# 195li Ganpat Rai Hira Lal and Another v. Aggarwal Chamber of Oonimerce Ltd

- **Citation:** [1953] 1 S.C.R. 758
- **Court:** Supreme Court of India
- **Decided:** 1951-07-23
- **Case number:** CIVIL Ar°FELLATE JURISDICTION: Civil Appeal No. 168 of 1952
- **Bench:** Mehr Chand Mahajan, Bhagwati
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/195li-ganpat-rai-hira-lal-and-another-v-aggarwal-chamber-of-oonimerce-ltd-197
- **Pages:** 9

## Headnote

Acknowledgment-Whether gives fresh cause of action-Practice
-Party in possession of documentary evidence-Duty to produce.
Where the defendants who had dealings with the plaintiffs
for several years signed the following entry in the plaintiffs' account book underneath the earlier entries:
"After adjusting the aceounts Rs. 34,000 found correct payable".
Held, that this amounted to an unqualified acknowledgment of
liability to pay and implied a promise to pay and could be made
the basis of the suit and gave rise to a fresh cause of action.
Maniram v. Seth Rup Chand (33 I.A. 165), Fateh Chn.nd v.
Ganga Singh II.L.R. 10 Lab. 745) and Kahan Chand Dularam v.
Daya1al Amritlal (I.L.R. 10 Lah. 748) relied on. Gh11lam M11rtuza
v. Fasih1mnissa (I.L.R. 57 All. 434) overruled.
It is not a sound practice for those desiring to rely upon a
certain state of facts to withhold from the court written evidence
which is in their possession which could throw light upon the.
issues in controversy and tc rely upon the mere doctrine of onus
of proof.
Murugesam Pillai v. Manickavasaka Pandara (44 I.A. 99)
referred to.
8.C.R.
SUPREME COURT REPORTS
759
CIVIL
Ar°FELLATE
JURISDICTION: Civil Appeal
No. 168 of 1952.
Appeal from a Judgment and Decree dated 23rd
July, 1951, of the Court of the Judicial Commissioner,
Vindhya Pradesh, in Civil First Appeal No. 26 of
1951 arising out of the Judgment and Decree dated
14th .:\farch, 1951, of the CouPt of the District Judge,
Umaria, in Case No. 32 of 1951.
N. S. Bindra (S. L. Chhibber, with him) for the
appellants.
S. P. Sinha (K. B. Asthana, with him) for the
respondents.
1953.
March 12. The Judgment of the Court was
delivered by
MAHAJAN J.-The suit out of which this appeal
arises was instituted by the plaintiff-respondents in
the court of the district judge of Umaria, for recovery
of Rs. 34,000 principal, and Rs. 2,626 interest, due on
foot of mu~ual dealings. The suit was dismissed by the
district judge but was decreed on appeal by the
Judicial Commissioner of
Vindhya Pradesh.
A
certificate for leave to appeal to this Court was granted as the case fulfilled all the conditions and requirements in force relating to appeals to the Supreme
Court.
The defendants did not admit the claim and it was
pleaded that no accounts were explained to fihem when
the signatures of Bhaiyalal and Hiralal were obtained
in the plaintiffs' ledger on 3rd September, 1949,
acknowledging the snit amount as due from them.
It was further pleaded that no suit could be based
merely on an acknowledgment of the debt.
In paragraph 4 of the written statement it was alleged that
the plaintiff No. 2 Dipchand having threatened to
bring a suit against defendants 1 and 2 whose financial position was bad and having represented that
plaintiff No. 1 Badkulal would be angry and abuse
plaintiff No. 2, and having assured on oath by placing
his hand on a deity in a temple that no suit shall be
1953
lliralal
and Others
v.
Badhulal
and Others.
1953
Hiralal
and 0th""'.
v.
Badknlal
and Othe1·s.
760
SUPREME COURT REPOR'rS
[1953]
brought, and that amouni of interest wouid be reduced,
asked defendants 1 and 2 to sign the khata, who
signed the same without going through the accounts,'
on the faith of these statements made by Dipchand
and that foe defendants were not bound by these
signatures.
In paragraph 9 of the written statement
it was alleged th'at in• fact Hs. 15,000 or 16,000 as
principal sum were due to plaintiffs from defendants
but the suit had been filed for a much larger sum
than due. Issue 1 framed by the district judge,was in
these terms :
"Did the defendants Hiralal and Bhaiyalal sign on
Bhadon Sudi 11 Samvat 2006 in the capacity of
manager and head of the family, on the khata of the
plaintiffs after understanding the debit and credit
accounts and accepting Rs. 34,000 as the correct
balance due to the plaintiffs."
