IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT SUIT SUIT NO.1068 OF 1980 NO.1068 OF 1980 NO.1068 OF 1980 M/s.Jaico Brothers .. Plaintiffs Versus Tata Press Ltd. .. Defendants Ms.Mamta Sadh i/by Thakordas & Madvakar for the plaintiffs. Mr.M.G.Mimani for the defendants. CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. JUDGMENT JUDGMENT JUDGMENT RESERVED ON RESERVED ON RESERVED ON : 16th December 2008. 16th December 2008. 16th December 2008. JUDGMENT JUDGMENT JUDGMENT PRONOUNCED ON : 09th January 2009. PRONOUNCED ON : 09th January 2009. PRONOUNCED ON : 09th January 2009. JUDGMENT: JUDGMENT: JUDGMENT: . The plaintiffs are claiming a decree in the sum of Rs.04,21,750/- with interest at the rate of 18% per annum on the sum of Rs.02,48,96.086/- from the date of institution of the suit till realisation. 2. The case of the plaintiffs is that they are a partnership firm duly registered under the Indian Partnership Act, 1931. The plaintiffs have been carrying on business in paper and other raw-material. The original defendants were Tata Press Limited. It (2) appears from the amendments carried out to the plaint that the name of the said company underwent change from time to time and now the name of the original defendants is M/s.Infomedia India Ltd. The case of the plaintiffs is that the original defendants used to purchase from the plaintiffs paper and other allied goods from time to time. The original defendants had agreed to pay the amounts of bills within a period of 40 days and in case of default in payment of amounts within 40 days, the original defendants agreed to pay interest at the rate of 18% per annum on the unpaid amount. According to the case of the plaintiffs, from the year 1973 to 1977 there were number of transactions between them and the original defendants and the defendants made part payments against the purchase from time to time. According to the plaintiffs they had been maintaining books of accounts in the regular Courts of business and have made entries in their books of accounts as and when the transactions took place and the part payments were made by the original defendants. The accounting year of the plaintiffs is according to Samvat year. 3. According to the plaintiffs it was agreed between the parties and that it was the usage and practice accepted by the parties that the plaintiffs (3) would maintain in their books of accounts one running account of the original defendants in respect of goods supplied by the plaintiffs to original defendants and the monies paid by the original defendants towards the price of the goods. According to the plaintiffs it was agreed that the original defendants would make adhoc payments to the plaintiffs from time to time in discharge of their liabilities. According to the plaintiffs there was a running open account of the original defendants with the plaintiffs in the books of accounts of the plaintiff from the Samvat year 2029 (i.e 1972-73) onwards. The plaintiffs have set out the details of the purchases made by the original defendants and the amounts received from the original defendants. The plaintiffs have relied upon copies of the account of the original defendants in their books of accounts for various Samvat years. According to the plaintiffs the accounts were settled from time to time and the original defendants have accepted the accounts as correct. The case of the plaintiffs is that the original defendants signed delivery challans and accepted the goods supplied by the plaintiffs from time to time and had never raised any dispute about the same. The plaintiffs by their letter dated 26th April 1977 forwarded a statement of account to the original defendants showing that the (4) principal amount of Rs.02,99.906.79/- was payable by the original defendants. The original defendants by their letter dated 06th July 1977 alleged that as on 31st March 1977, according to their books of accounts, they were liable to pay to the plaintiffs only a sum of RS.01,26,100.15/-. The plaintiffs by their reply dated 16th July 1977 informed the original defendants through their auditors M/s.A.F.Ferguson and Company that according to the plaintiffs’ books of accounts, the original defendants were liable to pay a sum of Rs.03,46,537.75/- as on 31st March 1977. The original defendants by their letter dated 28th December 1978 alleged that the balance amount payable as on 30th November 1978 by them was only Rs.62,940/-. The plaintiffs replied by their letter dated 16th January 1979 by contending that the principal amount payable by the original defendants as on 31st October 1978 was Rs.03,58.817.156/-. 