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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
ON THE 27*" DAY OF SEPTEMBER, 2010
BEFORE
THE HON'BLE MR. JUSTICE RAVI MALIM:}\T:i4{.i'g:'::Q:
REGULAR FIRST APPEAL NO.1AA186/2004-.~ .:(]V.|O'l:\:'l)=_ sf
BETWEEN:
Sri K.G.Hanumanthappa @
Kengo I-ianumanthappa
S/0 K.Dyamappa,
Aged about 65 years,
Agriculturist, _
R/0 Chikka Budihal Vi||age,I. ~
Davangere Taluk. _ "';'.-APPELLANT
(By Sri ;'Ka.nt"ijja .l§iéj'a, ».rgvoca':e;AAA
AND: . ', ._
M/s. Anaberu%Ra}an_na..V8z'S'6ns
A reg;:si:e.r.ed Pa»rtne'rshi'p Firm,
'~ Con§_rnissionve_ Agents...3a_.AMerchants,
Rep rese"nfted "by its Partner,
Sri 'N'.AM';RajaSh.ekharappa,
0-"Ni n'ga"p,pa , . V A
Aged' about eA6D'yea rs,
Hardeka.jr Manjappa Road,
'2__Davangere. ...RESPONDENT
A B.M.Siddappa, Advocate-absent)
**>i<*
This RFA filed under Section 96 of CPC against the
judgment and decree dated 27.8.2004 passed in
O.S.No.56/98 on the file of the I Addi. Civil Judge (Sr.Dn.),
r/Per
_2_
Davangere, partly decreeing the suit for recovery of
money.
This RFA coming on for hearing this day, theiioigrt
delivered the following:--
JUDGMENT
Aggrieved by the judgment
27.08.2004 passed by the I A.dd,_i.tionéa’l._Ci’vi| }L.id’ge.,(S}r.[‘§;n..’)i,
Davangere in 0.8.No.56/1998’=.._xdecreei’r’i~g:”thefiksuit for
recovery of money, tlieiii-‘.|eféAndiari’I:*.filed the present
appeal.
rank in’.,the_
The lease o:fV’v._th’e_splaintiff is that it is a registered
“V”«..,parvtn’ership..,_firm'”ca—-r-rying on the business of commission
defendant approached the plaintiff firm
for,_.’f’inanc’i’a!._assistance for the purpose of agricultural
‘*._operatio’n:s with an assurance that he would repay the said
after marketing the agriculture produce, which
was grown in his farm. Accordingly, between the periods
09.03.1994 to 17.03.1994 various sums were advanced to
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the defendant. As a consequence thereof, the defendant
opened a folio in the books of account of the piaintiff-firm
and the transactions continued. The accounts ma’i.nta.in.ed_,
by the piaintiff’s firm was a current, mutual ”
account. On 26.05.1995, 16.03.19’96″a«nd 25,,yo’6.719§s.Mthé,’ V’
defendant paid a sum of Rs.30,iOQO;’f’,’f
Rs.5,000/- respectiveiy. Inspi”te.”of repeated,,reqxu.es’tsand ”
demand made, the defen,dantAi’fai*I.e:d t’o.._payA’ the remaining
amount. On 25.06.1995, VVa.’su’rnjEo.€V” was due to
the piaintiff. Anotice was»’i_s«su’ed’~.f’seekirigid recovery of the
said at Rs.70,S0O/- and
interest @_ a.n”r.u__rn. amounting to Rs.61,238/–.
Since the said arnount paid, the present suit was
fiied_;seei,<ing.V 'r'ecoyery of a sum of Rs.1,31,738/- with
V,cuwrrent_;"'a.AndV%:future interest at the rate of 18% per annum
f'fr0'i7'n__Vytfh"e4.'d_ate~AV.fof"'the suit tili the date of reaiisation.
