Skip to content


Firm Baldeo Prasad Babu Ram and ors. Vs. Firm Haji Ali Mohammad Usman - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in112Ind.Cas.715
AppellantFirm Baldeo Prasad Babu Ram and ors.
RespondentFirm Haji Ali Mohammad Usman
Excerpt:
.....in the witness-box distinctly stated that the account between the parties was mutual, open and current and the defendant has not specifically denied this allegation. but, even if it were necessary, on the evidence we are satisfied that they cannot be separated. there is no evidence on the record to suggest that there was any want of good faith on the part of the official assignee in instituting the suit in the bombay high court. it was apparently an error of judgment, but that is quite a different thing from bad faith, we are, therefore, of opinion that section 14 is directly applicable and the entire period from 22nd july, 1921, when a suit was filed in the bombay high court to the 14th of march, 1924, when it was dismissed should be excluded. taking the 31st december, 1918, as the..........and limitation was stated to have been saved on account of a previous litigation pending in the bombay high court. the main defence was that the claim was barred by-limitation; that there was no mutual, open and current account and the present suit was instituted more than three years after the time when the amounts that were found due were beyond the period prescribed for limitation. the learned subordinate judge has come to the conclusion that the claim is not barred by limitation at all.2. it appears that the plaintiff firm became insolvent and an official assignee was appointed at bombay. on the 2nd july, 1921, the official assignee instituted a suit for recovery of the amount due to the plaintiff firm against the defendant firm. that suit remained pending for some time when the.....
Judgment:

1. This is a defendants' appeal arising out of a suit brought to recover Rs. 8,755 principal and Rs. 5,708-2 interest on account. The plaintiff was a firm carrying on business at Bombay which had an agent at Tilhar. The defendant firm was carrying on commission agency-business at Tilhar and was purchasing and selling grain for the plaintiff. It is also admitted that from time to time the defendant firm advanced money to the plaintiff and charged interest on the amounts so advanced. In the plaint it was stated that if there was a surplus amount sent by the plaintiff firm interest was credited to the plaintiff at the rate of VI annas percent, per mensem. This was not admitted -op. the written statement. At the same time 'there was no specific denial that no interest was allowed. The present suit was instituted on the 6th September, 1924, and it was alleged in the plaint that the last item in the account was dated the 6th September, 1918. The delay in the institution of the suit was explained and limitation was stated to have been saved on account of a previous litigation pending in the Bombay High Court. The main defence was that the claim was barred by-limitation; that there was no mutual, open and current account and the present suit was instituted more than three years after the time when the amounts that were found due were beyond the period prescribed for limitation. The learned Subordinate Judge has come to the conclusion that the claim is not barred by limitation at all.

2. It appears that the plaintiff firm became insolvent and an Official Assignee was appointed at Bombay. On the 2nd July, 1921, the Official Assignee instituted a suit for recovery of the amount due to the plaintiff firm against the defendant firm. That suit remained pending for some time when the insolvency of the plaintiff firm was cancelled. On the 14th of March, 1924, the proprietor of the plaintiff firm applied to the Bombay High Court for an amendment of the plaint and for bringing the name of the plaintiff on the record. This application was granted. After that, the Counsel for the plaintiff firm admitted before the learned Judge of the Bombay High Court that no part of the cause of action had arisen in Bombay and that inasmuch as the defendants did not reside or carry on business within the jurisdiction of the Bombay High Court that Court had no jurisdiction. The suit was accordingly dismissed on that date, namely, the 14th of March, 1924. Of course, the office took some time in preparing the decree which was not ready and was not sealed until the 22nd of July, 1924.

3. One of the grounds on which the learned Subordinate Judge has held that the claim is not barred by time is his supposition that the decree which was prepared by the High Court at Bombay did not bear the same date as the judgment. In this view he is obviously in error. The decree must, of course, bear the same date as the judgment even in cases on the Original Side of a High Court. Hajoo Aboobuckor v Official Assignee of Madras 21 Ind. Cas. 545 : (1913) M.W.N. 868 : 25 M.L.J. 560. The decree does, in fact, bear the same date, namely 14th of March, 1924. The other date mentioned is the date on which the decree after it had been prepared by the office was signed by the Registrar. It is obvious that the suit must be deemed to have terminated when the judgment was pronounced on 14th of March, 1924, irrespective of the time that might have been taken by the office in drawing up the formal decree.

4. The main point, however, is which Article applies to the present claim. That there was a mutual, open and current account between the parties admits of no doubt. Admittedly the account which was the basis of the suit contains debit and credit entries and the balances shift from one side to the other. It is also common ground that on the one hand, the plaintiff was sending money to the defendant which was duly debited to the defendant and, on the other hand, the defendant was making purchases on behalf of the plaintiff and was from time to time advancing money to the plaintiff which sums were credited in the defendant's account kept by the plaintiff. Interest also was charged by the defendant on the amount advanced by the defendant firm. There was undoubtedly an obligation on both parties to pay the balance due to the other. The plaintiff in the witness-box distinctly stated that the account between the parties was mutual, open and current and the defendant has not specifically denied this allegation. We have no doubt in our minds that the account under the circumstances was a mutual, open and current account. It follows, therefore, that the suit is governed by Article 85 of the Limitation Act as it is a claim for the recovery of the balance due on such account. The period of three years has, therefore, to be counted from the close of the year in which the last item admitted or proved is entered in the account.

