Chunnilal v. Ghanshyamdas — 1970 DIGILAW 192 (RAJ)

LODHA, J.—This is a defendants second appeal arising out of a money suit. 2. Briefly stated, the case of the plaintiff respondent Ghanshyamdas is that defendants Nos. 1 to 3 Chunilal, Nemichand and Mithalal were working as commission agents in partnership under the name and style of firm Jairoop Chunnilal at Jodhpur in connection with sale purchase of gold and silver bars and Ganeshmal defendant No. 4 transacted business in gold and silver through the agency of defendants Nos. 1 to 3 in Smt. 2002, It was further alleged in the plaint that Ganeshmal had also money dealings with defendants Nos. 1 to 3 who used to maintain accounts of all the dealings of Ganeshmal of cash as well as of gold and silver. It was averred that on Srawan Bad 9, Smt. 2002, Ranulal the Munim of firm Jairoop Chunnilal sent an account to Ganeshmal marked Ex. 1 showing an amount of Rs. 29,780-14-3 to the credit of Ganeshmal and Rs. 22,422-12-6 on the debit side. Thus according to this account a sum of Rs. 7358-1-9 was due to Ganeshmal from the appellant towards which Rs. 1000 were paid later on by defendant respondent Nemichand to Ganeshmal through a Hundi and thus a sum of Rs. 6358-1-9 remained outstanding in favour of Ganeshmal against the defendant appellant. The plaintiffs case is that this debt was assigned by Ganeshmal to him by a deed of assignment dated Chet Sudi 7 Smt. 2006, notice of which was also given to the defendants Nos. 1 to 3. The plaintiff, therefore, filed the present suit in the Court of Civil Judge, Jodhpur on 26.7.1951 against the firm Jairoop Chunnilal through its partners defendants Nos. 1 to 3 for recovery of Rs. 6358-1 9 as principal and Rs. 2352-14-3 as interest, total Rs. 8711. The assignor of the debt viz. Ganeshmal was also impleaded as a defendant in the suit, and it was prayed that in case it is held that defendants Nos. 1 to 3 are not liable for the suit amount a decree for the same be passed against Ganeshmal. 3. The defendants Nemichand, Mithalal and Ganeshmal did not appear inspite of service, and consequently they were proceeded against exparte. The appellant Chunnilal filed his written statement and denied the plaintiffs suit. He admitted that defendants Nos. 1 to 3 are not liable for the suit amount a decree for the same be passed against Ganeshmal. 3. The defendants Nemichand, Mithalal and Ganeshmal did not appear inspite of service, and consequently they were proceeded against exparte. The appellant Chunnilal filed his written statement and denied the plaintiffs suit. He admitted that defendants Nos. 1 to 3 used to carry on business as Adatiya in partnership in gold and silver under the name. Firm Jairoop Chunnilal in S. 2001 and closed the same on Asad Sudi 15, Smt. 2002 However, he denied knowledge about Ganeshmals doing any business through firm Jairoop Chunnilal and pleaded ignorance as to the amounts deposited by Ganeshmal and the resultant profits and losses in the alleged transactions of gold and silver. He denied that Ranulal had any authority as Munim to sign accounts on behalf of Firm Jairoop Chunnilal and that any amount was due to Ganeshmal from the said firm. He also pleaded that the account Ex. 1 cannot be the basis of the suit and in any case the suit is barred by limitation. He took certain other pleas but it is not necessary to refer to them as they are not being relied upon now. 4. After recording the evidence produced by the parties, the learned Civil Judge, Jodhpur by his judgment dated 8 5-1958 decreed the plaintiffs claim for the principal sum Rs. 6358 1-9 and also awarded pendente lite and future interest on this amount, but rejected the plaintiffs claim for interest prior to the date of the suit. 5. Aggrieved by the judgment and decree of the trial court Chunnilal filed appeal in the Court of District Judge, Jodhpur, and the plaintiff also filed cross-objection for interest upto the date of the suit. The learned District Judge dismissed the appeal as well as the cross-objection. Consequently, the defendant Chunnilal has come in second appeal to this Court, and the plaintiff has also filed cross-objection regarding interest upto the date of the suit. 6. Learned counsel for the appellant has urged only the following points in support of the appeal— (1) The account Ex. 1 is a mere acknowledgement which cannot form the basis of the suit. (2) Ranulal, who has signed the account Ex. 1 had no authority to do so on behalf of the defendant firm Jairoop Chunnilal, and consequently the defendants Nos. 1 is a mere acknowledgement which cannot form the