2016 (5) TMI 1573 - HC - Indian Laws

Suit for recovery of money - time limitation - identical orders of dismissal in limine without even issuing the summons to the respondents/defendants - HELD THAT - The limitation for a suit for price of goods sold and delivered by the appellant/plaintiff to the respondent/defendant in each of the suit from which these appeals arise provided in Article 14 of the Schedule is three years. It was not the case of the appellant/plaintiff herein that the price was agreed to be paid after the expiry of fixed period of credit. The suits were admittedly instituted more than three years after the date of sale and delivery of goods. However the appellant/plaintiff sought to extend the period of limitation by relying upon the payments made by cheques which were dishonoured. The said cheques were of a date before the expiry of period of three years from the date of sale and delivery of goods but were not presented for payment immediately and when presented later though within the period of their validity were dishonoured. It is not the case that the cheques were ante-dated. The cheques though dishonoured are deemed to be payment within the meaning of Section 19. Unlike the present case where the appellant/plaintiff to bring the suit within limitation has to necessarily rely on Section 18 and/or 19 for extension of limitation Steel Authority of India Ltd. 2007 (8) TMI 811 - DELHI HIGH COURT was not concerned therewith; that was a case of a suit for recovery of amount which was subject matter of cheque simpliciter. Similarly JHANG BIRADARI HOUSING RESIDENTS SOCIETY VERSUS BHARAT BHUSHAN SACHDEVA AND ORS. 2015 (8) TMI 1542 - DELHI HIGH COURT was not a suit for recovery of money but a suit for declaration of title to immovable property and the period of limitation provided wherefore commences from the date when the right to sue first accrues The limitation for a suit for recovery of price of goods as the subject suits does not commence from the date when the right to sue accrues but commences from the date of sale and delivery of goods and the extension of limitation by issuance of cheques which were dishonoured claimed by the appellant/plaintiff commences from the date when the acknowledgment was so signed and which can only be the date of the cheque and not the date of dishonour of cheque. To hold otherwise would be doing violation to the language of Section 18. Appeal dismissed.

Summary

Issues Involved:
1. Dismissal of suits for recovery of money as barred by time.
2. Objection regarding court fees on interest accrued after the date of institution of the suit.
3. Determination of the relevant date for limitation in suits based on dishonoured cheques.
4. Consideration of past liability in determining the limitation period.
5. Conflicting judgments regarding the commencement of the limitation period for suits based on dishonoured cheques.

Issue-wise Detailed Analysis:

1. Dismissal of suits for recovery of money as barred by time:
The appeals challenge the dismissal of suits filed by the appellant for recovery of money, which were dismissed in limine by the Additional District Judge (ADJ) without issuing summons to the respondents/defendants. The suits were dismissed on the grounds that they were barred by time. The ADJ held that although a suit on a cheque can be filed within three years of the date of dishonour, in this case, the cheques were acknowledgements of past liability, making the date of the cheque, not the date of dishonour, relevant for limitation purposes. Since the suits were filed beyond three years from the date of the cheques, they were deemed time-barred.

2. Objection regarding court fees on interest accrued after the date of institution of the suit:
The Registry raised an objection regarding the court fees paid, asserting that court fees are payable on interest accrued after the date of institution of the suit. This objection was overruled by the court, finding no merit in it.

3. Determination of the relevant date for limitation in suits based on dishonoured cheques:
The appellant contended that the limitation period should commence from the date of dishonour of the cheques, not the date of the cheques. The appellant relied on the case of Steel Authority of India Ltd. v. Rohini Strips Ltd., which held that the limitation period starts from the date of dishonour of the cheque. However, the court referred to its judgment in BPL Ltd. v. Hindustan Traders Co., which held that the limitation period commences from the date of the cheque under Article 35 of the Limitation Act, 1963.

4. Consideration of past liability in determining the limitation period:
The court emphasized that in a suit for recovery of money based on a dishonoured cheque, the plaintiff must plead and prove the consideration for which the cheque was issued. The past history of the transaction cannot be ignored. The court disagreed with the view that the past history is irrelevant, as held by the Karnataka High Court in Surendra v. Smt. Padma and G. Basavaraj v. H.M. Shivapppa Patel.

5. Conflicting judgments regarding the commencement of the limitation period for suits based on dishonoured cheques:
The court examined various judgments to resolve the inconsistency in the commencement of the limitation period. It referred to the Supreme Court's judgment in Jiwanlal Achariya v. Rameshwarlal Agarwalla, which held that the limitation period for a cheque commences from the date of the cheque, not the date of dishonour. The court also cited Technofab Engineering Ltd. v. Nuchem Weir India Ltd., which held that the issuance of a cheque extends the limitation period by three years from the date of the cheque, even if the cheque is dishonoured.

Conclusion:
The court concluded that the suits filed by the appellant were indeed barred by time. The limitation period for a suit for the price of goods sold and delivered commences from the date of sale and delivery, and the issuance of cheques extends the limitation period from the date of the cheque. The court dismissed the appeals, finding no error in the ADJ's conclusion that the claims were time-barred based on the averments in the plaints. The court also overruled the objection regarding court fees and emphasized the necessity of pleading and proving the consideration for which the cheques were issued. The appeals were dismissed with no costs.