State of Rajasthan v. Haridass — 1981 DIGILAW 307 (RAJ)

M.B. SHARMA, J. —The State of Rajasthan, defendant in the original suit has preferred this second appeal against the judgment and decree dated February 29, 1968 of learned Senior Civil Judge, No. 1, Jaipur city, Jaipur. 2. In short, the facts of the case are that Haridass respondent filed a suit against the appellant, State of Rajasthan for recovery of Rs. 1789.31 on account of grain supplied by him to the Devasthan Department of the State of Rajasthan. He set up a case in the plaint that he applied for payment of the amount to the State Government and a report from the Devasthan Department was sought by the Deputy Secretary, Revenue Dapartment. The Assistant Commissioner, Devasthan Department called the plaintiff and tallied the accounts available in his office with the entries in the account books of the respondent and then arrived at the figure of Rs. 1789.31 as due to the respondent. The Assistant Commissioner, Devasthan Department, thereafter sent his report to the Devasthan Commissioner and a copy of it was endorsed as Exh. 1 dated March 23, 1962 to the respondent. The respondent basing his claim on the above referred to letter of the Assistant Commissioner, Devasthan Department and taking it as an "account stated", filed a suit in the court of Munsif (West), Jaipurcity, Jaipur, which was transferred to the court of Additional Munsif, Jaipurcity, Jaipur. 3. The State of Rajasthan while admitting that Rs. 1789.31 were due to the respondent, raised a plea that the letter of the Assistant Commissioner, Devasthan Department, which was relied upon by the respondent as an account stated" does not come within that definition and, therefore, the respondents suit was not governed by Art. 26 of the Limitation Act, the suit was thus time barred. Learned Munsif framed necessary issues and after trial, dismissed the suit of the respondent on the ground that the letter of Assistant Commissioner, Devasthan Department does not amount to an "account stated". The respondent preferred an appeal which as already stated was allowed by the learned Senior Civil Judge, Jaipur City. 4. Learned Munsif framed necessary issues and after trial, dismissed the suit of the respondent on the ground that the letter of Assistant Commissioner, Devasthan Department does not amount to an "account stated". The respondent preferred an appeal which as already stated was allowed by the learned Senior Civil Judge, Jaipur City. 4. The learned lower appellate court held that the factual report given by the Assistant Commissioner, Devasthan Department to Commissioner, Devasthan on March 23, 1962, a copy of which was endorsed to the respondent, amounts to an "account stated" within the meaning of Art. 26 of he Limitation Act and as such, the suit was within limitation. In arriving at this conclusion, the lower court has placed reliance upon the case of Chhogalal vs. Kanayalal(l). 5. Thus, the only point in this appeal is as to whether the letter of the Assistant Commissioner, Devasthan Department dated March 23, 1962, the copy of which was endorsed to the respondent, amounts to an "account stated" and if so then whether this settlement of account, which only contains time barred items can give a fresh period of limitation. 6. The Supreme Court in Gorden Woodruff and Company (Madras) Ltd. vs. Shaik M.A. Majid and Company (2) in para 15 dealing with "account stated" have observed— "The expression account stated" has more than one meaning. It sometimes means a claim to payment made by one party and admitted by the other to be correct. An account stated in this sense is no more than an admission of a debt out of Court; while it is no doubt cogent evidence against the admitting party, and throws upon him the burden of proving that the debt is not due, it may, like any other admission, be shown to have been made in error. Where the transaction is of this character, it makes no difference whether the account is said to be "stated"or to be "stated and agreed"; the so-called agreement is without consideration and amounts to no more than an admission. There is, however, a second kind of account stated where the account contains items both the credit and debit, and the figures on both sides are adjusted between the parties and a balance struck." 7. There is, however, a second kind of account stated where the account contains items both the credit and debit, and the figures on both sides are adjusted between the parties and a balance struck." 