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TMI Blog1997 (3) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 42,927.50. The petitioner claimed this amount Along with interest at the rate of 18 per cent from 29 July, 1989 till 30th June, 1990 and filed a suit under Order 37, Civil Procedure Code (4) The acknowledgement has not been disputed by the petitioner/defendant except by barely saying that the petitioner has filed the present suit on false documents. The learned Counsel for the petitioner Mr. G.L. Rawal has challenged the impugned order dismissing application of leave to defend and decreeing the suit on the ground that the suit on the basis of acknowledgement is not maintainable under order 37, CPC. The learned Additional District Judge did not consider the objections on merits about the payments made by the defendant/ petitioner to third party on behalf of the plaintiff/respondent. (5) As regards first contention, learned Counsel for the petitioner contends on the basis of Shri J.S. Sood v. Mrs. Premlata Mehta Anr., 1984 (2) (Del) 761 that suit under Order 37, Civil Procedure Code is not maintainable on the basis of an acknowledgement. (6) 6. Before proceeding further it would be relevant to reproduce Rule 1 of Order 37, Civil Procedure Code It reads asunder: Subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A debt is a 'debitum in present ,solvendum in future. We, Therefore, hold, that the amount covered by the suit is an ascertained amount payable liability. The obligation has accrued and subsists. It is a debt accruing under a written contract . (10) The term written contract in the words of Black's Law Dictionary (6th Ed.) means as under : A. written contract is one in which all its terms is in writing . Commonly referred to as a formal contract. 11.1. According to Black's Law Dictionary an acknowledgement means as under: TO acknowledge is to admit, affirm, declare, testify, avow, confess or own as genuine, Favello v. Bank of America Nat. Trust Savings Ass'n, 24CalApp. 342, 74 P. 1057. Admission or affirmation of obligation or responsibility. Weyerhaeuser Timber Co. v. Marshall, C.C.A. Wash., 102 F. 78. (sic.) states have adopted the Uniform Acknowledgement Act. THE debtor's acknowledgement of the creditor's debt and or right of action that will revive the enforceability of a debt barred by the statute of limitations. Part payment of obligation which tolls statute of limitations is a form of acknowledgement of debt . In re: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt stated may only take the form of a mere acknowledgement of a debt, and in those circumstances, though it is quite true it amounts to a promise and the existence of a debt may be inferred, that can be rebutted, and it may very well turn out that there in no real debt at all, and in those circumstances there would be no consideration and no binding promise. But on the other hand, there is another form of account stated which is a very (stc.) form as between merchants in business in which the account stated is an account which contains entries on both sides, and in which the parties who have stated the account between them have agreed that the items on one side should be set against the items upon the other side and the balance only should be paid; the items on the smaller side are set off and deemed to be paid by the items on a larger side, and there is a promise for good consideration to pay the balance arising from the fact that the items have been so set off and paid in the way described. Their Lordships were further of the view that : That was done. The man writes an account which was demanded by the servant for the express purpose of knowing what sum he would be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of arriving at an agreed settlement is truly a bilateral one. The process of give and take which such a transaction demands from either side, itself constitute a sufficient consideration which is enough to sustain the fresh agreement as valid in law. Reference in this connection might be made to the case of Bishnu Chand v. Girdhari Lal in which their Lordships of the Privy Council have expounded the law in this regard. Then such an account stated is signed by the party sought to be made liable or its duly authorised agent, the account stated as envisaged in Art. 64 is created. Such an account stated gives rise to a new cause of action and a suit brought within three years of the date of such a cause of action is not barred by limitation. Such a suit cannot be thrown out on the ground that some of the items antecedent to the date of the account stated were barred by limitation. Previous rights and liabilities having been swept away by the concerted and agreed Will and action of parties themselves, the previous items which formed the material for arriving at the agreed figure must, for the purposes of the suit, be eliminated from consideration, and a fres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion reached by the Court of Appeal below that this letter amounts to an acknowledgement. The tenor of the letter shows that it is addressed by respondent 2 as mortgagor to respondent 1 as puisne mortgagee, it reminds him of his interest as such mortgagee in the property which would be put up for sale by the first mortgagee, and appeals to him to assist the avoidance of sale, and thus acquire the whole of the mortgagee's interest. it is common ground that no other relationship existed between the parties at the date of this letter, and the only subsisting