Delhi District Court
Aadinath Creation Through Its Deepak ... vs J Orient Apparels Through Its Prop Devi ... on 13 December, 2023
BEFORE THE COURT OF SH. SURINDER S. RATHI, DISTRICT JUDGE
(COMM.)-03 SHAHDARA, KARKARDOOMA, DELHI.
CS (COMM) 319/23
DEEPAK JAIN
Proprietor of
M/s Aadinath Creation
At : IX/520, Subhash Road,
Gandhi Nagar, Delhi
......Plaintiff
Versus
DEVI SINGH
Proprietor of
M/s J Orient Apparels
At N.K.S Plaza, Opp. D.C. Plaza,
2nd floor, A.S. Char Street, Bangalore
Also at :
5, Ambika Kunj, Opp. Srinath
Deluxe Lodge, 19th cross,
Rangaswami Temple Street,
Near Venkateswar Sweet,
Bangalore
Also at : Shop No. 3, 20th Cross, Kilari Road,
MM Lane, Bangalore-560053
......Defendant
Date of Institution : 05.07.2023
Date of final argument : 13.12.2023
Date of judgment : 13.12.2023
Decision : Decreed
SUIT FOR RECOVERY OF Rs. 9,69,115/- ALONGWITH INTEREST
JUDGMENT
1. The suit has been filed by the plaintiff for seeking recovery of Rs. 9,69,115/- alongwith interest @ 24% per annum.
CS No. 319/23 Deepak Jain Vs Devi Singh 1/18
Plaintiff's case :
2. Case of the plaintiff as per amended plaint and the documents is that he is in the business of ready made garments in the name and style of M/s Aadinath Creation. Defendant, who is proprietor of M/s J Orient Apparels of Bangaore, Karnatka had business relation with the plaintiff since 2017. Goods were sold as per purchase order by issuing regular invoices between 06.05.2017 to 07.10.18. 22. Plaintiff used to maintain ledger, where he used to make debit entry for sale and credit entry is part payments were received. Last payment of Rs. 25,000/- was made by defendant on 24.07.2019 by way of bank transfer. There was a debit balance of Rs. 5,63,439/- as on 24.07.2019 which was not cleared despite repeated demands. Plaintiff issued legal demand notice dated 21.02.2022 which was replied by the defendant on 09.03.2022 wherein he admitted that he had business relations with the plaintiff and admits the buying goods from plaintiff. He accepted that he carried out purchases worth Rs. 7,87,286/- but claims to have made payment of Rs. 8,08,291/-, as excess payment of Rs. 15,575/- It is claimed that he closed down his business on 31.01.2021 and had returned the goods worth Rs. 3,37,837/- on 03.11.2019. The plaintiff approached the Shahdara, DLSA under Section 12-A of Commercial Court Act, 2015 but defendant did not participate the same and Non-Starter Report dated 20.02.2023 was issued. In this backdrop, the suit in hand was filed with following prayers ; Prayers :-
(a) Pass a decree for a sum of Rs. 9,69,115/- (5,63,439/- + 4,05,676) against the defendant along-with pendent-lite and future interest @ 24% per annum.
(b) Grant cost of the suit in favour of the plaintiff and against the defendant.
(c) Pass such other and further orders as this Court may deem fit and proper in the facts and circumstances of the case in favour of the plaintiff and against the defendant.
3. The suit was initially filed before the Court of Ld. ADJ on 03.05.2017 but it was transferred to the Court of Ld. District Judge, Commercial-02, Shahdara CS No. 319/23 Deepak Jain Vs Devi Singh 2/18 but thereafter, it was returned on 17.05.2022 and was filed re-filed on 05.07.2023 before this Court.
4. Summons of the suit was served upon the defendant on 29.08.2023. When no WS was filed within 30 days, the defence of the defendant was struck off and following notional issues were identified on 07.11.2023.
Notional Issues :-
(i) Whether plaintiff is entitled to recovery of Rs. 9,69,115./- alongwith interest @ 24% p.a.?(OPP)
(ii) Relief
5. Evidence in this matter was recorded before Local Commissioner Sh. Gaurav Dixit, Advocate as per under mentioned protocol designed by this Court under Order 18 Rule 4 CPC and Order 15A Rule 6(l) & (o) CPC applicable to the Commercial Suit.
"Protocol for Recording of Evidence before Court Commissioner appointed by District Judge, Commercial Court, 2022"
Part - 1 Preliminary
1. Short title- This Protocol is titled "Protocol for Recording of Evidence before Court Commissioner appointed by District Judge Commercial Court 2022."
2. Statutory Provision- This protocol is prepared as per Order 18 Rule 4 CPC and Order 15A Rule 6(l) CPC as ap- plicable to Commercial Court.