It would have been more correct had a separate
issue been framed on the two points compositely
mentioned in this issue,
Be that as it may, the

## Text

195li
Ganpat Rai
Hira Lal
and Another
v.
Aggarwal
Chamber of
Oonimerce Ltd.
758
SUPREME COURT REPORTS
[1953)
the appeals are not competent is, in' om opinion,
erroneous.
The result is that Appeal No. 152 of .1951 is dismissed with costs throughout, while Appeals Nos. 167
and 167 A of 19.51 are allowed with costs throughout.
Appeal No. 12.5 dismissed.
Appeals Nos. 167 and 167 A .allowed.
Ghandrasekhara
Agents for the a.pp~llants in Appeals Nos. 167
AiyarJ.
and 167A: Mohan Behan Lal.
1958
March 12.
Agent for the appellant in Appeal No. 152 : Kitndan Lal Mehta.
Agent for respondents in Appeals Nos. 167 and
167 A: Naunit Lal.
Agent for respondent in Appeal No. 152: Mohan
Behari Lal.
HIRALAL AND OTHERS
v.
BADKULAL AND OTHERS.
[MEHR CHAND MAHAJAN and BHAGWATI JJ.]
Acknowledgment-Whether gives fresh cause of action-Practice
-Party in possession of documentary evidence-Duty to produce.
Where the defendants who had dealings with the plaintiffs
for several years signed the following entry in the plaintiffs' account book underneath the earlier entries:
"After adjusting the aceounts Rs. 34,000 found correct payable".
Held, that this amounted to an unqualified acknowledgment of
liability to pay and implied a promise to pay and could be made
the basis of the suit and gave rise to a fresh cause of action.
Maniram v. Seth Rup Chand (33 I.A. 165), Fateh Chn.nd v.
Ganga Singh II.L.R. 10 Lab. 745) and Kahan Chand Dularam v.
Daya1al Amritlal (I.L.R. 10 Lah. 748) relied on. Gh11lam M11rtuza
v. Fasih1mnissa (I.L.R. 57 All. 434) overruled.
It is not a sound practice for those desiring to rely upon a
certain state of facts to withhold from the court written evidence
which is in their possession which could throw light upon the.
issues in controversy and tc rely upon the mere doctrine of onus
of proof.
Murugesam Pillai v. Manickavasaka Pandara (44 I.A. 99)
referred to.
8.C.R.
SUPREME COURT REPORTS
759
CIVIL
Ar°FELLATE
JURISDICTION: Civil Appeal
No. 168 of 1952.
Appeal from a Judgment and Decree dated 23rd
July, 1951, of the Court of the Judicial Commissioner,
Vindhya Pradesh, in Civil First Appeal No. 26 of
1951 arising out of the Judgment and Decree dated
14th .:\farch, 1951, of the CouPt of the District Judge,
Umaria, in Case No. 32 of 1951.
N. S. Bindra (S. L. Chhibber, with him) for the
appellants.
S. P. Sinha (K. B. Asthana, with him) for the
respondents.
1953.
March 12. The Judgment of the Court was
delivered by
MAHAJAN J.-The suit out of which this appeal
arises was instituted by the plaintiff-respondents in
the court of the district judge of Umaria, for recovery
of Rs. 34,000 principal, and Rs. 2,626 interest, due on
foot of mu~ual dealings. The suit was dismissed by the
district judge but was decreed on appeal by the
Judicial Commissioner of
Vindhya Pradesh.
A
certificate for leave to appeal to this Court was granted as the case fulfilled all the conditions and requirements in force relating to appeals to the Supreme
Court.
The defendants did not admit the claim and it was
pleaded that no accounts were explained to fihem when
the signatures of Bhaiyalal and Hiralal were obtained
in the plaintiffs' ledger on 3rd September, 1949,
acknowledging the snit amount as due from them.
It was further pleaded that no suit could be based
merely on an acknowledgment of the debt.
In paragraph 4 of the written statement it was alleged that
the plaintiff No. 2 Dipchand having threatened to
bring a suit against defendants 1 and 2 whose financial position was bad and having represented that
plaintiff No. 1 Badkulal would be angry and abuse
plaintiff No. 2, and having assured on oath by placing
his hand on a deity in a temple that no suit shall be
1953
lliralal
and Others
v.
