KRISHNAN ASSARI Vs. AKILAKERALA VISWAKARMA MAHA SABHA

JUDGEMENT

(1.) The appellant is the plaintiff in O.S. No. 60 of 1971, on the file of the Subordinate Judge's Court, Mavelikkara. The suit was for recovery of Rs. 10,613.98 with interest at 6% from the date of the plaint.

(2.) During the period 3-11-1963 to 25-6-1967, the appellant was the President of the Akhilakerala Viswakarma Maha Sabha, which is registered under the Companies Act with its office at Mavelikkara (for short the Sabha). While so functioning he is stated to have advanced loans to the Sabha on various occasions. On 31-12-1966 an amount of Rs. 11,763.48 was due from the Sabha to the appellant. The same stood included in the balance sheet of the Sabha for the said year. Towards the above transaction an amount of Rs. 1,000/- was paid on 25-6-1968. The balance sheet dated 31-12-1968 mentioned that Rs. 10,613.98 was due to the appellant. The said amount continued to be included in the balance sheets for the years 1969 and 1970. On the failure of the Sabha to return the amount, the appellant sent a registered notice on 17-9-1971. The Sabha sent a reply to the above notice denying the transaction and alternatively setting - forth the bar of limitation. The suit was, accordingly, filed on 10th November, 1971.

(3.) The first respondent Sabha filed a written statement, through its Secretary, the third defendant, the President, fifth defendant, and the Treasurer, the sixth defendant. Defendants 2 and 4, according to the written statement, were not Office Bearers of the Sabha. The contesting defendants denied the loan According to them, since the affairs of the first defendant Sabha were being managed by contributions from its members, there was no occasion to borrow amounts from the plaintiff. The plaintiff manipulated the accounts of the Sabha during his tenure of office as President with a view to put forward a claim based on the loan. The entries in the accounts were fraudulent and had no foundation on truth, and as such, they are not binding on the first defendant Sabha or its members. The first balance sheet of the company including the amount of Rs. 11,763.48 was prepared on 6-5-1967 when the plaintiff was the President. The balance sheets for subsequent years only repeated the liability. The averment, that there was a payment of Rs. 1,000/- on 25-6-1968, is false. The balance sheet for the year ending 31-12-1968 did not correctly conform to the entries in the account books for the year. The balance sheet being a document prepared by the auditors, the general body of the members is not bound by its contents. It was not the practice for the general body to go into correctness or otherwise of the balance sheet. The balance sheets for the years 1969 and 1970 have not been accepted as correct by the general body. The contesting defendants also put forward a case, that the alleged loan was discussed during general body meeting held on 27-5-1967, under the Presidentship of the plaintiff. At the said meeting the plaintiff voluntarily relinquished his right to claim any amount from the Sabha. The said relinquishment is seen noted in the proceedings of that meeting which was passed on 24-6-1967. Being a voluntary relinquishment, in writing in his own hand, the plaintiff is bound by the relinquishment. The relinquishment has been accepted by the general body. The inclusion of the amount of Rs. 10,613.98 in the subsequent balance sheets did not amount to acknowledgment of liability by the Sabha. On the face of it, the suit was barred by limitation.