2003 (10) TMI 404 - HC - Companies Law

Summary

Issues:
- Interpretation of Articles 1, 14, and 137 of the Limitation Act in a claim under section 446(2)(b) of the Companies Act, 1956.
- Determining whether the claim is barred by the law of limitation.
- Assessment of mutual, open, and current account with reciprocal demands between the parties based on the provided evidence.

Analysis:
1. The petitioner sought a sum from the respondent under section 446(2)(b) of the Companies Act, 1956, for goods supplied but not paid for, with interest at 12% p.a. The respondent contested the claim, alleging full payment and invoking the law of limitation.

2. The petitioner presented accounts and invoices to support the claim, asserting a mutual, open, and current account. The respondent disputed the application of Article 1 of the Limitation Act, proposing Articles 14 or 137 instead. The respondent claimed the absence of reciprocal demands between the parties for the application of Article 1.

3. Legal arguments centered on whether the transactions constituted a mutual account with reciprocal demands. The petitioner relied on the nature of the accounts and transactions, citing relevant case law. The respondent countered, emphasizing the lack of mutual obligations and reciprocal demands in the dealings.

4. The court examined precedents defining mutual accounts, reciprocal demands, and contractual relationships. It concluded that the provided evidence did not establish a mutual, open, and current account with reciprocal demands between the parties, leading to the inapplicability of Article 1 for limitation purposes.

5. Considering the absence of mutual accounts and the nature of the claim, the court analyzed Articles 14 and 137. It determined that Article 137, as the residuary provision, applied to the case, setting the starting point for limitation from the date of delivery of goods under each invoice.

6. The court found most of the invoices to be time-barred except for specific ones, directing the respondent to pay the outstanding amount with 12% interest p.a. from the date of delivery. The decision aligned with legal principles and the interpretation of relevant statutes and case law, providing a comprehensive resolution to the dispute.