7. A look at the letter dated March 23, 1962 of the Assistant Commissioner, Devasthan Department, to the Commissioner, Devasthan Department, a copy of which was endorsed to the respondent, will show that after tallying the old record with the department with the accounts of the respondent, a sum of Rs. 1789.31 was shown to as payable to the respondent. A look at the aforesaid letter dated March 23, 1962 further shows that there are items both of credit and debit and both the figures are adjusted between the parties and thereafter a balance struck. Therefore, there can be no doubt that the aforesaid letter of Assistant Commissioner, Devasthan Department is an "account stated" within the meaning of Art. 26 of the New Limitation Act, which corresponds to Art. 126 of the Old Limitation Act. 8. The contention of learned Additional Government Advocate is that even a settlement of account which may amounts to an "account stated" has to be arrived at within the period of limitation and in case, all the items contained therein are time-barred then section 25(3) of the Contract Act must be satisfied. He, therefore, submits that admittedly these items of the "account stated" are time-barred and, therefore, the suit could not be held to be within limitation. 9. The contention of learned Advocate for the respondent is that it is not disputed that the sum claimed by the respondeat was due against the State of Rajasthan. Therefore, the State should not be allowed to raise the plea of limitation. According to learned Advocate even if two views can be taken on the point as to whether the letter dated March 23, 1962, which is an "account stated" gives start to a fresh period of limitation, it cannot become a question of law within the meaning of section 100 of the Code of Civil Procedure and appeal cannot be entertained under the aforesaid section. In support of his submission, learned Advocate has placed reliance on State vs. Associated Cement Co., Lakheri, S.B. Civil Regular Second Appeal No. 21 of 1980, decided by a Single Bench of this Court at Jaipur on February 20, 1980, learned Judge has observed as follows:— "The principal point argued by Mr. Mathur learned Additional Government Advocate appearing for the State-appellant is that the suit was time-barred. This argument has been repelled by first appellate court and after giving elaborate and weighty reasons. Even if two views can be taken on this point, it cannot become a substantial question of law on which an appeal can be entertained under section 100 of the Code of Civil Procedure." 10. Learned Single Judge also referred to a judgment of the Supreme Court, The Madras Port Trust v. Hymanshu International by its Proprietor v. Venkatadri (3) wherein, their Lordships have observed as follows :— "We do not think that this is a fit case where we should proceed to determine whether the claim of the respondent was barred by S. 110 of the Madras Port Trust Act (II of 1905). The plea of limitation based on this section is one which the court always looks upon with disfavour and it is unfortunate that a public authority like the Port Trust should, in all morality and justice, take up such a plea to defeat a just claim of the citizen. It is high time that governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens. Of course, if a government or a public authority takes up a technical plea, the Court has to decide it and if the plea is well-founded, it has to be upheld by the Court, but what we feel is that such a plea should not ordinarily be taken up by a government or a public authority, unless of course the claim is not well founded and by reason of delay in filing it, the evidence for the purpose of resisting such a claim has become unavailable. Here, it is obvious that the claim of the respondent was a just claim supported as it was by the recommendation of the Assistant Collector of Customs and hence in the exercise of out discretion under Art. 136 of the Constitution we do not see any reason why we should proceed to hear this appeal and adjudicate upon the plea of the appellant based on S. 110 of the Madras Port Trust Act (II of 1905)." 11. In Associated Cement Co., Lakheri (supra) the learned Single Judge of this Court was not dealing with the interpretation of the document and he was not called upon to say as to whether a document amounts to an "account stated" or not and if so such a settlement has to be within limitation. Even in Madras Port Trusts case (supra), their Lordships have observed that if a Government takes a technical plea and if the plea is well founded, the court has to decide it and same has to be upheld. The interpretation of the document has always been considered to be a point of law which can be entertained by this Court under section 100 of the Code of Civil Procedure. The present case is of the year 1968 i.e.f. much before the amendment in Sec. 100 of the Code of Civil Procedure came into force under which an appeal has been provided to this Court only if a substantial question of law arises. That apart, the learned lower appellate court has not while decreeing the suit of the respondent, even considered as to whether the settlement of an account contained in the "account stated" has to be within limitation and if so was within limitation. It has also not said that though the "account stated" contained time-barred debt but it amounts to a fresh promise to pay within the meaning of sec. 25(3) of the Contract Act and as such the suit is within limitation. Therefore, a question of law arises for determination in this second appeal. 