The main legal point established is the requirement of mutual, open, and current accounts with reciprocal demands under Art.1 of the Limitation Act, and the corroborative nature of account books under S.34 of the Evidence Act.

1. Defendant is the appellant. The suit was for recovery of money based on accounts. Plaintiff claimed that he is entitled to recover an amount of Rs.3,363.40 from the defendant. The trial court partially decreed the suit. Both the plaintiff and defendant were dissatisfied with the decree of the trial court. So, both filed appeals. The appellate court allowed the appeal filed by the plaintiff and dismissed the appeal filed by the defendant. Thus, cow there is a decree against the defendant allowing recovery of the amount claimed by the plaintiff. The defendant appeals.

2. The learned counsel for the appellant raised two points in this appeal. He submitted that the court below vent wrong in declining to accept the defence pleaded by the defendant that the suit is barred by limitation Further, he submitted that the courts below have wrongly applied S.34 of the Evidence Act to the facts of the case.

3. Apparently, both these points are in the range of pure questions of law and so I should examine these questions. The plaintiff contended that the nature of the transaction between the plaintiff and the defendant which has given rise to the suit conforms to the description of the suit in Art.1 of the Limitation Act, Art.1 of the Limitation Act reads thus:

The transaction between the plaintiff and the defendant, according to the plaintiff plainly and clearly discloses that the claim in the suit is for the balance due on a mutual, open and current account, where there have been reciprocal demands between the parties.

4. The plaintiff is a limited company which used to advance money to its customers for agricultural purposes on the agreement that the customers should deliver their agricultural produce to the plaintiff. As per the terms of the agreement, the plaintiff is obliged to sell the produce and remit the amount in the account of the customer and adjust and set off the amount due to the plaintiff and pay the balance amount to the customer. This obligation to effect the sale of the produce of the customer and account the sale produce and payment of balance created a reciprocal demand in the customer. If the proceeds of the sale of the agricultural produce is insufficient to wipe off the advance made, it will stand as a debt due to the plaintiff from the agriculturist and if the proceeds of the sale exceeds the amount due to the plaintiff it will remain as a debt of the plaintiff due to the customer the defendant.

5. In this case, it is said that the last date of the borrowing (the advance made by the plaintiff) was on 13-5-1971 and the last of the consignment of the agricultural produce by the defendant to the plaintiff was on 4-4-1971. The suit was filed on 21-6-1971. The plaintiff has stated that the cause of action for the suit arose on and since 30-6-1972 (the end of the accounting year 1971-72). It has to be noted that the starting point of limitation if Art.1 of the Limitation Act is applicable is "the close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account."

6. Both the courts, after an evaluation of the evidence and the circumstances involved in the case, held that the article that applies for determining the period of limitation for the suit is Art.1 of the Limitation Act and found that the suit is not barred by limitation.

7. The learned counsel for the appellant very emphatically submitted that both the courts below have not properly understood the width, scope and range of Art.1 of the Limitation Act and the decided cases of Supreme Court and this Court on this article. In this context, I feel that I must examine the true content of Art.1 of the Limitation Act. This requires a little tracing of the history and principle behind this article. This article takes its rationale from the observations in an old English decision Catling v. Skoulding (1795) 101 ER. 504 (506), decided as early as in 1795. Lord Kenyon in that decision observed thus:

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