4. According to the original plaintiffs, at the end of the Samvat year 2035 i.e as on 26th October 1979 there was due and payable by the original defendants a sum of Rs.2,84.961.86/- being the balance price of goods sold and supplied by the plaintiffs to the original defendants. By advocate’s letter dated 03rd May 1979 (5) the plaintiffs called upon the original defendants to pay the aforesaid amount with interest. By way of reply dated 11th May 1979, the original defendants admitted that the accounts between the parties had been settled till 31st March 1976 but falsely stated that they had not been settled thereafter. All original defendants denied the claim of the plaintiffs. The plaintiffs issued rejoinder dated 01st July 1979 for reiterating their claim. By another letter dated 21st March 1980 the plaintiffs called upon the original defendants to pay the outstanding amount. As the amount was paid, the present suit has been filed. In the present suit, the plaintiffs are claiming a sum of Rs.02,84,961.86/- as the principal amount payable by the original defendants. The plaintiffs are claiming a sum of Rs.01,36,788.14/- being interest on the principal amount from 09th June 1977 till the date of filing of the suit. The plaintiffs are claiming further interest at the rate of 18% per annum from the date of institution of the suit. 5. The suit was contested by the defendants by filing written statement. The original defendants did not admit that the plaintiffs firm was duly registered. The original defendants admitted that there was a business relationship between them and the plaintiffs (6) from December 1971 and not from the year 1973. The original defendants stated that the plaintiff supplied to them only paper and not other allied goods. The defendants denied that they had agreed to pay interest at the rate of 18% per annum to the plaintiffs on the unpaid amount. They denied that they had agreed to pay the price within 40 days. The original defendants relied upon the bills issued by the plaintiffs which did not contain any period of credit. It was pointed out that on the reverse of the bills it was mentioned that interest will be payable at the rate of 12% per annum if the amount was not paid within the stipulated time. It is pointed out that though time was not mentioned in the bills, it was agreed that the payment was to be made on expiry of 60 or 90 days from the date of the bill. 6. The case of the original defendants is that as the plaintiffs were under great financial strain between November 1975 to October 1976, on the request made by them, the original defendants made advance payment during the said period to the plaintiffs and as on 21st October 1976 the plaintiffs have received payments which were far in excess of the amount of bills. It is contended that the plaintiffs have not kept the account books in proper and business like manner. The case of (7) the original defendants was that each payment was made by them specifically against a particular bill. The original defendants stated that at the end of each financial year i.e either on 28th February 1976 or on 31st March 1976 the auditors of the defendants used to send a letter of confirmation of balance by the defendants to the plaintiffs and the plaintiffs from time to time signed and confirmed the said balance. According to the original defendants, last of such confirmations of balance by the defendants was for the period ending with 31st March 1976. It was contended that in the confirmation for the period ending on 31st March 1976, a sum of Rs.4,19,241.96/- was stated to be due and payable by the defendants to the plaintiffs. It is contended that after the said balance confirmation, the original defendants have from time to time made payments to the plaintiffs leaving a small balance which has now become time barred and thus there is nothing due and payable by the original defendants to the plaintiffs. 7. In the written statement, the original defendants pointed out the correct balances from time to time at the foot of the account of the transaction between the plaintiffs and defendants. In the written (8) statement specific challenge was made to the credit entry dated 21st April 1974 and two entries dated 28th September 1974 made for 13 and 17 different payments. The defendants denied that they were liable to pay sum of Rs.09,508.35/- against the debit note for expenses as claimed by the plaintiffs. The defendants denied that they have been given a credit of Rs.09,76,803.50/- by credit note as alleged. The defendants contended that a journal entry of Rs.09,17,285.55/- was false, mischievous and misleading. The original defendants placed reliance on the correspondence made between the parties and submitted that the plaintiffs are not entitled to any relief. 