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TMI Blog1961 (4) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... moneys lent up to that date. By Article 57 of the Indian Limitation Act the period of limitation is three years from the date when the loan was made. The suit was instituted on December 19, 1939. To save the suit from the bar of limitation the plaintiff relies upon the acknowledgments of liability 'contained in the balance-sheets of the defendant company for the years ended 30-11-1930, 30-11-1931, 30-11-1932, 30-11-1933, 30-11-1934, 30-14-1935 and 30-11-1936. Copies of these balance-sheets were tendered at the trial and were marked exhibits by consent of the parties. 3. During the relevant years a continuous and current account of the loans and part payments Was kept an the books of both Golam Hossain Cassim Ariff and tile defendant company. The books of account of the defendant are not available. The relevant books of G.H.C. Ariff have been made exhibits in the suit. If necessary adjustments are made and the balances are struck on November 30 of every year, the balances found to be due to G.H.C. Ariff from these books will tally with the balances shown as due to him in the balance sheets of the defendant company. Each of the balance-sheets is signed by the auditors as also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary of its properties and assets and its capital and liabilities at the end of the period for which its accounts were made up and must he audited by the auditors of the company. By Artcles. 101, 102 and 103 of the articles of association of the defendant company the managing agents were required to lay before the company at its ordinary meetings every year the yearly balance-sheet containing a summary of its properties and liabilities accompanied by their annual report and also to send a copy of the balance-sheet and the report to the members of the company seven days previously to the meeting. By Article 108 the Auditors of thecompany were required to report on the accounts and balance-sheet intended to be laid before the company in general meeting. Article 110 provided that every account of the managing agents audited and approved by general meeting would be conclusive except as regards any error discover ed therein within three months after the approval thereon. 6. Yearly balance-sheets of the company used to be prepared and signed by the managing agents in accordance with the articles. The accuracy of the entries in the balance-sheets used to be checked by the auditors w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on or about the 8th July, 1937. This allegation was not specifically denied in the written statement. The original records of the company such as the peon book, the attendance register and the minute book of the annual general meeting of the company are no longer available. On the materials we are satisfied that the balance-sheets for the year ended 30-11-1930. 30-11-1931, 30-11-1932, 30-11-1933, 30-11-1934, 30-11-1935 and 30-11-1936 were duly passed by the defendant company at its annual general meetings held respectively on 24-3-1931, 29-2-1932, 28-2-1933, 23-3-1934, 17-4-1935 sometimes in 1936 and 8-7-1937. 8. 'Prior to 1938 the defendant company had no directors and consequently the relevant balance-sheets were not signed by any director. They were all signed by the managing agents in accordance with the power conferred on them by the articles of association of the company. Before the trial court counsel for the defendant contended that the Indian Companies Act 1913 both before and after its amendment by the Indian Companies Amendment Act 1936 required that the company must have directors, that the balance-sheets must be prepared and signed by the directors and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d voluntary admissions. A document is not taken out of the purview of Section 19 of the Indian Limitation Act merely on the ground that it is made under compulsion of law. see Venkata v. Partha Saradhi, ILR 16 Mad 220 at p. 222, Udaya Them v. Subramania Chetti, 6 Mad LJ 266 at p. 209, Goode v. Job, (1858) 1 El and El 6 at p. 11 : 120 ER 810 at p. 812. I am unable to agree with the reasoning of the Nagpur decision that a balance-sheet does not save limitation because it is drawn up under a duty to set out the claims made on the company and not with the intention of acknowledging liability. The balance-sheet contains admissions of liability; the agents of the company who makes and signs it intends to make those admissions. The admissions do not, cease to be acknowledgments of liability merely On the ground that they were made in discharge of a statutory duty. I notice that in the Nagpur case the balance-sheet had been signed by a director and had not been passed either by the Board of Directors or by the Company at its annual general meeting ana it seems that the actual decision may be distinguished on the ground that the balance-sheet was not made or signed by a duly authorised agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn From the balance-sheets is that the closing balance due to the creditor at the end of the previous year will be carried forward as the opening balance due to him at the beginning of the next year. In each balance sheet there is thus an admission of a subsisting liability to continue the relation of debtor and creditor, and a definite representation of a present intention to keep the liability alive until it is lawfully determined by payment or otherwise. There is necessarily a time lag between the date of the signing of the balance-sheet and the end of the previous year. The balance sheet contain no admission of the amount due on the date of the signature. That amount may be and often is different from the amount shown as due at the end of the previous year, but that fact alone does not take the amount out of the purview of Section 19. Take the case of a banker and its depositor. Suppose the banker sends to the depositor a monthly statement of account made for the month of February 1961 and signed on March 15, 1961. The statement gives the balance due on February 28, 1961. The amount due on March 15 may be quite different; the banker might have been made payments for the custome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1955 in Re, Vita Supplies Corporation Ltd. D/7-125-1956 (Cal). 13. Mr. Banerji nest contends that the balance-sheets are not signed by any person duly authorized by the company to acknowledge on its behalf the debt due to the plaintiff. The balance-sheets are signed by Hashim Ariff Brothers and Co. the managing agents of the defendant company. Now the managing agents had authority to borrow moneys from. G.H.C. Ariff and to repay them. The authority to repay the debt implies an, authority to acknowledge it, ............ for it he could pay the amount of the claim, he could plainly also arrange to prevent time from becoming a bar to it , See Braja Sunder Deb v. Bholanath 24 Cal WN 153 : AIR 1919 PC 120. Besides they had the general power to manage the affiairs of the company and to do all acts and things in the name and on behalf of the company. But Mr. Banerji contends that the prima facie authority of the managing agents is taken away because in this case the creditor is one of its partners. Now it has been held that a director cannot, make an acknowledgment of a debt due to himself so as to bind the company, see Re Transplanters (Holding Co.) Ltd. (1958) 2 All E. R. 711 and (1 ..... 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