Badhulal
and Others.
1953
Hiralal
and 0th""'.
v.
Badknlal
and Othe1·s.
760
SUPREME COURT REPOR'rS
[1953]
brought, and that amouni of interest wouid be reduced,
asked defendants 1 and 2 to sign the khata, who
signed the same without going through the accounts,'
on the faith of these statements made by Dipchand
and that foe defendants were not bound by these
signatures.
In paragraph 9 of the written statement
it was alleged th'at in• fact Hs. 15,000 or 16,000 as
principal sum were due to plaintiffs from defendants
but the suit had been filed for a much larger sum
than due. Issue 1 framed by the district judge,was in
these terms :
"Did the defendants Hiralal and Bhaiyalal sign on
Bhadon Sudi 11 Samvat 2006 in the capacity of
manager and head of the family, on the khata of the
plaintiffs after understanding the debit and credit
accounts and accepting Rs. 34,000 as the correct
balance due to the plaintiffs."
It would have been more correct had a separate
issue been framed on the two points compositely
mentioned in this issue,
Be that as it may, the form
in which the issue was framed is uot material for the
decision of the appeal.
Issue 7 was in t'hese terms :
"Did the plaintiff Dipchand obtain the signature
of defendants 1 and 2, in their bahi under the threat ·
of instituting a suit and giving the assurance of the
suit being not filed and leaving the interest which is
incorrect and very much exaggerated, by saying that
Badkulal shall he very angry with him ... ".
The frame of the issue shows that the learned judge
at this stage made no effort to ascertain or apprehend
the nature of the plea taken in the written statement.
He seems to have acted more as an ~.utomaton than
as a judge in the discharge of his responsible duties.
Before framing an issue like this it was his duty to
examine the parties and to find out the precise nature
of the plea involved within these facts; in other
words, whether the a.efendants wished to plead in
defence fraud, coercion, undue influence or a mistake
of fact entitling them to reopen the accounts.
Mr. Bindra for the appellants was unable to tell us
S.C.R.
SUPREME COURT REPORTS
761
what real plea was involved in the facts stated under
th is issue.
The manner in which the learned judge dealt with
this issue lends support to our view that he did uot
at all apprehend what he had to decide.
It was held
that the defendants did not sign the entry after
understanding, settling, and adjusting oi the accounts,
hut that plaintiff Dipchand obtained their signatures
without explaining the accounts to them.
The fact that the entry was signed by both the
defendants who represented their family was not
denied.
Hiralal, defendant, in
the witness box
admitted that the defendants deal in gold, silver and
kirana and maintain regular books of account. It was
also admitted that two or three muneems are in their
employ for maintflining regular boo.ks of the business
dealings. Hiralal was questioned " How much money
was due from the defendants-firm to the plaintiflsfirm?".
The answer was evasive, viz., "He could not
say how much was due". When questioned about his
accounts, he replied that he had not filed them as he
was ill.
He further deposed that he had looked into
his accounts and Rs. 10,000 to Rs. 15,000 as principal
and interest were due but he could not say what was
the correct amount. vVhen asked whether on the date
of signing the acknowledgment he looked into the
books to see what amount was due from him, his
answer was in the ·negative. He further said that
even after receiving notice he did not look into his
own accounts to check as to what the correct balance
was .. A leading question was put to him whether on
Bhadon Sudi 11 Samvat 2006 there was an entry of
Rs. 34,000 in the defendants' kbata as being the
balance due from them to the plaintiffs.
The answer
was again evasive. He said "I couid not say whether
there was any such entry in bis books." In these
circumstances there was no justification for throwing
out the plaintiffs' suit on the ground that the
accounts were not explained to the defendants by the
plaintiffs. The defendants had written the accounts
in their own books from which the true,bala.nce co11ld
1958
Hiralal
and Others
V,
Badkulal
and Others.
Mahajan J.
1953
Hiralal
and Others
v.
Badkulal
and Others.
Mahajan J.
762
SUPREME COURT REPORTS
[1953]
be ascertained. An inference from the "statement of
Hiralal can easily be raised that the balance entry of
Rs. 34,000 r1lso existed in his own books. Mr. Bindra
tried to get out of this situation by urging that it was
no part of the defendants' duty to produce the books
unless they were called upon to do so and the onus
rested on. the plaintiffs to prove their case.
This
argument has to be negatived in view of the observations of their Lordships of
~he Privy Conncil in
Murugesam Pillai v. Manickavasaka Pandara('), which ·
appositely apply here.
