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1965 Supreme(All) 38

Allahbad High Court
C.B.CAPOOR
Lakshman Prasad - Appellant
Versus
Ghasi Ram - Respondent
Decided On : 02/24/1965

Advocates:
K.C. Saxena, for Appellant; B.C. Saxena, for Respondents.

Headnote:

LIMITATION ACT - ARTICLE 85 - MUTUAL, OPEN AND CURRENT ACCOUNT - SHIFTING OF BALANCE NOT SINE QUA NON - INDEPENDENT OBLIGATIONS ON BOTH SIDES - ESSENCE OF MUTUAL ACCOUNT - CREATION OF INDEPENDENT OBLIGATIONS.

Fact of the Case:

Plaintiff sued to recover the price of cloth allegedly purchased by the defendants and interest thereon. The defendants denied the agreement regarding interest and claimed that certain items were barred by limitation.

Finding of the Court:

The trial court decreed the suit, holding that Article 85 of the Limitation Act applied and the entire claim was within the prescribed period of limitation. The lower appellate court reversed, holding that Article 52 applied and reducing the decree amount.

Issues: Whether Article 85 or Article 52 of the Limitation Act applied to the case.

Ratio Decidendi: Article 85 of the Limitation Act applies to mutual, open and current accounts, which are characterized by independent obligations on both sides. The shifting of balance from one side to the other is not a sine qua non for a mutual account. In the instant case, the dealings between the parties created independent obligations, even though the balance was always in favor of the plaintiff. Therefore, Article 85 applied and the entire claim was within the prescribed period of limitation.

Final Decision: The revision application was allowed, the decree of the lower appellate court was set aside, and the decree of the trial court was restored with costs.

JUDGMENT :- This is a plaintiff's second appeal and arises out of a suit filed by him to recover a sum of Rs. 527-13-9 as price of cloth alleged to have been purchased by the respondents and interest thereon.

2. The plaint allegations were that the plaintiff appellant carried on business in cloth and the defendant-respondents, who were members of a joint Hindu family, purchased cloth from the plaintiff. It was also alleged that the defendants dealt in readymade garments and they supplied the same to the plaintiff for sale on commission basis. The amount claimed by the plaintiff comprised the following items :-

1. Rs. 247-12-0 as principal.

2. Rs. 230-15-3 as interest.

3. Rs. 49-4-6 as commission.

3. The defence, in the main, was that there was no agreement regarding the payment of interest, that certain items sought to be claimed were barred by the law of limitation. According to the defence, a sum of Rs. 7 only was due to the plaintiff.

4. The learned Munsif repelled the pleas put forward on behalf of the respondents and decreed the suit. He held that the article of the Limitation Act applicable to the case was 85 and the whole of the amount claimed was within the prescribed period of limitation. The defendants preferred an appeal against the aforesaid decision and the learned District Judge who heard the appeal held that there was no mutual, open and current account between the parties and that the article of the Limitation Act applicable to the case was 52. The learned District Judge passed a decree for a sum of Rs. 366-0-6 only. Aggrieved by the aforesaid decision the plaintiff has preferred this appeal.

5. A preliminary objection has been raised on behalf of the respondents that the second appeal is not competent in view of S. 102 of C.P.C. There can be no doubt that the suit filed by the plaintiff appellant was of a small cause court nature and as it was below Rs. 1,000 in value, a second appeal is not competent. The preliminary objection, therefore, prevails.

6. On behalf of the appellant, it has been prayed that the second appeal may be treated as an application in revision. On behalf of the respondents it has been contended that an application in revision also would not lie as the lower appellate court did not assume jurisdiction where none existed and did not fail to exercise the jurisdiction vested in it and as there was no material irregularity or illegality in the exercise of jurisdiction. The contention of the appellant is that the lower appellate court decided the question of limitation wrongly and thus it failed to exercise jurisdiction vested in it. It was previously held by this Court in the case of Babu Ram v. Munna Lal, AIR 1927 All 358 that an erroneous decision on a question, of limitation does not involve a question of jurisdiction. That view, however, did not find favour with their Lordships of the Judicial Committee in the case of Joy Chand Lal Babu v. Kamalaksha Chaudhury, AIR 1949 PC 239. The opinion expressed by the Privy Council in the aforesaid case was approved by the Supreme Court in the case of Keshardeo Chamaria v. Radha Kisen Chamaria, AIR 1953 SC 23. It would thus appear that if the contention of the appellant petitioner to the revision application is that the question of limitation arising in the case had been wrongly decided by the lower court, an application in revision would lie and the present application is maintainable. I therefore, allow the appeal to be treated as an application in revision.

7. The next question arising for decision is if the learned lower court erred in holding that article 85 of the Limitation Act was not applicable to the case. While the learned court held that there were mutual dealings between the parties it did not apply Art. 85 of the Limitation Act as during the course of the mutual dealings, the plaintiff was always the creditor and the defendants were always debtors. The balance, according to the learned Court, was not a shifting one and, as such, Art. 85 referred










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