8. On 25th January 2001 issues were settled by this Court. The settled issues read thus: "1) Do the plaintiffs prove that they are registered under the Partnership Act? 2) Whether the suit claim has barred by time? 3) Do the plaintiffs prove that there was an agreement with the defendants for (9) maintaining a running account in the name of the defendants by the plaintiffs? 4) Do the plaintiffs prove that the defendants also agreed to pay amounts of the bill within 40 days and further agreed to pay interest at the rate of 18% per annum in case the bills were not paid within that period? 5) Do the plaintiffs prove that for Samvat year 2029, the defendants purchased from the plaintiffs goods of the value of Rs.1,93,061.47/- against 13 bills and paid a sum of Rs.1,21,758.54/-, leaving a balance of Rs.71,302.93/- unpaid? 6) Do the defendants prove that they paid Rs.71,242.93/- between 3rd November 1973 and 29th March 1974 as alleged in para 6 of the written statement? 7) Do the plaintiffs prove that in Samvat year 2030, the defendants purchased from (10) the plaintiffs goods of the value of Rs.25,87,716.32/- against 86 bills and were also liable to pay a sum of Rs.193.40/- for cash payment as alleged? 8) Do the plaintiffs prove that for the said year i.e Samvat year 2030 the defendants paid a sum of Rs.24,35,471.26/- and are given credit of Rs.4,384.98/-, leaving a balance of Rs.2,19,356.41/- unpaid? 9) Do the defendants prove that they have paid Rs.2,19,356.41/- between 26.11.1974 and 25.2.1975 by retiring five hundies drawn on the plaintiffs by the defendants as alleged in para 7 of the written statement? 10) Do the plaintiffs prove that for the Samvat year 2031 the defendants purchased from the plaintiffs goods of the value of Rs.33,82,857.91/- against 98 bills and were also liable to pay a sum of Rs.9,508.35/- against the debit (11) note for expenses incurred on their behalf? 11) Do the plaintiffs prove that for the said year i.e Samvat year 2031 the defendants paid a sum of Rs.18.48.861.71/- and were given a credit of Rs.9,76,803.50/- by credit notes, leaving a balance of Rs.7,86,058.00/- unpaid? 12) Do the plaintiffs prove that for the Samvat year 2032, the defendants purchased from the plaintiffs goods of the value of Rs.13,38.294.54/- against 60 bills and were also liable to pay a sum of Rs.15,853.75/- against 5 debit notes for expenses incurred on their behalf? 13) Do the plaintiffs prove that the defendants have paid a sum of Rs.17,08,519.38/- and were given credit of Rs.81.381.13/- leaving a balance of Rs.3,50,305.78/- unpaid? (12) 14) Do the plaintiffs prove that for the Samvat year 2033, the defendants purchased from the plaintiffs goods of the value of Rs.2,56,210,76/- against 15 bills and were also liable to pay a sum of Rs.55.07/- against the debit note for the expenses incurred on their behalf? 15) Do the plaintiffs prove that for the Samvat year 2033 the defendants paid a sum of Rs.2,90,064.25/- and were given credit of Rs.31,545.52/- by credit notes leaving a balance of Rs.2,84,961.86/- unpaid? 16) Do the plaintiffs prove that accounts of the defendants as maintained by the plaintiffs were settled from time to time and the defendants accepted them as proved and correct? 17) Do the plaintiffs further prove that at the end of Samvat year 2035 i.e as on 26th October 1979 the amount due and (13) payable by the defendants were Rs.2,84.961.86? 18) Do the defendants prove that the amount of Rs.1,19,366.37/- was adjusted against 7 bills of the plaintiffs which had falled due as alleged in para 7 of the written statement? 19) Do the plaintiffs prove that they are entitled to recover the principal amount of Rs.2,84.961.86/- together with interest of Rs.1,36,788.14/-, that in all Rs.4,21,750.00/- with future interest? 20) What order and decree?" 9. The plaintiffs examined Mr.Natwarlal Mohanlal Patel as their only witness. The said Mr.Natwarlal is an employee of the plaintiffs. The said witness was cross examined by the counsel for the defendants. Apart from examining the said witness, the plaintiffs produced 14 documents alongwith a list. The defendants did not examine any witness and they have not produced any (14) documentary evidence on record. 