3. Court- Whenever the term 'Court' appears in this Protocol it should refer to Commercial Court as defined under Section 2(b) of Commercial Court Act 2015.
Part - 2 Preparation for Assignment
4. Recording of evidence in Commercial Cases- Recording of evidence in Commercial Cases may be carried out before the Court Commissioner.
Explanation: For reasons to be recorded, Court may retain the case for recording of evidence before the Court.
5. Appointment of Court Commissioner- As per the Protocol, on the first Case Management Hearing when the issues are identified, the Court may pass an order for appointment of Court Commissioner.
6. Copy of order be shared with parties and Court Commissioner- Copy of the order of framing of issues, ap- pointment of Court Commissioner and the schedule of recording of evidence shall be supplied to the parties as well as the Court Commissioner.
Part - 3 Recording of Evidence
7. Filing of list of witnesses- Both sides shall file list of witnesses preferably within one week but not later than 15 days of identification of issues before the Court while sharing an advanced copy thereof with the opposite party.
8. Order of assignment of Case to the Court Commissioner- While assigning the case, following aspects shall be complied :
(i) Schedule of evidence- Recording of evidence shall start within two weeks of identification of issues.
Evidence shall continue on day to day basis, till conclusion. Any alteration in schedule for recording of ev- idence, if needed, shall be decided by the Court Commissioner as per convenience of all concerned, as far as possible. However, entire evidence shall be concluded within Eight weeks of initiation.
CS No. 319/23 Deepak Jain Vs Devi Singh 3/18
(ii) Judicial File- Judicial file shall not be sent or summoned for the purpose of recording of evidence by the Court Commissioner.
(iii) Examination-in-Chief- An advance copy of examination in chief by way of affidavit shall be supplied to opposite party preferably one week in advance. However, no adjournment shall be granted in case of non-supply of advance copy.
(iv) Production of documents for cross-examination- In case the opposite side is desirous of production of any document by the witness or any other entity for the purpose of cross-examination, an application re - questing the same shall be moved well in advance before the Court.
Part - 4 Duty of Court Commissioner
9. Recording of evidence by the Court Commissioner-
(i) Place and Time- Court Commiss-ioner shall record evidence either in Lawyer's chamber, or Judges/Bar Library, Court Room or any other public place within the Court Complex as mutually agreed by all concerned. Evidence shall be recorded between 10.00 AM to 5.00 PM. It can carry on beyond 5.00 PM as well in case both parties agree. It can be recorded even on a holiday if all the stakeholders are com - fortable and agree to the same.
(ii) Chronology of recording- Court Commissioner shall proceed to record the examination by first recording the deposition of litigating party before examining additional summoned witnesses.
(iii) Oath to witnesses- Court Commissioner shall administer oath to the witnesses under examination as a delegatee of the Court as per Oaths Act, 1969.
(iv) Recording of evidence- The evidence shall be preferably typed on a computer but can also be recorded by hand neatly.
(v)Time frame- Court Commissioner shall conclude the recording of evidence, as early as possible, but not later than eight weeks of assignment of a case. In case, for any reason the parties are unable to adhere to the time schedule, extension can be sought from the Court.
(vi)Comfortable sitting space- Witnesses and their Counsel shall be provided comfortable sitting space by the Court Commissioner.
(vii)Exhibition of documents- Court Commissioner shall exhibit all the documents sought to be proved by a party on record. In case of any objection to exhibition of the documents by either side, the objection shall be recorded in some detail and left open with an assurance that mere marking of such exhibits will not be treated as conclusive proof thereof and that admissibility of such document shall be decided by the referral Court at final stage.
(viii)Original documents to be retained by parties- Court Commissioner shall make an observation in the record of evidence of all original documents produced and shall sign the exhibits with an endorsement OSR (original seen and returned) wherever necessary. If a party has filed original documents alongwith pleadings in Court, the same can be taken back as per rules for the purpose of recording of evidence before the Court Commissioner.
(ix)Language- Recording of evidence shall preferably be carried out in English or Court language, as the case may be, unless requested by the parties otherwise.
(x)Adjournments- Once started, the cross-examination shall preferably concluded on the same day or continue on day-to-day basis. In case of any hardship viz. ill health etc. the case can be deferred but prefer- ably for a day or two but not later than a week.
In case an evidence schedule is fixed and adjournment is sought by the opposite side, i.e the side other than who is leading evidence, without 24 hour advance notice.
Explanation: In case a witness scheduled to be examined or under examination is reported to be unwell or unavailable, the party leading the evidence shall produce the next witness in line in the list for recording of evidence.
