R.B. Misra, J.
1. These are two appeals against the common judgment of the First Additional Civil Judge, Agra dated 24th September 1956 in two cross suits between the parties. Suit No. 91 of 1952 giving rise to First Appeal No. 29 of 1957 was filed by Raj Bahadur against Chaubey Sushil Chand. Keshri Mal and Prem Chand, while suit No. 75 of 1952 giving rise to First Appeal No. 33 of 1957 was filed by. Chaubey Sushil Chand against Raj Bahadur. The material facts leading upto these appeals are as follows:
2. There is a glass factory known as Hanuman Glass Works at Station Road, Firozabad, Chaubey Sushil Chand was the sole owner till 1929 or 1930. In or about the year 1930-31 late Lal Pyare Lal uncle of Raj Bahadur appeared on the scene. He was taken in either as partner or on commission and his share was fixed at 3/6 in a rupee. In or about the year 1935 Lal Pyare Lal started another business for the purchase and pale of sand etc. used in the manufacture of glass in the name and style of Lal Pyare Lal Agarwal. According to Raj Bahadur, this new business was in partnership with Chaubey Sushil Chand wherein the share of Chaubey Sushil Chand was fixed at As. -/10/-and that of Lala Pyare Lal at As. -/-6/- in a rupee. According to Chaubey Sushil Chand, it was, however, a private concern of Lal Pyare Lal. In or about the same year Lal Ram Swarup, father of Raj Bahadur, also joined the firm Hanuman Glass Works as a servant on a salary of Rs. 35/- per mensem. Later on, he was also taken either as partner or on commission and the shares of these persons were readjusted in such a way that Chaubey Sushil Chand was to have As. -/9/6. Lala Pyare Lal -/3/6 and Lal Ram Swarup -/3/-. On 9th August, 1943, the firm Pyare Lal Agarwal entered into a financial agreement on commission basis with M/s Himalaya Glass Works at Firozabad for financing and supplying raw materials to and for the sale of the finished products of the latter firm. The said arrangement, however, lasted only for a year when huge amount had fallen due to the firm Pyare Lal Agarwal, A suit was filed by Lal Pyare Lal for the recovery of the dues against M/s Himalaya Glass Works. Pyare Lal in the meantime died and late Lal Ram Swarup as his legal representative entered into a compromise and under the compromise only a decree of Rs. 8000/-was passed. Firm Pyare Lal Agarwal stopped its business and was dissolved some time in 1944 on the failure of Himalaya Glass Works though its final accounts could not be settled and wound up on account of the pendency of the suit against M/s Himalaya Glass Works.
3. It appears that about the same time the business of Hanuman Glass Works was divided into two sections, known as Sections A and B. Section A was to deal in chemical etc. while section B was to deal in the manufacture and sale of Block Glass only. In Section A, the shares of Chaubey Sushil Chand, Lala Pyare Lal and Lala Ram Swarup continued to be the same as stated earlier but in Section B, (also known as 'Kanch Bhatti') two more partners, that is, Shri Keshari Mal and Shri Prem Chand were taken as new partners and their shares; were readjusted. The firm Hanuman Glass Works Sections A and B was not dissolved on the death of Lala Pyare Lal and under an oral agreement between the surviving partners they continued as before. The share of Lal Pyare Lal, however, devolved on Lal Ram Swarup. Lal Ram Swarup also died on 23rd September, 1951. On his death the firm stood legally dissolved.
4. It further appears that in the account books of Firm Hanuman Glass Works Section A. Lal Pyare Lal opened two Khatas -- one in the name of Lala Pyare Lal and the other in the name of Lala Pyare Lal Agarwal. Khata in the name of Lala Pyare Lal Agarwal represented the commission advances made in cash or kind to Himaliya Glass Works through firm Pyare Lal. Later on the two Khatas were amalgamated.
