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TMI Blog1959 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... undry, machinery, plant and equipment for a period of three months from 2nd of May, 1946, to 1st of August, 1946, for a total rent of Rs. 1,200. These premises were again taken on rent at a rate of Rs. 200 per mensem between 3rd of August, 1946, and 2nd of November, 1946. On the third occasion the Hindustan Company took these premises on lease from 17th of January, 1947, till 31st of December, 1947, for a period of less than one year. The rent which was payable up to the end of March, 1947, was fixed at Rs. 600 and from April, 1947, onwards a sum of Rs. 225 per mensem was payable as rent. This lease was again renewed from 1st of January, 1948, up to 31st of December, 1948. On 29th of November, 1948, Simplex Company served a notice vide exhibit O.W. 1/12, upon the Hindustan Company desiring that the premises be vacated. There was a considerable correspondence between the parties on the question whether the premises were liable to be vacated but the correspondence did not culminate in any agreement and no steps were taken by either party and the matter in controversy was not taken by either party to a court of law. It is contended by the Simplex Company and there is no denial by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn Improvement Trust, nothing was payable to Simplex Company after the date of acquisition. On the pleadings of the parties, the following issues were framed: "1.Whether the claim of Simplex Manufacturing Company (Private) Limited is within time? 2.What is the effect of the acquisition of the premises by Delhi Town Improvement Trust? 3.To what amount is the claimant entitled?" Shri Jiwan Lal Gauba, the managing director of the Simplex Company, appeared as O.W. 1 to support the claim of the Simplex Company and a number of documents have also been produced. Mr. Gauba stated that the transactions between the contending parties were that the castings used to be supplied by the respondent company to the petitioner company at a price which used to be adjusted against the petitioner's claim for rent and thus the net balance payable to either party was determined. It was admitted that the Delhi Town Improvement Trust had acquired these premises on 15th of April, 1953, and the petitioner company was paying rent to Delhi Development authorities who were the successors of Delhi Improvement Trust. This acquisition was made from the petitioner company's landlord. The first landlord was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years would expire on 1st of January, 1956. The company was ordered to be wound up on 6th July, 1955, and in view of the provisions of section 171, the claim of the petitioner company was within limitation on that date. The only question that arises in this case is whether the dealings between the parties were such which could be said to have been based on a mutual, open and current account where there had been reciprocal demands between them. The test of mutuality for purposes of this article is that the account must show mutual or reciprocal dealings in the sense that both parties may incur liability to each other on account of there being mutual obligations giving rise to liabilities on each side, or right of action to either against the other. A reliable test of mutuality is whether during the currency of the account each party can say to the other "I have an account against you". For showing mutuality, one should be able to deduce, after the perusal of the accounts, that out of a course of dealings, there arose cross-claims which could be set off one against the other. These cross-claims may arise, as in a case like the present, when the petitioner claims the rent, and the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 6 of the petition and the better statement. In this case the balance has been shifting. Mr. Tuli, on behalf of the insolvent company, has argued, that to the facts of this case, the provisions of article 85 do not apply, because the account cannot be said to be "open and current". He has relied in support of his contention on a lawyer's notice, exhibit O.W. 1/28, given on behalf of the Simplex Company to the Hindustan Company demanding certain sums which were due. I do not think that an account ceases to be "open and current" simply because the creditor has made a demand. The test in such cases is whether the account had been closed and that, to the knowledge of the other party. It is not open to any party to deprive the other of the benefit of article 85 of the Limitation Act by arbitrarily closing the account. An account is deemed to be open when the balance is not struck, or, though struck, is not accepted or acknowledged to be correct by the parties concerned. If the account is not closed by settlement or otherwise, it is open, and a mere cessation of dealings between the parties, does not mean that the account has been closed. Vide Karsondas Dhunjibhoy Co. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount payable by Hindustan Company, Mr. Awasthy, learned counsel for the Simplex Company, submits that the rent payable to his client as agreed between the parties included not only rent payable for the use and occupation of the building, but also for the use of the foundry, plant and equipment. Mr. Tuli has drawn my attention to the provisions of the Delhi and Ajmer Rent Control Act, 1952. Section 2( g ) defines "premises" as meaning: "any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose, and includes ( i )the garden, grounds and out-houses, if any, appertaining to such building or part of a building; ( ii )any furniture supplied by the landlord for use in such building or part of a building; but does not include a room in a hotel or lodging house." Section 2( i ) defines " standard rent" in the following words: " 'standard rent', in relation to any premises, means, ( i ) where the standard rent has been fixed by the court under section 8, the rent so fixed; or ( ii ) where the standard rent has not been fixed under section 8, the standard rent of the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing of the application for the determination of the standard rent or, as the case may be, of the institution of the suit or proceeding in which the standard rent is determined." I am required to determine in these proceedings the standard rent of the premises and the proviso makes it incumbent upon the court that the date from which the standard rent should be deemed to have effect shall in no case be earlier than six months prior to the date of taking proceedings in which the standard rent is determined. In this case, the petition was made to this court on 14th of March, 1957. This, therefore, means that having regard to the prayer made in this case, the tenant has to pay to the Simplex Company the standard rent from 14th of September, 1956, till the end of October, 1956. In view of the provisions of section 8(7) the standard rent of Rs. 35 in this case shall be deemed to have effect for a period of a month and a half. According to the clear provisions of section 8(7), I cannot accept the correctness of the contention of Hindustan Company that the rent should be deemed to be Rs. 35 per mensem from the very beginning, when it occupied the premises, and that the contractual rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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