Delhi District Court
M/S Indus Meta Enterprises vs M/S Akash Packaging on 5 July, 2022
DLCT010114032019
IN THE COURT OF SH. SANJEEV KUMAR AGGARWAL :
DISTRICT JUDGE (COMMECIAL) -01 : CENTRAL, TIS HAZARI
COURTS, DELHI
CS (Comm) No. 1599/19
M/s Indus Meta Enterprises
Through its proprietor,
Shri. Rajesh Bioshnoi,
R/o 10546/1, Shanker Gali No. 3,
Motia Khan, Pahar Ganj, Delhi
Pincode : 110055
..... Plaintiff
Versus
1. M/s Akash Packaging
Through its Proprietor Shri Pratap Singh
Plot No. 84, HSHDC Industrial Estate,
Sector-59, Ballabhgarhg, Faridabad,
Haryana-121001
2. Shri Pratap Singh,
Proprietor of M/s. Akash Packaging
44 K.M. Stone Sikri Delhi- Mathura Highway
Sector-31, Sector 34, Faridabad, Haryana-121004
..... Defendants
CS (Com.) No. 1599/2019 Page No. 1 of 23
M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr.
Date of Institution : 26.08.2019
Date of reserving judgment : 10.06.2022
Date of Judgment : 05.07.2022
Judgment
1. Vide this judgment, I shall decide the present suit for recovery of Rs.
16,07,742/- alongwith interest.
2. Brief facts as stated in the plaint are that plaintiff is a proprietorship
concern of Shri Rajesh Bishnoi and engaged in the business of sale of steel,
hardware, metal products, i.e., S.S. Sheet, Coils, Patti, Angle, Rod Flat, etc.
3. It is further stated that defendant no. 1 is a proprietor ship / partnership
concern of defendant no. 2 Shri Pratap Singh and defendants are also into
the business of packaging of goods and materials.
4. It is further stated that defendant no. 1 through defendant no. 2 and its
office bearers contacted the plaintiff for supply of items and terms and
conditions and rate for supply of the items were agreed at the place of
business of plaintiff. It is further stated that defendants used to place orders
either orally or through email and acting upon the requisition of the
defendants, plaintiff supplied various materials and and against supply of
such items, raised several invoices during the month of March, 2016 to July,
2016. It is further stated that as per invoices, the amount was to be paid
within 15 days and in the event of non-payment, the defendant was liable to
pay interest @ 24% per annum on the outstanding amount. It is further
stated that defendant no. 1 had made only part payment and thus an amount
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Rs. 15,12,458/- remained unpaid.
5. It is further stated that plaintiff sent numerous reminders to the
defendant through text messages and through email dated 07.09.2016,
14.09.2016, 09.09.2016, 10.11.2016, 06.03.2017 for the payment of due
amount but the defendant has failed to make the payment. It is further stated
that in the year 2016, 2017 and 2018 plaintiff also personally visited office
of the defendants in order to get the payment of due amount but defendants
and its office bearers admitted its liability and assured to make the payment
but they failed to make the payment and hence legal notice dated
08.05.2019 was sent to the defendants but despite said notice, no payment
was made by defendants to plaintiff. Hence, the present suit is filed.
6. Pursuant to service of summons, defendants appeared and contested
the case by filing its written statement. In the written statement,
preliminary objection was taken that present suit has been filed beyond the
limitation period 3 years and the same is barred under Limitation Act, 1963
ad is liable to be rejected.
7. On merit it is stated that defendant no. 1 is a sole proprietorship of
defendant no. 2 and defendants had ordered SS material, round, flat pipes
and flat sheets in the year 2016 from the plaintiff with specific requirements
regarding the size and shape of the goods to be supplied by the plaintiff.
8. It is further stated in written statement that plaintiff supplied the goods
as required by the defendant and against which the defendants had paid a
sum to the tune of (amount not mentioned as vide fluid was put on the
amount to conceal the same). It is further stated that the goods supplied by
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the plaintiff were not in accordance with the specific requirements as
mentioned by the defendants in different email and the same was intimated
by the defendant to plaintiff through various mails. Defendant has admitted
the transactions between plaintiff and defendants but denied that it is liable
to pay interest @ 24%. It is also denied that defendants have made part
payment against the principal sum of Rs. 15,12,458/-. It is also denied that
plaintiff has sent numerous reminders to the defendant through text
messages and through emails dated 07.09.2016, 14.09.2016, 09.09.2016,
10.11.2016, 06.03.2017 for payment of due amount. It is also denied that in
the year 2016, 2017 & 2018 the plaintiff personally visited office of the
defendants in order to get the payment of the due amount. Hence, the
present suit is liable to be dismissed.
