Now, in connection with the phrase “right to sue accrues” that appears in the third column of art. In this connection, he relied upon the observations of Chagla J., in the above-referred case.Ĩ. The true construction of the contracts of indemnity was that the right to sue accrued in favour of the plaintiff immediately upon the plaintiff receiving the order dated February 28, 1963. In fact, in accordance with the contracts of indemnity, the plaintiff had called Page: 45upon the defendants to deposit the amount of the tax and the penalty. The levy was made by the order dated February 28, 1963. Jhaveri for the defendants has submitted that on a true construction of the contracts of indemnity contained in the two letters mentioned above, the plaintiff became entitled to be indemnified immediately upon the levy of the sales tax and penalty. He, therefore, submitted that the suit that was filed before expiry of three years from April 27, 1963, was within the prescribed period of three years and was not barred by the Law of Limitation.ħ. 3,479.25 by deposit and payment thereof between April 27 and July 1, 1963. Malkani, is such that in the present case the right to sue on the contracts of indemnity between the parties should be held to have accrued to the plaintiff only upon the plaintiff being damnified and suffering loss of the sum of Rs. The effect of the observations of the Supreme Court in that case, according to Mr. Malkani for the plaintiff has submitted that the above finding of the learned Judge is contrary to the decision of the Supreme Court in the case of Shanti Swarup v. As three years' period had expired from that date prior to the date of the institution of the suit, he held that the suit was barred and dismissed the same.Ħ. L.R 703, the learned Judge below held that in the present case the right to sue had accrued in favour of the plaintiff when the order dated February 28, 1963, demanding and/or levying sales tax and penalty was issued.

Relying upon certain observations of Chagla J., (as he then was) in the case of Gajanan Moreshwar v. Any suit for which no period of limitation is provided elsewhere in this Schedule.ĥ. 113 in the Schedule to the Limitation Act of 1963 which runs as follows:. The parties were agreed before the learned Judge below that the claim in suit was governed by the provisions in art. The plaintiff filed the present suit on Apto recover the above amount paid as sales tax.Ĥ. Prior to the institution of the above appeal, between April 27 and July 1, 1963, the plaintiff deposited the aggregate sum of Rs. The revisional application filed by the plaintiff was dismissed in July 1963. An appeal filed by the plaintiff against the tax assessed was dismissed on November 12, 1963.

The plaintiff called upon the defendants to deposit the amount of tax and penalty, but the defendants failed to do so. In connection with the goods sold by the plaintiff to the defendants, the sales tax authorities issued an order dated February 28, 1963, calling upon the plaintiff to pay Rs. There is no dispute between the parties that in respect of the goods sold and delivered by the plaintiff to the defendants during the above period a contract of indemnity in the terms contained in the above letters existed.ģ. Similar letter of indemnity was executed by the defendants on January 3, 1958. In the letter dated October 11, 1957, the defendants stated: “In respect of the transaction under your invoice…dated Septemwe do hereby indemnify you against any amount of sales tax that may be levied by the authorities with or without any guarantee thereof, as the case may be, as and when charged”. The relevant facts are as follows:- Between Octoand January 3, 1958, the plaintiff had sold and delivered to the defendants certain different goods and had also recovered the price thereof. Judge Kapadia of Page: 44the City Civil Court, Bombay, whereby the learned Judge tried the issue of limitation as preliminary issue and upon finding that the suit was barred by the Law of Limitation dismissed the same with costs.Ģ. K.K Desai, J.:- This is an appeal on behalf of the original plaintiff from the judgment and decree dated November 16, 1966, passed by Mr.

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