K. Ramamoorthy, J.

1. The plaintiff has filed the suit against the three defendants. Originally it was filed against two defendants but later on it transpired that the first defendant M/s. Commercial Electric Works was a partnership concern and third defendant was one of the partners was impleaded as the third defendant.

2. The suit is for the recovery of Rs. 1,18,492.66 with future interest @ 18% per annum. The defendants are carrying on their business for the purchase and sale of various electrical goods. The defendants were acting as Stockists of the switchgears etc. of the plaintiff from 1962. There was a break in relationship and the same was resumed with effect from 1.4.70. The plaintiff used to supply goods on credit and the payment made through cheques by the defendants is to be credited to the accounts of the defendants. The account, was mutual open and current. The cheques issued by the defendants were invariably dishonoured and the amounts were debited in the account of the defendants.

3. The plaintiff stopped supply on and after 20.7.76. On 3.11.76 and 25.11.76 the plaintiff raised two debit notes towards interest and debited the said amount to the account of the first defendant firm. By a letter dated 6.2.78, the plaintiff requested the defendant to settle the account between the period from 20.7.76 and 31.3.78, the payments received from the defendants on account were adjusted in seriatum with reference to the purchases made by the defendants. As on 1.4.78 a sum of Rs. 1,90,054.56 was due. The defendants in their Balance Sheet for the year ending 31.3.78 admitted the plaintiffs dues at Rs. 1,74,091,03. This acknowledgement further extended the period of limitation by three years. By a letter dated 16/22 June, 1978 the defendants acknowledged the receipt of the statement of account sent by the plaintiff. The defendants in the letter dated 6.2.78 admitted the dues to the extent of Rs. 1,17,768.33 as against the actual amount due Rs. 1,90,054.56 which included two debit notes towards the interest for Rs. 22,365.76 and Rs. 3,367.53.

4. Between 1.4.78 and 22.2.78 the defendants had paid about Rs. 20,000/- on account and cheques issued by the defendants were dishonoured. The plaintiff by a letter dated 20.11.78 in reply to the defendants letter dated 22.6.78 demanded the payment due. By a letter dated 15.12.78 the defendants reiterated their stand in the letter dated 22.6.78 wherein they admitted the liability to the extent of Rs. 1,17,768.33. The defendants sent a cheque for Rs. 15,000/-. The said cheque was not honoured when it was presented. The defendants made the following payments through cheques:

Date Amount

5.1.79 Rs. 15,000/-

21.2.79 Rs. 5,000/-

25.4.79 Rs. 40,000/-

3.5.79 Rs. 5,000/-

1.8.80 Rs. 10,000/-

These amounts were adjusted in seriatum towards the purchases made earlier. The last payment was made on 1.8.80 as may be seen above and that is the extended period of limitation by three years. As on August, 1980 the amount due from the defendants was Rs. 95,054.56.

5. On 11.9.81, the plaintiff through his Counsel issued a notice to the defendants calling upon them to pay Rs. 95,054.56 with interest @ 18% per annum until payment. There was no response. On 14.12.81, the plaint was presented.

6. Alongwith the plaint the plaintiff has filed the statement of accounts showing as to how the amounts were received and credited and the balance due as on 1.4.81.

7. On 13.7.84 the defendants filed the written statement repudiating the claim of the plaintiff. The defendants went to the extent of stating that the plaintiff did not send any goods.

8. The defendants had made a counter claim in the following terms :

That a sum of Rs. 1,57,935.70 is due to the defendants from the plaintiff on account of the various items detailed in paras 28 to 33 above. A sum of Rs. 1,17,768.33 was admitted to be due to the plaintiff out of which Rs. 75,000/- has been paid without prejudice to the rights and claims of the defendants leaving a sum of Rs. 42,768.33. After adjusting this amount from the claim of the defendants for Rs. 1,57,935.70, the latter is entitled to a decree of Rs. 1,15,167.37 against the plaintiff.

In the written statement it is noted that the "judicial papers out of shock". On 31.7.84 another written settlement was filed by the defendants, apparently after the third defendant was brought on record making the same counter claim. The plaintiff filed replication to the written statement filed by the defendants. The counter claim is registered as CC No. 1372186.

