Case Note & Summary
The plaintiff, The Paper Products Ltd., filed a summary suit against the defendant, M/s. Venkataramana Food Specialties Ltd., for recovery of Rs. 16,08,530/- being the outstanding amount for packaging materials supplied. The plaintiff had supplied goods as per purchase orders from 10 October 2006 to 23 August 2007. The total amount due was Rs. 29,40,232.11, out of which the defendant paid Rs. 18,16,831/- by eight cheques, leaving a balance of Rs. 11,23,401/-. The plaintiff added interest at 24% per annum, making the total claim Rs. 16,08,530/-. The defendant confirmed the outstanding amount of Rs. 19,85,040.44 as on 31 December 2007 by a letter. Despite a legal notice dated 9 April 2009, the defendant failed to pay. The plaintiff obtained leave under Clause XII of the Letters Patent on 10 November 2009 and filed the suit on 10 December 2009. The defendant entered appearance on 3 March 2010. The plaintiff took out a Summons for Judgment on 20 April 2010. The defendant filed a reply on 24 March 2011, and the plaintiff filed a rejoinder on 29 March 2011. The court considered whether the suit was maintainable and whether the defendant had a triable defence. The court held that the suit was maintainable as the defendant had confirmed the debt and made part payments, and the suit was within limitation. The court rejected the defendant's defence regarding calculation of arrears of Rs. 35,999.89 as not credible. The court allowed the Summons for Judgment and passed a decree in favour of the plaintiff for the claimed amount with interest.
Headnote
A) Civil Procedure - Summary Suit - Maintainability - Order 37 of Code of Civil Procedure, 1908 - Summary suit for recovery of outstanding payment for goods supplied is maintainable even if based on running account, especially when the defendant has confirmed the debt and made part payments - The court held that the suit is maintainable and within limitation (Paras 6-7). B) Limitation - Running Account - Confirmation of Debt - Limitation Act, 1963, Article 14 - Suit based on running account is within limitation when the last payment or confirmation of debt is within three years of filing - The court held that the suit is within limitation (Para 6). C) Evidence - Confirmation of Debt - Acknowledgment of Liability - Indian Evidence Act, 1872, Section 17 - Confirmation letter dated 31 December 2007 acknowledging the outstanding amount of Rs. 19,85,040.44 constitutes an acknowledgment of liability - The court held that the confirmation letter supports the plaintiff's claim (Para 6).
Issue of Consideration
Whether a summary suit for recovery of outstanding payment for goods supplied is maintainable when the defendant has made part payments and confirmed the debt, and whether the defence raised by the defendant is sufficient to grant leave to defend.
Final Decision
Summons for Judgment is allowed. The defendant is directed to pay the plaintiff the sum of Rs. 16,08,530/- with interest at 24% per annum from the date of filing of the suit until payment. The suit is decreed accordingly.
Law Points
- Summary suit maintainable for recovery of debt based on running account
- confirmation of debt by debtor
- part payment acknowledgment
- limitation period for suit on running account
