Kerala HC: Buyer–Seller Credit Dealings Not a “Mutual, Open & Current A/c” Under Article 1 of Limitation Act

The Kerala HC held that a buyer–seller ledger of credit sales does not constitute a “mutual, open and current account” under Article 1 of the Limitation Act, 1963.

The Court observed that the account was unilateral, with only the seller making debit entries, and no reciprocal obligation or debtor–creditor shifts existed.

The case arose from a suit in which the respondent treated its credit-sales ledger with the dealer as a mutual account to claim the Article 1 limitation period. 

The Court clarified that Article 1 applies only when both parties have enforceable claims against each other, which was absent here.

[Jimmy Ellias v. The Tata Iron & Steel Co. Ltd and connected case]