4-a. Chaubey Sushil Chand in his suit no. 75 of 1952 against Raj Bahadur claimed a decree for Rs. 17,316/5/- with pen-dente lite and future interest against the assets of late Lala Pyare Lal in the hands of Raj Bahadur. According to the plaintiff Lal Pyare Lal supervised the plaintiff's business in Sections A and B of Hanuman Glass Works on commission basis and not as a partner. He also used to carry on his separate business at Firozabad, Under the terms of an agreement, Lala Pyare Lal was to get -/3/6 in a rupee as his commission on the net profits of the plaintiff's aforesaid business in Hanuman Glass Works as his remuneration for his work of supervision. Lala Pyare Lal used to take cash advances and raw material and glass etc. from the plaintiff's firm Hanuman Glass Works for his other business. There was mutual, open and current account between the plaintiff and Lal Pyare Lal deceased under which cash advances, price of the raw materials and glass etc. used to be debited to Lal Pyare Lal and the payments made out of the commission earned by him used to be credited by him. Though the account was open, mutual and current, yet for the facility and convenience, two Khatas were opened in the plaintiff's account books -- one in the name of Pyare Lal Agarwal and the other in the name of Lala Pyare Lal on 30th June, 1949. Both these Khatas were amalgamated under the instructions of Lala Pyare Lal deceased. From Ist July, 1948 to 30th June, 1949 Rupees 37.302/14/9 were debited to Lal Pyare Lal and from Ist July. 1948 to 30th June, 1949 Rs. 22,302/5/6 were credited to him in the plaintiff's regularly kept account books. Thus a balance of Rs. 15,000/9/-remained against Lal Pyare Lal. Subsequently from Ist July, 1949 upto 30th June, 1950, a balance of Rs. 17,308/11/-remained due from Lala Pyare Lal including the balance of Rs. 15,000/9/- as outstanding on 30th June, 1949. From Ist July, 1990 to 30th December, 1950, a further sum of Rs. 7/10/- was debited to Lal Pyare Lal and nothing was credited. Thus a total amount of Rs. 17,316/5/ remained due to the plaintiffs from Lal Pyare Lal deceased. Lala Pyare Lal died leaving Raj Bahadur, his nephew, the defendant. Besides the repeated demands, the defendant did not pay the amount so the plaintiff was obliged to file a suit for the recovery of the said amount.
5. Raj Baihadur in his turn filed suit no. 91 of 1952 for rendition of account of firm Hanuman Glass works at Firozabad Sections A and B and to pass a decree against the defendant for such amount that may be found due to the plaintiff in respect of the share of profits of Lal Pyare Lal and Lala Ram Swarup. His stand is that Lala Pyare Lal was taken as partner by Chaubey Sushil Chand in firm Hanuman Glass Works with -/3/6 as share in a rupee. During the continuance of the above partnership in or about the year 19-35 Chaubey Sushil Chand and Lala Pyare Lal started another business in partnership for the purchase and sale of the sand etc. in the name and style of Pyare Lal Agarwal. In this business the share of Lala Pyare Lal was As. -/6/-while that of Chaubey Sushil Chand was -/10/- in a rupee. Later on Lala Ram Swarup was also taken as partner in the firm Hanuman Glass Works and the shares of partners were readjusted. Chaubey Sushil Chand was to have -/9/6, Lala Pyare Lal -/3/6 and Lala Ram Swarup -/3/-. On the August. 1943, Lala Pyare Lal and Chaubey Sushil Chand as proprietor of the firm Pyare Lal Agarwal entered into a financial agreement on commission basis for financing and supplying raw materials and for the sale of finished products of the latter Firm. The said arrangement, however, lasted only for a year when a huge amount had fallen due to the firm Pyare Lal Agarwal. As the firm was not a registered firm, to avoid legal complications, on the advice of Chaubey Sushil Chand a suit was filed in the name of Lala Pyare Lal. Eventually the suit was compromised by Lala Ram Swarup as the heir and legal representative of Lal Pyare Lal who died during the pendency of the suit. Lala Pyare Lal died on 3rd November, 1949 and Lala Ram Swarup died on 23rd September 1957. The firm Hanuman Glass Works was not dissolved on his death and under an oral agreement between the surviving partners, they continued as before and the share of Lala Pyare Lal vested in Ram Swarup. On the death of Lala Ram Swarup the firm stood legally dissolved. In the account books of M/s. Hanuman Glass Works, Chaubey Sushil Chand opened two Khatas -- one in the name of Lala Pyare Lal and the other in the name of Lala Ram Swarup. There was another Khata also in the name of Lala Pyare Lal Agarwal which represented the advances made in cash and kind through firm Pyare Lal Agarwal. Later on Chabuey Sushil Chand without the consent and without any right or justification transferred the liability of Khata of Lal Pyare Lal Agarwal as far back as 1944. It is further alleged that Chaubey Sushil Chand had tempered with the Bahi Khatas in order to escape the bar of limitation. The plaintiff as heir and legal representative of Lal Ram Swarup and Lal Pyare Lal is entitled to claim from the defendant the amount that may be found due on accounting on account of their shares of profit in the above firm of M/s. Hanuman Glass Works with regard to Sections A and B. The defendants were asked to render account but instead of doing so, Chaubey Sushil Chand, defendant No. 1, has filed suit No. 75 of 1952 on false and frivolous grounds. Even assuming the allegation of Chaubey Sushil Chand that Lala Pyare Lal and Lala Ram Swarup were not partners but were only entitled to commission at the said rate in the profits of Firm Hanuman Glass Works, the plaintiff is entitled to recover the amount due on accounting on account of deposits in their respective Khatas and their shares of profit. Raj Bahadur contested the suit of Chaubey Sushil Chand on various grounds and it is not necessary to mention the various pleas taken by him in the written statement Suffice it to say that the stand taken by Raj Bahadur in his suit no. 91 of 1952 against Chaubey Sushil Chand is virtually his defence in suit No. 75 of 1952 and vice versa.
