Delhi District Court
M/S. Zed C. Infra vs . M/S. Samsung India Electronics Pvt. ... on 16 October, 2012
: 1 :
IN THE COURT OF DR. NEERA BHARIHOKE : ADDITIONAL DISTRICT
JUDGE01 : SOUTH DISTRICT : SAKET COURTS : NEW DELHI
Suit No. 761/2011
In the matter of :
M/s. ZED C. Infra Vs. M/s. Samsung India Electronics Pvt. Ltd. & Anr.
16.10.2012
ORDER :
Vide this order, I shall decided the application of the defendant u/o 7 Rule 11, CPC.
2 Plaintiff has filed the present suit on the basis of that defendant no.2 issued a work order dated 29.03.2007. After the receipt of work order, plaintiff started assigned work and submitted four invoices, invoice no.008 and invoice no. 009 for Rs.11,80,000/ each and invoice no.010 and invoice no.011 for Rs.7,70,000/. Plaintiff has submitted that against invoice no.008 dated 03.05.2007, defendants paid a sum of Rs.9,89,991/ after deducting TDS.
3 Plaintiff has also submitted that against the invoice no.009 dated 03.05.2007 for a sum of Rs.11,80,000/, defendant paid Rs.4,92,576/ after deducting TDS. For invoice no.010 dated 03.05.2007, invoice no.010 was submitted for sum of Rs.7,70,000/ and for invoice no.011 dated 27.06.2007 invoice for sum of Rs.7,70,000/ was submitted. The whole work order was completed in September, Contd....P..1 of 8 : 2 : 2007.
4 Plaintiff has submitted that against the sum of Rs.59,00,000/ the defendants paid a sum of Rs.14,82,567/. Thus leaving balance of Rs.44,17,433/ 5 Plaintiff has submitted that defendants acknowledged invoice no.008 and 009 both dated 03.05.2007 vide certificate of TDS dated 23.10.2008. Plaintiff has filed present suit limited to the balance due and payable under the said invoices on the basis of difference in the amount paid to the plaintiff and amount shown to have been paid to the plaintiff in the said TDS certificates. 6 Defendant has filed the present application claiming that the present suit is time barred as defendants made last payment on 01.06.2007 and the present case has been filed in 22.10.2011. The TDS certificate is dated 23.10.2008 which does not extend period of limitation under any of the invoices. Defendant has prayed for dismissal of the present suit on the basis that it is time barred. 7 Matter was argued at length by both the counsels.
8 Arguments heard. Record perused 9 Plaintiff has submitted in Para 20 of plaint that it had raised invoice no. 08 to 11 on 03.05.2007 and 27.06.2007, and part payments of Rs.9,89,991.00 and Contd....P..2 of 8 : 3 : Rs.4,92,576.00 were made by the defendants in respect of invoice no.8 and invoices no.9 on 01.06.2007 and 08.06.2007. The payment of these part payments has been acknowledged by the defendants by issuing the Income TaxTax Deduction at Source (TDS) Certificates on 23.10.2008. Hence, for the balance amounts due and payable under invoice no.8 and invoice no.9, the suit is within limitation as the three years period from 23.10.2008 is upto 22.10.2011.
10 Plaintiff in Para 18 of the plaint has submitted that the cause of action in the present suit arose when the defendants had issued the work order dated 29.03.2007 and it also arose when plaintiff had raised invoices nos.8 to 11 on 03.05.2007 and it also arose when made part payment of Rs.9,89,991.00 and rs. 4,92,576.00 after deducting the applicable Income Tax TDS, thereon, and it also arose when the defendant had acknowledged the payments by issuing the income tax TDS on 23.10.2008, and it also arose when the defendant had failed to pay the balance and other final amounts under the issued invoices. 11 A perusal of these paragraphs reveals that plaintiff has claimed the suit amount only for two invoices i.e. 08 and 09 on basis of TDS certificate and not for rest of the two invoices as the same do not find mention in the TDS certificate dated 23.10.2008. Thus claim of the plaintiff is based upon the acknowledgment of invoice no. 08 and 09 dated 03.05.2007 vide TDS certificate dated 23.10.2008 as is mentioned in Para 16 of the plaint. In Para 16 plaintiff has submitted that vide this certificate, the plaintiff has acknowledged the original invoices no.08 and 09 dated Contd....P..3 of 8 : 4 : 03.05.2007. Thus, plaintiff has submitted that the claim to these invoices is saved from bar of expiry of period of limitation on basis of acknowledgment in TDS certificates. Thus, it needs to be determined as to whether TDS certificates amount to an acknowledgment so as to save the claim of plaintiff in the present plaint with respect of invoice no.08 and 09.
