Delhi District Court
M/S Euro Graphics Limited vs M/S Ana Print O Grafix Pvt. Ltd on 6 July, 2022
IN THE COURT OF MS. SHELLY ARORA
ADDITIONAL DISTRICT JUDGE-01, SOUTH EAST DISTRICT,
SAKET COURTS, NEW DELHI
CNR No. DLSE01-000866-2016
RCA DJ-20196/2016
M/s Euro Graphics Limited
D-19/3, okhla Industrial Area, Phase-2nd,
New Delhi-110020.
....... Appellant
VERSUS
M/s Ana Print O Grafix Pvt. Ltd.,
PT-62/26, Sansad Kunj,
Kalkaji Extn., New Delhi-10019.
Through its Managing Director,
Mr. Ajay Rai,
Branch Office at :
347, K, Udyog Kendra, Extension-2nd
Sector-Ecotech-3rd, Greater Noida,
Distt-Gautam Budh Nagar (UP)-201306.
...... Respondent
Date of Institution : 12.01.2016
Date of Reserving judgment : 05.07.2022
Date of Judgment : 06.07.2022
Judgment:
1 This is an appeal filed by M/s Euro Graphics Limited (hereinafter referred as appellant) against M/s Ana Print O Grafix Pvt. Ltd. (hereinafter referred as respondent) against the impugned order and RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 1 of 14 decree dated 05.11.2015 passed by the Ld. Civil Judge, South East District, Saket Courts in Suit No.288/2014.
Appellant's case 2 It is submitted that the present appeal has been filed by Sh. Amit Jain, Authorized Representative who signed/verified and instituted the present appeal on behalf of appellant.
2.1 It is submitted that the appellant company is engaged in the business of aluminium plates, euro graphics printing material, Europlus PS Plates etc..
2.2 It is further submitted that the respondent company through its Directors Mr. Ajay Rai and Neeta Rai approached the appellant company for supply of plates /lithographic plates and assured that prompt payments shall be made for the same. Further, the goods were supplied from time to time in the year 2009 to 2011 by the appellant to the respondent which were received and the appellant company raised invoices.
2.3 It is further submitted that the respondent issued several cheques bearing No.169947, dated 18.02.2011 for Rs.36,409/- No.189586, dated 25.01.2011 for Rs.41,790/- and No.169948, dated 26.02.2011 for Rs.36,409/- which were dishonoured on presentation 26.07.2011 and amount of Rs.1,35,923/- was outstanding against the respondent. Further, respondent failed to make payment of outstanding amount despite repeated requests and reminders. Thereafter, appellant sent Legal Notice dated 01.05.20104 which was duly received. However, despite service RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 2 of 14 of Legal Notice, the respondent did not pay the outstanding amount.
GROUNDS OF APPEAL :
3 The Trial Court did not look into the pleas raised by appellant and decided the suit on conjectures and surmises. 3.1 That Ld. Trial Court did not consider that the cause of action arose when the cheques in question were dishonoured by the banker of defendant and limitation shall be considered from the date of dishonour of cheques.
3.2 That Ld. Trial Court did not consider that the cheques issued by respondent are bills of exchange through which, the respondent had promised to make payment. As per Article 40 of Limitation Act, the limitation shall start from the date of date of dishonour of cheques i.e. 26.07.2011 and the suit was filed on 17.07.2014, hence the same was within limitation.
3.3 That Ld. Trial Court did not consider that the dishonour cheques was not within the knowledge of appellant who came to know about the same on 26.07.2011. As per Article 40 of Limitation Act, the limitation shall start from the date of refusal of payment i.e. 26.07.2011.
3.4 That Ld. Trial Court did not look into the facts and documents available on record and passed the impugned order which is not sustainable in the eyes of law.
RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 3 of 14 4 It is submitted that impugned order was passed on 05.11.2015 and appellant received certified copy of the same on 11.12.2015. Hence, the appeal is within limitation. Thus, the appellant has prayed for setting aside the impugned order dated 05.11.2015 Respondent' s case 5 Reply to the appeal was filed by respondent wherein it is submitted that the present appeal is liable to dismissed being devoid of merits and without any cause of action. It is asserted that the suit was barred by limitation having been filed after the expiry of prescribed period. 5.1 It is further submitted that the appellant has failed to show in the suit/appeal the Invoice against which the amount is being claimed. Further, the invoices annexed with the suit were dated 03.09.2010, 18.09.2010, 25.09.2010 and 04.10.2010 whereas the suit was filed on 17.07.2014 which is after the expiry of period of limitation. Hence, the suit was not maintainable. 5.2 It is further submitted that the alleged Invoice which is the basis of recovery, is a completely concocted story and the respondent is not liable to pay any amount to the appellant.
