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Case Title: M/S VOIR INDIA ELECTRONICS PVT. LTD. THROUGH ITS DIRECTOR Versus M/S POLYBLENDS (INDIA) PVT. LTD. THROUGH ITS DIRECTOR

Case No: C.R.P. 69/2022 & CM APPL. 22206/2022

Decided on: 20th May , 2024

Quorum: HON’BLE MR. JUSTICE DHARMESH SHARMA

Facts of the case

A debit balance of Rs. 10,25,916/-that became payable by the petitioner/defendant to the respondent/plaintiff was at the center of the dispute between M/S Voir India Electronics Pvt. Ltd. (petitioner/defendant) and M/S Polyblends (India) Pvt. Ltd. (respondent/plaintiff). In their business interactions with the respondent, the petitioner bought materials like colored plastic dana and reinforced ABS on credit and paid the raised invoices. The amount was not paid despite a legal notice dated 16.01.2018 requesting payment, so on 03.04.2018 the respondent/plaintiff filed a suit for recovery against the petitioner/defendant [T6]. In its ruling, the Trial Court examined the idea of “cause of action” as well as the question of territorial jurisdiction in light of the Memorandum of Association.

Issues

1. Did M/S Voir India Electronics Pvt. Ltd. Successfully argue that the lawsuit brought by M/S Polyblends (India) Pvt. Ltd. Was precluded by limitation under Article 15 of the Limitation Act, 1963?

2. Did M/S Voir India Electronics Pvt. Ltd.’s dishonored checks to M/S Polyblends (India) Pvt. Ltd. Constitute an admission of debt and liability, thereby extending the statute of limitations?

3. Was there any proof to back up the claim that M/S Voir India Electronics Pvt. Ltd. Gave M/S Polyblends (India) Pvt. Ltd. Postdated checks that were misused?

4. Based on the addresses of the plaintiff and defendant listed on the invoices and the plaint’s face value, did the Trial Court have the authority to consider the lawsuit?

Legal Provisions

Section 18 of the Limitation Act, 1963 addresses the impact of written acknowledgment on the statute of limitations. According to this clause, a written acceptance of culpability signed by the party asserting a claim against property or a right may cause a new statute of limitations to begin running at the time of acknowledgment [T3]. Section 8 of the Limitation Act, 1859, which is equivalent to Article 1 of the Schedule to the Limitation Act, 1963, is the legal provision that does away with the concept of implied acknowledgment in cases of accounts between non-merchants and merchants. This section addresses lawsuits pertaining to current balances of accounts between traders and merchants, outlining the statute of limitations and the time frame from which the period begins to run.

Appellant contentions

Argument that the suit is blocked by limitation: According to Article 15 of the Limitation Act, 1963, the appellant argued that the respondent’s suit was barred by limitation since it was filed after the statute of limitations had passed. According to the appellant, the statute of limitations began on a particular day and ended before the lawsuit was filed [T3]. Misuse of postdated checks: The appellant brought up the concern that several postdated checks that were given to the respondent had been mishandled. They said that their stance on this issue was supported by the Division Bench ruling in Taneja Skins Company Private Limited v. Bharat Skins Corporation [T5]. These claims served as the foundation and were essential to the appellant’s case against the respondent.

Respondent Contentions

Recognition of debt and liability through dishonored checks: According to the respondent, the appellant’s dishonored checks constituted an acknowledgement of debt and liability, extending the statute of limitations in accordance with Section 18 of the Limitation Act, 1963. To bolster their argument, they cited the ruling in Hindustan Apparel Industries v. Fair Deal Corporation [T3]. Adherence to the statute of limitations: The respondent said that since they got their last payment on a particular date and sent out their legal notice within the allotted time, their lawsuit was filed fully within the statute of limitations. They contended that the lawsuit complied with the statute of limitations because it was filed within three years of the date of the legal notice [T2].

Court Analysis and Judgement

The respondent, M/S Polyblends (India) Pvt. Ltd., and the appellant, M/S Voir India Electronics Pvt. Ltd., both made reasons and contentions that the court considered during the case. On May 20, 2024, the court rendered its decision after taking into account the facts, the laws, and the precedents that both parties had referenced. Limitation Period: The court considered the appellant’s claim regarding the acknowledgment of debt through dishonored checks, as well as the respondent’s contentions regarding the applicable limitation period. To evaluate the effect of the acknowledgment on the limitation period [T3], [T4], the court cited Section 18 of the Limitation Act, 1963 and the ruling in Hindustan Apparel Industries v. Fair Deal Corporation. The court also took into consideration the respondent’s argument regarding compliance with limitation. Since they got the last payment on a particular day and sent out the legal notice in the allotted time, the lawsuit was filed within the allotted statute of limitations. A key component of the court’s approach was this adherence to the statute of limitations [T2]. The court rendered its decision after considering the arguments, case law, and legal precedents that were put up by each party.

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Judgement Analysis Written by – K.Immey Grace

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