IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 06.06.2011 CORAM THE HONOURABLE MR.JUSTICE S.PALANIVELU C.S.No.111 of 1999 M/s.Unipar Leather Chemicals Private Limited, Represented by its Chairperson & Wholetime Director ... Plaintiff vs. 1.M.O.H. Leathers Private Limited 2.Kaywear Exports ... Defendants Plaint under Order VII Rule 1 CPC read with O.S. Rules Order IV Rule 1. For Plaintiff : Mr.Kalyan Jabakh for M/s.Surana & Surana For Defendants : Mr.V.Anand for M/s.K.R.Hariharan JUDGMENT This is a money suit. 2. The following are the allegations contained in the plaint - 2(A) The plaintiff had supplied goods to the defendants on various dates as stated in the Statement of Accounts. On various occasions, the plaintiff had been calling upon the defendants to regularise their accounts and to clear their dues. The defendants have been promising to do so but have failed and neglected to do so. The defendants, by their letter dated 12.02.1996 to the plaintiff have admitted their dues to the tune of Rs.20,41,212.84 being the outstanding as per their Statement of Account in respect of the 1st defendant and a sum of Rs.4,11,170.88 in respect of the 2nd defendant. Thus, totally the defendants admit that they are due to the plaintiff to the tune of Rs.24,52,383.72. The defendants being a single entity and also acting as a single entity for all transactions with the plaintiff, had promised to clear the outstandings by way of payment of Rs.3 Lacs each month starting from February, 1996. The defendants assured the plaintiff to try out their level best to clear this outstanding amount as early as possible. Inspite of repeated requests and reminders, the defendants have not cared to settle the outstanding and clear their account. 2(B) The entire transactions between the plaintiff and the defendants are commercial in nature. The defendants were to make payments of the Invoices as and when raised. In case of delay, the defendants were liable to pay interest at the rate of 24% per annum on the amount outstanding. As on date, the defendants are due and liable to pay a sum of Rs.17,65,716.27 towards interest on the total outstanding. Hence, the defendants are totally due and liable to pay a sum of Rs.42,18,099.99 to the plaintiff. 2(C) As the various requests made by the plaintiff did not prove fruitful, the plaintiff sent a legal notice dated 23.01.1999 to the defendants calling upon them to pay the outstandings due together with interest at 24% per annum. The defendants have till date not paid the outstandings due together with interest. The defendants have not replied to the legal notice and hence the plaintiff has filed the present suit. 3. In the written statement filed by the first defendant, it is alleged that the 1st and 2nd defendants are two distinct and separate entities. The 1st defendant is a limited company and the 2nd defendant is a partnership firm. The cause of action against the defendants is different and therefore the suit is bad for mis-joinder of parties and mis-joinder of causes of action. The suit claim is for the period from 11.01.1993 to 31.05.1995 but the suit was filed in the year 1999. Hence, the suit is barred by limitation and liable to be dismissed. 4. The following are the issues framed in the suit - 1. Whether the plaintiff is entitled to the suit claim of Rs.42,18,099/- alongwith interest at the rate of 24% per annum on the principal sum of Rs.24,52,383.72 as o n the date of filing of the suit? 2. Whether the first defendant treated the accounts of the 1st and 2nd defendants as a single account? 3. Whether the suit is maintainable, since the cause of action is different (first defendant is a limited company and the second defendant is a partnership firm)? 4. Whether the first defendant in its letter dated 12.2.1996 has acknowledged and agreed to pay the liability of the first and second defendants payable to the plaintiff in the manner stated therein? 5. Whether the second defendant' is a necessary party to the suit in view of letter dated 12.2.1996? 6. Whether the suit is bad for misjoinder of parties and misjoinder of cause of action as alleged by the defendant? 7. Whether the suit as filed is barred by limitation? 8. Whether the defendants are jointly and severally liable to pay the suit claim amount? 9. Whether the plaintiff can file a single suit when the status or entity of the first and second defendant are different? 10. To what relief the parties are entitled ? Issue Nos.2 to 6, 8 and 9 :- 5. The plaintiff is a dealer in leather chemical goods. They were having business transactions with the defendants and for the goods despatched by the plaintiff, the defendants used to pay the amounts then and there. The plaintiff has produced various invoices to show that the plaintiff had been sending the goods to the defendant. Ex.P34 is the article of association and Ex.P35 is the memorandum of association of the 1st defendant company. Ex.P1 is the statement of accounts which shows the outstanding payable to the plaintiff by both the defendants on separate heads under the defendants names. Ex.P5 to P33 are the xerox and originals of invoices raised by the plaintiff on the defendants. When the xerox copies were marked, they were objected to by the defendant's side. The liability under these invoices constitutes the suit claim. The 1st defendant is said to have admitted the liability by means of Ex.P41. At the outset, Ex.A2, xerox copy of Ex.P41 was filed and