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Subba Naidu Alias Subbarayulu Naidu Vs. Ethirajammal and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported in(1912)22MLJ14
AppellantSubba Naidu Alias Subbarayulu Naidu
RespondentEthirajammal and ors.
Cases ReferredVelu Pillai v. Ghose Mahamed I.L.
Excerpt:
.....that they were regularly kept in the ordinary course of business, admitted them in evidence, the evidence was clearly not admitted on the ground stated in clause (a) of rule 27, that is, because of the court of trial having refused to admit such evidence. if the evidence already on record made out that it was a case of mutual, open and current account within the meaning of article 85, there could have been no necessity for admitting the additional evidence and, if not, the party who had to make out the plea and failed to do so in the court of first instance must suffer judgment against him on that point. but i fail to see how the accounts in question were needed to enable the appellate court to pronounce judgment......to dispose of the question on the evidence.2. the district judge holds that there was an open and current account between the first defendant and the plaintiff's father and guardian, as evidenced by exhibit xxiii series, and therefore none of the items are barred. in the first place his finding on this point, if it is a valid finding, would not bring the case within article no. 85. that article deals with cases of mutual, open and current accounts where there have been reciprocal demands between the parties. it is not sufficient to bring a case within the purview of this article that there is an open and current account or that the entries show debit and credit. suppose one person advances money to another and the latter pays him sums of money from tarried to time towards the discharge.....
Judgment:

Abdur Rahim, J.

1. In my opinion the judgment of the learned District Judge must be reversed and he should be asked to re-hear the appeal. The appeal was filed in a suit instituted by the appellant, a minor, through his next friend, to obtain a declaration that a deed of usufructuary mortgage (Exhibit IX), executed in favour of the first defendant on the, 26th April 1902 with respect to certain property belonging to the plaintiff, by defendants Nos. 2 and 5, two of his guardians appointed by the District Judge of Madura, is not binding on him, surd for recovery of possession of the property. The mortgage was executed without the sanction of the court and it has been held that it does not bind the appellant. But the District Munsif found that of the amount of Rs. 1,179-6-4, for which Exhibit IX was executed, the appellant was liable only for Rs. 147-120 , while the District Judge, relying on further evidence admitted by him during the hearing of the appeal, has held that the minor is liable for the entire amount of the bond, that is, Rs. 1,179-6-4. The amount for which the bond was executed consists of a number of items set out in the Distrct Munsif's judgment in paragraph No. 14, beginning with the life time of the plaintiff's father, whose death took place in September 1895, down to the date of the bond, i.e., a period of about seven years. It appears that the first defendant, who is the eldest son-in-law of the plaintiff's father, spent various sums' on behalf of the family from time to time, and the first defendant's case is that he thus spent out of his pocket altogether about Rs. 1,432, out of which he received Rs. 400 in the shape of rents collected by him from the plaintiff's property, and it was for the balance of Rsv 1,032 plus Rs. 50 and Rs. 100, advanced on other accounts, that Exhibit IX was executed. The District Munsif found that some of the items were advanced more than three years before the date of Exhibit IX and were thus baned. As regards one large item, i. e., of Rs. 740, spent by the first defendant for the maintenance of the; plaintiff's step-mother, the plaintiff and his sister, for the education of the plaintiff and on certain family ceremonies during the course of seven years, it did not appear in evidence how much was spent within three years of Exhibit IX and how much prior their to. He then strikes the average for each year and disallows the amount so calculated for the period beyond three years. This mode of dealing with item No. VIII has been objected to on behalf of the appellant but I do not wish to express any decided opinion on the point, as the appeal, in my opinion, ought to be re-heard, and it will then be open to the District Judge to dispose of the question on the evidence.

2. The District Judge holds that there was an open and current account between the first defendant and the plaintiff's father and guardian, as evidenced by Exhibit XXIII series, and therefore none of the items are barred. In the first place his finding on this point, if it is a valid finding, would not bring the case within Article No. 85. That Article deals with cases of mutual, open and current accounts where there have been reciprocal demands between the parties. It is not sufficient to bring a case within the purview of this Article that there is an open and current account or that the entries show debit and credit. Suppose one person advances money to another and the latter pays him sums of money from tarried to time towards the discharge of the debt, that would not be a case within Article No. 85. The essential requisite of this Article is that there should be reciprocal demands.

