Delhi District Court
Shri Vinod Madan Through His Legal Heirs vs . Shri Mangal Panday on 22 May, 2023
Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday
IN THE COURT OF SH. DINESH KUMAR,
ADDL. DISTRICT JUDGE02, SOUTH DISTRICT,
SAKET COURTS COMPLEX, NEW DELHI
Presiding Judge: Sh. Dinesh Kumar.
CS DJ No. 9381/2016
Filing No. 29470/2016
CNR No. DLST010063302016
In the matter of
Shri Vinod Madan (Since Deceased)
S/o Shri A.L. Madan
R/o G12/2, Malviya Nagar
New Delhi 110017
Office At : C70, Shop No. 4, Basement
Malviya Nagar, New Delhi 110017
Through his legal heirs:
i) Shri Ashok Madan
S/o Shri A.L. Madan
ii) Shri Sanjay Madan
S/o Shri A.L. Madan
Both R/o
G12/2, Malviya Nagar
CS DJ No. 9381/2016
CNR No. DLST010063302016
Page 1 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023
Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday
New Delhi 110017 ...............Plaintiff
Versus
Shri Mangal Panday
Proprietor of :
M/s Vijay Laxmi Electronics (P) Ltd.
16/A, Main Markit, Garhi,
East of Kailash,
New Delhi - 110065
Also At:
House No. C49, Ground Floor,
Dayanand Colony,
Lajpat Nagar Part 4, New Delhi 110024
.............Defendant
Date of Institution : 15.11.2016
Date of reserving the judgment : 17.05.2023
Date of pronouncement : 22.05.2023
Decision : Suit Decreed.
SUIT FOR RECOVERY OF RS. 4,84,475/(RUPEES FOUR
LAKHS EIGHTY FOUR THOUSAND FOUR HUNDRED
SEVENTY FIVE ONLY) ALONGWITH PENDENTE LITE
AND FUTURE INTEREST
JUDGMENT
1. Vide this judgment, I shall decide the Civil Suit filed by the plaintiff for recovery of Rs. 4,84,475/. The brief facts of the CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 2 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday case, as per the plaint, are as under: 1.1. The plaintiff is the authorized distributor of home appliances of brands including Godrej, Arise etc. The plaintiff has been carrying on his trading business under the name and style of M/s Arsh Trading Company. The defendant claimed himself to be in the retailing business of selling home appliances catering to the needs of consumers in his local area from where he is carrying on the business. 1.2. The defendant had purchased and the plaintiff had supplied, from time to time the goods and appliances as and when demanded. Accordingly, a running account was maintained between the defendant and the plaintiff. The plaintiff used to raise the invoices which were duly received by the defendant on the goods being supplied from time to time on his demand.
1.3. After some time of dealing with the defendant, the plaintiff realized that the defendant was not regular in clearing the outstanding dues standing to his credit and as such the plaintiff stopped supplying the goods to the defendant on credit basis. Till the month of August 2013, the total amount of arrears against the account of defendant came CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 3 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday to Rs.4,94,675/.
1.4. The plaintiff made repeated requests and demands to the defendant to clear the outstanding dues. However, the defendant kept on avoiding the payment on one pretext or the other sometimes citing the slump in his business and expecting the payment from his debtors soon. The plaintiff sent his employees many times to the shop/office of the defendant but to no effect. Even after expiry of considerable period of time, the defendant failed to make the payment of outstanding amount of Rs.4,94,675/.
1.5. The plaintiff sent a legal notice dated 26.02.2015 to the defendant through courier on 26.02.2015 and through speed post on 26.02.2015, calling upon the defendant to make payment of Rs.4,94,935/ along with interest @24% p.a. within 15 days from the receipt of the notice. The legal notice was duly served upon him through courier on 28.02.2015 and through speed post on 26.02.2015. Upon receiving the legal notice, the defendant approached the plaintiff and requested for some time to clear the outstanding amount. The defendant paid an amount of Rs. 10,200/ and assured that remaining payment would be made within one CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 4 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday year. The plaintiff provided the time due to long standing relations. However, the defendant failed to make the payment. Hence, the present suit has been filed seeking a decree of Rs. 4,84,475/ along with pendentelite and future interest @ 24% from the date of filing of the suit till payment.
