Saiyid Sadik Reza vs Bibhuti Bhusan Saha

Rowland, J.—The appellant is the manager of a waqf estate. He was defendant in the suit which was for recovery of a sum of Rs. 1860-8-0 and compensation of Rs. 200 which the plaintiff claimed in the following circumstances: The plaintiff''s father Rasaraj Sana was gomasta under the estate for a number of years and had given accounts of his collections and expenditure which were adjusted up to the end of the year 1330. He continued to be gomasta until his death which occurred on 3rd Agrahan 1334 B.S. corresponding to 19th November 1927. At that time the accounts for the years 1331-1333 and part of 1334 had not been submitted or adjusted. After his death the plaintiff, his son Bibhuti Bhusan Saha, carried on in his place and was formally appointed in Magh 1334 B.S

The plaintiff submitted his father''s accounts of the years 1331-1333 on 27th September 1928. The accounts were received by the defendant''s record-keeper and am Mukhtear Gopal Kristo Das, a copy being returned to the plaintiff with acknowledgments of receipts of each set of papers signed by Gopal Kristo Das. The balance due from the estate to the plaintiff''s father at the end of 1333 was according to the plaintiff Rs. 1860-8-0 Thereafter, on 5th October 1929, the plain tiff submitted his account for 1334 receipt of which was again acknowledged in writing by Gopal Kristo and a copy returned to the plaintiff which is Ex. 7. At the close of this account, balance was struck and it was found that for the year 1334 there was a. net balance of Rs. 1786-3-3 due from the plaintiff to the estate.

The result of deducting this balance from the previous balance of Rs. 1860-8-0 due from the estate to the plaintiff''s father was that Rs. 74-4-9 was the balance due to the plaintiff from the estate. The plaintiff retained in his hands the sum of Rs. 1786-3-3 which was the excess of receipts over expenditure during, the year 1334 only. The estate through its servant Saiyid Mohsan Reza instituted a criminal prosecution of the plaintiff u/s 408, I.P.C. alleging that he had misappropriated this entire sum of Rupees 1786-3-3.

The plaintiff brought into Court the entire amount on 22nd January, 1931, and the case is described as having been compromised which I suppose means that the prosecution was abandoned, the case not being, compoundable. Then the plaintiff brings this suit on 25th September 1931, to recover the sum of Rs. 1860-8-0 as due to his father at the close of 1333 and due to himself on the basis of the adjustment made on 27th September 1928, and also compensation by way of damages at Rs. 200 only for having withheld the amount without justification. The defendant pleaded that he was not liable to pay anything to the plaintiff substantially on the following grounds : that there had been no adjustment of account on. either of the dates alleged; that the suit was malicious having been instituted in revenge for the prosecution of the plaintiff by the estate; that on a proper examination of the account it would be found that a large sum is due from the plaintiff to the estate, and finally, that the suit was barred by limitation.

It should have been brought within three years from the death of Rasaraj Saha which occurred on 19th November 1927. Of the issues raised, contest centered on the questions whether the plaintiff had a cause of action; whether the suit was barred by limitation and whether there had been any settlement and adjustment of account between the parties on 27th September 1928. The first Court held that there had been no such adjustment; that time must run from the death of Rasaraj and accordingly that the suit must fail both on the merits and as being barred by limitation. On appeal this decision was reversed. The District Judge found that on the plaintiff''s copy of the account for 1333 there was a note to the effect that the upshot was excess of expenditure to the extent of Rs. 1860-8-0; that is to say, that on the basis of the account this sum was that it was due from the estate to the plaintiff.

The entry was in the writing of a moharrir of the estate named Bhuban Chandra Das. It was unsigned and the plaintiff''s case was that it was made in the presence and under the orders of Gopal Kristo Das that am-Mukhtear of the defendant. The District Judge finding that Bhuban Mohan Das was still in the respondent''s service came to the conclusion that Bhuban Mohan had ah authority to state the accounts on behalf of the defendant-respondent''s estate and had duly made the entry which he held to be undoubtedly a statement of accounts between the parties. As regards limitation he held that the plaintiff was entitled to count time from the date of this statement of account and on the defendant''s failure to give the plaintiff credit for the amount due, the plaintiff was entitled to sue within a period determinable with reference to Article 115, Limitation Act.