9. In its replication to WS plaintiff denied the contents of WS that
goods supplied by plaintiff were not in accordance with specification
requirement of defendant or were sub standard goods. It is also denied that
suit is barred by Limitation. It is stated that last transaction was on
23.07.2016 whereas suit was filed on 16.07.2016 therefore same falls under
the purview of Limitation Act.
10. Since it was a commercial case therefore affidavit of admission /
denial of documents also filed by defendant in which though the defendant
has not denied the existence of the documents except the legal notice but
denied those documents on account of correctness.
11. The following issues were framed on 09.09.2021 :-
1. Whether the plaintiff is entitled to decree of Rs.
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15,12,458/- ? OPP
2. Whether the plaintiff is entitled to recover any interest
from the defendants if so on which amount and at what
rate and for which period ? OPP
3. Whether the suit is barred by limitation in view of the
preliminary objection no. 9 of the written statement ?
OPD
4. Relief.
12. In order to prove its case plaintiff has only examined its
proprietor Mr. Rajesh Bishnoi as PW-1 who led his evidence by way of
affidavit Ex. PW-1/A and relied upon documents EX PW1/1 to EXPW1/5.
13. On the other hand Defendant has also examined 3 witnesses
Mr. Pratap Singh as DW-1, Mr. Suresh Chand Jain as DW-2 and Mr.
Gajender Singh as DW- 3 to support its case.
14. During the pendency, both parties settled their dispute in the
mediation thereby the defendant had agreed to pay a sum of Rs. 16.50 lacs
in three installments of May, June and July but after the said settlement, the
defendant neither appeared for recording of his statement nor paid the
installments as per the settlement therefore, it amounts to failure of
settlements and the matter was proceeded further and final arguments were
heard from Mr. Pradyot Pravash, Ld. Counsel for the plaintiff and Mr. Sajal
Jain, Ld. Counsel for the defendants. My issuewise findings are as under :-
15. Issue No. 1 :Whether the plaintiff is entitled to decree of Rs.
15,12,458/- ? OPP
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16. In order to prove its case plaintiff have only examined its proprietor
plaintiff no.2 as PW1. In his evidence led by way of affidavit EXPW1/A
PW-1 Rajesh Bioshnoi almost repeated the same contentions which were
stated in the plaint as mentioned above therefore same need not to be
repeated here. PW-1 has relied upon retail invoices raised by plaintiff
against the defendant for the goods supplied (running into 27 pages ) as Ex.
PW1/1, transaction slips generated by logistic company against the plaintiff
for the goods supplied to defendant (running into 19 pages) as Ex. PW1/2,
copy of the account statement dated 01.04.2015 to 28.02.2019 as Mark A,
printout of email correspondence exchanged between plaintiff and
defendant with respect to placing orders for the goods and also for payment
of due amount against the goods supplied to defendant (running into 36
pages) as Ex. PW1/3, the certificate U/s 65B of Indian Evidence Act as Ex.
PW1/4 and office copy of legal notice dated 08.05.2018 as Ex. PW1/5.
He was cross examined at length. In cross examination of PW-1
conducted by Ld. Counsel for defendants, he stated that he did receive
orders on telephone, through email or even through Whatsapp and he met
defendant no. 2 Mr. Partap Singh at his office at Faridabad in March, 2016
and he had supplied the goods to defendant as per the measurement
specified in the orders placed to him. He denied the suggestion that he did
not supply the goods to defendant as per the measurements specified in the
orders placed by defendant. He also denied the suggestion that the quality of
the goods supplied to the defendant was inferior. He also denied the
suggestion that he has not placed on record printout of all the email
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correspondence exchanged between himself and defendant with respect to
the supply of goods.