2. The present suit was filed under Order XXXVII CPC. However, the suit was converted into ordinary civil suit on the submission of Ld. Counsel for the plaintiff vide order dated 15.11.2016. Vide order dated 15.11.2016, summons were directed to be issued to the defendant. The defendant entered his appearance through a counsel and filed his WS. The defendant has taken the following objections in his WS :
2.1. The plaintiff has not come to the Court with clean hands and is guilty of concealment and suppression of material facts. The plaintiff has filed fabricated and manipulated bills in order to show exorbitant claim against the defendant. The alleged bills might be fabricated by the plaintiff. The defendant has already made the payment of entire outstanding amount. Nothing is due against him. 2.2. The plaintiff had not supplied the goods as per the CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 5 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday specification and satisfaction of the defendant. The plaintiff has supplied the damaged goods to the defendant due to which the defendant is suffering great hardship on account of acts and deeds of the plaintiff as the payment of the defendant has been withheld by other persons. The defendant has also suffered damages in terms of reputation and goodwill.
2.3. The present suit is not maintainable as the suit of the plaintiff is barred by limitation. Each bill claimed by the plaintiff is beyond the period of limitation as on the date of filing of the present suit. There is no current and running account maintained between the parties. The plaintiff has not filed any statement of account.
2.4. The representative of the plaintiff had approached the defendant and forcibly dropped the goods at the shop of the defendant only to grow their sale in market. The plaintiff has filed several forged and fabricated bills wherein the defendant has not received the goods. The bills are filed only to extort money from the defendant. The defendant has cleared all the outstanding payment against the plaintiff. The defendant had not made the payment of Rs. 10,000/ as CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 6 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday claimed by the plaintiff in the plaint. There are no merits in the suit. Hence, it is prayed that the suit of the plaintiff may be dismissed.
3. The plaintiff filed replication to the written statement of the defendant in which he denied the allegations made in the written statement and reiterated the facts stated in the plaint.
4. On the basis of the pleadings, following issues were framed vide order dated 24.08.2017 :
1. Whether the plaintiff is entitled to recover a sum of Rs. 4,87,475/ from the defendant, as claimed in the prayer clause?OPP
2. Whether the defendant has cleared all the outstanding dues pertaining to the plaintiff in view of their admitted commercial relationship?OPD
3. Whether the suit is barred by law of limitation?OPD
4. Whether the invoices relied upon by the plaintiff have been forged?OPD
5. Whether the plaintiff is entitled to pendente lite and future interest @ 24% p.a., as claimed in the prayer clause?OPP
6. Relief.
5. The plaintiff appeared as PW1 for his examination. He tendered his evidence by way of affidavit Ex. PW1/A. However, CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 7 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday he could not be cross examined on different dates. He expired on 04.07.2019. On 26.08.2019, file was taken up on an application under Order XXII Rule 3 CPC to bring on record the LRs of the plaintiff. Notice was issued to the defendant. In the meantime, the defendant stopped appearing. Therefore, vide order dated 20.12.2021, the application was allowed. The LRs were taken on record and the matter was adjourned for PE. Vide order dated 28.07.2022, the defendant was proceeded exparte.
6. The LRs of the plaintiff led their evidence. Sh. Ashok Madan i.e. LR No. 1 (as mentioned in the amended memo of parties) examined himself as PW1. He has tendered his evidence by way of affidavit Ex. PW1/A. He has relied upon the following documents :