6. The pleadings of the parties gave rise a fairly large number of issues but as the most of the issues were common in the two suits, the learned Judge has discussed those similar issues together and after considering both oral and documentary evidence, he came to the following conclusion.
(a) That Lala Pyare Lal was merely a servant in M/S Hanuman Glass Works upto the time of his death in 1949 and he was receiving -/3/6 in a rupee out of net profits as his commission. Likewise Ram Swarup was receiving -/3/- as his commission out of the net profits in Hanuman Glass Works Sections A and B.
(b) That Lala Pyare Lal never gave his consent that the amounts standing due from him in the Khata of Pyare Lal Agarwal be transferred to his current account; of commission maintained under the name of Pyare Lal.
(c) That the two Khatas were never amalgamated with the consent of Pyare Lal and this all is the doing of the plaintiff Chaubey Sushil Chand.
(d) That the suit filed by Chaubey Sushil Chand is barred by time and the two accounts maintained in the account books of Hanuman Glass works did not constitute a mutual, open and current account.
(e) Lal Pyare Lal was never a partner In Hanuman Glass Work Section A he was only acting as a commission agent for Chaubey Sushil Chand, the suit for rendition of accounts could not be filed by Raj Bahadur.
On these findings, both the suits were dismissed by the learned First Additional Civil Judge.
7. It appears that Chaubey Sushil Chand was confronted with the legal difficulty that the suit by an agent against the principal for rendition of account was not maintainable therefore, he moved an application for amendment of the plaint for a decree of specified amount but the application for amendment was dismissed by the court below.
8. Both the parties feeling dissatisfied with the judgment and decree have come up in appeal to this court.
9. We would first take up the appeal No. 29 of 1957. Shri Jagdish Swarup appearing for the appellant Raj Bahadur seriously contended that the court below has committed an error of law in dismissing the suit on the ground that the suit was not maintainable. In doing so, he has not applied the correct law. The Court below mainly relied upon Mirza Najm Effindi v. Firm Kohinoor Footwear Co. : AIR1946All489 . A learned Single Judge of this Court took a view that an agent is not ordinarily entitled to institute a suit for accounts against his principal. His suit must be for the recovery of the specific amount alleged to be due to him from the principal. The mere fact that the accounts are complicated, would not entitle him to sue for rendition of accounts for which a principal is not legally liable, but it is open to the agent to serve interrogatories on the principal or to apply for discovery and inspection of Ms accounts. Similarly the mere fact that in ascertaining the accounts does not in any way alter the nature of a suit brought by the agent against his principal. In this case, reliance was also placed on the case of Hanuman Baksh v. Balmukund Kanhaiyalai, AIR 1927 Lab 701 and Narmada Chandra v. Maharaj Bahadur Singh : AIR1937Cal359 . According to Shri Jagdish Swarup, the view taken in : AIR1946All489 has been turned down in a later decision of this Court. He referred to the case of Lakshmiji Sugar Mills Co. v. Banwari Lal : AIR1959All546 , A Division Bench of this Court held:
'There is no provision for a suit for accounts by the agent against his principal either in the Contract Act or in the Limitation Act. Therefore, normally such a suit will not lie. But the existence of special circumstances will justify such a suit for accounts. For the maintainability of such a suit it should be made clear that exceptional circumstance of the agent not being able to claim a specific sum without the principal's accounts being gome into exists. If this circumstance does as exist a suit for accounts by the agent would be clearly not maintainable,'
In that case the case of Ram Chandra Madhvadass Co. v. Moidun Kutti Birankutti and Bros. AIR 1938 Mad 707 was relied upon whereas the case of Mirza Najm Effindi v. Firm Kohinoor Footwear Co. (Supra) was criticised. In that case the plaintiff tentatively fixed the amount for the purposes of relief at Sections 5250/- or such other amount that may be found on rendition of details. On that basis it was contended that the plaintiff had claimed a decree for specific amount but that contention was repelled by the court on the ground that in a suit for recovery of money the plaintiff has to state the precise amount and in case of a suit for money to be found to state the approximate amount The plaintiff fixed the amount at Rs. 5,250/- only tentatively. He did not in the plaint state that this was the precise amount due to him. If he was really suing for the precise amount, that amount should have been mentioned precisely and not tentatively in the plaint. Both the parties understood that the suit was a suit for account. The plaintiff moved an amendment application, confronted with the difficulty, tot that was rejected and the Court dealing with the scope of Order 6 Rule 17 of the Code of Civil Procedure made the following observations:--
'The contention that all amendments are within the power of the Court and that the only question that a Court has to determine is whether the amendment should or should not be allowed is not acceptable. It is not open to either party to a suit by amendment to seek to substitute a new cause of action or to change the nature or character of the suit after limitation has set in.'