17. From the cross examination of PW1 it is evident that defendant
has not given any suggestion that plaintiff has not supplied the goods to
defendant through invoices Ex. PW1/1(colly) or that statement of account
01.04.2015 to 28.02.2019 mark A which was maintained by plaintiff with
respect to goods supplied to the defendant and entries of payments made by
defendant in said account are false. The only defence taken by the defendant
is that goods were not as per the specification about which order was placed
by the defendant to the plaintiff. Hence from the testimony of PW1 it is
proved that plaintiff has supplied the goods to the defendant vide invoice
EXPW1/1 and defendant made part payment of goods time to time and a
sum of Rs 1512458/- was remained to be paid by defendant for the goods
supplied by plaintiff to defendants.
18. Once it is proved that plaintiff supplied the goods to the defendant
onus is shifted upon the defendant to prove that he has valid reasons for not
making the payment of the goods as per invoice and it is liable to pay the
same.
19. Defendants have examined three witnesses to discharge the said onus.
DW-1 Mr. Pratap Singh, who is proprietor of defendant no. 1, led his
evidence by way of affidavit Ex. DW-1/A. He in his evidence has deposed
that he is proprietor of defendant no.1. Defendant no.1 has ordered for
SSMaterial, Round, Flat pipes and Flat sheets in the year 2016 which was
required to be of very particular size, shapes and specifications which is
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established through email correspondence annexed (but no email was
proved by him).
In his cross examination, defendant no. 2 / DW-1 stated that the
quality of the goods supplied by the plaintiff was not of the quality as
ordered and required by them since after they manufactured the machines
using the said raw steel and supplied them to their customers then they
received number of complaints that the machines parts have got rusted and
thereby affecting the quality of their goods being packed by using the said
machines. He further stated that they had made part payment against the
invoices vide which the plaintiff had supplied the material but thereafter
they withheld the remaining payment owing to defective quality of the
material supplied. He has further stated that plaintiff was intimated about
the inferior quality through email but no such email has placed on record by
DW-1.
20. DW-2 Mr. Suresh Chand Jain led his evidence by way of affidavit
Ex. DW-2/A. He has deposed that he is working as Accounts Head in the
Accounts Department of defendant no. 1. He also deposed in his evidence
that defendant no. 1 had ordered for SS material, round, flat pipes and flat
sheets in the year 2016 and also stated that the ordered materials were
required to be of very particular size, shapes and specifications. He further
deposed that plaintiff had not supplied the materials as per the specifications
provided by defendant no. 1 to plaintiff but he has also not proved any
documents as goods were not of the specifications.
In his cross examination he has stated that the goods were supplied
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by plaintiff from March 2016 till July 2016 and payment of about Rs. 3.03
lacs against the material supplied till 28.03.2016 was paid on 25.05.2016
and another payment of about 2.50 lacs was paid for the material supplied
till 30.04.2016 on 05.07.2016. He further stated that the total material
supplied by plaintiff firm to them as per the invoices raised by them was for
about Rs. 20 lacs and the balance payment was withheld since they have
received number of complaints from their customers that some machine
parts of the machines supplied by them have got rusted. He further stated
that they informed the plaintiff abut the defective quality of the goods
supplied verbally as well as through email but he again did not place on
record any email sent by defendant to plaintiff or the date, month, year
when the said complaints were made.
21. Mr. Gajender Singh has examined as DW-3, who is working as the
Accounts Head in the Accounts Department in defendant no. 1 and led his
evidence by way of affidavit Ex. DW-3/A. He has also almost repeated the
same facts as deposed by DW2 through his evidence affidavit.
In his cross examination conducted by Ld. Counsel for plaintiff, he
stated that he is working as Manager Operation & Commercial in defendant
firm which means he is his evidence affidavit has wrongly deposed that he
is working as Account Heads in Account Department. He like DW2 has
also admitted supplying of the goods by plaintiff from March 2016 till July
2016 and making of payment of Rs. 3.03 lacs against the material supplied
till 28.03.2016 was paid on 25.05.2016 and another payment of about 2.50
lacs was paid for the material supplied till 30.04.2016 on 05.07.2016. He
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also deposed that the goods supplied by plaintiff was of inferior quality or
not according to the specification as per order placed and that he informed
the plaintiff about the defective quality of the goods.