9. The plaintiff has filed Ex. P1 letter dated 16/22.6.78 written by the plaintiff to the defendants. Ex. PW1/1 is the power of attorney in favour of Mr. K.L. Kanthan, Regional Manager, Delhi and Mr. S.L. Mendiratta, Assistant Administrative Officer Delhi jointly or severally, to institute the suit. Ex. PW 1/2 is delivery note No. 426 dated 29.3.76. Ex. PW 1/3 again is the delivery note No. 431 dated 29.3.1976. Ex. PW 1 /4 is also the delivery note No. 438 dated 29.3.76. Ex. PW 1/5 is the debit note dated 25.11.76 in and by which the plaintiff has debited a sum of Rs. 3,367.53 towards interest. Ex. PW 1/6 is the debit note dated 3.11.76 showing the claim of interest of Rs. 22,365.76. Ex. PW 1/7 is the certificate of Incorporation with Memorandum of Association. Exhibits P 2, P 3, P 4, P 5 and P 6 are the bills of exchange drawn for the supply of goods.

10. The defendants had filed documents as Ex. D1 letter dated 16.22.78. Ex. D 2 is the second page of the letter dated 15.1.74 by Chenab Textile Mills, Kathua (J & K) to the plaintiff through the defendants. Ex. D 3 is the letter dated 20.10.78 from the plaintiff to the defendants asking the defendants to give Sales Tax declaration forms. Ex. D 4 is the delivery note No. F/390 dated 24.3.76 showing the supply of materials. Ex. D 5 is the letter dated 3.12.73 from the plaintiff to the defendants about the order placed by Chenab Textile Mills, Kathua (J & K). Ex D 6 is the letter dated 16.8.75 from the plaintiff to the Stores & Purchase Officer (D), Delhi Electric Supply Undertaking, Delhi, undertaking to supply material with a-copy to the first defendant. Ex. D 7 is the second page of the letter dated 29.10.74 which is marked as Mark F from the plaintiff to the DESU with a copy to the defendants. Ex. D 8 is a letter from the plaintiff to the DESU with a copy to the defendants about the supply of materials. Ex. D 9 is the letter dated 3.9.74 from the plaintiff to DESU with a copy to the first defendants regarding extended validity of offer. Ex. D10 is a letter dated 5.7.74 from the plaintiff to the DESU with a copy to the defendants. What is stated to the defendants is marked as Ex. D10. Ex. D11 is the terms and conditions dated 5.7.74 from the plaintiff. Ex. D 12 is the letter dated 3.7.76 from the plaintiff to the defendants about the discrepancy in despatch of material ordered on the Faridabad office of the plaintiff. The plaintiff had written to the defendants stating that "we feel that in the event of your not receiving the cases/materials as indicated in the G/R or alternatively there being some difference in the case markings as indicated in the G/R you should have informed the carriers under advice to us. We find that there is no such indication from you. In view of the above, we regret our inability to assist you in the matter." Ex. D13 is the letter dated 10.5.76 from the plaintiff to the defendants about short supply. Ex. D 14 is the letter dated 29.9.73 showing the order placed by the defendants on the plaintiffs Company. Ex. D15 is the credit note No. 203337/E dated 27.11.74 sent to the defendants for Rs. 84,612/-. Ex. D 16 is a letter dated 29.5.75 from the plaintiff to the Executive Engineer, Badarpur Thermal Power Station, Badarpur with a copy to the defendants requesting the defendants to send suitable quotation. Ex. D 17 is the letter dated 17.5.75 from the Badarpur Thermal Power Station, Badarpur, to the plaintiff with a copy the defendants asking the plaintiff to submit the quotation. Ex. D 18 is the second page of the letter dated 6.3.74 written by the plaintiff to the Badarpur Thermal Station with a copy to the defendants Ex. D 19 is the terms and conditions for supply of switch gear sent by the plaintiff. Ex. D20 is the letter dated 20.1.76 from the plaintiff to the Deputy Director (Purchase), Badarpur Thermal Power Project, New Delhi. Ex. D 21 is the second page of letter dated 30.10.74 copy of which was endorsed to M/s. Commercial Electric Works. Ex. D 22 is the terms and conditions for supply of switchgear dated 30.10.74. Ex. D 23 is the letter dated 2.3.73 from the plaintiff to the defendants regarding supply of 200A & 400A type FJ switch. Ex. D 24 is the copy of Ex. D 23. Ex. D 25 is the letter dated 24.12.73 from the defendants to the plaintiff. Ex. D 26 is the letter dated 5.1.74 from the plaintiff to the defendants. Ex. D 27 is the quotation dated 2.6.73 from the plaintiff. Ex. D28 is the letter dated 2.6.73 from the plaintiff to the defendants regarding tender No. TE-106 of DESU Due on 4.6.73 for 630 Amps and 800 Amps rating Air Circuit Breakers. Ex. D 29 is the letter dated 25.11.76 from the plaintiff to the defendants. Ex. D30 is the customer copy dated 28.12.73 from the plaintiff to the defendants. Ex. D31 is the letter dated 12.9.72 from the plaintiff to the DSU. Ex. D 32 is the letter dated 29.3.73 from the plaintiff to the defendants regarding pending order for 10 Nos: ACBs 1000A type DVR. Ex. D 33 is the letter dated 13.6.74 from the plaintiff to the defendants regarding supply of circuit breakers against DESU Order No. ST/ 60/ SPIV/ TE 87/ 8745. Ex. D 34 is the letter dated 15.12.78 from the defendants to the plaintiff. Ex. D 35 is the letter dated 20.11.78 from the plaintiff to the defendants quoting outstand- ing payment. Ex. D 36 is the letter dated 22.2.75 from the plaintiff to the defendants regarding RSEB order for supply of 400 A switch fuse units and 100 Amps Moulded case circuit breakers. Ex. D 37 is the credit note No. E/20854, dated 21.7.78 for Rs. 78,870.35. Ex. D 38 is the statement of credit note from the plaintiff to the defendants.

