Appeal No 77 of 1954
Appeal from the judgment and decree dated August 25 1949 of the former Nagpur High Court in First Appeal No 91 of 1945 arising out of the judgment and decree dated July 31 1945 of the Court of Second Additional District Judge Akola in Civil Suit No 7 B of 1944
C B Agarwala and Ratnaparkhi A G for the appellant
Veda Vyasa and Ganpat Rai for the respondent
February 18
The following Judgment of the Court was delivered by BHAGWATI J
This appeal with a certificate under section 109a read with section 110 of the Code of Civil Procedure Act V of 1908 is directed against the judgment and decree passed by the Nagpur High Court dismissing the appeal of the appellant and confirming the dismissal of his suit by the learned Second Additional District Judge Akola
The appellant who was the plaintiff in the trial court filed in the Court of the First Additional District Judge Akola Civil Suit No 2 B of 1944 against the 7 B respondent a limited company incorporated under the Indian Companies Act of 1882 which owned a 1333 Ginning and Pressing Factory and carried on business of ginning and pressing cotton at Akot in District Akola
The appellant alleged that he was one of the creditors of the company which used to borrow money from him for about 35 years past
He claimed to have acted as Banker of the company and the sums borrowed from him were entered in the account books of the company in two khatas one known as current account or  chalu khata  and the other described as fixed deposit khata 
An account used to be made up at the end of  every year and the amount found due at the foot of the account was entered in the balance sheet of the company which was adopted at the Annual General Meeting of the company
Deposit receipts also used to be passed for the amounts standing in the fixed deposit khata from time to time and at the end of the year ending July 1939 a sum of Rs 79519 12 9 was found due by the company to him on both these accounts
On January 15 1940 the company passed a deposit receipt in his favour for this amount which he demanded from the company by his letters dated May 10 1941 and May 17 1941
The company failed and neglected to pay the said amount with the result that he filed on June 161944 a suit against the company for recovery of a sum of Rs 103988 made up of Rs 79519 12 9 for principal and Rs 24468 as interest from August 1 1939 to January 15 1944
The claim as laid in the plaint was that all these amounts which had been borrowed by the company from him were payable on demand to be made by him as creditor and they were deposits with the company but in order that the company may not be compelled to pay a big sum on demand items in the current account were being transferred to the fixed deposit account from time to time
The amounts of these deposits being thus payable on demand the cause of action accrued to him on May 17 1941 and limitation for the suit expired on May 17 1944
But as the courts were closed on that day the suit was filed on 1334 the first opening day i e June 16 1944 and limitation was therefore saved by section 4 of the Limitation Act
He also relied upon the acknowledgments of his debt made by the company in a the resolution passed by the Board of Directors on May 20 1941 b the balance sheet of the company for the year 1940 41 dated October 10 1941 and for the years 1941 42 and 1942 43 and c the entry in the khata of the plaintiff in the books of the company made on or about July 31 1941 and signed by the Chairman of the company
He further relied upon an application made under section 162 of the Companies Act to liquidate the company on June 16 1941 which application was however dismissed by the court on June 16 1944 stating that as he was bona fide prosecuting this application for the same relief as claimed in the suit and as the court was unable to entertain the application because the debt was disputed by the company he was entitled to deduct from the period of limitation the time spent by him under section 14 of the Limitation Act
This claim of the appellant was contested by the respondent mainly on the ground that the suit was barred by the law of limitation
Both the courts below negatived his claim
The trial court dismissed his suit and the High Court on appeal dismissed his appeal and confirmed the dismissal of his suit by the trial court hence this appeal
The only question which arises for our consideration in this appeal is whether the appellant s suit was barred by limitation
The appellant in the first instance relied upon the deposit receipt which was passed by the company in his favour on January 15 1940
This receipt exhibit P 1 evidenced a deposit of Rs 79519 12 9 for 12 months from August 1 1939 to July 31 1940 and the amount at the foot thereof became due and payable by the respondent to him on July 31 1940
The appellant however sought to extend the commencement of the period of limitation to May 17 1941 on the ground that the monies the subject matter of that deposit receipt were payable to him on demand that such demand was made by him 1335 on May 17 1941 and that therefore that was the date for the commencement of the period of limitation
No express agreement in this behalf could be proved by him nor could an agreement be implied from the course of dealings between him and the company for the period of 25 years during which the dealings continued between the parties
As a matter of fact such an agreement either express or implied was negatived by the very terms of the deposit receipt which apart from mentioning that the monies were received by the company as deposit for 12 months from August 1 1939 to July 31 1940 contained on the reverse a note that interest would cease on due date
This was sufficient to establish that the amount due at the foot of the deposit receipt became due and payable on the due date mentioned therein and that there was no question of the amount being payable at any time thereafter on demand being made in this behalf by the creditor
