Krishnaswami Nayudu, J.
1. The appellants are the defendants in O. S. Nos. 165 of 1947 and 164 of 1947 and in S. C. S. Nos. 133, 187, 119 and 186 of 1947 filed in the District Munsif's Court, Erode. The plaintiffs in those suits were employed under the defendants as accountants, clerks, and cloth-holders in their cloth business. The common case of the plaintiffs in all the suits is that they were employed under the defendants, that their salary was fixed inclusive of bonus and that while the salary was being paid, the bonus has not been paid, in some cases fully and in some cases partially. The suits, therefore, were instituted for the recovery of the amount of the bonus, which remained unpaid. The defendants contended that there was no agreement to pay the plain-tiff's any bonus and as bonus depends upon one's sweet will and pleasure and it is a mere gift, no suit could be filed in respect of the same. They also pleaded bar of limitation to the suits. The lower Court passed decree in all the suits. The defendants filed appeals against O. S. No. 165 of 1047 and against O. S. No. 164 of 1947 in the Subordinate Judge's Court, Coimbatore, but the appeals were transferred to the High Court to be heard along with C. R. P. Nos. 1903 to 1906 of 1947, which were revision petitions filed by the defendants against the decree in S. C. S. Nos. 133, 187, 119 and 186 of 1947.
2. Two contentions were urged before me: (1) That no suit is maintainable for recovery of bonus which is an 'ex gratia' payment and that, in any event, there was no agreement for payment of such a bonus, and (2) The claims are barred by limitation.
3. These payments of salary and bonus are stated to have been agreed to be paid annually and the amounts claimed in the several suits are based on the agreement to pay the bonus every year at differing rates in several suits. The plaintiffs have examined themselves and also relied on the account books maintained in the business which were, stated to have been written by Chidambaram, the plaintiff in O. S. No. 165 of 1947. These account books are not forthcoming but it is stated that there are in the accounts of every year credit entries in the ledger pages of each of these plaintiffs of not only the amount of salary but also the amount of bonus stipulated for. Chidambaram filed Ex. A. 1, which is a copy of the balance sheet for the year 1943-44 and the balance sheet shows the amounts credited to four of the six plaintiffs, which they claim in these suits and which amounts are stated to be the balance due in respect of bonus. Ex. A. 1- does not give particulars as to the nature of the amounts to which credit has been given - but there is the evidence of the plaintiffs that these amounts represent the balance due for bonus agreed upon.
The explanation for the non-production of the account books, of which the defendants must be in possession, is that they have been filed with the income-tax authorities to whom income-tax returns for the years 1942-43, 1943-44 and 1944-45 have been submitted and pending scrutiny, it is stated the books have not been returned. The 2nd defendant examined himself as D. W. 1. He is unable to say whether Ex. A. 1 is a true copy of the accounts and states that the account books were filed by the defendants about five months prior to the date of his examination, with the Excess Profits Tax authorities and that they did not attempt to get the account books after the suit. He does not know whether defendant 1 made any attempt to get them. The 1st defendant is apparently not taking any interest in the suit as he has not examined himself, leaving defendant 2 to face the trial. The 2nd defendant 'further says that he did not verify the balance-sheet and that he does not know if they deducted the bonus amounts from the gross-profits earned by them and showed the balance as net profits to the income-tax authorities.
4. In view of the specific allegation in the plaint that credit has been given from time to time for the respective amounts of salary and bonus due to the respective plaintiffs, it is incumbent on the defendants to produce the account books and prove that the state of the accounts does not support the plaintiffs' contention. Except taking a subpeona for their '- production, the defendants did not apparently take any serious steps to have them produced as evidence and their failure to do so would justify an adverse inference to be drawn, viz., that by their production the case of the defendants would not receive any support. There is no reason to disregard the genuineness and the truth of the entries in the balance sheet, Ex. A. 1 and that would be sufficient to show that the course of business and the nature of the accounts must have been what is stated by the plaintiffs, viz., that there was an arrangement to pay not only salary but bonus every year. This would be amply proved by the fact of credit entries being made from time to time in the books of account maintained on behalf of the defendants. Bonus as such would mean 'ex gratia' payment and there cannot be an action to enforce the payment of such an 'ex gratia' payment but if it is established that in feet there was an arrangement to pay a certain sum as bonus and that it would be part of the contract of service between the parties, there is no reason why such a contract should not be enforceable.