(xi)Recording of objections- All the objections raised during cross-examination/reexamination shall be recorded in the deposition under title objections and shall be left open for the decision of the Court at the stage of final arguments. Witness shall not refuse to answer the question asked.
(xii)Questions to be allowed- In case Court Commissioner finds any question not related to the fact and issue, he shall record his objection but shall allow the question to be put and witness must answer.
(xiii)No third person intervention- Court Commissioner shall ensure that the witness is not assisted by his Counsel or any other person while under examination in answering the questions.
(xiv)Recording of demeanour of witness- Court Commissioner shall record the demeanour of the witness wherever it is found pertinent and necessary for sharing with the Court.
(xv)Copy of evidence- All parties shall be provided uncertified electronic/hard copy of the evidence recorded, free of cost by Court Commissioner.
(xvi)Safe keeping of original deposition- Court Commissioner shall keep the original depositions in his safe custody till such time they are filed in the Court in original upon completion of each witness individu- ally.
(xvii)Miscellaneous proceedings- Court Commissioner shall maintain a miscellaneous proceeding sheet for each day of work and shall submit it in the Court at the time of submission of final report. (xviii)Hostile Witness- In case a witness is sought to be declared hostile, then Court Commissioner shall refer both the parties to Court at the earliest and the Court shall decide the issue within three days.
Part - 5 Miscellaneous
10. Summoning of Witness-
CS No. 319/23 Deepak Jain Vs Devi Singh 4/18
(i)Summons from Court- In case a litigating party is desirous of summoning a person for deposition or production of documents, it shall obtain summons from the Court with an endorsement that such person shall appear before the address of Court Commissioner on scheduled date, time and place.
(ii)Diet Money- Diet money shall be paid to such witness by the party desirous of summoning as per rules.
11. Advisory to Court Commissioner- While recording the evidence on commission, the Court Commissioner shall ensure the following:
(i)Impartial- Court Commissioner shall conduct himself in an impartial way and behave in an indiscrimi- nate manner while recording of evidence.
(ii)Polite- Court Commissioner shall be polite with the witness and other stakeholders while recording of evidence.
(iii)Confidentiality- Court Commissioner shall maintain confidentiality during the whole process.
(iv)Keeping professional distance- Court Commissioner shall not solicit professional work from the par- ties.
(v)Integrity- Court Commissioner shall not accept remuneration or any favour in cash or kind from the parties over and above the honorarium fixed by the Court.
(vi)Non-judgmental- Court Commissioner shall not criticize the professional conduct of lawyers and liti - gating parties on their understanding of law.
(vii)Punctuality- Court Commissioner shall adhere to time schedules and shall not make excuses like be- ing engaged in some personal or Court work etc.
(viii)Coordination- In case of any unforeseen circumstances warranting change of dates of hearing, for his own case or the request of other side, he shall apprise the other side in advance via phone call, email, SMS, Whatsapp Group etc..
(ix)No third party sharing- Court Commissioner shall not allow the deposition to be inspected by any third party and shall not share a copy thereof with any stranger without permission of the Court. (x)Inspec- tion- Court Commissioner shall allow any party to inspect the recorded proceedings only in his presence.
(xi)Recusal- In case either of the parties or Counsel for the parties are related or closely known to Court Commissioner, he/she shall recuse self from the case and inform the referral Court.
12. Remuneration of Court Commissioner -
(i)Remuneration- In terms of Order 18 Rule 4 of the Code read with Order 15 Rule 2(l) and Rule 2(o) of the Code, Court Commissioner shall be paid remuneration for the work carried out.
(ii)Mode of payment- Such remuneration shall be paid by the party directly for the work carried out by way of cash, UPI, Bank Transfer, cheque or draft against due receipt.
(iii)Cost to parties- Each party shall individually bear the cost incurred in leading its evidence.
(iv)Fee to be paid- Remuneration fee for recording of evidence is fixed at Rs.10,000/- per witness.
(v)Court Commissioner shall record the Evidence himself and in case the Stenographer services are taken it can either be arranged by a litigating party on its own cost or in case the same is arranged by Court Com - missioner, then the actual cost of typing shall be reimbursed by the party to the Court Commissioner.
(vi)Litigation Cost- Expenditure incurred in recording of evidence shall be redeemable as cost of litiga - tion at the end of the suit.
13. Judicial Intervention during recording of evidence-
(i)Parties to cooperate- It is expected that both the sides will cooperate with Court Commissioner as well as with each other in recording of evidence and carry out proceedings in a cordial manner.
(ii)Dissolution of hindrances- In case of any conflict resulting into hindrance recording of evidence, it shall be resolved amicably by the parties at their own level with the active help of the Court Commissioner.