In that particular case, the plaintiff (an agent) had sought a decree for accounts. He had based his claim on the repeated refusal of the defendant (his principal) to render the account and to pay the money in spite of promises. By the amendment the plaintiff wanted to change the relief originally claimed for rendition of accounts and a decree for the amount found due on such rendition of accounts into a new relief for a decree for a specific amount of Rs. 54,808/-claimed to be due as commission on specific contracts secured by the plaintiff and also wanted to change the cause of action from the refusal to render accounts to non-payment of the specific amount. The Court held:
'That the change in both the relief claimed and the cause of action was a fundamental change in the character of the suit and in the circumstances of the case the plaintiff could not be permitted to make such an amendment. Hence the amendment sought was not within the jurisdiction of the Court to allow after the bar of limitation had become available to the defendant.'
10. In Ham Krishna Agencies (Pvt.) Ltd, v. Life Insurance Corporation, Madras : AIR1967AP109 a learned Single Judge of that Court took a similar view that broadly speaking no agent can institute a suit for account against the principal who normally is not held liable for account. It is not, however, an absolute rule of law. It accepts some well recognised facts in relation to the business (which) can be within the exclusive knowledge of the principal. In such a case it is recognised that a suit for account in those special circumstances can lie against the principal.
11. Next reliance was placed on Narandas Morardas Gajiwala v. S. P. A. M. Papamal : AIR1967SC333 . While dealing with Section 213 of the Indian Contract Act the Supreme Court held:
'The principal's right to sue an agent for rendition of accounts is recognised by the Contract Act, inasmuch as Section 213 thereto specifically provides that an agent is bound to render proper accounts to his principal on demand. There is no such provision in the Act which enables an agent to sue his principal for accounts. The statute is not exhaustive and the right of the agent to sue the principal for accounts is an equitable right arising under special circumstances and is not a statutory right. In English law an agent has a right to have an account taken and where the accounts are of a simple nature they can be taken in an ordinary action in a Queen's Bench Division. The legal position in India is not different. Though an agent has no statutory right for an account from his principal, nevertheless, there may be special circumstances rendering it equitable that the principal should account to the agent. Such a case may arise where all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claims for commission against his principal. The right of the agent may also arise in an exceptional circumstance where his remunerafion depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into.'
12. On an analysis of the above reported cases the law holding the field at present appears to be that in exceptional circumstances, even an agent can file a suit for accounting against a principal. This right is not a statutory right but it is based on equitable considerations. In view of this legal position, we have to examine in the instant case whether the appellant had made out a special case for such relief. From the statement of Raj Bahadur himself, it is clear that he had gone through the account books before filing the suit and about 70 to 80 thousands were due towards his father and uncle as commission earned by them The plaintiff Raj Bahadur at page 57 of the typed paper book, deposed:
'At the age of 17-18 years, I knew everything by making visits there. I used to go to the factory and see the Bahi Khata. I started seeing the Bahi Khatas from the year 38-39. I do not remember the amount, due to my uncle Pearey on account of his share, in the year 38-39 nor do I remember about the subsequent period...... Before I filed the suit Chaubey Sushil Chand sorted out the amount with reference to the original Bahis and a sum of Rs. 2000/- was found due to Pearey Lal and. Ram Swarup from Chaubey Sushil Chand, I knew it before getting the plaint drafted. I had told my Vakil Singh that a sum of Rs. 20,000/-would be found due to me; but the Vakil informed me that at that time the suit was being filed on payment of court-fee on a lesser amount.''
