This first appeal is directed against the judgment and decree dated 27 November, 1997 in O.S.No.9557 of 1996 on the file of the V Additional Judge, City Civil Court, Chennai directing the appellants and respondents 2 & 3 to pay a sum of Rs.1,93,577.62 with interest at 12% per annum to the first respondent.
2. The parties to this appeal are referred to as "plaintiff" and "defendants" hereafter for the sake of convenience.
3. The suit in O.S.No.9557 of 1996 was preferred by the plaintiff against the defendants praying for a judgment and decree directing the defendants jointly and severally to pay a sum of Rs.3,17,984.92 with interest at 18% on Rs.1,93,577.52 from the date of plaint till the date of realisation.
4. In the plaint in O.S.No.9557 of 1996 the plaintiff inter alia contended thus:-
(i) The plaintiff is a limited company engaged in the business of supplying Solidaire T.V. sets to various dealers. The first defendant is one of the dealers of the Solidaire T.V. sets. Defendants 2 to 4 are the partners of the first defendant firm. The plaintiff has been supplying Television sets to the first defendant and the firm has been making payment against such supplies. The first defendant was selling Solidaire T.V.sets both black and white and colour.
(ii) From 1985 onwards the defendants have been highly irregular in adjusting their running account with the plaintiff. Since there was no action to pay the outstanding as per the running account, the plaintiff caused a lawyer's notice to be issued to the defendants calling upon them to pay a sum of Rs.2,02,497/- towards their running account.
(iii) The second defendant representing the other defendants sent a reply on 10.12.1996 intimating the plaintiff that there was a dispute between second and fourth defendant and the first defendant firm is no more doing business. The second defendant further admitted that he was authorised by defendants 1 and other partners to dispose of the goodwill as well as movable property of the first defendant firm for the purpose of discharging the money due to the creditors. However he was not in possession of the accounts and as such he was not in position to ascertain the claim made by the plaintiff.
(iv) The plaintiff reliably came to know that the second defendant by virtue of the authorisation given to him disposed of the properties of the first defendant firm. However not even a single pie was paid to the plaintiff. In such circumstances, the plaintiff was constrained to file the suit for recovery of the amount as shown in the running account.
5. The suit was contested by the defendants.
6. In the written statement filed by defendants 2 and 3 it was contended thus:-
The suit is barred by limitation. It was not stated in the plaint as to when the alleged principal sum of Rs.1,93,577.62 become due. The alleged acknowledgment of liability dated 16.12.1986 signed by the fourth defendant was not binding on the other defendants. The firm itself is not in existence. The plaintiff did not furnish any of the details sought for from them. If proper accounts are taken the plaintiff would be liable to pay certain amount to the first defendant. The plaintiff has no valid claim against the defendants and in fact the acknowledgment of liability by the fourth defendant was collusive, fraudulent and without any authority and as such it is not binding on the defendants or the firm.
7. The fourth defendant filed a separate written statement and contested the claim disputing the arrears as well as the rate of interest.
8. The learned trial Judge on the basis of the pleadings framed the following issues:-
(i) Whether the plaintiff is entitled to Rs.3,17,984.92 with 18% interest as prayed for?
(ii) Whether the suit is barred by limitpation?
(iii) Whether the plaintiff is entitled to claim 18% interest as prayed for?
(iv) To what relief the plaintiff is entitled?
9. Before the trial court, P.W.1 was examined on the side of the plaintiff. Exs.A.1 to A.3 were marked on his side. No evidence was adduced on the side of the defendants and no exhibits were also marked.
10. The learned trial Judge found that the plaintiff was maintaining a running account which shows the transaction in question. The last entry in the running account in Ex.A.3 was on 1.4.1989. The suit was filed on 8.12.1989. The learned trial Judge was of the opinion that the suit was filed within three years and as such the contention raised by the defendants to the effect that the suit was barred by limitation was rejected. The learned trial Judge also found that the payments made by the first defendant was duly credited and the statement of accounts as on 1.4.1989 shows the balance as Rs.1,93,577.62. Accordingly the learned trial Judge decreed the suit. With respect to the interest the Court found that there was no agreement entered into between the parties. Since the suit transaction was a commercial transaction, the plaintiff was entitled to the agreed rate of interest. Since there was no agreement for payment of interest, the learned trial Judge granted interest at the rate of 12% per annum. Accordingly the suit was decreed. It is the said judgement and decree which is impugned in the first appeal.
