MADHAV MOTIRAM Vs. JAIRAM SAKHARAM

JUDGEMENT

(1.) The plaintiff sued to recover on a Khata or account of dealings which had continued between the parties from the 1 March 1913. The business between the parties was that the plaintiff advanced money to the defendant to buy cotton which was ginned and pressed by the plaintiff, the charges being debited to the defendant, and after that the cotton was sent to Bombay through the plaintiff and sold, the plaintiff being credited with the sale proceeds as against the advances made by him to the defendant.

(2.) The only question in this appeal is whether, such being the facts, the account between the parties was mutual, open and current, so that the period of limitation would be fixed by Article 85 of the first Schedule to the Indian Limitation Act instead of by Art. 62 or 57, in which case only the items in the account within the last three years before suit could be considered. The question whether a particular account between two parties can be called a mutual, open and current account, has given rise to a considerable amount of controversy. The difficulty of coming to a decision is intensified by the words which have been added to Art. 85 " where there have been reciprocal demands between the parties." These words which were intended to define what is meant by a mutual, open and current account singularly fail to do so, moreover they might also be interpreted as limiting-cases of mutual, open and current accounts coining within the Art. to those cases only in which reciprocal demands have been made.

(3.) In Ganesh V/s. Gyanu (1897) I.L.R. 22 Bom. 606, 609, the learned Judges said : The dealings to be mutual must be transactions on each side creating independent obligations on the other, and not merely creating obligations on one side, and the other side being merely discharges of these obligations," Following that definition strictly it must be that where A advances, say Rs. 1,000, to B, and B works off that debit by sending cotton to A to be sold, the sale proceeds to be credited to B, that could never be a mutual, open and current account; and that was the view taken in Shivi Gowda V/s. Fernandes (1910) I.L.R. 34 Mad. 513.