'fhis is what their Lordships
observed:
"A practice has grown up in Indian procedtue of
those in possession of important documents or information lying by, trusting to the abstract doctrine of
the onus of proof,.and failing, accordingly, to furnish
to the courts the best material for its decision. With
regard to third parties this may be right enonghthey hf1.ve no responsibility for the conduct of the
suit; but with regard to the parties to the suit it is, in
their Lordships' opinion, an inversion of sound
practice for those desiring to rely upon a certain state
of facts to withhold from the court the written
evidence in their possession which would throw light
upon the proposition."
This rule was again reiterated in Rameshwar Singh
v. Rajit Lal Pathak(').
.
.
On the evidence of the parties it is clear that both
parties are businessmen and each party has been
maintaining accounts of their mutual dealings, and
they met on 3rd September and in the plaintiffs' book
the defendants signed an entry on page 58 of bhe
ledger which runs thus:-
"Rs. 34,000 balance due to be received up to
Bhadon Sudi 11 Samvat 2006 made by check and
understanding of accounts with Hiralalji's books."
This acknowledgment was made below a number of
entries made in this khata on the credit and debi&
side and the mutual dealings had continued since
(!) (1917) 44 I.A; 99,
8.0.R.
SUPREME COUR'r REPOR'rs
763
several years.· The acknowl~dgment is signed by Hiralal and Bhaiyalal, with the following endorsement:
"After adjusting the' accounts Rs. 34,000 fonnd
correct payab-Ie."
In these circumstances we are not able to understand the view of the district judge that it
was not proved that the accounts were explained
to the defendants by Dipchand. It was unnecessary
to do so because the defendants themselves were
keeping accounts and they would not have signed the
balance for Rs. 34,000 with the endorsement above
cited, without reference to their own books or in the
manner suggested in the written statement. Plaintiff
Dipchand in the witness box supported the plaintiffs'
case as laid in the plaint.
He deposed that "This
accounting was done by my muneem Puranfai and
Ram Prasad, muneem of Hiralal. ........... Muneems
explained and Hiralal signed after understanding it."
In cross-examination he said that muneems were
checking the accounts and when both the mnneems
said that so much was the bala,nce, Hiralal then
signed and that Hiralal and Bhaiyalal them~elves did
not check any account. The learned district judge
and Mr. Bindra criticized the evidence of this witness
and it was urged that he had made false and highly .
improbable statements with regard to the manner and
circumstances in which the entry was signed.
The
discrepancies in the statement relate to matters of no
consequence. In our opinion, his evidence along
with the entry was sufficient to hold the plaintiffs'
case proved when the best evidence ·of their own
books to disprove the plaintiffs' case had been withheld by the defendants. No satisfactory explanation
had been given for the non-production of the defendants' books, and the evidence given by Hiralal does
not do much credit to him.
Mr. Bindra contended that it should have been held
that Bhaiyalal did not sign at the same time when the
entry was written but he signed later on.
On this
point Hiralal deposed that when he signed Bhaiyalal
99
1953
Hiralal
and Others
v.
Badkulal
and Others.
Mahajan J,
1953
Hiralal
and Others
v.
Badkulal
and Others.
Mahajan J.
764
SUPREME COURT REPORTS
[1953]
was not present, that he signed afterwttrds, that
Kulai muneem came with the bahi s:!.ying that Badkulal and Dipchand had quarrelled among themselves
that there should also be the signature of Bhaiyalal,
that Bhaiyalal questioned him as to why the witness
had signed, that he replied that Dipchand had told
him l!.fter pointing his hand towards God that he
would take no action so long as he lived, so he did not
check, nor any one explained him the accounts, that
on this he asked Bhaiy1tlal to sign and on his asking
he signed. It was for Bhaiyalal to explain his signature by going into the witness box but he did not
give evidence in the case and there is no explanation
why he did not do so. Mr. Bindra's contention therefore that it should be held that Bhaiyalal was not
present when the acknowledgment was signed cannot
be sustained.
'1
1he defendants tried to support their case by the
statements of Kulai Prasad, muneem, and the other
two muneems Ram Prasad aud Puraulal. So far as
Kulai Prasad is concerned, he was in the plaintiffs'
service and was dismissed by Badkulal, plaintiff, on
31st March, 1950. Much reliance cannot be placed
on the statement of a dismissed and disgruntled employee. He stated that Hiralal was not made to
understand auy accounts and Dipchand assured him
on oath that he would raise no trouble during his life
and asked Hiralal to sign and that Bhaiyalal signed
on a different date.