This aspect was dealt with by :? Bench of this Court in the decision reported in -- 'Kana-kasabapathi v. Hajee Oosman', 47 Mad LJ 791, and as observed by one of the learned Judges, the claim of the plaintiff should be deemed to be based on a contract, apart from any question whatever of a contemplated gift or a completed gift and apart from any relationship between the parties of depositor and depositee or creditor and debtor and the plaintiff had a case on the footing of a contract which was clearly sustainable. It cannot, therefore, ] amount to a promise without consideration, the consideration being the plaintiff's services to the defendant on an express agreement that they were to be paid two sums, one described as salary and the other as bonus. In this case, such an agreement has been proved both by the evidence of the plaintiffs and by Ex. A, 1. The lower Court rightly held that the defendants are liable to pay the bonus. There is no dispute as to the amount due and, therefore, the decree of the lower Court would be sustainable.
5. But there is the further question that, requires to be considered as to whether the suits are within time. It is urged on behalf of the appellants that the payments agreed upon as salary or bonus are wages and Article 1, Limitation Act, would bo the proper article that would be applicable and as such all the claims made by the plaintiffs would be barred by limitation. The lower Court held relying on a decision reported in -- 'Chinnan Chetti v. Vilathan', : AIR1928Mad27 , that where the wages instead of being paid then and there to the servant are credited to his account in the account books the law of limitation applicable is not that under Article 7, but the ordinary rule of limitation between a creditor and a debtor. In this case, i.e., in -- 'Chinna Chetti v. Vilathan', : AIR1928Mad27 , where a domestic servant sued for wages, it was found that where the master instead of paying the salary to the servant then and there gives credit in his account book and treats the servant as his creditor, Article 7 does not apply. The learned Judge observes as follows :
'Both the lower Courts have relied upon these entries as saving the bar of limitation. The suit for wages as a domestic servant no doubt must be brought within one year after the same became due. But it is open to a master instead of paying the salary then and there to give credit in his account books and treat the servant as his creditor. It would make no difference whether the master gives a pronote for wages or whether he gives credit in his account books and treats him ns his creditor. If the master does that, then the law of limitation applicable is not that under Article 7 but the ordinary rule of limitation as to debtors.'
Whether by a mere credit entry in the book of the debtor, the creditor would be entitled to rely upon it as forming a contract between the creditor and the debtor appears to mo to be rather difficult to hold.
6. In the present case, in so far as Ex. A. 1 is concerned, it could be relied upon in support of the plaintiffs' case that there was originally an agreement between the parties for the payment of bonus as part of the remuneration but whether Ex. A. 1 could be further relied upon as saving the bar of limitation is what has to be determined now. The entries in Ex. A. 1 could not be taken as acknowledgment in writing under Section 19, Limitation Act, nor could they be held to amount to a contract to pay a barred debt under Section 25, Contract Act. It is very difficult to hold that a mere entry would by itself be sufficient to constitute a contract between the creditor and the debtor. The entries in Ex. A. 1 are not in the handwriting of either of the defendants, admittedly having been written by Chidambaram, one of the plaintiffs in one of the suits. Either to constitute an acknowledgment under Section 19. Limitation Act, or to be a contract un-dev Section 25, Limitation Act, it must be in writing and signed by the person who makes himself liable under the contract. None of these conditions are satisfied in the present case. I find it very difficult to agree with the learned Judge who decided -- 'Chinnan Cheiti v. Vila-than', : AIR1928Mad27 , that there is no difference between an entry in an account book and a promissory note for wages. A promissory note would certainly stand on a different footing and a credit entry in an account book cannot have the same effect.
7. It is urged on behalf of the respondents that when once an entry appears in an account book maintained by a debtor, there is a relationship of creditor and debtor created and either Article 64 or Article 85, Limitation Act, can be made applicable. In so far as Article 64 is concerned, it is for money payable to the plaintiff for money found to be due from the defendant to the plaintiff on accounts stated between them and time begins to run from the date when the accounts are stated in writing signed by the defendant or his agent duly authorised in this behalf, unless where the debt is, by a simultaneous agreement in writing signed as aforesaid, made payable at a future time and then when that time arrives. Article 85 relates to -the balance due on a mutual, open and current account, which certainly can have no application in this case. None of these articles would be of any assistance to the appellant. The learned Counsel urged further that when once the amounts, which are stated to be due to the plaintiffs, have been mentioned in the account books from time to time and there is a course of transaction to show that the defendants intended to divest themselves of this amount pointing out the persons who should be benefited by them, a trust could be implied from such entries in the account books and that, therefore, the question of limitation would not arise.
