Thuppati Veera Chetti and Another vs Rengacharlu and Another

This appeal is by the defendants and the question argued is that the suit is barred by limitation as there were no mutual open and current account

between the parties. The District Munsif and the District Judge both held that there were such accounts between them. The District Munsif

proceeds mainly on the ground that the accounts shewed that the balances were constantly shifting, sometimes in favour of one party and some

times in that of the other. This is not the real test to be applied in deciding whether the accounts are mutual open and current. The test is whether

there were mutual demands and not mere payments by one party to the other on account of a debt due by the former to the latter--see Shiva

Gowda v. Fernandas ILR (1911) M. 513, Velu Pillai v. Ghose Mahomed ILR (1893) M. 293. The fact that balance was shifting between the

parties would no doubt be an important matter in considering whether there were mutual demands. As the Lower Courts seem to have proceeded

on the footing that it would be sufficient if the balance was a shifting one, we cannot accept the finding that the accounts between the parties were

mutual, open and current accounts. The question must be decided by applying the test we have already mentioned. We reverse the decree of the

Lowar Appellate Court and remand the appeal for fresh disposal according to law.

Costs will abide the result.