(iii)Court intervention- However, in case of any unforeseen situation requiring judicial intervention, Court Commissioner shall fix date and time for joint appearance of both sides before the Court for removal of any such impediment.
14. Miscellaneous Applications-
(i)Moving the application- In case either of the parties is desirous of moving any miscellaneous applica- tion viz. amending of pleadings, interim injunction etc. it shall share an advance copy with the opposite side and reply thereof, if any, shall be filed and shared within seven days.
(ii)Date of hearing- Upon receipt of reply, both the sides shall get the application fixed for disposal in the Court with the help of Reader of the Court and shall not wait till next date fixed for hearing. All such mis - cellaneous applications shall be registered, numbered and indexed separately.
(iii)Evidence not to be stalled- It is clarified that, unless Court Commissioner is of the view that the in- terim application moved by either of the parties is such that evidence cannot be recorded before its dis - posal, the recording of PE/DE shall continue unabatedly.
Plaintiff's evidence :-
6. To prove his case, plaintiff examined himself as PW-1 Deepak Jain Vide his affidavit Ex. PW1/1, he deposed on the lines of the plaint and exhibited the following documents :-
(i) Adhar Card is Ex. PW1/A (OSR).
CS No. 319/23 Deepak Jain Vs Devi Singh 5/18
(ii) Copy of GST Registration Certificate is Ex. PW1/B.
(iii) Copy of Account Statement / Ledger is Ex. PW1/C.
(iv) Bills/Invoices along-with one e-way Bill are Ex. PW1/D (colly).
(v) Legal Notice dated 21.02.2022 is Ex. PW1/E.
(vi) Original Postal receipts dated 21.02.2022 are Ex. PW1/F (colly).
(vii) Reply dated 09.03.2022 to the legal notice dated 21.02.2022 is Mark A.
(viii) Non Starter dated 11.07.2022 is Ex. PW1/G.
(ix) Transport receipt issued by Vicek Logistic Solution Pvt. Ltd is Ex. PW1/H.
(x) Transport receipts issued by Bright Road Logistic is Ex. PW1/I.
(xi) Transport receipts issued by Karnatka Rajdhani Carriers (R) are Ex. PW1/J
(colly).
None appeared on behalf of defendant to cross examine this witness.
Arguments :-
7. I have heard final arguments advanced by Sh. Inderjeet Singh, Ld. Counsel for plaintiff. None appeared on behalf of defendant to argue the case. I have also gone through the case file carefully.
8. Record reveals that plaintiff is relying on invoices issued between 06.5.2017 and 07.10.2018 and the suit in hand was filed on 03.09.2022 (before the Court of Ld. ADJ) and on 05.07.2023 before this Court.
9. Although no separate tabulation is filed by Ld. Counsel for plaintiff but perusal of ledger account Ex. PW1/C shows that it start from 01.04.2017 and the last entry of part payment of Rs. 25000/- is on 24.07.2019. Out of the 22 invoices issued qua sales, upon adjusting the admitted credit entries received by the plaintiff, first 10 invoices issued between 01.04.2017 to 07.12.2017 already stands paid. Some part of Bill dated 08.12.2017 for Rs.
44,100/- also stands paid. Thus, unpaid bills can be tabulated as under ;
Sr. No. Invoice No. Date Amount in Rs.
1. 21 06.05.2017 36,138/-
2. 30 19.05.2017 69,492/-
3. 32 24.05.2017 40,922/-
4. 15 12.08.2017 26,281/-
5. 58 13.09.2017 24,854/-
CS No. 319/23 Deepak Jain Vs Devi Singh 6/18
6. 62 14.09.2017 22,932/-
7. 70 15.09.2017 24,948/-
8. 187 05.12.2017 47,288/-
9. 189 06.12.2017 33,960/-
10 190 07.12.2017 36,790/-
11. 193 08.12.2017 44,100/-
12. 203 27.12.2017 59,094/-
13. 309 22.02.2018 38,430/-
14. 311 23.02.2018 37,275/-
15. 320 28.02.2018 33,800/-
16. 350 21.03.2018 41,895/-
17. 558 14.08.2018 48,636/-
18. 486 25.05.2018 45,171/-
19. 563 17.08.2018 41,360/-
20. 629 04.10.2018 40,289/-
21. 631 05.10.2018 1,08,549/-
22. 638 07.10.2018 47,250/-
10. As far as law of limitation is concerned, such like transactions of Sales of Goods Act, 1930 are covered either in Article 1 or Article 14 & 15 of Schedule attached to Limitation Act, 1963. Same are reproduced hereunder:
Schedule to Limitation Act Article Description of suit Period of Time from which period begins to limitation run
1. For the balance due on a mutual, open and Three Years The close of the year in which the current account, where there have been last item admitted or proved is reciprocal demands between the parties entered in the account; such year to be computed as in the account
14. For the price of goods sold and delivered, Three years The date of the delivery of the where no fixed period of credit is agreed goods.
upon
15. For the price of goods sold and delivered to Three years When the period of credit expires.
be paid for after the expiry of a fixed period of credit
11. Upon being asked, Ld. Counsel for plaintiff concedes that there has never been reverse credit entry or credit note entry in this account. It is stated that all the sales are shown as debit entries and all the part payment are shown as credit entries. It is accepted that even though in reply to legal notice Ex.