On the own showing of Raj Bahadur, he knew about the actual state of affairs. No special circumstances have been made out by the plaintiff and, therefore, the suit giving 'rise to this appeal by Raj Bahadur is not maintainable. When the plaintiff appellant was met with such a plea, he sought for an amendment of the plaint by adding a relief for specific amount. This application was objected to by Chaubey Sushil Chandra defendant. His contention was that the amendment sought for would change the nature of the suit. The court below dismissed the application for amendment.
13. Sri Jagdish Swarup reiterates before this Court as well that the application for ' amendment should have been allowed. His contention is that it was just and fair to allow the amendment application of the plaintiff for the relief for specific amount, at least for the amount admitted by the defendant Chaubey Sushil Chandra. It would be really hard if the plaintiff is non suited on a technical ground and the amendment sought for is refused.
14. Sri Raja Ram Agarwal, on the other hand, contended, for Chaubey Sushil Chandra, that the amendment sought for changes the very nature of the suit and cannot be allowed. It is also contended that a valuable right has vested in the defendant respondent by lapse of time and he cannot be deprived of that right under the garb of amendment. Reliance was placed on Lakshmiji Sugar Mills v. Banwari Lal : AIR1959All546 (Supra). That was also a case for accounting by an agent against the principal and the plaintiff, faced with similar situation, filed an application for amendment of the plaint by adding a relief for decree for specified amount. This court held that the amendment sought for would change the nature of the suit. Inasmuch as the cause of action in a suit for accounting is different from the cause of action in a suit for specific amount, the amendment was refused.
15. In the case in hand, the amendment in question was sought for on the ground that the defendant had taken the plea in the written statement that the suit was not maintainable. Although the stand of the plaintiff is that the suit, as framed, is legally maintainable, but in order to obviate any future difficulty, the plaintiff sought for an amendment by adding a relief for a decree for specific amount. The cause of action in a suit for accounts is that the defendants are not prepared to render accounts while the cause of action in a suit for specific amount would be the non-payment of the amount.
16. There are two hurdles in the way of the plaintiff (i) the application for amendment has been moved at a time when a valuable right has accrued to the defendant by lapse of time. No good ground has been shown in the application why the application was not moved earlier (ii) Besides it would change the very nature of the suit. Sri Jagdish Swarup, however, took support from a reported decision of A. K. Gupta and Sons v. Damodar Valley Corporation : 1SCR796 . The Supreme Court while dealing with the scope of Order 6 Rule 17 observed:
'In the matter of allowing amendment of pleading the general rule is that a party is not allowed by amendment to set up a new case or a new cause of action particularly when a suit on the new cause of action is barred where however the amendment does not constitute the addition of a new cause of action or raise a different case, but amounts merely to a different or additional approach to the same facts the amendment is to be allowed even after expiry of the statutory period of limitation.'
They further observed.
'The expression cause of action in this context does not mean every fact which is material to be proved to entitle the plaintiff to succeed. The expression only means a new claim made on a new basis constituted by new facts. The words new case means new set of ideas. Thus no amendment will be allowed to introduce new set of ideas to the prejudice of any right acquired by any party by lapse of time.''
17. In this connection. Shri Jagdish Swarup also relied upon the cases of Jai Jai Ram Manohar Lal v. National Building Material Supply, Gurgaon : 1SCR22 and L. J. Leach and Co. Ltd. v. Jardine Skinner and Co. : 1SCR438 .
18. Shri Raja Ram Agarwal appearing for the respondent in this appeal on the other hand contended that if the amendment sought takes away the vested right, the special circumstances should be shown for allowing such amendment. He supported his contention by a Supreme Court decision in Shanti Kumar R. Canji v. Home Insurance Co. of New York : 1SCR550 . In that case, the Supreme Court observed as under:
'In exceptional cases an amendment has been allowed where the effect is to take away from a defendant a legal right which has accrued to him by lapse of time, because the court found that consideration of lapse of time is outweighed by the special circumstances of the case.' He also relied upon the case of Lakshmiji Sugar Mills v. Banwari Lal : AIR1959All546 (supra).
19. On an analysis of the aforesaid cases, the law seems to be well settled that if an amendment seeks to change the nature of the suit, it should not be allowed, as a valuable right has accrued to the other party. The appellant has not been able to show the special cause for allowing such amendment in this view of the matter, this appeal cannot succeed.
20. This leads us to the other Appeal No. 33 of 1957. This appeal, as stated earlier arises out of Suit No. 75 of 1952. It was filed by Chaubey Sushil Chandra against Raj Bahadur. The suit was dismissed by the Civil Judge on the ground of limitation.
