Modi, J. - (1.) THIS is a second appeal by the defendant Phoolchand against the judgment and decree of the Civil Judge, Sirohi, dated the 29th July, 1952.
(2.) THE plaintiffs Tarachand and others are a firm who carried on commission agency business in the name of Tarachand Kundan Mal in Siana. THE plaintiffs' case was that the defendant Phoolchand did business in gold and silver through their agency. This business lasted from Svt. 2000 Asoj Vadi 5 (corresponding to 7. 9. 1944) to Chait (second) Vadi Svt. 2001 (corresponding to 2. 4. 1945) and the defendant owed to the plaintiffs a sum of Rs. 5626/0/6 towards which the defendant paid a sum of Rs. 4000/- on Asad Vadi 2, Svt. 2001 through the firm of Shah Jawanmal Rikhab Das of Jawal with the result that a sum of Rs. 1626/0/6 remained outstanding against the defendant. THE plaintiff added a sum of Rs. 324/15/6 to the above sum by way of interest and brought a suit for Rs. 1951/-against the defendant on the 11th March, 1948. THE plaintiffs further alleged that defendant No. 2 Chunnilal was their partner but as he was not prepared to join in the institution of the suit, they were compelled to implead him as a defendant. THE defendant appellant admitted that he did business in gold and silver through the commission agency of the plaintiffs but mainly" resisted the suit on the ground that it was barred by limitation. He also pleaded that nothing was due from him either by way of principal interest. As regards the payment of Rs. 4,000/-, the defendant denied that the payment was made under his signature or under the signature of any agent of his. THE trial court decree the plaintiffs' suit for a sum of Rs. 640/2/- plus Rs. 112/- as interest having held that the rest of the plaintiffs' claim was barred by time. THE plaintiffs went up in appeal to the Civil Judge, Sirohi, who varied the judgment of the trial court and decree the plaintiff's suit in-toto. This second appeal has been filed by the defendant Phoolchand against the above judgment and decree. The learned Judge of the lower appellate court held the plaintiff's suit to be within time on the ground that the sum of Rs. 4000/-which was admittedly received by the plaintiffs and credited in their account books on Svt. 2001, Asad Vadi 2, (corresponding to 27th June, 1944) had been paid by the defendant appellant through his agents Jawanmal Rikhabdas (vide Ex. P-7) and was a payment which satisfied the conditions of sec. 20 of the Limitation Act and, therefore, saved limitation for the plaintiffs' suit which was brought on the 11th March, 1943. As regards the other ground on which the plaintiff's claimed that their suit was within limitation, the learned Judge held that the account between the plaintiffs and the defendants was not a mutual, open and current account and therefore, could not be governed by Art. 85 of the Limitation Act. It may be pointed out here that if Art. 85 applied, then the last item of Rs. 4000/-in the plaintiff's account being dated Asad Vadi 1, Svt. 2001, (equal to 26th June, 1945), limitation would run from the end of that year, and the year ended on Kati Vadi 15, Svt. 2001, (equal to 19th November, 1945), and so the plaintiffs' suit would certainly be within limitation. It was strenuously contended before me on behalf of the defendant appellant that the finding of the court below on the first point stated above was wholly erroneous and that it was not at all proved on the record that Jawanmal Rikhabdas through whom the payment of Rs. 4000/r was alleged by the plaintiffs to have been made by the defendant were the latter's agents. The finding of the lower court on this point is based on a reading of Ex. P-7 which it found was quite plain and unambiguous and could lead only to one conclusion namely that the amount of Rs. 4000/- had been paid by the defendant to Jawanmal Rikhabdas who were his agent, to be transmitted to the plaintiffs. I regret that it does not seem possible for me to share this opinion. I have read Ex P-7 more than once and have no hesitation in saying that it is a most ill-written letter which lacks all grammer, syntax and coherence. At the best the letter is extremely ambiguous. All that it indicates in its essence is that a sum of Rs. 4000/- had been received from the defendant who owed money to the plaintiffs. It is not clear, however, from a perusal of this latter whether Jawanmal Rikhabdas had received this payment as agents of the defendant or of the plaintiffs. So far as the scribe of this letter is concerned. P. W. Ratanchand, who was produced by the plaintiffs themselves does not support the plaintiffs' case that his firm had received the money as the defendant's agent. The learned Judge below through fit to discard the evidence of this witness because in his opinion the language of Ex. P-7 was clear and unambiguous. That finding, however, loses much of its force because I have been constrained to come to the conclusion that Ex. P-7 is capable of more meanings than one as it has been written. It is, therefore, not possible to discard the evidence of Ratanchand, when he states to have written the letter Ex. P-7 at the instance of Chunnilal, in the manner in which the lower appellate Judge has done. There are a few other consideration which appear to me to have not received that consideration which deserved in this connection. In the first place it is significant that when this latter was written and when the payment of Rs. 4000/-was made, Chunnilal, whom the plaintiffs have stated to be their partner, was present. Now, it seems to me to be very