CS No. 319/23 Deepak Jain Vs Devi Singh 7/18 PW1/E, send by defendant which has been put as Mark A, it is claimed that defendant returned goods worth Rs. 3,37,837/- on 03.11.2019 but no credit entry was issued and no reverse credit entry has been made. As such, the plaintiff's case cannot be covered under Article 1 of Schedule attached to Limitation Act, 1963. Law in this regard is well settled by "Suman Goel & Anr Vs Sanjeev Kumar Jain", RFA No. 98/2018 decided on 05.02.2018 by HMJ Sh. Valmiki J. Mehta.
12. Once the plaintiff's case is found to be not covered under Article 1, it should by necessary legal implication fall under Article 14 & 15 where under the three years period of limitation starts from the date of delivery of goods under Article 14 and starts from the date after expiry of initial Bill payment credit period under Article 15. Some of the invoices Ex. PW1/D (colly) carry the credit period of 15 days. Computing the period of limitation under Article 15 shows that the 12 Bills issued between 08.12.2017 to 07.10.2017 are per se barred by Limitation period of three years. Law in this regard is well settled by landmark judgment of Hon'ble Diovision Bench of High Court of Delhi in case title "Manish Garg Vs. East India Udyog Limited"
decided by Division Bench led by HMJ A.K. Sikri and HMJ Arun Kumar in RFA decided on 30.03.2001.
In this case, an appeal was filed against the Order of Ld. ADJ, wherein plaintiff's suit claim for Rs. 4 lacs against the unpaid dues of goods sold / supplied was partly dismissed by referring the bills to be time barred and only a decree of Rs. 36,404/- was passed. For better understanding of facts, it would be appropriate to quote Para 2 of the judgement.
"2.The plaintiff had filed the suit for recovery of amount against supply of goods in respect of various other bills as well. However, the learned Additional District Judge by impugned judgment and decree held that the claim in respect of these bills, which were prior in time to the aforesaid bills, was time barred and thus rejected / rest of the claims and decreed the claim in respect of the aforesaid bills only CS No. 319/23 Deepak Jain Vs Devi Singh 8/18 which were found to be within limitation. The plaintiff has filed this appeal challenging the finding of the Trial Court holding rest of the claims as time barred."
13.In the Manish Garg Case, the plaintiff had filed suit qua recovery of sales made with effect from 12.02.1994 onwards and the Suit was filed on 15.02.1999. There was an agreement of 60 days credit period between the parties which attracted Article 15 of Limitation Act, 1963. Upon calculating the three years period back from the date of filing of the suit i.e. 15.02.1999, it was found that only five bills were found to be within the limitation. This can be understood as per the Para 3 of the judgement of Hon'ble Division Bench.
"3.The plaintiff had filed statement of account (Exhibit Public Witness 1/56). It starts from 12/02/1994 and gives the details of various bills raised from time to time when the material was supplied to the defendant. It also mentions various payments made by the defendant to the plaintiff, credit of which has been given in the statement of account. Suit for recovery was filed on 15.02.1999. Article 14 of the Limitation Act prescribes limitation for a suit filed for particulars of goods sold and delivered. Period of limitation is three years which is to be determined from the date of delivery of goods. However, as per the agreement between the parties, 60 days credit was to be given to the defendant for making payment. Under, article 15 of the Limitation Act, the limitation starts from the date of expiry of fixed period of credit. On this reckoning by counting the period of limitation of three years backward from 15.02.1999 when the suit was filed, the trial Court held that claim in respect of aforementioned five bills only was within limitation."
14.The Division Bench led by HMJ Sh. A.K. Sikri discussed the contentions raised by the plaintiff before the Trial Court in Para 4, as under;
"4. The case of the plaintiff before the Trial Court was that entire claim was within the period of limitation in view of the provision of CS No. 319/23 Deepak Jain Vs Devi Singh 9/18 Article 1 of the Limitation Act inasmuch as it was a case of mutual, open and current account and the three years limitation period was to start from the closing of the year in which the last item admitted or proved is entered in the account. Plaintiff's submission was that last payment was made on 26.07.1997 and the date of close of that year was 31.03.1998. The suit filed on 15.02.1999 was very much within the period of limitation if three years period is to be reckoned from 31.03.1998. This contention was rejected by Ld. Trial Court holding that provision of, article 1 of the Limitation Act had no application.
