New Delhi: The Supreme Court has allowed an appeal filed by a company against a decree for recovery of money passed in favour of its supplier, holding that the claim was barred by limitation, even while affirming the finding that the supplier was a duly registered partnership firm.
A Bench of Justices J.B. Pardiwala and K. Vinod Chandran was hearing an appeal filed by Mageba Bridge Products Private Limited against a judgment of the First Appellate Court, which had reversed the Trial Court's dismissal of a suit filed by M/s. Trade Centre for recovery of Rs.24,36,105/- along with interest at 6% per annum. The Trial Court had dismissed the suit on the ground that the plaintiff's status as a registered partnership firm was not proved, attracting the bar under Section 69(2) of the Indian Partnership Act, 1932.
On appeal, the First Appellate Court had accepted Exhibit-8, a Memorandum of Registration issued by the Registrar of Firms, as conclusive proof of registration, and after permitting a certified copy of Form-VIII to be brought on record as additional evidence under Order XLI Rule 27 CPC, decreed the suit on merits. The appellant, who was the defendant before the Trial Court, challenged this judgment primarily on the grounds that valid proof of the plaintiff-firm's registration had not been produced and that the suit claim was, in any event, barred by limitation.
The Court, on a perusal of the record, held that there was sufficient evidence to establish the registration of the respondent-firm. It noted that Exhibit-8 was a memorandum issued by the Registrar of Firms, West Bengal, acknowledging that the partnership documents had been filed and registered, and reflecting Registration No. L73931 allotted to the firm with effect from 14.05.2010. This was found to be corroborated by the certified copy of Form-VIII permitted to be produced as additional evidence, which recorded the same registration number and date.
On the question of limitation, the Court noted that the suit was founded on specific bills raised for supplies made by the respondent to the appellant, and not on a running account, notwithstanding that the parties had numerous transactions between them. The respondent had contended that the cause of action arose on 03.06.2008, relying on an alleged admission of debt and part payment, and had further argued that the time spent pursuing a winding-up petition before the Company Court ought to be excluded under Section 14 of the Limitation Act, since the Company Court, while relegating the respondent to a civil remedy, had granted liberty to file the suit within three months.
Examining this contention, the Court referred to its earlier decisions in Kalpraj Dharamshi v. Kotak Investments Advisors Limited, Yeswant Deorao Deshmukh v. Walchand Ramchand Kothari and Jignesh Shah v. Union of India, and held that a winding-up petition and a civil suit for recovery of money are separate and independent remedies, with divergent procedures and reliefs, and that the pendency of one cannot be treated as furthering the same relief as the other for the purposes of Section 14. The Court observed that “the initiation of a winding up proceeding, which may or may not enable recovery, will not impact the limitation for the separate remedy of suit for recovery of money.”
Applying this principle, the Court found that the appellant's communication relied upon by the respondent did not amount to an acknowledgment of the debt claimed in the suit, as it admitted liability only in respect of three specific invoices, one of which did not even figure in the suit claim and had, in fact, already been paid before the notice of demand was issued. It was further noticed that before the Company Court, the appellant had agreed to furnish security only for two particular bills dated 30.01.2006, for which limitation to institute a suit expired on 29.01.2009 a date prior even to the filing of the Company Petition on 10.02.2009, rendering the question of exclusion under Section 14 academic for those bills.
As regards the remaining bills, the last of which was dated 06.03.2007, the Court held that the suit, having been filed only on 05.06.2010, was clearly barred by limitation. Accordingly, while affirming the finding that the respondent-firm's registration stood duly proved, the Supreme Court set aside the judgment of the First Appellate Court to the extent it granted the decree for recovery, and held that the suit stood dismissed as being barred by limitation. The appeal was allowed.
Appearances:
For the Appellant: Mr. Nikhil Nayyar, Senior Advocate.
For the Respondent: Mr. Manish Goswami, Senior Advocate.
Case Title: Mageba Bridge Products Private Limited vs. M/s. Trade Centre, Civil Appeal No. 10658 of 2026 (Arising out of SLP (C) No. 24861 of 2025)
