TMI Blog1974 (8) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-5-1964. It was further alleged in the plaint that on 30-3-1965, the defendant paid a further sum of ₹ 500 towards interest, but failed and neglected to pay the balance. Hence the suit. 2. The defendant in his answer denied that he ever borrowed any amount at any time from the plaintiff. He also denied specifically the alleged borrowing of a sum of ₹ 7000, the demand by the plaintiff for the repayment on 30-5-1964, the alleged payment of a sum of ₹ 500 towards interest on that date, the preparation by the plaintiff on the account stated and the alleged acknowledgment by the defendant of the account stated by putting his signature thereto. The defendant also denied that on 30-3-1965 he paid a sum of ₹ 500 towards the alleged dues. The case of the defendant was that he, as a tin-can manufacturer, used to receive supply of old tin sheets and new tin sheets from the plaintiff and would manufacture out of that material snuff boxes and supply the same in different sizes to the plaintiff, who is a dealer in snuff. In the course of the dealings, the plaintiff used to take the signature of the defendant in a note book as a token of his having received the raw ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determination are:-- (1) Whether the loan said to have been advanced by the plaintiff to the defendant is true; (2) Whether Ex. A. 1 is in the nature of an account stated or in the nature of a valid acknowledgment; (3) Whether, in any event, the suit claim is in time? 5. Point No. 1: Though in the plaint, the date of the advancement of the loan has not been mentioned, P. W. 1 the plaintiff, stated for the first time from the witness box that he advanced the loan of ₹ 7000 to the defendant in January 1959 and that the defendant agreed to repay the loan with interest at 12 per cent per annum. It is astonishing that the plaintiff did not take the trouble of obtaining a promissory note or at least a voucher from the defendant to evidence the payment of this huge amount. Admittedly, he had not, advanced any loan to the defendant on any prior occasion. The plaintiffs explanation is that out of confidence, which he reposed in the defendant, he did not obtain any promissory note from him. One wonders why he should not have issued a cheque for ₹ 700ft to the defendant instead of paying the whole amount in cash. According to the plaintiff, be paid this amount in his own offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 7000 in January 1959, and the defendant had paid over ₹ 4000 by way of interest in numerous instalments from January 1959 to 30-5-1964, and if there were no accounts kept by the plaintiff to evidence either the payment or the repayments alleged, one is at a loss to understand with reference to which account Ex. A. 1 was prepared on 30-5-1964 and with reference to which books the defendant was able to verify the correctness of the three suspiciously bald entries, which are entered in Ex. A. I. Be it noted that Ex. A. 1 itself makes no reference whatsoever to the loan of ₹ 7000 advanced in January 1959, or to the alleged repayments by the defendant of ₹ 4999 or the dates and particulars thereof. The very first entry, in Ex. a. 1, which is in Tamil, is to following effect-- Arrears due by tin factory Ethirajulu Naidu on account of balance of principal ₹ 7000, The entry does not explain as to how it was arrived at. The next entry runs as follows-- Interest arrears upto 15-5-1964 ₹ 1330. Below this entry is given the amount of ₹ 8330, which is evidently the total of the balance of principal and interest. Below this entry, the third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has, without a strict scrutiny of the relevant circumstances, ascribed undue weight to two circumstances. The first is that the defendant has admitted his signature in Ex. A. 1. According to the trial Court, the fact that EX. A. 1 contains the signature of the defendant is prima facie proof that the defendant had acknowledged his liability to pay the amount of ₹ 7830 Contained in Ex. A. 1 to the plaintiff . Hence there is absolutely no difficulty in holding that the defendant had acknowledged the correctness of the 'account stated' in Ex. A. 1. The lower court has overlooked the fact that the execution of a document implies intelligent and conscious appreciation of the contents thereof and the facts connected therewith ; and where the defendant admitted only that he had put his signature in a blank piece of paper, which, he alleged, had possibly been utilised for fabricating Ex A. 1 it cannot be regarded as his having admitted the execution or Ex. A. 1. The onus of proving that a particular paper, which is the basis of a suit was duly executed by the defendant, must, therefore, have been thrown upon the shoulders of the plaintiff. 7. The second circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged therewith or by his agent generally or specially authorised in that behalf, to pay whole or in part a debt of which the creditor might have enforced payment, but for the law for the limitation of suits. But there is no such promise contained in Ex. A. 1. Learned counsel for the respondent wants us to construe Ex. A. 1 as embodying an implied promise to pay a time-barred debt, What the section requires is an express promise made in writing and signed by the person to be charged therewith. Nothing short of an express promise, therefore, will provide a fresh period of limitation. It is settled law that an implied promise is not sufficient. In fact, in Govinda Nair v. Achutan Nair : AIR 1940 Mad 678, this court held as follows-- The promise referred to in Section 25, Sub-section (3) Contract Act, must be an express one and cannot be held to be sufficient if the intention to pay is unexpressed and has to be gathered from a number of circumstances. In other words, there must be a distinct promise to pay before the document could be said to fall within the provisions of this section -- See Ramaswami Pillai v. Kuppuswami Pillai, 1910 MWN 547; Govind Das v. Sarjudas, ILR (1908) Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 observations above quoted show that the essence of an account stated being bilateral the promise to pay made by one party is good enough consideration for the promise made by the other. Such a contract being fully supported by consideration is enforceable at law, and would constitute a new cause of action. But, where in an account of the nature of Ex. A. 1, the relationship between the debtor and the creditor is unilateral, the implied promise of the debtor to pay the creditors a time-barred debt would be an agreement made without consideration, and, therefore, void under Section 25 of the Indian Contract Act, subject of course to the exception contained in Sub-section (3) of Section 25 of the Act. In fact, in their Lordships, while holding that an account stated would constitute a new cause of action, even though some of the items were statute barred expressly left the question open whether the same principle would be applied if all the items in the account st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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