Case: Kashinath Sankarappa Wani Vs. New Akot Cotton Ginning &amp; Pressing Co. Limited

could not, therefore, avail the appellant as an acknowledgment of his debt.10. In regard to the balance-sheet of the company for the year 1940-41 dated 10 th October 19412, it is to be noted that, even though the appellant applied before the trial Court for filing the balance-sheet of 1940-41 on 28 th April 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 11th July 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 Ss. 65 and 74 (2) of the Evidence Act. The attention of the High Court was evidently not drawn no 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 Indian Evidence Act, 1872, and notwithstanding anything contained therein, a Court(a) ........................................(b) may presume, within the meaning of that Act, in relation to documents included in Pt. II of the Schedule:-That any document purporting to be a document included in Part I or Part II 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. II of the Schedule mentions :"Copy, certified by the Registrar of Companies of the Balance Sheet, Profits and Loss Account, and audit report of a company, filed with the said Registrar under the Indian Companies act, 1913 and the rules made thereunder."11. 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.12. 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. 67,939 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 S. 3 (b). Commercial Documents Evidence Act (XXX of 1939).13. It is to be noted that this presumption is not compulsory as in the case of S. 3 (a) 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 27th April 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 17th May 1941, but it had to be adjourned for want of a quorum. The adjourned meeting was held on 20th May 1941, 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 Share-holders was called for 16th November, 1941, to pass the balance-sheet. This also had to be adjourned to the following day for want of a quorum. At the adjourned meeting the share-holders then present refused to pass the accounts and it was not till some five weeks later, namely on 30th December 1941, that the rival faction met and passed the accounts. But this meeting only purported to be a continuation of the meeting which had to be adjourned for want of a quorum and that clearly was irregular because the adjourned meeting had to be called within twenty-four hours. It did not purport to be a fresh meeting convened after due notice etc. Under the circumstances, it could not be urged that the balance-sheet was duly passed.14. Even if the attention of the High Court had been drawn to the provisions of S. 3 (b), 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 acknowledgement also is of no avail to the appellant.15. In regard to S. 14, 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 S. 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 Court in this behalf was incorrect in any manner whatever.16. On all the above grounds we have come to the conclusion that the appellants claim was clearly time-barred 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.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]As a matter of fact, such an agreement, either express or implied, was negative 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 re-payable on demand and that monies due at the foot thereof became due and payable by the company to him on 31st July 1940.It is to be noted that this presumption is not compulsory as in the case of S. 3 (a) 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 27th April 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 17th May 1941, but it had to be adjourned for want of a quorum. The adjourned meeting was held on 20th May 1941, 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 yearA general meeting of the Share-holders was called for 16th November, 1941, to pass the balance-sheet. This also had to be adjourned to the following day for want of a quorum. At the adjourned meeting the share-holders then present refused to pass the accounts and it was not till some five weeks later, namely on 30th December 1941, that the rival faction met and passed the accounts. But this meeting only purported to be a continuation of the meeting which had to be adjourned for want of a quorum and that clearly was irregular because the adjourned meeting had to be called within twenty-four hours. It did not purport to be a fresh meeting convened after due notice etc. Under the circumstances, it 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 S. 3 (b), 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 acknowledgement also is of no avail to the appellant.In regard to S. 14, 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 S. 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 Court in this behalf was incorrect in any manner whatever.On all the above grounds we have come to the conclusion that the appellants claim was clearly time-barred 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.