Jairam Son Of Govind Vyawahare vs Shri Vithal Son Of Piraji Patil
2003 Latest Caselaw 964 Bom

JUDGMENT

S.T. Kharche, J.

1. This Second Appeal arises out of judgment and decree passed by the Additional District Judge, Yavatmal in Civil Appeal No. 84 of 1985, setting aside the judgment and decree passed by the trial Court in Regular Civil Suit No. 15 of 1982. The trial Court had granted decree and directed the defendant to pay Rs.4010/- to the appellant / plaintiff with interest @ 12% p.a. from the date of the suit till realisation, with costs. The Appellate Court allowed the appeal and dismissed the suit.

2. Brief facts are as under :

The plaintiff is the owner of the cloth shop in the name of "Jairam Govind Vyawahare Cloth Business" in Pusad. The defendant had kept account with that shop and purchased cloth on credit since the year 1974. It is the case of the plaintiff that, at the end of the year 1978-79, amount of Rs. 2374/- was outstanding. The defendant on 09.03.1979 had acknowledged debt which was outstanding against him as per the entries made in the books of account, by executing a receipt (Exh.25), and also on the same day he purchased cloth worth Rs. 1640/- on credit, and therefore, the total outstanding balance was to the tune of Rs. 4000/- in the year 1979. Then the defendant had taken Rs. 110/- on 17.11.1979, he paid Rs. 100/- and, therefore, the total outstanding amount was Rs.5740/-. The suit was filed on 04.02.1982 for recovery of the said amount remained unpaid.

3. The defendant combated the claim and contended that the suit is hopelessly barred by period of limitation. Alternatively he contended that there was no agreement to pay interest, and therefore the suit is liable to be dismissed. The learned trial Court on appreciation of evidence, granted decree and directed the defendant to pay Rs.4010/- with interest @ Rs.12% p.a. from the date of the suit till realisation with costs.

4.Being aggrieved by this judgment and decree the defendant had carried the appeal to District Court. The Appellate Court on appreciation of evidence on hearing the learned Counsel had arrived at the conclusion that the document Exh.25, was in the nature of a letter, and not an acknowledgment of debt and consequently, it would not extend the period of limitation within the meaning of Section 18 of the Limitation Act, 1963 (hereinafter for short referred to as Limitation Act). He further held that though the extract of account Exh.26 to 29 are relied on by the plaintiff, the entries in the account books alone are not sufficient to fasten the defendant with the liability. He also recorded a finding that there was no contract between the parties regarding payment of interest. Consistent with these finding, he allowed the appeal and dismissed the suit by setting aside the judgment and decree passed by the trial Court. The original plaintiff has come up before this Court in the Second Appeal.

5. While admitting the appeal on 27.02.1989, the substantial question of law was not framed, and therefore on hearing Mr. Deshpande, the learned Counsel for appellant / plaintiff this Court has formulated the substantial question of law as under :

"Whether the document Exh.25, was in the nature of acknowledgment within the meaning of Section 18 of the Limitation Act, and Whether the entries in the books of accounts maintained regularly during the course of business can be relied on as a relevant circumstance to fix the liability on the defendant."

6. Mr. Deshpande, the learned Counsel for the plaintiff contended that the Appellate Court has wrongly considered the acknowledgment Exh.25, as a letter though it is an acknowledgment of debt within the meaning of Section 18 of the Limitation Act. He contended that the defendant acknowledged the previous debt outstanding against him by virtue of the acknowledgment dt. 09.03.1979 and the suit was filed on 04.02.1982, and therefore, the suit was perfectly within the period of limitation.

7. The second limb of the argument of Mr. Deshpande, is that the entries were made in the books of account which were regularly maintained during the course of the business by the plaintiff, and those entries are relevant and since there is acknowledgment by the defendant of the outstanding dues, the Appellate Court has committed an error of law by not appreciating the evidence in its correct perspective. He contended that the trial Court was perfectly justified in granting decree for the recovery of Rs. 4010/- with interest as mentioned above. He therefore, contended that the impugned judgment and decree passed by the Appellate Court cannot be sustained in law.

8. None present for defendant though served.

9. I have carefully considered the contentions canvased by Mr. Deshpande, the learned Counsel for the plaintiff. In order to appreciate his contentions, it is necessary to reproduce Section 18 of the Limitation Act :

"Effect of acknowledgment in writing -

(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

Explanation -- For the purpose of this Section,--

(a)an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off or is addressed to a person other than a person entitled to the property or right;

(b)the word "signed" means signed either personally or by an agent duly authorised in this behalf; and

(c)an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right."

