Case Note & Summary
The appellant, a registered partnership firm dealing in poultry feed, sought recovery of the outstanding balance from the respondents for goods sold and delivered on credit. The last delivery of goods occurred on 11 December 1989, and the last payment on account was made on 7 October 1992. The appellant filed a suit for recovery on 4 October 1995, after more than three years from the last delivery. Both the trial court and the first appellate court dismissed the suit as barred by limitation, holding that the suit was for recovery of price of goods sold and delivered and that the period of limitation commenced from the date of last delivery under Article 14 of the Limitation Act, 1963. The appellant contended that the suit was within limitation because the last payment was made within three years before filing, and that the account continued. The respondents argued that the suit was a simple suit for price of goods, not a suit for accounts, and that under Article 14 the limitation ran from the date of delivery, making the suit time-barred. The High Court examined the relevant provisions and precedents, particularly the Division Bench decisions in Atmaram Vinayak Kirtikar v. Lalji Lakhamsi and Vijaykumar Satischandra and Co. v. Rajgopal Badrinarayan Malpani, which established that in a suit for recovery of price of goods sold and delivered, the limitation period is three years from the date of the last delivery, irrespective of subsequent part payments. The Court noted that the suit was not one for accounts and that Section 20 of the Limitation Act could not extend limitation because of the specific starting point provided in Article 14. Since the last delivery was on 11 December 1989 and the suit filed on 4 October 1995, it was clearly beyond the three-year limitation period. The Court found no reason to interfere with the concurrent findings of the courts below and dismissed the second appeal, holding that the suit was barred by limitation.
Headnote
A) Limitation - Recovery of Price of Goods Sold and Delivered - Article 14, Limitation Act, 1963 - The suit for recovery of balance price of goods sold and delivered on credit is governed by Article 14, and limitation of three years begins from the date of last delivery, not from the date of last payment. The last payment does not extend limitation under Article 14 as it is not a suit for accounts. The suit filed beyond three years from the last delivery (11.12.1989) on 4.10.1995 was thus barred by limitation. Held that the suit was time-barred and concurrent findings of lower courts dismissing the suit were correct. (Paras 3-5)
Issue of Consideration
Whether the suit for recovery of balance price of goods sold and delivered, filed more than three years after the last delivery, is barred by limitation under Article 14 of the Limitation Act, 1963, despite last payment having been made within three years before filing
Final Decision
Second Appeal No. 874 of 2005 is dismissed, confirming the concurrent findings of the courts below that the suit is barred by limitation
Law Points
- Limitation for recovery of price of goods sold and delivered commences from date of last delivery under Article 14 of Limitation Act
- 1963
- suit for recovery of price of goods sold is governed by Article 14 and not by accounts or payment acknowledgment
- Section 20 of Limitation Act
- 1963 inapplicable when no subsequent transaction after last delivery
Case Details
2005 LawText (BOM) (12) 53
Second Appeal No. 874 of 2005
T.s. Ingale, Kuldeep S. Patil
M/s Daulat Feeds Distributors, A Registered Partnership Firm, Through Partner B.R. Patil
1. M/s Razvi Brothers, Through its partner. 2. Shri Mubarak Babalal Razvi
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Nature of Litigation
Second Appeal against dismissal of suit for recovery of outstanding account for purchase of poultry feed on ground of limitation
Remedy Sought
Appellant sought reversal of lower courts' decree and decree in its favor for recovery of balance amount
Filing Reason
Lower courts dismissed suit as time-barred, holding that suit for recovery of price of goods sold and delivered must be filed within three years from date of last delivery
Previous Decisions
Trial Court and First Appellate Court dismissed suit as barred by limitation
Issues
Whether the suit for recovery of balance price of goods sold and delivered is barred by limitation under Article 14 of the Limitation Act, 1963, when the last payment was made within three years before suit filing but last delivery was more than three years prior
Whether the suit could be treated as a suit for accounts to avail benefit of extended limitation
Submissions/Arguments
Appellant argued that the last payment on 7.10.1992 kept the suit within limitation, as it was within three years before filing, and the account continued
Respondents argued that the suit was for price of goods sold and delivered, governed by Article 14, and limitation ran from date of last delivery (11.12.1989), making the suit filed in 1995 time-barred
Ratio Decidendi
In a suit for recovery of the price of goods sold and delivered on credit, the period of limitation is three years from the date of the last delivery of goods, as per Article 14 of the Limitation Act, 1963. The last payment made on account does not extend the limitation period, as such a suit is not a suit for accounts. The provisions of Section 20 of the Limitation Act do not apply to extend limitation in such a case because Article 14 provides a specific starting point.
Judgment Excerpts
The suit for recovery of the balance amount in such transaction of sale and purchase of goods governed by the provisions of Limitation Act, basically Article 1 and or Article 14 of the Limitation Act. The suit itself based on the recovery of the amount of goods sold and delivered. The period of limitation will commence from the date of the transaction, lastly entered into between the parties. In the present case, that was 11th December, 1989, when the account was closed. Admittedly, the suit in question was filed on 4/10/1995 and is was beyond the period of limitation.
Under Article 14 of the Act, the cut-off date for starting the period of limitation is the date of purchase or delivery of the goods by the appellants-defendants on credit.
In view of the above observation and clear findings, there is no reason to interfere with the concurrent findings given the Courts, which is within the frame work of law, as well as within the frame of record. Second Appeal is therefore, dismissed.
Procedural History
The plaintiff filed a suit for recovery of outstanding account for purchase of poultry feed. The trial court dismissed the suit as barred by limitation. The first appellate court confirmed the dismissal. The plaintiff then filed the present second appeal before the Bombay High Court.
Acts & Sections
- Limitation Act, 1963: Article 1, Article 14, Section 20