1. The bill no. 3632 dated 12.07.2013 amount of Rs. 38,600/ is Ex. PW1/1.
2. The bill no. 3629 dated 10.07.2013 amount of Rs. 47,500/ is Ex. PW1/2.
3. The bill no. 3624 dated 06.07.2013 amount of Rs. 51,900/ is Ex. PW1/3.
4. The bill no. 3517 dated 29.05.2013 amount of Rs. 3,700/ is Ex. PW1/4.CS DJ No. 9381/2016
CNR No. DLST010063302016 Page 8 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday
5. The bill no. 3513 dated 28.05.2013 amount of Rs. 18,800/ is Ex. PW1/5.
6. The bill no. 3497 dated 24.05.2013 amount of Rs. 25,200/ is Ex. PW1/6.
7. The bill no. 3453 dated 15.05.2013 amount of Rs. 66,250/ is Ex. PW1/7.
8. The bill no. 3450 dated 15.05.2013 amount of Rs. 42,600/ is Ex. PW1/8.
9. The bill no. 3398 dated 30.04.2013 amount of Rs. 40,175/ is Ex. PW1/9.
10. The bill no. 3385 dated 26.04.2013 amount of Rs. 9,575/ is Ex. PW1/10.
11. The bill no. 3380 dated 23.04.2013 amount of Rs. 28,800/ is Ex. PW1/11.
12. The bill no. 3372 dated 20.04.2013 amount of Rs. 7,500/ is Ex. PW1/12.
13. The bill no. 3371 dated 20.04.2013 amount of Rs. 27,400/ is Ex. PW1/13.
14. The bill no. 3335 dated 13.04.2013 amount of Rs. 16,600/ is Ex. PW1/14.
15. The bill no. 3334 dated 13.04.2013 amount of Rs.
CS DJ No. 9381/2016CNR No. DLST010063302016 Page 9 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday 40,800/ is Ex. PW1/15.
16. The bill no. 3304 dated 05.04.2013 amount of Rs. 26,700/ is Ex. PW1/16.
17. The bill no. 2843 dated 13.11.2012 amount of Rs. 9,000/ is Ex. PW1/17.
18. The bill no. 2653 dated 15.09.2012 amount of Rs. 43,000/ is Ex. PW1/18.
19. Legal notice dated 26.02.2015 is Ex. PW1/19.
20. Speed post receipts are Ex. PW1/20 (Colly).
21. Courier receipts are Ex. PW1/21 (Colly).
22. The speed post internet tracking reports are Ex. PW1/22 (Colly).
23. Courier internet tracking reports are Ex. PW1/23 (Colly).
24. Photocopy of his Aadhaar Card is Mark PW1/24.
25. Photocopy of death certificate is Mark PW1/25.
7. LR No. 2 of the plaintiff Sh. Sanjay Madan examined himself as PW2. He has tendered his evidence by way of affidavit Ex. PW2/A. He has relied upon the documents Ex. PW1/1 to Ex. PW1/23, photocopy of his Aadhaar Card which is Ex. PW2/1 and photocopy of death certificate of the plaintiff Mark PW1/25.
8. The LRs of plaintiff did not examine any other witness.
CS DJ No. 9381/2016CNR No. DLST010063302016 Page 10 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday Hence, vide order dated 13.09.2022, PE was closed and the matter was listed for final arguments.
9. Vide order dated 20.10.2022, at oral request of Ld. Counsel for the plaintiff, permission was granted to the LRs of the plaintiff to lead additional evidence.
10. PW1 was further examined. He has tendered his additional evidence by way of affidavit Ex. PW1/X. He has also relied upon the document i.e. statement of account which is Ex. PW1/26 (colly)(running into 7 pages). PW2 also tendered his additional evidence by way of affidavit Ex. PW2/X. He has also relied upon the document Ex. PW1/26 (colly)(running into 7 pages). The PE was closed and the matter was fixed for final arguments.
11. Ld. Counsel for the plaintiff would argue that the plaintiff has proved the case as per law. The plaintiff has proved that the defendant had received the goods and materials from the plaintiff from time to time. It has also been proved that there was a running, current and open account between the parties. The defendant has failed to cross examine the witnesses of the plaintiff. The defendant has not led any evidence in support of his defence. Hence, the case of the plaintiff stands proved as per law.
CS DJ No. 9381/2016CNR No. DLST010063302016 Page 11 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday Therefore, it is prayed, the suit may be decreed.
