A.K.SABKAR,J.: - (1.) THE following Judgment of the court was delivered by
(2.) THIS appeal arises out of a suit filed in the High court of Jammu and Kashmir for recovery of price of goods sold and delivered. The only point involved in it is whether the suit was governed by art. 115 of the Jammu and Kashmir Limitation Act. The courts below have held, and this has not been disputed in this appeal, that if that article did not apply, the suit would fail on the ground of limitation. Sometime in November 1946, the parties entered into an agreement in writing for the supply by the sellers, the respondents, to the buyer, the appellant, of 5,000.00 maunds of maize, 500 maunds of wheat and 100 maunds of Dal at the rates and times specified. The agreement stated that on the date it had been made the buyer had paid to the sellers Rs. 3,000.00 and had agreed to pay a further sum of Rs. 10,000.00 within ten or twelve days as advance and the balance due for the price of goods delivered, after the expiry of every month. It is admitted that the said sum of Rs. 10,000.00 was later paid by the buyer to the sellers. Various quantities of goods were thereafter delivered by the sellers to the buyer and though such deliveries had not been made strictly at the times specified in the contract, they had been accepted by the buyer. The buyer in its turn made various payments towards the price of the goods delivered but not month by month and had not further paid it in full. The last delivery of goods was made on 23/06/1947, and the suit was brought on 10/10/1950, for the balance of the price due. The learned Judge of the High court who heard the suit held that art. 115 had no application and dismissed the suit as barred by limitation. The sellers went up in appeal which was heard by two other learned Judges of the High court. The learned Judges of the appellate bench of the High court held that art. 115 of the Jammu & Kashmir Limitation Act applied and the suit was not barred. They thereupon allowed the appeal and passed a decree in favour of the sellers. The buyer has now come up in appeal to this court. Article 115 of the Jammu and Kashmir Limitation Act which is in the same terms as art. 85 of the Indian Limitation Act except as to the period of limitation, is set out below: JUDGEMENT_1349_AIR(SC)_1959Html1.htm
(3.) IF the article applied the suit would be clearly within time as the last item found to have been entered in the account was on 23/06/1947. The only question argued at the bar is whether the account between the parties was mutual. The question what is a mutual account, has been considered by the courts frequently and the test to determine it is well settled. The case of the Tea Financing Syndicate Ltd. v. Chandrakamal Bezbaruah (1) may be referred to. There a company had been advancing monies by way of loans to the proprietor of a tea estate and the proprietor had been sending tea to the company for sale and realisation of the price. In a suit brought by the company against the proprietor of the tea estate for recovery of the balance of the advances made after giving credit for the price realised from the sale of tea, the question arose as to whether the case was one of reciprocal demands resulting in the account between the parties being mutual so as to be governed by art. 85 of the Indian Limitation Act. Rankin, C.J., laid down at p. 668 the test ,to be applied for deciding the question in these words: ` There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided following Halloway, A.C.J., transactions on each side creating independent obligations on the other and not merely transactions which create obligations on one side, those on the other being merely complete or partial discharges of such obligations. It is further clear that goods as well as money may be sent by way of payment. We have therefore to see whether under the deed the tea, sent by the defendant to the plaintiff for sale, was sent merely by way of discharge of the defendant's debt or whether it was sent in the course of dealings designed to create a credit to the defendant as the owner of the tea sold, which credit when brought into the account would operate by way of set-off to reduce the defendant's liability.` The observation of Rankin, C.J., has never been dissented from in our courts and we think it lays down the law correctly. The learned Judges of the appellate bench of the High court also appear to have applied the same test as that laid down by Rankin, C.J. They however came to the conclusion that the account between' the parties was mutual for the following reasons: ` The point then reduces itself to the fact that the defendant company had advanced a certain amount of money to the plaintiffs for the supply of grains. This excludes the, question of monthly payments being made to the plaintiffs. The plaintiffs having received a certain amount of money, they became debtors to the defendant company to this extent, and when the supplies exceeded Rs. 13,000.00 the defendant company became debtors to the plaintiff and later on when again the plaintiff 's supplies exceeded the amount paid to them, the defendants again became the debtors. This would show that there were reciprocity of dealings and transactions on each side creating independent obligations on the other.` ;