11. The learned Senior Counsel appearing on behalf of defendants 2 and 3 contended that as per Ex.A.1 notice dated 20.11.1986 issued by the plaintiff, the payments due were for the period up to 8.4.1986. The plaint also proceeds on the basis that a sum of Rs.2,02,497/- was due as on 8.4.1986. However the suit was filed only on 8 December, 1989 and as such the suit was clearly barred by limitation. No other point was argued.
12. None appeared for the plaintiff or defendants 1 and 4.
13. The following point arises for consideration in the first appeal.
1. Whether the suit is barred by limitation?
2. Whether the plaintiff is entitled to 12% interest subsequent to the decree?
14. The plaintiff is a distributor of T.V.sets and admittedly the first defendant was having commercial transaction with the plaintiff. Defendants 2 to 4 are the partners of the first defendant firm. The statement of accounts marked as Ex.A.3 clearly shows that a running account was maintained by the plaintiff with respect to the transaction involving the first defendant. The payments made by the first defendant firm towards the purchase made from the plaintiff was clearly accounted. The last entry in the running account was on 1.4.1989. It is true that in the notice issued by the plaintiff as per Ex.A.1 they have calculated the dues as on 8.4.1986.
15. The receipt of notice was acknowledged by the second defendant and in fact in Ex.A.2 there was no denial maintaining a running account in respect of the transaction between the plaintiff and the first defendant. The second defendant only wanted the plaintiff to furnish a copy of the accounts so as to enable him to pay the debt. In fact the second defendant as per Ex.A.2 maintained that he was authorised to make payment to the creditors by way of disposal of the movable property as well as goodwill of the firm.
16. The contesting defendants have taken up the contention that the acknowledgment of liability made by the second defendant was not binding on the other defendants. However the fact remains that the first defendant is a registered partnership and as per
Section 25 of the Indian Partnership Act, the act of a partner in the ordinary business of partnership firm is binding on the other partners. Therefore the contesting defendants 2 and 3 cannot be heard to say that the acknowledgment of liability made by the second defendant as per Ex.A.2 was not binding on them.
17. The statement of accounts marked as Ex.A.3 shows that it was a running account. The entries found in the said document clearly shows that there was a transaction even subsequent to 8.4.1986. Therefore it cannot be said that the suit was only in relation to a particular account and the account was closed as on 8.4.1986.
18. It has to be noted that the second defendant as per reply notice dated 10.12.1986 marked as Ex.A.2 acknowledged the liability and there was nothing in the said reply disputing the genuineness of the accounts.
19. The suit was filed on 8.12.1989. The period of limitation has to be computed from 10.12.1986, the day on which the reply was sent by the second defendant admitting the liability. Therefore the suit was within three years and as such it is not barred by limitation.
20. The contention of the learned Senior Counsel for defendants 2 and 3 was mainly on the ground that the dues were for the period up to 8.4.1986 and the suit was filed only on 8.12.1989 which was beyond the period of three years. However when there is an acknowledgment of liability as on 10.12.1986, the period has to be computed only from the said date. It is true that the contesting defendants have taken up a contention that the acknowledgment of liability was a collusive act between the plaintiff and the second defendant. However no evidence was adduced before the court to show that the second defendant was not authorised to make any such confirmation and it was not binding on the other defendants.
21. Even otherwise the suit was within the period of limitation. The document in Ex.A.3 is found to be maintained in the regular course of business of the plaintiff. Ex.A.3 contains accounts pertaining to other defendants also with whom the plaintiff was doing business. The said document clearly shows that the account in relation to the first defendant was a running account. The last entry in Ex.A.3 was made on 1.4.1989. The suit was filed on 8.12.1989. The suit was filed on 8.12.1989. Therefore the suit was within the period of limitation.
22. Therefore I am of the view that there is no basis in the argument advanced on the side of the contesting defendants to the effect that the suit filed on 8.12.1989 was barred by limitation. Accordingly the first point is answered against defendants 2 and 3 and in favour of the plaintiff.
23. The learned Judge has granted interest at 12% even for the period subsequent to the decree. The grant of interest for the period after decree is discretionary. Section 34 of the Code of Civil Procedure provides for the payment of interest for the period from the date of decree to the date of realisation. The learned Judge has granted interest uniformly at 12% for the entire period from the date of plaint and till realisation. In the facts of the case, I am of the view that the interest of justice would be subserved in case of granting future interest at 6% simple. The second point is answered accordingly.
24. In the result, the judgment and decree dated 27 November, 1997 is modified as above.
25. The first appeal is allowed in part as indicated above. No costs.
Tr/ To
1. V Additional City Civil Court, Madras.
2. The Section Officer VR Section High Court Madras 104