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Gopi Nath vs Srimati Chameli And Anr.

High Court Of Judicature at Allahabad|06 May, 1938


1. This is a defendant's appeal against a decree of the learned Civil Judge of Meerut. The following pedigree will give relationship of the parties:
2. The plaintiff Srimati Chameli, widow of Jamna Prasad, comes into Court on the allegations that she is the owner of the firm styled Lira Lal Jamna Prasad; that the firm was originally owned by L. Hira Lal and his adopted son Jamna Prasad; that after their death Khushi Ram, the adopted son of Jamna Prasad, became the owner of the said firm; that on the death of Khushi Ram, Mt. Mahadevi widow of Khushi Ram, succeeded to her husband; that Mt. Mahadevi died in 1919 and the plaintiff as the widow of Jamna Prasad became the owner of the firm; that the defendants had a firm styled Kedari Prasad Chhedi Lal at Ferozpur which carried on banking, money lending and contract business; that for several years a current account has been running between the two firms of the parties and the two firms have been receiving and paying money to and from each other; that the interest on the outstandings was paid or received by each other at the rate of 7 annas 9 pies per cent per mensem; that the accounts between the two firms were settled on 31st March 1928 when Rs. 54,376-1.9 was found due to the firm of the plaintiff; that defendant 1 represented the defendants' firm and acknowledged the liability for the aforesaid amount and executed a promissory note for the said sum on 29th May 1928; that on 31st March 1929, the accounts of the two firms were again examined and checked by the parties and the sum of Rs. 57,205-7-3 was found due from the defendants' firm; that defendant 1 on 5th February 1930 executed another promissory note for Rs. 57,205-7-3 which included the amount due under the previous promissory note of 1928; that the defendants were members of a joint Hindu family but separated from each other some eight months before the institution of the suit; that in spite of notice the defendants failed to pay the debt due from them; hence the present suit for the recovery of Rs. 64,562-6-0 from the defendants with pendente lite and future interest.
3. Defendant 1 admitted the claim of the plaintiff but defendant 2 contested it inter alia on the grounds that the plaintiff was not the owner of the firmHira Lal Jamna Prasad; that the Ferozpur firm did not borrow any money from the firm styled Hira Lal Jamna Prasad; that the defendants themselves were the owners of the firm Hira Lal Jamna Prasad as well as of the Ferozpur firm; that separate accounts were maintained for the facility in payment of income-tax; that no promissory notes were executed with the knowledge and consent of the contesting defendant; that the promissory notes in suit were antedated and were executed by defendant 1 some little time before the institution of the suit with a view to saddle the contesting defendant with liability for the loan which was time barred.
4. The issue of jurisdiction was disposed of by the Court below by the judgment dated 10th October 1933. The following three issues were tried and decided by the judgment of 10th February 1934 under appeal:
1. Is the plaintiff owner of the firm Hira Lal Jamna Prasad and entitled to maintain the suit? 2. Whether defendant 1 was empowered on behalf of the firm at Perozpur to execute the promissory note in suit? 3. Is the suit barred by time?
5. In the Court below the contesting defendant seriously disputed the right of the plaintiff to maintain the suit and the parties adduced a considerable amount of oral and documentary evidence in support of their respective contentions. The Court below upon a consideration of evidence decided this issue in favour of the plaintiff. The contesting defendant challenged the finding of the lower Court on this issue in the grounds of appeal. Learned Counsel for the appellant however did not press those grounds before us. We are therefore not called upon to examine the finding recorded by the Court below on this issue and we proceed on the assumption that the finding of the Court below on this issue is correct and that the plaintiff is the proprietress of the firm Hira Lal Jamna Prasad and is entitled to maintain this suit.