3. In the next place, it was not the case of the first defendant, as is to be gathered from his written statement, the issues, the District Munsif's judgment and even the grounds of appeal to the District Judge, that there was a mutual, open and current account between him and the plaintiff's father as his guardian. Apparently it was during the hearing of the appeal that it suggested itself to the District Judge, or was argued before him, that the account kept by the first defendant was of such a nature. The plaintiff was, under these circumstances entitled to complain that he was taken by surprise,

4. The next question is, does the Judge's action come within the powers conferred by Order XLI, Rule 27, which substantially is in the same terms as Section 568 of the old Code He apparently did not record any reasons at the time he admitted the additional evidence, and what is to be gathered from his judgment is this : he thought that the evidence already on record for the defence showed that the defendant's claim was on a running account; the account kept by the first defendant was handed over to the fifth defendant but it was not filed in the course of trial. The fifth defendant happened to be present at the hearing of the appeal, and so the District Judge examined him as a supplemental witness (court's first witness, as he is described). The accounts were produced, and the witness having sworn that they are in the handwriting of the first defendant, the Judge, being satisfied from an inspection of the accounts that they were regularly kept in the ordinary course of business, admitted them in evidence, The evidence was clearly not admitted on the ground stated in Clause (a) of Rule 27, that is, because of the court of trial having refused to admit such evidence. Was this then a proper case under Clause (b)? It could not be said that the appellate court required the additional evidence to enable it to pronounce judgment. If the evidence already on record made out that it was a case of mutual, open and current account within the meaning of Article 85, there could have been no necessity for admitting the additional evidence and, if not, the party who had to make out the plea and failed to do so in the court of first instance must suffer judgment against him on that point. But I fail to see how the accounts in question were needed to enable the appellate court to pronounce judgment. Then, does this come within the scope of ' any other substantial cause,' mentioned in Clause (b)? 'Any other substantial cause' is apparently not to be understood in a wide and unrestricted sense but as referring to the same class of cases as the one specifically named. That is how I understand the interpretation placed on the section by the Privy Council in Kessowji Issur v. G.I.P. Railway Company I.L.R. (1907) B. 381, where their Lordships lay down that the legitimate occasion for Section 568 (of the old Code) is where, on looking into he evidence as it stands, some inherent lacuna or defect becomes evident. This reading of the section would not, in my Opinion, cover a case where the evidence on record suggests to the appellate court a certain plea which one of the parties might have relied on but did not, and it proceeds to take additional evidence in support of that view. And this is what happened in this case.

5. Having made up his mind to take additional evidence, the District Judge admits the accounts produced by the fifth defendant, merely on his proving that they were made over to him by the first defendant and are in the hand writing of the first defendant. There was no evidence that they were, kept in the ordinary course of business, but the Judge infers that they were so kept from an inspection of the accounts. He limited the cross-examination of the witness examined in connection with the accounts by the pleader for the plaintiff to matters relating to the proper custody of the accounts and to the question whether they were kept back in the court of first instance. The plaintiffs were not allowed to show that the accounts were not kept in the ordinary course of business or to prove facts which would negative the inference that there was a mutual, open and current account between the parties or to impeach the correctness of the entries. It might be that, so far as the items admitted by the plaintiffs in the first court to be correct are concerned, it was not open to the plaintiffs to impeach them, but they would be entitled at least to show that the other entries which would make out a case of mutual, open and current account were not correct.

6. It is clear from the proceedings that the plaintiff objected to the admissibility of the accounts, though there is no note to that effect and it was not suggested during argument before us that the plaintiffs did not object to the taking of additional evidence.

7. In my opinion, the procedure of the appellate judge was wholly unwarranted by law and I would therefore reverse his judgment and direct him to re-hear the appeal and dispose of it according to law. The cost of this appeal will abide the result.

8. I may mention that the learned pleader for the respondent also tried to support the decree of the. lower appellate court on grounds other than those relied on by that court. It will be open to the respondent to urge those grounds before the District Judge, who, in dealing with the case on the facts as may be found by him, will be in a position to dispose of such grounds in a satisfactory manner.

