JUDGMENT :- The appellant in this First appeal is the State Bank of India, who has taken over the management and control of the Manipur State Bank. This Manipur State Bank, filed the suit out of which this first appeal arises against the respondents before the First Subordinate Judge for a sum of Rs. 30,271-13-8. The case of the plaintiff was that respondent 1 who had an account in the Bank applied for overdraft arrangement and he was allowed overdraft facilities in pursuance of the resolution of the Board of Directors of the Bank and that between January 1950 and June, 1955 a total amount of overdraft amounting to 10 lakhs and odd was allowed to respondent 1, and that towards the said overdrafts various amounts were paid by respondent 1 leaving the balance of Rs. 30,271-13-8 on 30-6-1955. The suit itself was filed on 30-6-55. The Bank claimed a decree against respondents 1, 2 and 4 and in case Respondent 3 acted without the authority of Respondent 2, then against Respondent 3, instead of Respondents 2 and 4. 2. Respondent 1 was absent and set ex parte in the lower Court. But Respondents 2 to 4 contested the suit stating that they were not liable. The learned Subordinate Judge held that respondents 2 to 4 were not liable for the amount and dismissed the suit against them. He also dismissed the suit against respondent 1 on the ground that the suit was based on a promissory note dated 27-2-50 and the suit having been filed on 30-6-55 was barred by limitation under Art. 59 of the Limitation Act. It is against that decision, dismissing the entire suit against all the respondents that the present appeal has been filed. 3. When the appeal was taken up for hearing, the appellant stated that he did not press the appeal against respondents 2 to 4, but only against respondent 1. Thereupon respondent 1, who had remained ex parte in the lower Court and continued to be ex parte in the appeal also, applied to have the ex parte order set aside. He was allowed to do so. Thus the appeal was confined only against respondent I and arguments were hoard from both the appellant and respondent 1. The only question argued before me was the question of limitation and it is the only question which has to be decided in this appeal. He was allowed to do so. Thus the appeal was confined only against respondent I and arguments were hoard from both the appellant and respondent 1. The only question argued before me was the question of limitation and it is the only question which has to be decided in this appeal. 4. The case of the appellant is that the learned Subordinate Judge was entirely wrong in stating that the suit was based only on the promissory note. Ext. 10 dated 27-2-50 and that Art. 59 of the Limitation Act applied to the case. According to the appellant, the suit was based on an overdraft account, which was of the nature of a mutual, open and current account between the parties and this fact had been made clear beyond any doubt in the plaint itself and the promissory note was taken only as a collateral security and it was Art. 85 of the Limitation Act which applied to the case. It was pointed out that the account between the parties as seen from Ext.-3. would show that the last item in the account was dated 28-6-55, that under Art. 85 of the Limitation Act, limitation would begin to run only from the close of the year, 1955 and that the suit would have been in time under the said Article even if filed before the end of the year 1958 and that therefore no question of limitation at all was involved in the case. On the other hand, respondent 1, who did not as I said contest the suit in the lower Court argued that the suit was based on the promissory note-Ext.-10, dated 27-2-50 and that the suit ought to have been brought on or before 27-2-53 and that the suit was therefore barred by limitation. 5. I am indeed surprised that the learned Subordinate Judge should have come to the conclusion that the suit was based on the promissory note-Ext. 10. Evidently, he has not even cared to read the plaint or the documents produced by the appellant or even the evidence of the appellants witness P.W. 1 before he came to that conclusion. It is a most unsatisfactory way of disposing of a case of this nature for such a large amount. It would appears from the judgment of the learned Subordinate Judge that respondent 3 raised the plea of limitation before him. It is a most unsatisfactory way of disposing of a case of this nature for such a large amount. It would appears from the judgment of the learned Subordinate Judge that respondent 3 raised the plea of limitation before him. In dealing with Issue 1, the learned Subordinate Judge has mentioned the argument advanced by respondent 3 that the suit was barred under Art. 59 of the Limitation Act. But he has not even-cared to mention what his finding was on the said argument. Actually, he has not given any definite finding on that issue that the suit was barred by limitation. He has referred to the appellants contention that Ext. 15 dated 18-7-55 was an acknowledgment of the debt under S. 25(3) of the Indian Contract Act and he has negatived that contention, firstly, on the ground that the acknowledgment was not made within 3 years of the debt, and secondly, on the ground that there was nothing to show that Gaurmani Singh, the Managing Director of the Firm of respondent 1 was authorised to acknowledge the time-barred debt on behalf of the respondent 1. From this we are expected to take it that the learned Subordinate Judge has found against the appellant on the question of limitation. 