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Silla Laxminarayana Vs. Arjuna Gaudo - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtOrissa High Court
Decided On
Case NumberFirst Appeal No. 135 of 1967
Judge
Reported inAIR1973Ori134
ActsLimitation Act, 1963 - Schedule - Article 1
AppellantSilla Laxminarayana
RespondentArjuna Gaudo
Advocates:Y.S.N. Murty, Adv.
DispositionAppeal dismissed
Cases ReferredGokuldas v. Radhakrishan
Excerpt:
.....devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - murty for the appellant contends that the learned trial judge was clearly in error in holding that article 1 of the limitation act did not apply to the facts of the case. the nagpur view has been clearly dissented by the kerala high court in the case of s. 1, 2, 3, 4 and 5 series) do not clearly indicate the method of adiustment. that contention shall also therefore fail......bench in the case of tea financing syndicate v. chandra kamal, air 1931 cal 359, stated:--'to form mutual accounts there must be a mutual credit founded on a subsisting debt on the other side, or an express or an implied agreement for a set-off of mutual debts. where for instance, the dealings on either side are so independent of each other that neither party in giving credit to the other relies on the debt which he has against him. there are no mutual dealings; in other words, each party must be able to say to the other at some time or other during the period of account; 'i have an account against you' i.e. not merely a shifting balance but reciprocity of dealing and the right to mutual demand which form the essential ingredients of a mutual open and current account.'the test laid down.....
Judgment:

R.N. Misra, J.

1. This is a plaintiff's appeal against the decree passed by the learned Subordinate Judge at Bhubaneswar allowing his claim in part in a suit for recovery of money.

2. The plaintiff came to Court on the allegation that the defendant was an employee under the firm 'Silla Rammamurty & Sons' of which he happens to be the managing partner. The defendant was posted at Balugaon branch of the firm from 1951, initially as accountant and later as manager. The defendant used to draw advances from the firm and his salary as and when due was being adjusted against such advances. The defendant stopped work from 24th of July, 1964. By then he had over-drawn to the extent of Rs. 6,496.97. The plaintiff asked for recovery of that amount along with damages at six per cent in all Rupees 7,190/-.

3. The defendant did not enter contest. In fact no written statement even was filed. An employee of the firm was examined as P. W. 1 on behalf of the firm.

4. The learned Subordinate Judge found that the suit was instituted on 9-5-1966. He also found that there was no running account or transaction between the parties so as to bring the matter under Article 1 of the new Limitation Act. He accordingly held that the plaintiff's claim prior to three years before the date of suit had become barred by limitation. Accordingly he gave a decree for a sum of Rs. 1,519.37 with proportionate costs and future interest at six per cent until realisation and held the other part of the claim to have become barred by limitation. The plaintiff has appealed against this decree and wants the remaining portion of his claim to be decreed.

5. In this Court the defendant-respondent has not entered appearance. Mr. Murty for the appellant contends that the learned trial Judge was clearly in error in holding that Article 1 of the Limitation Act did not apply to the facts of the case. In support of his contention he relies upon two decisions of the Nagpur High Court in the case of Pandurang v. Kalludas, AIR 1923 Nag 108 and Motirao v. Gambhirprasad. AIR 1925 Nag 295. He alternately contends that limitation is saved on account of the various adjustments made towards the running debt on account of salary of the defendant as and when it became due. The plaintiff having appropriated towards the firm's debt, the salary due to the defendant from time to time, limitation has been saved. In support of such contention of his. he relies upon a decision of the Patna High Court in the case of Firm Jiban Ram v. Sagarmal, AIR 1933 Pat 267. Each of these two contentions may now be examined.

6. Article 1 of the Schedule to the new Limitation Act provides:

'1. For the balance due on a mutual, open and currentaccount, where there have been reciprocal de-mands between the parties.

Three years

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.'

The provision of this Article corresponds to Article 85 of the Limitation Act of 1908. In fact there is no difference in the language. Sir George Rankin, C. J. delivering the judgment of a Division Bench in the case of Tea Financing Syndicate v. Chandra Kamal, AIR 1931 Cal 359, stated:--

'To form mutual accounts there must be a mutual credit founded on a subsisting debt on the other side, or an express or an implied agreement for a set-off of mutual debts. Where for instance, the dealings on either side are so independent of each other that neither party in giving credit to the other relies on the debt which he has against him. there are no mutual dealings; in other words, each party must be able to say to the other at some time or other during the period of account; 'I have an account against you' i.e. not merely a shifting balance but reciprocity of dealing and the right to mutual demand which form the essential ingredients of a mutual open and current account.'

The test laid down in the aforesaid decision has been approved in terms by their Lordships of the Supreme Court in the case of Kesharichand v. S. Banking Corporation, AIR 1965 SC 1711, referred to these decisions with approval. In this Court in the case of Sardar Singh Kewalram Firm v. Chandulal Satnarain, ILR (1963) Cut 779, the dictum of Sir George Rankin, C. J., has been quoted with approval.

Applying the test laid down in the dictum of Rankin. C. J., I do not find any scope for the contention of Mr. Murty that there is mutuality in the account. The Nagpur view has been clearly dissented by the Kerala High Court in the case of S. N. Purushotam & Co. Ltd v. Chathukutty, AIR 1959 Ker 356. As I find even in the Nagpur High Court in the case of Gokuldas v. Radhakrishan, AIR 1933 Nag 50, there is a decision taking a contary view though the earlier decisions of that Court were not referred to. Commentaries on the Limitation Act also indicate that the Nagpur decision is not sound. In the facts end circumstances of this case, therefore. I shall hold that the learned trial Judge has rightly not applied Article 1 of the new Limitation Act to the facts of the case. The plaintiff was not, therefore, to be entitled to take advantage of that Article in computation of limitation for his dues.

7. The next device by which limitation is contended to have been saved by Mr. Murty is the appropriation of the salary of the defendant as and when due against the outstanding debts owed by the defendant to the plaintiff. The solitary witness for the plaintiff does not refer to the method of such adjustment or appropriation. The ledger entries (Exts. 1, 2, 3, 4 and 5 series) do not clearly indicate the method of adiustment. Sometimes adjustments have been shown to be on annual basis and at other places it has been shown to be on monthly basis. In the plaint it is not pleaded that by appropriation of the salary limitation has been saved. The plaintiff had to indicate the process by which the suit was within limitation. I do not find any direct support from the Patna decision already referred to in which Mr. Murty seeks to rely for his contention in the facts of this case. That contention shall also therefore fail.

8. Mr. Murty emphasised upon the fact that the defendant has defrauded the plaintiff. A plea of fraud has not been raised in the plaint. However genuine the plaintiff's claim may have been limitation is a bar which ousts the jurisdiction of the Court to adjudicate the plaintiff's claim once limitation sets in. In the circumstances. I am not in a position to differ from the conclusion reached by the trial Court.

9. The appeal fails and is dismissed. I shall, however, not saddle the appellant with costs particularly when the respondent has not appeared to be heard.


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