defendant entered appearance and denied the
,,.."'_s:.i,i:t""averments. He contended that the piaintiff is not
entitied for the said amount due to the fact that the suit
itself is barred by iimitation and hence the suit requires to
fir
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be rejected on that ground alone. That, even though the
alleged transaction has taken place in the month of EV’E’a.rch
1994, it is necessary that the plaintiff proves
every transaction claimed In the suit is within..:|iri5§_itation.’..:_’V’
Since the suit was filed in the x-feaVrl::A1’9.9’8_,
alleged transactions are within limitation._f;.§El’eric’e=-4.«’he'”–
pleaded for dismissal of the
The trial Court onilfrarnlrifg;si’xV.[V’:issu.,es, decreed the
suit of the plain_ti’ff__ hoitiiiin’g~t’iiat.tiie plaiiiiziilff is entitled for
an amount..alo.ngij;withmilnterest @ 6% per
annumgonthesamloitint'”of”P.s.?O’;5–O’t)/– from the date of the
suit till””.the_ rea|qisatiion…V_.V”iélggriheved by the judgment and
decree, the’p%reseVn’t is filed by the defendant.
_”:Sr_iv.Kantha Raja, the learned Counsel appearing
contends that the impugned judgment
and”‘–decree’:is bad in law. He contends that the reasoning
C of.-the trial Court is inadequate and hence interference is
“called for. Primarily, contentions were urged on Issue
“”l\lo.4 with regard to the limitation in filing the suit. He
contends that the trial Court committed an error in
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applying Article 1 of the Limitation Act to the suit on hand.
He submits that there is no mutual, open and current
account maintained between the parties in orcierwto :a’ttjr’axcvt.
Article 1 of the Limitation Act. He contends that .thV.e’t-ti-¢ai”‘_”r
Court should have applied Articie of LimliVta.tEon–Act’-as
to the facts and circumstances of the caste.
application of Articie 23 to the….’L:su.i»t on hand,j’v§.tVV’i”s>4’VeUident is
that the suit is barred Vhy…l_imit.at’i’o’nV..’i
4. In support ofshts relies on the
judgment repo.rtedd_in 1 in the case of
RAJU V.:Sf;”-I..§(U:”v#iRAMUTHU to contend
that rnere.Vs’triléing:”ot’:the balance of the parties, it
cannot be’lprirna_Vf’acAile_s made out, that the account is a
anVd’tcu-ri*ent account. The account may be
_cu~rren.t”an’d..’e£J:uaully it may be open, but unless it is mutual
it”=:eases.’to._ei5e a mutual, open and current account.
‘=.,Hence,~ he pleads that none of the ingredients with regard
“«.to.V_a””mutual, open and current account exists and hence
‘ the application of Artécle 1 of the Limitation Act is opposed
to the said citation. He further places reliance n the
%\r”””‘
.. 6 w.
judgment reported in AIR 1984 ORISSA 226 in the case
of ATTADI VENKETI VS. M/S.BHARATAM
AND sous wherein it was heid that Arucie_r..1ffbof-ibl’rheaat
Limitation Act appiies to a case where the
on a mutuai, open and current account t_a–nd-;wh”en ,there”’.
had been reciprocai demands _betwe’e__n:’th.e part_i’e’s;
instant case there is no recéprocai:’V”d.emand.inasrndchbwwaisbwbthe
payment has been made.V_A’oni’y””byV¢,,:t:ifé”-piaintéiff””an’d hence
the provision of Article the present
case on hand, and decree is
opposed to the said judgment.
appearing for the piaintiff
is absent. t_hVe._iea.rined Counsel appearing for the
V. _a p peiia. ntja n e§<a":"nin.ec!~ th e records.
' -.61.-v..,AqA'Thée'i.ssues framed for consideration by the triai
Court'*we»reé77with"regard to the maintainabiiity of the suit,
[the factuflna a loan being avaiied by the defendant from
'v~:the'ii'p.sIAaintiff partnership firm, the correctness of the
'"'~-___""i'."acVcounts maintained by the piaintiff's the
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entitlements of the plaintiff’s firm towards interest as
claimed and whether the suit is within limitation or4not.,€7.,_
7. It is contended by the iearnecl
appearing for the defendant that me ‘issue_ whethexrg
the suit was in time or not has beeri*.w:r’lo_nglyco,Ansi,dered”~by”.,
the trial Court. By placing.:’relianceV._on!thérflfindijngs ‘V
recorded on the said Issue No-.’4,:..”i:t. is-.c.ontended»-‘that the
judgment and decree fre’qaiires to be set
aside.
