IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS.No. 277 of 2000(A)
1. SAJAN VARGHESE
... Petitioner
Vs
1. KERALA STATE ELECTRONIC DEVP.CORPN.LTD.
... Respondent
For Petitioner :SRI.P.GOPALAKRISHNAN NAIR
For Respondent :SRI.T.P.KELU NAMBIAR (SR.)
The Hon'ble MR. Justice HARUN-UL-RASHID
Dated :12/01/2010
O R D E R
*CR* HARUN-UL-RASHID,J
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A.S. NO. 277 OF 2000
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Dated this the 12th day of January, 2010
J U D G M E N T
The defendant in O.S.No.142 of 1994 on the file of the
Principal Sub Court, Thiruvananthapuram is the appellant. The
appeal is directed against the judgment and decree dated
30.06.1999. The plaintiff Kerala State Electronic Development
Corporation Ltd., filed the suit for recovery of Rs.87,364/-
together with interest at 20% due from the defendant. The court
below decreed the suit allowing the plaintiff to recover the sum of
Rs. 87,364/- with interest at 12%. Aggrieved by the decree and
judgment, the defendant had preferred this appeal. Parties
hereinafter referred to as plaintiff and defendant.
2. The suit is for recovery of the price of the goods
purchased by the defendant. The defendant had purchased 50
colour T.V. Sets from the plaintiff as per invoice Nos.102189-
102194 dated 27.12.1989. The defendant had availed credit
purchase facility for Rs.5,24,475/-. The defendant also purchased
one sterio tape recorder for Rs.1,725/- and a Black and While
T.V.Set worth Rs.2,300/-. It is pleaded that the defendant has
been making part payment on various dates till 26.2.1992. The
suit was filed for the outstanding balance.
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3. The suit is mainly contested on the question of bar of
limitation.
4. Admittedly, the defendant purchased T.V.Sets as per six
invoices. Ext.A1 series are the invoices. It is admitted that after the
purchase, the defendant had been making the payments towards the
price of the articles sold. According to the defendant the last cheque
payment was made on 15.3.1991. Hence the suit claim is barred by
limitation and therefore not enforceable.
5. In Paragraph 11 of the plaint it is averred that the defendant
has acknowledged the liability by the part payment on various dates
and last such payment was made on 26.2.1992 by remitting
Rs.10,000/-. There is no doubt that the plaint was proceeded on the
premise that the suit was barred by limitation but for part payment
made on 26.2.1992.
6. The plaintiff produced Exts. A2, A3 and A4, true copies of
ledger papers maintained by the plaintiff in the name of the
defendant. The part payment made by the defendant is credited to
in the accounts. The trial court applied Article 1 of the Limitation
Act, 1963. Article 1 reads as follows:
Description of suit Period of Time from which period
limitation begins to run
1. For the balance due on a Three years The close of the year in which
mutual, open and current account, the last item admitted or proved
where there have been reciprocal is entered in the account; such
demands between the parties. year to be computed as in the
account.
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7. The court below examined the nature of the transaction and
took the view that the transaction is mutual, open and current
account. To consider the transaction as mutual, open and current
account, where they have been reciprocal demand between the
parties, the trial court held that the account maintained by the
plaintiff is a running account of which the limitation starts from the
close of the year in which the last item admitted or proved. The
account shows that the defendant was issuing cheques as well as
making cash payments on various dates during the period between
December 1989 to February, 1992. The trial court also noted that
the last payment was on 26.2.1992. The learned Judge held that the
account is carried over from 1989 to 1992, therefore the account is
current, open and mutual. The trial court observed that if the
plaintiff can recover the money based on the dishonoured cheque, it
is still open for him to recover the balance price of the delivered
goods. According to the court below the suit is perfectly
maintainable and is filed within the period of limitation and the same
falls under Article 1 of the Limitation Act.
8. The learned counsel for the appellant/defendant contented
before this court that Article 14 is squarely applicable in this case
and that Article 1 cannot have any application. The scope of Article
1 of the Limitation Act and its distinguishing characteristics are
examined by a Division Bench of this Court in UNION BANK LTD.
VS. N. RAGHAVAN NAIR (1958 KLR 706). This court held that the
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distinguishing characteristics of a mutual account are (1) that there
should be two sets of independent transactions between the parties
in one of which one of the parties should hold the position of debtor
and the other that of creditor, and in the other, the reverse position;
(2) that the dealings should disclose independent obligations on both
sides, and not merely obligations on one side, the acts done by the
other being merely discharge of such obligation and (3) that each
party must be able to say to the other ‘I have an account against
you’. The first requirement as laid down by this court is that there
should be two independent transaction between the parties.