5.3 It is further submitted that the case of appellant is completely unfounded, without any factual or legal basis and hence, liable to be dismissed. Rest of the averments made in the appeal were denied being wrong and frivolous. Hence, the respondent has prayed for dismissal of the appeal.
6 I have heard the arguments of both the sides and have gone through RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 4 of 14 the record.
WRITTEN SUBMISSIONS OF APPELLANT :
7 It is submitted that Ld. Trial Court wrongly interpreted the cheques dated 25.01.2011, 18.02.2011 and 26.02.2011 which were deposited on 26.07.2011 and were dishonoured on the same day i.e. 26.07.2011. Hence, the limitation shall start from 26.07.2011 as per which suit was filed within limitation period. 7.1 It has been observed by Ld. Trial Court in para 8 that defendant has not denied the business relationship between the plaintiff and defendant and also that the parties have not denied that the goods had not been supplied to the defendant and that it can be accepted that the cheques belong to defendant.
7.2 It is further submitted that the fact of dishonour of cheques came to the knowledge of appellant on 26.07.2011 and as per Article 40 of Limitation Act, limitation shall start when bill of exchange got dishonoured by non-acceptance by the bankers within three years from the date of such non-acceptance by the banker. 7.3 In the present case, the cheque is bill of exchange as per Section 6 of N.I. Act and was got dishonoured on 26.07.2011 and the suit was filed on 17.07.2014 i.e. within 3 years and Ld. Trial Court has erroneously calculated the limitation period. In support of his contentions, Ld. Counsel for appellant has relied upon the judgment of the Hon'ble High Court of Punjab and Haryana at Chandigarh in the case of M/s Jodhpur Brick kiln and Ors.
Vs. Piara Singh in RSA No.4106 of 2012 (O & M).
RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 5 of 14 WRITTEN SUBMISSIONS OF RESPONDENT :
8 It is submitted that the appellant has deliberately not brought the complete facts on record. Further, the respondent never received the goods alleged to have been delivered by appellant. 8.1 It is further submitted that the cause of action to file a suit commences from the time of the date of delivery of goods. In cases where credit is being offered, cause of action commences from the date of expiry of credit. The invoices annexed with the suit are dated 03.09.2010, 18.02.2010, 25.09.2010 and 04.10.2010 and the suit was filed on 15.07.2014 which was barred by limitation and the same has been upheld by Ld. Trial Court.
8.2 It is further submitted that in case a cheque is dishonoured and no payment in lieu of an alleged debt is made, then limitation can only be from the date of the cheque which in this case are 25.01.2011, 18.02.2011 and 26.02.2011. Further, the appellant has miscalculated the period of limitation from the date of dishonour of cheques. Reliance has been placed on the judgment of the Hon'ble Allahabad High Court in the case of S. Dharam Singh Vs. Khan Chand, AIR 1966 ALL 137, wherein it was held as follows :
"... Cheque is defined Section 6 of the Negotiable Instruments Act as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. Cheque is, therefore, a kind of bill of exchange, and cause of action accrues on a cheque being dishonoured as on a dishonoured bill of exchange. Limitation for a suit based RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 6 of 14 on a dishonoured bill of exchange including cheque is laid down in Articles 78 and 80 of the Act. Article m78 makes a provision for a suit by the payee against a drawer of bill of change which has been dishonoured by non-acceptance; while Article 80 for a suit on a bill of exchange not expressly provided for in the Act. The period of limitation for both is three year; in case of Article 78, it commences from the date the bill becomes payable. Article 78 would ordinarily not apply to cheques; but the payee can easily avail of the provisions of Article 80. Thus a suit based on a dishonoured cheque shall be maintainable within three years of the delivery of the cheque to the payee. The present suit was instituted within three years of the issue of the cheque, and hence would be within time if based on the bill of exchange...."
8.3 It is further submitted that the appellant has maintained an open, current and running account between itself and respondent. Therefore, Article 113 of the Limitation Act would be applicable in such circumstances. Further no payment was made to the appellant by respondent. Therefore, limitation cannot be enlarged beyond the original scope i.e. date of issuance of cheque. Counsel for respondent has also relied upon the judgment of the Hon'ble Delhi High Court in case of Bharath Skins Corporation Vs. Taneja Skins Company Limited, 2012 (1) CLJ 205 DEL, wherein it was held as follows :
".... 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."