8. V”rio’.4, the trial Court
examined the tp’iea.d_I_’ngs’an’d..__evidence on record. Ex.P14 is
the ledgehextract lot’t,.he—gdefendant with regard to the
drawing” of a.Vch.,e_que {ride Ex.P~13. The trial Court on
te)<a.n§inin"'g:i«tht:e«.evidence of PW~2 with regard to Ex.P13~the
c'heq.i'ue1a-rid.,ViVts~n.li»'edger entries, came to the conclusion that
l _ the a"ccoL,:_'nts.iAl5etween the plaintiff and the defendant being
""'~..a"mutual;-open and current account and the said amount
A that/'ing.tt'tbeen paid on 25.06.1996, the suit having been filed
Ii' =o.n..}28.03.1998, is weii within the limitation of three years.
"Vi find no error committed by the trial Court in coming to
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the said conclusion. The material on record would clearly
show that EXP13 has been signed by the defeficleant
himself in favour of the plaintiff. In view of 3
being maintained between the parties, the
has been paid.
9. The learned Counselappeawringpfor
contends that there is no mlaterial p|ace_d’-on éV”rgcoVrd to
show for what purpose” issued. He “therefore
contends that in view of the earli’er_.~.t:r’ansactions between
both of them..vthe:V1′–said_ been issued
Dertainivnldlto rlieff Era n’sa’ction’s;””
10’… “There”His.V_no..V_:l’ie\fiVr;lence of the defendant on
recordto sis-pportv}his~._»contention that E><.P13 has been issued with reference to
'a particular transaction. Therefore, the learned Counsel
"ba_pVpea'ring for the defendant contends that there is no
K"—..'jmaterial placed on record to show for which purpose
Ex.P13 has been issued. In view of the submissions made,
we
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the conclusion drawn by the trial Court was that the
transactions between the parties would have to be read as
a mutual, current and running account stands},s_lnc’e~ftheV
same stands fortified by the contentions of
himself. Ex.P13 could not be related’to-,anyf,:pla_rtiCular”‘.
transaction by both the parties. siti;-at’ion’~
arise only when a mutual, curi’*en’t.and runn=ir1_”g accohunt is
maintained, Any depos’it.,_made”int.o; th”e_accouVn’t therefore,
cannot be read as reiatable toiany__.p”artVi.cul.ar transaction
between the parties; The paymentl’hmaydefthereon is always
with reference to account and would
not rel’ate._tohvhhay–p_a’rticu,la-r.___transaction. Therefore, the
subrnissior:».,:_’of theCounsel appearing for the
defepngdaiit is un’su_st’aina:ble.
:”:Reliance is placed by the defendant on AIR
to the effect, that in order to establish
V V’ _ mutu-alit.y,’ i-this necessary that at one point of time atieast,
.V_eac,h_. of”the parties should have a credit as against the
‘otherfl In other words, the account should be capable of
“git/ing rise to shifting balances, which would therefore
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mean that in the accounts maintained, the creditor
becomes a debtor and the debtor becomes a creditorin so
far as the entries in the books of accounts are co_nce’rned”.~«V
By placing reliance on the said judgment, it
that the plaintiff never become a creditor in a_s”:l:he’.
accounts are concerned and further”that_therehas. bee’n”n_¢”~.
payment whatsoever so far as”‘th:e.defen’dantis concerned.
Hence, the accounts c’an_not.’*b’e “considered as a mutual,
open and current account i’n7’terrn_s’-.A/_’ofa’fin AIR 1975
MADRAS 1 .
12. ” tr:i:ai”‘C’ouV’rt wh_i’§e”‘considering Article 1 of
the Lim”itati.on it is established, that
during _the’lcieai’in,gVs’v–, th_at~~~one party has become a creditor
‘”~.._to otheranclx”a’t*-another point of time the other party
“wa’s_:’af”lc.re’cfitor has become a debtor to the other,
brin’g’is;.V_o:ut the essence of mutuality in the accounts,
<._it ceas'~e_si'to be a mutual, open and current account. In the
V'a_a':1se'rj;«ce of shifting of the balance, it cannot be held that
Article 1 of the Limitation Act would stand attracted.
