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Mushat Cloth Stores Vs. Shivratan - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMadhya Pradesh High Court
Decided On
Case NumberCivil Revn. No. 83 of 1958
Judge
Reported inAIR1958MP320
ActsMadhya Bharat Interest Act, 1956 - Sections 2(4) and 3 - Order 20, Rule 17
AppellantMushat Cloth Stores
RespondentShivratan
Appellant AdvocateR. Vohra, Adv.
Respondent AdvocateC.S. Chhazed, Adv.
DispositionPetition allowed
Cases ReferredBajaranglal v. Anandilal
Excerpt:
- indian penal code, 1890.section 306 :[dalveer bhandari & harjit singh bedi,jj] abetment of suicide deceased, a married woman, committed suicide - allegation of abetment of suicide against appellant husband and in-laws - ocular evidence was sketchy - dying declaration recorded by tahsildar completely exonerated all accused in-laws of any misconduct dispelling any suspicion as to their involvement - letter of threat allegedly written by appellant to father of victim was concocted piece of evidence held, though presumption against appellant can be raised, it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. .....are settled between the parties and parties agree to take a gross sum as the balance, then the settled account is binding on the parties and it cannot be reopened on any ground except fraud or mistake (see radhikaprasad dani v. nandkumar, ilr 1944 nag 63: air 1944 nag 7 (a); bajaranglal v. anandilal, ilr 1944 nag 101 (air 1944 nag 124 (b) and henry mckellar v.' john wallace, 5 moo ind app 372 (pc) (c). a party who wishes to reopen a settled account must, therefore, show that there was fraud or substantial mistake when the accounts were settled. in the present case, it is not the plea of the defendant that there was any fraud or mistake when he, after the settlement of accounts, acknowledges rs. 601/- as due from him, the defendant has thus no right to claim reopening of the account.....
Judgment:
ORDER

P.V. Dixit, J.

1. This is a petition to revise an order passed by the Additional Civil Judge, Second Class, Ratlam, directing the plaintiff-applicant to produce in the Court his account books for the last ten years for inspection and determination of the question whether the amount claimed by the plaintiff from the defendant includes excess interest and compound interest.

2. The plaintiff's suit is for the recovery of Rs. 601/- said to have been acknowledged by the defendant 'as due from him after taking an account of the dealings between the parties with regard to purchases of cloth from time to time. The pleaof: the defendant inter alia is that the sum acknowledged by him included excess interest and compound interest and that the accounts were not explained to him. On these pleadings of the parties, the lower Court framed an issue as to whether the amount of Rs. 601/- included a sum in the neighbourhood of Rs. 300/- by way of interest and whether the defendant's signature on the acknowledgment was obtained without explaining the accounts to him. It was in connection with this issue that the lower Court made the order sought to be revised.

3. I have heard learned counsel for- the parties. In my judgment, this petition must be accepted. It is now firmly established by numerous authorities that when accounts are settled between the parties and parties agree to take a gross sum as the balance, then the settled account is binding on the parties and it cannot be reopened on any ground except fraud or mistake (see Radhikaprasad Dani v. Nandkumar, ILR 1944 Nag 63: AIR 1944 Nag 7 (A); Bajaranglal v. Anandilal, ILR 1944 Nag 101 (AIR 1944 Nag 124 (B) and Henry McKellar v.' John Wallace, 5 Moo Ind App 372 (PC) (C).

A party who wishes to reopen a settled account must, therefore, show that there was fraud or substantial mistake when the accounts were settled. In the present case, it is not the plea of the defendant that there was any fraud or mistake when he, after the settlement of accounts, acknowledges Rs. 601/- as due from him, The defendant has thus no right to claim reopening of the account and consequently a right to demand production of the plaintiff's account books.

4. Mr. Chhazed, learned counsel for the opponent, however, urged that Section 3 of the Madhya Bharat Interest Act, 1956 permits the defendant to claim a reopening of the accounts. Learned counsel said that when Section 3 of the Act empowers the Court to. adjudge the rate of interest on the principal sum at rates not exceeding those specified in that section and also says that the Court shall in no case adjudge compound interest, it necessarily gives to the Court the power to reopen settled account and also to a party a right to demand reopening of the accounts on the ground that the principal sum accepted by him included interest exceeding the rates mentioned in Section 3 of the Interest Act and also compound interest. I am unable to accept this contention.

The Madhya Bharat Interest Act is an Act-for the regulation of interest. Section 3 gives to the Court power to adjudge the rate of interest and not the power to adjudge the principal amount. The proviso to Section 3 also says that compound interest shall in no case be adjudged or ordered. The adjudication is, therefore, of the interest and not of the principal sum. It is true that Section 2 (4) of the Act defines principal sum as 'sum adjudged as such by a Court'. But this does not mean that the Court has been given the power to adjudicate on a principal sum when parties have ,agreed to accept a certain sum as principal sum.

Section 3 of the Act overrides that agreement between the parties which relates to interest and not which is in regard to the principal sum. The principal sum defined in Section 2 (4) of the Act means the principal sum which is adjudged by theCourt in accordance with an agreement between the parties or with the provisions of any law. When under the general law, a settled account cannot be reopened except on grounds of fraud or mistake, and when the Madhya Bharat Interest Act nowhere expressly authorises the Court to reopen settled accounts and determine the principal sum, such a drastic power of reopening the accounts on the ground that the amount acknowledged includes excess interest and compound interest cannot be inferred merely from the definition of the expression 'principal sum.'

In my opinion, the learned trial Judge was not right in directing the plaintiff to produce his accounts books when the defendant has not pleaded any fraud or mistake in the settlement of the accounts. As observed by this Court in AIR 1944 Nag 124 (B)., when parties settle accounts, the presumption ought to be that they have settled the accounts with their eyes open and that they knew what the accounts contained and then decided what the settlement ought to be. A settled account cannot be reopened merely on a general allegation that the accounts were not explained to the party seeking reopening of the accounts,

5. For all these reasons, I accept this revision petition and set aside the order dated 1st January, 1958 passed by the Additional Civil Judge, Second Class, Ratlam. The applicant shall have costs of this petition from the opponent.


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