Non-Payment of Dues Under a Running Account Constitutes Recurring Causes of Action, Not a Continuing Wrong

The Appellant supplied Ready-Mix Concrete (RMC) to the Respondent for school construction under a purchase order dated 02.03.2017, which stipulated "60 days credit and weekly billing".

The Appellant maintained a running account, recording the last payment on 06.03.2018.

Claiming an outstanding balance of Rs. 69,72,422/-, the Appellant issued a legal notice on 18.12.2021, to which the Respondent replied on 30.12.2021 denying liability due to substandard quality.

Following a failed pre-institution mediation (Non-Starter Report dated 14.02.2022), the Appellant filed a commercial suit via e-filing on 13.10.2023.

The Trial Court rejected the plaint under Order VII Rule 11 of the CPC, holding it barred by limitation.

1. Whether the non-payment of contractual dues under a running account constitutes a "continuing wrong" or gives rise to recurring causes of action.

2. Whether a unilateral legal notice or a reply denying liability can reset the period of limitation or act as an acknowledgment under Section 18 of the Limitation Act.

3. Whether the suit was within time after applying the COVID-19 limitation exclusion periods and pre-institution mediation time.

Article 15 of the Schedule to the Limitation Act, 1963, provides a three-year limitation period for goods sold and delivered on credit, starting from the expiry of the credit period.

Distinction between a "continuing wrong" (Section 22, Limitation Act) and "recurring wrongs" based on Balakrishna Savalram Pujari Waghmare v. Shree Dhyaneshwar Maharaj Sansthan and Union of India v. Tarsem Singh.

Section 18 of the Limitation Act requires an acknowledgment of liability to be made before the expiration of the prescribed period.

Suo Motu Writ Petition (C) No. 3 of 2020 directions regarding pandemic-related limitation extensions.

The Court determined that since the last transaction occurred on 06.03.2018, the 60-day credit period expired by 05.05.2018, making the debt actionable and starting the three-year clock under Article 15.

It rejected the "continuing wrong" argument, clarifying that while the effect (financial loss) continues, the breach (non-payment) was a completed act.

The legal notice of 18.12.2021 was held incapable of reviving a dead claim, as time-barred debts cannot be reset by unilateral acts.

The Respondent's reply dated 30.12.2021 did not qualify as an acknowledgment under Section 18 because it was made after the limitation period had already lapsed and contained a denial rather than an admission of a jural relationship.

Even applying the Supreme Court’s pandemic exclusion (extending limitation to 31.05.2022 for claims expiring during the pandemic), the suit filed in October 2023 was found to be delayed by 17 months.

The High Court dismissed the appeal and upheld the Trial Court's judgment rejecting the plaint.

The court further held that procedural irregularities (lack of opportunity to file a reply to the O7 R11 application) did not vitiate the order as limitation was a pure question of law based on the Appellant's own undisputed dates in the plaint.