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Firm of Sarabhai Hathising and anr. Vs. Ratilal Nathalal and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtGujarat High Court
Decided On
Case NumberFirst Appeal No. 226 of 1973
Judge
Reported inAIR1979Guj110; (1979)0GLR484
ActsLimitation Act, 1908 - Sections 19 and 19(2); Contract Act, 1872 - Sections 25; Evidence Act; Partnership Act, 1932 - Sections 18 and 19
AppellantFirm of Sarabhai Hathising and anr.
RespondentRatilal Nathalal and ors.
Appellant Advocate D.F. Amin, Adv.
Respondent Advocate B.R. Shah, Adv.
Cases ReferredV. Adikesavel Naidu v. V. K. R. Krishnaswami Mudaliar
Excerpt:
.....contract act, 1872, indian evidence act and sections 18 and 19 of partnership act, 1932 - defendant challenged plaintiff suit for money decreed in favour of plaintiff - defendant contending that suit barred by time - expression 'baki deva' constitutes an acknowledgement of liability - debt which defendant incurred was within time - defendant no.8 had authority to acknowledge liability on behalf of firm - partners cannot compromise or relinquish claim or portion of claim by firm - no substance in appeal - appeal liable to be dismissed. - - 86 and 87. which clearly amount to acknowledgements of liability by defendant 8 on behalf of defendant i firm, save. in our opinion, therefore, the contesting defendants have signally failed to show that defendant 8 had no authority to acknowledge..........portion of a claim by the firm, nor can he admit any liability in a suit or proceeding against the firm. acknowledgement of the liability of defendant 1-firm in respect of subsisting debt made by defendant 8 on behalf of defendant 1-firm neither amounts to compromising or relinquishing a claim or a portion thereof nor does it amount to admission of any liability in a suit or proceeding as against the firm. exs. 86 and 87 were written and signed long before the suit was filed. in our opinion, therefore, the contesting defendants have signally failed to show that defendant 8 had no authority to acknowledge on behalf of defendant 1firm the subsisting debt in favour of the plaintiff. the law did not prevent defendant 8 from doing it. the second contention which has been raised by mr. amin.....
Judgment:

S.H. Sheth, J.

1. The plaintiff filed the present suit against the defendants to recover a sum of Rs. 23,528-85 p. which consisted of the principal amount of Rs. 22,342-50 p. lent by the plaintiff to defendant 1 firm and Rs. 1186-35 as and by way of interest. Defendant 1 is the firm to which moneys were advanced by the plaintiff from time to time. Defendants 2 to 11 are the partners thereof. The suit was filed in the City Civil Court at Ahmedabad as a summary suit. After the defendants entered their appearance in the suit, the plaintiff took out summons for judgment. At the hearing of the summons for judgment, defendants 2 to 8 and 10 admitted the plaintiff's claim. Therefore, decree on admission was passed against them. Defendants 1, 9 and 11 contested the suit. They were granted unconditional leave to defend the suit. In the written statement which they filed, they raised three principal contentions. According to them, the suit was barred by time defendants 2 to and 10 had no authority to acknowledge the liability on behalf of defendant 1- firm. The learned trial Judge negatived the defence raised by the contesting defendants and passed in favour of the plaintiff decree for the entire amount.

2. It is that decree which is challenged by defendants 1 and 11 only in this appeal.

3. The first contention which has been raised by Mr. Amin who appeals on behalf of the appealing defendants is that the plaintiff's claim was barred by time. The accounts produced by the plaintiff (Exs. 81, 82, 83, 84 and 85) show that the first amount which was advanced by the plaintiff to defendant I firm was on Bhadarva Vad 7 of Samwat Year 2013 which is equivalent to 16th September 1957. There are cash book entries at Exs. 76, 77, 78, 79 and 80 which support the ledger entries Exs. 81 to 85. At Ex. 86 is the statement of account written down by defendant 8 on behalf of defendant 1-firm at the end of Samwat Year 2015. It, inter alia, shows that a sum of Rupees 13,099-08 p. was owed by defendant 1-firm to the plaintiff on Kartak Sud 1 of Samwat Year 2016 which is equivalent to 1st November 1959. At Ex. 87 is the statement of account written down by defendant 8 on behalf of defendant 1-firm at the end of Samwat Year 2017. It, inter alia, shows that on Kartak Sud 1 of Samwat Year 2013 which is equivalent to 9th November 1931 a sum of Rs. 19,920-83 p. was due from defendant 1-firm. It was payable to the plaintiff. The transactions of money-lending between the plaintiff and defendant. I started on 16th Sept. 1957. Defendant 8 on behalf of defendant 1-firm by Ex. 86 acknowledged the liability of that firm in respect of the amount due and payable to the plaintiff on 1st Nov. 1959. That acknowledgement was made within time. Therefore, a fresh period of limitation started running from that date. The second acknowledgement was made on behalf of defendant 1-firm by defendant 8 on 9th Nov. 1961. That acknowledgement was also made within the period of limitation from the last acknowledgement Ex. 86. A fresh period (A limitation, therefore, started running from 9th Not. 1961. The present suit was filed on 3rd Sept. 1964. Ex facie. therefore, the suit was filed within time. We may note that defendant 8, Chinubhai Sarabhai, has in terms signed Ex. 86 and Ex. 87 on behalf of defendant 1-Firm of Sarabhai Hathising.

