Admission of liability for payment by conduct obviates proof of invoices and debit notes.

The plaintiff, Textile Connection, a partnership firm, filed a suit (C.S.No.29 of 2000) against the defendants, M/s.Burlington's Exports and its partners, seeking recovery of Rs.39,67,144/- with 24% interest.

The suit arose from the plaintiff's supply of cotton fabrics to the first defendant, who would convert them into garments for export.

The usual business practice involved the first defendant requesting fabric specifications, the plaintiff providing samples, and after approval, the plaintiff quoting prices.

A trial order of 100 meters would precede bulk orders, which were then countersigned by the plaintiff.

While payments for supplies through banks were timely, direct supplies often faced delays of three to twelve months.

In June 1998, the first defendant claimed the plaintiff's prices were 20% to 30% higher than competitors and demanded a 10% credit note on supplies from April 1, 1996, to June 30, 1998.

The plaintiff countered, offering a 5% deduction on future bills for cleared pending payments, but the first defendant issued a debit note for Rs.8,00,994/-.

The plaintiff claimed Rs.39,67,144/- was due after adjustments.

The defendants disputed the claim, arguing that the plaintiff's calculation was not provided and that they rejected goods or received belated supplies, leading to delayed payments and debit notes being issued for rejected goods.

The defendants asserted that as per their reconciled accounts, Rs.2,42,995.40/- was due.

The Single Judge dismissed the suit, noting that some invoices were outside the claim period or barred by limitation, and the plaintiff failed to challenge the defendant's statement of accounts or substantiate their pleadings.

1. Whether the invoices marked as Exs.P12, P13, P15, P17 to P23 have to be rejected since they were prior to the suit claim which commenced from 01.04.1996?

2. Whether the claim under the invoices marked as Exs.P24 to P29 and P31 were barred by the law of limitation?

3. Whether the Court can take note of the debit notes said to have been issued by the respondents particularly when copies of the same had not been produced during the course of trial?

4. Whether the reasoning of the learned Single Judge in dismissing the suit has to be upheld by this Court or interfered with by this Court?

The Court applied the principles of the Law of Limitation, specifically concerning the three-year period for claims based on invoices and running accounts, where an invoice beyond three years from the date of filing would be barred.

It also considered the evidentiary value of admitted financial statements and the necessity of producing documents like debit notes to substantiate claims.

The Court further referred to the Supreme Court's observations in *Jagdish Singh Vs. Madhuri Devi* (2008 10 SCC 497) regarding the appellate court's approach to trial court findings on oral evidence.

The Court further referred to *Gordon Woodroffe and Company (Madras) Ltd., Vs. Sheikh M.A. Majid & Co.* (AIR 1967 SC 181) concerning "account stated" and its acceptance through conduct or express admission.

The Court analyzed the appellant's claim by examining the marked invoices against the backdrop of the claimed period and limitation law.

It found that invoices Exs.P12, P13, P15, P17 to P23 covering the period from May 15, 1995, to November 17, 1995, were outside the suit claim period (April 1, 1996, to June 30, 1998) and were therefore barred by limitation, as the suit was filed on September 30, 1999.

Similarly, invoices Exs.P24 to P29 and P31, despite falling within the stated claim period from April 8, 1996, to August 13, 1996, were also deemed outside the time period for which the claim was made and thus rejected.

The Court rejected the respondents' claim regarding debit notes, noting that despite their contention, not a single debit note was produced as evidence during the trial, and the witness (DW-2) gave evasive answers when confronted about their absence.

The Court highlighted that the respondents, in Ex.P305 (letter dated September 15, 1999), had unequivocally admitted their liability to pay approximately Rs.17 lakhs to the appellant, which the Single Judge had omitted to consider.

The Court determined that while certain invoices were indeed barred by limitation or fell outside the claim period, the remaining invoices and the respondents' admission in Ex.P305 indicated a clear outstanding amount, contrary to the Single Judge's complete dismissal of the suit.

It held that the invoices in Exs.P12, P13, P15, P17 to P23, totaling Rs.1,56,899/-, were barred by limitation.

The invoices in Exs.P24 to P29 and P31, totaling Rs.1,02,078/-, were rejected as they predated the suit claim period.

The respondents' claims concerning debit notes were rejected due to the non-production of any debit notes as documentary evidence during the trial.

The appeal was partly allowed, setting aside the Single Judge's dismissal.

The Court granted a judgment and decree for Rs.23,62,162/- (calculated as Rs.26,21,139/- less Rs.1,56,899/- and Rs.1,02,078/-), with interest at 24% per annum from the date of the plaint until the date of the decree and @ 6% per annum from the date of the decree until the date of realization, along with costs.