10. Bare reading of the aforesaid provision of law, would reveal that if a debtor acknowledges the dues in writing signed by him, then the period of limitation would be computed from the date of acknowledgment. In the present case, it is obvious that Exh.25 is dated 09.03.1979 and evidence on record would clearly indicate that the defendant had signed the said acknowledgment on that date and also paid Rs. 14/- to the plaintiff and also purchased the cloth worth Rs.1640/- on the same day. By no stretch of imagination it could be said that the document was in the nature of a letter written by the plaintiff to the defendant.

11. Bare reading of the contents of the acknowledgment, would reveal that the defendant in so many words has stated in the acknowledgment that the amount of Rs. 2360/- was outstanding against him on 09.03.1979, and he admitted his liability. Not only that he also credited Rs.14/- in his account on the same day and executed acknowledgment in writing. This acknowledgment is not in the nature of a letter, it is a duplicate copy of the receipt. It is pertinent to note that what ever is mentioned in the acknowledgment is supported by the entries recorded in the books of accounts which were regularly kept during the course of the business and as such are admissible in evidence.

12. It is necessary to reproduce Section 34 of the Indian Evidence Act, which contemplates that :

"Entries in books of account when relevant -- Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has inquire but such statements shall not alone be sufficient evidence to charge any person with liability."

13. It is obvious that entries in the books of account regularly kept in the course of business are relevant and, though the entries alone are not sufficient to charge any person with the liability, if there is a cogent and reliable evidence to show the genuineness of the accounts, then the liability can be fasten on the defendant.

14. In the present case, the defendant did not dispute the genuineness of the entries recorded in the books of accounts, which were kept by the plaintiff in the regular course of his business, and therefore, those entries would be relevant to charge him with the liability. He did not adduce any evidence to show that he did not purchase the cloth on credit from the shop of the plaintiff since the year 1974, and that he did not acknowledge the outstanding amount as on 09.03.1979. He simply denied each and every transaction and has come with a case that a false suit has been filed against him. Such a defence cannot be accepted.

15. The Appellate Court has apparently committed an error of law by not relying on the acknowledgment Exh.25, as well as the entries recorded in the books of accounts. He has observed in para no.9, that, "The plaintiff stated on oath that the defendant on 9th March, 1979 purchased from his shop the cloth worth Rs.1640/- on credit. It is highly improbable that the plaintiff would allow the defendant to purchase the cloth worth Rs. 1640/- on 09.03.1979, when the amount of Rs. 2360/- was already outstanding against him. It is no doubt true that the plaintiff has relied on extract of ledger at Exhs. 26 and 27 and extract of cashbook at Exhs. 28 and 29. The plaintiff has also stated that he maintains the accounts in the regular course of business, however, mere entries in the account books are not sufficient to fasten the defendant with any liability, unless there are other documents to support the claim of the plaintiff. The plaintiff has not filed on record any copy of bill to show that on 9.3.1979 the defendant purchased cloth worth Rs. 1640/- from his shop." This observation of the Appellate Court is based on conjectures and surmises because, the probabilities is not to be taken into consideration, especially when there is a documentary evidence available on record in the nature of the acknowledgment and the entries in the books of account regularly kept during the course of business by the plaintiff.

16. Once it is held that the defendant has acknowledged the dues of the plaintiff on 09.03.1979, then as per Article 14 and 26 of the Schedule of the Indian Limitation Act, 1963 the suit filed on 04.02.1982 within 3 years would be perfectly within limitation and there is a substance in the contention of the learned Counsel for the plaintiff.

17. Mr. Deshpande, contended that there was oral agreement to charge interest @ 1.50% p.m., on the unpaid price of the goods, and therefore, the interest may be awarded from the date of the acknowledgment of debt. This contention is required to be rejected in view of the fact that grant of interest is a discretionary relief. Admittedly, there was no written contract between the parties regarding the payment of interest. The trial Court has exercised his discretion in a judicious manner while awarding interest @ 12% p.a., and therefore, I am of the considered view that so far as grant of interest is concerned no interference into the same is warranted.

18. In such circumstances, the impugned judgment and decree passed by the Appellate Court cannot be sustained in law and deserves to be set aside, and is set aside and the judgment and decree passed by the trial Court is restored. Appeal is allowed. No costs in the circumstance.