strange why the payment in question should have been made by defendant appellant Phoolchand to Jawan-Mal Rikhabdas when the said Chunnilal was himself present on the spot. It would appear that the payment was made by the defendant to Chunnilal The question then arise why was the money handed over to Jawanmal Rikhabdas. The answer to that question has been furnished by the plaintiff Tarachand himself who in his deposition stated that he had dealings with Jawanmal Rikhabdas. It is no wonder, therefore, if Chunnilal instead of carrying such a large sum with himself deposited it with Jawanmal Rikhabdas who should have naturally found this payment convenient from their own interest also. There is yet another circumstance which clinches the case on this point. Ex. P-5 is the entry in respect of Rs. 4000/- in the plaintiffs' own books. This is dated Asad Vadi 2, Svt. 2001 and clearly states that the sum had been received from defendant Phoolchand through Chunnilal. Now, if this money had been received through Jawanmal Rikhabdas as defender's agents, I have no doubt that this entry would not have been recorded in this manner in the plaintiffs' own books and the name of Jawanmal Rikhabdas as the defendant's agents should have certainly found place therein, as the plaintiffs' case now is that they received the money from Jawanmal Rikhabdas as the agents of the defendant. It is true that Ratanchand a proprietor of Jawan Mal Rikhabdas intimated to the plaintiffs that this sum had been paid and that it had been credited to the plaintiff's account. But to say that is not necessarily to say that the said firm had received that amount in question as the defendant's agent. This letter may well have been written just at the instance of Chunnilal, as Ratanchand, in fact, says and in any case the language of the latter is open to very great doubt and considerable obscurity. In this state of affairs Ex. P-5 furnishes us a clear pointer and the lower appellate court was, in my opinion, not at all right in wholly disregarding that indication. My conclusion on this aspect of the case, therefore, is that the plaintiffs have not succeeded in estabishing their contention that the payment of Rs. 4000/- which had been received by them from the defendant was sufficient to satisfy the conditions of sec. 20 of the Limitation Act, as it was payment which was neither signed by the defendant nor his agent. It follows, therefore, that the plaintiffs' suit for the disputed items cannot be held to be within limitation on his score. Learned counsel for the respondents however strenuously argued that the court below had fallen into grave error in holding that the plaintiffs' suit was not governed by Art. 85 of the Limitation Act in the circumstance of the present case. Learned counsel for the appellant objected to this point being raised on the ground that it had been conceded before the court below by learned counsel for the plaintiffs that the present suit was governed by Art. 83 of the Limitation Act. He also urged that this ground of limitation had not been taken by the plaintiffs in their plant. I am not impressed by these arguments. It appears clearly from a perusal of paragraph 4 of the plaint that the plaintiffs had taken two grounds for getting over the bar of limitation, and one of these two grounds was that the limitation for the suit would being from the end of the year in which the last item of account was made and that the amount was a continuous one, and, therefore, it was pleaded that limitation would start in the present case from Kati Vadi 15 Svt. 2001 (corresponding to 19. 11. 45 ). It is true that Art, 85 was not mentioned expressly nor was the ground taken as precisely as it should have been, but, that notwithstanding, I am of opinion that the suggestion obviously was to the application of sec. 85 of the Limitation Act. The defendant negatived this contention in paragraph 4 of his written statement and pleaded that limitation ran with respect to each item from the date thereof and not from the end of the year of the last item in the account as claimed by the plaintiffs. It further appears that the point was argued before both courts below and there is no surprise to the defendant whatsoever. I, therefore; held that it was perfectly open to learned counsel for the plaintiffs to have relied on this point before this court. The question for determination, therefore, is whether the plaintiffs' suit falls within the four corners of Art. 85 of the Limitation Act. Art. 85 is in these terms : Description of suit. Period of Limitation. Time from which period begins to run. 85. For the balance due on a mutual, open and current accourt, where there have been reciprocal demands between the parties. Three years. The close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account. The question, then is was the account between the parties mutual, current and open account ? It was strenuously argued on behalf of the appellant that the account was not at all a mutual one inasmuch as the relationship between the parties was a single one, namely, that of an agent and a principle the plaintiffs were throughout agents and the defendant throughout a principal and never vice versa. I was referred to a number of authorities in this connection; but I consider it unnecessary to refer to all of them and would content myself with referring only to a few which are applicable to the facts and circumstances of the present case. In Hirada Basappa vs. Gadigi Mandappa (l), Halloway, Ag. C. J. , observed that in order to constitute 'mutual