6. Although the finding on Issue 2 is against the contesting defendant, the Court below under this issue has also dealt with the question of the genuineness or otherwise of the promissory notes dated 29th May 1928 and 5th February 1930. The Court for the reasons given in its judgment held that the promissory notes were not genuine and were manufactured by Ramnath, defendant 1, to support the plaintiff. The respondent questioned the finding of the Court below and has filed a cross-objection under Order 41, Rule 22, challenging the conclusions of the learned Civil Judge on this point and on some other points which were decided against the plaintiff. We have no hesitation in holding that the learned Civil Judge has come to a right conclusion in holding that the promissory notes are not genuine and were not executed on the dates on which they purport to have been executed. The evidence produced by the plaintiff on this point is meagre and unreliable. (His Lordship then examined the evidence and proceeded.) The Court; below had the advantage of noticing the demeanour of these witnesses and has given reasons for rejecting their testimony. We see no reason to disagree with the learned Civil Judge in his estimate of the evidence of the plaintiff's witnesses. We are not particularly impressed with the evidence of the defendants' witnesses but we attach much importance to the circumstances enumerated by the Court below against the genuineness of these promissory notes. It has been pointed out by the learned Civil Judge that the promissory notes were not noted down in the 'bahi khata' of the defendants' firm. Again there is no mention of the promissory notes in the list of debts which the defendant Ram Nath filed before the arbitrator who was appointed by the two defendants for the partition of the estate between them. In the aforesaid list Ram Nath did mention the debts due to the plaintiff, but as the debts had merged in the promissory notes one would have expected that the promissory notes or at least the second promissory note would have been specifically mentioned in the list. It is significant that both the promissory notes were written by the 'munib' of the defendants' firm. Bihari Lal who wrote one of the two promissory notes is dead and Gokul Chand who wrote the second promissory note is the maternal uncle's son of Ram Nath. It is proved beyond doubt that Ram Nath is siding with the plaintiff and has been living for some time with the plaintiff. If the pedigree attached to the plaint is complete, Ram Nath would be the next reversioner to the estate which is in possession of the plaintiff at present. It is therefore suggested with considerable force that Ram Nath manufactured these promissory notes in his own interest to meet the plea of limitation that might be raised by the contesting defendant. Taking all the circumstances into consideration we think that the promissory notes are antedated and were not executed in the manner alleged on behalf of the plaintiff. We agree with the conclusions of the learned Civil Judge on this point.
7. It is then urged that the plaintiff's suit being on the basis of the promissory notes which are held to be fictitious the plaintiff should not have been allowed to fall back upon the original debt to be proved by the "bahi khata" account and at least the plaintiff should have been called upon to amend the plaint to enable the contesting defendant to meet the allegations of the plaintiff. In support of this contention reliance has been placed on Ravjibhai Natha Bhai v. Ranchhod Raghunath (1930) 17 A.I.R. Bom. 66. In this case a learned single Judge observed that where there has been material alteration in the document the further questions for the consideration of the Court are whether the alteration is fraudulent or innocent and whether the plaint is or can also be based on the original loan itself and evidence which exists aliunde. Where alteration is fraudulent the Court will not allow the plaint to be amended and the plaintiff to fall back on the original cause of action. It is true that in the present case we have held that the promissory notes were manufactured and are not genuine documents but we are not sure that the plaintiff was fully cognizant of this fact. It is admitted that the plaintiff is a pardanashin lady of mature age and it is proved that Ram Nath is the person who has been running the case on her behalf. We do not think that under the circumstances it will be fair and just to hold that the plaintiff is responsible for the production of the promissory notes in suit. It has never been disputed that the defendants did owe money to the plaintiff. The only question is whether the claim is time-barred. We have examined the plaint carefully and we find that all the facts necessary for the disposal of the suit are fully stated in the plaint and that the defendant had full opportunity of meeting the allegations of the plaintiff. The plea of limitation would be redundant if the promissory notes in suit were genuine and the bar of limitation has been pleaded merely to meet the alternative case of the plaintiff which is based on the original loan. In the ruling cited above the learned Judge has further observed that where the alteration though material is innocent and the plaint is based on the original cause of action as well as on the document altered, the claim if properly proved can be allowed on the original cause of action. In our judgment the learned Judge was justified in permitting the plaintiff to base her claim on the original cause of action : Gopala Padyachi v. Raja Gopala Naidu (1926) 13 A.I.R. Mad. 1148 at p. 76, Jagan Prasad v. Indermal (1914) 1 A.I.R. All. 25 and Nazir Khan v. Ram Mohan Lal (1931) 18 A.I.R. All. 183. It may be noted that the original transaction of loan was antecedent in fact as well as in time to the promissory notes in suit. The transaction being truly independent and not a part of the transaction of the promissory note can be the basis of the present suit although the promissory note itself has been held to be unenforceable. In Nazir Khan v. Ram Mohan Lal (1931) 18 A.I.R. All. 183 this question has been discussed at length and all the authorities on the question have been reviewed. It would not be possible for the plaintiff to maintain this suit if the money had been advanced on the basis of the promissory notes which were held to be fictitious. The plaintiff never alleged that there was any transaction of loan at the time of the execution of the promissory note. All that was alleged was that the amount that was found due on previous transactions was totalled up and a promissory note was executed for that amount. We therefore hold that the plaintiff is fully entitled to fall back upon the original loan.
