Report No. 89
Articles 1 to 5: Suits Relating to Accounts
31.1. Article 1.- We now proceed to a consideration of the articles contained in the Schedule to the Act laying down various time limits. Article 1 reads as
|"For the balance due on a mutual, open and current account, where there has been reciprocal demands between the parties.||
|The close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account."|
It is identical with Article 85 of the Act of 1908 and 1877.
This article made its first appearance as Article 87 of the Act of 1871, where it read as unde.-
|"For the balance due on a mutual, open and current account where there have been reciprocal demands between the parties.||
|The time of the last item admitted or proved in the account."|
The phrase "mutual account", which is the crucial expression in the article, has come to acquire a well established meaning.1 No difficulties at present exist as to the other words used in the article. It therefore needs no change.
1. See Hindustan Forest Co. v. Lal Chard, AIR 1959 SC 1349.
31.2. Article 2.- Article 2 reads as unde.-
|"Against a factor for an account.||Three years.||When the account is, during the continuance of the agency, demanded and refused, or where no such demand is made, when the agency terminates."|
It is identical with Article 88 of the Acts of 1908 and 1877. It corresponds to Article 64 of the Act of 1871, with slight verbal changes in the last column.
No change is needed in the article.
31.3. Article 3.- Article 3 reads as unde.-
|"By a principal against his agent for movable property received by the latter and not accounted for.||
|When the account is, during the continuance of the agency, demanded and refused or, when no such demand is when, when the agency terminates.."|
It is identical with Article 89 of the Acts of 1908 and 1877. It corresponds to Article 90 of 1871, with slight verbal changes. The last column in the Act of 1871 re.-"When the account is demanded and refused."
31.4. Suit against legal representative of the agent.- Article 3, during its development from 1871, has given rise to three types of problems. The first was Does the article apply to a case when the principal sues, not the original agent but the legal representatives of the agent?
The High Courts of Madhya Pradesh,1 Punjab,2 Nagpur,3 Calcutta,4 Madras5 and Allahabad6 have held that the article has application to such a case. The Privy Council has held Article 89 of the Act of 1908 to be applicable in a suit for accounts instituted by the sons for an account against their deceased father's agent.7
1. Kashiram v. Santokhhai, AIR 1968 MP 91.
2. Jagir Singh v. Dheru, AIR 1958 Punj 487.
3. Deorao Zolba v. Laxmansingh, AIR 1943 Nag 227.
4. Bikram Kishore v. Jadab Chandra, AIR 1935 Cal 817.
5. Appa Rao v. Subba Rao, AIR 1927 Mad 157.
6. Ramrup Goshain v. Rarndhari Bhagat, AIR 1925 All 683.
7. Nobin Chandra v. Chandra Madhah, AIR 1916 PC 148.
31.5. In an earlier Allahabad case1 which was a suit under the Act of 1877, it was held that a suit to recover, from the sons of the deceased as representative of his father, money which had been received by the deceased as pleader in his professional capacity on behalf of a client was governed by Article 120 of the Act of 1877 (residuary article) and a period of 6 years was allowed. When Article 89 of the Act of 1877 was pressed during the arguments, the court observed:
"Article 89, which is suggested as the article applicable to this case, has clearly no application, because the suit is not against the agent, but against the legal representative of the agent. It has been held by the Punjab Chief Court, in a case undistinguishable from the present one, that under such circumstances Article 120 applies, and that the terminus a quo is the time when the right to sue accrues. The right of the plaintiff to sue the present defendant could not have accrued until he (the defendant) had received the money from his father on his father's decease."
Similar observations appear in another Allahabad case,2 which was a suit against the heirs of an agent and, on the facts of the case, instead of Article 89, the Court held that Article 116 of the Act of 1908 applied.
1. Bindraban Behari v. famuna Kunvar, 1903 ILR 25 All 55.
2. Mathura Nath v. Chheddu, AIR 1917 All 14.
31.6. No change needed as to legal representative.- In view of the definition of the word "defendant" occurring in section 2(e) of the Act of 1908 and the later decisions mentioned above,1 the controversy could be said to have been put at rest, and no amendment of the text of the article on this point is called for.
1. Para. 31.4, supra.
31.7. Refusal whether express or implied.- The second question that arose under Article" was whether the demand and refusal contemplated by the third column of the Schedule should be an express one?
31.8. Whitley Stokes' view and later case law.- Whitley Stokes,1 while dealing with this article, has added a footnote against the word "refused", which runs as unde.-
"That is, expressly refus.-but see III CLR 446." Coming as it did from the pen of one who was also a Legislative Secretary to the Government of India, this comment was noticed by the Calcutta High Court2 and the Court observed as unde.-
"The there failure of the agent to render accounts on demand does not amount to refusal to render accounts within the meaning of Article 89. The question whether the failure of the agent to render accounts amounts to refusal within the meaning of Article 89, depends upon the circumstances of each case."
This point was again argued in a Bombay case3 by Mr. Setalvad and the court observe.-
"Mr. Setalvad refers to one or two decided cases in which it seems it was held that the refusal to render an account within the meaning of Col. 3, Article 89, must be express. With all respect I differ from this view. In my opinion, whether an account was demanded and refused or not must depend upon the circumstances of each case, and I see no reason why a refusal may not be inferred or implied from the facts of the case."
1. Stokes Anglo-Indian Codes, (1888), Vol. 2, p. 987.
2. Bhabatarini Debi v. Sheikh Bhahadur Sarkar, AIR 1919 Cal 458.
3. Karsondas Dhunjibhoy v. Surajbhan Ramrijnal, AIR 1933 Born 450 (457).
31.9. No change needed as to scope of "refusal".- This reasoning appears to have been followed by the Calcutta High Court1-2 and the Chief Court of Sind3.
1. Abdul Latiff v. Gopeswar Chattoraj, AIR 1933 Cal 204.
2. Prim Ram Mookerjee v. Jagadish Nath Ray, AIR 1922 Cal 355.
3. Ganeshdas Lokuram v. Gangaram Dhingar, AIR 1930 Sind 142.
31.10. As the judicial view now seems to have been fairly well settled, we do not think it necessary to add any Explanation to indicate that the "refusal" could be an implied one.