RSA-1356-1989 IN THE HIGH COURT OF PUNJAB AND HARYANA M/s Reliable Agro Engineering Services Tarsem Singh (s CORAM : HON’BLE MS. JUSTICE MANDEEP PANNU Present: Mr. Rohit Sud, Advocate and Mr. Sameesh Bassi, Advocate for the appellant. Respondent was proceeded ex Vide order MANDEEP PANNU, 1. The present Regular Second Appeal has been filed by the appellant plaintiff, Reliable Agro Engineering Services Pvt. Ltd., assailing the judgment and decree dated 10.08.1988 passed by the learned lower appella judgment and decree dated 15.04.1987 of the learned Sub Judge, Jalandhar, decreeing the suit of the plaintiff, has been reversed. Brief Facts 2. The brief facts necessary for adjudication are that the appellant plaintiff, a duly incorporated company through its Managing Director Shri Balbir Raj Sondhi, instituted the present suit on 17.07.1984 for recovery of a sum of ₹57,311.05 comprising ₹34,971. towards interest and extension charges at the agreed rate of 18% per annum. The 1989 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH -.- RSA Reserved on: Date of Decision : Reliable Agro Engineering Services Pvt. Ltd VERSUS since deceased) through LR HON’BLE MS. JUSTICE MANDEEP PANNU Mr. Rohit Sud, Advocate and Mr. Sameesh Bassi, Advocate for the appellant. Respondent was proceeded ex-parte Vide order dated 17.09.2025 -.- MANDEEP PANNU, J. The present Regular Second Appeal has been filed by the appellant plaintiff, Reliable Agro Engineering Services Pvt. Ltd., assailing the judgment and decree dated 10.08.1988 passed by the learned lower appella judgment and decree dated 15.04.1987 of the learned Sub Judge, Jalandhar, decreeing the suit of the plaintiff, has been reversed. The brief facts necessary for adjudication are that the appellant plaintiff, a duly incorporated company through its Managing Director Shri Balbir Raj Sondhi, instituted the present suit on 17.07.1984 for recovery of a sum of ₹57,311.05 comprising ₹34,971.05 as balance principal amount and towards interest and extension charges at the agreed rate of 18% per annum. The -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA-1356-1989 (O&M) Reserved on:-24.09.2025 Date of Decision : 26.09.2025 Pvt. Ltd ....Appellant ....Respondent HON’BLE MS. JUSTICE MANDEEP PANNU Mr. Sameesh Bassi, Advocate for the appellant. parte The present Regular Second Appeal has been filed by the appellant plaintiff, Reliable Agro Engineering Services Pvt. Ltd., assailing the judgment and decree dated 10.08.1988 passed by the learned lower appellate Court whereby the judgment and decree dated 15.04.1987 of the learned Sub Judge, Jalandhar, decreeing the suit of the plaintiff, has been reversed. The brief facts necessary for adjudication are that the appellant plaintiff, a duly incorporated company through its Managing Director Shri Balbir Raj Sondhi, instituted the present suit on 17.07.1984 for recovery of a sum of 05 as balance principal amount and ₹22,340/ towards interest and extension charges at the agreed rate of 18% per annum. The - The present Regular Second Appeal has been filed by the appellant– plaintiff, Reliable Agro Engineering Services Pvt. Ltd., assailing the judgment and te Court whereby the judgment and decree dated 15.04.1987 of the learned Sub Judge, Jalandhar, The brief facts necessary for adjudication are that the appellant– plaintiff, a duly incorporated company through its Managing Director Shri Balbir Raj Sondhi, instituted the present suit on 17.07.1984 for recovery of a sum of ₹22,340/- towards interest and extension charges at the agreed rate of 18% per annum. The TRIPTI SAINI 2025.09.26 16:43 I attest to the accuracy and integrity of this document RSA-1356-1989 plaintiff’s case is that the defendant tubes and flaps worth Out of this, the defendant had admittedly made part payments totaling leaving the aforesaid balance. Despite service of legal notice, the defendant failed to pay the outstanding amount, leading to institution of th 3. The defendant, while admitting that goods worth purchased, took the stand that the entire liability stood discharged by making full payment and, therefore, nothing remained due. 4. On the pleadings of the parties, the trial Co issues, including Issue No.5 relating to limitation. Court are as under: 1. 2. suit 3. ₹2,62,351.05 4. OPD 5. 6. and signed? OPD 7. 5. Parties have led their evidence in support of their case. 1989 (O&M) plaintiff’s case is that the defendant–respondent had purchased on credit tyres, tubes and flaps worth ₹2,62,351.05 during the peri Out of this, the defendant had admittedly made part payments totaling leaving the aforesaid balance. Despite service of legal notice, the defendant failed to pay the outstanding amount, leading to institution of th The defendant, while admitting that goods worth purchased, took the stand that the entire liability stood discharged by making full payment and, therefore, nothing remained due. On the pleadings of the parties, the trial Co issues, including Issue No.5 relating to limitation. Court are as under:- Whether the plaintiff is a duly incorporated Co.?OPP Whether Balbir Raj Sondhi is duly authorized to institute the suit by the