basis of the suit. (2) Ranulal, who has signed the account Ex. 1 had no authority to do so on behalf of the defendant firm Jairoop Chunnilal, and consequently the defendants Nos. 1 to 3 are not bound by the same. (3) The learned District Judge has erred in law in applying Art.62 of the Marwar Limitation Act (which was in force at the relevant time). Art. 89 is the only appropriate Article applicable to the facts and circumstances of the case, and since this Article prescribes a period of three years, the suit is beyond limitation, and must be dismissed as such. (4) The plaintiff has failed to prove that the defendant Ganeshmal transacted business in gold and silver in the agency of defendants Nos. 1 to 3, as a result of which the suit amount remained due to defendant No. 4 from defendants Nos. 1 to 3. (5) In any case the plaintiff has failed to prove that the Samwat Year used to change from Kartik Sudi 1, in the account books of defendants Nos. 1 to 3, and consequently the suit would be beyond limitation even if six years period is applied. 7. I would first take up points Nos 1 and 4 as in my opinion they can be conveniently disposed of together. The lower court has held that Ex. 1 is not an account stated inasmuch as no balance has been struck in it. This position is not contested by any of the parties. In Tarachand vs. Mst. Dhapu (1) it was held that— "Striking of a balance is essential for a real "account stated" because unless that is done, it cannot be said that the defendant agreed to set off his payments towards the earlier items of the plaintiff or that he had admitted that a certain sum was due from him and to pay the same." 8. Learned counsel for the respondent, however, submits that there is an unconditional promise contained in Ex. 1 to pay the amount. It is stated therein that the amount due on the account will be paid in instalments. The contention of the learned counsel is that even though Ex.1 is not an account stated yet it is an acknowledgement containing an unconditional promise to pay, and, therefore, the suit can be based on it. 1 to pay the amount. It is stated therein that the amount due on the account will be paid in instalments. The contention of the learned counsel is that even though Ex.1 is not an account stated yet it is an acknowledgement containing an unconditional promise to pay, and, therefore, the suit can be based on it. In the alternative he has submitted that the plaintiff has not based his suit merely on Ex. 1 but has alleged in para No. 7 of the plaint that the cause of action arose when transactions took place between the defendant No. 4 Ganeshmal and the firm Jairoop Chunnilal from S. 2002 Srawan Bad 9 to S. 2006 Chet Sudi 7. In this connection he has invited my attention to issue No. 1, which reads as under— "1. Whether defendant No. 4 transacted the business of silver bars, gold Mohars and cash in the adat of the firm of defendants Nos. 1 to 3 and Rs. 6352-1-9 remained due against defendants Nos. 1 to 3 in that business." 9. It is argued on behalf of the plaintiff respondent that the defendant had not raised any such specific plea in the written statement that the suit cannot be based on Ex. 1, and the only objection in this connection was that Ex. 1 was a mere acknowledgement and hence not admissible in evidence being unstamped, which was the subject matter of issue No. 7. 10. I have considered the rival contentions of the parties. In Jeevraj vs. Lalchand—FB(2), it was held (per majority) that an acknowledgement if it implied a promise to pay can give rise to a fresh cause of action, and can be made the basis of a suit. It was observed that a mere acknowledgement in order to form the basis of a suit must be an agreement under which the defendant has to pay a particular sum of money to t|he plaintiff. A distinction was, however, brought out between an acknowledgement under sec. 19 of the Limitation Act 1908 which may be unilateral transaction and a document bilateral in nature. Bhandari, J. (Tyagi, J., agreeing with him) observed as follows— "I do not mean to say that in all cases an unconditional acknowledgement could form the basis of the suit. As I have already pointed out in the opening part of my judgment that an acknowledgement under sec. Bhandari, J. (Tyagi, J., agreeing with him) observed as follows— "I do not mean to say that in all cases an unconditional acknowledgement could form the basis of the suit. As I have already pointed out in the opening part of my judgment that an acknowledgement under sec. 19 may be a unilateral act and such an acknowledgement may not be sufficient