Research › Search › Judgment

Punjab High Court · body

2012 DIGILAW 874 (PNJ)

Vijay Kumar Sondhi v. Zira Cooperative Sugar Mills Ltd. Zira

2012-07-06

L.N.MITTAL

body2012
JUDGMENT Mr. L.N. Mittal, J.: (Oral) - CM No. 10811.C of 2008 Heard. For reasons mentioned in the application which is accompanied by affidavit, delay of 6 days in filing the appeal is condoned. The application stands disposed of. RSA No. 3643 of 2008 1. Plaintiff Vijay Kumar Sondhi who was substantially successful in the trial court but has been completely non-suited by the lower appellate court has filed this second appeal. 2. Plaintiff-appellant supplied lime to defendant – respondent Zira Cooperative Sugar Mills Limited vide bills dated 4.3.1997 and 8.3.1997 pursuant to orders placed by the defendant. Plaintiff’s case is that the defendant failed to pay the price of the said lime totalling Rs.47,091/-. The plaintiff also claimed interest @ 24% per annum amounting to Rs.33,904/- till filing of the suit. Accordingly, plaintiff filed suit for recovery of Rs.80,995/-. 3. The defendant contested the suit. While admitting that plaintiff had supplied lime to the defendant, it was pleaded that the plaintiff did not adhere to the delivery schedule nor supplied the lime as per specification. The lime supplied was substandard. It was also pleaded that the dispute had to be referred to Arbitrator in view of arbitration clause in the contract. Suit was also alleged to be bad for non-joinder of Sugarfed as necessary party. Various other pleas were also raised. 4. Learned Additional Civil Judge (Senior Division), Phagwara vide judgment and decree dated 24.8.2007 partly decreed the plaintiff’s suit for recovery of principal amount of Rs.47,091/- with interest thereon @ 12% per annum from the dates of bills till recovery. However, first appeal preferred by defendant has been allowed by learned District Judge, Kapurthala vide judgment and decree dated 19.4.2008 and thereby suit filed by the plaintiff stands dismissed. Feeling aggrieved, plaintiff has filed this second appeal. 5. I have heard learned counsel for the parties and perused the case file. 6. Counsel for the appellant contended that plaintiff could not be non-suited on the ground of arbitration clause and learned appellate court gravely erred in doing so. 7. Counsel for respondent however contended that in view of arbitration clause, suit of the plaintiff has been rightly dismissed by lower appellate court. 8. I have carefully considered the rival contentions. The defendant did not move any application under section 8 of the Arbitration and Conciliation Act, 1996 (in short, the Act) before filing of written statement. 7. Counsel for respondent however contended that in view of arbitration clause, suit of the plaintiff has been rightly dismissed by lower appellate court. 8. I have carefully considered the rival contentions. The defendant did not move any application under section 8 of the Arbitration and Conciliation Act, 1996 (in short, the Act) before filing of written statement. Section 8 of the Act stipulates that such an application has to be moved before filing of written statement. Objection regarding arbitration clause taken in the written statement does not meet the requirement of section 8 of the Act. On the contrary, according to section 8 of the Act, the defendant before submitting his written statement should have filed application under section 8 of the Act for referring the dispute to the Arbitrator. However, it was not so done. Consequently, the plaintiff cannot be non-suited on this ground. 9. Counsel for respondent contended that application under Order 7 Rule 11 of the Code of Civil Procedure (in short, CPC) had also been moved by defendant on the ground of arbitration clause. However, said application was dismissed by the trial court and the said order was upheld by this Court in revision petition. Consequently, the plaintiff cannot be non-suited on the ground of arbitration clause. 10. Counsel for appellant next contended that the suit is within limitation and was erroneously held to be barred by limitation. The goods were supplied on 4.3.1997 and 8.3.1997 and the suit was filed on 03.6.2000. According to Article 14 of the Schedule to the Limitation Act, 1963, where no period of credit is agreed, limitation period for filing suit for price of the goods sold and delivered is three years commencing from the date of delivery of the goods whereas according to Article 15, the limitation period of three years commences when the period of credit expires if some credit period is fixed. In the instant case, bills issued by the plaintiff stipulated that interest would be payable if payment was not made within 15 days. The said period of 15 days can be said to be credit period agreed to by the parties. In addition to it, the plaintiff also served requisite notice dated 5.2.2000 on the defendant under section 79 of the Punjab Cooperative Societies Act, 1961 before filing the suit. In the notice, period of one week was specified for making payment. The said period of 15 days can be said to be credit period agreed to by the parties. In addition to it, the plaintiff also served requisite notice dated 5.2.2000 on the defendant under section 79 of the Punjab Cooperative Societies Act, 1961 before filing the suit. In the notice, period of one week was specified for making payment. Under section 79 of the Punjab Cooperative Societies Act, notice of at least three months has to be issued before filing the suit. The suit was in fact filed more than three months after service of said notice i.e. after expiry of requisite notice period stipulated in section 79 of the Punjab Cooperative Societies Act. Said notice period has to be taken into consideration while computing the period of limitation in view of section 15(2) of the Limitation Act. Consequently, considering the notice period of three months, the suit filed on 03.6.2000 would come within limitation. Finding of the lower appellate court to the contrary is, therefore, unsustainable. 11. Counsel for the respondent contended that suit is bad for nonjoinder of Sugarfed, although Sugarfed was necessary party as the contract was between plaintiff and Sugarfed. The contention cannot be accepted. The plaintiff supplied the goods to the defendant. Payment of price of the goods was to be made by the defendant and not by Sugarfed to the plaintiff. Consequently, suit has been rightly filed against the defendant. The plaintiff cannot be non-suited on the ground of non-joinder of Sugarfed as party to the suit when the amount was recoverable from the defendant and not from the Sugarfed. 12. For the reasons aforesaid, I find that findings of the lower appellate court on all the aforesaid three points against the plaintiff are patently perverse and illegal and, therefore, unsustainable, giving rise to substantial questions of law to this effect. The said substantial questions of law are answered in favour of the plaintiff – appellant for the reasons already recorded hereinabove. 13. Resultantly, the instant second appeal is allowed. Judgment and decree of the lower appellate court are set aside. Judgment and decree of the trial court are restored with proportionate costs throughout.