plaintiff? OPP Whether the defendant purchased the goods of the value of 2,62,351.05? OPP Whether the plaintiff is entitled to interest. If so, at what rate? OPD Whether the suit is barred by time? OPD If issue No.2 is proved, whether t and signed? OPD Relief. Parties have led their evidence in support of their case. -2- respondent had purchased on credit tyres, ₹2,62,351.05 during the period 23.12.1980 to 07.02.1984. Out of this, the defendant had admittedly made part payments totaling ₹2,27,380/ leaving the aforesaid balance. Despite service of legal notice, the defendant failed to pay the outstanding amount, leading to institution of the suit. The defendant, while admitting that goods worth ₹2,27,380/- were purchased, took the stand that the entire liability stood discharged by making full On the pleadings of the parties, the trial Court framed the necessary issues, including Issue No.5 relating to limitation. The issues framed by the trial Whether the plaintiff is a duly incorporated Co.?OPP Whether Balbir Raj Sondhi is duly authorized to institute the Whether the defendant purchased the goods of the value of Whether the plaintiff is entitled to interest. If so, at what rate? Whether the suit is barred by time? OPD If issue No.2 is proved, whether the plaint is not duly verified Parties have led their evidence in support of their case. - respondent had purchased on credit tyres, od 23.12.1980 to 07.02.1984. ₹2,27,380/-, leaving the aforesaid balance. Despite service of legal notice, the defendant failed were purchased, took the stand that the entire liability stood discharged by making full urt framed the necessary The issues framed by the trial Whether Balbir Raj Sondhi is duly authorized to institute the Whether the defendant purchased the goods of the value of Whether the plaintiff is entitled to interest. If so, at what rate? he plaint is not duly verified TRIPTI SAINI 2025.09.26 16:43 I attest to the accuracy and integrity of this document RSA-1356-1989 Findings of the trial Court 6. On appreciation of evidence, the trial Court held that the last payment made by the defendant was in limitation would start from the said date. Since the suit had been filed on 17.07.1984, it was held to be within limitation. Consequently, the suit was decreed in favour of the plaintiff for recovery of Findings of the lower appellate Court 7. Aggrieved, the defendant preferred an appeal. The learned lower appellate Court reversed the findings of the trial Court holding that the present was a case of successive supplies of goods Limitation Act, 1963, corresponding to Article 52 of the 19 held that limitation of three years for recovery of price of goods sold and delivered begins to run from the date of each delive lower appellate Court found that only goods worth within the three years preceding the filing of the suit and that against this, the defendant had made payments of was, therefore, dismissed as barred by limitation. 8. Feeling aggrieved, the Regular Second Appeal. Submissions of learned counsel for the appellant 9. In the present second appeal, it has been argued on behalf of the appellant that the lower appellate Court has erred in law in applying Article 14 of the Limitation Act inasmuch as the dealings between the parties were in the nature of a running and mutual 1989 (O&M) Findings of the trial Court On appreciation of evidence, the trial Court held that the last payment made by the defendant was in March 1983 as reflected in Ex.P42, and therefore the limitation would start from the said date. Since the suit had been filed on 17.07.1984, it was held to be within limitation. Consequently, the suit was decreed in favour of the plaintiff for recovery of ₹34,971.05 with interest. Findings of the lower appellate Court Aggrieved, the defendant preferred an appeal. The learned lower appellate Court reversed the findings of the trial Court holding that the present was a case of successive supplies of goods on credit and, therefore, Article 14 of the Limitation Act, 1963, corresponding to Article 52 of the 19 held that limitation of three years for recovery of price of goods sold and delivered begins to run from the date of each delivery and not from the last payment. The lower appellate Court found that only goods worth within the three years preceding the filing of the suit and that against this, the defendant had made payments of ₹1,49,390/-. Thus, no li was, therefore, dismissed as barred by limitation. Feeling aggrieved, the appellant-plaintiff Regular Second Appeal. Submissions of learned counsel for the appellant In the present second appeal, it has been argued on behalf of the appellant that the lower appellate Court has erred in law in applying Article 14 of the Limitation Act inasmuch as the dealings between the parties were in the nature of a running and mutual open account and not mere isolated supplies. It is further -3- On appreciation of evidence, the trial Court held that the last payment March 1983 as reflected in Ex.P42, and therefore the limitation would start from the said date. Since the suit had been filed on 17.07.1984, it was held to be within limitation. Consequently, the