The course of dealings between the parties also negatived any such agreement because it appears from the record that such deposit receipts were passed by the company in his favour from time to time each of such receipts being for a fixed period in the same terms as the deposit receipt in question and the receipts containing similar notes on the reverse that interest would cease on due date
Both the courts below were therefore right in coming to the conclusion that there was no agreement of the kind put forward by the appellant that the monies due at the foot of the deposit receipt in question were repayable on demand and that monies due at the foot thereof became due and payable by the company to him on July 31 1940
The next question to consider is whether the bar of limitation which set in on July 31 1943 was saved by reason of the circumstances set out in the plaint for avoidance of the same
Out of the three acknowledgments of debt pleaded by the appellant the third was abandoned by him in the course of the hearing and the only two acknowledgments which were pressed were a the resolution passed by the Board of Directors on May 20 194 1 and b the balance sheet of the company for the year 1940 41 dated October 10 1336 1941
It may be noted that he made no attempt at all to prove the balance sheets of the company for the years 1941 42 and 194 2 43
In regard to the resolution passed by the Board of Directors on May 20 1941 the position is that at that meeting one Pandurang Narsaji Hadole who was one of the Directors of the company
made a reference to aproposed settlement of the claim of the appellant for a sum of RIB
67939 as found due at the end of July 1936 which had been resolved upon by the Board of Directors on December 221936 but had not been accepted by the appellant
The resolution then requested the appellant to inform the company again if even then he was prepared to abide by the terms of that proposed settlement which would be placed before the general meeting of all the share holders of the company if a reply was received from him in the affirmative
This resolution of the Board of Directors was alleged by the appellant to be an acknowledgment of a subsisting liability in regard to the debt due by the company to him at the foot of the deposit receipt in question 
We do not see how it could ever be spelt out as such acknowledgment
The contents of the resolution only referred to a past liability of the company to the appellant and there was nothing therein which could by any stretch be construed as referring to the liability of the company to him at the foot of the deposit receipt dated January 15 1940
Our attention was drawn to the deposit receipts which had been passed by the company in favour of the appellant on May 30 1935 October 18 1936 and November 301938 each of which was for a sum of Rs 47500
No connection was however established between the sum of Rs 47500 the subject matter of these receipts and the sum of Rs 79519 12 9 the subject matter of the deposit receipt in question and in the absence of any such connection having been established the appellant could not avail himself of the alleged acknowledgment of liability contained in the resolution of the Board of Directors dated May 20 1941 1337 even if it could perchance be construed as an acknowledgment of a subsisting liability
This resolution of the Board of Directors dated May 20 1941 could not therefore avail the appellant as an acknowledgment of his debt
In regard to the balance sheet of the company for  the year 1940 41 dated October 10 1941 it is to be noted that even though the appellant applied before the trial court for filing the balance sheet of 1940 41 on April 28 1945 he expressly stated that he did not want to adduce any oral evidence to prove it
He was however allowed to file the same
But it was realised later that the balance sheet did not prove itself and he therefore made another application on July 11 1945 for permission to file a copy from the Registrar of Companies and contended that this proved itself
This document was however rejected by the trial court as filed too late
When the appeal came up for hearing before the High Court it was contended on behalf of the appellant that the copy which was adduced from the office of the Registrar was admissible in evidence but that evidence was rejected by the High Court on a consideration of sections 65 and 742 of the Evidence Act
The attention of the High Court was evidently not drawn to the Commercial Documents Evidence Act XXX of 1939 which has amended the Law of Evidence with respect to certain commercial documents
Section 3 of that Act enacts that  for the purposes of the  and notwithstanding anything contained therein a Court a          b may presume within the meaning of that Act in relation to documents included in Pt
11 of the Schedule  That any document purporting to be a document included in or of the Schedule as the case may be and to have been duly made by or under the appropriate authority was so made and that the statements contained therein are accurate
 Item No 21 in Pt
11 of the Schedule mentions 1338  Copy certified by the Registrar of Companies of the Balance Sheet Profit and Loss Account and audit i report of a company filed with the said Registrar under the Indian Companies Act 1913 and the rules made thereunder
If the attention of the High Court had been drawn to this provision of law we are sure it would not have rejected the copy of the balance sheet obtained by the appellant from the office of the Registrar of Companies
We are of the opinion that the copy should have been admitted in evidence and we do hereby admit the same
The appellant contends that that balance sheet which was signed by the Directors contained an acknowledgment of the debt due by the company to the appellant for the sum of Rs 67939 as and by way of fixed deposit and that was sufficient to save the bar of limitation
The question therefore arises whether any presumption can be raised as regards the balance sheet having been duly made by or under the appropriate authority or in regard to the accuracy of the statement contained therein under section 3b of the Commer cial Docuinents Evidence Act XXX of 1939
It is to be noted that this presumption is not compulsory as in the case of section 3a of the Act it is discretionary with the court