22. On analyzing the testimony of testimony of DW1 it is evident that he
has admitted of supplying of the goods by plaintiff and making part
payments and he has only deposed that plaintiff has not supplied the
materials as per the specifications provided by defendant no. 1 to plaintiff
but he has not specified what was the specification which the defendant
placed and why the plaintiff goods were returned if same as not according
to the specification.
Further from testimony of DW2 to DW 3 also it is evident that both
DW2 and DW3 have admitted the supply of the goods by plaintiff to
defendant company for approximately 20 lakh and making of part payment
of Rs. 5.53 thousand only which means plaintiff payment of goods of
approx. 14.50 lakh was not made by defendant. None of the witness of
defendant in their testimony have deposed that invoices EXPW1/1 (colly)
which were proved by PW1 in his testimony were forged or fabricated or
that goods mentioned in the said invoices were not delivered by plaintiff
firm to defendant firm or account statement filed by plaintiff is false.
Rather from account statement mark A it is evident plaintiff has supplied
the goods to the tune of Rs. 2039081/- and payment of Rs. 526623/- were
made by defendant which corroborate the testimony of DW 2 and 3 that
approx. 20 lakh goods were supplied by plaintiff to defendant and defendant
made part payment. Undoubtedly plaintiff has not proved his ledger
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account as per Indian Evidence Act but Since DW2 and DW3 have admitted
of supplying the goods and making part payment onus also shifted upon
defendant to produce the documents to prove how much amount goods
plaintiff firm supplied to defendant firm and how much amount exactly
defendant firm paid but defendants firm has not produced ledger to show
what exact amount goods were supplied to them and what amount was paid
by them. Hence there is no ground to disbelieve testimony of PW1 that Rs.
1512458/- is balance towards defendant till the day of filing suit.
The only reason they given by defendant to non payment of balance
amount is that goods were not as per specification as ordered by defendant
firm but Defendants have failed to produce any documents that they have
ever intimated plaintiff that goods supplied were not of specific requirement
or of substandard quality. In these circumstances except bald statement
there, is nothing to corroborate the testimony of DW1 to DW3 that plaintiff
supplied the goods which are of defective quality or was not of specification
therefore I held that they have failed to proved the said facts. On the other
hand plaintiff through the testimony of PW1 and document DW1/1 to
DW1/4 has been able to proved that plaintiff has supplied the goods to
defendant and a sum of Rs. 1512458/- is balance which plaintiff is entitle to
recover from defendants. Issue No.1 decided accordingly.
23. Issue No. 3 : Whether the suit is barred by limitation in view of the
preliminary objection no. 9 of the written statement ? OPD
The onus to prove this issue was upon the defendant. Though the
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defendant has not led any specific evidence but I found substance in the
contention of Ld. Counsel for defendant that even if plaintiff facts are
admitted as true plaintiff need to prove that its case is with in limitation. He
argued that as per statement of account and invoices plaintiff has supplied
the goods to defendant during March 2016 till July 2016 and part payment
was also made on 25.05.2016 and 05.07.2016. Therefore, period of
limitation at the best would start from last payment which was made on
05.07.2016. Since plaintiff has filed the present suit on 23.08.2019 and
therefore, period for limitation as three year from date when the goods were
supplied or the last payment was made, and the period of limitation will
expire on 04.07.2019 hence suit is barred by Limitation.
24. On the other hand Ld. Counsel for plaintiff has argued that last time
goods to defendant were supplied on 23.07.2016 and application for pre
litigation was filed on 18.07.2019 suit is file with in Limitation.
25. I have heard the arguments. I am agreed with the submission of Ld.
Counsel for the defendants that the account which has been maintained by
the plaintiff is not a mutual account because in this case, there is transaction
of selling of goods by the plaintiff to the defendant and not vice versa hence
it was a simple current running account maintain by plaintiff in which it
used to mention details of goods supplied to defendant and payments made
by defendant, hence, period of limitation would start from the date when
goods were supplied to defendant as per entry 14 of schedule to the Indian
Limitation Act 1963 or not from the date of end of financial year as
provided in entry 1 of the schedule to Indian Limitation Act. In this regard I
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rely upon Bharath Skins Corporation v. Taneja Skins Company Pvt.
