ORDER OF REFERENCE

MALIK, CJ.:- This is a Special Appeal against a judgment of a learned single Judge. The plaintiff filed a suit for recovery of Rs.1200/-, on the allegation that the plaintiff-firm Kamta Prasad Jagannath Prasad was a registered firm and carried on business of commission agency for sale and purchase of potato, tobacco and khali, and the defendants had entered into several transactions of sale of potatoes, tobacco, etc., through the plaintiff-firm and they had also made certain purchases from the firm and the amount was due on a balance of account. It was said that the accounts between the parties were mutual, open and current as the plaintiff had to pay to the defendants the price realised from defendants customers and the defendants had to pay to the plaintiff price of the goods purchased. The last item was entered in the accounts on 31-7-1943, from which date, it was claimed, limitation should be computed. The suit was filed on 24-2-1944. Among other defences, a defence was taken that the plaintiffs suit was barred by limitation. The trial Court dismissed the suit, holding that it was barred by limitation. The lower appellate Court decreed it. The learned single Judge has, however, dismissed the suit.

2. It appears from the judgment of the learned single Judge, as also from the judgment of the lower appellate Court, that it was admitted that in the beginning the accounts were mutual, open and current. The lower appellate Court has said as follows:

"The account in the present case was admittedly mutual in the beginning. The plaintiff sold goods to the defendant creating an obligation on the defendant to pay him their price. It also sold the defendants goods to third parties making itself liable to the defendant to pay their price. It bought goods under the directions of the defendant and sold them to other persons under the directions of the defendant; in these transactions the defendant was under an obligation to pay the price paid by the plaintiff and the plaintiff was under an obligation to pay to the defendant what it realised on sale. So there were mutual dealings between the parties creating independent obligations."

The learned single Judge has said:

"It is conceded before me that the dealings between the parties were in the nature of mutual, open and current account, where there had been reciprocal demands between the parties and the Article applicable to the case is Art.85, Limitation Act."

3. On this point, therefore, both parties were agreed that the dealings between the parties gave rise to reciprocal demands and the accounts were mutual, open and current.

4. The learned single Judge, however, has said in his judgment that it was not disputed before "him that the accounts were closed in November, 1937. This statement is challenged by learned counsel for the appellant and he points out that this was the main point for decision and the lower appellate Court had given a finding on the point in his favour that the accounts being admittedly mutual, open and current giving rise to reciprocal demands, it was for the defendants to show that the accounts ceased to be such, and the mere fact that there were no fresh dealings for some time did not necessarily lead to the conclusion that at any stage during that period the nature of the accounts was altered. The learned District Judge has rightly pointed out that at any time it was open to the parties to enter into a fresh transaction which would have been entered in the accounts and become a part of the same old mutual, open and current account, and that the mere fact that there were no dealings for a period did not necessarily entitle the Court to hold in retrospect that the accounts had ceased to be mutual, open and current.

5. Neither the learned District Judge nor the learned single Judge, however, appear to have given due weight to the finding recorded by the trial Court that after the end of the year the plaintiff struck a balance in his books on 3-