1. This is an application under Section 25, Provincial Small Cause Courts Act. The applicant is a firm carrying on business under the name and style of Mihin Lal Jwala Prasad. The plaintiff firm alleged that it had deposited 96 pieces of cloth for sale with the firm of the defendant on 4th January 1925; that an account was settled between the parties on 25th February 1928 and that on instructions received from Jwala Prasad, the proprietor of the defendant firm, Bhekhar Chand, munim and mukhtaram, acknowledged the liability of the firm as regards a sum of Rs. 178-13-0 which was payable to the plaintiff by the defendant upon account. The defendant agreed to pay this sum to the plaintiff after a month.
2. The suit was instituted on 1st of July 1929. It was resisted inter alia upon the ground that the claim was time barred; that Shekhar Chand was not authorized to acknowledge the liability and that the acknowledgment had been made after the period for the institution of the suit had expired, The Court below recorded the following findings:
(1) That the plaintiff firm had deposited 96 pieces of cloth with the defendant on 4th January 1925 : and (2) that accounts were settled between the parties and that Rs. 178-13-0 were found due to the plaintiff's firm on 25th February 1923 and that Shekhar Chand agreed to pay Rs. 178-13-0 to the plaintiff on behalf of the defendant according to the instructions of Jwala Prasad, the proprietor of the defendant firm, The Court below upon these findings repelled the plea as to limitation and decreed the suit for payment of Bs. 178-13-0 with proportionate costs and pending and future interest at Rs. 6 per cent per annum.
3. It has been contended before this Court that the plaintiff's claim is barred by limitation. The acknowledgment was obviously made more than three years from the date when the pieces of cloth were deposited, with the defendant. Ex facie, therefore the claim was beyond time. It has further been pointed out that no powers were given to Shekhar Chand under the mukhtarnama, dated 17th January 1927, to acknowledge a liability of this description. The mukhtarnama has been examined in detail and it must be conceded that no such powers have been granted to Shekhar Chand. The case of the plaintiff, however, was that Shekhar Chand was verbally instructed by Jwala Prasad the proprietor of the defendant firm, to examine the account and to acknowledge his liability and append his signature to the acknowledgment. Evidence has been adduced by the plaintiff which has been believed by the Court below, and no reason has been assigned by the applicant why the said evidence should not be accepted. It must therefore be taken that Shekhar Chand was authorized to acknowledge the liability and to sign the said acknowledgment of liability.
4. The suit is not one for balance cue on a mutual, open and current account; nor is it a suit upon an account stated the relevant article of the Limitation Act to a suit of this description is Article 85. There can be no mutual account unless each party has a right of action against the other party and has a right to demani the fulfilment of certain obligations. In order to prove a mutual account it is necessary to establish mutual dealings between the parties. No such mutual dealings appear to have been proved in this case. If therefore the transaction, dated 25th February 1928 could be treated merely as an acknowledgment of liability even though made by an authorized person on behalf of the defendant, the plaintiff would not have been entitled to get over the plea of limitation. The document dated 25th February 19-8 has been examined the Court below finds that the sarrafi written portion of this document amounts to a bond. What the Court below intended to find was that the operative portion of this document was an express promise to pay a time-barred debt. Section 25, Contract Act, provides that an agreement made without consideration is void, unless it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. The transaction dated 25th February 1928, is not merely an acknowledgment of liability but an express agreement to pay a time-barred debt which has been entered into by Shekhar Chand, the munim and mukhtaram of the defendant firm, upon authority received from the latter. The agreement in question therefore is enforceable and the suit having bean instituted within a year and a half of the said agreement, is clearly within time. I dismiss this application with costs.