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(Firm) Puttu Lal Kunji Lal Vs. (Firm) B. Jagannath - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1935All53; 155Ind.Cas.44
Appellant(Firm) Puttu Lal Kunji Lal
Respondent(Firm) B. Jagannath
Cases ReferredAbdul Aziz v. Munna Lal
Excerpt:
- - now it is well settled that an open account is one which is continuous or current, uninterrupted or unclosed by settlement or otherwise consisting of a series of transactions. the question there was a question of jurisdiction and it was held that in a case like this although a part of the cause of action might arise in a different place, for purposes of jurisdiction the entire cause of action must be deemed to be one. the plaintiff in a case like this is, of course, entitled to appropriate the payments to the earlier items in the account but not to credit them to the entire balance due up to date in the sense of saving limitation for each and every item......ram pershad v. harbans singh (1907) 6 c.l.j. 158, mukerji, j., says:now it is well settled that an open account is one which is continuous or current, uninterrupted or unclosed by settlement or otherwise consisting of a series of transactions. an account current is an open or running account between two or more parties or an account which contains items between the parties from which the balance due to one of them is or, can be ascertained from which it follows that such an account comes under the term of an open account, in so for as it is running, unsettled or unclosed. mutual accounts are such as consist of reciprocity of dealings between the parties and do not embrace those having items on one side only, though made up of debits and credits.3. in support of these propositions the.....
Judgment:

Bajpai, J.

1. This is an appeal from an order of remand and the appeal is directed to the decision by the Court below that the plaintiffs' claim with the exception of a small sum of. Rs. 49-13-3 is barred by time. The plaintiff alleged in his plaint that he had a firm of commission agents dealing in betel leaves at Mohoba in the district of Hamirpur, and that the defendant was a firm dealing in betel leaves in the city of Aligarh. The plaint went on to say that the defendant purchased betel leaves from the plaintiff's firm between 17th November 1926 to 17th November 1928 of the value of Rs. 10,095-1-9 and paid Rs. 9,426-7-6 up to 16th November 1928 and as such a balance of Rupees 668-10-3 was due to the plaintiff from the defendant under account. This sum together with interest was claimed in the plaint.

2. The lower appellate Court has held that as the suit was instituted on 10th August 1931, the claim for the price of articles supplied before 10th August 1928 was barred by time. There were two other dates which were considered - one was 16th November 1928 when the defendant sent Rs. 50 - to the plaintiff and the other was 17th, November 1928 when the plaintiff sent betel leaves of the value of Rs. 49-13-3 to the defendant. The Court below held that the plaintiff:

had the option to credit the sum of Rs. 50 the entire balance due on 16th November 1928,

and therefore the sum of Rs. 49-13-3, the price of the goods supplied on 17th November 1928 was within time on the date of the institution of the suit. In the appeal before us it is contended that the plaintiffs' suit is not barred by time for any amount. The first submission is that this is a suit for the balance due on a mutual open and current account under Article 85, Limitation Act, and therefore the time from which the period begins to run is the close of the year in which the last item admitted or proved is entered in the account. We have come to the conclusion that the account between the parties was neither, on the pleadings nor on the evidence produced by the plaintiff a mutual open and current account. The facts are that the plaintiff supplied betel leaves to the defendant from time to time and the defendant paid the price thereof from time to time and this went on up till November 1928. Before November 1928 there were transactions up till May 1928, and therefore if the account was not mutual open and current, the transactions that took place up till May 1928 could not be considered in the present suit because they would be barred by time. In Ram Pershad v. Harbans Singh (1907) 6 C.L.J. 158, Mukerji, J., says:

Now it is well settled that an open account is one which is continuous or current, uninterrupted or unclosed by settlement or otherwise consisting of a series of transactions. An account current is an open or running account between two or more parties or an account which contains items between the parties from which the balance due to one of them is or, can be ascertained from which it follows that such an account comes under the term of an open account, in so for as it is running, unsettled or unclosed. Mutual accounts are such as consist of reciprocity of dealings between the parties and do not embrace those having items on one side only, though made up of debits and credits.

3. In support of these propositions the learned Judge referred to the judgment of Holloway, J., in Hirada v. Gadigi (1871) 6 M.H.C.R. 142 where that learned Judge observed that:

in order that accounts might 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.