Before us, in this appeal, the Ld. Counsel for plaintiff/appellant limited his argument to the aforesaid aspect. The Ld. Counsel submitted that various payments made by the defendants would show that those payments were made on account inasmuch as there were certain payments in round figures and even odd figure payments did not tally with the amount mentioned in the bills from which it could clearly be inferred that payment did not relate to any specific bill but were on account. We had summoned the record and perused the statement of account (Exb. Public Witness 1/56) the genuineness of which is not in doubt. The perusal of the statement of account confirms the truthfulness of the stand taken by the plaintiff/appellant. Therefore, to this extent there cannot be any dispute viz. That payment made by the defendant to the plaintiff were not in respect of specific bills/supplies and could be treated as payment made on account. However, whether, Article 1 of the Limitation Act would still apply on the facts of this page is a question to be decided. To appreciate the controversy let us first re- produced the provision of Articles-Description of period of limitation Time from which suit period begins to run."
15.Upon discussing the facts in the Manish Garg's case, the Hon'ble Division Bench came to the conclusion that in so far as it is not the case of shifting balances or mutual demands, there was no application of Article 1, the relevant portion of the judgement qua this conclusion is Para 8, same is reproduced hereinunder :-
CS No. 319/23 Deepak Jain Vs Devi Singh 10/18 "8. Thus for an account properly to be called Mutual account there must be mutual dealing in the sense that both the parties come under liability under each other. In this case, this ingredient is not satisfied. It was simply a case of the debtor and creditor only and not a case of mutual obligations which will in the ordinary way result in enforceable liabilities on each side. Mutual Account is when each has a demand or right of action against the other."
16.Having concluded that the cited case is not covered under Article 1, the Bench concluded that case is covered under Article 15 in so far as there was 60 days credit period contract between the parties. In such a situation, the Bench ruled that as and when the buyer makes lumpsum payments on account and does not pay bill wise, the seller like the plaintiff in cited case as well as in case in the hand has a right to adjust it against the oldest unpaid bill. Section 60 of Indian Contract Act, 1872 is very clear in this regard, same is reproduced hereinunder;
"60. Application of payment where debt to be discharged is not indicated Where the debtor has omitted to intimate, and there are no other circumstances indicating to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred by the law in force for the time being as to the limitations of suits."
17.Plain reading of this statute shows that as and when in cases where payments are received without any indication or rider from the debtor then the creditor discretion to apply it against any lawful debt due and payable. The statue further provides that such payments can be adjusted even against the dues which are barred by limitation.
18.While concluding that the Hon'ble Division Bench led by Justice A.K. Sikri concluded that once a case is not covered in Article 1 then it covers under Article 14 and 15 and payments made in account can be adjusted against the oldest bill. This conclusion is arrived at Para 9, same is reproduced hereinunder;
CS No. 319/23 Deepak Jain Vs Devi Singh 11/18 "9.Thus, applying the aforesaid principles, it clear that in the instant case account in question was not mutual, open and current account not was it a case reciprocal demands. The learned Trial Court was therefore right in holding that Article 1 of the Limitation Act did not apply. In fact in such a case payment was made by the defendant from time, as per, Section 60 of the Indian Contract Act, it was open to the plaintiff to adjust the payment received against any of the bill at his discretion. Therefore, in order to save limitation the plaintiff could adjust the payment made against the oldest bills. But Section 60 of the Contract Act would not extend limitation period." (Emphasis supplied)
19. On this core, Ld. Counsel for plaintiff submits that his case is not covered under Article 1 or for that matter, under Article 14 & 15 of Schedule attached to Limitation Act or is rather covered under Article 113 as per another judgment of Division Bench of Hon'ble High Court of Delhi, title "Bharath Skins Corporation Vs. Taneja Skins Company Pvt. Ltd., decided on 21.12.2011, Latest Case law 6272 Del.
20. Submissions of Ld. Counsel for plaintiff on this cited judgment heard at length. In the cited judgment, the Division Bench heard an appeal against an order passed by Single Judge of Hon'ble High Court which dealt with a case where sales were made by way of invoices but the payments were not made as per individual invoices but only part payments were made on account in lumpsum and the suit demanded the debit balance as per ledger maintained and not for non payment of specific invoices.