4. Mr. Amin has firstly tried to argue that Exs. 86 and 87 do not constitute the acknowledgements of liability. We are not impressed by this argument. Ex. 86 in terms states that a sum of Rs. 13,099-08 p. was payable by defendant 1-Firm to the plaintiff. The Gujarati expression which has been used in Ex. 86 is 'Baki Deva': Similarly, in Ex. 87 it was stated on behalf of defendant 1-firm that Rupees 19,920-83 p. were 'Baki Deva' by defendant 1-firm to the plaintiff. We have no doubt in our mind that the expression 'Baki Deva' constitutes an acknowledgement of liability. Literally translated it means 'the balance which is owed.' Such an expression may not constitute a fresh promise to pay within the meaning of S. 25 of the Contract Act and therefore, if, on the date on which the debt was acknowledged, it was beyond time. Ex 86 or 87 probably would not have helped the plaintiff. In the instant case, if they constitute the acknowledgements of liability, they are sufficient for the plaintiff to establish his claim. We have no doubt in our mind that they certainly constitute an acknowledgement of liability. That the expression 'Baki Deva' unequivocally constitutes an acknowledgement of liability is not required to be supported by: any decision. The words themselves are clear enough. However, the three decisions of the High Court of Bombay lend support to the view which we are expressing.

5. In Amritlal Mansuk v. Maniklal Jetha (1873) 10 Bom. H. C. R.- 375, Mr. Justice Melvill held that a 'Thamkhata' written down by the defendant constituted an acknowledgement of liability. In Ranchhoddas Nathubhai v. Jeychand Khushalchand (1884) ILR 8 Bom. 405, the expression 'Baki Deva' came up for consideration before Division Bench of the High Court of Bombay. Chief Justice Sargent delivering the opinion . of the Court stated that the Gujarati words 'Baki Deva' which are of common use in balancing accounts, import no more than the English words 'balance due', from which an unwritten contract may be inferred, though they do not themselves amount to a written promise to pay. In Chunilal Ratunchand Gujarati v. Laxman Govind Dube, 23 -Bom LR 606: (AIR 1922 Bom 183), the plaintiff sued the defendant to recover a certain amount on Ruzukhata which was the account made up after taking into consideration the payments made and interest charged and signed by the defendant. A Division Bench of the High Court of Boinba, consisting of Sir Norman Macleod, Kt., Chief Justice, and Mr. Justice Shah took the view that though the Ruzukhata signed by the defendant constituted an acknowledgement of liability, it did not constitute a fresh promise to pay. In the instant case, we are not concerned with the plaintiff right to recover a time-oarred debt by virtue of Exs. 86 and 87. The debt which defendant 1 incurred was very much within time when on behalf of defendant 1 firm, defendant 8 wrote down and signed Ex. 86 and it was also within time when defendant 8 on behalf of defendant I wrote down, Ex. 87 and signed it. Therefore, two statements of accounts, Exs. 86 and 87. which clearly amount to acknowledgements of liability by defendant 8 on behalf of defendant I firm, save. the present suit from bar of limitation.

6. The second argument which has been raised by Mr. Amin is that Exs. 86 and 87 do not show the, dates on which they were written and that, therefore they cannot constitute the acknowledgement of liability within the meaning of Section 19 of the repealed limitation Act (Section 18 of the new Limitation Act). In 1959 and 1960 when Exs. 86 and 87 were written and signed on behalf of defendant 1-firm, the repealed Limitation Act was in force. We may, there fore, usefully refer to Section 19 there of. Sub-section (1) thereof, inter alia, provided for the effect of acknowledgement in writing. Sub-section (2) on which Mr. Amin relied provided that where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 oral evidence of its contents shall not be received, it has been argued by. Mr. Amin that there is no oral evidence to show when Exs: 86 and 87 were written. The submission which he has made is quite correct. But, in the instant case. no oral evidence in this behalf is necessary. Ex. 86 in terms mentions the date Kartak Sud 1 of Samwat Year 2016, which is equivalent to 1st of Nov. 1959. Ex. 87 in terms shows Kartak Sud 1 of Samwat Year 2018 which is equivalent to 9th of Nov 1961. Indeed these two dates have been shown in Exs. 86 and 87 in the context of the dates on which the amounts shown in those two statements were due in normal course of human behaviour, these two statements could not have been written before those dates. They could have been written either on those two dates or on any subsequent dates. If we, therefore, take those very dates as the dates on which they were written and signed, (they ire the earliest dates which can be assumed in favour of the contesting defendants) we find that those two acknowledgements were made within time.