to form the basis of the suit. Unless there are bilateral acts which give rise to an agreement enforceable at law under the provisions of the Indian Contract Act, there can be no question of a unilateral transaction forming the basis of a suit. 11. In the present case the document Ex. 1 undoubtedly evidences a unilateral act of the defendants Nos. 1 to 3. It is not a bilateral document. It is an account sent by the defendants Nos. 1 to 3 to Ganeshmal agreeing to pay what may be due. Ex. 1 does not contain a promise to pay any amount in express terms. It is only an acknowledgement by a unilateral act of the defendants and according to the majority view expressed in Jeevrajs case (supra), it cannot form the basis of the suit. 12. However, while deciding issue No. 1 the trial court has found on the basis of the evidence of P. W. 1 Ganeshmal, P. W. 3 Kedarnath and P. W. 5 Ghan Shyam, and the previous accounts Ex. 6 and Ex. 7 corroborated by the letters Ex. 8 Ex. 10, Ex. 11, Ex. 13 and Ex. 14 to Ex. 17 that the defendant Ganeshmal did business of sale and purchase of gold and silver bars through the firm of the defendants Nos. 1 to 3 as a result of which a sum of Rs. 6358-1-9 remained outstanding against the defendants firm Jairoop Chunnilal. This finding was not assailed before the learned District Judge, and all that was contended before him in this connection was that Ex. 1 was merely an acknowledgement. Even in this Court the learned counsel for the appellant made no attempt to show how the finding arrived at by the learned trial court that the amount of Rs. 6358-1-9 was due to Ganeshmal from defendants Nos. 1 to 3 is erroneous? The defendants Nos. 1 to 3 have not produced their account books. I am consequently of the opinion that the suit is not based on Ex. 6358-1-9 was due to Ganeshmal from defendants Nos. 1 to 3 is erroneous? The defendants Nos. 1 to 3 have not produced their account books. I am consequently of the opinion that the suit is not based on Ex. 1 alone and that the plaintiff has succeeded in proving that the defendant No. 4 Ganeshmal did business of sale and purchase of gold and silver bars through the agency of the defendants Nos. 1 to 3 as a result of which a sum of Rs. 6358-1-9 remained outstanding against the defendants Nos. 1 to 3. 13. The next contention that Ranulal had no authority on behalf of defendants Nos. 1 to 3 to sign the account Ex. 1 involves a pure finding of fact based on pure appreciation of evidence. It is in the evidence of Ganeshmal, Shrigopal, Kedarnath and Jugalkishore that Ranulal was working as a Munim and Karinda at the firm of Jairoop Chunnilal. The only argument advanced by the learned counsel for the appellant in this connection is that there is no evidence to show that Ranulal had executed similar other documents. In my opinion the contention raised on behalf of the appellant in this connection has no substance in view of the overwhelming evidence produced from the side of the plaintiff that Ranulal was acting as Munim and Karinda at the defendants firm, and had authority to send the accounts, signed by him on their behalf. 14. This brings me to the question of limitation. It has been strenuously argued on behalf of the appellant that Art. 89 of the Marwar Limitation Act which prescribes a period of three years applies in the present case. Art 89 reads as under— "89. By a principal against his agent for movable property received by the latter and not accounted for: Three Years When the account is, during the continuance of the agency, demanded and refused or, where no such demand is made, when the agency terminates." It is submitted that the view of the learned District Judge that this Article applies only to a suit in which accounts have to be taken and since in the present case the accounts had already been rendered by the agent, this Article has no application, is erroneous. It is argued that the phrase movable property used in Art.89 includes money. It is argued that the phrase movable property used in Art.89 includes money. In support of his contention the learned counsel for the appellant has relied on Md. Amirul Islam vs. Md Abdul Hamid(3), Kashiram vs. Santokhbai(4), and Thomman Thresia vs. Pothen Chacko(5). 