suit was decreed 34,971.05 with interest. Aggrieved, the defendant preferred an appeal. The learned lower appellate Court reversed the findings of the trial Court holding that the present was on credit and, therefore, Article 14 of the Limitation Act, 1963, corresponding to Article 52 of the 1988 Act, would apply. It held that limitation of three years for recovery of price of goods sold and delivered ry and not from the last payment. The lower appellate Court found that only goods worth ₹1,26,176/- had been supplied within the three years preceding the filing of the suit and that against this, the . Thus, no liability subsisted. The suit was, therefore, dismissed as barred by limitation. plaintiff has preferred the present Submissions of learned counsel for the appellant In the present second appeal, it has been argued on behalf of the appellant that the lower appellate Court has erred in law in applying Article 14 of the Limitation Act inasmuch as the dealings between the parties were in the nature open account and not mere isolated supplies. It is further - On appreciation of evidence, the trial Court held that the last payment March 1983 as reflected in Ex.P42, and therefore the limitation would start from the said date. Since the suit had been filed on 17.07.1984, it was held to be within limitation. Consequently, the suit was decreed Aggrieved, the defendant preferred an appeal. The learned lower appellate Court reversed the findings of the trial Court holding that the present was on credit and, therefore, Article 14 of the 8 Act, would apply. It held that limitation of three years for recovery of price of goods sold and delivered ry and not from the last payment. The had been supplied within the three years preceding the filing of the suit and that against this, the ability subsisted. The suit has preferred the present In the present second appeal, it has been argued on behalf of the appellant that the lower appellate Court has erred in law in applying Article 14 of the Limitation Act inasmuch as the dealings between the parties were in the nature open account and not mere isolated supplies. It is further TRIPTI SAINI 2025.09.26 16:43 I attest to the accuracy and integrity of this document RSA-1356-1989 contended that in terms of Sections 59 to 61 of the Contract Act, it was open to the creditor to adjust the payments made by the debtor towards outstanding bills and, therefore, the date of last p starting point of limitation. Reliance has been placed on the judgment of this Court in M/s Singh Steel Sales v. M/s Manjit Machinery Works, wherein it was held that in case of running an parties, Article 1 of the Schedule to the Limitation Act would apply and limitation would commence from the close of the financial year in which the last item was entered. Findings 10. Having considered the submissions the appellant, this Court is of the opinion that the question of limitation assumes importance in the present appeal. The pleadings in para 6 of the plaint clearly state that the cause of action arose from the purch is that the defendant had been purchasing goods on different occasions from December 1980 to February 1984. There is no plea or proof of any mutual, reciprocal dealings between the parties so as to constitute a mutual current account. The entries relied upon in Ex.P42 and Ex.P43 are unilateral statements of account maintained by the plaintiff debit or credit entries arising out of reciprocal obligations. In such circumstances, the case is squarely covered by Article 14 of the Limitation Act which prescribes a period of three years from the date of delivery of goods. 11. The reliance placed on distinguishable. In that case, the Court 1989 (O&M) contended that in terms of Sections 59 to 61 of the Contract Act, it was open to the creditor to adjust the payments made by the debtor towards outstanding bills and, therefore, the date of last payment, i.e. March 1983, ought to be treated as the starting point of limitation. Reliance has been placed on the judgment of this Court M/s Singh Steel Sales v. M/s Manjit Machinery Works, wherein it was held that in case of running an parties, Article 1 of the Schedule to the Limitation Act would apply and limitation would commence from the close of the financial year in which the last item was Having considered the submissions , this Court is of the opinion that the question of limitation assumes importance in the present appeal. The pleadings in para 6 of the plaint clearly state that the cause of action arose from the purchase of goods. The plaintiff’s own case is that the defendant had been purchasing goods on different occasions from December 1980 to February 1984. There is no plea or proof of any mutual, reciprocal dealings between the parties so as to constitute a mutual current account. The entries relied upon in Ex.P42 and Ex.P43 are unilateral statements of account maintained by the plaintiff debit or credit entries arising out of reciprocal obligations. In such circumstances, e case is squarely covered by Article 14 of the Limitation Act which prescribes a period of three years from the date of delivery of goods. The