Admittedly, there is only one transaction in this case. The plaintiff
sold a few articles to the defendant on credit basis and the defendant
made part payments towards the said transaction. The plaintiff has
no case that there are two independent transaction between the
parties by which one of the party should held the position of a debtor
and the other that of a creditor and in the other, the reverse position.
The second requirement as held by this court that the dealings
should disclose independent obligation on both sides and not merely
obligations on one side, the acts done by the other side being merely
discharge of such obligation. I do not find that there is any
independent obligation on both sides. The acts done by the
defendant is only discharge of his obligation to the plaintiff i.e. to
discharge the amounts payable under the sale transaction. Going by
the dictum laid down by this court, and a reading of Article 1, I find
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that the findings of the learned Judge that this is a case where
Article 1 has application cannot stand.
9. Admittedly, the suit is for recovery of the price of goods
purchased by the defendant. Under Article 14 of the Limitation Act,
the cut off date for starting the period of limitation is the date of
purchase or delivery of the goods by the defendant on credit . This is
a simple suit for recovery of the price of goods sold and not a suit for
accounts. Therefore the findings and reasons of the learned Judge
are unsustainable. The further question to be examined is the effect
of payment on account of debt. The learned counsel for the
plaintiff/respondent strenuously contented that there is sufficient
pleadings in the plaint which would go to show that the defendant
has acknowledged the debt by making part payment on various dates
and the last such payment was made on 26.2.1992. Since the last
payment was made within the period of limitation by issuing a
cheque it was argued that Section 19 is applicable and therefore the
decision of the court below decreeing the suit has to be sustained.
Section 19 of the limitation Act, 1963 reads as follows:
Effect of payment on account of debt or of interest on
legacy.– Where payment on account of a debt or of interest
on a legacy is made before the expiration of the prescribed
period by the person liable to pay the debt or legacy or by his
agent duly authorised in this behalf, a fresh period of
imitation shall be computed from the time when the payment
was made:
Provided that, save in the case of payment of interest
made before the 1st day of January, 1928, an
acknowledgment of the payment appears in the handwriting
of, or in a writing signed by, the person making the payment.
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Explanation.- For the purposes of this section, –
a. where mortgaged land is in the possession of the
mortgagee, the receipt of the rent or produced of such
land shall be deemed to be a payment,’,
b, “debt” does not include money payable under a decree
or order of a court”.
10. The learned counsel for the plaintiff brought to my
attention Exts.A5 and A6 documents produced in support of his
claim for exemption from limitation. Ext.A5 is the cheque receipt dt.
26.2.1992 issued by the plaintiff to the defendant acknowledging the
receipt of the cheque. Ext.A6 dated 14.5.1999 is the certificate
issued by the Uco bank to the plaintiff. Ext.A6 certified that the
cheque for Rs. 10,000/- was cleared through Indian Oversees Bank,
Thiruvananthapuram. On the basis of these two documents, learned
counsel for the respondent/plaintiff contented quoting section 19
that the plaintiff is entitled to the benefit of a fresh period of
limitation. The cheque dated 26.2.1992 is the document relied on by
the plaintiff in order to save the suit from the period of limitation.
The payment specified in Ext.A5 and A6 was not endorsed by the
defendant and the plaintiff has not summoned the cheque issued by
the defendant in support of his case of fresh period of limitation. To
attract Section 19 of the Act the acknowledgment of payment shall
be in the handwriting or is a writing signed by the defendant
making the payment. In a similar situation, the Apex Court in SANT
LAL MAHTON VS. KAMLA PRASAD (AIR (38)1951 SUPREME
COURT 477) examined the question of limitation in the background
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of Article 19 previously, (Article 20) of the Limitation Act. That was
a case where there was admission in the written statement filed on
behalf of the defendant 1 to 3 whereby the defendant admitted not
only that the payment specified in the plaint were actually made on
the respective dates but also asserted that there were other
payments made besides these, which reduce the debt still further
and for which the plaintiff did not give any credit to the defendants.
The trial judge in that case relied on the above said statement in the
written statement held that since the written statement was signed
by the defendant, it would fulfill all the requirement of a signed
acknowledgment as contemplated by the proviso to section 20.
11. The Apex Court in paragraph 10 of the judgment observed
that the written acknowledgment should be made prior to the expiry
of the period of limitation, it is, in our opinion, essential that such
acknowledgment whether made before or after the period of
limitation must be in existence prior to the institution of the suit,
that whether the suit is time barred or not has to be determined
exclusively with reference to the date on which the plaint is filed and
the allegations made therein. It was also observed that if the
plaintiff’s right of action is apparently barred under the statute of
Limitation Act, Order 7 Rule 6 of CPC makes it his duty to state
specifically in the plaint the ground of exemption allowed by the
Limitation Act, upon which he relies to exclude its operation and if
the plaintiff has got to allege in his plaint the facts which entitle him
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to exemption, obviously these facts must be in existence at or
before the time when the plaint is filed, facts which come into
existence after the filing of the plaint cannot be called in aid to
revive a right of action which was dead at the date of the suit.