dealings' - There must be transaction on each side, creating independent obligations on the other, and not merely transactions which create obligations oh the one side, those on the other being merely complete or partial discharges of such obligations". It has thus been held that were the dealings between the parties disclose a single contractual relationship, there will be demands only in favour of one of the parties and such a case is that of a lender and a borrower, and if a borrower makes payments in discharge of his loan, such payments cannot constitute a demand and,therefore,such an account cannot be said to be mutual. It has also been held that is such a case even if the borrower makes an overpayment by mistake, the right to recover such over payments would not be sufficient to give the account the character of a mutual account. See Gokuldas vs. . Radhakishan (2 ). But the case would be different where the dealings between the parties disclose two contractual relationships as in such a case demands may arise in favour of each side against the other. The real test, therefore, appears to me to be whether there is a dual contractual relationship between the parties. See Waston vs. Aga Mehedee Sherazee (3 ). Dau Dayal vs. Peare Lal (4),joharmal Mathu-radas vs. Hira Lal (5), Tea Financing Syndicate vs. Chandra Kamal (6) and Firm Ruldu Ram Daulat Ram vs. Basant Rami7 ). Let us see what was the nature of the accounting between the parties. The plaintiffs were admittedly commission agents and did business under the instructions of the defendant for him. They were also entitled to charge commission for the business done by them on behalf of the defendant, and such commission has in fact been charged. When there were profits, they gave credit to him and when there were losses they raised a debit against him and the profits and losses so made from time to time were intended to serve as set off against each other. It was further impliedly agreed to between the parties that in so far as the losses would be greater than the profits the defendant principal was bound to reimburse the agents. Then there area number of entries which relate to expenditure incurred by the plaintiffs as for sending a man to Jawal on behalf of the defendant or certain other sundry items. Again a payment of Rs. 3000/-made by the defendant to Tarachand in Jawal in January, 1945, was credited in the account. It appears to me from the nature of the dealings between the parties that this was really not a case of a single contractual relationship like that of a borrower and a lender. It was perfectly conceivable that there should have been in the ordinary course of things, occasions when the plaintiffs mad profits on behalf of the defendant, and, on others, they might have suffered losses. In the event of profits, the defendant could legitimately say, "i have an account against you", just as the plaintiffs were entitled to be indemnified by the defendant in the event of losses and could say to the defendant that they had an account against him. This was, therefore, really a case where the relationship between the parties was dual; the plaintiffs having a right to charge their commission and to be indemnified for the losses incurred by them on the business done for the defendant under his instructions, and on the other hand, the defendant was entitled to claim the profits, if any from the plaintiffs and the account was a single continuous one the items on the one side discharging those on the other until an accounting was done. I am supported in this view by a decision of their Lordship of the Privy Council in Watson vs. Aga Mehedee Sherazee (3)already cited above. This case arose under sec. 8 of Act XIV of 1859 which, for all practical purposes, was to the same effect as sec. 85 of the Limitation Act of 1908. There was an agreement between the principal and his agent which clearly contemplated the existence of an account containing mutual items of debit and credit. The agreement contained a stipulation that on the adjustment of the accounts the principal should be bound to pay such balance as might be found due from him. The account, was kept as a continuous account, and contained several items which brought down the mutual dealings to March, 1868. The agent brought an action in February, 1671, to recover the balance due on the account. It was held that the case fell within the 8th section and that it was one continuous account between the principal and the agent with debits and credits on each side and that the contract was to pay the balance of that account when is should be struck. Reference may next be made of Johar Mai Mathuradas vs. Hira Lal (5 ). This was also a case between an agent and a principal, The plaintiff firm purchased shellac under instructions from the defendants and sold them on different dates. There was profit in the first transaction but loss in the remaining three and plaintiff brought an action to recover the amount of the loss from the defendants. The learned Judges in these circums-tances came to the conclusion that there was a reciprocity of demands between the parties and that the defendants were in a position to say to the plaintiff at one time that they had an account against the latter. It was further held that although a shifting balance was a factor in favour of mutuality of the account, its absence was not a conclusive proof against mutuality. I am of opinion that it is impossible to distinguish the facts of this case from the one before me. In Dau Dayal vs. Pearelal (4), the plaintiffs were a firm