The difficulty in the way of the appellant here is however insuperable because we find that there were factions in the company at or about the relevant time
A Directors  meeting was held on April 27 1941 and the resignation of the appellant as the Chairman was accepted and another person was appointed in his place
A second meeting was called for May 17 1941 but it had to be adjourned for want of a quorum
The adjourned meeting was held on May 201941 but no balance sheet was passed at that meeting
There is nothing on the record to show that there was another meeting of the Board of Directors for passing the balance sheet of the company for the year 1940 41
A general meeting of the Shareholders was called for November 16 1941 to pass the balance sheet
This also had to be adjourned to the following day for want of a quorum
At the 1339 adjourned meeting the shareholders then present refused to pass the accounts and it was not till some five weeks later namely on December 30 1941 that the rival faction met and passed the accounts
But this meeting only purported to be a continuation of the meeting which bad to be adjourned for want of a quorum and that clearly was irregular because the adjourned meeting had to be called within twentyfour hours
It did not purport to be a fresh meetino convened after due notice etc
Under the circumstancesit could not be urged that the balance sheet was duly passed
Even if the attention of the High Court had been drawn to the provisions of section 3 b of the Commercial Documents Evidence Act XXX of 1939 it would have been perfectly justified in not raising the presumption in regard to the balance sheet having been duly made by or under the appropriate authority and in regard to the accuracy of the statement contained therein
We are therefore of the opinion that this alleged acknowledgment also is of no avail to the appellant
In regard to section 14 of the Indian Limitation Act which was sought to be relied upon by the appellant it may be shortly stated that the liquidation proceedings had not been filed in the courts below and there is nothing to show that the requirements of section 14 were at all satisfied
No cogent argument has been advanced before us on behalf of the appellant which would induce us to hold that the conclusion reached by the High Courtin this behalf was incorrect in any manner whatever
On all the above grounds we have come to the conclusion that the appellant s claim was clearly timebarred and the dismissal of his suit by the trial court as well as the dismissal of his appeal by the High Court were in order
This appeal will therefore stand dismissed with costs
Appeal dismissed


Summary:
 Appellant took the tenancy of the premises in question on an agreed monthly rent of Rs22  Rs220 per month on account of Education Cess
Respondent purchased the house on December 3 1976
Appellant was in arrears of rent from 161976 to 301176
In response to the notice issued by the Respondent appellant sent a money order to Respondent treating him as the Muktyar or agent of the previous landlord
The respondent refused the money order
Thereafter the appellant filed an application in the trial court for fixing the standard rent of the premises under the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act 1947
The Respondent filed a suit claiming arrears of rent and possession of the suit premises on the ground of non payment of arrears of rent and bona fide requirement under section 123 and section 131 of the Act
Trial Court passed an order fixing the interim rent of Rs20 and directed the appellant to pay all arrears of rent and future rent accordingly
Appellant deposited the arrears and thereafter made payment not monthly but at some irregular intervals
The Trial Court held that the respondent had failed to prove that he was in bona fide need of the suit premises but passed a decree for eviction on the ground that the Appellant had committed default in payment of rent as contemplated under section 123b of the Act
On appeal these findings were confirmed by the Additional District Judge
The Appellant filed a Writ Petition in the High Court which was dismissed
In the appeal by special leave it was contended on behalf of the appellant that payments of rents were made with substantial regularity and that no decree for eviction could be passed against the Appellant
The contention of the Respondent was that there was irregularity in the deposit of the rent and that the appellant was liable to be evicted on the ground of default in payment of rent
462 Disposing of the appeal this Court  HELD 1
Section 123a of the Act will not be applicable since there was dispute regarding the amount of standard rent
Section 123b is applicable which makes it clear that no decree for eviction can be passed in a suit for recovery of possession on the ground of non payment of standard rent or permitted increases instituted by the landlord against the tenant if on the first day of the hearing of the suit or on or before such a date as the court may fix the tenant pays or deposits in court the standard rent and permitted increases then due and thereafter continues to pay or deposits in court regularly such rent and permitted increases till the suit is finally decided and also pays the costs of the suit as directed by the court
466E F 2
As ordered by the Trial Court the monthly rent should have been deposited on the fifth day of each succeeding month
There were a few defaults committed by the Appellant varying from 2 to 3 days into a maximum of 23 days
On the other hand rent for most of the months had been deposited in advance
In the circumstances of the case the Appellant had been depositing the rent with reasonable punctuality and can be regarded as having deposited the rent regularly  as contemplated in Section 123b and it is incorrect to say that exact or mathematical punctuality was required in the deposit of rent by a tenant to take advantage of the provisions of Section 123b
467G H 468A C Mranalini B Shah and another vs Bapalal Mohanlal Shah  followed
The decree for eviction was set aside and the court directed that the suit filed by the Respondent shall stand dismissed