12. To claim exemption under section 19 of the Limitation Act
it is mandatory that the plaintiff must be in a position to allege and
prove the part payment and that such payment had been
acknowledged in writing in the manner contemplated by the section.
In the plaint itself there must be pleadings and the plaint shall also
be supported by proof showing that such payment had been
acknowledged in writing in the manner contemplated by section 19.
In this case, the pleadings is incomplete. The pleadings only state
that the defendant has acknowledged the debt by making part
payment. The pleadings does not contain averments that such
payment had been acknowledged in writing or the acknowledgment
of payment appears in the hand writing signed by the person making
the payment. Therefore the pleadings are not complete. More over
the plaintiff did not produce the proof in support of
acknowledgment. The pleadings and the proof at the time of filing
the suit is mandatory because whether the suit is time barred or not
is to be determined exclusively with reference to the date on which
the plaint is filed and the allegations made therein. Section 3 of
Limitation Act mandates that the court shall dismiss the suit which is
brought after the period prescribed under the schedule of the
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Limitation Act. Therefore it is the duty of the plaintiff to state
specifically in the plaint the ground of exemption allowed by the
Limitation Act, whether it is under section 18, 19 or 20 as the case
may be. The further condition to attract the provision relates to
exemption is that if the plaintiff wanted to allege facts which entitle
him exemption obviously these facts shall be pleaded at the time
when the plaint is filed. Section 3 r/w Section 19 of the Act
therefore make it clear that the plaint shall not only contain the
pleadings but also shall be supported by documents which shall be
produced at the time of the filing of the suit in order to enable the
court to satisfy as to whether the suit is filed within time.
13. The Apex Court in the said case held that to claim
exemption under Section 20 of the Limitation Act, (presently Section
19) the plaintiff must be in a position to allege and prove not only
that there was payment of interest on a debt or part payment of the
principal, but that such payment had been acknowledged in writing
in the manner contemplated by that section, that the ground of
exemption is not complete without the second element, that unless
both these elements are proved to exist at the date of the plaint the
suit would be held to be time barred.
14. In the decision M/S. VIJAYAKUMAR SATISCHANDRA &
CO. VS. M/S. RAJGOPAL BADRINARAYAN MALPANI (1996 A I
H C 4163) a Division Bench of Bombay High Court held that the suit
for recovery of the price of goods purchased by the appellants,
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Article 14 of the Limitation Act is the article to be applied and
further held that the cut off date for starting the period of limitation
is the date of purchase or delivery of the goods by the appellants/
defendants on credit.
15. The case on hand is a simple suit for recovery of balance
amount due towards the price of goods supplied by the plaintiff to
the defendant and is not a suit for accounts. In such a situation, the
article applicable is Article 14 of the Limitation Act subject to
acknowledgment if any, under section 19 of the Act. The essential
requirement in order to attract section 19 of the Limitation Act is
that the acknowledgment must be in existence prior to the
institution of the suit. In this case, as observed earlier the pleadings
in the plaint are insufficient in order to satisfy the requirement of
pleadings to attract section 19 of the Limitation Act. I also find that
there is no proof adduced by the plaintiff at the time of filing the
plaint in order to claim the ground of exemption. Since Ext.A5 and
A6 are not either acknowledged nor signed by the defendant,
Section 19 of the Act cannot have any application. To claim
exemption under section 19 of the Limitation Act, the plaintiff must
be in a position not only to plead but also to prove that there was
part payment of debt; that such payment had been acknowledged in
writing or signed in the manner contemplated by the said section.
The suit is of the year 1994. The proceedings of the suit continued
in appeal till date i.e. for the last more than 14 years. Since the
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plaintiff failed to take any steps to summon the cheque issued by the
defendant in order to claim exemption under section 19, the suit has
to fail.
16. Learned counsel for the appellant defendant also invited
this court’s attention to the decision reported in K.C. PANGUNNI
VS. THE OFFICIAL LIQUIDATOR, WANDOOR JUPITOR CHITS
(P)LTD. IN ILR 1981(1) KERAL SERIES 420. The Division
Bench of this Court held that under section 19 of the Limitation Act
it is not every part payment that would save limitation but only
payment the acknowledgment of which appears in the handwriting
of, or in writing signed by the person making the payment.
In the result, judgment and decree passed by the court below
are set aside. Appeal allowed. The suit stands dismissed. There will
be no order as to cost.
( HARUN-UL-RASHID, JUDGE)
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