12. I do not doubt the position of law that if the whole items of the "account-stated", when the account is so stated, are time-barred then unless the document under section 25(3) of the Contract Act amounts to a fresh promise to pay time-barred debt, the same cannot extend the limitation prescribed by law. 13. 12. I do not doubt the position of law that if the whole items of the "account-stated", when the account is so stated, are time-barred then unless the document under section 25(3) of the Contract Act amounts to a fresh promise to pay time-barred debt, the same cannot extend the limitation prescribed by law. 13. In Chacke Varkey vs. Thommen Thomas (4) it was held that an account-stated is no more than an agreement and when the entire claim is barred (as in that case) prior to the date of the settlement, the "account-stated" cannot give rise to any cause of action unless it amounts to an express promise within the meaning of sec. 25(3) of the Contract Act. In the aforesaid case reliance was placed on Ran Bahadur Singh v. Hanuwant Singh (5) wherein, Wanchoo, C.J. as he then was, has observed that an "account stated" is no more than an agreement. 14. In N Ethirajulu Naidu v. K.R. Chimnikrishnan Chettier (6) reliance was placed on the aforesaid authority of the Kerala High Court and the dictum laid down therein was approved. It was held in para 9 that "we respectfully follow the rulings cited above and hold that the "account-stated" in Ex.A 1 on May 30, 1964 relates to a claim which was clearly time-barred on that date, and there being no express promise within the meaning of section 25(3) of the Contract Act to pay the time-barred debt, the plaintiff cannot rely upon it to save his claim from the bar of limitation." 15. In Ganeshprasad Bania v. Mt. Rambati Bai(7), it was held that if there is an "account-stated" the fact that some of the items than one, are time-barred is immaterial. If the whole account is time-barred, then the ban imposed by section 25(3) of the Contract Act, would apply. 16. Placing reliance on the aforesaid authorities in Prabhakar Fatoo Dessai v. Vassudeva Narayan Sarmalker (8), it was held that "in view of above discussion, I hold that though Exh. 11 could be treated as "account-stated", the entire debt being barred before the date of the settlement of account, it could not furnish a cause of action nor could provide a fresh starting point of limitation". 17. I respectfully agree with the above authorities. 11 could be treated as "account-stated", the entire debt being barred before the date of the settlement of account, it could not furnish a cause of action nor could provide a fresh starting point of limitation". 17. I respectfully agree with the above authorities. As expressed earlier, it can therefore be said that if at the time of settlement of the account the entire debt has become time-barred, the "account-stated" will not furnish a frash cause of action so as to give rise to a fresh period of limitation, unless it amounts to an express promise within the meaning of section 25(3) of the Contract Act. 18. Learned lower appellate court though held that the letter of the Assistant Commissioner, Devasthan Department dated March 23, 1962, a copy of which was endorsed to the respondent, was an "account-stated" but did not address itself to the point as to whether at the time of the aforesaid settlement all the items were within limitation. 19. A look at the "account-stated" dated March 23, 1962 Exh. l will show that it relates to the period of 1948-1950. It is thus for the amount or claim all of which had long ago become time-barred. The recommendation was made by the Assistant Commissioner, Devasthan to the Commissioner, Devasthan Department, Rajasthan, Udaipur for payment of Rs. 1789.31 to the respondent for the amount which was time-barred. A look at Exh.l dated March 23,1962 further shows that it was a only recommendation sent by the Assistant Commissioner, Devasthan Department to the Commissioner, Devasthan Department, Rajasthan, Udaipur for sanction of Rs. 1789.31 to the respondent. It cannot be said that the State Government or any of its competent officer ever made a promise for payment of Rs. 1789. 31 the recovery of which had become time-barred. 20. I, therefore, allow the appeal and set aside the judgment and decree of the lower court and restore the judgment and decree of the trial court, which dismissed the suit of the plaintiff-respondent. But, in view of the facts and circumstances of the case, I leave the parties to bear their own costs throughout.