G. N. SABHAHIT, J. ( 1 ) THIS appeal by the defendant is directed against the judgment and decree dated 19-7-1974 passed by the Civil Judge, dharwar in R. A. No. 78/72 on his file, dismissing the appeal on confirming the stated-Suit on-Limitation. judgment and decree dated 29-5-1979 passed by the Munsiff, Navalgund, in o. S. No. 26/69 on his. file, decreeing the suit of the plaintiff as prayed for. ( 2 ) THE plaintiff firm is dealing in cotton and grains at Annigeri. The defendant was having his account with the plaintiff firm and was selling his goods to the plaintiff's firm. He was purchasing goods from the plaintiff firm and also borrowing and taking money as advance since 1956-57. Finally according to the plaintiff on 11-9-1966, the defendant paid rs. 300 towards his account and signed the entry in that behalf, leaving a balance of rs. 3,086-20. Again on 28-11-1967, the defendant paid Rs. 500 through one mallappa Naiker leaving a balance of rs. 2,586-20. The defendant failed to pay this balance in spite of demands and finally a registered notice was issued to the defendant on 4-2-1969 which he refused. Hence, the plaintiff filed the suit for recovery of the said balance of Rs. 2,586-20 with interest by way of damages. ( 3 ) THE defendant resisted the suit. He denied that he was due the plaint amount. The plaintiff did not give him the patty showing the supply of goods by defendant from 1956-57. For the past 30 years the defendant and his father were supplying goods to the plaintiff and plaintiff has not given patty showing the amounts for which the goods were sold, therefore, the defendant pleaded that it was not possible for him to give the correct accounts. He also denied alternatively liability to pay the interest. According to him the suit was barred by time. ( 4 ) ON the pleadings the trial Court raised the following issues: (1) Whether the defendant is due in a sum of Rs. 2,586/-as on 28-11-1967 to the plaintiff as alleged in the plaint ? (2) Whether the accounts maintained by plaintiff is true and correct ? (3) Whether the plaintiff is entitled to interest ? If so, at what rate ? (4) Whether the suit claim is time barred ? (5) Is there no cause of action for the suit? 2,586/-as on 28-11-1967 to the plaintiff as alleged in the plaint ? (2) Whether the accounts maintained by plaintiff is true and correct ? (3) Whether the plaintiff is entitled to interest ? If so, at what rate ? (4) Whether the suit claim is time barred ? (5) Is there no cause of action for the suit? (6) Whether the defendant is entitled to repay the amount due in instalments ? if so, at what rate ? (7) To what relief are the parties entitled? ( 5 ) DURING hearing the plaintiff examined Karabasappa as P. W. 1 and one virupaxappa as P. W. 2 and got marked exts. P-1 to P-8. The defendant examined himself as D. W. 1. ( 6 ) THE learned Munsiff appreciating the evidence on record, answered the material issues in favour of the plaintiff and in that view he decreed the suit of the plaintiff. Aggrieved by the said judgment and decree, the plaintiff went up in appeal before the Civil Judge, Dharwar in R. A. No. 78/72 on his file and the Civil Judge in the course of his judgment raised the following points as arising for his consideration. (1) Whether the suit is barred by time ? (2) Whether the plaintiff's accounts are not correct ? (3) Whether the suit claim is established ? (4) What order ? ( 7 ) THE learned Civil Judge, reassessing the evidence on record, answered the first point in the negative. Under the second point he held that the accounts were correct. Under the third point he held that the suit claim was established and in that view he dismissed the appeal confirming the judgment and decree of the trial Court. Aggrieved by the said judgment and decree, the defendant has come up with the above second appeal before this Court. ( 8 ) THE learned Counsel appearing for the appellant strenuously urged before me that the Courts below were not justified in holding that the suit was not barred by time. She pointed out that the balance of accounts was struck in 1961-62 itself and that thereafter the mutual and current accounts were not operated. It is shown however that the defendant paid Rs. 25 on 22-9-1963. It does not contain the signature of the defendant. She pointed out that the balance of accounts was struck in 1961-62 itself and that thereafter the mutual and current accounts were not operated. It is shown however that the defendant paid Rs. 25 on 22-9-1963. It does not contain the signature of the defendant. That is the only entry to be found in the extract of accounts for the year 1962-63 showing a balance of rs. 3401-20p. There is no mutual and current account in the year 1962-63. Therefore, from the end of the year 1962, the mutual and current account has come to an end. It is further seen that Rs. 300 is shown to be credited on 11-9-1966 and Rs. 500 on 28-11-67. But for these credits, there are no transactions whatsoever which can be described as mutual and current account for the years 1962-63,1963-64,1964-65, 1965-66 and 1966-67. Therefore the suit which was admittedly instituted on 28-2-1969, after the balance was struck in the year 1961-62, she submitted was barred by time. ( 9 ) AS against that, the learned counsel appearing for the respondent-plaintiff submitted that Rs. 25 was credited in the year 1963, and thereafter Rs. 300 was credited in the year 1966 and Rs, 500 in the year 1967, and hence, the accounts continued till the end of the year 1967 and as such the suit was in time as held by the courts below. ( 10 ) THE sole point, therefore, that arises for my consideration in this appeal is, whether the Courts below were justified in holding that the suit was in time ? ( 11 ) THE suit on accounts stated is governed by Art 26 of the Limitation Act, 1963, It states;" For money payable to the plaintiff for money found to be due from the defendant to the plaintiff on accounts stated between them. Three years when the accounts are stated in writing signed by the defendant or his agent duly authorised in this behalf unless where the debt is by a