KUMARAN NAIR Vs. KHADER SHAH

JUDGEMENT

(1.) THIS is an appeal by the defendant in a suit on accounts. According to the averments in the plaint, plaintiff is conducting a trade in the name and style of Sbajahan Timber Depot. The defendant used to receive advance amounts for the purpose of supplying timber and in the same transaction under the accounts a sum of Rs. 18,380. 02 is due from the defendant as on 31-3-197 1. The plaintiff is maintaining true and proper accounts for the dealings and inspita of repeated demands the defendant has not paid the amount. The plaintiff also relied on certain acknowledgements made by the defendant in his letters dated 1-5-1971,16-1-1969, 23-5-1968 and 27-1-1969 to save limitation and filed the suit for recovery of the amount with interest. The defendant filed a written statement contending that the suit is barred by limitation, that from 27-4-1968 onwards the defendant was acting as the power bolder of the plaintiff and that the other dealings were put an end to in 1967 itself. He further contended that there was no payment of rs. 2250/- on 9-2-1971 as shown in the accounts, that the letters relied on for the purpose of proving an acknowledgement are not sufficient to save the period of limitation and that the suit is liable to be dismissed.

(2.) ORIGINALLY, the suit was dismissed by the trial court on the ground that it is barred by limitation. The plaintiff took up the matter before this Court in A. S. No. 120/76. By judgment dated 18-2-1980, a Division bench of this Court remanded the case to the trial court for considering the question whether the account between the parties was mutual open and current and whether the entry dated 9-2-1971 of an amount of Rs. 2250/-was genuine.

(3.) IN this Court the counsel for the defendant argued that the finding by the lower court on the two questions directed to be decided by this Court were not correctly decided by that court and he challenges both the findings. So the points for determination in this appeal are (1) whether the accounts between the plaintiff and defendant were mutual, open and current and (2) whether the entry in the account books dated 9-2-1971 for the payment of Rs. 2250/- is genuine. It is an admitted case between the parties that if the findings on these two points are in favour of the plaintiff, the suit is within time. The counsel for the appellants contended that the account is not a mutual open and current account, that the account will show that there was no reciprocal demand and that the payments made were only in discharge of the existing obligation of the parties, whereas the counsel for the respondent contended that in the circumstances of the case and from the account it is clear that it is a mutual, open and current account. The transaction between the parties, as can be seen from the evidence is that the plaintiff used to advance money to the defendant for supply of timber to the plaintiff's depot at palghat. He will sell the timber and out of the sale proceeds the plaintiff is entitled to 10 per cent commission and the balance will be credited to the defendant's account. There is no sale of the timber to the plaintiff and it remains the property of the defendant. The plaintiff acts as an agent for selling timber and be is entitled to only a commission of 10 per cent. The counsel for the respondent relied on a decision of this Court by a learned Single Judge in purushothan Ranchoddas Salt v. Ramaswami Iyer (1961 KLJ. 1377) to contend for the position that the account in a transaction of the nature with which we are concerned is mutual open and current. IN the above case the plaintiff bad advanced various amounts to the 1st defendant and the latter supplied goods to the former for sale on commission. The plaintiff sold them and debited the proceeds against the advances made taking the commission for himself. After considering the various decisions on the question, this Court held: IN the present case, the goods were not sold to the plaintiff in discharge of the defendant's liability, bat were delivered for the purpose of sale by the plaintiff, to enable him to earn his 'commission debiting the balance of the sale proceeds against the amount payable by the defendant. The plaintiff's counsel also relied on M/s. Ganesh Prasad Bhurelal v. M/s. Dullchand Girdharilal (AIR 1961 Madhya Pradesh 99) for contending that the accrual of the commission due to the plaintiff envisaged an independent account against the defendant. but 1 am of the view, that this case is fully covered by the decision of Rankin C. J. Here also, as in the other case, the plaintiff's liability to account to the defendant for the proceeds of the goods sold, must be held to be an independent obligation, and applying the above test it follows, that the account sued on is a mutual account within the meaning of article 85 of the INdian Limitation Act " The principles applicable in deciding the question as to whether an account is mutual, open and current are correctly laid down in the above decision. The facts in the above case are identical with the present case. There was no sale of timber to the plaintiff. The timber was being supplied only for the purposes of sale by the plaintiff enabling him to earn a commission of 10 per cent. The plaintiff's liability to account for the profits of the timber entrusted is an independent obligation, different from the defendant's obligation to return the money advanced. Following the principles laid down in the above decision we hold that the account in the present case is a mutual, open and current account.