10. The learned counsel appearing for the plaintiffs has taken me through the pleadings and notes of evidence. She submitted that the evidence of the only witness examined by the plaintiffs has gone unchallenged. She invited my attention to the cross-examination of the said witness made by the advocate for defendants. She submitted that the defendants have not examined any witness. Inviting my attention to the document at Exhibit P2 she submitted that the plaintiffs firm was duly registered on the date of institution of the suit. She submitted that name of the partner of the plaintiffs who has signed and verified the plaint also appears on the Register of Firms on the date of the institution of the suit. Inviting my attention to the entries in the books of accounts at Exhibit P3 to P7, she pointed out that the entire suit claim is within limitation and the defendants have not substantiated their plea of bar of limitation. As far as issue no.3 is concerned, she invited my attention to paragraph 11 of the affidavit in lieu of examination-in-chief of Mr.Natwarlal examined by the plaintiffs. She stated that the statement made in paragraph 11 regarding the plaintiffs maintaining (15) running account of the defendants has gone unchallenged as there is no cross-examination of the said witness made on what is stated in paragraph 11. Her submission is that the transaction of sale is not denied in the written statement. She submitted that the challenge by the defendants to entries made in the books of accounts is confined only to two entries. She submitted that the said challenge has not been substantiated. She pointed out that the challenge to journal entry in the sum of Rs.09,17,285.58/- will not help the defendants as it is a credit entry made in their favour. She invited my attention to the correspondence made between the parties. She submitted that the said correspondence also proves the case of the plaintiffs. She invited my attention to letters at Exhibits P8 and P11. As far as interest is concerned, the learned counsel invited my attention to paragraph 3 of the written statement in which the defendants have admitted that on the reverse of the bills there is a stipulation for payment of interest at the rate of 12% per annum. Her submission is that in any event the plaintiffs will be entitled to interest at the rate of 12% per annum. She submitted that the plaintiffs are entitled to a decree. 11. The learned counsel appearing for the defendants (16) submitted that though the firm of the plaintiffs may be duly registered under the Indian Partnership Act, 1932, the name of Mr.Jaman Shah who has signed and verified the plaint does not appear in the Register of Firms on the date of institution of the suit. He submitted that according to the case of the plaintiff, the statement of accounts at Exhibits P3 to P7 are not the extracts of the books of accounts but the same are the original accounts. He placed reliance on a decision of the Apex Court in the case of Ishwar Dass Jain (Dead) through legal representatives Vs. Sohan Lal (Dead) by legal representatives [(2001) Supreme Court Cases 434). He also placed reliance on a decision of the Apex Court in the case of Central Bureau of Investigation Vs. V.C. Shukla and Ors [(1998) 4 Supreme Court Cases 410). He submitted that as held by the Apex Court loose sheets of papers cannot be said to be a book and hence the loose sheets of papers are not admissible under section 34 of the Indian Evidence Act, 1872. He submitted that the documents in support of the entries made in the said accounts are not produced by the plaintiffs. He submitted that the entries made in the said statement of accounts at Exhibits P3 to P7 are not admissible as the same are entries made on loose sheets. He submitted that the plaintiffs ought to have produced bills, debit (17) notes etc which are referred to in the statement of accounts. He, therefore, submitted that the plaintiffs have not established their claim. He submitted that as the plaintiffs have not established their claim, it was not necessary for the defendants to examine any witness. He prayed that the suit may be dismissed. 12. By way of rejoinder, the learned counsel for the plaintiff submitted that the defendants have not challenged the accounts at Exhibit P3 to P7. She submitted that only two entries in the said statements of accounts have been challenged by the defendants as reflected from paragraph 8 of the cross-examination of the witness examined by the plaintiff. She submitted that one entry challenged is of Rs.09,17,285.55/- which is a credit entry and the only other entry challenged is in the sum of Rs.04,096.30/-. She therefore submitted that the suit deserves to be decreed. 