21. Sri .Raja Ram Agarwal, appearing for the appellant, contended that the court below has erred in law in dismissing the suit on the ground of limitation The limitation, according to him, in this case would be governed by Art. 85 of the Indian Limitation Act No. 36 of 1963. It reads:
'85. For the balancedue on a mutual, open, and current account, where there have been reciprocaldemands between the parties.
The close of the year inwhich the last item admitted or proved is entered in the account; such year tobe computed as in the account'.
22. The contention of Sri Raja Ram Agarwal, is that, in the present case, the account between the parties was mutual, open and current. In support of his contention, he placed reliance on Keshari chand Jaisukhalal v. Shillong Banking Corporation Ltd. Shillong : 3SCR110 . In that case, the Supreme Court quoted with approval the observations made in the case of Hirada Basappa v. G. Muddappa (1871) 6 Mad HC 142, wherein it was held:
'To be mutual there must be transactions on each side creating independent obligations on the other and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations.'
23. On the facts of that case, the Supreme Court found that there were mutual dealings between the parties. In that case, the respondent Bank gave loans on overdrafts and the appellant made deposits. The loans by the respondent created obligations on the appellant to repay them. The respondent was under independent obligations to repay the amount of the cash deposits and to account for the cheques, hundis and drafts deposited for collection. In these circumstances, it was held that 'there were transactions on each side creating independent obligations on the other, and both sets of transactions were entered in the same account. The deposits made by the appellant were not merely complete or partial discharges of its obligations to the respondent. There were shifting balances; on many occasions the balance was in favour of the appellant and on many other occasions, the balance was in favour of the respondent. There were reciprocal demands between the parties, and the account was mutual. That mutual account was active up to 25th June, 1947, and there was no evidence to show that the account ceased to be mutual thereafter and the mutual account continued until 29th December, 1950, when the last entry in the account was made.
24. Next, reliance was placed on Jandas v. Indermal . In that case, a learned Single Judge of the Rajasthan High Court took the view that:
'When there was a mutual, open and current account between the parties in a certain year the presumption is that this account continued to remain open and current. It is for the party alleging that the account was closed on a particular date to prove that it was so closed. The mere fact that there were no dealings between the parties for a period does not entitle the court to hold in retrospect that the accounts had ceased to be mutual, open and current.'
25. In M. W. Pradhan v. Panchal Engineering Works at Ahmedabad : AIR1967Bom48 , a learned Single Judge of the Bombay High Court reiterated the same principle in the following terms:
'The mutuality, openness and currency of the account presupposes the continuance of the mutual dealings between the parties. If an event has taken place which will make it impossible for the parties or either of them to continue the dealings, then certainly it would be difficult to say that the account continued to be open or mutual. It is true that mere stoppage or cessation of dealings, by itself is no ground for holding that the account has Come to a close. But, side by side with the cessation of the dealings, if we find a situation which makes it impossible for either of the parties to continue the transactions, then it would be reasonable to draw an inference that the mutuality or openness of the account has come to an end. Such a situation would arise where one of the parties is dead or where, if it is a firm, it has been dissolved and if it is a limited company, it has gone into liquidation.'
26. Sri Jagdish Swarup, appearing for the respondent, Raj Bahadur, on the other hand, referred to Hindustan Forest Company v. Lal Chand : 1SCR563 . In that case, the parties entered into an agreement for the supply of grain by the sellers, to the buyer at the rates and times specified. The agreement stated that on the date it had been made, the buyer had paid to the sellers Rupees 3,000/- and had agreed to pay a further sum of Rs. 10,000/- within ten or twelve days as advance and the balance due for the price of the goods to be delivered after the expiry of every month. The said sum of Rs. 10,000/- was later paid by the buyer to the sellers. Various quantities of goods were thereafter delivered by the sellers to the buyer and though such deliveries had not been made strictly at the times specified in the contract, they had been accepted by the buyer. The buyer in his turn made various payments towards the price of the goods delivered but not month by month and had not further paid it in full. The last delivery of goods was made on June 23, 1947, and the suit was through on October 10, 1950, for the balance of the price due. It was held by the Supreme Court on the facts:
'that there was no reciprocity of dealings; there was no independent obligation. In so far as the payments had been made after the goods had been delivered, they had been made towards the price due, and were in discharge of the obligation created in the buyer by the deliveries made to him to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer. The sum of Rs. 13,000/-paid as and by way of advance payment of price of goods to be delivered was paid in discharge of obligations to arise under the contract. It was paid under the terms of the contract which was to buy goods and pay for them. It did not itself create any obligation on the sellers in favour of the buyer. It was not intended to be and did not amount to an independent transaction detached from the rest of the contract.'
