PETITIONER:
HIRALAL AND OTHERS
Vs.
RESPONDENT:
BADKULAL AND OTHERS.
DATE OF JUDGMENT:
12/03/1953
BENCH:
MAHAJAN, MEHR CHAND
BENCH:
MAHAJAN, MEHR CHAND
BHAGWATI, NATWARLAL H.
CITATION:
1953 AIR 225 1953 SCR 758
CITATOR INFO :
R 1961 SC1316 (7)
ACT:
Acknowledgment- Whether gives fresh cause of action-Practice
-Party in possession of documentary evidence-Duty produce.
HEADNOTE:
Where the defendants who had dealings with the
plaintiffs for several years signed the following entry in
the plaintiffs' account book underneath the earlier entries:
"After adjusting the accounts Rs. 34,000 found correct
payable
Held, that this amounted to an unqualified acknowledgment
of liability to pay and implied a promise to pay and could
be made the basis of the suit and gave rise to a fresh cause
of action.
Maniram v. Seth Rup Chand (33 I.A. 165), Fateh Chand v.
Ganga Singh (I.L.R. 10 Lah. 745) and Kahan Chand Dularam v.
Dayalal Amritlal (I.L.R. 10 Lah. 748) relied on. Ghulam
Murtuza v. Fasihunnissa (I.L.R. 57 All. 434) overruled.
It is not a sound practice for those desiring to rely
upon a certain state of facts to withhold from the court
written evidence which is in their possession which could
throw light upon the issues in controversy and to rely upon
the mere doctrine of onus of proof.
Murugesam Pillai v. Manickavasaka Pandara (44 I.A. 99)
referred to.
759
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 168 of 1952.
Appeal from a Judgment and Decree dated 23rd July, 1951,
of the Court of the Judicial Commissioner, Vindhya Pradesh,
in Civil First Appeal No. 26 of 1951 arising out of the
Judgment and Decree dated 14th March, 1951, of the Court of
the District Judge, Umaria, in Case No. 32 of 1951.
N. S. Bindra (S. L. Chhibber, with him) for the
appellants.
S. P. Sinha (K. B. Asthana, with him) for the
respondents.
1953. March 12. The Judgment of the Court was delivered
by
MAHAJAN J.-The suit out of which this appeal arises was
instituted by the plaintiff-respondents in the court of the
district judge of Umaria, for recovery of Rs. 34,000
principal, and Rs. 2,626 interest, due on foot of mutual
dealings. The suit was dismissed by the district judge but
was decreed on appeal by the Judicial Commissioner of
Vindhya Pradesh. A certificate for leave to appeal to this
Court was granted as the case fulfilled all the conditions
and requirements in force relating to appeals to the Supreme
Court.
The defendants did not admit the claim and it was pleaded
that no accounts were explained to them when the signatures
of Bhaiyalal and Hiralal were obtained in the plaintiffs’
ledger on 3rd September, 1949, acknowledging the suit amount
as due from them. It was further pleaded that no suit could
be based merely on an acknowledgment of the debt. In para-
graph 4 of the written statement it was alleged that the
plaintiff No. 2 Dipchand having threatened to bring a suit
against defendants I and 2 whose financial position was bad
and having represented that plaintiff No. 1 Badkulal would
be angry and abuse plaintiff No. 2, and having assured on
oath by placing his hand on a deity in a temple that no suit
shall be
760
brought, and that amount of interest would be reduced asked
defendants 1 and 2 to sign the khata, who signed the same
without going through the accounts, on the faith of these
statements made by Dipchand and that the defendants were not
bound by these signatures. In paragraph 9 of the written
statement it was alleged that in fact Rs. 15,000 or 16,000
as principal sum were due to plaintiffs from defendants but
the suit had been filed for a much larger sum than due.
Issue I framed by the district judge was in these terms : ”
Did the defendants Hiralal and Bhaiyala I sign on Bhadon
Sudi 11 Samvat 2006 in the capacity of manager and head of
the family, on the khata of, the plaintiffs after
understanding the debit and credit accounts and accepting
Rs. 34,000 as the correct balance due to the plaintiffs.”
It would have been more correct had a separate issue been
framed on the two points compositely mentioned in this
issue. Be that as it may, the form in which the issue was
framed is not material for the decision of the appeal.
Issue 7 was in these terms :
” Did the plaintiff Dipchand obtain the signature of
defendants 1 and 2, in their bahi under the threat of
instituting a suit and giving the assurance of the suit
being not filed and leaving the interest which is incorrect
and very much exaggerated, by saying that Badkulal shall be
very angry with him…”.
The frame of the issue shows that the learned judge at
this stage made no effort to ascertain or apprehend the
nature of the plea taken in the written statement. He seems
to have acted more as an automaton than as a judge in the
discharge of his responsible duties. Before framing an
issue like this it was his duty to examine the parties and
to find out the precise nature of the plea involved within
these facts ; in other words, whether the defendants wished
to plead in defence fraud, coercion, undue influence or a
mistake of fact entitling them to reopen the accounts. Mr.
Bindra for the appellants was unable to tell us
761
what real plea was involved in the facts stated under this
issue.