subsequently PW1 was recalled and examined and she produced the original in Ex.P41 which plays crucial role in this case. 6. Ex.P41 is dated 12.02.1996. It is profitable to extract the entire contents of the letter to appreciate the matter in issue. "This has reference to the meeting and undersigned had with your Chair person, Ms.Shahzeman M.Parpia in respect of settling of outstandings in the name of M.O.H. Leathers Pvt. Ltd., and our sister concern KAYWEAR EXPORTS. The amount outstanding as per the list submitted by you is - 1.M.O.H. Leathers Pvt. Ltd., : Rs.20,41,212.84 2.Kaywear Exports : Rs. 4,11,170.88 We hereby come to an agreement that we will be liquidating this outstandings by way of payment Rs.3,00,000/- every month starting from February 1996. We assure you we will try our level best to clear this outstanding as early as possible. We thank you very much for your indulgence so far." 7. Ex.P41 answers all the questions raised in this case. Firstly, the 1st defendant wherein M.O.H. Iqbal has admitted the liability, i.e. the suit claim in unambiguous terms. Secondly, this letter shows that the 2nd defendant is also a sister concern or the 2nd defendant, being controlled and managed by the 1st defendant. Thirdly, cause of action for filing the suit flows from Ex.P41 since for both the defendants, the 1st defendant undertakes to pay the outstanding amount. Fourthly, the 2nd defendant, though being controlled and managed by the 1st defendant, has to be impleaded as a necessary party to the present suit. Fifthly, by means of Ex.P41, it can be concluded that the suit is not bad for mis-joinder of parties and mis-joinder of causes of action since by this letter itself the liabilities of each of the defendant is admitted. The letter has been produced by the plaintiff. The 2nd defendant is remaining ex parte. The 1st defendant has not chosen to examine himself before the Court to deny neither the contents of the letter nor the liability. 8. Pointing out the non-examination of the defendant, the learned counsel for the plaintiff Mr.Kalyan Jabakh would contend that adverse inference has to be drawn for non-examination of the defendant. In support of his contention, he placed reliance upon a decision of Bombay High Court (Nagpur Bench) reported in MANU/MH/0711/2003 [Kisanial Maniklal Rathi vs. Dinkar Yashwant Patil] in which it is held that the party who does not enter the witness-box runs a great risk of presumption being drawn against him and it is clear that when a party abstains himself from giving substantial evidence, adverse inference can be drawn against it. In the present case, i.e. there is no evidence on the side of the defendants to controvert Ex.P41. Hence, there is no impediment for this Court to draw adverse inference on the absence of defendants side witness. The necessary corollary would be that the plaintiff is entitled for the suit claim. 9. In view of the above, I answer Issue Nos.2 to 5, 8 and 9 in the affirmative and Issue No.6 in the negative. Issue No.7 10. It is contended by the defendants that the suit is barred by time. A specific plea has been raised in the written statement that the suit transactions were during the period from 11.01.1993 to 31.05.1996 and the suit was filed in the year 1999, beyond three years and hence the suit is barred by limitation. But the 1st defendant for himself and on behalf of the 2nd defendant has admitted the liability on 12.02.1996 by means of Ex.P41. Hence, the time will run from the date of Ex.P41, i.e. 12.02.1996. In this respect, the learned counsel for the plaintiff placed reliance upon a decision of this Court reported in MANU/TN/2722/2010 [Om Prakash Hundia Prop. Hrinkar Exports Vs. Sanco Trans Limited, represented by its Managing Director, Sri.V.Upendran] wherein the learned Judge has followed a decision of the Apex Court and held that the period of limitation will start from the date of acknowledgment. The relevant paragraphs in the decisions runs as follows - 28. It is well settled principle in law that in case of loan recovery if an acknowledgment of debt in writing is made the limitation period well start from the date of signing of the acknowledgment and not from any other date subsequent to the signing of the acknowledgment, as opined by this Court. Once the period of limitation commences that does not stop and while calculating the limitation period equitable consideration is out of question as per decision of Boota Mal v. Union of India [MANU/SC/0301/1962 : AIR 1962 S.C. 1716]. 29. At this stage, this Court aptly points out that in the decision Bengal Credit Corporation vs. Central Bank of India [MANU/WB/0131/1978 : AIR 1978 Cal 567], wherein it is held that 'Confirmation by a letter amounts to an Admission.' 11. The plaint was presented into the Court on 04.02.1999. Hence, within three years from the date of Ex.P41, the suit has been filed. Hence, the suit is not barred by limitation. I answer this issue in the negative. Issue No.1 and 10: 12. In view of the above said discussions, the Court has reached a conclusion that in view of the admission of liability in Ex.P41 and the fact of the suit having been filed within the period of limitation, it is well within time and that the 1st defendant has avoided the witness-box to challenge Ex.P41 and hence the plaintiff is entitled to get the relief as prayed for. These issues are answered accordingly. In the result, the suit is decreed as prayed for with costs. rgr