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Nahanibai Widow of Venkatidas Vs. Nathu Bhau - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMumbai
Decided On
Judge
Reported in(1883)ILR7Bom414
AppellantNahanibai Widow of Venkatidas
RespondentNathu Bhau
Excerpt:
signed balance of account - account stated--acknowledgment--limitation--act ix of 1871, section 20, and schedule ii, article 62--act xv of 1877, section 19, and schedule ii, article 64. - - three years afterwards the debtor paid interest, which he debited in his ledger to the creditor against a credit of the like amount for interest accrued due......in his ledger to the creditor against a credit of the like amount for interest accrued due. fifteen years afterwards the interest was again computed, and the debtor's successor in title, his brother, carried over the balance to the next year with a written memorandum 'due for balance of old account'. as an acknowledgment this could not avail to revive the right to sue which had long before been barred by limitation; but it is urged that the transaction was an account stated, and that on such a statement in writing signed a new cause of action arose, which, under article 64 of schedule ii of act xv of 1877, could be sued on at any time within three years from its date. now, there are, no doubt, some cases which assume, and some few which necessarily imply, that an account made up,.....
Judgment:

West, J.

1. The original debt in this case was contracted eighteen years before the striking of the balance on Which eventually the present suit was instituted. Three years afterwards the debtor paid interest, which he debited in his ledger to the creditor against a credit of the like amount for interest accrued due. Fifteen years afterwards the interest was again computed, and the debtor's successor in title, his brother, carried over the balance to the next year with a written memorandum 'Due for balance of old account'. As an acknowledgment this could not avail to revive the right to sue which had long before been barred by limitation; but it is urged that the transaction was an account stated, and that on such a statement in writing signed a new cause of action arose, which, under Article 64 of Schedule II of Act XV of 1877, could be sued on at any time within three years from its date. Now, there are, no doubt, some cases which assume, and some few which necessarily imply, that an account made up, as this one was, on a particular date, with an acknowledgment of an aggregate sum due, constitutes an account stated. But there are others, even amongst those cited by Mr. Pandurang, which assume, or imply with equal force, that an acknowledgment in a ledger of a sum as due on foot of a particular account is of the nature of, and subject to the rules of limitation applicable to any other acknowledgment of debt in writing. Thus we should have, under Section 19 of the Act, an acknowledgment in effectual to bar limitation, because not made within the prescribed period, while one of exactly the same character might be made under Article 64 of Schedule II at any time whatever, and would bar limitation, because no time is prescribed within which an account must be stated. The Legislature cannot have intended to lay down rules which would by self-contradictory, or have meant by Article 64 to defeat its own purpose in Section 19. We must see if a reasonable construction cannot be found, which will give a distinct operation to each of the two rules, and an operation that will obviate clashing and inconsistency. Such a construction is immediately found when we adopt Lord Blackburn's definition of 'account stated' in Laycock v. Pickles 33L.J. Q.B.47. The learned Judge says: 'In common talk an account stated is treated as an admission of a debt due from the defendant to the plaintiff; but there is also a real account stated, which is equivalent to what is called, in the old law, an insimul computaverunt, when several items of claims are brought into account on either side, and being set against one another, a balance was struck, and the consideration for the payment of the balance was the discharge on each side' An account stated (so-called) gives no new starting point for limitation when the items are all on one side. See Thakoor Pershad Singh v. Mohesh Lall and Khemchand v.Narayanji. This is, no doubt, the true sense of account stated: each party resigns his own rights on the sums he can claim in consideration of a similar abandonment on the other side, and of an agreement to pay, and to receive in discharge, the balance found due. In the present case there had been a payment of interest fifteen years before the closing of the account. From that time forward there were no accounts at all until the interest was computed and added to the principal, which had lain due for fifteen years to make up a sum then acknowledged to be due. On the other side of the account there ware no entries, and though, claims or payments might have been made, it, does not appear that any had been made. There was thus no account to state in the real sense of the term. There was nothing for the debtor to give up in consideration of the balance struck being taken, as final, because there was, and could be, no item to his credit. To admit such a transaction as here occurred to be a statement of account, which might be made after any lapse of time, would be to provide the easiest possible way, not only for barring limitation, but for defeating the Limitation Act.

2. After the acknowledgment in 1875 the account was again balanced in 1878, and the acknowledgment of a sum due was repeated. But as the previous acknowledgment had not revived the right to sue, neither could this second one.

3. We, therefore, discharge the rule with costs.


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