Ltd.,186 (2012) DLT 290 (DB) where in it is held as under:
"10. In order to find an answer to the question: Whether Arti-
cle 1 of the Schedule to the Limitation Act, 1963 applies to the
present case, it is first required to be seen: Whether the ac-
count between the parties was a mutual account as envisaged
in Article 1 of the Schedule to the Limitation Act, 1963, it not
being in dispute that the account was current and open.
11. In the decision reported as AIR 1965 SC 1711, Kesharic-
hand Jaisukhlal v. The Shillong Banking Corporation, the
Supreme Court defined the scope of the expression 'mutual' oc-
curring in Article 85 of the Schedule to the Indian Limitation
Act, 1908 (precursor to Article 1 of the Schedule to the Limita-
tion Act, 1963) in the following terms:
The next point in issue is whether the proceedings are gov-
erned by Article 85 of the Indian Limitation Act, 1908, and if
so, whether the suit is bared by limitation. The argument before
us proceeded on the footing that an application under Section
45(D) of the Banking Companies Act is governed by the Indian
Limitation Act, and we must decide this case on that footing.
But we express no opinion one way or the other on the question
of the applicability of the Indian Limitation Act to an applica-
tion under Section 45(D). Now, Article 85 of the Indian Limita-
tion Act, 1908 provides that the period of limitation for the bal-
ance due on a mutual, open and current account, where there
have been reciprocal demands between the parties is three
years from the close of the year in which the last item admitted
or proved is entered in the account such year to be computed
as in the account. It is not disputed that the account between
the parties was at all times an open and current one. The dis-
pute is whether it was mutual during the relevant period.
11. Now in the leading case of Hirada Basappa v. Gadigi Mud-
dappa, (1871) VI Mad H C R 142, 144]. Holloway, Acting C.J.
observed:
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To be mutual there must be transactions on each side creating
independent obligations on the other, and not merely transac-
tions which create obligations on the one side, those on the
other being merely complete or partial discharges of such obli-
gations.'
12. These observations were followed and applied in Tea Fi-
nancing Syndicate Ltd. v. Chandrakamal Bezbaruah, I.L.R.
[1931] 58 Cal. 642 and Monotosh K. Chatterjee v. Central
Calcutta Bank Ltd., [1953] 91 C.L.J. 16, and the first men-
tioned Calcutta case was approved by this Court in Hindustan
Forest Company v. Lal Chand, (1960) 1 SCR 563. Holloway,
Acting C.J. laid down the test of mutuality on a construction
of Section 8 of Act 14 of 1859, though that Section did not con-
tain the words "where there have been reciprocal demands, be-
tween the parties". The addition of those words in the corre-
sponding Article 87 of Act 9 of 1871, Article 85 of Act 15 of
1877 and Article 85 of the Act of 1908 adopts and emphasises
the test of mutuality laid down in the Madras case.
13. In the instant case, there were mutual dealings between the
parties. The respondent Bank gave loans on overdrafts, and the
appellant made deposits. The loans by the respondent created obligations on the appellant to repay them. The respondent was under independent obligations to repay the amount of the cash deposits and to account for the cheques, hundis and drafts de- posited for collection. There were thus transactions on each side creating independent obligations on the other, and both sets of transactions were entered in the same account. The de- posits made by the appellant were not merely complete or par- tial discharges of its obligations to the respondent. There were shifting balances on many occasions the balance was in favour of the appellant and on many other occasions, the balance was in favour of the respondent. There were reciprocal demands be- tween the parties, and the account was mutual. This mutual ac- count was fairly active up to June 25, 1947. It is not shown that the account ceased to be mutual thereafter. The parties contem- plated the possibility of mutual dealings in future. The mutual CS (Com.) No. 1599/2019 Page No. 14 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. account continued until December 29, 1950 when the last entry in the account was made. It is conceded on behalf of the appel- lant that if the account was mutual and continued to be so until December 29, 1950, the suit is not barred by limitation, hav- ing regard to Section 45(o) of the Banking Companies Act. The Courts below, therefore, rightly answered issue No. 1 in the negative.
