TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 735
X X X X Extracts X X X X
X X X X Extracts X X X X
....rity' observed as follows: "6. Further, the account is not a "Running Account" as stated in reply by respondent. Clearly, 17 out of 25 invoices are beyond the period of limitation. The applicant has not filed any documents to satisfy that the old invoices are valid and enforceable in the eye of law. The respondent has stated in para-8 of the reply, the payment was made to exact amount of each invoice. Hence, on perusal of pleadings and documents, we conclude that the account cannot be termed as "running account" as evidence in Invoices at Page 18 to page 42, calculation sheet at page.43. The Operational Creditor has claimed interest at the rate of 24% per annum since earlies invoice dated 29.04.2015. The claim of Applicant included principal and interest since 29.04.2015. Admittedly, out of 25 invoices 17 are barred by limitation. The applicant has failed to prove "debt" and "default" as stated in application. However, this order does not bar the applicant to approach Civil Court for recovery, if any." 2. It is stated that the 'Operational Creditor' is involved in the business of manufacturing Metal Forming Fluid Lubricant and Industrial Oils and in the due course of business, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Account of 'Appellant' without seeking leave of the 'Tribunal' and without giving any 'Notice' to the 'Appellant'. Therefore, the 'Appellant' as per Section 60 of the Contract Act, 1872, has adjusted the amount paid towards the interest dues. It is contended that the Respondent had served a memo on 08.03.2021 that 8 invoices, which are not 'barred by Limitation' have been paid, but the same was objected to on the ground that the amount was apportioned towards interest. As far as interest is concerned, the 'terms' and 'conditions' of the invoice attract 'Penal Interest' at 24% p.a. after the Credit period of 90 days. It is also submitted that the Hon'ble Supreme Court has held that any acknowledgement in the Balance Sheet of the 'Corporate Debtor' is an 'acknowledgement of debt', and in the present case, the 'Corporate Debtor' having admitted to the invoices in October 2018, would only show that 'Corporate Debtor' has acknowledged their liability to pay the amounts. Further, the earliest unpaid invoice is dated 29.04.2015, for which the 'Limitation' of three Years, expires on 28.04.2018, but the cheque payment alleged by the 'Corporate Debtor' is dated 13.03.2017 which construes an ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Debtor' that the email communications relied upon by the 'Appellant' does not construe 'acknowledgement of debt', but only contain a 'payment advice' from the Respondent. Further, the cheque which was issued by the Respondent in respect of these amounts was not even cleared by the Bank. The email includes a 'payment advice' from the Respondent that they have made payments to the tune of Rs.3Lakhs/- towards certain invoices by a cheque dated 13.03.2017. It is the case of the Respondents that the email can at best be treated as a Statement of payment and not an acknowledgement of a subsisting debt. Learned Sr. Counsel placed reliance on the Judgement of the Hon'ble High Court of Madras in 'Karamadai Naicken' Vs. 'R. Raju Pillai & Anr.' AIR 1949 Mad 401 , in support of his submissions that a Statement made by the Debtor that he was under a liability, coupled with a Statement that he has discharged the debt, would not amount to an 'acknowledgement' of a subsisting liability. It is also contended that a cheque which is dishonoured, cannot be construed as part payment within the meaning of Section 20 of the Limitation Act, 1963. It is the case of the Respondent that the issue of Balanc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re debits and credits going on simultaneously or on a regular basis and that balances are struck with some periodicity; not that there are a number of invoices, some of which remain unpaid. Non-payment of invoices and payment without specifying a particular invoice does not make the transactions a "running account"." ( Emphasis Supplied ) 10. From the aforenoted Judgements it is clear that for an Account to be termed a 'running Account' it must be demonstrated that there are 'Debits' and 'Credits' entries going on simultaneously or on a regular basis and the balances are struck with some periodicity. Non-payment of invoices and payment without specifying a particular invoice does not make the transaction a 'running Account'. As can be seen from the invoices/communication dated 18.04.2018, 24.04.2018, 12.05.2018, 12.10.2018, 26.10.2018, 15.11.2018, 11.12.2018 & 24.12.2018, it can be clearly seen that the amounts were paid towards specific invoices and therefore keeping in view the ratio of the aforenoted Judgements the said 'Account' cannot be termed as a 'running Account'. 11. Learned Counsel for the 'Appellant' placed reliance on the email dated 23.10.2018 in support of his co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a person other than a person entitled to the property or right, (b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right." 16. In the instant case, the contention of the Learned Counsel for the 'Appellant' that the email dated 29.05.2019 should be construed as 'acknowledgement' is also not within 3 Years of the dates of invoices. It is also a settled proposition of law that a cheque which has not been encashed cannot amount to an 'acknowledgement of liability' in terms of Section 18 of the Limitation Act, 1963. This 'Tribunal' is of the considered view that the emails relied upon by the 'Appellant' do not strictly construe an 'acknowledgement of liability' as provided for under Section 18 of the Limitation Act, 1963. Though it is mentioned by the 'Appellant' in the 'Notes of Submissions' that these amounts have been 'acknowledged' in the Balance Sheets, the same has neither been produced before the 'Adjudicating Authority' or before this 'Tribunal'. This Pleading is not even a part of the grounds o....