GOKULDAS Vs. RADHAKRISHAN LAD

JUDGEMENT

(1.) 1. The plaintiff brought a suit against the defendant on the basis of an amount due on an open, mutual and current account. The dealings started in 1919 and the last entry in the accounts is dated 9th April 1925. The suit was brought on 17th October 1928 and it is claimed that the suit was within limitation as under Article 85, Schedule 1, Lim. Act, the cause of action arose on 17th October 1925, the closing of the trading year in which the last item of the account occurred. The defendant denied that the accounts were mutual and also denied that, the plaintiff was a minor at the time the cause of action accrued, a position which the plaintiff took in the plaint. The trial-Court found both points in the defendant's favour, namely, that the plaintiff had failed to establish that he was a minor at the time when the cause of action accrued and also that the account was not mutual and the suit having been brought more than three years after the date of the last transaction, namely, 9th April 1925, the suit was time barred. This finding was confirmed in appeal and the plaintiff has preferred a second appeal.

(2.) AS regards the question of the plaintiff's minority there is no doubt that evidence which was clearly open to the plaintiff to bring to establish the age of his birth has not been brought and both Courts were justified in considering that the evidence which was adduced., in the absence of the definite evidence which could have been produced, was insufficient. It is strongly contended that the account between the parties was mutual and that Article 85, Schedule 1, Lim. Act, did apply and that the suit was consequently within time; and in support of the contention that the accounts were mutual it is pointed out that on two occasions between 1919 and 1925 the balance shifted in the defendant's favour. Strong reliance is placed on behalf of the appellant on the ruling in Tea Financing Syndicate, Ltd. v. Chandrakamal , but the facts on which that case was decided and on which it was determined that there was a mutual account between the parties are easily distinguishable from the facts before me. On p. 668 (of 58 Cal), Rankin, C. J., stated: There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Holloway, A C. J. in Hirada Basappa v. Gadigi Muddappa (1871) 6 MHCR 142, transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of set off to reduce the defendant's liability.

(3.) IT is the nature of the dealings which is the true criterion and the nature of the dealings may establish mutuality without the balance ever having shifted at all. In Tea Financing Syndicate, Ltd. v. Chandrakamal , Ghose, J., pointed out that a shifting balance may be a test of mutuality, but its absence is not a conclusive proof against mutuality. Similarly a shifting balance is not necessarily a conclusive proof of mutuality. In this case the occasion of the balance in the plaintiff's favour is easily explained. On one occasion in the year 1921, it was accounted for by an entry in the plaintiff's books of a sum of Rs. 757-5-3 said to have been received in cash at a time when only Rs. 529-12-0 were due from the defendant. The defendant denied any such cash payment and on examination the plaintiff's witnesses were constrained to admit that no such amount was in fact received in cash, but that defendant had directed the firm of Nandram Baxiram to pay an amount owing to the defendant to the plaintiff in order to set against his own account with them. If the amount so paid was in excess of what was actually due at the time it is but natural that the defendant before directing such a payment would not trouble to calculate the exact amount and direct only the payment of so much, especially as he was in the habit of continually taking advances from the plaintiff's firm. The shifting of the balance in this case clearly imposes no consideration of mutuality.. The next occasion arose by the consignment of cotton to the value of Rs. 1,100 by the defendant to the plaintiff as a result of which there was a slight credit balance in the defendant's favour. As pointed out by Rankin, C. J., in the passage already quoted "goods as well as money may be sent by way of payment." In the Calcutta case it was held on the facts that the tea was not sent as payment but for the purpose of being sold and converted into money for the defendant's benefit. No such allegation in respect of this consignment of cotton has been made in this case and the cotton must be taken to have been sent as payment of money borrowed and accepted as such. There is no evidence or even allegation that the plaintiff had cotton dealings with the defendant or acted as a broker for him. It is, as before, merely an occasion of payment of an approximate amount due without any particular inquiry as to the exact amount due as the accounts were open and current but such action, as has already been shown, does not make the accounts mutual accounts.