Supreme Court of India· 12 August 2026

Where a defendant, in response to a demand notice, admits and pays specific invoices that are undisputed while contesting the rest, does that payment amount to an acknowledgment of debt on a running account so as to extend limitation for the entire claim?

MAGEBA BRIDGE PRODUCTS PRIVATE LIMITED v. M/S. TRADE CENTRE

2026 INSC 839 · Civil Appeal No.10658 of 2026
Coram: K. Vinod Chandran; J. B. Pardiwala

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Answer

No. Since the payment was made in respect of specific admitted bills and the suit itself was filed on the strength of individual invoices rather than a running account, the payment did not amount to an acknowledgment of debt, and the mere deduction shown in the schedule to the plaint does not convert the claim into a running account.

Headnote

Indian Partnership Act, 1932 — s.69(2) — Limitation Act, 1963 — s.14 — Registration of firm — Acknowledgment of debt — Running account — Winding up proceedings — Indian Partnership Act, 1932 — s.69(2) — Registration of firm — Form-VIII — Order XLI Rule 27(1) — Held: Exhibit-8, a memorandum issued by the Registrar of Firms acknowledging receipt of documents and intimating that they were filed, recorded and registered, together with a certified copy of Form-VIII produced under Order XLI Rule 27(1), sufficiently proved registration of the plaintiff-firm, and the suit was not hit by Section 69(2) of the Indian Partnership Act, 1932. (¶4, 5, 6) Limitation Act, 1963 — s.14 — Winding up — Separate and independent remedy — Acknowledgment of debt — Running account — Held further: Time spent prosecuting a winding up petition cannot be excluded under Section 14 of the Limitation Act, 1963 for a suit for recovery of money, since a winding up proceeding is a separate and independent remedy from a suit for recovery; and since the payment recorded admitted bills, not acknowledgment of debt on a running account, the claim was barred by limitation. (¶14, 15, 16, 17) Indian Partnership Act, 1932 — Limitation Act, 1963 — Appeal allowed — Held further: The order of the High Court was reversed to the extent of granting the relief of recovery, since the claim for recovery is hit by limitation, despite the finding that the suit was properly instituted by a partnership firm whose registration was proved in accordance with law; the appeal was allowed. (¶18, 19)

In the Court's own words

Paragraph 15Be that as it may, we have to notice from the order of the Company Court that the petition filed before it was affirmed on 07.02.2009 and filed on 10.02.2009. The suit was filed with the cause of action arising on 03.06.2008; when a demand was raised by the respondent, on 01.08.2008; when it was responded by Annexure P-18 and on 02.09.2008; when part payment was made. However, Annexure P-18 indicates that there was no acknowledgment of debt and the payment made was not a part payment but the payment with respect to three invoices, admitted as remaining due, by the appellant/defendant. The appellant by Annexure P-18 admitted TC No.32/07-08, TC No.33/07-08 and TC No.64/07-08, which was paid by the appellant, one of which; TC No.64/07-08 dated 24.08.2007, did not even figure in the schedule of the claim, as revealed from the plaint, which stood already paid on 12.12.2007 before the notice of demand was issued.

Paragraph 17We categorically find that Annexure P-18 did not acknowledge the debt as sought to be recovered by the respondent, evidenced by the bills, more fully described in the schedule to the plaint. The suit as we found was filed on the strength of the invoices raised and not on the basis of a running account. The mere deduction shown with respect to the payment of the admitted bills, in the schedule to the plaint, will not make it a running account. The notice of demand, the reply issued or the payment made on admission of two bills, with disputes raised with respect to the other bills, demolishes the case set up by the respondent-plaintiff on cause of action as emanating from the plaint.

Acts & Sections

s.69(2) Indian Partnership Act, 1932s.14 Limitation Act, 1963s.5 Limitation Act, 1963Order XLI Rule 27(1) Code of Civil Procedure, 1908

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Also decided in this judgment

Under Section 14 of the Limitation Act, 1963, can the time spent prosecuting a winding up petition before the Company Court be excluded in computing the limitation period for a subsequent suit for recovery of money based on the same transactions?Under Section 69(2) of the Indian Partnership Act, 1932, can a suit by an unregistered firm be maintained where a memorandum issued by the Registrar of Firms acknowledging receipt and registration of documents, along with a certified copy of Form-VIII, is produced to prove registration?Does the principle in Kalpraj Dharamshi, permitting exclusion of time under Sections 5 and 14 of the Limitation Act, 1963 for a delayed appeal bona fide pursued before a wrong forum, extend to permit exclusion of time spent in an independent winding up proceeding for the purpose of a separate suit for recovery of money?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Supreme Court of India. Corrections