TMI Blog2005 (2) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent company to the petitioner included last payment of ₹ 24,467/- which was made on 15th September, 1995 by means of a cheque. Since the respondent company did not make further payments, the petitioner has calculated interest on the overdue payment at the rate of 18 per cent per annum after the expiry of 30 days from the date of invoices and in this manner further sum of ₹ 3,20,683/- as interest is added for the period up to 15th August, 1998, thus making a total sum of ₹ 6,73,154/-. The petitioner sent statutory notice dated 28th July, 1998 which, according to the petitioner, was received by the respondent company on 3rd August, 1998 and in support of this plea, acknowledgement card purported to have signed on behalf of the respondent company is annexed with the petition. The case of the petitioner is that in spite of this notice, the dues of the petitioner were not paid and, Therefore, it be deemed that the respondent company is unable to pay the debt. It is also stated in the petition that the respondent company had borrowed loan from other companies including PICUP and even that is outstanding. The debt is also due to one M/s. Mahesh Ramdas Kanani of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase there is any order passed by this Court directing it to pay back the same. The said amount is accordingly withdrawn by the petitioner on furnishing the security. 6. The respondent company also filed supplementary reply as permitted by the Division Bench and rejoinder thereto is filed by the petitioner. 7. I may state that at the time of arguments, learned Counsel for the respondent company did not press the plea regarding limitation or service of statutory notice or that the petitioner firm is an unregistered firm. Even otherwise, there is no denial to the averment that part payment was made on 15th September, 1995 and the present petition was filed on 9th September, 1998, i.e. within three years of this payment. Therefore, the purported claim cannot be treated as time-barred. Insofar as service of statutory notice is concerned, the petitioner has enclosed with the petition the postal receipt as well as the AD card. Address of the respondent company indicated on the said AD card is also correctly mentioned. The petitioner has also stated in the rejoinder that it is a registered partnership firm and copy of the registration of the petitioner firm is produced which is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the respondent company in support of his plea that acknowledgement contained in the balance sheet could not be relied upon by the petitioner. However, on going through this judgment, one would clearly notice that it does not lay down the proposition which is sought to be advanced by the learned Counsel. That was a case where balance sheet was not confirmed or passed by the shareholders. The Court observed that such a balance sheet, before it could be relied upon, must be duly passed by the shareholders at the appropriate meeting and must be accompanied by a report, if any, made by the Directors for its validation. The principle of law laid down was that statement in the balance sheet indicating liability is to be read along with the Directors' report to see whether both so read would amount to an acknowledgement. There is no dispute about this proposition of law. However, in that case, the Court refused to accept entry in the balance sheet as acknowledgement of debt because of two reasons: (a) The balance sheet was not passed by the shareholders at the appropriate meeting. (b) The Directors' report, in the balance sheet, contained the following statement: Yo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. Such an intention need not, however, be in express terms and could be inferred by implication from the nature of the admission and the surrounding circumstances. Generally speaking, a liberal construction of the statement in question should be given. That of course did not mean that where a statement was made without intending to admit the existence of jural relationship, such intention should be fastened on the person making the statement by an involved and far-fetched reasoning. In order to find out the intention of the document by which acknowledgement was to be construed the document as a whole must be read and the intention of the parties must be found out from the total effect of the document read as a whole. 13. In the present case, it would be seen that the admission of liability in the list of creditors maintained by the respondent company or in the balance sheet is without any conditions or any strings attached. Such an admission would clearly amount to an acknowledgement [State Bank of India v. Hegde and Golay Ltd.; New Era Mfg. Co. Ltd., Re (1967) 37 Comp.Cas. 796 (Ker.). Jones v. Bellegrove Properties Ltd. (1949) 2 KB 700 and Gee and Co. (Woolwich) Ltd. Re (1975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner, the respondent company did not appear and was proceeded ex parte. The petitioner was allowed to lead ex parte evidence. However after hearing the petitioner, the Court was pleased to dismiss the petition as it was based on running account maintained between the parties. The reason given by the Court in support of this decision is contained in para 3 of the judgment which reads as under: In his evidence by way of affidavit Sh. Rishi Pal Gupta, petitioner, has reiterated what has been stated in the petition. So far as the official of the Registrar of Companies is concerned, he proved on record the reply filed by Shri Subhash Sahni, director of the respondent company. Photocopy of the same has been exhibited as Ex.-1. The petitioner is in fact relying on this document and states that an amount of ₹ 6,89,870.76 is due. It is petitioner's own admission that this petition is based on the running account maintained between the parties. That every year the accounts were sent to the respondent. The respondent company had been making the payment and these were also adjusted against the running account. Section 34 of the Evidence Act stipulates that mere entries in the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count, there is a clear admission on the part of the respondent company acknowledging the said debt. Be it in the form of some communication or be it in the form of entries in the books of accounts or balance which can safely be treated as acknowledgement of debt. This aspect cannot be overlooked and case cannot be treated as the one asked on merely a running account simplicitor. In such a case the petition is also based upon the acknowledgement of debt by the respondent company which is in the nature of admission of the debt. No doubt the entries in the running account are to be proved. However, whether any proof is necessary when there is an admission? Obviously what is required to be proved by a person is the fact which is disputed by the other side. One is not to prove those facts which are admitted. This is a clear mandate of Section 58 of the Evidence Act. Take for example, in a given case, the petitioner who is maintaining running account sends the same to the respondent company for verification and the respondent company after going through the same not only verifies but confirms the balance outstanding payable by the respondent company to the petitioner. Can it be said, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition can be admitted. 18. I am, Therefore, of the prima facie opinion that the respondent company is indebted to the petitioner which debt is acknowledged. Once that is found, the defense of the respondent company that it is a solvent company would also not hold any water. This petition is accordingly admitted to hearing. Let citations be published in Statesman (English) and Jansatta (Hindi). The question of appointment of provisional Liquidator shall be considered after the citation is published. However, liberty is grated to the respondent company to deposit balance amount of ₹ 1,52,471/- (₹ 2,00,000/- already deposited pursuant to the Division Bench order) along with interest calculated at the rate of 6 per cent per annum on ₹ 3,52,471/- from 1st August, 1998 (keeping in view that registered notice was sent on 31st July, 1998) with the Registrar General of this Court within six weeks from the date of this order. The petitioner shall not get the citations published for a period of six weeks. In case the aforesaid amount is not deposited, the petitioner shall proceed with the publication of citations, 19. List for further orders on 12th July, 2005. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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