5. Admittedly the last item relating to grain dealings is dated 15th July, 1918, and a later item relating to the price of gunny bags is dated 6th September, 1918. There has been some controversy as to whether the year should be taken to be the English year or the sambat year. The daily entries in the cash book contain corresponding dates of both the systems. The plaintiff went into the witness-box and swore that' he kept his accounts according to the English calendar and not according to the sambat year. The defendant has not produced any evidence to rebut this statement. The accounts were kept by the plaintiff's munim at Tilhar in these Provinces. If the sambat year prevailing in these Provinces were to be considered the year would expire some time in April of the year. On the other hand, the sambut in Gujrat is stated to begin in October or November. On the materials before us we are of opinion that the English year should be taken to be the year according to which the accounts were really kept. All the English dates are mentioned regularly and there is nothing to contradict the statement of the plaintiff that he kept the account according to the English year. That being so, the close of the year in which the last item proved was entered would be the 31st December, 1918.

6. In this view of the matter it is wholly unnecessary to consider whether the dealings relating to gunny bags were part and parcel of the dealings relating to grain or not. But, even if it were necessary, on the evidence we are satisfied that they cannot be separated. Gunny bags were required for filling up grain before it could be despatched to Bombay. On the 6th September, 1918, an account of the outstanding number of gunny bags appears to have been made up and signed by the defendant's munim and it was agreed that the balance should be entered in the defendant's account with the plaintiff firm. The sum of Rs. 6,000 odd representing its price was entered in the cash book though the entry appears to have been made after the Official Assignee had taken over charge. The two were treated as one consolidated account and it is the balance on such account that is claimed in the suit. The next question that remains for consideration is whether the plaintiff is entitled to exclude from calculation the time spent during the litigation in the Bombay High Court. The first objection to the exclusion of that period is that the parties are different. We are unable to accept this contention. The suit instituted in the Bombay High Court was against the defendant firm. Even if one of the partners was then dead the suit was nevertheless against the firm. The present suit also is against the defendant firm through its partners and the persons who are now in possession of the assets of the deceased partner have been named in the plaint. It is, therefore, impossible to hold that the parties to the two suits are different and that, therefore, the benefit of Section 14 of the Limitation Act cannot be claimed. Under Order XXX, Rule 1 persons carrying on business in the name of a firm may be sued under such name if they were carrying on business as partners on the date of the accruing of the cause of action and not necessarily at the time of the suit. Rule 4 also makes it clear that even if one of the partners is dead at the time of the institution of the suit the suit may nevertheless be instituted against the firm under its name. The proviso to Rule 3 merely refers to the way in which summons has to be served in case a dissolution of partnership to the knowledge of the plaintiff has taken place before the institution of the suit. We are, therefore, of opinion that this objection cannot prevail.

7. The next contention is that the litigation in the Bombay High Court was not carried on with due diligence. The suit was on the Original Side of the Bombay High Court and there is nothing to suggest that the Official Assignee was not duly diligent in the prosecution of the claim so long as he was in charge of it. It is contended that inasmuch as the plaintiff's insolvency was cancelled sometime in December, 1922, the firm ought to have applied promptly for the dismissal of the suit. But the question whether the suit was or was not maintainable was a question of law which could be appreciated by Counsel appearing for the plaintiff. As far as the record goes it appears that Mr. Billimoria who admitted that the suit was not maintainable was engaged for the first time on the 14th March, 1824, We are, therefore, unable to hold that the plaintiff firm was negligent in not applying to the Bombay High Court for the dismissal of the suit earlier. There is no evidence on the record to suggest that there was any want of good faith on the part of the Official Assignee in instituting the suit in the Bombay High Court. It was apparently an error of judgment, but that is quite a different thing from bad faith, We are, therefore, of opinion that Section 14 is directly applicable and the entire period from 22nd July, 1921, when a suit was filed in the Bombay High Court to the 14th of March, 1924, when it was dismissed should be excluded. Taking the 31st December, 1918, as the starting point of limitation and excluding the period above mentioned the suit is well within three years and is accordingly not barred by limitation.

8. Mr. Malik on behalf of Musammat Srimati Savitri has urged that so far as she is concerned the claim is barred against her but, she has been impleaded in the plaint on the alleged ground that she is in possession of the assets of Babu Ram, a deceased partner. She is not being sued in her personal capacity. It is the firm which is being sued of which one partner is dead and whose assets are alleged to be in the hands of Musammat Srimati Savitri and other defendants. The relief claimed in the plaint is a decree for the amount against Baldeo and the estate of Babu Ram in the hands of the defendants. We, therefore, think that the claim is not barred even as against her in the capacity in which she is being sued. Taking the persons named as defendants in the plaint in their order, the plaintiff will be entitled to execute the decree only as against the assets of Babu Ram whether of the firm or otherwise in the hands of defendant No. 3. Defendant No. 2 will be liable to the extent of his interest in the family property as also in the firm. Defendant No. 1 is, of course, personally liable, in addition to the liability of his interest in the firm.

9. The appeal is accordingly dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //