1958 (2) TMI 50 - SC - Indian Laws

Issues Involved:
1. Whether the appellant's suit was barred by limitation.
2. Whether the acknowledgments of debt pleaded by the appellant were valid.
3. Whether the balance-sheet of the company for the year 1940-41 could be admitted as evidence.
4. Whether the appellant could rely on Section 14 of the Indian Limitation Act to save the limitation period.

Issue-wise Detailed Analysis:

1. Whether the appellant's suit was barred by limitation:
The primary issue was whether the appellant's suit, filed on June 16, 1944, was barred by limitation. The appellant relied on a deposit receipt passed by the company on January 15, 1940, which evidenced a deposit of Rs. 79,519-12-9 for 12 months from August 1, 1939, to July 31, 1940. The appellant argued that the monies were payable on demand, and the demand was made on May 17, 1941, thus extending the limitation period. However, the court found no express or implied agreement that the monies were payable on demand. The terms of the deposit receipt indicated that the amount became due and payable on July 31, 1940, and interest would cease on the due date. Therefore, the suit filed on June 16, 1944, was beyond the limitation period, which ended on July 31, 1943.

2. Whether the acknowledgments of debt pleaded by the appellant were valid:
The appellant relied on three acknowledgments of debt: (a) a resolution passed by the Board of Directors on May 20, 1941, (b) the balance-sheet of the company for the year 1940-41 dated October 10, 1941, and (c) an entry in the khata of the plaintiff in the books of the company. The third acknowledgment was abandoned during the hearing. The court found that the resolution of May 20, 1941, referred only to a past liability and could not be construed as an acknowledgment of a subsisting liability. Additionally, no connection was established between the amounts mentioned in previous deposit receipts and the sum of Rs. 79,519-12-9. Therefore, the resolution could not serve as an acknowledgment of the debt.

3. Whether the balance-sheet of the company for the year 1940-41 could be admitted as evidence:
The appellant sought to rely on the balance-sheet of 1940-41, which was signed by the Directors and allegedly contained an acknowledgment of the debt. The trial court initially rejected the balance-sheet as it was filed too late. The High Court also rejected the balance-sheet, considering sections 65 and 74(2) of the Evidence Act. However, the Supreme Court noted that the High Court's attention was not drawn to the Commercial Documents Evidence Act (XXX of 1939), which allows the court to presume the accuracy of certain commercial documents. Despite this, the court found that the balance-sheet was not duly passed due to internal conflicts and irregularities within the company's meetings. Therefore, even if admitted, the balance-sheet would not serve as a valid acknowledgment of the debt.

4. Whether the appellant could rely on Section 14 of the Indian Limitation Act to save the limitation period:
The appellant contended that he was entitled to deduct the time spent in prosecuting liquidation proceedings under Section 14 of the Indian Limitation Act. However, the liquidation proceedings were not filed in the courts below, and there was no evidence to show that the requirements of Section 14 were satisfied. The court found no cogent argument to support the appellant's claim under Section 14.

Conclusion:
On all the above grounds, the Supreme Court concluded that the appellant's claim was clearly time-barred. The dismissal of the appellant's suit by the trial court and the subsequent dismissal of his appeal by the High Court were upheld. The appeal was dismissed with costs.

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