21.While critically analyzing the Order of single Judge, the Bench came to conclusion that Article 1 did not have any application in so far as the account was not "mutual, open and current account" but concluded that it was a "non mutual, open and current account". While concluding so the Bench observe.
CS No. 319/23 Deepak Jain Vs Devi Singh 12/18 "19. In the instant case, the account between the parties was an open, running and nonmutual account".
"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 for recovery of money due on a running and a non-mutual current account between the buyer and seller."
22.With above observations, the Division Bench concluded that in such cases where there are 'open, running but non-mutual accounts', Article 14 of the Limitation Act too would not apply. Having so concluded the Bench further observed in Para 24, same is reproduced hereinunder;
"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.
23. As such The Division Bench observed :-
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 Rs. 7,000/- was paid on 13.07.1985 and 24.07.1985 (Rs.
2000/- on the former date and Rs. 5000/- on the later 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.
24.Evidently, the Hon'ble Division Bench allowed the period of limitation of three years to start not from the date of delivery of goods under the last bill or expiry of credit period but from the date of last payment received on account.
25.Now upon inter-se comparison between the stand taken by Division Bench of Hon'ble High Court of Delhi in "Manish Garg Vs. East India Udyog Limited" in March 2001 with the stand taken by Hon'ble Division Bench in "Bharath Skins Corporation Vs. Taneja Skins Company Pvt. Ltd. In December 2011, it is found that the later judgment is per incurium. The facts CS No. 319/23 Deepak Jain Vs Devi Singh 13/18 in the Manish Garg case were identical to the fact in the Bharath Skins case, as also to the case in hand. The Division Bench of Hon'bnle High Cort of Delhi had taken a stand that in case such accounts which are not 'open, current and mutual', the calculation of limitation has to be carried as per Article 14 & 15 of Limitation Act. The conclusion arrived at in Judgment Bharath Skins, ought to have discussed the earlier stand taken & law crystallized, gave a contradictory finding that such cases would be covered under residuary provision of Article 113.
It goes without saying that for a trial Court like the situation in which this Court find itself to set of two judgments passed by co-equal Bench of the same High Court are cited, it is the older judgement which shall prevail. The later judgment is apparently and evidently is per incurium. If the later Division Bench was desirous of altering and changing of law, it could have referred the matter to the Hon'ble Chief Justice of Delhi for constituting a Full three Judge Bench after giving its opinion for a need for review of dictum laid by Manish Garg's case.
26.Ld. Counsel for plaintiff admits that no such steps were taken by Division Bench. For the foregoing reason, applying the celebrated principles of Interpretation of Law and binding judgments, this Court is bound to follow the dictum laid by the Division Bench of Hon'ble High Court of Delhi in Manish Garg Case as the binding law instead of Bharath Skins Case.
27.Upon calculation the limitation period of Bills issued between 08.12.2017 and 07.10.2018 under Article 15, upon adding 15 days as per credit period, the same were payable on 23.12.2017 to 22.10.2018. The three years period of these 12 invoices ends on 23.12.2020 to 22.10.2021. In so far as the above two dates fell within the window of Covid triggered lockdown, plaintiff is entitled to benefit under the directions passed by Hon'ble Supreme Court of India under Article 141 of the Constitution.
CS No. 319/23 Deepak Jain Vs Devi Singh 14/18
28.In case title "Indian Oil Corporation Ltd Vs. Municipal Corporation & Anr" 1995, 4SCC 96, Hon'ble Supreme Court categorically ruled that an earlier decision taken by the Court cannot be over ruled by the co-equal Bench of the Same Court. Any deviation would be treated as misunderstanding of Law of Precedent.
29.In another case title "N. Bhargavan Pillai by LR's & Anr Vs. State of Kerla" 2004, Latest Case law 291 SC, Hon'ble Supreme Court while dis- cussing Law of Precedent ruled that the word in-curia literally means care- lessness and in practice perincuriam is taken to mean ignoratiaum. It is also ruled that although it is a principal of English Courts but the same has been adopted by the Hon'ble Supreme Court of India & is now part and parcel of Doctrine of Precedent as a matter of law.
30.Five Bench of Judges of Hon'nle High Court of MP, in case title "Jabalpur Bus Operator Association VS State of MP", 2003(4) JCR 325, MP, 2003 (1) MPHT 226, has ruled that in case of conflict between two decisions of the Apex Court, Benches comprising of equal number of judges, decision of earlier Bench is binding unless explained by the latter Bench of equal strength, in which case the later decision is binding. Decision of a larger Bench is binding on smaller Benches. Therefore, the decision of earlier Di- vision Bench, unless distinguished by latter Division Bench, is binding on the High Courts and the Subordinate Courts. Similarly, in presence of Divi- sion Bench decisions and larger Bench decisions, the decisions of larger Bench are binding on the High Courts and the Subordinate Courts. The common thread which runs through various decisions of Apex Court seems to be that great value has to be attached to precedent which has taken the shape of rule being followed by it for the purpose of consistency and exact- ness in decisions of Court, unless the Court can clearly distinguish the deci- sion put up as a precedent or is per incuriam, having been rendered without noticing some earlier precedents with which the Court agrees.