re”
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13. There has been a mutual demand or otherwise
between the parties in so far as the said account is
concerned. The actual demand or otherwise m,ad»e,”by
either one of the parties cannot by itself dete_:rmi«n_e—-,:thre:__’_
nature of the account. It is not necessary–.i.rj~..business’ if
transactions between the parties,:=._:tha-ta’ si,tuation”‘weou*l.l:l,u
always arise for the payment’ and av”cl_ernand”beingH made
by one of them. There couldlflbel situatio’n.s_’whefrein the
accounts, notwithstandinofbeing ;fn..utti_a.i,A”open and current,
no occasion arises in th,e..b.us.in’ess., tra’nsa’-cl’tions for one of
the parties””an’y’.,Ad-emalnd’against the other. The
failure o’f_,o’n’e to make a demand/payment
could not therefore’V-bi/’-.its’e’llf be a factum to determine the
c_f._.th.e accVountsi’between the parties. Hence while
‘¥o’isagree’:n:gi lwith’-.the reasoning in AIR 1975 MADRAS 1,
rameor the’co_nrsidered view that the trial Court has rightly
liappreciated the facts and circumstances of the case while
to the conclusion with regard to the mutual, open
current account between the parties. The application
flvof Article 1 of the Limitation Act to the facts and
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circumstances of the case is therefore just and in
accordance with law. I find no grounds to interfere’-with
the finding recorded by the triai Court on the ap’Vpl_i_catioIr-{ofV.
Article 1 of the Limitation Act to the case on
in view of the reliance placed o:n””E5<.'P1E'}g isstied._to'*:the".
plaintiff and the suit being filed onA:42_81.'Q_3.19l98_lr:Athe
well within the period of |imitat'io:n';i,
14. Reliance also’ irlfpaatedtg on “AIR 1934
ORISSA 226 wherein it twat held of mutuality
would be that.vtheVg:fl–eal:i_ngs .l.3’etwe’e’ri-.th’eVVfloarties shouid be
such, tVl1at’iti’:giiballa:hc’e in favour of one party
and sornetlimes other. While agreeing with
the finding’l’recordVe’d lin_ti°~.e said judgment, I’am unable to
the ifV’sa’i’–d-~–«”judgment with the facts and
g_ci~i’cu’ms’tancels.g_of the present case. The dealings between
the _oartivegsrefiecting the shifting of balances in favour of
‘geither of them, is not an issue either pleaded, relevant
“:l:orhco’i3sidered by the court. The essence of mutuality as
made out under Article 1 of the Limitation Act being
attracted in the present case, I’ am of the considered view
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that the trial Court has rightly applied Article 1 of the
Limitation Act to the facts and circumstances of the case.
15. The other contention urged by thei-HlVea”rne’dV
Counsel appearing for the defendant is with
grant of interest on the decretai amlounlt, “,It,i«sj1Vco_ntendecI’:
that in the absence of a contract u’w_ith.,_regard_–v_l.to».interest,<_
no interest could have been granted bu t-h.e'tri'alxC,:ourt.s He V
places reliance on thel"eyide,nt:'e FV5li'=J51 toCc'ontend that
there is no written contlraot.v'c"betwe'en.,"'the parties for
payment of in_tere_st.
__ granting interest @ 6%
per annumielied th’e.,,”provisions of the Interest Act,
197$; to award” tshevlsame. It came to the conclusion that
interest is the discretion of the Court,
the terms of the contract. In the
absence-..’:of’valny contract with regard to interest between
.::tl1ea,parti’es, the Court is justified in law, to award such a
rate “of interest as is just and necessary that the case
“demands. Hence in view of the reliance placed on the
Interest Act, the interest granted at 6% pa. is just and
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proper. Even otherwise the rate of interest at 6% per
annum awarded by the trial Court is in consona_nce–yv’:th
the business transactions with regard to
current and open account.
17. In view of aforesaid reasons, I.’V_{a’I”r’: ‘~o»Vf»ithe”*-
considered View that the judgmerut of th’e._tr’i.ai”.=Co’urtmbieing
weii reasoned, does not ca|l=”fortanVy~..inter§°erence. The
appeal being devoid of rnerits is
No cosétsi .
Sd/-1
JUDGE