Andhra HC (Pre-Telangana)
Santhi Enterprises vs Texmaco Limited, Cement Division on 18 August, 2005
Equivalent citations: 2006(1)ALD399, II(2007)BC185
JUDGMENT V. Eswaraiah, J.
1. Keurd the learned Counsel for the appellant. None appears for the respondent even after service of notice. The appellant is the defendant and the respondent is the plaintiff in the suit. For the sake of convenience, the parties herein are referred to as they are arrayed in the suit.
2. The appeal is filed by the defendant aggrieved by the judgment, dated 27-3-1999, in O.S. No. 59/91, on the file of the Senior Civil Judge, Proddatur, in decreeing the suit for a sum of Rs. 73,466/- with costs and future interest.
3. It is the case of the plaintiff, that the plaintiff is the supplier of cement. The defendant is the stockist. The plaintiff had been supplying the cement to the defendant and the defendant has been making the payments periodically for the said supply either by cheques or by Demand Drafts. The last consignment was sent on 30-4-1987 under invoice No. 305/60 MTF for value of Rs. 74,928/-. The defendant did not make further payments subsequent to the payment of Rs. 13,578/- by Demand Draft No. 200564 dated 24-9-1988 drawn on the District Co-operative Central Bank, Cuddapah which was received by the plaintiff on 26-9-1988 as per Ex.A-7. It is stated that the said amount was given credit to the defendant's account. In spite of repeated demands, the defendant did not pay the said amount and therefore the plaintiff issued a notice dated 7-5-1991 under Ex.A-3 to the defendant, but the defendant did not pay the same. It is farther stated that the defendant purchased banker's cheque dated 28-12-1985 for Rs.13,600/-which is marked as Ex.X-1 from Tirupathi Co-operative Central Bank Limited and sent to the plaintiff and the plaintiff presented the same in State Bank of India, Yerraguntla, but the same was not cleared for the reasons not known to the plaintiff. The plaintiff brought it to the notice of the defendant and demanded for payment of the same. The plaintiff also wrote letter to the Manager, District Co-operative Central Bank Limited, Cuddapah on 25-8-1988, which is marked as Ex.A-4. The Bank Manager sent the bounced cheque to the Tirupathi Cooperative Central Bank Limited, Tirupathi regarding the acknowledgement for the receipt of the same. On demand of the plaintiff, the bank issued D.D. bearing No. 200564 dated 24-9-1988 which was given credit to the account of the defendant. Therefore, it is the case of the plaintiff that the suit is filed within 3 years from 24-9-1988 i.e. the date of last payment and therefore the plaintiff is entitled for recovery of the suit amount.
4. The case of the defendant is that it is not liable to pay the said sum of Rs. 73,466-24 ps to the plaintiff. He had admitted that the last consignment was sent during the middle of April 1997 for the invoice No. 305/76 dated 30-4-1987. The defendant was stockist from 1985 on executing an agreement and he has paid a sum of Rs. 15,000/- as security deposit at the time of execution of the agreement. On 1-5-1987, the defendant stopped the business transaction with the plaintiff and accounts were settled after adjusting the security deposit of the defendant. The defendant wrote a letter to the plaintiff to cancel the stocks and the same was received by the plaintiff on 5-7-1987. Since then, there were no dealings between the plaintiff and defendant. It is further stated that in reply notice dated 16-5-1991, which is marked as Ex.B-2, for the notice sent by the plaintiff Ex.A-3, that the stockist ship was cancelled on 5-7-1987 and the plaintiff has not contradicted the said statement as stated in the reply and therefore it cannot be said that the relationship between the parties are not extinguished after 1-5-1987. Insofar as the demand draft obtained by the plaintiff on 26-8-1988 for a sum of Rs. 13,578/- under demand draft No. 200564 is concerned, no doubt it is stated that the said demand draft was purchased by the defendant. It is stated that the defendant purchased the banker's cheque No. 34191 for a sum of Rs.13,600/- in Tirupathi Cooperative Bank and the same was given to the plaintiff for encashment and it is for the plaintiff to encash the same within six months, but the plaintiff without presenting the same for encashment, he has obtained a fresh demand draft so as to save the limitation and therefore the limitation cannot starts from 26-9-1988, but the limitation commences from 1-5-1987 only for filing the suit, whereas, the suit has been filed on 25-9-1991 i.e., after the lapse of three years. If the period of limitation is taken from 1-5-1987, it expires by 1-5-1990 and therefore, it is stated that the suit is hopelessly barred by limitation. It is further stated that for recovery of money under a suit or for realization of money under a cheque has to be filed within a period of three years as per the limitation Act, but the suit is filed beyond the period of three years and therefore, it is liable to be dismissed.
