Kanchipati Ramunaidu vs Sri Srinivas Cloth Emporium

C.V.N. Sastri, J.—This revision by the defendant in a small cause suit is directed against the decree granted by the lower Court against him. The respondent filed the small cause suit out of which this revision arises for recovery of a sum of Rs. 2,242-80, being the principal and interest due on katha from the defendant. According to the plaintiff, the defendant opened a Katha account with the plaintiff-firm and purchased cloth on credit from time to time. By 23-6-1986 a sum of Rs. 1,752-40 was found due to the plaintiff as per the Katha account after giving credit to the sum of Rs. 1,000/- paid by the defendant on the said date. As the defendant failed to repay the amount due in spite of lawyer''s notice dated 18-3-1987 got issued by the plaintiff to the defendant, the plaintiff laid the suit on 29-9-1988 for recovery of the amount due. In the written statement filed by him, the defendant, while admitting the katha dealings, however, disputed the alleged part-payment of Rs. 1,000/-and pleaded that the suit is barred by limitation. On a consideration of the oral and documentary evidence adduced in the case, the trial Court held that the suit Katha is true, that the part-payment of Rs. 1,000/- on 23-6-1986 pleaded by the plaintiff is true and the same saves the suit claim from the bar of limitation. Accordingly the lower court decreed the suit with costs for a sum of Rs. 2,242-80 with subsequent interest at 6% per annum on Rs. 1,752-40 from the date of the suit till the date of realisation. Hence this revision by the defendant in the suit.

The only question raised in this revision is whether the suit is barred by limitation?

The learned counsel for the petitioner has contended that even assuming that the alleged part-payment of Rs. 1,000/- said to have been made by the defendant on 23-6-1986 is true, the suit is clearly barred by time as there is no acknowledgment of the said payment either in the hand-writing or in writing signed by the defendant as required under the proviso to Section 19 of the Limitation Act. In support of the above contention, the learned counsel for the petitioner-defendant has relied upon two judgments of this Court in Syed Jalaluddin Hasan Quadri Vs. Tarapharmacy, and K. Suryanarayana v. State Bank of India 1988 (2) ALT 833.

On the other hand, the learned counsel for the respondent-plaintiff has contended that as the payment of Rs. 1,000/-, which is found to be true by the lower Court, was made on 23-6-1986 and as the suit was filed on 29-9-1988 within three years from the date of payment, the suit is well within time. The learned counsel for the respondent-plaintiff further contends that the Katha in question is a mutual current and open account and that as the last entry in the suit Katha was on 23-6-1986, the suit is in time.

It is not in dispute that though the alleged payment of Rs. 1,000/- on acknowledged in the hand-writing of or in a writing signed by the defendant. Section 19 of the Limitation Act lays down that,

"Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the hand-writing of, or in a writing signed by, the person making the payment."

It is, therefore, clear from the proviso to Section 19 of the Limitation Act that in order to save the debt from limitation, there must be acknowledgment of the payment in the hand-writing of or in a writing signed by the person making the payment. A mere entry in the account book of the creditor, which is not in the hand-writing of the debtor or which is not signed by the debtor, cannot save the claim from limitation. The two decisions referred to above cited by the learned counsel for the petitioner are directly in point. In the light of the proviso to Section 19 of the Limitation Act and the two judgments cited by the learned counsel for the petitioner, I have no hesitation in holding that the alleged payment of Rs. 1,000/ - even if true, cannot save the suit claim from the bar of limitation. In the instant case, the last debit entry in the suit Kama is dated 27-3-1985 whereas the suit was filed on 29-9-1988 i.e., beyond three years. I cannot accept the submission of the learned counsel for the respondent-plaintiff that the suit Katha is a mutual, open and current account. Firstly there is no plea to that effect by the plaintiff. Secondly the suit Katha does not fulfil the requirements of mutual, open and current account. In The Hindustan Forest Company Vs. Lal Chand and Others, the Supreme Court has considered the test applicable to a mutual, open and current account within the meaning of Article 85 of the Indian Limitation Act 1908 which corresponds to Article 1 of the Limitation Act of 1963 and held that a mutual account involving reciprocal demands requires transactions on each side creating independent obligations on the other. Admittedly in the present case there are no such reciprocal demands or shifting balances. It cannot, therefore, be said that the suit Katha is a mutual, open and current account.

For the aforesaid reasons, the C.R.P. is allowed and the judgment and decree of the lower Court are set aside and the small cause suit S.C.No. 75 of 1988 on the file of the Court of Subordinate Judge, Chodavaram, is dismissed, However, there will be no order as to costs.