(Emphasis supplied)
12. From the aforesaid observations, it can be deduced that for the creation of an open, current and mutual account, there must be an intention between the parties, either express or im- plied, which may be deducible from the course of dealings to have mutual dealings, creating reciprocal obligations, inde- pendent of each other. A 'demand' in relation to a matter of ac- count means a 'claim for money', arising out of a 'contractual business relationship' between the parties. Where the dealings between the parties disclose a 'single' contractual relationship, there will be demands only in favour of one party. For in- stance, where the relationship between 'A' and 'B' is that of lender and borrower respectively, 'A' will have a 'demand' against 'B' in respect of every item of loan advanced. But 'B' can have no demand against 'A'. Where the dealings between the parties disclose 'two' contractual relationships, there will arise demands in favour of each side against the other. For in- stance, where 'A' advances money to 'B' from time to time as loan, and 'B' engages 'A' as his agent for the sale of goods sent by 'B', there are two contractual relationships between the par- ties: one, that of lender and borrower and the other, that of principal and agent. 'A' as creditor may have several demands against 'B' who as principal may have, independently, several demands against 'A'. The real test, therefore, to see whether there have been reciprocal demands in any particular case is to see: Whether there is a 'dual contractual relationship' be- tween the parties.
13. Where 'A' sells goods to 'B' from time-to-time and 'B' makes payments towards the price from time-to-time, there is only a CS (Com.) No. 1599/2019 Page No. 15 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. 'single' contractual relationship, namely that of buyer and seller, between the parties. 'A' has demands against 'B' for items sold, but 'B' can have no 'demands' against ' A'. Such case is not one of reciprocal demands and thus Article 85 of the Schedule to the Indian Limitation Act, 1908 corresponding to Article 1 of the Schedule to the Limitation Act, 1963 will not apply to suits on such accounts. We are fortified in our view by the following observations made by the Supreme Court in the decision reported as AIR 1959 SC 1349, Hindustan Forest Company v. Lal Chand:
The learned Judge of the High Court who heard the suit held that Art. 115 had no application and dismissed the suit as barred by limitation. The sellers went up in appeal which was heard by two other learned Judges of the High Court. The learned Judges of the appellate Bench of the High Court held that Art. 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred. They thereupon allowed the ap- peal and passed a decree in favour of the sellers. The buyer has now come up in appeal to this Court.
5. Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as Art. 85 of the Indian Limitation Act ex- cept as to the period of limitation, is set out below:
6. If the article applied the suit would be clearly within time as the last item found to have been entered in the account was on June 23, 1947. The only question argued at the Bar is whether the account between the parties was mutual.
7. The question what is a mutual account, has been considered by the Courts frequently and the test to determine it is well set-
tled. The case of the Tea Financing Syndicate Ltd. v. Chan- drakamal Bezbaruah, I.L.R. (1930) Cal. 649, may be referred to. There a company had been advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price. In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of CS (Com.) No. 1599/2019 Page No. 16 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. tea, the question arose as to whether the case was one of recip- rocal demands resulting in the account between the parties be- ing mutual so as to be governed by Art. 85 of the Indian Limi- tation Act. Rankin, C.J , laid down at p. 668 the test to be ap- plied for deciding the question in these words:
There can, I think, be no doubt that the requirement of recipro- cal demands involves, as all the Indian cases have decided fol- lowing Halloway, A.C.J , transactions on each side creating in- dependent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of set-off to reduce the defendant's liability.'
8. The observation of Rankin, C.J , has never been dissented from in our Courts and we think it lays down the law correctly.
The learned Judges of the appellate Bench of the High Court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the conclusion that the ac- count between the parties was mutual for the following rea- sons:
The point then reduces itself to the fact that the defendant com- pany had advanced a certain amount of money to the plaintiffs for the supply of grains. This excludes the question of monthly payments being made to the plaintiffs. The plaintiffs having re- ceived a certain amount of money, they became debtors to the defendant company to this extent, and when the supplies ex- ceeded Rs. 13,000 the defendant company became debtors to the plaintiff and later on when again the plaintiff's supplies ex- ceeded the amount paid to them, the defendants again became the debtors. This would show that there were reciprocity of CS (Com.) No. 1599/2019 Page No. 17 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. dealings and transactions on each side creating independent obligations on the other.'
9. The reasoning is clearly erroneous. On the facts stated by the learned Judges there was no reciprocity of dealings there were no independent obligations.What in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. There can be no question that in so far as the payments had been made after the goods had been deliv-
ered, they had been made towards the price due. Such pay- ments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods deliv- ered and did not create any obligation on the sellers in favour of the buyer. The learned Judges do not appear to have taken a contrary view of the result of these payments.