simultaneous agreement in writing signed as aforesaid, made payable at a future time, and then when that time arrives. "thus it is clear that limitation is for a period of three years, on accounts stated, between them. ( 12 ) THERE are two kinds of 'accounts stated. The first constitutes a mere admission or acknowledgement of a debt. "thus it is clear that limitation is for a period of three years, on accounts stated, between them. ( 12 ) THERE are two kinds of 'accounts stated. The first constitutes a mere admission or acknowledgement of a debt. The second is an account containing item both on the credit and debit sides and the figures on both sides are adjusted between the parties and a balance struck. It is this second kind which is really 'accounts stated'. The real 'accounts stated' is "when several items of cross claims are brought into account on either side, and being set against one another a balance is struck, and the consideration for the payment of the balance is the discharge of items on each side. Each party resigns his own rights on the sums he can claim in consideration of a similar abandonment on the other side of an agreement to pay and to receive in discharge of the balance found due". (Vide (Elvira Rodrigues) Sequeira v. (Godnicalo Hypolito ' Constancio) noronha (l ). Thus the term 'account stated' used in Art 26 of the limitation Act relates to mutual and open account in which the parties who have stated the accounts between them, have agreed that the items on one side should -be set off against the items upon the other side and the balance only should be paid. The other meaning of the term 'account stated' relates to acknowledgement. ( 13 ) LORD Wright in Bhishun Chand v. Giridharilal (2 ) speaking on this aspect has observed :"the essence of an account stated is not the character of the items on one side or the other but the fact that there are cross-items of account and that the parties mutually agree to the several amounts of each and, by treating the items so agreed on the one side as discharging the items on the other side pro tanto, go on to agree that the balance only is payable. Such a transaction is in truth bilateral and creates a new debt and a new cause of action. Such a transaction is in truth bilateral and creates a new debt and a new cause of action. There are mutual promises, the one side agreeing to accept the amount of the balance of debt as true (because there must in such cases be, at least in the end, a creditor to whom the balance is due) and to pay it, the other side agreeing to the entire debt as at a certain figure and then agreeing that it has been discharged to such and such extent so that there will be complete satisfaction on payment of the agreed balance. Hence there is mutual consideration to support the promises on either side and to constitute the new cause of action. The account stated is accordingly binding save that it may be re-opened on any ground-for instance fraud or mis' take-which would justify setting aside any other agreement. " ( 14 ) WHEN examined in this perspective we find by looking into the acccounts that the mutual transactions have come to an end in the year 1961-62 itself and the balance is struck at the end of that year and rs. 3401-20 P. were found due from the defendant. Thus, the balance was struck and the accounts stated. Thereafter we find from the extract of accounts that there are no mutual transactions at all. It is for that reason that 1 am persuaded to agree with the submission made by the learned Counsel for the appellant that the cause of action in the suit under Art. 26 of the Limitation Act commences. from the end of 1962, that being the date on which the account was stated after striking the balance. The suit instituted, therefore, on 28-2-1969 is clearly barred by time. ( 15 ) IT is no doubt true that time could be saved by acknowledgement of the debt under S. 19 of the Limitation Act, which speaks of effect of payment on account of debt or of interest on legacy. The suit instituted, therefore, on 28-2-1969 is clearly barred by time. ( 15 ) IT is no doubt true that time could be saved by acknowledgement of the debt under S. 19 of the Limitation Act, which speaks of effect of payment on account of debt or of interest on legacy. It states :"where payment on account of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made : provided that, save in the case of payment of interest made before the 1st day of January 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed, by, the person making the payment. "thus in order to invoke S. 19 of the limitation Act it is necessary that the payment must be made by the debtor within the period of limitation and it must be acknowledged by the debtor by signing it or endorsing it in the handwriting of the debtor. ( 16 ) IT is no doubt true that in the extract of accounts it is seen that Rs. 25/- is shown to be credited in the year 1962-63 on 22-9-1963. That would be within the time of limitation. But then it does not comply with the provisions of S. 19 of the act in as much as it is not signed by the debtor nor is the endorsement in the handwriting of the debtor. Thereafter, it is true that Rs. 300/~ was credited on 17-9-1966 after the period of limitation is over and the entry is signed by the debtor. That also would not save limitation because it is beyond the period of limitation. This aspect has not been considered by the Courts below. The learned Civil Judge, though he quotes from the commentary of the learned author Mitra as to what is 'accounts stated', failed to apply the principle to the facts of the case. ( 17 ) IN the result, I am constrained to hold on the admitted and proved facts, that the suit was barred by time when it was instituted on 28-2-1969. Therefore, the appeal is allowed. ( 17 ) IN the result, I am constrained to hold on the admitted and proved facts, that the suit was barred by time when it was instituted on 28-2-1969. Therefore, the appeal is allowed. The Judgments and decrees of the Courts below are set aside and the suit is dismissed as barred by time. No costs throughout --- *** --- .