4. We agree with the above observations. Applying the test laid down therein we have got to see whether the accounts between the parties can be said to be a mutual, open, and current account. It may be conceded that it was an open and current account inasmuch as it had not been closed, but it cannot be said to be mutual. The plaintiff in his statement before the Court said that there never was an occasion when the balance stood in favour of the defendant and from the nature of the dealings it is clear that there never was a possibility of the balance standing in favour of the defendant. For all practical purposes the plaintiff purchased betel leaves on behalf of the defendant and sent them to the defendant. The defendant used to pay the price thereof from time to time to the plaintiff and as mentioned before the accounts never revealed that the defendant paid more than what was due to the plaintiff. Reliance was placed by the learned Counsel for the appellant on the case of Dan Dayal v. Pearey Lal 1928 All 236. The facts of that case were entirely different. The plaintiffs there were commission agents and they after having obtained some margin money purchased and sold grain on behalf of the defendants with the result that on occasions the balance stood in favour of the defendants when the transaction resulted in a profit and at others it stood against the defendants when the transaction resulted in a loss. At the time of the institution of the suit there was a great deal of loss and the plaintiffs therefore brought the suit for the recovery of that amount. It was held that the parties stood to each other in a dual relationship and there was a mutuality of dealings and that the suit was within time under Article 85, Limitation Act. This case therefore does not help the plaintiff and we have no hesitation in holding that Article 85, Limitation Act, does not apply to the present case.

5. It was then contended that Article 83 was applicable but that relates to a contract to indemnify and in the present case there was no such contract between the parties nor can Article 115 apply, for the present suit cannot be said to be a suit for compensation for the breach of any contract. It is a suit for the recovery of a certain sum of money due for articles supplied to the defendant. A lukewarm argument was. advanced before us to the effect that Article 52 would be applicable to the facts of this case, but it is clear that there was no fixed period of credit in the present case and that article has no application.

6. The main contention of the plaintiff was that the dealing between the parties was a continuous dealing and therefore there was only one cause of action which cannot be divided. Reliance in this connection was placed upon the case of Kedar Nath v. Dinabandhu Saha 1916 Cal 580. The basis of the decision in this case was that the claim was not barred by limitation because of the application of the proviso to Section 20, Limitation Act. It was held that where a cheque is signed by the debtor and paid in part payment of the principal of a debt, the cheque being subsequently signed, the Proviso to Section 20, Limitation Act, was complied with and the suit was within limitation. It was not necessary to decide anything further but their Lordships towards the end of their judgment relied upon the case of Bonsey v. Wordsworth (1856) 18 C.B. 325, at p. 334 and they quoted the following passage from that judgment:

Where a tradesman has a bill against a party for any amount in which the items are so connected together that it appears that the dealing is not intended to terminate with one contract, but to be continuous, so that one item, if not paid, shall be united with another and form one continuous demand, the whole together forms but one cause of action and cannot be divided.

7. The English case is not an authority for the proposition that for purposes of limitation, in the case of a continuous demand, the whole forms but one cause of action. The question there was a question of jurisdiction and it was held that in a case like this although a part of the cause of action might arise in a different place, for purposes of jurisdiction the entire cause of action must be deemed to be one. We are not prepared to extend the principle contained therein to a question of limitation more specially when we find that we have got to decide the case on the basis of a legislation which was enacted in the year 1877 long after 1856. For the same reasons we are not prepared to follow the case of Najan Ahmed v. Salemahomed 1923 Bom. 113.

8. The case which is very similar to the facts of the present case is Abdul Aziz v. Munna Lal 1921 All 325. It was held there that in the case of a tradesman's account for goods sold and delivered to the customer from time to time, in respect of each item the liability to pay and the period of limitation commences on the date of the delivery of that particular item. In a suit by a tradesman for the price of goods sold arid delivered from time to time, the customer having from time to time made payments without specifying any particular item for which the payments were made, the limitation was governed by Article 51 in respect of each item as delivered. The plaintiff in a case like this is, of course, entitled to appropriate the payments to the earlier items in the account but not to credit them to the entire balance due up to date in the sense of saving limitation for each and every item. This is what has been done by the lower appellate Court in the present case. The item of Rs. 50 has been allowed to be credited towards earlier liabilities but the suit for the remaining balance has been held to be beyond time on the ground of limitation. There is no force in this appeal and is dismissed with costs.

9. The defendant has filed cross-objections regarding the sum of Rs. 50. We have held already that the Court below was right in allowing the plaintiff to appropriate this sum towards the earlier purchases. There was no specification by the defendant when he made this payment that it should be applied towards any particular debt and the plaintiff was therefore justified in appropriating it towards an earlier account. The mere fact that there is some similarity between the figure of Rs. 50 the amount paid by the defendant and the figure of Rs. 49-13-3 the price of the goods supplied does not show in the absence of any other evidence that this sum had to be credited towards the purchase of 17th November 1928 and could not be appropriated towards an earlier liability at the option of the plaintiff.

10. There is no force in the cross-objections and we dismiss them also with costs.


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