IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 18TH JUNE 2009 / 28TH JYAISHTA 1931 AS.No. 441 of 1997() -------------------- OS.400/1993 of II ADDL.SUB COURT, KOZHIKODE .................... APPELLANT(S)/Defendant: ------------------------------------ M/S DURON RUBBER PRODUCTS THIRUVANGOOR, A PARTNERSHIP FIRM REP.BY MANAGING PARTNER, BABUKUMAR, THIRUVANGOOR AMSOM, KOYILANDI TALUK. BY ADV. SRI.M.C.SEN, SENIOR ADVOCATE SMT.SHAHNA KARTHIKEYAN SRI.S.PRAKASH SRI.M.P.SREEKRISHNAN RESPONDENT/PLAINTIFF: ------------------------------------ M/S S.GOPAL KAMATH, A FIRM 4/1438 OLD COURT ROAD, CALICUT 32, REP.BY PARTNER G.HIRENDRA KAMATH. ADV. SRI.M.RAMESH CHANDER SRI.M.VIJAYAKUMAR THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 18/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: A.S.441/1997 ORDER ON CMP NO.3551 OF 1997 IN A.S.NO.441 OF 1997 DISMISSED 18.6.2009 SD/- K.S.SURENDRA MOHAN, JUDGE TRUE COPY P.A.TO JUDGE K.SURENDRA MOHAN, J. ------------------------------------------- A.S.No. 441 of 1997 ------------------------------------------- Dated this the 18th day of June, 2009 JUDGMENT The appellant is the defendant in O.S.No.400 of 1993 of the Court of the Subordinate Judge, Kozhikode. As per the judgment and decree under appeal, the respondent/plaintiff has been granted a decree allowing him to recover an amount of Rs.27,334.51 with future interest at 18% per annum from the defendant, with proportionate costs. The said decree is under challenge in the above appeal. 2. The suit was filed by the plaintiff alleging that he was the distributor and the agent of chemicals and carbon black. The defendant was purchasing the above articles from the plaintiff firm and as per the accounts maintained, an amount of Rs.37,484.41 is due to the plaintiff as on 31.7.1991. In spite of repeated demands and a registered letter dated 31.7.1991, the defendant failed to pay the amount due. Though a notice was issued through their lawyer, it was replied to, raising false allegations. Therefore, the plaintiff prayed for a decree for realisation of the amount with interest and costs. A.S.No.441/1997 2 3. The appellant/defendant filed written statement alleging that the suit was not maintainable. The accounts were not produced along with the plaint and the defendant was not given a copy of the accounts. According to the defendant, copy of the accounts relied on by the plaintiff was not sufficient to support the claim of the plaintiff. The defendant used to purchase carbon black and chemicals from the plaintiff. However, the carbon black supplied was of inferior quality and this resulted in defects in the quality of tread rubber manufactured by the defendant. Consequently, there were serious complaints from the customers of the defendant and it affected his good will and he incurred a loss to the tune of Rs.85,000/-. When the above facts were brought to the notice of the plaintiff, they agreed to compensate the same. While so, a notice was received from the plaintiff demanding an amount of Rs.27,334.51. As the defendant had no liability to pay the said amount, a reply notice was issued on 5.10.1991. The plaintiff knew that the purchase of carbon black by the defendant was for the manufacture of tread rubber and that he was bound to supply good quality material. Supply of carbon black of inferior quality amounted to breach of contract, for A.S.No.441/1997 3 which the defendant was entitled to recover damages. The defendant was not liable to pay any amount to the plaintiff. According to the defendant, the last payment was made on 26.10.1989 and thereafter there was no acknowledgment of any liability by the defendant. Therefore, the suit was barred by limitation. On the above pleadings, the defendant prayed for dismissal of the suit. 4. The court below raised four issues and tried the suit on the above pleadings. The evidence in the case consists of the oral testimonies of PW1 and DW1 and Exts.A1 to A5 and B1 to B4 documents. 5. The point that arises for consideration is: Whether the court below was right in accepting the plaint claim and decreeing the suit? 6. The counsel for the appellant has attacked the judgment and decree of the court below on two grounds. According to the counsel, the last purchase by the appellant was on 26.10.1989. The suit was filed on 15.6.1993. Therefore, according to the appellant, the suit was time barred. However, as per the accounts maintained by the respondent/plaintiff, on 27.11.1990, a payment of Rs.250/- has A.S.No.441/1997 4 been credited in the account of the appellant. This payment is disputed by the defendant. Further, the counsel for the appellant points out that there is no averment in the plaint as required by Order VII Rule 6 explaining how the limitation has been saved in the present case. It is also pointed out that the payment of 27.11.1990 cannot be treated as an acknowledgment under Section 19 of the Limitation Act for the reason that there is no writing signed by the appellant accompanying the same as required by the said provision. The counsel for the respondent on the other hand points out that the suit is one for the balance due on a mutual, open and current account and therefore, the suit has