1971 (4) TMI 100 - HC - Companies Law

Summary

Issues:
Recovery of loan amount with interest and costs, Suit barred by limitation, Acknowledgment of liability in letters, Appropriation of credits towards prior amounts due.

Analysis:

1. The plaintiff filed a suit for the recovery of a loan amount with interest and costs from the defendant. The plaintiff claimed that the defendant had dealings with them from 1953 to 1956, involving advances for goods imported by the defendant. The plaintiff asserted that the amounts advanced were to be repaid with interest. The defendant contended that the statement of account was incorrect, and the suit was barred by limitation.

2. During the trial, the defendant submitted lists of items considered as debit and credit. A Commissioner was appointed to investigate the transactions. The trial court found the dealings between the parties to be true but dismissed the suit on the grounds of limitation, stating that the claim for the period before 10-12-1955 was time-barred.

3. The main issue on appeal was whether the suit claim was barred by limitation. The plaintiff relied on letters as acknowledgment of liability to save the suit from limitation. However, the court found that the letters did not constitute an acknowledgment of liability under the Limitation Act. The plaintiff also failed to plead in the plaint that certain letters saved the suit from limitation.

4. The court analyzed the appropriation of credits towards prior amounts due. It was established that the debts were discharged in the order of time by the credits, irrespective of limitation. The defendant's argument that the plaintiff had appropriated each entry of credit towards specific transactions was dismissed, as it was not supported by the evidence.

5. The court concluded that the suit was not barred by limitation. The plaintiff was entitled to a decree for the principal amount due, with interest at 6% per annum from the date of the suit. The claim for interest prior to the suit was disallowed. The judgment and decree of the lower court were set aside, and the suit was decreed in favor of the plaintiff.

6. The plaintiff's appeal was allowed, and the defendant was directed to pay the plaintiff the principal amount due, along with interest. The plaintiff was also awarded proportionate costs for both courts.

This detailed analysis covers the issues of recovery of loan amount, limitation, acknowledgment of liability, and appropriation of credits, providing a comprehensive overview of the judgment.