Authority: High Court of Delhi (Bench: Hon'ble Mr. Justice Anil Ksh etarpal, Hon'ble Mr. Justice Amit Mahajan)

Order Date: 16 July 2026

Case Overview

  • Parties: Appellant – M/s Prism Johnson Limited (formerly Prism Cement Limited), a public limited company engaged in cement, ready‑mix concrete, tiles, sanitaryware and bath products. Respondent – M/s Master Nihal Singh Memorial Education Society, an educational trust that sought concrete supplies for a school project in Sector‑43, Gurugram.
  • Nature of Proceeding: Appeal under Section 96 read with Order XLI of the CPC and Section 13(1A) of the Commercial Courts Act against the District Judge’s order dated 19‑04‑2024, which dismissed the suit (CS (COMM) 576/2023) as barred by limitation.
  • Background Facts:
  • Purchase order dated 02‑03‑2017 stipulated 60‑day credit and weekly billing for various grades of concrete.
  • Supplies were made; appellant claims the material met specifications and that a running account reflected outstanding dues of Rs 69,72,422 plus 18% per annum interest.
  • Respondent contends the concrete was sub‑standard, rejected most lots, and that payments of Rs 21,19,596 (06‑03‑2018) and Rs 8,00,000 (24‑02‑2021) constituted full and final settlement.
  • Legal notice issued by appellant on 18‑12‑2021; respondent’s reply on 30‑12‑2021 raised quality objections for the first time.
  • Pre‑institution mediation was initiated on 21‑12‑2021 but respondent did not appear; a Non‑Starter Report was issued on 14‑02‑2022.
  • Suit filed on 13‑10‑2023; respondent moved an application under Order VII Rule 11(d) CPC, which the trial court allowed, rejecting the plaint as time‑barred.

Legal Analysis (as per the High Court)

1. Scope of Order VII Rule 11(d) CPC – The Court affirmed that limitation is a “law” within the meaning of the rule; the plaint’s averments and accompanying documents suffice for a dismissal without a full trial.

2. Applicable Provision of the Limitation Act – Article 15 governs suits for price of goods sold on a fixed credit period. The 60‑day credit period from each delivery is the trigger; the last supply reflected in the running account occurred on 06‑03‑2018, making the latest possible credit expiry 05‑05‑2018. Consequently, the three‑year limitation expired on 05‑05‑2021.

3. Continuing vs. Recurring Cause of Action – The Court held that non‑payment of a debt due on a specific date is a completed breach, giving rise to recurring causes of action, not a continuing wrong. Each unpaid invoice creates a separate limitation period.

4. Effect of Legal Notice and Reply – A unilateral legal notice (18‑12‑2021) and the respondent’s reply (30‑12‑2021) do not restart the limitation clock nor constitute an acknowledgment under Section 18, as the reply was after the limitation period and denied liability.

5. Pandemic Exclusion & Pre‑institution Mediation – The Supreme Court’s pandemic exclusion (15‑03‑2020 to 28‑02‑2022) and the mediation period (21‑12‑2021 to 14‑02‑2022) fall within the same excluded window; they do not provide additional time. The suit should have been filed by end‑May 2022, but was instituted on 13‑10‑2023.

6. Procedural Grievance on Reply – The Court found no prejudice from the trial court’s decision to decide the Order VII application without granting a reply; a demurrer based on the plaint’s chronology suffices.

Final Outcome

  • The appeal is dismissed.
  • The trial court’s judgment and decree dated 19‑04‑2024 are upheld.
  • The plaint is rejected as barred by limitation; no relief is granted to the appellant.
  • All pending applications, if any, stand disposed of.

Topics: Limitation Law, Commercial Contract Dispute