12 Section 18 of the Limitation Act which speaks of the effect of acknowledgment in writing reads as follows:
18. Effect of acknowledgment in writing.
(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he de rives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
(2) Where the writing containing the acknowledgment is undated oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation. For the purposes of this section.
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, Contd....P..4 of 8 : 5 : deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right,
(b) the word 'signed' means signed either personally or by an agent duly authorized in this behalf, and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.
From a perusal of Subsection (1) of Section 18 it is evident that to invoke this provision :
(1) there must be an acknowledgment of liability in respect of property or right;
(2) the acknowledgment must be in writing signed by the party against whom such right or property is claimed (or by any person) through whom he derives his title or liability;
(3) the acknowledgment must be made before the expiration of the period pre scribed for a suit or application (other than application for the execution of a decree) in respect of such property or right.
The effect of such an acknowledgment is that a fresh period of limitation has to be computed from the time when the acknowledgment was so signed.
Subsection (2) permits giving of oral evidence at the trial of the suit where the acknowledgment is undated but it prohibits, subject to the provisions of the Evidence Act, receiving of oral evidence of contents of the acknowledgment.
Clause (a) of the explanation appended to that Section says that an Contd....P..5 of 8 : 6 : acknowledgment may be sufficient for purposes of Section 18 even though,
(i) it omits to specify the exact nature of the property or right;
(ii) it avers that the time for payment, delivery, performance or enjoyment has not yet come;
(iii) it is accompanied by refusal to pay, deliver, perform or permit to enjoy;
(iv) it is coupled with a claim to set off; or (v) It is addressed to a person other than a person entitled to the property or right.
Clause (b) of the explanation defines the word "signed' to mean signed either personally or by an agent duly authorized in that behalf. 13 It may be noted that for treating a writing signed by the party as an acknowledgment, the person acknowledging must be conscious of his liability and the commitment should be made towards that liability. It need not be specific but if necessary facts which constitute the liability are admitted an acknowledgment may be inferred from such an admission.
14 Here it is necessary to refer to the effect of TDS Certificates on period of limitation i.e. whether the TDS certificates amount to an acknowledgment. If they amount to acknowledgment, plaintiff will be entitled to a fresh period of limitation from date of TDS certificate i.e. 23.10.2008. In Khan Bahadur Shapoor vs Durga Prosad Chamaria And Others, AIR 1961 SC 1236, Hon'ble apex court held that the documents "on which a plea of acknowledgment is based must relate to a present Contd....P..6 of 8 : 7 : subsisting liability though the exact nature or the specific character of the said liability might not be indicated in words; if words used in the acknowledgment indicated the existence of jural relationship between the parties, such as that of debtor or creditor and the statement was made with the express intention to admit such jural relationship of if such intention could be inferred by implication from the nature of the admission, the acknowledgment of liability would follow." 15 In S.P. Brothers, A Partnership Firm vs Biren Ramesh Kadakia on 27 March, 2008, Hon'ble High Court of Bombay held that:
"The issuance of TDS certificates does not amount to an acknowledgment of liability within the meaning of Section 25 of the Indian Evidence Act and the Full Bench judgment of this Court in the case of Jyotsna K. Valia vs T.S. Parekh And Co., 2007 (3) BomCR 772, puts the matter beyond doubt. The TDS certificate is primarily to acknowledge the deduction of tax at source. The certificate does not refer to any amount of loan or even the rate of interest which is payable on the said principal amount. It does not refer to any contract between the parties and even a transaction."
16 In my view, the said certificate, as the very certificate shows, can prima facie be proof only of the tax deducted at source and not of the amount due to the petitioner more so when what is the amount mentioned therein has not been shown by the petitioner as due to him. The said certificate, therefore, in my view, cannot be taken as prima facie evidence of the debt or liability of the petitioner in the sum of Rs. 3,77,220/ when the very case of the petitioner is that what is due and payable to Contd....P..7 of 8 : 8 : the petitioner is the sum of Rs. 1,72,406/.
17 In view of law discussed herein with respect to section 18 of Limitation Act and law laid down in judgments referred hereinbefore, the TDS Certificates are neither the evidence of the debt or liability of the defendant nor can be relied upon to amount to an acknowledgment so as to get the benefit of Section 18 of Limitation Act. Thus the suit of the plaintiff is time barred. Accordingly, the present application of the defendant is allowed and the plaint is rejected as the same is time barred. 18 File be consigned to record room after necessary compliance. Dictated and announced in the open court on 16.10.2012 (Dr. Neera Bharihoke) ADJI(South) Saket Courts 16.10.2012 Contd....P..8 of 8