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TMI Blog1934 (5) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... 982 (that is, 26th September 1925), ₹ 16,043-8-9. 2. Below this entry was written in the writing of one of the respondents: Balance due to be paid after adjusting the account up to Kunwar Sudi 9, ₹ 16,013-8-6. 3. This latter entry was signed by both respondents, who were both literate. The respondents pleaded that they merely signed in reliance on the word of the appellants and did not go into the accounts with them. They did not however give evidence before the Judge. The appellants gave evidence that the respondents had signed the entry "after they had understood the account;" that "sometimes they would come for the purpose of making up accounts;" that after the respondents had signed the entry the appellants sent them a registered notice, whereupon they were asked by the respondents for time, but as in the end no payment was made, they brought the present suit. The appellants stated in evidence that the last loan granted to the respondents was ₹ 1,000 on 9th August 1921, and that the last acknowledgment of the accounts by the respondents previous to that sued upon was on 10th October 1921. It is dear that considerable payments, either on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted is when several items of cross claims are brought into account on - either side, and being set against one another, a balance is struck, and the consideration for the payment of the balance is the discharge on either side; each party resigns his own rights on the sums he can claim in consideration of a similar abandonment on the other side, and of an agreement to pay and to receive in discharge the balance found due.' There are numerous cases of the Indian High Courts where this phraseology has been borrowed, and stress has been laid on the restricted meaning of the expression. We may only give references to a few of such cases, viz., Nahanibai v. Nathu Bhau (1888) 7 Bom. 414; Jamun v. Nand Lal (1892) 15 All. 1 and Suraj Prasad v. W.W. Boucke A.I.R. 1920 Pat. 161. On the other hand there are undoubtedly some observations to the contrary in Dukki Sahu v. Mahomed Bhiku (1883) 10 Cal. 284, and a clear expression of opinion in Manjunatha Kamti v. Devamma (1902) 26 Mad. 186, and a reference to such contrary opinion in Sarifun Mandalin v. Feradoul Khatun A.I.R. 1923 Cal. 578. It may be pointed out that the case of Ganga Prasad v. Ram Dayal (1901) 23 All. 502, was explained in Bho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Munna Lal (1880) 3 All. 148 (F.B.) and Sital Prasad v. Immam Bakhsh (1883) A.W.N. 47, it seems to have been assumed, rather than held, that a mere acknowledgment of a balance struck in the plaintiff's books was an account stated within the meaning of Article 62, Schedule 2, Limitation Act, 1871, or of Article 64, Schedule 2 of the present Limitation Act. The Court's attention does not in any of those cases seem to have been directed to the precise meaning of an account stated. On the other hand in Kanhaiya Lal v. Stowell (1888) 3 All. 581 (F.B.), a settlement of accounts, such as we have in the present case, seems to have been considered a mere acknowledgment; and in Ghasita v. Ranchore (1880) 3 All. 581 (F.B.), the Court declined to uphold a decree which was based entirely on an acknowledgment of this kind. In this state of authorities in this Court we consider that we are free to follow the decision in Jamun v. Nand Lal (1892) 15 All. 1, and hold that what is sued upon in the present case is not an account stated, but a mere acknowledgment. 7. In this state of the authorities in the Indian Courts their Lordships feel both entitled and bound to consider the question as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance arising from the fact that the items have been to set off and paid in the way described. 8. Lord Atkin quoted the language of Viscount Cave in Camillo Tank Steamship Co., Ltd. v. Alexandria Engineering Works (1921) 38 T.L.R. 134: There is the second kind of account stated, where the account contains items both of credit and debit, and the figures on both sides are adjusted between the parties and a balance struck. 9. Lord Cave, in the passage quoted by Lord Atkin, went on to quote the words of Blackburn, J., in Laycock v. Pickles (1863) 33 L.J.Q.B. 43, the main purport of which has already here been set out in the passage quoted above from the judgment in Raj Narain Rao v. Ram Sarup A.I.R. 1930 All. 467. Lord Cave did not apparently lay any emphasis on a distinction between mere items of debit and credit and what Blackburn, J., describes as items of claim. It seems that the case which Lord Atkin was dealing with was a case in which the employee could have claimed his salary, just as here the appellants could have claimed the money lent and interest, and that what the account stated brought in on the other side was merely the record of the monies drawn by the employee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greeing to accept the amount of the balance of the debt as true (because there must in such cases be, at least in the end, a creditor to whom the balance is due) and to pay it, the other side agreeing the entire debt as at a certain figure and then agreeing that it has been discharged to such and such an extent, so that there will be complete satisfaction on payment of the agreed balance. Hence, there is mutual consideration to support the promises on either side and to constitute the new cause of action. The account stated is accordingly binding, save that it may be reopened on any ground-for instance, fraud or mistake which would justify setting aside any other agreement. In Ashby v. James (1843) 11 M. & W. 542, (the leading authority for the rule that though some of the items are barred by limitation, a settlement of accounts including these items is none the less binding), Baron Alderson thus summed up the position: Here the striking of a balance between the parties is evidence of an agreement that the items of the defendant's account should be set off against the earlier items of the plaintiffs leaving the case unaffected either by the Statute of Limitations or the set-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. D. 529, but does not directly affect the actual settlement of the items n the first place as between the principal and agent. 13. The closest parallel however to the case presented in this appeal is that of accounts between banker and customer; that relationship is one of debtor and creditor, the banker being debtor, when the account is in credit, and the customer being debtor when the account is overdrawn. It has not been doubted that in law there can be a settled or stated account between banker and customer : what has been questioned is whether the acceptance by the customer without protest of a balance struck in the passbook constitutes a settled account, but the question has had reference merely to the issue whether such a settlement can be inferred as a matter of fact from the passing backward and forward of the pass-book. The legal competence of such a settlement, if made, is not questioned. In Blackburn Building Society v. Cunliffe Brooks & Co. (1883) 22 Ch. D. 61, at p. 71, Lord Selborne said: "Nor can they (the bankers) have the benefit of the doctrine that a pass-book passing to and fro is evidence of a stated and settled account." 14. On the other hand, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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