reliance placed on M/s Singh Steel Sales distinguishable. In that case, the Court found on facts that there was a mutual open -4- contended that in terms of Sections 59 to 61 of the Contract Act, it was open to the creditor to adjust the payments made by the debtor towards outstanding bills and, ayment, i.e. March 1983, ought to be treated as the starting point of limitation. Reliance has been placed on the judgment of this Court M/s Singh Steel Sales v. M/s Manjit Machinery Works, 2018(3) PLR 527 wherein it was held that in case of running and continuous account between the parties, Article 1 of the Schedule to the Limitation Act would apply and limitation would commence from the close of the financial year in which the last item was Having considered the submissions made by the learned counsel for , this Court is of the opinion that the question of limitation assumes importance in the present appeal. The pleadings in para 6 of the plaint clearly state ase of goods. The plaintiff’s own case is that the defendant had been purchasing goods on different occasions from December 1980 to February 1984. There is no plea or proof of any mutual, reciprocal dealings between the parties so as to constitute a mutual open and current account. The entries relied upon in Ex.P42 and Ex.P43 are unilateral statements of account maintained by the plaintiff-company and do not reflect any debit or credit entries arising out of reciprocal obligations. In such circumstances, e case is squarely covered by Article 14 of the Limitation Act which prescribes a period of three years from the date of delivery of goods. M/s Singh Steel Sales’s case (supra) is clearly found on facts that there was a mutual open - contended that in terms of Sections 59 to 61 of the Contract Act, it was open to the creditor to adjust the payments made by the debtor towards outstanding bills and, ayment, i.e. March 1983, ought to be treated as the starting point of limitation. Reliance has been placed on the judgment of this Court 2018(3) PLR 527, d continuous account between the parties, Article 1 of the Schedule to the Limitation Act would apply and limitation would commence from the close of the financial year in which the last item was made by the learned counsel for , this Court is of the opinion that the question of limitation assumes importance in the present appeal. The pleadings in para 6 of the plaint clearly state ase of goods. The plaintiff’s own case is that the defendant had been purchasing goods on different occasions from December 1980 to February 1984. There is no plea or proof of any mutual, open and current account. The entries relied upon in Ex.P42 and Ex.P43 are unilateral company and do not reflect any debit or credit entries arising out of reciprocal obligations. In such circumstances, e case is squarely covered by Article 14 of the Limitation Act which prescribes a is clearly found on facts that there was a mutual open TRIPTI SAINI 2025.09.26 16:43 I attest to the accuracy and integrity of this document RSA-1356-1989 and current account between the parties which was subject to regular entries of debits and credits arising out of reciprocal dealings, thereby attracting Article 1 of the Limitation Act. In the present case, the account was mutual or open in nature. Rather, it is a case of successive sales made by the plaintiff Article 1. 12. As regards the argument based on Sections 5 Act, it is true that when a debtor makes a payment without specifying the particular debt to which it should be appropriated, the creditor has the discretion to adjust such payment to any lawful debt due. However, this principle doe enlarge the statutory period of limitation. The appropriation of payments may determine which particular debt stands discharged, but it does not alter the fact that limitation for recovery of the price of goods sold and delivered begins fro date of their delivery. Therefore, even if the plaintiff had discretion to appropriate payments towards earlier debts, the claim for recovery of the price of goods supplied beyond three years of the suit remains barred under Article 14. The argument based on Sections 59 aid of the appellant. 13. Viewed thus, the finding of the lower appellate Court that only such claims which relate to deliveries within three years of the institution of the suit would be within time is unexceptionable. Since the payments made by the defendant within the said period exceeded the value of the goods supplied, no liability survives against him. The trial Court fell in error in extending the limitation from the date of last 1989 (O&M) and current account between the parties which was subject to regular entries of debits and credits arising out of reciprocal dealings, thereby attracting Article 1 of the Limitation Act. In the present case, there is no evidence to show that the account was mutual or open in nature. Rather, it is a case of successive sales made by the plaintiff-company on credit. Therefore, Article 14 would apply and not As regards the argument based on Sections 5 Act, it is true that when a debtor makes a payment without specifying the particular debt to which it