9. My learned brother would confirm the judgment of the lower appellate court. The second appeal is dismissed under Section 98, C. P. C, with costs. The time for redemption is extended by three months from this date.

Phillips, J.

10. The chief ground of appeal is that the District Judge was wrong in admitting additional evidence at the hearing of the appeal, and a further objection is taken, that he refused to allow cross-examination of the witness examined by him. The District Munsif found that a large portion of the consideration for the plaint bond was time-barred at the date of execution, and that therefore the minor could not be bound by the action of his guardians in admitting liability, although no issue on the point had been raised. Oral evidence of the dealings between the parties had been given In the lower court, but the accounts were not filed, although the fifth defendant had been summoned to produce them. On the oral evidence there is undoubtedly some ground for supposing that the account between the parties was a mutual, open and current account, but the question was not raised before the District Munsif, apparently because there had been no plea of limitation. Accordingly, when the plea was raised before the District Judge, I think that he was justified in thinking that the absence of a document, which would confirm or rebut the oral evidence was such an inherent lacuna in the evidence as would justify its admission in appeal, in order to decide a very material question which had not been decided in the lower court. In fact it would appear that on the evidence before him the District Munsif had not sufficient material for a finding that some of the items were barred by limitation, and this is shown by the unsatisfactory method adopted by him to decide what amount was so barred. It might be contended that the first defendant should have insisted on the production of the account in the court of first instance, but in that court its production seemed to be unnecessary, as the plaintiff had not pleaded that some of the items in the account were barred by limitation. I am, therefore, not prepared to say that there was not substantial cause for the production of the document, such as would justify the District Judge in admitting it under Order XLI; Rule 27.

11. As regards the further plea that the fifth defendant as court witness was not allowed to be cross-examined, I see from the District Judge's note that cross-examination as to the genuineness and custody of Exhibit XXII (the account filed is appeal) was not shut out, but only cross-examination as to the correctness of the details in the account. As the fifth defendant had not kept the accounts, he could hardly be expected to verify the details. In fact, in arguing this second appeal, the only objection taken was that the plaintiff had no opportunity to disprove the Guinness of the account. It does not appear that he wanted to adduce additional evidence on the point, and he was allowed to cross-examine the court witness as to the genuineness. I cannot therefore say that the District Judge's procedure was irregular or prejudicial to the interests of the parties. The District Judge has omitted to separately record his reasons for admitting further evidence, but the reasons are apparent in his judgment and that would appear to be sufficient record to meet the requirements of the law.

12. As regards the question whether Exhibits XXII and XXII-A. do or do not constitute a mutual, open and current account, with all due deference, I am unable to concur in my learned brother's opinion. The fact that the expenditure is shown in one account and the receipts in a separate account does not, in my opinion, alter the nature of the account, for in the former account the transactions in the latter have been periodically brought to account and a balance struck. The receipts are mostly on account of rent, for which the first defendant had to account to the minor and the expenditure consisted of various items spent for the maintenance and education of the minor and his family. The minor could at any time demand the rent due to him, and similarly the first defendant could demand repayment of the sums spent by him. In fact the minor's claim to some of the rent was as much barred by time as the first defendant's claim against the minor, but this did not prevent the parties from taking into account all the items on both sides when striking a balance. The mere fact that the balance was always in favour of the first defendant is not conclusive proof against its mutuality, for it is sufficient that there should be reciprocal dealings. Velu Pillai v. Ghose Mahamed I.L.R (1893) M. 293. In the present case, it does not appear that the rent received by the first defendant was so received merely in partial discharge of the monies lent by him, but the first defendant was bound to account for the rent, if called upon to do so. This is, I think, apparent from the fact that the rent account is kept separately. It might be argued that the two sets of dealings are altogether independent transactions, but the fact that the respective debits and credits have been balanced against each other destroys the value of this argument. I think, therefore, that the District Judge was right in treating these accounts as a mutual, open and current account within the meaning of Article No. 85 of the Limitation Act, and in holding that there was no bar of limitation.

13. I would, therefore, dismiss the appeal with costs.


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