This evidence is of a partisan
character and no reliance can be placed on it.
Ram Prasaa stated that he did not check the accounts of the plaintiffs from Bhadon Samvat 2006
and that Hiralal did not sign in bis presence. In
cross-examination he admitted that there were mutual
dealings between the parties and that Hiralal might
have signed after accounting was done. He pretended
ignorance of what happened on Bbadon Samvat
2006.
As regards Puranlal, be stated that after looking
inlio the accounts and after mutual talk, Exhibit P-1
8.C.R.
SUPREME COURT REPORTS
765
was written on Dip Chand's asking, that accounts
might have been told by Dipchand on the basis of
the statement which he had with him, that no ac--
counts were explained. He further stated that Hiralal said to Dipchand "Please see me", on which
Dipchand replied after raising his hand towards the
temple "I shall not do anything unfair in my lifetime." In cross-examination he admitted that the
words" signed Bhurey Naik Raghunandan Prasad
Bakala.rn Hira Lal", and the words " after adjusting
the accounts Rs. 34,000 found correctly payable
signed Hinllal " were written by Hiralal himself. It
was further elicited in cross-examination that the
witness had forged a receipt and for forging that
receipt he was sentenced to one year's imprisonment
in a criminal case started by Badkulal, plaintiff. 'l'his
evidence therefore is not of much consequence in this
case.
In these circumstances we are satisfied that the
district judge not only approached the decision of the
case from an erroneous point of view but he also incorrectly appreciated the material on the record. The
learned Judicial Commissioner was therefore perfectly
justified in reversing his decision and in holding that
on 3rd September, 1949, there was an adjustment of
accounts actually done by the muneems and accepted
by the principals and the story of coercion and misrepresentation was false. ·
Mr. Bindra next urged that the plaintiff's suit
should have been dismissed because it could not be
maintained merely on the basis of au acknowledgment
of liability, that such an acknowledgment could only
save limitation but could not furnish a cause of i>ction
on which a suit could be maintained. The Judicial
Commissioner took the view that an unqualified
acknowledgment like the one in the suit, and the
statement of the account under which the entry had
been made, were sufficient to furnish a cause of action
to the plaintiffs for maintaining the present suit. We
are satisfied that no exception can be taken to this
conclusion. It was held by the Privy Council in
1953
Hiralal
and Other's
v.
Bodkulol
and Others.
ltfa,hajan J.
1953
Hiralal
and Others
v.
Badkulal
and Others.
Mahajan J.
766
SUPREME COURT REPORTS
[19/i3j
Maniram v. Seth Rupchand('), that an unconditional
acknowledgment implies a promise to pay because
.that is the natural inference if nothing is said to the
contrary. It is what every honest man would mean to
do. In Fateh Chand v. Ganga Singh(') the same view
was taken. It was held. that a suit on the basis of a
balance was competent In Kahanchand Dularam v.
Dayaram Amritlal(3) the same view was expressed and
it was observed that the three expressions "balance
due", " account adjusted " and "balance struck" must
mean that the parties had been through the account.
The defendant there accepted the statement of account
contained in the plaintiff's account book, and made it
his own by signing it and it thus amounted to an
"accounts stated between them" in the language of
article 64 of the Limitation Act. 'l'he same happened
in the present case. The acknowledgment which forms
the basis of the suit was made in the ledger of the
plaintiffs in which earlier mutual accounts had been
entered and truly speaking, the snit was not based
merely on this acknowledgment but was based on the
mutual dealings and the accounts stated between them
and was thus clearly maintainable.
Mr. Bindra drew our attention to a decision of the
Allahabad High Court in Ghulam Murtuza v. Fasihunnissa('), wherein it was held that even if an acknowledgment implies a promise to pay it cannot be made
the basis of suit and treated as giving rise to a fresh
ca use of action. We have examined the decision and
we· are satisfied that it does not lay down good law.
For the reasons stated above this appeal has no
merits and we accordingly dismiss it with costs.
Appeal dismissed.
Agent for the appellants: Govind Saran Singh.
Agent for the respondents : A. D. Mathur.
(r) (I906) 33 I.A. I65.
(2) (I929) I.L.R, Io Lah, 748.
(3) (I929) l.L.R. Io Lah. 745.
(4) (I935) I.L.R. 57 All. 434,