The manner in which the learned judge dealt with this
issue lends support to our view that he did not at all
apprehend what he had to decide. It was held that the
defendants did not sign the entry after understanding,
settling, and adjusting of the accounts, but that plaintiff
Dipchand obtained their signatures without explaining the
accounts to them.
The fact that the entry was signed by both the defendants
who represented their family was not denied. Hiralal,
defendant, in the witness box admitted that the defendants
deal in gold, silver and kirana and maintain regular books
of account. It was also admitted that two or three muneems
are in their employ for maintaining regular books of the
business dealings. Hiralal was questioned ” How much money
was due from the defendants-firm to the plaintiffs” He
couldn’t firm?”. The answer was evasive, viz., say how much
was due”. When questioned about his accounts, he replied
that he had not filed them as he was ill. He further
deposed that he had looked into his accounts and Rs. 10,000
to Rs. 15,000 as principal and interest were due but he
could not say what was the correct amount. When asked
whether on the date of signing the acknowledgment he looked
into the books to see what amount was due from him, his
answer was in the negative. He further said that even after
receiving notice he did not look into his own accounts to
check as to what the correct balance was. A leading
question was put to him Whether on Bhadon Sudi 11 Samvat
2006 there Was an entry of Rs. 34,000 in the defendants’
khata as being the balance due from them to the plaintiffs.
The answer was again evasive. He said ” I could not say
whether there was any such entry in his books.” In these
circumstances there was no justification for throwing out
the plaintiffs’ suit on the ground that the accounts were
not explained to the defendants by the plaintiffs. The
defendants had written the accounts in their own books from
which the true balance could
762
be ascertained. An inference from the statement of Hiralal
can easily be raised that the balance entry of Rs. 34,000
also existed in his own books. Mr. Bindra tried to get out
of this situation by urging that it was no part of the
defendants’ duty to produce the books unless they were
called upon to do so and the onus rested on the plaintiffs
to prove their case. This argument has to be negatived in
view of the observations of their Lordships of the Privy
Council in Murugesam Pillai v. Manickavasaka Pandara(1),
which appositely apply here. This is what their Lordships
observed:
“A practice has grown up in Indian procedure of those in
possession of important documents or information lying by,
trusting to the abstract doctrine of the onus of proof, and
failing, accordingly, to furnish to the courts the best
material for its decision. With regard to third parties
this may be right enough they have no responsibility for the
conduct of the suit; but with regard to the parties to the
suit it is, in their Lordships’ opinion, an inversion of
sound practice for those desiring to rely upon a certain
state of facts to withhold from the court the written
evidence in their possession which would throw light upon
the proposition.”
This rule was again reiterated in Rameshwar Singh v. Rajit
Lal Pathak(2).
On the evidence of the parties it is clear that both
parties are businessmen and each party has been maintaining
accounts of their mutual dealings, and they met on 3rd
September and in the plaintiffs’ book the defendants signed
an entry on page 58 of the ledger which runs thus: –
“ Rs. 34,000 balance due to be received up to Bhadon Sudi
11 Samvat 2006 made by check and understanding of accounts
with Hiralalji’s books.”
This acknowledgment was made below a number of entries
made in this khats, on the credit and debit side and the
mutual dealings had continued since
(1) (1917) 44 I-A. 99. (2) A.I.R. 1929 P.C. 95,
763
several years. The acknowledgment is signed by Hiralal and
Bhaiyalal, with the following endorsement:
“After adjusting the accounts Rs. 34,000 found correct
payable.”
In these circumstances we are not able to understand the
view of the district judge that it was not proved that the
accounts were explained to the defendants by Dipchand. It
was unnecessary to do so because the defendants themselves
were keeping accounts and they would not have signed the
balance for Rs. 34,000 with the endorsement above cited,
without reference to their own books or in the manner
suggested in the written statement. Plaintiff Dipchand in
the witness box supported the plaintiffs’ case as laid in
the plaint. He deposed that ” This accounting was done by
my muneem Puranlal and Ram Prasad, muneem of
Hiralal………… Muneems explained and Hiralal signed
after understanding it.” In cross-examination he said that
muneems were checking the accounts and when both the muneems
said that so much was the balance, Hiralal then signed and
that Hiralal and Bhaiyalal themselves did not check any
account. The learned district judge and Mr. Bindra
criticized the evidence of this witness and it was urged
that he had made false and highly improbable statements with
regard to the manner and circumstances in which the entry
was signed. The discrepancies in the statement relate to
matters of no consequence. In our opinion, his evidence
along with the entry was sufficient to hold the plaintiffs’
case proved when the best evidence of their own books to
disprove the plaintiffs’ case had been withheld by the
defendants. No satisfactory explanation had been given for
the non-production of the defendants’ books, and the
evidence given by Hiralal does not do much credit to him.
