1990 (7) TMI 374 - HC - Indian Laws

Summary

Issues:
- Suit for recovery of outstanding amount
- Question of limitation
- Proof of debt by the plaintiff

Analysis:

1. Suit for recovery of outstanding amount:
The case involved a first appeal against a judgment and decree of the Assistant District Judge decreeing the suit of the plaintiff for the recovery of a specific sum. The plaintiff, a private limited company, had lent money to tea estates owned by a Hindu Undivided Family (H.U.F.). Disputes arose within the family, leading to a partition suit and a compromise decree. The plaintiff filed a suit against the family members for the outstanding amount borrowed by the tea estates. The defendants contested the suit, denying the transactions and claiming the accounts were fabricated. The trial court relied on the plaintiff's accounts and decreed the suit. The defendants appealed against this judgment.

2. Question of limitation:
The defendants argued that the suit was barred by limitation. The plaintiff claimed that the defendants' acknowledgment of the liability by taking over the tea estates extended the limitation period. However, the court found that the defendants did not acknowledge the liability, and the compromise decree did not constitute an acknowledgment under the Limitation Act. The court further analyzed the application of Section 25(3) of the Contract Act and concluded that it did not apply in this case. The court held that the suit for the amount outstanding as of a specific date was barred by limitation, while the claim for amounts advanced in subsequent years was within the limitation period.

3. Proof of debt by the plaintiff:
The defendants also challenged the plaintiff's failure to prove the debt. The plaintiff relied on the entries in its account books and balance sheets to establish the debt. The defendants argued that mere entries were not sufficient evidence to prove the debt, citing Section 34 of the Evidence Act. The court agreed with the defendants, stating that the plaintiff failed to prove the individual transactions or entries, and solely relying on the balance in the accounts was insufficient. As the plaintiff did not provide additional evidence to prove the debt, the court held that the suit should have been dismissed.

In conclusion, the High Court allowed the appeal of the defendants, dismissing the plaintiff's suit for recovery of the outstanding amount due to lack of proof of debt and being barred by limitation.