15. On the other hand learned counsel for the respondent has placed strong reliance on Jasraj vs. Devichand (6) in support of his contention that Art. 89 has no application. It has also been argued on behalf of the respondent that the appropriate Article applicable to case is Art. 85, which runs as under— "85. For the balance due on a mutual open and current account where there have been reciprocal demands between the parties Six Years The close of the year in which the last item admitted or pro- ved is entered in the accounts such year to be computed as in the account. In the alternative he submits that even if the case is taken to be covered by Art. 62 the suit would he within limitation. It may be necessary to mention here that under the Marwar Limitation Act which governs the present case the limitation under Arts. 62 and 85 is six years, whereas the limitation under Art. 89 is three years and that accounts for the anxiety of the appellant to bring the case within the purview of Art. 89 so that he may succeed in defeating the plaintiffs claim on the ground of limitation. 16. In Md. Amirul Islam vs. Md. Abdul Hamid (3) it was observed that the terra movable property in Art.89 includes money and therefore Art.89 applies to the suit for the recovery of money received by the agent on behalf of the principal and not accounted for. Certain rulings were referred to in that case in support of the contention that Art.89 is only applicable when the suit is for accounts. But the learned Judges of the Calcutta High Court observed that Art.89 also applies to a claim for a balance of account, but there is no reason to suppose that it is limited only to suits for account. 17. But the learned Judges of the Calcutta High Court observed that Art.89 also applies to a claim for a balance of account, but there is no reason to suppose that it is limited only to suits for account. 17. In Kashiram vs. Santokhbai (4) it was observed that from the language of Art. 89 it is manifest that its applicability is not confined to suits for accounts and that it is applicable for the recovery of any movable property which has been received by the agent and which has not been accounted for. 18. In Thomman Thresia vs. Pothen Chacko(5) the plaintiff had entrusted to the defendant a sum of money for negotiating and obtaining for him a sale from K and on settlement of terms of the sale the defendant was to pay the amount entrusted as an advance towards the sale consideration. The defendant failed to do the same and therefore the plaintiff took the sale from K direct and paid the entire amount of consideration. Consequently, the plaintiff sued the defendant for recovery of the amount entrusted within three years from the date of execution of the sale deed in his favour. The question was whether the suit was barred by limitation ? It was held that the legal relationship between the plaintiff and defendant was one of principal and agent and not merely of two persons one of whom has received money belonging to the other, and, therefore Art. 62 did not apply. It was further held that the retention of the money by the defendant without accounting for it would be either neglect or misconduct on the part of the agent, and, therefore, Art. 90 of the Limitation Act was applicable. The learned Judge also observed that Art. 89 would also apply to such a case. The applicability of Art. 89 was opposed on the ground that the suit contemplated in the first column of this Article is a suit for movable property. This argument was repelled on the ground that the term movable property would include money also. In conclusion the learned Judge held that the period of limitation would be the same whether Art. 89 or Art. 90 is applied. It may be observed that in this case there was no discussion on the point whether Art. 89 applied to suits for accounts only. 19. In conclusion the learned Judge held that the period of limitation would be the same whether Art. 89 or Art. 90 is applied. It may be observed that in this case there was no discussion on the point whether Art. 89 applied to suits for accounts only. 19. Learned counsel for the respondent placed strong reliance on the following observation in a Bench decision of this Court in Jasraj vs. Devichand (6)— "In our opinion, the ratio decidendi of the cases is that Art. 89 would apply where the suit is by the principal against his agent not only for accounts but also for recovery of money based on the accounts." 