been filed within the period of limitation stipulated by Article-1 of the Limitation Act, 1963. Since the last payment was on 27.11.1990, the limitation would start to run only from the close of the year in which the last payment was made. 7. The fact that the appellant was purchasing carbon black and other chemicals from the respondent firm for which an account was being maintained by the respondent is an admitted fact. The respondent/plaintiff contends that the amount outstanding as on 30.7.1991 was Rs.27,334.51. On A.S.No.441/1997 5 30.1.1991, a debit note of interest for Rs.10,149.90 has been entered in the account and the closing balance is shown as Rs.37,484.51. It is for the said amount that the suit was instituted. The amount is disputed by the appellant. The appellant seriously disputes the debit of Rs.10,149.90 made on the ground that the same was unilateral and unauthorised. A perusal of Exts.A1 to A3 accounts show that the amount up to 31.7.1991 is shown as Rs.27,334.51. PW1, the Managing Partner of the plaintiff firm has explained the addition. According to him, the debit note in page 2(3)(5) of Ext.A3 has been made as interest over due till that date. In cross examination, he admits that the debit was made without the permission of the defendant. Therefore, the court below has found that the plaintiff was not entitled to recover the amount of Rs.10,149.90 which represents interest, from the defendant. Therefore, the said claim of the plaintiff has been negatived. There is no cross appeal on the said aspect and thus the said finding of the court below has become final. 8. As noticed above, Exts.A1, A2 and A3 are the accounts of the plaintiff firm for the years 1989-1990, 1990- 1991 and 1991-1992. According to the plaintiff, the defendant A.S.No.441/1997 6 was having business transactions with them from 1984 onwards. A perusal of the accounts show that payments were being periodically made towards the amounts due to the plaintiff as per the accounts and that entries crediting payments made, were being entered in the accounts maintained in the name of the appellant. The accounts were duly inspected by the appellant who filed a petition for the purpose as I.A.No.310 of 1995. The petition was allowed and the original accounts were inspected by the defendant on 18.11.1995. However, the appellant has not been able to point out any discrepancy to justify a conclusion that the accounts were not maintained properly or that they were not maintained in the normal course of business. It can be seen that the same is an open and current account to which the payments made by the appellant were being periodically credited. Therefore, Article-1 of the Limitation Act, is the proper provision that is applicable to the present suit. According to the plaintiff, the limitation starts to run only from 27.11.1990, the date on which the last payment was made. The payment is disputed by the appellant/defendant. When the Managing Partner of the respondent firm was examined as A.S.No.441/1997 7 PW1, he has deposed that a receipt had been duly issued for the payment made on 27.11.1990, which is receipt No.7787. Since the appellant has not been able to point out any discrepancy or defect in Exts.A1 to A3 accounts to find that they were not true or correct, the only conclusion possible is that Exts.A1 to A3 are properly maintained accounts in the normal course of business. The entries in the said accounts are reliable and have to be accepted also for the additional reasons taken note of by the court below. The original accounts were scrutinised by the appellant with the permission of the court. However, no additional written statement was filed disputing the payment seen to have been made on 27.11.1990. Therefore, the rejection of the said line of defence, developed during the stage of evidence, is justified. 9. A perusal of the correspondence between the parties including the notice and reply notice, shows that the main dispute raised by the appellant was with regard to the defective quality of carbon black supplied by the appellant and the loss caused to him from the use of such defective materials. It is pertinent to note that though the appellant is alleged to have suffered loses due to supply of defective carbon black, no A.S.No.441/1997 8 action has been initiated by him for the redressal of any such grievance. 10. Since it has been found that Article 1 of the Limitation Act is the correct provision applicable to the present suit, the argument advanced by the counsel for the appellant construing the payment made on 27.11.1990 as an acknowledgment under Section 19 cannot be accepted. The decision, reported in Sant Lal Mahton v Kamla Prasad and others (AIR 1951 SC 477) pressed into service by the counsel for the appellant in support of the above contention also has no application. For the above reasons, it is found that there are no grounds to interfere with the judgment and decree appealed against. The appeal fails and is accordingly dismissed. No costs. K.SURENDRA MOHAN Judge css/ A.S.No.441/1997 9 K.SURENDRA MOHAN JUDGE --------------------------------------- AS.No.441 OF 1997 --------------------------------------- JUDGMENT 18.06.2009