TaxTMI 
TaxTMI 
2013 (9) TMI 1326
X X X X Extracts X X X X
X X X X Extracts X X X X
....he plaintiff's place to the transport carriers place for delivery to the defendant on payment of freight. It is his case that the defendant accepted the delivery of all the supplies and sent the required sales tax Forms "C" for all these supplies. The plaintiff has given the details of the supplies made to the defendant from 01.04.1982 to 31.03.1997, furnishing the details of the bills" dates and the amounts. Likewise, the details of the amounts remitted by the defendant from time to time, have also been given. As per the details, the last supply was made vide bill No. 10953 dated 12.02.1993 of goods worth Rs. 50130.20/- and the last amount remitted by the defendant was by way of a cheque amounting Rs. 50,000/- dated 11.07.1996. The plaintiff submits that a sum of Rs. 10,90,052.57/- as the principal remains outstanding against the defendant. It is also the plaintiff's case that interest @ 23% p.a. was payable by the defendant on each delivery in the event of the payment being not made within seven days. This was stated to be specifically mentioned on the bills that interest at this rate will be charged if the payment was not made within seven days. The plaintiff has claimed interes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Delhi and the goods were supplied from Delhi to the defendant through the transport carriers. The submission of the defendant that since the communication of the acceptance of the order was received at Iqbalpur, the court at Iqbalpur has the jurisdiction and not Delhi, is entirely erroneous. The acceptance of the order at Delhi and the delivery of goods at Delhi to the transport carriers for onward delivery to the consignee i.e. the defendant, would bring into the formation of the contract at Delhi. The delivery to the transport carriers was to be taken as delivery to the consignee as per Section 39 of the Sale of Goods Act, 1930. 8. PW2 stated and maintained that order of the defendant used to come from its Delhi office and that the documents with regard to the delivery also used to be sent directly to the defendant at Delhi office, and some time through the bank. It is seen from the bills proved on record that all the communications between the parties were to be settled at Delhi and the transactions were subject to Delhi jurisdiction. From all this, there does not remain any doubt that this court has the jurisdiction to entertain the present suit. The issue is accordingly d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the statement of account between the parties is to be regarded as a Mutual, Open and Current Account, then the period of limitation of three years would begin from the close of the year in which the last item admitted or proved is entered in the account. 11. The question what is Mutual or Reciprocal Account has been considered by the courts frequently and the test to be determined is well-settled. Article 85 of the Indian Limitation Act, 1908, which is in the same term as Article 1 of the Indian Limitation Act except as to the period of limitation, was interpreted by Rankin C.J. in Tea Financing Syndicate Ltd. Vs. Chandrakamal, AIR 1931 Cal 359. The observations of Rankin C.J. have never been dissented from in our courts and the same has been endorsed by the Supreme Court in various cases. Reference can be made to Hindustan Forest Company Vs. Lal Chand and Others, AIR 1959 Supreme Court 1349. The test that was laid by Rankin C.J. for determining whether an account is mutual and reciprocal or not, was reiterated by the Supreme Court in the aforesaid case of Hindustan Forest Co., observing that "the requirement of reciprocal demands involves transactions on each side creating inde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat if it is not a Mutual or Reciprocal Account as is contemplated in Article 1 of the Limitation Act, but, is a Running Account as prescribed in Article 14, in that event, the limitation would not end with the supply, but it would keep on being extended when the last payment is made. Though, where the goods were delivered to the defendant from time to time on account, the starting point of limitation in respect of each item of account as per Article 14 is to be the date of delivery of goods under that item of account, and the last date of delivery cannot be taken to be the date of delivery on earlier occasions, but the cause of action for all the items delivered is single down to the date of last delivery. 16. In Kedarnath Vs. Denobandhu Saha, AIR 1916 Cal. 580, Jenkins C.J. quoted with approval the following passage from the decision in Bonsey Vs. Wordsworth, (1856) 18 CB 325: "Where a tradesman has a bill against a party for any amount in which the items 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e outstanding, unless there was an expressed agreement or intention of the debtor to adjust such payments towards specific debt. 20. Now, reverting back to the facts, it is seen that except two specific payments of small amounts all other on account payments were made by the defendant from time to time. All these payments were made by the defendant not with the delivery of the goods vide specific bills, but, as per its own convenience. Though, the payments were required to be made by the defendant within seven days of delivery as per the terms stipulated in the bills, but, the same having not been adhered to by the defendant and there being no other agreement of fixed period of credit, the part payments were made by the defendants towards the unpaid amounts. These by any means, cannot make the account mutual or reciprocal. The dealings between the parties continued and did not terminate with one supply and thus, the deliveries got united with one another and formed one continuous demand which kept on being carried forward from year to year till the last supply was made. Thus, it all formed one cause of action and could not be divided. The nature of transactions as well as the pa....