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1977 Supreme(Mad) 428
Madras High Court
SETHURAMAN,BALASUBRAHMANYAN
V.K.Abraham - Appellant
Versus
N.K.Abraham - Respondent
Decided On : 10/04/1977
S. Padmanabhan, for Appellant; M. Srinivasan, for Respondent.
An account may be called a mutual, open and current account if there are independent transactions resulting in possibility of reciprocal demands and shifting balances. The entries should not be mere repayments of advances already received. The accounts must be open and continuing.
Headnote:
LIMITATION - MUTUAL, OPEN AND CURRENT ACCOUNT - ACCOUNT BOOKS - INTEREST - SUIT FOR RECOVERY OF MONEY DUE ON MUTUAL, OPEN AND CURRENT ACCOUNT - WHETHER SUIT BARRED BY LIMITATION - WHETHER ACCOUNT BOOKS PROPERLY ACCEPTED AS PROVING TRANSACTIONS - WHETHER PLAINTIFF ENTITLED TO INTEREST UPTO DATE OF SUIT.
Fact of the Case:
Plaintiff, a rubber dealer, filed a suit for recovery of Rs. 58,660 from the defendant, a rubber estate owner, for rubber and scrap rubber supplied to the defendant. The defendant denied liability and pleaded limitation. The trial court held that the suit was within time and that the plaintiff was entitled to interest at 12% per annum. The defendant appealed.
Finding of the Court:
The court held that the suit was not barred by limitation as the account between the plaintiff and the defendant was a mutual, open and current account. The court also held that the account books were properly accepted as proving the transactions and that the plaintiff was entitled to interest at 12% per annum.
Issues: 1. Whether the suit was barred by limitation? 2. Whether the accounts were properly accepted as proving the transactions between the parties? 3. Whether the plaintiff was not entitled to any interest upto the date of the suit?
Ratio Decidendi: 1. To constitute a mutual account between two parties, there must be independent transactions resulting in possibility of reciprocal demands and shifting balances. The entries should not be mere repayments of advances already received. The accounts must be open and continuing. 2. Entries in books of account, regularly kept in the course of business are relevant whenever they refer to a matter into which the court has to enquire, but such statements shall not alone be sufficient evidence to charge any person with liability. 3. The plaintiff has to show by some independent evidence that the entries in his books represented real and honest transactions and that the moneys paid or the transactions took place in accordance with those entries.
Final Decision: The appeal was dismissed with costs.
SETHURAMAN, J. :- The defendant in O. S. No. 91 of 1970 in the Court of the Subordinate Judge, Padmanabhapuram, is the appellant. The plaintiff is a rubber dealer in Kulasekharam. The defendant is the owner of a rubber estate called the Cross Field Plantation at Kaliel. From the year 1963 the defendant was supplying sheet rubber as well as scrap rubber to the plaintiff from time to time. The plaintiff was also supplying estate stores and other materials. There were in addition cash transactions between the parties. The last of the dealings between the plaintiff and the defendant was on 23rd July 1966. The defendant did not thereafter supply any rubber. The account of the defendant stood at a debit of, or overdrawn on that date by a sum of Rs. 46,505.67. The plaintiff filed the present suit for recovery of this sum along with interest at 12 per cent per annum, after giving credit for a sum of Rs. 8,494.20 being the amount due to the defendant' s father M. K. Kuriakose on account of the price of scrap rubber supplied by him to the plaintiff. This credit entry was made on 20-4-1968. The present suit was for recovery of Rs. 58,660 including interest and future interest and costs.
2. The defendant in his written statement stated that how the amount of the opening balance of Rs. 8,306.05 was due to the plaintiff was not clear, as the plaintiff had not produced the accounts, for the year 1963-64. The defendant, therefore, reserved his right to file a detailed written statement when the particulars for the said amount were furnished by the plaintiff but he did not do so even after those accounts were filed. According to the defendant the plaintiff had not accounted for the price of the rubber properly and the plaintiff was not justified in adjusting the amount due to Kuriakose in his account. The defendant denied liability to pay interest. There was also a plea that the suit was hopelessly barred by limitation.
3. On the pleadings the following issues were framed for trial -
1. Was a sum of Rs. 8,306.05 due from the defendant to the plaintiff as on 31-12-1965 ?
2. Has the defendant been paid the proper price for the rubber sold by him to the plaintiff ?
3. Has not the entire quantity of rubber sold by the defendant to the plaintiff accounted for ?
4. Was there a contract between the defendant and the plaintiff that the latter shall pay the price of rubber at the rate prevailing in the Cochin auction or Cochin market ?
5. Was the store purchase dated 7-1-1966 on cash or on credit ?
6. Has the defendant received only one of the cash payments entered on 21-1-1966 and 22-1-1966 ?
7. Are the entries dated 31-1-1966 and 8-6-1966, by transfer of accounts from M. K. Kuriakose authorised and valid ?
8. Is the credit entry dated 20-4-1968 by transfer of accounts from M. K. Kuriakose made on the authorisation of the defendant or whether it is a bogus entry only to save limitation ?
9. Is the interest claimed excessive ?
10. What is the amount, if any, due from the defendant to the plaintiff ?
11. Reliefs and costs?
12. Whether the plaint claim or any portion thereof is barred by limitation ?
4. The learned Subordinate Judge held on issue No. 1 that a sum of Rupees 8,306.05 was due to the plaintiff as on 31-12-1965. On issues Nos. 2, 3 and 4, he found that the plaintiff had credited in his account the entire quantity of rubber sold by the defendant to him and that there was no agreement between the parties for payment of the price at the rate prevailing in Cochin auction. He held on Issues 5 and 6 that the estate stores purchased by the defendant were only on credit and not for cash and that the defendant had received the amount of Rs. 1,500
each recorded in the books on 21-1-1966 and 22-1-1966. On issues Nos. 6, 7 and 8, 9, the credit for the amount due to M. K. Kuriakose given in the plaintiff' s books as against the defendant was considered to be proper and interest was also held to be payable. On the question of limitation raised in issue No. 12, t