should be appropriated, the creditor has the discretion to adjust such payment to any lawful debt due. However, this principle doe enlarge the statutory period of limitation. The appropriation of payments may determine which particular debt stands discharged, but it does not alter the fact that limitation for recovery of the price of goods sold and delivered begins fro date of their delivery. Therefore, even if the plaintiff had discretion to appropriate payments towards earlier debts, the claim for recovery of the price of goods supplied beyond three years of the suit remains barred under Article 14. The based on Sections 59–61 of the Contract Act, thus, cannot come to the aid of the appellant. Viewed thus, the finding of the lower appellate Court that only such claims which relate to deliveries within three years of the institution of the suit be within time is unexceptionable. Since the payments made by the defendant within the said period exceeded the value of the goods supplied, no liability survives against him. The trial Court fell in error in extending the limitation from the date of last payment. -5- and current account between the parties which was subject to regular entries of debits and credits arising out of reciprocal dealings, thereby attracting Article 1 of re is no evidence to show that the account was mutual or open in nature. Rather, it is a case of successive sales made company on credit. Therefore, Article 14 would apply and not As regards the argument based on Sections 59 to 61 of the Contract Act, it is true that when a debtor makes a payment without specifying the particular debt to which it should be appropriated, the creditor has the discretion to adjust such payment to any lawful debt due. However, this principle does not extend or enlarge the statutory period of limitation. The appropriation of payments may determine which particular debt stands discharged, but it does not alter the fact that limitation for recovery of the price of goods sold and delivered begins from the date of their delivery. Therefore, even if the plaintiff had discretion to appropriate payments towards earlier debts, the claim for recovery of the price of goods supplied beyond three years of the suit remains barred under Article 14. The 61 of the Contract Act, thus, cannot come to the Viewed thus, the finding of the lower appellate Court that only such claims which relate to deliveries within three years of the institution of the suit be within time is unexceptionable. Since the payments made by the defendant within the said period exceeded the value of the goods supplied, no liability survives against him. The trial Court fell in error in extending the - and current account between the parties which was subject to regular entries of debits and credits arising out of reciprocal dealings, thereby attracting Article 1 of re is no evidence to show that the account was mutual or open in nature. Rather, it is a case of successive sales made company on credit. Therefore, Article 14 would apply and not 9 to 61 of the Contract Act, it is true that when a debtor makes a payment without specifying the particular debt to which it should be appropriated, the creditor has the discretion to adjust s not extend or enlarge the statutory period of limitation. The appropriation of payments may determine which particular debt stands discharged, but it does not alter the fact that m the date of their delivery. Therefore, even if the plaintiff had discretion to appropriate payments towards earlier debts, the claim for recovery of the price of goods supplied beyond three years of the suit remains barred under Article 14. The 61 of the Contract Act, thus, cannot come to the Viewed thus, the finding of the lower appellate Court that only such claims which relate to deliveries within three years of the institution of the suit be within time is unexceptionable. Since the payments made by the defendant within the said period exceeded the value of the goods supplied, no liability survives against him. The trial Court fell in error in extending the TRIPTI SAINI 2025.09.26 16:43 I attest to the accuracy and integrity of this document RSA-1356-1989 Conclusion 14. Accordingly, this Court finds no error in the judgment and decree dated 10.08.1988 merit and is hereby dismissed. 15. Pending application(s), if any, also stands September 26, 2025 tripti Whether speaking/non Whether reportable 1989 (O&M) Accordingly, this Court finds no error in the judgment and decree 10.08.1988 passed by the lower appellate Court. The appeal is devoid of merit and is hereby dismissed. Pending application(s), if any, also stands , 2025 (MANDEEP PANNU Whether speaking/non-speaking : Speaking Whether reportable : Yes. -6- Accordingly, this Court finds no error in the judgment and decree the lower appellate Court. The appeal is devoid of Pending application(s), if any, also stands disposed of. MANDEEP PANNU) JUDGE speaking : Speaking - Accordingly, this Court finds no error in the judgment and decree the lower appellate Court. The appeal is devoid of TRIPTI SAINI 2025.09.26 16:43 I attest to the accuracy and integrity of this document