5. Basing on the aforesaid pleadings, the trial Court framed the following issues :
1. Whether the plaintiff is entitled for the suit amount ?
2. To what relief ?
Additional issue :
Whether the suit claim is hopelessly time barred as the payment of demand draft or the cheque dated 26-9-1988 or 26-12-1985 and it cannot be enforced under law as the suit is time barred by limitation ?
6. To prove the claim of the plaintiff, the accounts officer of the plaintiff-company is examined as P.W.1 and the Assistant Manager of the State Bank of India, Yerraguntla as P.W.2 and Exs.A-1 to A-8 were marked on behalf of the plaintiff. The proprietor of the defendant firm was examined as D.W.1 and the Chief Accountant of Co-operatives Town Bank was examined as D.W.2 and the Branch Manager, Andhra Bank, Proddutur is examined as D.W.3. Exs.B1 to B 10 are marked on behalf of the defendants and Exs.X1 to X5 are marked with the consent of both the parties through Court.
7. On consideration of oral and documentary evidence produced by both the parties and relying on various decisions, the Court below decreed the suit. Aggrieved thereby, the present appeal has been preferred.
8. The question that arises for consideration is, as to whether the suit is barred by limitation ?
9. It is the case of the plaintiff that it had supplied the cement to the defendant from 31-1-1985 to 30-4-1987 and the defendant was making the payments either by cheques or Demand Drafts, which were given credit against the supplies. It is stated that as per the accounts as on 30-4-1987 a total sum of Rs.73,446-24ps is payable by the defendant. Therefore, the only question that arises for consideration is whether any payments were made after 30-4-1987 by the defendant so as to enable the plaintiff to file the suit on 25-9-1991 i.e., within three years from the date of the last payment or acknowledging the debt. P.W.1 stated that defendant issued banker's cheque dated 28-12-1995 in favour of the plaintiff-company for Rs.13,600/- drawn on Tirupathi Co-operative Central Bank Limited and the said banker's cheque was presented in the State Bank of India, Yerraguntla for due collection of the amount, but the same was bounced and therefore it was not encashed. It is further stated that subsequently the plaintiff received demand draft bearing No.200564 dated 24-9-1988 for the said sum of Rs. 13,578/- and the same was credited to the account of the defendant. Thus it is the case of the plaintiff that the last payment was made on 26-9-1988 and therefore, the suit is within the period of three years. It is stated that the banker's cheque issued by the defendant under Ex.X-1, dated 28-12-1985, was given credit to the account of the defendant on 4-1-1986, but the said cheque was bounced and therefore, the said cheque amount was collected on 26-9-1988. In the cross-examination, P.W.1 stated that he do not remember whether any bank guarantee given by the Indian Bank on behalf of the defendant was returned and whether the security deposit of Rs. 15,000/- was given back to the defendant by the plaintiff-company. He cannot say whether the supply under invoice No. 305 was made on 12-4-1987 or 13-4-1987 as the copy of the invoice was not available. The interest was calculated upto 30-4-1987 only. As the banker's cheque amount of Rs. 13,600/- was not collected within six months though it has been shown in their account by debiting the said amount in the debit entry of the defendant on 31-12-1986 and as the banker's cheque was bounced, they have taken a fresh demand draft. P.W.2, the Assistant Manager of State Bank of India, Yerraguntla stated that the plaintiff-firm got the account in their bank and the plaintiff-firm presented the cheque No. 200564 issued by the Cuddapah District Co-operative Central Bank and the same was encashed on 26-9-1988. In the cross-examination, it is stated that the cheque is dated 24-9-1988, which belongs to the Cuddapah District Co- operative Central Bank. The demand draft or the banker's cheque is valid for the period of six months and after the period of six months, the amount will be disbursed at the instance of the person deposited and the demand draft or banker's cheque can be cancelled at the instance of the party deposited.