7. Mr. Amin has, however, tried to argue that it is quite probable that Exs. 86 and 87 might not have been written and signed on the dates shown therein but might have been signed later and antedated. Such a possibility cannot be ruled out. Defendant 8 on behalf of defendant 1 firm could have written and signed those accounts at a much later date and sent them to the plaintiff. It is equally possible that he might have written them after the original debt had become time-barred. If that was so, the claim made by the plaintiff would not survive the bar of' limitation. However, what Mr. Amin has submitted to us is a mere conjecture. It is nothing but a guess work. The allegation that Exs. 86 and 87 were written long after the respective dates shown therein and were antedated was required to be proved by the contesting defendants. The burden of proof lay squarely upon them. On behalf of the contesting defendants, defendant 1, Anubhai Sarabhai, alone gave evidence. His deposition appears at Ex. 93. He has not stated anything in his evidence in this behalf. Therefore, the argument which Mr. Amin has raised on behalf of the contesting defendants before us has no foundation whatsoever. He was trying to build up a castle in the air. Taking into account the contents of Exs. 86 and 67, we are of the opinion that they were written down and signed by defendant 8 on behalf of defendant 1-firm on the dates shown in those two documents and that, therefore, there were valid and subsisting acknowledgements of debt on behalf of defendant 1 firm in favour of the plaintiff. He has in this connection invited our attention to the decision of the High Court of Madras in V. Adikesavel Naidu v. V. K. R. Krishnaswami Mudaliar (1965) 2 Mad LJ 516. The learned single Judge who decided that case has observed that in cases where there is an acknowledgment of liability in writing but the date is not specified oral evidence may be given of the date when such acknowledgement was made. However, he has further observed that it is for the plaintiff to make out that his claim is within time and it is for him to let in evidence to show that the acknowledgement was made within three years of the original date or the date of any subsequent acknowledgement. He has further observed that there is no presumption that in the absence of any evidence as to the exact date of the endorsement it should be taken as made within three years of the prior endorsement. What Mr. Amin has emphasised with reference to this decision is that the plaintiff must lead evidence to show the date on which Exs. 86 and 87 were written and that there cannot be a presumption in favour of the plaintiff in that behalf. It is wrong to say that we are presuming in favour of the plaintiff the dates of those two documents. Indeed the plaintiff has not led any oral evidence on this aspect but Exs. 86 and 87 themselves bear the dates which we are entitled to take into account. The first contention raised by Mr. Amin, therefore, fails and is rejected.

8. The next contention which he has raised is that defendant 8 who wrote and signed Exs. 86 and 87 on behalf of defendant-1firm had no authority to acknowledge the debt. The case of the contesting defendants on this aspect is much weaker. They have not produced in the Court the partnership deed. If they had done so, the document would have shown the authority of each of the partners of defendant 1-firm in this context Mr. Amin has invited our attention to the avertments made by the plaintiff in paragraph 5 of the plaint Ex. 1. They show that disputes had arisen amongst the partners of defendant 1 firm and that defendant 10 had filed Civil Suit No. 1080 of 1963 in the City Civil Court at Bombay for dissolution of partnership and for taking accounts of the partnership business. They further show that that suit was stayed under. Section 34 of the Arbitration Act and that the disputes between the parties were referred to the arbitration of Shri G. A. Thakkar, Advocate. These averments made by the plaintiff only show that the disputes had arisen between the partners of defendant 1-firm. They do not show that in 1959 and in 1961 when defendant 8 on behalf of defendant 1 firm wrote down and signed Exs. 86 and 87 he had no authority to acknowledge the debt which defendant 1-firm owed to the plaintiff. Section 18 of the Partner ship Act provides that subject to the provisions of the said Act, a partner is agent of the firm for the purposes of the business of the firm, A firm always operates through its partners, one or more. Each partner is the agent of the firm. Therefore, a partner has got the authority to do all acts which are necessary to be done for the benefit of the partnership firm, in particular to keep its business running. Section 19 provides that subject to the provisions of Section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. Sub-section (2) which lays down exceptions to the implied authority of a partner does not lay down that a partner cannot acknowledge the subsisting debt of the firm in favour of its creditor. It indeed, inter alia, provides that a partner cannot compromise or relinquish a claim or a portion of a claim by the firm, nor can he admit any liability in a suit or proceeding against the firm. Acknowledgement of the liability of defendant 1-firm in respect of subsisting debt made by defendant 8 on behalf of defendant 1-firm neither amounts to compromising or relinquishing a claim or a portion thereof nor does it amount to admission of any liability in a suit or proceeding as against the firm. Exs. 86 and 87 were written and signed long before the suit was filed. In our opinion, therefore, the contesting defendants have signally failed to show that defendant 8 had no authority to acknowledge on behalf of defendant 1firm the subsisting debt in favour of the plaintiff. The law did not prevent defendant 8 from doing it. The second contention which has been raised by Mr. Amin is, therefore, without any substance and is rejected.

9. Appeal dismissed.


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