashed the said demand draft and returned the same to the Defendant no. 1. Thus, what can be inferred is that the limitation got extended vide letter dated 07.08.2010 but thereafter, the Defendant no. 1 vide reply dated 04.02.2011 and e- mail dated 19.06.2011 has clearly stated that there was no liability pending against the Defendant no. 1 apart from Rs. 61,679/-. Moreover, the demand draft dated 25.10.2012 was not encashed by the plaintiff and as such, no payment was made on that date to the plaintiff to provide him benefit under Section 19 of the Limitation Act. As mentioned hereinabove, only the demand draft has been placed on record and no covering letter has come on record which could have an effect of acknowledgment under Section 18 of Limitation Act.
38. Thus, what can be concluded from the above discussion that the Defendant no. 1 acknowledged the debt of the plaintiff on 07.08.2010 which was within the original limitation period and limitation got extended till 06.08.2013. However, as discussed the letters dated 04.02.2011, 19.06.2012 and demand draft dated 25.10.2012 do not extend the period of limitation as neither they can be considered as acknowledgment under Section 18 of the Act nor the demand draft has the effect of payment under Section 19 of the Act.
39. As such, the period of limitation to file the present case was till 06.08.2013. As the application for condonation of delay in re-filing the case was not pressed by the plaintiff, the date of filing of the present case has to be taken as 11.09.2015. Since the period of limitation for filing of the present case got over on CS No. 678/19 Page No. 21 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.
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2024.12.06 16:14:44 +0530 06.08.2013, the present case has been filed beyond the period of limitation.
40. In view of the above discussion, the preliminary issue of limitation is decided against the plaintiff and in favour of the Defendant no. 1.
41. As per Order XIV Rule 2 CPC, in case, the suit can be disposed of on an issue of law only, the Court is empowered to try that issue first if it relates to a bar created by any law he enforced at that point of time. In the present case, the issue of limitation was framed as a preliminary issue on the directions of Hon'ble High Court of Delhi in CM(M) No. 1186/2023. As the issue has been decided against the plaintiff, in terms of Order XIV Rule 2 CPC, the present suit is dismissed for being filed beyond the period of limitation.
42. Decree sheet be prepared accordingly.
43. File be consigned to record room after due compliance.
Digitally signed by RAHULRAHUL BHATIA BHATIA Date:
2024.12.06 16:14:53 +0530 Announced in the open Court today (Rahul Bhatia) on 06th December, 2024 District Judge-01 SE/Saket Courts/ 02.12.2024 CS No. 678/19 Page No. 22 of 22 Chandrahas Kuchya Vs. M/s. ACME Cleantech Solutions Ltd.