10. D.W.1 stated that the defendant is the stockist of the plaintiff-company and all the accounts were settled by the end of April, 1987 and they paid a sum of Rs. 50,000/- towards full and final settlement and therefore, the security deposit of Rs. 15,0007- was adjusted towards the interest payable by them and as there were no dues at all, the bank guarantee given by the defendant for a sum of Rs. 1,00,000/- for a period of one year valid from 17-2-1986 to 17-2-1987 was returned on 20-4-1987 and the bank guarantee was cancelled on 20-4-1987. It is further stated that several letters have been addressed to the plaintiff to cancel the stockistship and on the said letters, certain accounts under Exs.B-1 and A-2 were furnished with number of discrepancies. In reply to the legal notice of the plaintiff, while sending Ex.B2, it was clearly stated that a letter dated 20-4-1987 was addressed to the plaintiff for cancellation of the stockistship and to the said letter, a reply dated 5-7-1987 was sent cancelling the stockistship with immediate effect and the same has not been denied either in the plaint or adduced any contra evidence. It is the case of D.W.I that he made payment of Rs. 13,600/- by way of banker's cheque of the Co-operative Town Bank, dated 28-12-1985 and he do not know whether the cheque was encashed by the plaintiff-company or not and he do not know why they have not encashed and he also do not know as to why they have taken a fresh demand draft for the said amount of Rs. 13,578/- on 24-6-1988. D.W.2, the Chief Accountant of Co-operative Town Bank, Tirupathi stated that Ex.X-1 is the banker's cheque bearing No. 34911 dated 28-12-1985 issued in favour of the plaintiff-company. The plaintiff-company addressed a letter on 18-8-1988 stating that the banker's cheque was not honoured at the District Co-operative Town Bank, Cuddapah and accordingly requested to issue fresh cheque and the said letter is marked as Ex.X-2. It is further stated that fresh cheque was issued as per the request of the plaintiff on 24-8-1988 vide bearing cheque No.200564 dated 24-8-1988. He further stated that there is no possibility for dishonoring the banker's cheque due to lack of funds. The cheque has to be encashed within the maximum period of six months. As per the bank records, the cheque was not presented within six months. The banker's cheque can be revalidated at the option of the person obtained it. Therefore, the same was revalued at the option of the plaintiff. The banker's cheque was cancelled at the instance of plaintiff for issuing of fresh cheque. They did not inform to the defendant with regard to the cancellation of the banker's cheque and issuing the fresh banker's cheque. D.W.3, the branch manager of Andhra Bank, Proddutur, who is the banker of the plaintiff stated that for revalidation, the consent of the producer is necessary. The producer has got option to get the revalidation or get it cancelled by producing the original demand draft or the banker's cheque. Therefore, the evidence available on record goes to show that the banker's cheque bearing No. 34911 issued by the Cuddapah Co-operative Central Bank Limited, Cuddapah, dated 28-12-1985, was not at all dishonoured. There is no dispute that a cheque or banker's cheque is as good as cash. Once the banker's cheque has been issued by the defendant, it amounts to the payment of the money. That being so, the further question that arises for consideration whether the said amount of Rs. 13,600/- was received by the plaintiff and on what date. It is the admitted case of the plaintiff in Para 4(a) of the plaint that the defendant purchased a banker's cheaue dated 28-12-1985 for Rs.13,600/- from Tirupathi Co-operative Central Bank and gave it to the plaintiff. It is also the admitted case of the plaintiff that the said banker's cheque amount of Rs.13,600/- was given credit to the amounts payable by the defendant in the accounts. Therefore, it cannot be said that the said sum of Rs.13,600/- was not the payment of the money. The said oral and documentary evidence available on record further goes to show that the said banker's cheque was revalidated at the instance of the plaintiff-firm alone and the same was encashed on 26-9-1988. Once the banker's cheque is given and the said banker's cheque is dishonored, there will be a claim on the bank, who issued the cheque. As per the evidence of the bank officials, it is clear that there is no scope for dishonouring the banker's cheque or demand draft. Unless the amount is deposited into the bank, no bank will issue the demand draft or banker's cheque. That being so, it cannot be said that the said amount was not equated with the cash. Under the banking regulations, the banker's cheque as well as the demand draft is as good as cash. Therefore, the plaintiff with a view to save the limitation at his own instance, has not presented the banker's cheque and he himself revalidated the same and in fact, the bank collected the commission for revalidating and instead of Rs.13,600/- the bank issued the demand draft for Rs.13,578/- alone. It was at the instance of the plaintiff alone, but not at the instance of the defendant. Therefore, it cannot be said that the amount of Rs.13,578/- vide D.D. revalidated by the plaintiff was the last payment. Therefore, I am of the opinion that the last payment was made under Ex.X-1 banker's cheque alone and in fact the said sum of Rs.13,600/-was given credit to the account and the said amount was debited from the amounts payable by the defendant and therefore, the limitation starts from 1-5-1987 alone after closing the accounts as no payments were made by the defendant after 1-5-1987. That being so, the suit filed by the plaintiff is hopelessly barred by limitation and therefore, the plaintiff is not entitled to recover the same.
11. Accordingly, the appeal is allowed setting aside the judgment and decree in O.S. No.59/91 dated 27-3-1999. No order as to costs.