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M.N. Setty Vs. V.A. Subbiah Setty - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberCivil Revn. Petn. No. 154 of 1959
Judge
ActsStamp Act, 1899 - Sections 1
AppellantM.N. Setty
RespondentV.A. Subbiah Setty
Appellant AdvocateL.S. Seshagiri Rao, Adv.
Respondent AdvocateM.N. Venkatachalayya, Adv.
Cases ReferredManilal Motiram v. Natwarlal Gokaldas
Excerpt:
- trade unions act, 1926[c.a. no. 16/1926]. section 2(h): [h.n. nagamohan das, j] settlement under section 18 of the industrial disputes act, 1947 negotiation with union held, in the absence of code of conduct recognising union which enjoys support of majority of workmen, it is not proper to exclude the recognised trade union from the proceedings before the tribunal. tradition of simultaneous but separate negotiation with both unions for sufficient length of time will have a binding force. impugned award was liable to be quashed......by the petitioner in this case, or whether it is an acknowledgment of liability in order to supply evidence of such debt and hence is inadmissible as not having been duty stamped. in the view of the learned civil judge, kolar it is of the latter category and not being duty stamped is inadmissible in evidence. (2) the facts leading up to this petition are briefly as follows : the plaintiff who is the petitioner before this court filed a suit for dissolution of partnership and for accounts. he alternately prayed for payment of rs. 9,853/-. according to the plaintiff, he and the defendant were partners though this fact is denied by the defendant. on 31-12-1954, accounts of the partnership were looked into and the balance was struck which showed that there was a loss of rs. 17,000/-.....
Judgment:
ORDER

(1) The only point for determination in this revision petition is whether the entry in an account book is admissible in evidence as contended by the petitioner in this case, or whether it is an acknowledgment of liability in order to supply evidence of such debt and hence is inadmissible as not having been duty stamped. In the view of the learned Civil Judge, Kolar it is of the latter category and not being duty stamped is inadmissible in evidence.

(2) The facts leading up to this petition are briefly as follows : The plaintiff who is the petitioner before this Court filed a suit for dissolution of partnership and for accounts. He alternately prayed for payment of Rs. 9,853/-. According to the plaintiff, he and the defendant were partners though this fact is denied by the defendant. On 31-12-1954, accounts of the partnership were looked into and the balance was struck which showed that there was a loss of Rs. 17,000/- and odd. As per plaintiff- petitioner this loss was shared by both the parties, and half of the amount of the loss was carried on to the personal account of each of the partners viz. the plaintiff and the defendant. Defendant is the respondent before this Court. On 31-12-1954, there is an entry to the effect that a sum of Rs. 9853-0-3 is due in the 'katha lekka (account) of the defendant Subbiah setty. Underneath that the defendant has put his signature. This signature is not affixed on a stamp.

(3) It is argued by Sri Seshagiri Rao, the learned advocate for the petitioner that all that the defendant has done is, after striking the balance the accounts, he has signed it indicating thereby that the account is correct. It was not the intention of the parties at that it should be treated as supplying evidence of any debt. According to the arguments addressed before the Court, there was no litigation between them. The partnership continued even thereafter. Under the circumstances does it come within the mischief of Article 1 of Schedule I, the relevant provision of which runs as follows?

'Acknowledgment of a debt exceeding twenty rupees in amount or value, written or signed by, or on behalf of a debtor in order to supply evidence of such debt in any book (other than a banker's pass book) or on a separate piece of paper when such book or paper is left in the creditor's possession..................'

(4) In order to find out whether it evidences a debt or acknowledges liability the surrounding circumstances have to be looked into. The frame of the suit is also a good indicator. It is not merely for the recovery of an ascertained sum of money ; but it is a suit for dissolution of partnership as well. The plaintiff had no idea that he should take an acknowledgment from the defendant to base a cause of action thereon in a further suit. Neither was there the fear of the debt being barred by limitation. Hence it cannot stated that the plaintiff wanted to secure himself against the defendant reselling from the position, and therefore got an acknowledgment from him. Under such circumstances, I have no hesitation in coming to the conclusion that this does not represent an acknowledgment of a debt in order to supply evidence thereof. Hence it does in not come within the mischief of Art. 1 of Sch.I.

(5) A direct authority on that point is that of our own High Court in the case of C.Parasappa v. H.M. Gurubasaiah, 37 Mys LJ 296, where it is held as follows:

'Striking of balance in the creditor's books which is signed by the debtor would amount to an acknowledgment chargeable to stamp duty only if it was signed with the intention that the debtor should supply evidence of the debt due from him. Where, on the contrary, it is clear that the signature was taken in order that the liability of the debtor should be determined on that date and that he should not thereafter dispute the correctness of the account, the entry does not amount to an acknowledgment within the meaning of Art. I of Sch.I of the Stamp Act and a suit thereon is maintainable.'

As per the citation referred to supra, it is abundantly clear that it was made only for the purpose of ensuring that dispute regarding the correctness of the account should not play a part henceforth in the relationship between the parties.

(6) The decision of Nagpur High Court in the case of Bulakhidas v. Ganpatrao, AIR 1946 Nag 112, is also to the same effect. It was held therein as follows :

' A document is not acknowledgment within the terms of Art. 1 unless it is given with the dominant intent to supply evidence of the debt. Where therefore, on a date when the claim was not getting barred by time the dominant intent in obtaining the signature of the debtor on the account book is that he should not thereafter dispute the correctness of the account, the signature does not amount to an acknowledgment so as to require a stamp under Art. 1'.

(7) It is strenuously contended by Sri Venkatachala, the learned counsel for the respondent that this is nothing else than an out and out acknowledgment liability and therefore, comes within the mischief of Art. 1 of sch. 1. He relies on a decision of the Bombay High Court in the case of Manilal Motiram v. Natwarlal Gokaldas AIR 1947 Bom 337. His Lordship Lokur, J.

While enunciation the principle which I should say with respect to be the correct one viz., a debtor's admission taken in writing in order that he may not subsequently dispute the correctness of accounts cannot be regarding as an acknowledgment intended to supply evidence of debt, on the facts of that case held that the creditor admitted that he took the writing in order that it may be used as evidence for the purpose of saving the bar of limitation under s. 19, Limitation Act. Hence it was an acknowledgment within the terms of Art. 1. That case is distinguishable..

So also is the decision of the Madras High Court : AIR1951Mad605 . There, the plaintiff based his cause of action solely on the acknowledgment of liability made by the defendant in his own writing which is not the case in the instant case.

(8) In the circumstances Find that this revision petition should be allowed and it is so ordered.

(9) Petition allowed.


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