11. The plaintiff examined PW 1 Mr. S.L. Mehandiratta and PW 2 Mr. P.S. Kapoor. PW 1 has spoken to the power of attorney given in favour of Mr. K.L. Kanthan. He has also proved Ex. PW 1/1. He has also spoken to Exhibit PW 1/2 invoice and also invoices exhibits PW 1/3 and PW 1/4. He has also spoken to the Hundies as Exhibits P 4 and P 5 which were not honoured by the defendants on presentation. He speaks to Exhibit D 4 the invoice sent by the plaintiff and the goods covered by Ex. D 4 was sent to the defendants.

12. PW 2 would state that the amount dues as on 1.4.81 was to the tune of Rs. 95,054.56. He has brought the ledger books for the year 1979-80. As on 1.4.79 the balance is Rs. 1,50,054.56 and the balance as on 1.4.81 is Rs. 95,054.56. This balance is correctly shown in the statement of account relating to the period from 1.4.78.1981. In the cross-examination the question was put to the witness that whether he wrote the accounts. The fact that the plaintiff maintained the books of account in the course of its regular business is not disputed by the defendants.

13. Defendants examined DW1 Mr. Chakresh Kumar Jain. This witness states that he is one of the pertners of the defendants firm. The plaintiff used to supply goods. The dealing with the plaintiff and the defendants continued from the years 1961 to 1976. The witness would also state that "Besides supplying the material to us, the plaintiff was also supplying material to Government through us and with our back-up. The plaintiff used to give us commission for the supply that we used to do to the customers." According to this witness, the goods sent through Ex. D 4 was never received by the defendants. The defendants would state that no amount is due from the defendants and the plaintiff owed money to the defendants as claimed in the written statement. In the Chief Examination the witness would not speak to the documents filed by the defendants and nothing is mentioned in the chief-examination as to how the defendants substantiate their claim in the counter claim. No details are given by this witness. In the cross-examination DW1 admits that the firm maintained books of account. When a question was put to him whether he could produce the balance sheet for the year ending 31.3.78, he categorically answered that "No. I cannot produce it. The question was put to the witness whether the balance sheet for the year ending on 31.3.78, the defendants firm have shown a credit of Rs. 1,74,091.03. The answer is "No. It is incorrect".

14. In the light of this factual position, I have absolutely no difficulty in coming to the conclusion that the plaintiff has proved its claim and when the defendants have admitted the supply of goods from the plaintiff it is for the defendants to show that the goods were not received and the defendants are not liable to pay. The payment as shown in the plaint in 1979 and on 1.8.80 are not disputed by the defendants. It is for the defendants to show how the plaintiff was liable to pay any amount to the defendants and the defendants have not produced any document to prove their case.

