SHIVI GOWDA Vs. FERNANDES

JUDGEMENT

(1.) The main question raised in this appeal is whether the suit is for the balance due on a mutual, open and current account, where there have been reciprocal demands betwee the parties within the meaning of Art. 85 of the second schedule to the Limitation Act. If so, the defendants plea of limitation fails. If not, the plaintiffs are not entitled to recover in respect of items in the account prior in date to three years before the institution of the suit.

(2.) The District Judge held that Art. 85 applied and the suit was not barred by limitation apparently on the ground that the accounts had been open and running for many years. He does not seem to have considered the question with reference to the words of the article "Where there have been reciprocal demands between the parties." The oral evidence affords little assistance as to the course of business between the parties and we have to rely in the main on the plaintiffs accounts.

(3.) The plaintiffs are merchants and the defendants are coffee planters, and the plaintiffs accounts show that, from the year 1893, the plaintiffs had been financing the defendants and the defendants had been sending consignments of coffee to the plaintiffs, In April 1893, a sum of Rs. 4,000 was advanced by the plaintiffs and the account for 1893-1894 (exhibit V) states that a document was executed for this amount. During 1893 further advances were made by the plaintiffs and sundry payments were made by them on the defendant's behalf. By January 1894 these advances and payments amounted to Rs. 10,700. In January 1894, a consignment of coffee was received by the plaintiffs from the defendants and other consignments were received later. These consignments were sold by the plaintiffs and the defendants were credited with the sale-proceeds with interest. A balance was struck in May 1894 the defendants being debited with interest on the moneys paid by the plaintiffs and also with what was termed commission. This was not really commission but an amount calculated at Rs. 2 per candy, every Rs. 1,000 advanced being taken as the equivalent of 30 candies, in respect of advances made before" any coffee was received by the plaintiffs, and every Rs. 1,000 being taken as the equivalent of 10 candies in respect of advances made subsequently. The higher rate is described in paragraph A of the plaint as damages for the defendants default in not supplying the full quantity of coffee, in other words for not keeping the plaintiffs fully secured in respect of advances made by them to the plaintiffs or on their behalf. The accounts for 1894--1895 (exhibit IV) and 1895-1896 (exhibit III) show that business was continued on the same lines. In June 1896, the defendants made a cash payment of Rs. 13,000 and the balance against them was reduced to Rs. 5,500 (exhibit II). In May 1897, the balance was Rs. 5,545 odd and on this the plaintiffs claimed to charge interest at 15 par cent. In November 1899, the balance shown in the plaintiffs accounts (exhibit A) was Rs. 7,500 odd and this is the amount for which the suit was brought. I am of opinion that, having regard to the course of business so far as it can be ascertained from the plaintiffs accounts, the relation between the defendants and the plaintiffs was not that of seller and buyer as regards the coffee consigned to the plaintiffs--nor that of principal and agent in respect of the coffee sold by the plaintiffs, sou Mussamut Phool Koomaru Bibee V/s. Woonkar Pershad Rustody (1867)7 W.R. 67 at p. 70-- but that the contract between the parties was, as would seem to be suggested in paragraph 4 of the plaint and in the concluding portion of paragraph 6 of the learned Judge's judgment that the plaintiff's should finance the defendants, and that the defendants should keep the plaintiffs secured in respect of the advances made by the plaintiffs on their behalf by consigning to them coffee of a value equal to the amount of their indebtedness, the defendants being given credit for the proceeds of the coffee as and when sold by the plaintiffs and that if they failed to do this, they should make the further payment which is called commission but which is really a payment by way of damages.