13. I have given careful consideration to the submissions. The first issue is regarding registration of the plaintiffs Firm. My attention was invited to Exhibit P2 which is a certified copy of extract of Register of Firms. The said certified copy shows that entry of name of the plaintiffs was made in the register (18) on 31st January 1972. Thus, the plaintiffs firm was duly registered under the Indian Partnership Act, 1932 prior to the date of institution of the suit. Hence the first issue must be held in favour of the plaintiffs. The learned counsel appearing for the defendants submitted that the name of the partner who has signed and verified the plaint is not shown in the Register of Firms as the partner of the plaintiffs firm. He has placed reliance on a decision of the Apex Court in the case of M/s.Shreeram Finance Corporation Vs. Yasin Khan & Ors [(1989) 3 Supreme Court Cases 476). The perusal of the plaint shows that the same has been signed and verified by one Jaman Hansraj Shah. The document at Exhibit P2 shows that Shri Jaman Hansraj Shah (HUF), trustee of Asha Trust was a partner of the plaintiffs firm and entry of the name as a partner is made in the register on 31st January 1972. The entry made on 07th February 1981 shows that the said Jaman Hansraj Shah (HUF) retired on 04th November 1975 and said Jaman Hansraj Shah joined as a partner in his capacity as trustee and representative of Tajal Trust on 04th November 1975. Emphasis was laid by the learned counsel appearing for the defendants on the fact that entry of name of Shri Jaman Hansraj Shah as a partner of the plaintiffs Firm was not made on 07th May 1980 when the (19) suit was instituted. The document at Exhibit P2 clearly records that the said Jaman Hansraj Shah joined as a partner on 04th November 1975. In any case, the entry in the Register of Firms of the name of Shri Jaman Hansraj Shah (HUF) was very much in existence on the date of institution of the suit. Thus, HUF of Jaman Hansraj Shah was shown as a partner in the Register of Firms on the date of institution of the suit and the said entry was deleted on 07th February 1981. When the HUF was a partner, the said Jaman Hansraj Shah as Karta of HUF and as trustee of Asha Trust could have always signed and verified the plaint. As pointed out earlier, as on the date of institution of the suit the entry of Jaman Hansraj Shah (HUF), trustee of Asha Trust was very much there in the Register of Firms. It must be also stated here that there is no issue framed on the question whether the name of the person signing and verifying the plaint was appearing in the Register of Firms on the date of institution of the suit. Nevertheless the extract at Exhibit P2 reflects the aforesaid factual position. Therefore, the first issue will have to be answered in the affirmative. 14. The second issue is regarding bar of limitation. The suit is for recovery for the amount balance at the (20) foot of the account of the original defendants maintained by the plaintiffs in their books of accounts. Reliance is placed on the balance at the foot of the said account as on 31st October 1979 of Rs.02,84,961.86/-. The said amount is the principal amount claimed in the suit. The suit has been lodged on 08th May 1980. The statement of account at Exhibit P7 shows that last credit entry has been made on 09th June 1977 which is of a payment of cheque of Rs.15,000/- by the original defendants. There is a controversy as to whether the entries in the statement of accounts are admissible in evidence. The said controversy has been dealt with separately while answering the other issues. However, if the entries in the said statement of accounts are taken as proved, the suit will have to be held as filed within the stipulated period of limitation. The issue of bar of limitation will have to be answered accordingly. 15. As far as third issue is concerned, a reference will have to be made to the averments made in the plaint. In paragraph 4 of the plaint it is asserted that "The plaintiffs say that it was agreed and arranged between the parties and it was the usage and practice known to and accepted by the parties that the plaintiffs (21) would and did maintain in their books of accounts one running account of the original defendants in respect of goods supplied by the plaintiffs to the original defendants or the moneys paid by the plaintiffs to or on behalf of the original defendants debiting the same and all the moneys received from the original defendants towards the price of the goods or otherwise due and payable to the original defendants by the plaintiffs." It is further asserted in paragraph 4 there was a running open account of the original defendant with the plaintiffs in the plaintiffs’ books of account from Samvat year 2029 i.e the year 1972-73 onwards. In paragraph nos.5 to 11 of the plaint reliance has been placed by the plaintiffs on the amounts due and payable as per the running open