Mr. Bindra contended that it should have been held that
Bhaiyalal did not sign at the same time when the entry was
written but he signed later on. On this point Hiralal
deposed that when be signed Bhaiyalal
99
764
was not present, that he signed afterwards, that Kulai
muneem came with, the bahi saying that Badkulal and Dipchand
had quarrelled among themselves that there should also be
the signature of Bhaiyalal, that Bhaiyalal questioned him as
to why the witness had signed, that he replied that Dipchand
had told him after pointing his hand towards God that he
would take no action so long as he lived, so he did not
check, nor any one explained him the accounts, that on this
he asked Bhaiyalal to sign and on his asking he signed. It
was for Bhaiyalal to explain his signature by going into the
witness box but he did not give evidence in the case and
there is no explanation why he did not do so. Mr. Bindra’s
contention therefore that it should be held that Bhaiyalal
was not present when the acknowledgment was signed cannot be
sustained.
The defendants tried to support their case by the statements
of Kulai Prasad, muneem, and the other two muneems Ram
Prasad and Puranlal. So far as Kulai Prasad is concerned,
he was in the plaintiffs’ service and was dismissed by
Badkulal, plaintiff, on 31st March, 1950. Much reliance
cannot be placed on the statement of a dismissed and
disgruntled employee. He stated that Hiralal was not made
to understand any accounts and Dipchand assured him on oath
that he would raise no trouble during his life and asked
Hiralal to sign and that Bhaiyalal signed on a different
date. This evidence is of a partisan character and no
reliance can be placed on it.
Rain Prasad stated that he did not check the accounts of the
plaintiffs from Bhadon Samvat 2006 and that Hiralal did not
sign in his presence. In cross-examination he admitted that
there were mutual dealings between the parties and that
Hiralal might have signed after accounting was done. He
pretended ignorance of what happened on Bhadon Samvat 2006.
As regards Puranlal, he stated that after looking into the
accounts and after mutual talk, Exhibit P-1
765
was written on Dip Chand’s asking, that accounts might have
been told by Dipchand on the basis of the statement which he
had with him, that no accounts were explained. He further
stated that Hiralal said to Dipchand “Please see me”, on
which Dipchand replied after raising his hand towards the
temple ” I shall not do anything unfair in my lifetime.” In
cross-examination he admitted that the words ” signed Bhurey
Naik Raghunandan Prasad Bakalam Hira Lal “, and the words ”
after adjusting the accounts Rs. 34,000 found correctly
payable signed Hiralal ” were written by Hiralal himself.
It was further elicited in cross-examination that the
witness had forged a receipt and for forging that receipt he
was sentenced to one year’s imprisonment in a criminal case
started by Badkulal, plaintiffs This evidence therefore is
not of much consequence in this case.
In these circumstances we are satisfied that the district
judge not only approached the decision of the case from an
erroneous point of view but he also incorrectly appreciated
the material on the record. The learned Judicial
Commissioner was therefore perfectly justified in reversing
his decision and. in holding that on 3rd September, 1949,
there was an adjustment of accounts actually done by the
muneems and accepted by the principals and the story of
coercion and misrepresentation was false.
Mr. Bindra next urged that the plaintiff’s suit should
have been dismissed because it could not be maintained
merely on the basis of an acknowledgment of liability, that
such an acknowledgment could only save limitation but could
not furnish a cause of action on which a suit could be
maintained. The Judicial Commissioner took the view that an
unqualified acknowledgment like the one in the suit, and the
statement of the account under which the entry had been
made, were sufficient to furnish a cause of action to the
plaintiffs for maintaining the present suit. We are
satisfied that no exception can be taken to this conclusion.
It was held by the Privy Council in
766
Maniram v. Seth Rupchand(1), that an unconditional
acknowledgment implies a promise to ‘pay because that is the
natural inference if nothing is said to the contrary. It is
what every honest man would mean to do. In Fateh Chand v.
Ganga Singh(2) the same view was taken. It was held that a
suit on the basis of a balance was competent. In Kahanchand
Dularam v. Dayaram Amritlal(3) the same view was expressed
and it Was observed that the three expressions “balance due
“, ” account adjusted ” and “balance struck” must mean that
the parties had been through the account. The defendant
there accepted the statement of account contained in the
plaintiff’s account book, and made it his own by signing it
and it thus amounted to an ” accounts stated between them ”
in the language of article 64 of the Limitation Act. The
same happened in the present case. The acknowledgment which
forms the basis of the suit was made in the ledger of the
plaintiffs in which earlier mutual accounts had been entered
and truly speaking, the suit was not based merely on this
acknowledgment but was based on the mutual dealings and the
accounts stated between them and was thus clearly
maintainable.
Mr. Bindra drew our attention to a decision of the Allahabad
High Court in Ghulam Murtuza v. Fasihunnissa(4) , wherein it
was held that even if an acknowledgment implies a promise to
pay it cannot be made the basis of suit and treated as
giving rise to a fresh cause of action. We have examined
the decision and we are satisfied that it does not lay down
good law.
For the reasons stated above this appeal has no merits and
we accordingly dismiss it with costs.
Appeal dismissed’.
Agent for the appellants: Govind Saran Singh.,
Agent for the respondents : A. D. Mathur.
CO 2,0.3
(i) (1906) 33 I.A. 165.
(2) (1929) I.L.R. Io Lab- 748.
(3) (1929) I.L.R. to Lah. 745.
(4) (1935) I.L.R. 57 All- 434.
767