10. The learned Judges however held that the payment of Rs. 13,000 by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer. This apparently was the reason which led them to the view that there were re- ciprocal demands and that the transactions had created inde- pendent obligations on each of the parties. This view is un- founded. The sum of Rs. 13,000 had been paid as and by way of advance payment of price of goods to be delivered. It was paid in discharge of obligations to arise under the contract. It was paid under the terms of the contract which was to buy goods and pay for them. It did not itself create any obligation on the sellers in favour of the buyer it was not intended to be and did not amount to an independent transaction detached from the rest of the contract. The sellers were under an obliga- tion to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone. If the sellers had failed to deliver goods, they would have been liable to refund the monies advanced on account of the price and might also have been liable in damages but such liability would then have arisen from the contract and not from the fact CS (Com.) No. 1599/2019 Page No. 18 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. of the advances having been made. Apart from such failure, the buyer could not recover the monies paid in advance. No ques- tion has, however, been raised as to any default on the part of the sellers to deliver goods. This case therefore involved no reciprocity of demands. Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit.
14. In view of the above discussion, since the dealings between the parties disclose a single contractual relationship i.e. of buyer and seller between them, the account between them can- not be termed as a 'mutual' account. As a necessary corol- lary, Article 1 of the Schedule to the Limitation Act, 1963 has no application in the present case.
(Emphasis Supplied)
26. Further in Wings Pharmaceuticals (P) Ltd vs Praveen Bhasin CS (COMM) 1141/2016 passed by our High Court on 30.09.2016 while re- lying upon judgement of Bharat Skin ( supra) it is held that :
25. In the present case as well, the statement of account cannot be said to be an „open mutual running current account‟ as the relationship is singular, i.e that of buyer and seller. The state-
ment shows the account of the defendant being credited upon sales of pharmaceutical products and the defendant occasion- ally paying the same. Upon being shown the statement of ac- count placed on record by the plaintiff, the counsel for the plaintiff very fairly agrees that, in fact, the account placed on record does not reflect that it was an open mutual current ac- count. In my view, merely by stating that it was an open mutual current account would not bring the suit within the parameters of Article 1 of the Schedule to the Limitation Act.
27. The detail of goods were delivered are as under:
CS (Com.) No. 1599/2019 Page No. 19 of 23M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. Sr. No. Invoice No. Date of invoice Amount in Rs
1. 038 05.05.2016 73400
2. 039 07.05.2016 43900
3. 040 09.05.2016 21994
4. 045 14.05.2016 61525
5. 047 16.05.2016 28890
6. 048 17.05.2016 7316
7. 049 19.05.2016 118900
8. 051 23.05.2016 50075
9. 053 26.05.2016 87360
10. 054 27.05.2016 26700
11. 055 28.05.2016 24583
12. 056 01.06.2016 92859
13. 057 01.06.2016 94505
14. 058 01.06.2016 1785
15. 059 04.06.2016 25836
16. 062 09.06.2016 88000
17. 063 09.06.2016 44366
18. 065 10.06.2016 16611
19. 066 15.06.2016 77900
20. 067 18.06.2016 96500
21. 069 25.06.2016 47603
22. 070 27.06.2016 59650 23 074 05.07.2016 85000
24. 078 09.07.2016 96497
25. 079 15.07.2016 38059
26. 084 20.07.2016 16379
27. 086 23.07.2016 38500 CS (Com.) No. 1599/2019 Page No. 20 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr.
28. Since it is undisputed fact that only plaintiff was supplying good to defendant and not vice versa and defendant was only making payments of the goods received by it time to time and about which plaintiff was maintain maintaining current running account and therefore present case for the purpose of limitation would fall in entry 14 of Limitation Act and not in entry 1, period of Limtation as per said entry is three year which would start from from the date of delivery of goods if no specified period is fixed for making payment of the goods. From the invoices EXPW1/1 it is evident that payment was to be made with 15 days otherwise defendant was to pay interest @24% per annum. Hence there was 15 days time to the defendant to make payment hence the period of limitation would commence from 15 days after the date of delivery of good.
