Parry & Co. , Limited, a company incorporated under the Companies Act, represented by K. U. Kumaran, Manager, Engineering Division v. Southern Roofings Private Limited a company incorporated under the Companies Act
1996-03-15
GOVARDHAN
body1996
DigiLaw.ai
Judgment : Plaintiff is the appellant herein. The averments in the plaint briefly stated are as follows: The defendant entrusted to the plaintiff, the work of electrical installation in their factory at Mudichur. The plaintiff carried out the electrical installation and in respect of the said work of supplying materials, installing and commissioning 250 K.V.A. Transformer Substation complete with medium pressure installation, a sum of Rs.44,118.45 had become due from the defendant. The transformer was energised in 1974 and the factory of the defendant started production. The entire amount due to the plaintiff was however not paid inspite of repeated demands. A statement of account as on 30.6.1975 was sent to the defendant after adjusting the credits and it was found, that a sum of Rs.38,907.55 was due by the defendant. The defendant acknowledged their liability and undertook to pay the amount in instalments on account of the financial difficulty faced by them. No payment was however made by the defendant. A notice calling upon the defendant to pay the entire arrears at Rs.38,907.55 with interest at 12% p.a. was sent to the defendant. The defendant is liable to pay interest at 13% per annum from 22. 1977, the date on which the liability was acknowledged. A total sum of Rs.45,910.81 is due by the defendant. 2. The defendant in his written statement stated as follows: The claim with regard to the first 3 items are barred by limitation. The plaintiff has not set out correctly the amount due by the defendant. The letter dated 22. 1977 does not amount to an acknowledgement of liability. The first two items have become barred by limitation even prior to 22. 1977. The defendant is not liable to pay interest as there was no stipulation for the payment of interest. 3. On the above pleadings, the learned Judge of the City Civil Court, after trial, has held that the claims under Bill No.356/01306 is time barred and negatived the claim of the plaintiff so far as the amount claimed under the will and granted decree in favour of the plaintiff for the rest of the amount. Aggrieved over the same, the plaintiff has come forward with this appeal. 4. The learned counsel appearing for the appellant/ plaintiff has argued that this appeal is only against the decree granting amount of Rs.15,394.45 which was not the entire amount prayed for.
Aggrieved over the same, the plaintiff has come forward with this appeal. 4. The learned counsel appearing for the appellant/ plaintiff has argued that this appeal is only against the decree granting amount of Rs.15,394.45 which was not the entire amount prayed for. There was no decree passed by the learned Judge on the ground of limitation and it is erroneous in view of Sec.25 of the Indian Contract Act. 5. According to the learned counsel, even though the claim under Ex.A-1 was a time barred one, yet the plaintiff is entitled to the decree in view of the contract which the defendant had entered into with the plaintiff in his reply notice accepting his liability and praying for instalment for the said amount. As per Illustration (e) of Sec.25 of the Contract Act, even if the debt is barred by Limitation Act if the debtor writes a letter promising to pay the amount due and barred by limitation, there is a contract and the creditor is entitled for the claim of the same. In the present case, the defendant has sent a reply under Ex.A-7 in which the defendant has accepted their liability for all the claims made by the plaintiff including the claim under Ex. A-1. In this letter, under Ex.A-7 the defendant has promised to arrange for the payment of the entire amount due and has prayed for instalment and stating that they are taking every effort to settle the claim of the plaintiff at the earliest. A reading of Ex.A-7 shows that the defendant has entered into an agreement with the plaintiff for the liability in respect of the time barred claim under Ex.A-1. As per the decision reported in Maidens Hotel, Delhi v. Willnott, A.I.R. 1935 Lah. 984, a letter containing a promise to pay a debt which is barred by limitation is itself an agreement enforceable in law and is therefore, a contract and as such can for the basis of fresh cause of action. 6. In the light of the above decision, when we consider Ex.A-7 the finding of the trial court that the suit is barred in so far as the claim and so far as the first claim is concerned, cannot be sustained.
6. In the light of the above decision, when we consider Ex.A-7 the finding of the trial court that the suit is barred in so far as the claim and so far as the first claim is concerned, cannot be sustained. In that view, I am of opinion that the judgment and decree of the trial court is liable to be modified granting a decree in favour of the plaintiff for the entire amount including for the amount claimed under Ex.A-1. 7. In the result, the appeal is allowed. The suit is decreed as prayed for. There will be no order as to costs in this appeal.