20. In the present case it will be noticed that the suit is neither for accounts, nor for recovery of money based on the accounts, the plaintiff has nowhere prayed for taking accounts and has sued for a specific sum found to be due from the defendants. A perusal of the plaint would show that there is no prayer for rendition of accounts. The plaintiff has not denied the correctness of the account Ex.1 sent by the defendant to Ganeshmal. Put in other words, the plaintiffs case is that Ganeshmal was entitled to recover the excess amount which he had paid to the defendants Nos. 1 to 3 of what was due to him from them. Thus in view of the clear pronouncement made in Jasraj vs. Devichand (6), I am of the opinion that Art.89 has no application to the present case. 21. Learned counsel for the respondent has urged that the suit would be governed by Art.85 of the Marwar Limitation Act. In support of his contention he has placed reliance on Phoolchand vs. Tarachand (7), where the defendant carried on business of gold and silver through the agency of the plaintiff, who was his commission agent and who was to credit to the defendant with the profits earned by him and debit to him the losses suffered, and the profit and losses were intended to serve as set off against each other, it was held that it was not a case of single contractual relationship like that of a borrower and a lender, but it was a case of dual contractual relationship between the parties, and consequently, the suit filed by the commission agent against his principal on such an account is governed by Art.85. 22. 22. The law seems to be well settled that where the dealings between the parties disclose two contractual relationships between them, there may arise demands in favour of each side against the other. The real test, to see whether there have been reciprocal demands in any particular case is to find out whether there is a dual contractual relationship between the parties ? In the present case, it appears that prior to Ex. 1 the defendant had sent the account Ex 6 to Ganeshmal which showed Rs. 5878 15.3 to the credit of Ganeshmal and Rs. 4578 3.6 were debited to him. Prior to Ex. 6 the defendants had sent letter Ex 7 containing their accounts with Ganeshmal according to which the accounts between them stood cleared up. Ex. 1 further shows that two amounts of Rs, 50,000 and 13,000 were remitted to the defendants on Jeth Sudi 12, Smt. 2052. A close scrutiny of the account Ex. i further shows that on account of the advance of Rs. 18 000 by Ganeshmal on Jeth Sudi 12, there stood a considerable balance in favour of Ganeshmal and thereafter certain amounts were debited to him on account of losses incurred by Ganeshmal in the, transactions carried out by him through the agency of the defendants Nos. 1 to 3. In view of this state of accounts it would not be incorrect to say that the dealings between the parties disclosed a dual contractual relationship and there had been reciprocal demands. I am fortified in this view by the pleadings of the parties. In para No, 2 of the plaint, it is stated that Ganeshmal had money dealings with firm Jairoop Chunnilal and also did business in gold and silver in the latters adat [agency]. The defendant Chunnilal has not denied this fact specifically in his written statement but has stated in reply to this para that he has no knowledge what transactions in gold and silver had been done by Ganeshmal in the adat of Firm Jairoop Chunnilal and how much money he had advanced in cash to the said firm and what were the profits and losses of Ganeshmal? In his statement as a witness of the plaintiff, P. W. 1 Ganeshmal has also stated that he had money dealings with the defendants firm Jairoop Chunnilal and also entered into transactions for sale and purchase of gold and silver bars through the agency of the said, firm. The defendant Chunnilal [appellant] has however deposed in his statement that he does not know Ganeshmal at all and he had not seen any Khata of Ganesh Mal in the account books of firm Jairoop Chunnilal. The defendants Nos. 1 to 3 have suppressed the account books of their firm and Chunnilal has stated that the same were lost by defendant Mithalal. But he is not able to state when they were lost. In his cross-examination he further states that they were lost at the Railway Station of Bombay but he was not present there at that time. Mithalal has not come in the witness box. The irresistible conclusion that flows from the pleadings and evidence of the parties is that there was a dual contractual relationship between Ganeshmal and firm Jairoop Chunnilal, one as principal and agent and the other as lender and borrower. 23. The phraseology of Art. 85 is wide and comprehensive and does not exclude from its purview the case of a principal and an agent between whom a mutual, open and current account may exist. From the nature of the transaction carried on between the defendants Nos. 1 to 3 and Ganeshmal, it appears that Ganeshmal was advancing money to the defendants Nos. 1 to 3 and the defendants Nos. 1 to 3 were carrying on transactions on behalf of Ganeshmal as the latters Adatiya. In this view of the matter, Art. 85 applies to the present case and the suit is within time as the period prescribed under this Article is six years from the close of the year in which the last item is admittedly entered in the account according to the change of Samwat in the defendants account books, namely from Kartik Sudi 1. 