27. In Chandradhar Goswami v. Gauhati Bank Ltd. : 1SCR898a even on the assumption that it was 'a case of an open, current and mutual account, the last payment was made in November. 1949. Article 85 of the Indian Limitation Act gives limitation of three years from the close of the year in which the last item admitted or proved is entered in the accounts. The mutuality, in that case, came to an end in 1949 inasmuch as from the account thereafter, it appeared that there were only entries of interest due to the bank from October 31, 1952, and, in the circumstances, the Court found that the suit was barred by time.
28. In Anumukonda Anjaneyulu v. Agricultural Traders 0065/1973 : AIR1973AP219 , the course of conduct as exhibited by the entries in the account books abundantly proves that all these transactions were in respect of the transactions of fertilizers. Either the moneys were advanced just sometime before the supplies were made or moneys were paid a few days after the purchases were made. Both the payments anterior and subsequent to the actual deliveries of fertilizers were thus intimately connected with the deliveries of fertilizers. In these circumstances, it was held:
'There were no independent transactions creating independent obligations. Merely because on one or two occasions the balance shifted from one side to the other and remained undischarged for a few days, it cannot be said that the account was a mutual, open and current account.'
On an analysis of the various authorities, cited on either side, the legal position is quite clear. An open account is one which is continuous or is uninterrupted or is unclosed by settlement or otherwise, consisting of a series of transactions. Mutual accounts are such as consist in reciprocity of dealings between the parties, and do not embrace those having items on one side only, though made up of debits and credits.
29. To constitute a mutual account, there must be transactions on each side creating independent obligations on the other and not merely transactions which create obligation on the one side, those on the other being merely complete or partial discharges of such obligations. For an account properly to be called mutual account, there must be mutual dealings in the sense that both parties give common mutual liabilities to each other. The lest of mutuality in our opinion, is that the dealings between the parties should be such that the balance is sometimes in favour of one party and sometimes in favour of the other. An account which consists of entries of payments made by one party in deduction to a debt to another and payments made by the latter on behalf of the former would not be a mutual account.
30. Now we have to examine how far the instant case satisfied the requirements of law. According to the plaintiff, in the khata of Pyare Lal, the commission earned by him was entered. But from the entries, it appears that the amounts taken by Pyare Lal, from time to time, were also debited to his account in that khata. The account is running from 30th June, 1936, when, for the first time, -/3/6 in a ruppee out of the net profits earned during the year 1935-36 were credited to the account of Pyare Lal. The money required for prosecuting the case filed against Himalayas Glass Works was advanced by Hanuman Glass Works and the same was debited to the account of Pyare Lal Agarwal. Extracts from the Khata for the year 1946-47 show that on Ist July, 1946, a sum of Rs. 25,559/4/6 was due to Hanuman Glass Works from Pyare Lal and in the year 1946 up to May. 1947, about Rs. 3,000/- were further advanced by Hanuman Glass Works to Pyare Lal for meeting the expenses of the litigation. While on the credit side, only Rs. 537/14/- were credited to the account of Pyare Lal. At the end of the year 1946-47, about Rs. 28,000/- were due from Pyare Lal Agarwal to Hanuman Glass Works. In the year 1947-48, there are entries of about Rs. 1,000/- on the debit side. Thus for all purposes, the account of Pyare Lal Agarwal closed at the end of the year 1947-48. It appears that the amount standing due from Pyare Lal in the account of Pyare Lal Agarwal was transferred to his other account and the two accounts were amalgamated. The actual entry of the amount, which was due up to 30th June, 1949, that is Rupees 29,018/1/3 was made by Arjun Singh The case of Chaubey Sushil Chandra is that it was done at the dictation of Pyare Lal.
31. From the evidence on the record, we find it difficult to accept that this amalgamation of the accounts was done at the dictation of Pyare Lal. Chaubey Sushil Chandra was the best person to depose about the matter, as Pyare Lal is already dead. He was the best person to explain the circumstances under which Pyare Lal agreed to the amalgamation of the two accounts, specially when he knew that the claim for the amount due from Pyare Lal in the Khata of Pyare Lal Agarwal had already become barred by time. We have grave doubts that still Pyare Lal Agarwal would have agreed to the transfer of the said amount to the other Khata The stake was heavy. One would have expected that Pyare Lal would give his consent by some writing or, at any rate, his signatures might have been obtained on the entry of Rupees 29,018/1/3, which the Munim Arjun Singh made on the debit side of the Khata of Pyare Lal if the claim in respect of the amount due for the advances made to Pyare Lal had become barred by time.