Findings 9 The short ground which has been raised by counsel for appellant is the primary basis of the present appeal that period of limitation ought to be counted from the date of encashment/dishonour of cheque, not on the date of issuance of cheque and thus, limitation RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 7 of 14 can be extended till the date when appellant received acknowledgment of dishonour of cheque, since limitation can only commence upon refusal to accept the Bill of Exchange which is cheque in the present case. Therefore, as the appellant was not in knowledge of dishonour of cheque, thus, there is no question of commencement of limitation period. It is asserted the cheques are Bills of Exchange and represent a promise to make the payment due against respondent and thus, it is the date of encashment of cheque which is important. It is asserted that Article 40 of Limitation Act 1963 represents that limitation commences from the date of refusal of payment which in this case is 26.07.2011 and thus, present suit having been filed on 17.07.2014 is within the period of limitation. This is the brief ground of present appeal.
10 Ld. Trial Court has disposed the preliminary issue vide the impugned order holding that the suit of plaintiff is barred by limitation which is under challenge in the present appeal. 11 Respondent has made a submission that period of limitation is to begin from the date of delivery of goods or from the date of expiry of period of credit. Thus, while the latest invoice placed reliance upon is dated 04.10.2010, the suit of plaintiff having been filed on 17.07.2014 falls beyond the statutory period of limitation and thus, is barred by limitation.
12 Counsel for respondent has also averred that no amount was due to be paid to the plaintiff as the material supplied was not as per standard and therefore, defendant stopped placing further orders and started making further due payment and therefore, the entire story RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 8 of 14 projected by plaintiff is concocted.
13 Whether or not material was taken or not taken subsequently was as per requisite standard is not of any consequence at this juncture. There is no denial on the part of respondent that alleged cheque had been issued by respondent and that there were business transactions with the plaintiff during the relevant period. It is conceded in Written Statement that orders were placed against which goods were supplied and payments were made however as those were substandard, further orders were not placed and due payment was cleared. The respondent has not denied specifically issuance of any cheque to Appellant although whether those were duly in discharge of liability arisen hereunder is a separate concern. It is also submitted in the Written Statement that defendant has no liability towards the alleged cheque as the same were lying with the plaintiff and after the settlement of account have tried to get the same honoured illegally and as such, there is no amount due and payable by defendant to plaintiff.
14 The bench mark to understand whether suit of plaintiff was filed within the period of limitation can be either the invoices or to ascertain whether any limitation was extended by virtue of applicability of any statutory leverage and that whether benefit of that extension has been duly taken by plaintiff and thus, suit falls well within the period of limitation. The invoices placed reliance upon are dated 13.9.2010, 18.09.2010, 25.09.2010 and 04.10.2010, therefore, as nothing has been stated about the credit period available to defendant to make payment, the suit ought to have been filed RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 9 of 14 within three years starting from 04.10.2010 which has admittedly not been done.
15 Moving further, the plaintiff has its case based on cheque subsequently issued by defendant against part payment or amount due and payable as per running account between plaintiff and defendant as maintained by plaintiff. It is contended that cheques of part payment were issued on 25.01.2011, 18.02.2011 and 26.02.2011. It is noted that these cheques have not been claimed to be issued against payment of goods raised in any particular invoice rather it is a case of regular business dealings taken place between plaintiff and defendant qua which invoices were raised upon placing of orders and with respect to those invoices, debit entry was made and any payment against the due amount paid by defendant against the credit entry was being maintained during the period from 2009 to 2011, as contended by plaintiff itself. This aspect has been discussed in detail by Ld. Trial Court. Such like accounts maintained between the parties were categorized to be the open, running and non-mutual account in the course of dealings as in the present case. Parties did not make any reciprocal obligation as relationship was only of supplier and buyer and thus, only supplier would have demand for the purchaser and not vice-versa. Therefore, there is single contractual relationship between the two and thus, Article 14 of Limitation Act 1963, as held in the judgment in the case of Skins Corporation (supra) would not apply. It is also held therein, as rightly applied by Ld. Trial Court that limitation period shall be determined in case of open, running and non-mutual account by RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 10 of 14 residual Article 113 of Limitation Act, as per which period of limitation shall be three years from the time when right to sue accrue.
16 So, the entire crux of arguments now falls on the premise as to whether limitation has to be computed from the date of issuance of cheque or whether such cheques were dishonoured. Ld. Trial Court has relied upon the judgment of Hon'ble Allahabad High Court in the case of S. Dharam Singh (supra) as relied upon by Counsel for Appellant that Article 20 of Limitation Act cannot be used to enlarge period of limitation in case of dishonour of cheque. 17 Appellant has relied upon Section 19 of Limitation Act that cheque entail part payment within the meaning of Section 19 of Limitation Act and thus, seeks extension of limitation period on that premise. There is no denial of issuance of cheque as already stated whether or not those were against discharge of liability accrued by defendant or not is not the point of any concern before this court at this stage. As the invoices relied upon are all of the year 2010 while cheques have been used for the various dates in the months of January and February 2011, therefore, were given prior to the expiration of the prescribed period of limitation from the time when right to sue accrued.