Since in the present case which is a commercial suit and thus pre litigation mediation is mandatory therefore it would be treated that suit was file on the day when application for pre litigation mediation was file which as per non starter report is 18.07.2019. Hence present suit would be treated to be filed on 18.07.2019. As per invoice EXPW1/1 (colly) the payment of goods were to be made with in 15 days from the date of invoice, hence period of limitation for each invoice would begin after 15 days of date of each invoice hence only the goods which were supplied though invoice dt. 05.07.2016, 09.07.2016, 15.07.2016, 20.07.2016 and 23.07.2016 for a sum of 85000/-, 96497/-,38059/-. Rs.16379/-, and 38500/- respectively are with in period of Limitation of three year if we add 15 days on the date of each of above said invoice and recovery of amount of rest of the invoices i.e. CS (Com.) No. 1599/2019 Page No. 21 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. 038, 039, 040, 045, 047, 048, 049, 051, 053, 054, 055, 056, 057, 058, 059, 062, 063, 065, 066, 067, 069 and 070 which are mentioned at serial No. 1 to 22 of the table are barred by limitation as suit was filed after three year of delivery of goods send through these invoices. Since last part payment was made by defendant on 05.07.2016 therefore according to section 19 of Limitation Act part payment made by defendant only extend time till 04.07.2019 for the balance/ unpaid amount of goods supplied through invoices prior to 05.07.2016 as fresh period of Limitation will be counted from the date of payment. Hence even same will not extend period of Limitation for these invoices mention at serial no.1 to 22 above table. Therefore, I held that plaintiff is not entitle to recover the amount of invoices mentioned at serial no.1 to 22 of above said table above being barred by Limitation and further held that present suit qua the amount of goods which were supplied though invoice dt. 05.07.2016, 09.07.2016, 15.07.2016, 20.07.2016 and 23.07.2016 for a sum of 85000/-, 96497/-,38059/-. Rs.16379/-, and 38500/- mentioned at serial no. 23 to 27 of above table are with in Limitation. Issue no. 3 is decided accordingly.
29. Issue No. 2 : Whether the plaintiff is entitled to recover any interest from the defendants if so on which amount and at what rate and for which period ? OPP Ld. Counsel for Plaintiff has argued that plaintiff is entitle to 18% per annum interest on the said due amount. He argued in the the clause-1 of term and condition printed on the invoices EXPW1/1 rate of interest has been mentioned as 24% per annum but plaintiff is only claiming interest @ rate of 18% per annum. In my view the same is excessive rate of CS (Com.) No. 1599/2019 Page No. 22 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr. interest as interest rate are falling and current bank rate for even FD is around 7% hence in my view it would be appropriate to grant 9% per annum interest from 15 days after the date of each invoice till the date of filing of the suit and further the plaintiff is entitled to interest @ 9 % from the date of filing of suit till the date of passing of decree and thereafter till the date of realization. Issue no. 2 is accordingly decided.
Issue No. 4 Relief.
30. In view of finding on issue no. 1, 2 & 3, a decree for a sum of Rs. Two Lakh Seventy Four Thousand Four Hundred Thirty Five only (85000/- + 96497 +38059 +16379 +38500 = 274435) alongwith interest @ 12% per after 15 days from the date of invoice of bill No. 074 dated 5.7.2016 for an amount of Rs. 85000/-, bill No. 078 dated 9.7.2016 for an amount of Rs. 96497/-, bill No. 079 dated 15.7.2016 for an amount of Rs. 38059/-, bill No. 084 dated 20.7.2016 for an amount of Rs. 16379/- and bill No. 086 dated 23.7.2016 for an amount of Rs. 38500/- till the date of filing of the suit and thereafter @ 9 % per annum from the date of filing of the suit till its realization is passed in favour of plaintiff and against the defendant. Plaintiff will also be entitle to proportionate cost. Decree Sheet be prepared accordingly. File be consigned to record room.
Announced in the open court on 05.07.2022 (Sanjeev Kumar Aggarwal) District Judge (Commercial Court)-01 Central District, Tis Hazari Courts,Delhi CS (Com.) No. 1599/2019 Page No. 23 of 23 M/s Indus Meta Enterprises Vs. M/s Akash Packaging & Anr.