32. Sri Raja Ram Agarwal sought to argue that Chaubey Sushil Chandra was ill and, therefore, he could not appear in the witness box. This appears to be only a lame excuse. He could have sought for an adjournment and come in the witness box on the next adjourned date. (In the rest of Para 32 and Part of Para 33 the Court proceeds to examine the oral evidence on record and holds:)
The oral evidence produced on behalf of the plaintiff, in our opinion, does not inspire much confidence and on the basis of the depositions of the witnesses produced on behalf of the plaintiff, it is difficult to hold that the amalgamation of the two khatas was at the direction of late Pyare Lal.
34. It may be recalled that a suit had to be filed against Himalaya Glass Works by Pyare Lal on behalf of the firm Pyare Lal Agarwal. There is a dispute between the parties as to whether Chaubey Sushil Chandra was or was not a partner in the firm Pyare Lal Agarwal. According to Raj Bahadur, Chaubey Sushil Chandra was a partner in the firm Pyare Lal Agarwal while according to Chaubey Sushil Chandra, that was the exclusive concern of Pyare Lal himself. That suit was compromised and as a result of the compromise, the suit was decreed only for a sum of Rs. 8,000/-. The other outstanding amount was lost. The lost amount appears to have been debited in the account of Pyare Lal Agarwal.
35. In any case, if the claim for the amount standing up to 1948 as due from Pyare Lal had become barred by time, it does not stand to reason that Pyare Lal would have peadily consented that the same amount be debited in his account in the so-called amalgamated Khata. The court below has given very cogent reasons for holding that Pyare Lal had never consented to the amalgamation of the Khata. The court below further found that the account books of the year 1945 and afterwards had been prepared simply to create evidence on behalf of Chaubey Sushil Chandra, when he found that his claim had already become barred by time. Arjun Singh, who is a close relation of Hargvan Singh, the Mukhtar-e-am of Chaubey Sushil Chandra, had been, utilised to prepare the account, of the year 1949.
36. Under Section 34 the Indian Evidence Act provides:
'34. Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability.'
37. The plaintiff was thus obliged to produce other evidence to corroborate the entries, but, as observed earlier, oral evidence produced on behalf of the plaintiff does not at all inspire confidence. The entries of the year 1949 and onwards in the account books also appear to be suspicious, for example, the supplementary paper book, supplied during the course of arguments, indicates that the amount of Rs. 29,018/1/9 was debited to the account of Pyare Lal on 30th June, 1949 But we find subsequent entries of Rs. 100/- made on 7th June, 1949, and the entry for a sum of Rs. 50/- and on 30th June, 1949, debiting the account of Pyare Lal were made subsequent to 30th June, 1949, which cast doubt on the entries as to whether they were kept in the regular, course of business. An explanation was sought to be offered that this was an omission which was corrected subsequently, but that is hardly sufficient to dispel the suspicion about the genuineness of those entries. The reasons given by the trial court appear to be more plausible and we fully agree with the reasons given by the trial court and it is not necessary to repeat them over again.
38. So far as the account of the parties being mutual, open and current is concerned, it is true that Pyare Lal was entitled to commission for the services rendered by him in Hanuman Glass Works, which accrued due to him and the amount was credited in the account of Pyare Lal. Pyare Lal also took money in connection with his business in the firm Pyare Lal Agarwal which, according to him, was a joint firm of Chaubey Sushii Chandra and Pyare Lal and the amount taken by him, was debited to his account. This too, in our opinion, represents to two separate accounts, but there seems to be no mutuality. As stated earlier, to constitute a mutual account, there must be transactions on each side creating independent obligations on the other and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations. The test of mutuality is that the dealings between the parties should be such that the balance is sometimes in favour of one party and sometimes in favour of the other. The fact that the balance is a shifting one, sometimes in favour of the plaintiff and sometimes in favour of the defendant, is not a decisive test yet it is valuable as an index on the nature of the dealings. On an examination of the account books in the instant case, we find that the balance in the instant case is mostly, in favour of Chaubey Sushii Chandra.
39. For the reasons given above, we cannot hold that the account between the parties was mutual, open and current. As the first condition for attracting Art. 85 of the Indian Limitation Act has not been satisfied, Art. 85 will have no application. In ordinary accounts, suit must be filed within three years from each items of the account and in any view of the matter, the suit is clearly barred by time and the court below was fully justified in so holding. In the result, both the appeals fail. Accordingly, both the appeals are dismissed with costs.