Bombay High Court
Vijaykumar Satishchandra & Co. And Anr. vs Rajgopal Badrinarayan Malpani And Anr. on 13 December, 1995
Equivalent citations: 1996(3)BOMCR176, (1996)98BOMLR425, 1996 A I H C 4163, (1996) 1 MAH LJ 594 (1996) 3 ALLMR 277 (BOM), (1996) 3 ALLMR 277 (BOM)
JUDGMENT V. H. Bhairavia, J.
1. This appeal is directed against the judgment and decree dated 27th April, 1987 passed by the learned Joint Civil Judge, Senior Division, Solapur, in Special Civil Suit No. 119 of 1981.
2. The suit was filed by the respondents-plaintiff for recovery of a sum of Rs. 61,357.50 with future interest. It is submitted that the plaintiff is a registered firm dealing in trading in cloth as a commission agent. Defendant No.1 is a registered partnership firm and defendant Nos. 2 and 3 were its partners. The defendants were doing the trade business in cloth. It is submitted that the appellant No. 1 defendant No. 1 firm had kept a khata with the plaintiff-firm at Solapur for purchasing cloth on credit. Accordingly, clothes were purchased on credit at Solapur and also took delivery of the same at Solapur. They promised to pay the amount of the goods purchased by them at Solapur from time to time. The vasul paid by the defendants came to be credited in the khata and the balance vasul shown against the principal amount. It is the case of the plaintiffs that by the end of 15th June, 1981 the appellants-defendants were in arrears of Rs. 61,074.10. It is also submitted that according to the trade custom and the agreement between the parties, the appellants-defendants have agreed to pay interest at the rate of Rs. 1,25 percent per month on the arrears of the amount. As the appellants-defendants failed to pay the arrears despite notice issued by the respondents-plaintiffs on 19th June, 1981, the suit was filed by the plaintiffs-respondents. After framing the necessary issues and recording evidence of the parties, the learned trial Judge partly decreed the suit by his judgment and order dated 27th April, 1987 with proportionate costs. Defendant Nos. 1 to 3 were held liable to pay jointly and severally an amount of Rs. 57,799.90 to the plaintiffs and to pay future interest on the principal amount of Rs. 32,335.30 at the rate of 12 percent per annum from the date of the suit till realisation. Under the said decree, the appellants-defendants were also ordered and permitted "For the price of goods sold and delivered Three Years The date of where no fixed period of credit is agreed upon. delivery of goods"
It has been submitted that the learned trial Judge has also held that the suit falls under Article 14 of the Indian Limitation Act, yet the present suit being a suit on the account book, the vasul paid by the defendants within three years from the date of the last vasul, gives a fresh extension of limitation for another three years under section 20 of the Indian Limitation Act. It has been submitted that this observation is unsustainable in view of the clear provisions of Article 14 of the Limitation Act. In support of his argument, the learned Counsel has relied on a ruling in Atmaram Vinayak Kirtikar v. Lalji Lakhamsi, reported in A.I.R. 1940, Bombay page 158, another ruling in A.K.S. Muhammad Sultan Rowther & Co. v. Manickam Chettiar, ; and another ruling in Bibhuti Bhusan Bose v. National Coal Trading Co., . In the case of Atmaram, (supra), it has been held thus:-
"Where in a suit for balance due on account of goods sold and delivered from time to time the evidence discloses sale and delivery of goods and there is no evidence that the buyer ever had any account submitted to him, or that he ever agreed to be bound by any account, the cause of action is for the price of goods sold and delivered and not a claim for the balance due at the foot of an account and the mere fact that the buyer paid moneys on account of what was due from time to time, for which he was given credit, cannot alter the nature of the seller's cause of action. Therefore, the case falls under Article 52 and not Article 115."
Further, it has been held thus:-
"The starting point of time is the date of the delivery of the goods, and although the cause of action is one for the price of all the goods delivered, the Court is bound to check the various items which go to constitute that cause of action and to apply Article 52 to deliveries which took place more than three years before the filing of the suit."
