9911796707
TMI Blog1966 (1) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies Act, 1932; the plaintiff was a director of the defendant company for a number of years and was interested in its well being. In the year 1960, the defendant company was short of funds and the plaintiff on being approached by it, agreed to finance the company to meet its urgent needs. On 24th Oct. 1950, the plaintiff advanced the sum of ₹ 67,000/- to the defendant company on the promise of payment of interest at the rate of 4 per cent per annum. In the year 1954, the management of the company changed and a new Board of Directors came into existence. The plaintiff's dues however remained unpaid. The plaintiff was willing to forego interest in case the payment was made as promised but as no payment had been made, the assuranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time. The second contention made by him was that the plaintiff never came out with a case that the rate of interest recoverable by him was 5 per cent. His case was that it was only at the rate of 4 per cent per annum and consequently the lower court was not justified in awarding interest at the rate of 5 per cent per annum as it has done. He further urged that in case the claim of the plaintiff is found to be within time then it was a fit case in which a decree for payment by instalment may be passed. 7. In support of his contention on the first point, namely, that a balance sheet cannot constitute an acknowledgment within the meaning of Sec. 19 of the Indian Limitation Act, the learned counsel for the appellant pointed out that the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur directors, there was a valid balance sheet even if the plaintiff had not sighed the same. We are therefore unable to agree with the defendant-appellant that in this case, the balance sheet would not constitute an acknowledgment within the meaning of Sec. 19 of the Indian Limitation Act on the ground of there being a fiduciary relationship between the plaintiff and the defendant company. . In support of his other ground, namely, that a balance sheet by its very nature is not an acknowledgment of subsisting liability on the date when the balance sheet is prepared. What has been urged by the learned counsel for the appellant is that the balance sheet may constitute an admission of the fact that on the 31st March of that year, there was a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitute acknowledgment within the meaning of Sec. 19 of the Indian Limitation Act. The argument advanced before their Lordships of the Calcutta High Court was also similar to the argument advanced before us. Their Lordships of the Calcutta High court, took the view that the fact that in the balance sheet of the foregoing year, there is an acknowledgment of liability in itself implies the continuance of that liability after that year, because such a liability shown in the balance sheet for the outgoing year must necessarily be brought forward in the current year. The view taken by their Lordships was, that though a balance sheet may not expressly disclose that the liability was subsisting on the date when the balance sheet was drawn up yet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bahalla . A.I.R 1958 Pun. 341.. So far as the two cases of the Madras High Court relied upon by the defendant-appellant are concerned, they relate to the question of existence of fiduciary relationship. We have already expressed our view based on the facts of the present case so far as that point is concerned. The view taken by the Nagpur High Court in Kashinath Shankarappa v. The New Akot Cotton Ginning & Pressing Co. Ltd. was that a balance sheet having been prepared according to the dictates of statutory provision, they could not be deemed to be acknowledgment by the agent with the concurrence and at the instance of the principal. The facts of the case of Jwala Prasad v. Jwala Bank Ltd. were different from the facts of the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. On behalf of the plaintiff-respondent, it has been urged that a clause entitling the plaintiff-respondent to recover the entire decretal amount in case of default in payment of instalments after two months, be attached to the instalment decree. We are, therefore, of the view that it is a fit case in which the defendant be allowed to pay up the entire decretal amount along with interest and costs of the suit in both the courts within a period of two years from the date of the decree of this Court. We also accept the request of the learned counsel for the plaintiff-respondent that in case of default in the payment of any two consecutive instalments, the entire amount then due, under the decree would be recoverable at once in execution o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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