CS No. 319/23 Deepak Jain Vs Devi Singh 15/18 With regard to the High Court, a Single Bench is bound by the deci- sion of another single Bench. In case, he does not agree with the view of the other Single Bench, he should refer the matter to the larger Bench. Simi- larly, Division Bench is bound by the judgment of earlier Division Bench. In case, It does not agree with the view of the earlier Division Bench, it should refer the matter to larger Bench. In case of conflict between judgments of two Division Benches of equal strength, the decision of earlier Division Bench shall be followed except when it is explained by the latter Division Bench in which case the decision of latter Division Bench shall be binding. The decision of larger Bench is binding on smaller Benches.
Doctrine of "Stare-decisis" - Meaning of.
The doctrine "Stare-decisis" commonly called "The doctrine of prece- dent" means adherence to decide cases on settled principles and not to dis- turb matters which have been established by judicial decisions.
31.Since the three years period ended within the lockdown window, plaintiff is entitled to additional 90 days time period for filing the suit under these 12 invoices, these 90 days as per calculation ended on 29.05.2022.
32.As per Non Starter Report, plaintiff approached DLSA, Shadara on 28.05.2022 i.e. within 90 days period. As per proviso to Section 12-A under Chapter 3 of Commercial Courts Act, 2015, as amended on 03.05.2018, plaintiff is entitled to benefit of period spent under the Pre Institution Mediation. When the plaintiff applied for Pre Institution Mediation on 28.05.2022, he had only two days left out of additional 90 days granted by Hon'ble Supreme Court. The 90 days limitation clock stopped on 29.05.2022 but when the Non Starter Report was issued on 11.07.2022, the remaining two days limitation clock shall restart again and the additional period of two days ends on 13.07.2022. Admittedly, the suit was originally filed before the Court of Ld. ADJ on 03.09.2022 i.e. after a CS No. 319/23 Deepak Jain Vs Devi Singh 16/18 delay of one month and 20 days. Although expiry of three years period and Article 15 of Schedule attached of Limitation Act.
33.At this juncture, Ld. Counsel for plaintiff submits that since no objection qua limitation was raised by the Court of Ld. ADJ or for that matter, the Commercial Court where the suit was transferred and was returned, it should be deemed that his delay of One month 20 days stood condoned. This plea of Ld. Counsel for plaintiff is unacceptable in so far as condonation of delay in limitation of three years for filing a suit is not permissible under Limitation Act, 1963. Section 3 & 5 of Limitation Act is reproduced hereinunder ;
"3.Bar of Limitation - (1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.
(2) For the purpose of this Act
(a) A suit is intituted,
(i) in an ordinary case, when the plaint is presented to the proper Officer;
(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and
(iii) in the case of a claim against a company which is being wound up by the Court, when the claimant first sends in his claim to the official liquidator;
(b) any claim by way of a set off, or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted
(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;
(ii) in the case of a counter claim, on the date on which the counter claim is made in Court;
(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that Court.
"5. Extension of prescribed period in certain cases - Any appeal or any application, other than application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period, if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period.
CS No. 319/23 Deepak Jain Vs Devi Singh 17/18
34. Section 5 does not apply to suits. Simply because Ld. Predecessor of this Court or for that matter, Court of Ld. ADJ could not assess the aspect of limitation when they took cognizance of the suit does not mean that the flaw of this suit being time barred stands cured. Moreover, now it is at the stage of final arguments, when a Court applies its Judicial mind for arriving at a just decision of the matter.
35.In the light of the above, I have no hesitation in concluding that the plaintiff's entire suit claim of Rs. 9,69,115/- which includes Rs. 5,63,439/- as Principal and Rs. 4,05,676/- as pre suit interest is barred by limitation and is hit by Section 3 of Limitation Act. As such, no decree as prayed can be passed. This issue is accordingly answered against the plaintiff.
RELIEF:-
In the light of the above discussions and findings, the suit of the plaintiff is accordingly dismissed without cost.
File be consigned to Record Room after due compliance.
Announced in the open Court (SURINDER S. RATHI)
on day of 13.12.2023 District Judge/Commercial Court-03
Shahdara District, KKD
CS No. 319/23 Deepak Jain Vs Devi Singh 18/18