In second appeal it has been pointed out that neither Section 19, Limitation Act, nor Article 64 of the Schedule can be invoked in favour of the plaintiff; that Section 19 only applies when the acknowledgment of liability has been made in writing signed by the party either personally or by agent; that for Article 64 the period begins when the accounts are stated in writing signed by the defendant or his agent; and it is said that the absence of a signature of Bhuban Mohan Das is fatal to the plaintiff''s claim to save limitation by reference to the date on which the" accounts were presented and accepted. It is said that there was no real statement of account between the parties, and for this, reference was made to Suraj Prasad Pandey v. Boucke AIR (1920) Pat 161, and some other cases, Shankar v. Mukta (1898) 22 Bom 513 and Ganga Prasad v. Ram Dayal (1901) 23 All 502. All these cases however are cases of transactions between a creditor and his debtor.

There might have been some payments made from time to time by the debtor in reduction of his indebtedness; but the nature of those accounts throughout was that the debtor was indebted and the cause of action was the debt and not an, acknowledgment of it. The present case seems to be on quite a different footing as the whole basis of the relation between the parties was that it was a relation of principal and agent the accounts between whom are mutual, running and current accounts. The essentials of a mutual, open and current account are, as held in Haji Abdul Rahman Shirazi v. Hajee Bibi (1905) 7 Bom LR 151, the reciprocity of dealing and the right to mutual demand; where these are the relations between the parties, an account to be a settled account need not, it was there held, be signed provided that it, is submitted to the party sought to be made liable on it and he has by words or by his; conduct acquiesced in its correctness. Until an account is stated between the parties, the right of either of them is to bring a suit for account and to have accounts taken. But once account has been stated, the party in whose favour there is a credit balance) has the right to sue for the balance due to him. It was so held in the Madras High Court also in Marimuthu Pillai v. Saminatha Pillai (1898) 21 Mad 366. It was said:

The allegation of partnership dealings and of settlement of accounts between the partners followed by a promise on the part of one partner to pay a liquidated sum to the other amounts to a contract supported by good consideration and the law does not require it to be in writing.

The case of an adjusted account between partners was considered in the Calcutta High Court in Jalim Singh v. Choonee Lal 15 CWN 882. The parties had agreed to dissolve their partnership; they had formulated a basis of settlement; accounts were thereafter examined between them and a final adjustment was made on 20th August 1906. It was held that limitation did not run from the date on which the partnership itself terminated but that the adjustment gave rise to a fresh cause of action from the date on which it was made. A case between principal and agent was considered in Kesho Prasad Singh Sarwan Lal AIR (1917) Cal 156. From this decision it would appear that as between a principal and agent the obligation of either party is not confined to the rendering of accounts but includes also the payment of any balance which might be found due on taking accounts and where accounts are taken and adjusted and a specific sum found due from the agent to the principal, the principal then has a right to sue forthwith for recovery of the money.

There can be no difference in principle between that case and the case in which on striking account the balance is found payable to the agent rather than to the principal. From these ''decisions it would seem to follow that a cause of action arose to the plaintiff from ''the fact of adjustment of account on 27th September 1928. I do not wish to whittle away the principle that ordinarily as between a debtor and creditor an acknowledgment does not create any liability but merely keeps an existing liability alive and the creditor suing for his debt has his original cause of action to sue on; but the point is that the principle does not apply to this case. The points taken in appeal that the plaintiff had no cause of action and that the suit is barred by limitation both in my opinion fail, and for the rest, the matter is concluded by the findings of fact. I would dismiss the appeal with costs.

Chatterji, J.

I agree.