12. I have heard the submissions of Ld. Counsel for the plaintiff and perused the material on record. My issue wise findings are as follow :
13. Issue No. 1 to 4 : These issues are taken jointly as they require common discussion. The issues read as under :
"1. Whether the plaintiff is entitled to recover a sum of Rs. 4,87,475/ from the defendant, as claimed in the prayer clause?OPP "2. Whether the defendant has cleared all the outstanding dues pertaining to the plaintiff in view of their admitted commercial relationship?OPD "3. Whether the suit is barred by law of limitation?OPD "4. Whether the invoices relied upon by the plaintiff have been forged?OPD"
14. The plaintiff has averred that he had supplied the goods and materials to the defendant from time to time as per agreement between them. The defendant was not making the payment regularly. Therefore, the plaintiff stopped supplying the goods to the defendant and in the month of August 2013, the defendant was liable to make a payment of Rs. 4,94,675/ to the plaintiff. The defendant, on the other hand, has claimed that nothing was due against him and that he had made all the CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 12 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday payments which were due against him. It has also been one of the defence of the defendant that the invoices relied upon by the plaintiff have been forged. However, the defendant has not led any evidence in the present case. He has stopped appearing after filing of WS and before cross examining the witness. The testimonies of PW1 and PW2 have remained unrebutted and hence, the statements made in their testimonies stand proved as per law on the preponderance of probabilities. The defendant has failed to prove that the invoices relied upon by the plaintiff have been forged. There is nothing on record to substantiate the said claim. The issue no. 4 is therefore, decided against the defendant.
15. Further, the testimonies of PW1 and PW2 have proved the invoices Ex. PW1/1 to Ex. PW1/18 as per law. One of the ground of defence taken by the defendant is that the suit is barred by limitation. It is stated in the WS that each bill claimed by the plaintiff is beyond the period of limitation of 3 years as on the date of filing of the present suit.
16. Perusal of the record would show that the plaintiff has claimed the recovery in the present suit on the basis of various CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 13 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday invoices which are Ex. PW1/1 to Ex. PW1/18. As already stated these invoices have been proved as per law. The plaintiff has also brought on record a statement of account of the defendant which is Ex. PW1/26 (Colly). The statement of account shows that various invoices were raised by the plaintiff on the account of defendant from time to time and the defendant was also making payment from time to time in part. The statement of account does not reflect that the payment was made by the defendant on the invoice to invoice basis. No evidence has been led by the defendant to show that the payment was made by the defendant on invoice to invoice basis. Thus, it is shown that there was an open, current, running, non mutual account between the parties.
17. Division Bench of Hon'ble High Court of Delhi in Bharath Skins Corporation Vs. Taneja Skins Company Pvt. Ltd.:MANU/DE/7351/2011 has discussed the law relating to the Limitation Act in such cases. The claim of the plaintiff in the said matter was that starting from 11.08.1978, hides were sold under 56 bills by the plaintiff to the defendant. As and when goods were supplied, a bill was raised for the value of the CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 14 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday goods supplied and correspondingly a debit entry was made in the account of the appellant and as and when payment was received, the same was credited by making a credit entry in the account. Suit was filed for recovery of the balance amount. In the written statement, plea was taken that goods being supplied on credit, limitation would run for each supply and that the account between the parties was not a mutual account. Hon'ble High Court after discussing the law relating to the mutual account as mentioned hereinabove, held that since the dealings between the parties disclosed a single contractual relationship i.e. of buyer and seller between them, the account between them could not be termed as a 'mutual' account. As a necessary corollary, Article 1 of the Schedule to the Limitation Act, 1963 was held to be had no application in the said case. After discussing various judgments including Kesharichand Jaisukhlal v The Shillong Banking Corporation AIR 1965 SC 1711, Hirada Basappa v. Gadigi Muddappa [[1871] VI Madras High Court Reports. 142, 144], Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah I. L.R[1931] 58 Cal. 642 and Monotosh K. Chatterjee v. Central Calcutta CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 15 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday Bank Ltd. [1953] 91 C.L.J. 16, it has observed as under:
"13. From the aforesaid observations, it can be deduced that for the creation of an open, current and mutual account, there must be an intention between the parties, either express or implied, which may be deducible from the course of dealings to have mutual dealings, creating reciprocal obligations, independent of each other. A demand in relation to a matter of account means a claim for money arising out of a contractual business relationship between the parties. Where the dealings between the parties disclose a single contractual relationship, there will be demands only in favor of one party. For instance, where the relationship between A and B is that of lender and borrower respectively, A will have a demand against B in respect of every item of loan advanced. But B can have no demand against A. Where the dealings between the parties disclose two contractual relationships, there will arise demands in favor of each side against the other. For instance, where A advances money to B from time to time as loan, and B engages A as his agent for the sale of goods sent by B, there are two contractual relationships between the parties: one, that of lender and borrower and the other, that of principal and agent. A as creditor may have several demands against B who as principal may have, independently, several demands against A. The real test, therefore, to see whether there have been reciprocal demands in any particular case is to see:
Whether there is a dual contractual relationship between the parties.