of commission agents who had agreed to advance money to the defendants for making certain purchases. The plaintiffs were to get a certain rate of interest on the money to be advanced by them besides a certain amount of commission and other incidental charges. The plaintiffs made certain purchases on behalf of the defendants, spent a certain amount of margin money which the defendants had deposited with them and supplied the balance out of their own funds. The plaintiffs debited the defendants with the amounts paid by them on their behalf, and further debited them wish interest, commission and incidental charges. When they sold certain goods, they credited the defendants with their price and debited them with commission and incidental charges. Such transactions continued for about a year. The learned Judges pointed out that the account between the parties showed on the one side advances, made in accordance with the agreement, together with interest, commission and minor incidental charges, and, on the other side,the receipts on the defendant's behalf. To the extent that the plaintiffs made advances, they were acting as bankers and the position was that of lender and borrower. To the extent of receipts, the position was that of principal and agent, with a liability, as agent, to account, and, therefore, the parties stood towards each other in a dual relationship and that Art. 85 was applicable. The. last case to which I may refer in this connection is Tea Financing Syndicate vs. Chandra Kamal (6 ). In that case Rankin, C. J. has said that the type of case suggested by Vice Chancellor Turner in Philips vs. Philips (8) viz, where each of two parties had received and paid on the other's behalf, is by no means the only type of case coming within Art. 85. The simplest and commonest case of all is that of two merchants supplying goods to the other. The learned Chief Justice proceeded to point out that there must be cross-claims arising out of a course of dealings which evidences or is referable to an intention of set-off. Father, that the phrase 'reciprocal demands' does not import that either party has made an actual demand in fact. From a review of the aforesaid autho-rities hold that the true criterion of a mutual account is that the account must be of a type where there are transactions on each side which are in the nature of cross-items, and there is a mutual credit founded on a subsisting debt on the other side or an express or an implied agreement for a set-off of mutual debts. In other words, there must be cross-claims arising out of a course of dealings which is referable to an intention to set-off. and, if during the currency of an account each of the parties could substantially, even though occasionally, say to the other "i have an account against you", the condition of mutuality would be satisfied. It must be further borne in mind that it is not essential to an account being mutual, open and current, having reciprocal demands between the parties within the meaning of Art 85 that an actual demand should have been made by one party to the other. All that is necessary is that the account should be of a character where there is a possibility of such demands being made. The circumstance, therefore, that the defendant principal may have throughout been a loser in the transactions entered into by the agent on his behalf and was therefore never in a position actually to demand money from him, would not be sufficient to rob the character of mutuality from an account between such parties. Applying these tests to the facts of the present case, I am of opinion that the account between the parties was a mutual one. It was also open for the simple reason that the account had never been stated between the parties or a balance arrived at. It was a running continuous account for the period during which it lasted and was, therefore, current. The mere fact that the plaintiffs had found a certain amount due against the defendant and carried it forward would not deprive it of the character of an open and running account. In these circumstances, I hold that in view of the facts and circumstances explained above, this is a case of a mutual, current and open account within the meaning of Art. 85 of the Limitation Act and that the last item in the account which is dated Asad Vadi 2, Svt. 2001, corresponding to the 27th June, 1945, would bring all the older items within limitation, as the plaintiffs had brought their suit within three years from the close of the year (i. e. , the 19th November, 1944), in which the item in question was entered in the account. It only remains briefly to dispose of the ground raised on behalf of the defendant that the lower appellate court was not right in decreeing the plaintiffs' suit with regard to three items of annas /8/-, Rs. 45/- and Rs. 14/- which, it was argued, had been abandoned by learned counsel for the plaintiffs in the trial court. The attention of the lower appellate court does not seem to have been drawn to this point. I am of opinion that the plaintiffs having relinquished their claim in respect of them, these items amounting to Rs. 59/8/- must, therefore, be excluded from the decree awardable to the plaintiffs. The result is that I dismiss this appeal and affirm the decree of the Civil Judge, although on grounds different from those which found favour with him, with the variation that the decree awarded by him will be reduced by a sum of Rs. 59/8/ -. The appellant shall pay the proportionate costs of the amount decreed to the contesting respondents throughout. . ;