8. The main question that has been argued at some length by learned Counsel for the appellant is that the suit is barred by limitation. It is contended that the period of limitation began to run from 31st March 1929 when the accounts were stated and that Article 64, Lim. Act applied to the suit. In our judgment the contention is untenable. The accounts are alleged to have been examined on 31st March 1928 and again on 31st March 1929 but neither of the defendants signed the account books. A mere statement of the balance which is due on a particular date cannot be called an account stated within this Article. It is admitted that the annual accounts between the parties were drawn up at the end of every year. The amount that was found due was carried forward to the next year and fresh transactions were noted down during the year. This practice prevailed throughout the period the parties had dealings with each other. Nothing unusual seems to have been done either on 31st March 1928 or 31st March 1929. The Court below upon an examination of the transactions between the parties came to the conclusion that the suit was goverend by Article 85, Lim. Act and that the parties had a mutual open and current account with each other. Prom the tabular statement prepared by the learned Civil Judge printed on p. 216 of our paper book the opinion of the learned Civil Judge is fully confirmed. It appears that the defendants' firm was a debtor to the plaintiff in 1894. Prom 1901 to 5th January 1910 the defendants' firm was a creditor. From 9th July 1910 up to 24th September 1917 the defendants' firm was indebted to the firm of the plaintiff. In 1917 again the defendants' firm became a creditor and continued as such till 14th February 1919. From 31st March 1919 onward the balance was always against the firm of the defendants. To constitute a mutual account there must be transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side only. The former is the case here. For, an account to be called a mutual account there must be mutual dealings in the sense that both parties come under mutual liability to each other. In order to bring the case under Article 64, there should be something in the nature of a fresh contract. In Jwala Das v. Hukum Chand (1922) 9 A.I.R. Lah. 316 the plaintiffs had sued to recover the balance due on cross transactions in which each side supplied the other with goods in kind. There were mutual dealings although balances were struck from time to time. These were merely acknowledgments and not an agreement to pay. On these facts the learned Judges held as follows:
The case is one not of stated account but of a mutual open and current account where there had been reciprocal demands between the parties. The mere fact that the plaintiffs have allowed a considerable time to elapse before suing cannot in any way change the nature of the account nor can it be held that an account becomes closed whenever a balance is struok.
9. In the present case the account was never closed and it is admitted that after the annual balance was struck in 1929 the parties continued to deal with each other on the old footing. In Chitarmal v. Bihari Lal (1910) 32 All. 11 it was held that a mutual account within the meaning of Article 85 of Schedule 2, Lim. Act, 1877, is an account of dealings between the two parties which are such as to create independent obligations in favour of one party against the other. In that case the learned Judges considered a large number of rulings on the subject. In the present case there is not the least doubt that independent obligations were created between the parties and the fact that during the last few years the balance was always in favour of one party will not take the transaction out of the category of Article 85, Lim. Act. Learned Counsellor the appellant has cited a ruling of their Lordships of the Privy Council, Bishan Chand v. Girdhari Lal (1934) 21 A.I.R. P.C. 147 In that case the plaintiffs were money-lenders and had been lending money to the defendants for 25 years. On a date within three years of the institution of the suit an account between the parties was taken, a balance was struck and was signed by the defendants. The question was whether the suit was barred by limitation or not. On behalf of the appellant it was pleaded that the case was governed by Article 64, Lim. Act, and that a fresh contract was created on the date the accounts were stated and signed. The plaintiff could therefore bring the suit on the basis of the accounts stated irrespective of the fact that some of the transactions constituting the balance were beyond three years. The contention found favour with their Lordships and it was held that the suit was within time. A perusal of the ruling will show that it was not a case under Article 85, I Lim. Act. The observations of their Lordships do not support the contention of learned Counsel for the appellant that on 31st March 1929 the accounts ceased to be mutual, open and current within the meaning of Article 85, Lim. Act, merely because a balance was struck on that date. The next case cited is Kesho Prasad Singh v. Sarwan Lal (1917) 4 A.I.R. Cal. 156. This was also a case under Article 64, Lim. Act. In this case it was held as follows:
Where the accounts of an agent have been taken and adjusted and a specific sum has been found due from the agent to the principal, the principal becomes entitled to sue forthwith for its recovery and the question is not altered even if the agent continues thereafter to hold his office as agent of that principal. A suit of this description falls under Article 64 or Article 115.
10. We do not find anything in this case which lends support to the contention of learned Counsel for the appellant. We have given our serious consideration to the argument of learned Counsel for the appellant and we have no reason to hold that the learned Civil Judge has come to a wrong conclusion. In our judgment the claim is not barred by time. We therefore maintain the decree of the Court below and dismiss the appeal with costs.
11. Learned Counsel for the respondents has pressed ground No. 2 of his grounds of objections and has urged that the decree passed by the learned Civil Judge that each of the defendants shall be liable under the decree to the extent of half and half is erroneous in law. It is contended that the plaintiff is entitled to a joint decree against both the defendants. We do not agree with this contention. It is admitted that the defendants have separated from each other. We have already held that Ram Nath, defendant 1, is siding with the plaintiff. There is ample evidence on the record to show that the two defendants are not on the best of terms. To avoid future litigation it is desirable that the liability of the two defendants should be separated. In our judgment, the Court below was fully justified in the circumstances of this case to have separated the liabilities of the two defendants. We see no reason to interfere with the decree of the Court below. The cross-objection is accordingly dismissed with costs.
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Gopi Nath vs Srimati Chameli And Anr.


High Court Of Judicature at Allahabad

06 May, 1938