Case Note & Summary
The case involves a suit for recovery of money filed by M/s. Jindal Steels, a partnership firm (plaintiff), against Trident Architectural Aluminium Private Limited and its Managing Director (defendants). The plaintiff alleged that it supplied goods to the first defendant as per purchase orders, and it was mutually agreed that payment would be made within thirty days of invoice. Despite repeated demands, the defendants failed to pay the outstanding amount of Rs. 5,00,000. The defendants filed a written statement admitting the liability but claimed that the suit was barred by limitation as the last supply was made on 31.03.2010 and the suit was filed on 05.11.2013, beyond the three-year limitation period. The trial court dismissed the suit holding it was time-barred. The plaintiff appealed under Section 96 of CPC. The High Court framed the issue of limitation and examined whether the admission in the written statement constituted an acknowledgment under Section 18 of the Limitation Act. The court noted that the defendants in their written statement admitted the liability and promised to pay, which amounts to a clear acknowledgment of liability. The court held that such acknowledgment extends the limitation period, and the suit is not barred. The court also observed that the defendants did not specifically deny the plaint averments regarding supply and payment terms, which amounts to admission under Order VIII Rule 5 CPC. Accordingly, the High Court allowed the appeal, set aside the trial court's decree, and decreed the suit in favor of the plaintiff for the claimed amount with interest at 6% per annum from the date of suit till realization.
Headnote
A) Limitation Act - Acknowledgment of Liability - Section 18 - Admission in Written Statement - The suit for recovery of money was filed beyond three years from the date of last supply. However, the defendant in its written statement admitted liability and promised to pay. The court held that such admission constitutes a valid acknowledgment under Section 18 of the Limitation Act, 1963, which extends the limitation period. The suit is not barred by limitation. (Paras 5-8) B) Civil Procedure Code - Admission - Order VIII Rule 5 - Non-Traversal of Plaint Averments - The defendant did not specifically deny the plaint averments regarding supply of goods and payment terms. The court held that such non-traversal amounts to admission of facts, and the plaintiff is entitled to a decree based on those admissions. (Paras 4-6) C) Civil Procedure Code - Appeal - Section 96 - First Appeal Against Decree - The appeal was filed under Section 96 of CPC against the trial court's decree dismissing the suit. The High Court, after re-appreciating evidence, set aside the trial court's finding on limitation and decreed the suit in favor of the plaintiff. (Paras 1-10)
Issue of Consideration
Whether the suit for recovery of money is barred by limitation and whether the admission of liability in the written statement amounts to an acknowledgment under Section 18 of the Limitation Act, 1963.
Final Decision
Appeal allowed. The judgment and decree of the trial court dated 31.08.2016 in O.S. No. 1234/2013 is set aside. The suit is decreed in favor of the plaintiff for Rs. 5,00,000 with interest at 6% per annum from the date of suit till realization. No order as to costs.
Law Points
- Admission of liability in written statement constitutes acknowledgment under Section 18 of Limitation Act
- 1963
- saving suit from limitation
- Suit for recovery of money based on invoices
- Order VIII Rule 5 CPC - admission by non-traversal
- Section 96 CPC - appeal against decree