Reliance was placed on a decision of. Basheer Ahmed Sayeed J. in -- 'Devar and Co. v. Radhakrishna Naidu', 1952 2 Mad LJ 308, where it was held that,
'Where the employer has credited the employee in his accounts with the clearness allowances and bonuses and represented to the income tax department that those amounts so set apart have been paid over to the employees from year to year it would certainly constitute a trust in favour of the employee especially when loans to the employee have been debited and repayments and loans and also salaries have been credited in such accounts. The cash has been sufficiently allocated and separated from the general funds of the employer.'
Applying the principles laid down in the Privy Council decision -- 'Chambers v. Chambers', 1944 2 Mad LJ 29 (PC) and -- 'Ramanathan Chettiar v. Palaniappa Chettiar : (1945)2MLJ164 , the learned Judge observecMhat he was inclined to hold that the action of the defendants in having made not merely the entries in the account books but also in having represented to the income-tax department that these amounts have been set apart for the plaintiff and the other employees and that they have been paid over to the employees from year to year would certainly constitute a trust in favour of the plaintiff.
Further the learned Judge notes with reference to the case before him that 'the credit entries do not stand by themselves as mere credit entries in favour of the plaintiff. A reading of the exhibits containing the credit entries would show that this is something like a running account wherein there are also debit entries against the plaintiff.' On the facts of the case, the learned Judge held that a trust was created and it was., therefore, open to the employees to enforce the recovery of the amounts as on the basis of a trust. This decision may be helpful to the case of the plaintiffs but the difficulty arises owing to the paucity of evidence as to whether, in fact these amounts were taken into account in the income-tax returns, i.e., whether the defendants had claimed credit for these amounts in the return submitted to the income-tax department. In the absence of the features, which are present in the case referred to, viz., about the course of transaction which would only be ascertained from the account books which un-fortunately have not been produced in this case and for which, in my view, the defendants arc really responsible, I am unable to apply the principle of trust to the case before me.
8. In the view I have taken that mere credit entries in the 'BOOKS of account would not be sufficient to either constitute a contract to pay a barred debt or to enable a trust to be implied therefrom, it is further necessary to determine whether the suit claim comes within any of the articles of the Limitation Act. Article 7, which was relied upon on behalf of the appellants refers to claims relating to the wages of a household servant, artisan or labourer where one year's period is provided from the time when the wages accrue due. The plaintiffs belong to none of the categories mentioned in Article 7. The only other article which relates to wages is Article 102.
9. Article 102 deals with wages not otherwise expressly provided for by the schedule and three years period of limitation is provided from the time when wages accrue due. The question still remains whether the pay o the plaintiffs could be treated as wages. Wages, though they may be restricted to the remuneration for mechanical or muscular labour or to such amounts as arc usually paid at short intervals, may be held to include payments to any kind of employee where a remuneration is provided for his services. Wages means according to the Concise Oxford Dictionary 'amount paid periodically especially by the day or week or month for time during which workman or servant is at an employer's disposal.' It can be held in the present case that wages may generally be applied to all kinds of payments, which are made periodically so long as his services are at the disposal of the, master. In -- 'Bharadwaja Mudaliar v. Aruna-chala Gurukkal', 41 Mad 528, Article 102 was held to be applicable to a suit instituted by an archaka against a trustee as regards the pay and perquisites and it was held that the suit was not barred as regards such a claim, the same having been instituted within three years from the date from which the pay had become due.
10. In my view, therefore, the proper article that would be applicable to the present case would be Article 102. The plaintiffs would not then be entitled to the full amount of the decree_ passed by the lower Court. The suits were instituted in April .1947 and they will be entitled only to the bonus claimed in alt the suits 'except in S. C. S. No. 186 of 1947 for the years 1943-44, and 1944-45. In S. C. No. 186 of 1947 the claim is from 1941 to 1944 i.e., 1941-42, 1942-43, 1943-44 and they will be entitled to the bonus due for the year 1943-44.
11. The decrees will, therefore, be modifiedby excluding the amounts for the years 1941-42 and 1942-43. Subject to this modification,the appeals and petitions are dismissed. If forthe period prior to 1942-43 any amounts havebeen received by the plaintiffs, they will bepermitted to appropriate it for the period from1941 to 1943. There will be no order as to costs.