"14. Where A sells goods to B from time to time and B makes payments towards the price from time to time, there is only a single contractual relationship, namely that of buyer and seller, between the parties. A has demands against B for items sold, but B can have no demands against A. Such case is not one of reciprocal demands and thus Article 85 of the Schedule to the Indian Limitation Act, 1908 corresponding CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 16 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday to Article 1 of the Schedule to the Limitation Act, 1963 will not apply to suits on such accounts. We are fortified in our view by the following observations made by the Supreme Court in the decision reported as AIR 1959 SC 1349 Hindustan Forest Company v Lal Chand: "The learned Judge of the High Court who learned the suit held that art. 115 had no application and dismissed the suit as barred by limitation. The sellers went up in appeal which was heard by two other learned Judges of the High Court. The learned Judges of the appellate bench of the High Court held that art. 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred. They thereupon allowed the appeal and passed a decree in favour of the sellers. The buyer has now come up in appeal to this Court.
"5. Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as art. 85 of the Indian Limitation Act except as to the period of limitation, is set out below: "xxx "6. If the article applied the suit would be clearly within time as the last item found to have been entered in the account was on June 23, 1947. The only question argued at the bar is whether the account between the parties was mutual. "7. The question what is a mutual account, has been considered by the courts frequently and the test to determine it is well settled. The case of the Tea Financing Syndicate Ltd. v.
Chandrakamal Bezbaruah I.L.R (1930) Cal. 649, may be referred to. There a company had been advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price. In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of tea, the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 17 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday governed by art. 85 of the Indian Limitation Act. Rankin, C.J., laid down at p. 668 the test to be applied for deciding the question in these words :
"There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Halloway, A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of setoff to reduce the defendant's liability."
"8. The observation of Rankin, C.J., has never been dissented from in our courts and we think it lays down the law correctly. The learned Judges of the appellate bench of the High Court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the conclusion that the account between the parties was mutual for the following reasons :
"The point then reduces itself to the fact that the defendant company had advanced a certain amounts of money to the plaintiffs for the supply of grains. This excludes the question of monthly payments being made to the plaintiffs. The plaintiffs having received a certain amount of money, they became debtors to the defendant company to this extent, and when the supplies exceeded Rs. 13,000 the defendant company became debtors to the plaintiff and later on when again the plaintiff's supplies exceeded the amount paid to them, the defendants again became the debtors. This would show that CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 18 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday there were reciprocity of dealings and transactions on each side creating independent obligations on the other."
"9. The reasoning is clearly erroneous. On the facts stated by the learned Judges there was no reciprocity of dealings; there were no independent obligations. What in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. There can be no question that in so far as the payments had been made after the goods had been delivered, they had been made towards the price due. Such payments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer. The learned Judges do not appear to have taken a contrary view of the result of these payments.