6. In paragraph 4 of the plaint, the appellant has clearly stated that his present claim was with regard to the overdrafts granted to respondent 1 on the basis of the promissory note confirmed by a letter of continuity and that the said claim including interest at 7 1/2 per cent per annum amounted to Rs. 30,271-13-8 after crediting the amounts repaid on such overdrafts as would appear from the account. Para 3 of the plaint further stated that respondent 1 applied to the appellant for overdraft arrangement and was allowed overdraft in pursuance of the resolutions of the Board of Directors of the appellant. The said resolutions were produced an Exts. 1 and 2 and proved by P.W. 1. They showed that the General Manager was authorised to make the advance against securities. Ext. 10 is the promissory note executed on 27-2-50 by respondent 1. But the suit was not brought on Ext. 10. Ext. 11 is the letter of continuity sent along with the promissory note. Ext. 1 and 2 and proved by P.W. 1. They showed that the General Manager was authorised to make the advance against securities. Ext. 10 is the promissory note executed on 27-2-50 by respondent 1. But the suit was not brought on Ext. 10. Ext. 11 is the letter of continuity sent along with the promissory note. Ext. 11 would have clearly showed to the Subordinate Judge that the promissory note was given only as collateral security for the repayment of the overdraft up to an extent of Rs. 40,000/- and for the repayment of the ultimate balance which remained unpaid on the Overdraft. By June 1951, respondent 1 found that he required overdrafts of more than Rs. 40,000/- as the balance due by him to the bank on the overdraft account came to more than Rs. 40,000/-. Then, the Managing Director of Respondent 1, applied by Ext. 12 to increase the overdraft to Rs. 45,000/-. It was then that the resolutions Exts. 1 and 2 happened to be passed. 7. P.W. 1 also had given evidence on this point. He stated that the overdraft account of respondent 1 started in February 1950 and transactions continued up to June, 1955 when the balance as claimed in the plaint became outstanding. He specifically, mentioned that Ext. 10, the promissory note was executed by respondent 1 as collateral security. He also proved Ext. 11, the letter of continuity. 8. Ext. 3 is the certified copy of the account of the respondent in the Bank. It showed that on 3-1-50 there was a credit balance in favour of respondent 1. The overdraft dealings began with the execution of Exts. 10 and 11 on 27-2-50, but the account continued to be on the credit side for respondent 1, even though there were very many transactions between February and June, 1950. It was only by September, 1950 that the account began to be on the debit side and this debit gradually increased and at one stage in December, 1951 was as high as Rs. 68,000/-. The debits went on fluctuating between March, 1952 and June, 1955 and at one stage it was as low as Rs. 5,000/- in March, 1954 and finally on 30-6-55, it was Rs. 30,271-13-8 for which the appellant filed the suit. 9. Thus it is clear that the appellants claim was not based on the promissory note-Ex. 10. 68,000/-. The debits went on fluctuating between March, 1952 and June, 1955 and at one stage it was as low as Rs. 5,000/- in March, 1954 and finally on 30-6-55, it was Rs. 30,271-13-8 for which the appellant filed the suit. 9. Thus it is clear that the appellants claim was not based on the promissory note-Ex. 10. The learned Subordinate Judge did not care to study or to go through the account-Ext. 3. In fact, I do not find Ext. 3 even referred to in his judgment. If he had perused it, he would have dearly seen that it disclosed a mutual, open and current account where there have been reciprocal demands between the parties as required under Art. 85 of Limitation Act. 10. It was however argued for respondent that the account was no doubt open and current, but that it was never mutual as it was always on the debit side as far as respondent 1 was concerned. But it is clear that this argument was advanced without reference to the account-Ext. 3. I have pointed out from Ext. 3 that the account started with a credit balance in favour of respondent 1 on 3-1-50 and that this credit balance continued till September, 1950. Ext. 3 shows that at one stage in April, 1950, it was as much as Rs. 84,000/- and odd in favour of respondent 1. It was only subsequent to September, 1950 that respondent 1 began to over-draw and the debit balance against him began to occur in the account. Thus it is clear case wherein the course of the account between 3-1-50 and 30-6-55, the balance was shifting sometimes in favour of respondent 1 and at other times in favour of the appellant. Thus in the course of the dealings between 1950 and 1955, there were transactions on both sides creating independent obligations on cither side. That is the real test of mutuality within the meaning of Art. 85 of the Limitation Act. 11. Thus in the course of the dealings between 1950 and 1955, there were transactions on both sides creating independent obligations on cither side. That is the real test of mutuality within the meaning of Art. 85 of the Limitation Act. 11. A direct decision on this point is Firm Mansa Ram and Sons v. Hira Lal Sanon reported in AIR 1940 All 209, wherein it was held that where a person deposits a certain amount with a bank in the current account and then makes an overdraft of a larger amount which is allowed on account of his current