15. Therefore, I accept the evidence of PW 1 and PW 2 and I am not able to accept the evidence of DW 1.1 now proceed to give my finds on the issues.

16. Mr. Jain learned Sr. Counsel for the defendants apart from arguing on merits submitted that the suit was barred by time. Mr. Kohli the learned Counsel for the plaintiff relied upon the letter written by the Incometax Officer in January 1981 to the defendants wherein the Incometax Officer had said that the defendants had shown in the balance sheet for the year ended 31.3.78 a sum of Rs. 1,74,000/- as due from the defendants to the plaintiff and the plaintiff, therefore, filed an application for a direction to the defendants to file the balance sheet. Mr. Kohli learned Counsel for the plaintiff contends that the balance sheet wherein the defendants itself had shown that particular amount is due to the plaintiff would constitute an acknowledgement within the meaning of Section 18 of the Limitation Act, 1963. As I had already noticed that the last payment by cheque by the defendants was on 1.8.80, the plaint was presented on 14.12.81, therefore, the suit is in time. I need not go into the question of acknowledgement but it is well settled in ILR 33 Cal 1033 that such a statement in accounts would constitute acknowledgement of liability. In any view of the matter the suit is in time.

17. This Court framed the following issues on 10.11.86 for trial:

1. Whether the plaintiff is duly incorporated under the Indian Companies Act and the suit is instituted and the plaintiffs pleadings signed and verified by a duly authorised person

2. Whether the plaintiff supplied goods relating to Bill No. 283560 dated 24.3.76 to the defendants

3. Whether the plaintiff is entitled to charge interest If so, at what rate and to what extent

4. Whether a sum of Rs. 68,287.95 is due to the defendants from the plaintiff as alleged in Clauses (a) to (h) of para 27 of the written statement

5. Whether the defendants are entitled to a sum of Rs. 20,000/- from the plaintiff as alleged in para 28 of the written statement

6. Whether the defendants are entitled to a commission of Rs. 60,000/- as alleged in para 29 of the written statement

7. Whether the defendants are entitled to a sum of Rs. 7,988/- as alleged in para 30 of the written statement

8. Whether the defendants are entitled to a sum of Rs. 1,652/- as alleged in para 32 of the written statement

9. Whether the defendants are entitled to the amount mentioned in pare 33 of the written statement

10. What amount, if any, is the plaintiff entitled to recover from the defendants

11. Relief.

(i) On issue No. 1, I find that the plaintiff is duly incorporated under the Indian Companies Act, and the suit has been instituted by a person authorised by the Company.

(ii) On issue No. 2, I find that the plaintiff supplied goods relating to the bill No. 283560 dated 24.3.76.

(iii) On issue No. 3, the plaintiff is entitled to charge interest because the defendants without any justification denied the claim of the plaintiff.

(iv) On issue No. 4, no amount is due from the plaintiff to the defendants.

(v) On issue No. 5, I find that a sum of Rs. 20,000/- as alleged in para 28 of the written statement is not due from the plaintiff to the defendants.

(vi) On issue No. 6, I find that the defendants have not proved their claims to a commission of Rs. 60,000/- as stated in para 29 of the written statement.

(vii) On issue No. 7, I find that the defendants are not entitled to a sum of Rs. 7,988/- as stated in para 30 of the written statement.

(viii) On issue No. 8, the defendants are not entitled to a sum of Rs. 1,652.25 as stated in para 32 of the written statement and there is absolutely no proof from the defendants.

(ix) On issue No. 9, the defendants have not proved their claim as stated in para 33 of the written statement.

18. On a consideration of the documents and oral evidence adduced, I find that the plaintiff is entitled to a sum of Rs. 1,18,492.66. Regarding rate of interest though the transactions are of commercial nature as the transactions pertain to the year 1976 and prior thereto, I feel that the rate of interest could be fixed @ 12% per annum from the date of plaint till the date of realisation.

19. Accordingly, there shall be a decree ;

(a) directing the defendants to pay to the plaintiff a sum of Rs. 1,18,492.66.

(b) directing the defendants to pay the plaintiff interest @ 12% per annum on the sum of Rs. 1,18,492.66 from the date of suit till the date of realisation.

(c) directing the defendants to pay the plaintiff the costs of the suit.

(d) directing the dismissal of the counter claim filed by the defendants with no costs.