"10. The learned Judges however held that the payment of Rs. 13,000 by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer. This apparently was the reason which led them to the view that there were reciprocal demands and that the transactions had created independent obligations on each of the parties. This view is unfounded. The sum of Rs. 13,000 had been paid as and by way of advance payment of price of goods to be delivered. It was paid in discharge of obligations to arise under the contract. It was paid under the terms of the contract which was to buy goods and pay for them. It did not itself create any obligation on the sellers in favour of the buyer; it was not intended to be and did not amount to an independent transaction detached from the rest of the contract. The sellers were under an obligation to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone. If the sellers had failed to deliver goods, they would have been liable to refund the monies advanced on CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 19 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday account of the price and might also have been liable in damages but such liability would then have arisen from the contract and not from the fact of the advances having been made. Apart from such failure, the buyer could not recover the monies paid in advance. No question has, however been raised as to any default on the part of the sellers to deliver goods. This case therefore involved no reciprocity of demands. Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit." (Emphasis Supplied)
18. After holding that Article 1 of the Schedule was not applicable, Hon'ble High Court held that Article 14 was also not applicable and that Article 113 was applicable in such cases. It has held as under:
"20. In case of a running and nonmutual 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 nonmutual 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 CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 20 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday 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 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 of 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 nonmutual account between the buyer and seller i.e. an account of the kind with which we are dealing.CS DJ No. 9381/2016
CNR No. DLST010063302016 Page 21 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday "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 nonmutual 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." (emphasis supplied)
19. The Division Bench of Hon'ble High Court of Madras in case titled Renganathan Vs. M/s Sarvana Store, 2018 SCC Online Mad 5897, decided on 10.07.2018, while quoting the judgment of Hon'ble High Court of Delhi in Bharat Skins Corporation (Supra) has held that in such cases the residuary article 113 of the Schedule to the Limitation Act would be applicable.
20. In the present case also, it can be seen from the material on record that the plaintiff had supplied goods and materials to the defendant through various invoices on various dates. The statement of account filed by the plaintiff would CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 22 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday show that the payments had not been made by the defendant as per the invoices. Perusal of the statement of account filed by the plaintiff which is Ex.PW1/26 (Colly) would show that payments of different amounts were made by the defendant on different dates while invoices of different amount were raised by the plaintiff. Therefore, in the present case limitation period would start running from the date of legal notice as held by Hon'ble High Court of Delhi in Bharath Skins Corporation Vs. Taneja Skins Company Pvt. Ltd.:MANU/DE/7351/2011. Legal notice in the present case is shown to be issued on 26.02.2015. The present suit is filed on 15.11.2016 i.e. within 3 years from the date of accrual of the cause of action. The suit is therefore, within limitation. Hence, issue no. 3 is decided against the defendant.
21. The plaintiff has claimed recovery of Rs. 4,87,475/ from the defendant. There is no mentioning in the plaint as to how that amount has been calculated by the plaintiff. The plaintiff has filed various invoices which are Ex. PW1/1 to Ex. PW1/18 and a statement of account which is Ex. PW1/26 (Colly). The first invoice is Ex. PW1/18 dated 15.09.2012 and CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 23 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday other invoices are of a date after the said date. The total amount of the invoices Ex. PW1/1 to Ex. PW1/18 comes to Rs. 4,76,175/. As the plaintiff has not filed any other invoice, therefore, I hold that the plaintiff has failed to prove any other liability of the defendant. It is settled position of law that statement of account in itself is not sufficient to prove the liability. I get strength from the judgment titled Chandradhar Goswami & Ors. Vs. The Gauhati Bank Ltd. AIR 1967 SC
816. While quoting Section 34 of the Indian Evidence Act, Hon'ble Supreme Court of India has observed as under :
"It is clear from a bare perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them. In the present case, however, the appellants did not accept the correctness of the books of account."
22. In the present case also, the liability of the defendant cannot be decided only on the basis of the statement of account. The plaintiff has brought on record various invoices as above CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 24 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday mentioned which have been proved as per law. The invoices start from 15.09.2012. The total amount of the invoices Ex. PW1/1 to Ex. PW1/18 comes to Rs. 4,76,175/. In the statement of account Ex. PW1/26 (Colly), the plaintiff has shown various part payments made by the defendant on various dates after 15.09.2012. The total amount shown to be received by the plaintiff comes to Rs. 3,21,137/. Therefore, the said amount is required to be adjusted against the amount of Rs. 4,76,175/ of the invoices. After adjusting the said payment, an amount of Rs. 1,55,038/ remains to be paid by the defendant to the plaintiff.