account and executes a promissory note and a receipt in lieu of the overdraft, the transaction clearly falls within the purview of Art. 85. The only difference between that case and the present case is that instead of a receipt in lieu of the overdraft we have the letter of continuity-Ext. 11 in the present case. The decision again holds that for determining the real question of mutuality there should be two sets of transactions and that in one set one party should hold the position of the creditor and the other a debtor and in the other set the position should be reversed. All these factors are present in the present case as shown by me. 12. Another decision, namely, R.N. Kapur v. Travancore National and Quilon Bank Ltd., reported in AIR 1945 Mad 467 , is to the effect that where a customer of a bank has a current account, which at times is in credit and at other times is in debit, the bank having granted to the customer the right to overdraw, Art. 85 applies and not Art. 57. The following observations are found in the said decision : "When a person opens a current account with a bank and pays money into it, the money goes into the general funds of the bank which uses it for the purposes of its business. While the account is in credit the bank is a debtor to the customer. The customer can demand payment in whole or in part by drawing on the account. If the bank allows the customer to overdraw the account and he does so, he becomes a debtor to the bank and the bank in its turn is entitled to demand repayment of the overdraft without closing the account. The customer can demand payment in whole or in part by drawing on the account. If the bank allows the customer to overdraw the account and he does so, he becomes a debtor to the bank and the bank in its turn is entitled to demand repayment of the overdraft without closing the account. Where the balance is a shifting one, the bank is under an obligation to the customer when the account is in credit and must meet his demand for payment; likewise when the account is overdrawn the customer is under an obligation to the bank and in law is bound to comply with the banks demand for payment, when made. It seems to us that in these circumstances the account can only be regarded as a mutual account fulfilling the test laid down in Hirda Bhsappa v. Gadigi Mhddappa, 6 Mad HCR 142." 13. The leading case, regarding mutuality, namely, 6 Mad HCR 142, which is thus quoted in the other decision, lays down that in order that an account might be mutual there must be transactions on each side creating independent obligations on each 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. 14. The Madras decision AIR 1945 Mad 467 , holds that a shifting balance is not a conclusive test of mutuality and that in the case of the customer and the Bank, where the customer is permitted to overdraw a current account and the account is sometimes in credit and sometimes in debit there are obligations on both sides and each party can say to the other "I have an account with you" and can make a demand. 15. Thus in the present case, the respondent 1 could have made a demand on the Bank so long as he had a credit balance and the Bank could make the demand on the customer so long as a debit balance existed. This will continue until the account is finally closed. In the present case the account was closed only on 28-6-55 when the last item of debit was entered in the account as seen from Ext. 3, There is little doubt therefore, that it is only Art. 85 of the Limitation Act which can apply to the present case. There is thus no question of limitation. 16. In the present case the account was closed only on 28-6-55 when the last item of debit was entered in the account as seen from Ext. 3, There is little doubt therefore, that it is only Art. 85 of the Limitation Act which can apply to the present case. There is thus no question of limitation. 16. If only the learned Subordinate Judge had cared to understand the case, read the pleadings, go through the documents and understand the deposition of P.W. 1, he would not have committed such a serious blunder. I must express my dissatisfaction with the way in which the learned Subordinate Judge has dealt with this case. He has not discussed the case as far as respondent 1 is concerned at all, who remained ex parte even though duly served with summons. Under Order 9 Rule 6 he ought to have proceeded ex parte against respondent 1. The very acknowledgment Ext. 15, which has been referred to by the learned Subordinate Judge in his judgment would have shown to him that respondent 1 admitted that the balance was due by him on an overdraft loan account and not on the promissory note dated 27-2-50, which was only given by way of collateral security. It was for that reason that he did not appear or contest the suit. It was highly wrong on the part of the learned Subordinate Judge to have dismissed the case against respondent I when evidence had been fully let in by the appellant against him. I am sure that if the lower Court had dealt with the case properly and given a decree against respondent 1, this appeal would not have been filed. 17. P.W. 1 gave evidence that subsequent to suit a sum of Rs. 6,077-7-9 was paid and that the balance sum due from respondent 1 was Rs. 24,194-5-11. The appellant therefore will get a decree against respondent 1 for the said amount with full costs in this Court as also in the Court below. The appeal is dismissed against respondents 2 to 4 but without costs. Order accordingly.