Find a Lawyer

----Art. 85‑Word "Mutual" and expression "where there have been reciprocal demands between the parties"‑Meaning of‑Shifting of balance Whether sure criterion that account is mutual.

Mutual accounts are those that consist of reciprocity of dealings between the parties, and do not embrace those having items on one side only, though made up of debits and credits. In order that the ‑accounts might be mutual, there must be transactions on each side, creating independent obligations on the other, and not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges of such obligations. Article 85 of the Limitation Act contemplates those cases where the transactions between the parties create a basis for reciprocal demands. There can be no talk of there having been any reciprocal demands where there is no basis for such a demand.

Mere shifting of balance is no sure criterion that the account is mutual. It is not accidental shifting of the balance, bur a real basis of such shifting in the transactions between the parties, that is important.

Ram Parshad and another v. Harbans Singh and others 6CL J 158 ref.

Birendra Kumar De for Petitioner.

Rohm‑ Binod Rakshit for Opposite Party.

‑The Rule was obtained by the defendant petitioner against the opposite party under section 25 of the Provincial Small Cause Courts Act, asking him to show‑ cause why the decree obtained by him in S. C. C. Suit No. 228 of 1952 should not be set aside.

The suit was instituted on the 30th of December 1952, for recovery of Rs. 174 on account of motor‑hire from the 24th of August 1945, to the 11th of June 1950.

The petitioner challenges the plaintiff's claim, characteris ing his accounts as false, and, in order to support his case, he produced certain passports of the year 1947 to show that on several dates of the alleged transactions in that year he was away in foreign countries. As these documents were not produced within the time fixed by the Court for filing documents, the learned Small Cause Court judge refused to admit them in evidence when they were produced at the time of the hearing, on the ground that their admission would prejudice the plaintiff.

The claim of the plaintiff has been decreed on the assumption that the case is governed by Article 85 of the Limitation Act.

It is quite clear, and it is not disputed, that if Article 85 does not apply, the plaintiff cannot, even if his case is true, get any decree in respect of any year other than the year 1950.

Mr. De for the petitioner contends that this Article is not applicable to the present case. He further contends that the learned Small Cause Court Judge did not exercise a proper discretion in refusing to admit the passports into evidence, considering that these were evidence of a nature that could not be fabricated.

The judgment of the learned Small Cause Court Judge does not disclose the specific reason for which he decided that the case would be governed by Article 85 The suit to which this Article applies is, as stated in the first column, a suit "For the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties." The mere fact that two persons are concerned in an account, does not bring the case within this Article. On the question as to what the meaning of this Article is, there is much authority. An open account, of course, means an account which is kept open for the future, and a current account is a running account. The real difficulty is with regard to the word "mutual" and the expression "where there have been reciprocal demands between the parties". In Ram Pershad and another v. Harbans Singh and others (6 C L J 158), to which Mr. De has referred, it was observed that mutual accounts are such as consist of reciprocity of, dealings between the parties, and do not embrace those having items on one side only, though made up of debits and credits. That decision refers to the observation of A Holloway J. in Hirada v. Gadiji ((1871.) 6 Mad. H C R 142), that in order that the accounts might be mutual, there must be transactions on each side, creating independent obligations on the other, and' not merely transactions which create obligations on the one side, those on the other being merely complete or partial discharges on such obligations. To my mind, it seems that this Article contemplates those cases where the transactions between the parties create a basis for reciprocal demands. There can be no talk of there having been any reciprocal demands where there is no basis for such a demand. That' there was any such basis of reciprocal demands in this case, is not clear. The claim is for hire of motor car; the liability was on one side only: and there was basis for claim only against one party. Mr. Rakshit for the opposite party has pointed out that once in 1947, and again in 1949. there was a balance in ‑favour of the defendant. It seems to be well -settled that a shifting balance is no sure criterion that the account is a mutual one. It is not the accidental shifting of 6 the balance, but a real basis for such shifting in the transac tions between the parties, that is important. In my opinion, Article 85 does not apply to this case.

But I am not inclined to accede to the prayer of Mr. De that this case should be remanded in order to enable the petitioner to put in the evidence that was refused by the learned Small Cause Court Judge. The evidence relates to the year 1947, the claim in respect of which, according to my judgment as pronounced now, is barred by time.

In the view I have taken above, the decree of the Court below is modified by reducing the amount decreed to Rs. 103, which, upon the account proved, is found to be due for the transaction in the year 1950. The Rule is disposed of in these terms. The parties will be entitled to proportionate costs in all the Courts,

K. B. A. Decree modified.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.