18 Section 19 of Limitation Act also mandates acknowledgment in writing or any writing signed by a person making payment to complete the requisite applicability of Section 19 to the benefit of plaintiff. So, there is a legal tender handed over by defendant to plaintiff prior to the expiration of the prescribed period of limitation RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 11 of 14 which also can be stated to be an acknowledgment by person making the payment. However, these cheques were subsequently dishonoured.
19 Whereas all cheques which subsequently dishonoured would constitute part payment within the meaning of Section 19 of Limitation Act is the point in concern. It was held in the case of Rajesh Kumari Vs. Prem Chand Jain, AIR 1998 Delhi 80 by the Hon'ble Delhi High Court, in respectful agreement with a view taken by Hon'ble High Courts of Madhya Pradesh and Calcutta, that payment by cheque constitutes valid discharge of liability and bouncing of cheque would not undo time of extension for the period of limitation earned by plaintiff, as appellant has no reason to believe that cheque will be honoured subsequently, when presented for payment and thus, time of extension for the limitation period earned by plaintiff would not be wiped out by any subsequent act of respondent, which led to dishonour of cheque, not within the active and conscious knowledge of plaintiff at the time of accepting of cheques as legal tender, given in discharge of liability by defendant. Therefore, cheques dated 25.01.2011, 18.02.2011 and 26.02.2011 even though subsequently dishonoured would constitute acknowledgment as well as part payment within the meaning of Section 19 of Limitation Act. The contention of counsel for appellant still remains with respect to date of dishonour of cheque to be the valid date for computing the period of limitation. Observations made by their Lordships of the Hon'ble Supreme Court of India in the case of Jiwan Lal Achariya Vs. Rameshwar Lal RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 12 of 14 Aggarwalla 1967 SCR(1) 93 are pertinent to determine this issue whereby they observed that payment for the purpose of Section 20 of Limitation Act 1908 would be the date on which cheque would actually be payable at the earliest assuming that it will be dishonoured. Therefore, late presentation of cheque would be immaterial in computing the earliest date on which payment could be made. In the case of Damdilal Vs. Parash Ram 1976 AIR 2229 also, it was observed that cheque against payment of debt would constitute valid discharge of the debt and date of payment would be the date when the cheque was sent by post.
20 Counsel for respondent has contended that Article 40 of Limitation Act shall apply where date of refusal to accept Bill of Exchange would determine the time from which period begins to run which in this case is 26.07.2011. This was directly in issue in the case of Shaminderpal Singh Vs. Gamdoor Singh, in RSA No.149 of 2014, decided by the Hon'ble High Court of Punjab and Haryana whereby it is held that provision of Article 20 of Limitation Act would apply when the lender has given cheque for the money and not governed by Article 40 which pertains to the suit by a payee against the drawer of Bill of Exchange. Even though, the cheque is Bill of Exchange within the meaning of Section 6 of N.I. Act, it is explicitely mentioned in Article 20 of Limitation Act that time from which prescribed period of limitation shall began to run will be the date when the cheque is paid. Since in this case, cheques were dated 25.01.2011, 18.02.2011 and 26.02.2011, therefore, these constitute the earliest dates when the cheques could have been RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 13 of 14 encashed / signed and therefore, any subsequent date when the cheques were presented or dishonoured would be immaterial to constitute extension of prescribed period of limitation or to constitute any benefit of extension of limitation in favour of plaintiff. 21 In view of the extension discussion made above, it is held that benefit of Section 19 of Limitation Act, 1963 can be extended only till three years from the date of cheques and not within three years from the date of dishonouring of cheques. The appellant has not been able to avail benefit of extension of period of limitation under Section 19 of Limitation Act, 1963. The same analogy would apply even if extension of limitation period u/s 18 of Limitation Act is considered to be mere acknowledgment and not part payment. There is no error or infirmity in the impugned order and decree dated 05.11.2015 passed by Ld. Trial Court. The suit has been filed beyond the statutory period of limitation. Accordingly, the appeal stands dismissed.
22 TCR be returned along with copy of the judgment.
23 The appeal file be consigned to record room. Digitally signed by SHELLY SHELLY ARORA Date:
ARORA 2022.07.13
22:54:56
+0530
Announced in the open (SHELLY ARORA)
Court on 06.07.2022 Additional District Judge-01(SE),
Saket Courts, New Delhi.
RCA DJ20196/2016 M/s Euro Graphics Limited Vs. M/s Ana Print O Grafix Pvt. Ltd. Pg. 14 of 14