24. The learned District Judge has held that Art. 62 of the Limitation Act applies to the case even though he has given no reasons in support of his finding and has merely contented himself by saying that atleast he has no doubt in this respect. 24. The learned District Judge has held that Art. 62 of the Limitation Act applies to the case even though he has given no reasons in support of his finding and has merely contented himself by saying that atleast he has no doubt in this respect. This sort of dealing with a point of law by the learned District Judge is far from satisfactory. Art. 62 of the Marwar Limitation Act runs as under— "62. For money payable by the defendant to the plaintiff for money received by the defendant for the plaintiffs use: Six Years When the money is received." 25. It may be noticed that in the present case Ganeshmal had paid Rs. 18,000 to the defendants on Jeth Sudi 12, Smt. 2002 (vide Ex.1) and the latter was bound to pay back so much portion of this money which remained due to Ganeshmal after adjusting the accounts, and after deducting all legitimate expenses and allowances admissible to the defendants Nos. 1 to 3 as the agents of Ganeshmal. The third column of Art.62 mentions the starting point for limitation as the date when the money is received. In the present case it cannot be said that the liability of the defendants to return Rs. 18,000 or a portion thereof accrued when this amount was received by them. On the other hand this liability arose only when the accounts between the parties had been finally closed. In this view of the matter, Art. 62 is not an appropriate Article to be applied to the present case, and, in my view as discussed above the present case is governed by Art.85, according to which the suit is undoubtedly within limitation. 26. Now, it remains to consider the last submission made on behalf of the appellant, viz., whether the plaintiff has succeeded in establishing that the Samwat year in the defendants Bahis changes on Kartik Sudi. The defendant appellant Chunnilal has admitted in his statement on oath in clear terms that in the account books of the Firm Jairoop Chunnilal the Samwat year used to start from Kartik Sudi 1. Learned counsel for the appellant has, however, urged that no such allegation was made by the plaintiff in the plaint. The defendant appellant Chunnilal has admitted in his statement on oath in clear terms that in the account books of the Firm Jairoop Chunnilal the Samwat year used to start from Kartik Sudi 1. Learned counsel for the appellant has, however, urged that no such allegation was made by the plaintiff in the plaint. It may be pointed out that when defendant No. 1 in his written statement pleaded that the firm Jairoop Chunnilal had closed its business on Asad Sudi 15, Smt. 2002, the plaintiff in his replication stated in clear terms that in the Bahis of the firm Jairoop Chunnilal the Samwat year used to be changed on Kartik Sudi 1. Thus this part of the case set up by the plaintiff was admitted by the appellant Chunnilal in his own statement. Consequently, the appellant cannot be allowed to argue against his own admission. This point is completely devoid of force and is to be stated only to be rejected. 27. The result is that I do not find any force in this appeal and dismiss it with costs. 28. Coming to the cross-objection, it is urged by the counsel for the respondent plaintiff that the plaintiff should have been allowed interest upto the date of the suit. In para No. 6 of the plaint the plaintiff has claimed Rs. 9352-14-3 as interest upto the date of the suit on the basis of contract as well as usage. There is no evidence in support of this assertion except the statement of P.W. 1 Ganeshmal which has not been relied upon by the courts below and has also been found to be wholly insufficient. The fact that the plaintiff has based his claim for interest on contract as well as usage, itself weakens his case. I am also in agreement with the lower court that neither contract nor usage for payment of interest is proved. Consequently, I dismiss the cross-objection with costs. 29. The net result is that the appeal as well as cross objection are dismissed with costs.