relationship was that of mortgagee and mortgagor. This letter acknowledges the existence of the said jural relationship and amounts to a clear acknowledgement under Section 19 of the Limitation Act. It is conceded that if this letter is held to be an acknowledgement there can be no other challenge against the decree under appeal 11.6. In Hiralal Ors. v. Badkulal Ors, [1953]4SCR758 , it is true to find that Defendant H who was in mutual understanding with the plaintiff signed an entry in the plaintiff's Khata on which earlier mutual account had been entered to the following effect : Rs. 34.000.00 balance d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... location money of ₹ 1,00,000.00 for allotment of shares. The defendants accepted the payment as allocation money. The payment, its acceptance and the receipt thereof issued by the defendants held to constitute a written contract for the purposes of Order 37 Rule 1. It was observed that though it may be labelled as receipt but that does not meant that it is not a contract. In paras 10 11 it was further observed as under : 10. The question is whether the receipt dated 26th August, 1978 is a written contract or not. In my opinion it clearly is. The plaintiff paid the application money of allotment for shares. The defendants accepted it, though it is true that defendant No. 2 came into existence a few months later. The payment of ₹ 1,00,000.00 by the plaintiff as application money and its acceptance by the defendants constitutes a contract. It may be labelled as a receipt but that does not mean that it is not a contract. 11. It was said that it has not been pleaded that the suit is based on a written contract. This is not required by any provision of law. The Court has to find out whether the suit has been brought upon a negotiable instrument or a written contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the circumstances surrounding the creation of the subject matter to which it was designed and intended that it should apply. It must be seen what is the intention expressed by the words used; but whether the language is imperfect, and it is impossible to know what the intention is without enquiring further, the circumstances with reference to which the words were used should be looked. The contract must be construed as a whole and the intent of the parties must be ascertained from the documents as a whole. 12.4. In jiwibai v. Rarnkunwar Shriniwas Murarka Agarwala, Air (34) 1947 Nag 17, a Full Bench of the Nagpur High Court took the view that the express authority given to the agent to 'compromise' under Mukhtarnama included the power to refer the suit to arbitration because the deed set out in separate phrases the two aspects of 'compromise' which the single English word normally connoted. It may further be added that document embodying a business agreement should be construed formally and broadly and there must in such documents imply a term which will give such business efficacy to the transaction as must have been intended by the parties. One cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a balance of ₹ 59,854.50p interest up to 6th June, 1988 amounting to ₹ 7,422.00 and ₹ 8,081.00 up to 31st March, 1989 had also been shown. to be payable in the 'statement of account'. On 6th July, 1988 ₹ 7,422.50p. were given and ₹ 67,940.50p. was shown as 'bakijama raha' on 31st March, 1989. This account was signed by Sh. Naveen Kumar, partner. If one goes by the judgment of the Privy Council in Elvira Rodrigues (supra) this is second kind of account stated as it is very usual form between merchants in business in which the account stated is a kind which contains entries on both sides and in which the parties, who have stated the account between them, have agreed that the items on one side should be set aside against the items upon the other side and the balance only should be paid and there is a promise for good consideration to pay the balance arising from the fact that items have been so said and paid in the way described. It was intended to express the same in the nature of obligation. The partner of the fire authenticated the document. It may further be noted that the interest was also paid in the light of acknowledgement and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to the plaintiff and allowed the plaintiff to purchase further goods worth ₹ 41,341.00 from M/s. Paras Nath Textiles on 1st December, 1989 on their guarantee. The plaintiff issued a cheque of ₹ 6,341.00 as for payment to M/s. Paras Nath Textiles and allowed the applicants to adjust the outstanding amount against credit of ₹ 35,000.00 . The plaintiff gave an undertaking to the applicant that the plaintiff would pay the balance amount of ₹ 35,000.00 to M/s. Paras Nath Textiles herself and in case of any failure on her part, the applicant/ defendants would pay the said amount of ₹ 35,000.00 to M/s. Paras Nath Textiles on behalf of the plaintiff. Thus, the outstanding amount stand exhausted on failure of the plaintiff to pay the said amount of ₹ 35,000.00 since the said Cheque No. 196311 could not be encased by M/s. Paras Nath Textiles. They also raised the demand of ₹ 35,000.00 and the petitioner/defendant had paid the amount of ₹ 35,000.00 to M/s. Paras Nath Textiles as per undertaking. The application is supported by affidavit of Sh. Naveen Kumar, partner of the defendant-firm'. (16) It is further notable that before filing t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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