This view has been also reflected in the case of A.K.S. Mohammad Sultan Rowther & Co., (supra,) wherein it has been observed thus:-
"The further question is, how this principle has to be applied to an account of the present kind. The amounts credited from time to time will go to wipe off the debts against the goods supplied from time to time until we reach a particular delivery of goods on a particular date which remain unadjusted either in whole or in part by the above procedure. If the date corresponding to the delivery which remains thus unadjusted, in whole or in part, is beyond three years from the date of the suit, the claim in respect of that amount will remain barred under Article 52 of the Limitation Act."
Admittedly, the suit is filed for recovery of the amount towards the price of the clothes sold on credit. It is an admitted fact that the entry of the total bill amount was carried forward upto 15th March, 1975 and thereafter a sum of Rs. 63,752.46 has been debited in the khata of the appellants-defendants. We do find much substance in this submission of the learned Counsel for the appellants. The crucial question that requires to be decided by us in this appeal, in our opinion, is squarely covered by the ruling in A.I.R. 1940, Bombay page 158. It has been observed therein thus:-
"The case is one of importance because it is a type of case which very frequently arises in the Small Cause Court as the trial Judge points out. The plaintiff's cause of action is, in my opinion, for the price of goods sold and delivered, and I can see no ground for saying that the claim is not a claim for the price of goods sold and delivered, but is for the balance due at the foot of an account."
"The evidence was of sale and delivery of goods and there was no evidence that the defendant ever had any account submitted to him, or that he ever agreed to be bound by the account submitted to him, and the mere fact that he paid moneys on account of what was due from time to time, for which he was given credit, cannot alter the nature of the plaintiff's cause of action. But for the difficulty of applying Article 52, I doubt if it would have occurred to the learned Chief Judge to suggest that the cause of action was for moneys due on an account. But though I think that the cause of action is for the price of goods sold and delivered, I agree with Modi, J., in thinking that there is only one cause of action for the whole amount due. The principle to be applied has been laid down in various English cases which have been followed in India. That principle is stated very clearly in Bonsey v. Wordsworth, 1856(18) C.B. 325, in these terms (p 334):-
'....where a tradesman has a bill against a party for any amount in which the terms 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 while together forms but one cause of action, and cannot be divided.'..."
As against this, Mr. A.G. Pawar, learned Counsel for the respondents, has submitted that the cause of action falls under section 20 of the Limitation Act and not under Article 14 of the said Act. It has been submitted by the learned Counsel that the cause of action starts from the last payment made by the defendants' firm i.e. on 21st February, 1979. In support of his argument, the learned Counsel has relied on the provisions of section 20 of the Limitation Act. Section 20 reads as under:-
"Effect of acknowledgment or payment by another person---(1) The expression 'agent duly authorised in this behalf' in sections 18 and 19 shall, in the case of person under disability, include his lawful guardian, committee or manager or an agent duly authorised by such guardian, committee or manager to sign the acknowledgment or make the payment."
A plain reading of the provisions of section 20 of the Act makes it very clear that it would not be applicable in the instant case in view of the clear provisions of Article 14 of the Limitation Act. The suit is for recovery of the price of goods purchased by the appellants-defendants and admittedly there is no sale or purchase transaction by the appellants-defendants since 1975. Under Article 14 of the Act, the cut-off date for starting the period of limitation is the date of purchase or delivery of the goods by the appellants-defendants on credit. In our opinion, as the suit was for recovery of the price of goods sold and not a suit for accounts, the findings and reasonings of the learned trial Judge are unsustainable and the suit was absolutely barred by the provisions of Article 14 of the Limitation Act.
3. In the result, the appeal is allowed. The judgment and decree dated 27th April, 1987 passed by the learned Joint Civil Judge, Senior Division, Solapur in Special Civil Suit No. 119 of 1981 is quashed and set aside, and the suit itself is dismissed. In the circumstances of the case, there will be no order as to costs.