23. The defendant has not brought on record any evidence to prove that he had made the payment of Rs. 1,55,038/ to the plaintiff as claimed by him. The defendant in his WS has also stated that goods supplied by the plaintiffs were in damaged condition. However, there is no evidence to substantiate the said averment. Hence, I am of the considered opinion that the defendant has failed to prove that he has cleared all the outstanding dues pertaining to the plaintiff. The plaintiff is however, entitled to recovery of Rs. 1,55,038/ from the defendant and not the amount as claimed by the plaintiff in the CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 25 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday suit. The issues no. 1 to 4 are accordingly decided in favour of the plaintiff.
24. Issue No. 5 : This issue reads as under :
"5. Whether the plaintiff is entitled to pendentelite and future interest @ 24% p.a., as claimed in the prayer clause?OPP"
25. The plaintiff has claimed interest @ 24% p.a. Admittedly, there is no agreement between the parties regarding the rate of interest. There is nothing on record to show that it is an agreed rate of interest. Be that as it may, it is discretion of the Court to award interest pendente lite and future interest even if there is a specific contract between the parties. I get strength from the judgment passed by Hon'ble Supreme Court of India in case titlted Central Bank of India Vs. Ravindra & Ors. SLP (C) 2421/1993 decided on 18.10.2001.
26. Further Section 61 (2) of the Sales of Goods Act provides that in the absence of a contract to the contrary, the Court may award interest at such rate as it thinks fit on the amount of the price to the seller in a suit filed by him for the amount of the price, from the date of tender of the goods or CS DJ No. 9381/2016 CNR No. DLST010063302016 Page 26 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023 Shri Vinod Madan Through His Legal Heirs Vs. Shri Mangal Panday from the date on which the price was payable. In Clariant International Ltd. & Anr. Vs. Securities & Exchange Board of India (2004) 8 SCC 524, Hon'ble Supreme Court of India has held that in the absence of any agreement or statutory provisions or mercantile usage, interest payable can be only at the market rate and such interest is payable upon establishment of totality of circumstances justifying exercise of such equitable jurisdiction. It has also been held that the Courts of law can take judicial notice of both inflation and also the bank rate of interest.
27. In the present case, the interest claimed by the plaintiff is very high. In the facts and circumstances of the case and taking judicial notice about the rate of interest charged by nationalized banks, I hold that the plaintiff is entitled to interest @ 10% p.a. from the date of filing of the suit, as claimed by him, i.e. 15.11.2016 till preparation of decree. As the transaction in question is commercial in nature, the plaintiff is also entitled to interest at the same rate from the date of decree till realization of the amount. The issue no. 5 is accordingly decided in favour of the plaintiff.
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28. Issue No. 6 : Relief: In the light of the discussion herein above, the suit of the plaintiff is decreed. The plaintiff is entitled to a decree of recovery of Rs. 1,55,038/ from the defendant alongwith interest @ 10 % per annum from the date of filing of the suit till preparation of the decree. The plaintiff is further entitled to an interest @ 10% per annum from the date of decree till recovery of the amount. The plaintiff is also entitled to the cost of the suit.
29. Decree sheet be prepared accordingly.
30. The plaintiff shall deposit the deficient Court Fee, if any. The decree shall not be executed unless the deficient Court Fee is paid.
Pronounced in the open Court on this 22nd day of May 2023.
(DINESH KUMAR) ADDL. DISTRICT JUDGE02, SOUTH, SAKET COURTS, NEW DELHI.
Digitally signed by DINESH DINESH KUMAR
KUMAR Date:
2023.05.22
17:13:07 +0530
CS DJ No. 9381/2016
CNR No. DLST010063302016
Page 28 of 28 Dinesh Kumar/ADJ02/South/Saket/22.05.2023