1999 (8) TMI 996 - HC - Indian Laws

Court saves suit from limitation bar, orders defendants to pay Rs. 62,133.52 + 6% interest. Appeal dismissed, cause title amended.

Swarna Paper Cutting Works, rep. by it's proprietor Mr. S. Paulpandian, Madras and another Versus M/s. Indian Express (Madurai) Private Limited, Madras

Swarna Paper Cutting Works, rep. by it's proprietor Mr. S. Paulpandian, Madras and another Versus M/s. Indian Express (Madurai) Private Limited, Madras - ... Issues Involved:1. Whether the suit claim is barred by limitation.2. The amount due to the plaintiff from the defendants.3. Entitlement of the plaintiff to interest, and if so, at what rate and from which date.4. The relief to which the plaintiff is entitled.Issue-wise Detailed Analysis:1. Whether the suit claim is barred by limitation:The defendants argued that the suit was barred by limitation, asserting that the accounts were not a running or mutual open current account. They contended that each sale was a separate transaction, and payments were made independently for each bill. The plaintiff, however, maintained that there was a running account. The court found that the accounts did not constitute a running account or mutual current account, as each debit entry corresponded to the value of goods sold under each bill, and each credit entry represented payments made by the defendants towards specific bills. Consequently, the suit filed on 29.3.1982 was beyond the three-year limitation period from the last transaction on 16.10.1981, unless saved by acknowledgments of liability. The court held that the acknowledgments marked as Exs. A.12, A.16, A.20, A.24, A.28, A.32, and A.36, which were part of the defendants' income tax returns, constituted valid acknowledgments under Section 18 of the Limitation Act, thereby saving the suit from being barred by limitation.2. The amount due to the plaintiff from the defendants:The trial court decreed the suit for a sum of Rs. 62,133.52 based on the acknowledgments of liability placed before the court. The court found that the balance due on account should be struck as on 6.11.1978, and the later debit and credit entries did not carry forward the said balance. The court upheld the trial court's finding that the defendants were liable to pay Rs. 62,133.52, as the acknowledgment covered only such amount.3. Entitlement of the plaintiff to interest, and if so, at what rate and from which date:The plaintiff claimed interest at 18% per annum, arguing that the transactions were commercial in nature. The trial court awarded interest at 18% per annum from 1.12.1981. However, the defendants contended that, under the Sale of Goods Act, the plaintiff was not entitled to interest higher than 6%. The court agreed with the defendants and modified the interest rate to 6% per annum from 1.12.1981 on the amount found due by the trial court.4. The relief to which the plaintiff is entitled:The court held that the plaintiff was entitled to the amount decreed by the trial court, i.e., Rs. 62,133.52, with interest at 6% per annum from 1.12.1981. The court also addressed the amendment application filed by the plaintiff to amend the cause title and incorporate grounds saving the suit from the law of limitation. The court allowed the amendment related to the description of the plaintiff in the cause title but dismissed the amendment concerning the grounds for exemption, deeming it unnecessary.In conclusion, the court upheld the trial court's decree for Rs. 62,133.52 with modified interest at 6% per annum from 1.12.1981 and allowed the amendment to the cause title. The appeal was dismissed without costs.