Thuppati Veeri Chetti and Others vs Moluguvam Renganayakulu Aiyar 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

accounts 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 showed that the balances were constantly shifting, sometimes in favour of one party and

sometimes 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 payment by one party to the other on account of a debt due by the former to the latter. See Shiv

Gowda v. Fernandaz 8 M.L.T. 412 : 8 Ind. Cas. 141 and Velu Pillai v. Ghose Mahomed 4 M.L.J. 140. The fact that the 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 lower Appellate Court and remand the appeal for fresh disposal according to law. Costs will abide the result.