- Bookmark
- Share
- CaseIQ
Beni v. Bisan Dayal
Factual and Procedural Background
Defendant No. 2 held a licence to run a liquor shop for 1920–1921 and was liable to pay Rs. 108 per month to Government; Defendant No. 1 stood as his surety. Because Defendant No. 2 defaulted, Defendant No. 1 sought removal of Defendant No. 2 and was permitted by Government to carry on the shop for the remaining term. An arrangement was made among the parties that Defendant No. 1 would permit Defendant No. 2 to carry on the shop, that the plaintiff would be responsible for Government demands if Defendant No. 2 failed to pay, and that if the plaintiff paid the Government demand Defendant No. 1 would recover it from Defendant No. 2 and pay it to the plaintiff.
The plaintiff alleges he paid the January 1921 kist (Rs. 108) on 24 January 1921 and sued both defendants for recovery with interest. Defendant No. 1 admitted that the January kist was paid but pleaded the money was his own; he also alleged he paid the February and March kists and counterclaimed for recovery after certain deductions. The Small Cause Court held Defendant No. 1 (not the plaintiff) had paid the January kist, dismissed the plaintiff's claim, and gave Defendant No. 1 a decree for Rs. 335-14-0 (after deductions); the plaintiff's separate Suit No. 1286 (1921/1923 references appear) was also dismissed. The plaintiff filed the present revision.
Legal Issues Presented
- Whether Defendant No. 1 discharged the onus of proving that the sum for the January 1921 kist paid into the Government Treasury (for which a treasury receipt Ex. P-1 in the plaintiff's name exists) was in fact Defendant No. 1's money.
- Whether entries in Defendant No. 1's account-books (and his testimony about an agent) suffice to prove payment to the plaintiff under Section 34 of the Evidence Act.
- Whether Defendant No. 1's claim for recovery of the kists of February and March 1921 is barred by limitation, and if so, whether the relevant date for limitation is the date of the plaintiff's suit or the date on which Defendant No. 1 preferred his counterclaim.
Arguments of the Parties
Plaintiff's Arguments
- The plaintiff asserted he paid the January 1921 kist out of his own pocket and produced the Treasury receipt (Ex. P-1) showing payment in his favour.
- The plaintiff denied that the money paid by him was Defendant No. 1's money.
- The plaintiff admitted Defendant No. 1 paid February and March kists but denied liability for them on the ground that Defendant No. 1 had forcibly taken possession of the shop from Defendant No. 2 and prevented Defendant No. 2 from carrying on the shop.
Defendant No. 1's Arguments
- Defendant No. 1 admitted the January kist was paid into the Treasury but pleaded that the money so paid by the plaintiff was in truth Defendant No. 1's money (i.e., the plaintiff paid it as agent or on instructions).
- He relied on his own testimony and a copy entry in his account-books indicating payment to the plaintiff (he stated his agent paid Rs. 109-1-0 to the plaintiff and that he had instructed the agent).
- He claimed he had paid the kists for February and March 1921 and counter-claimed for those amounts (after allowing a deduction for certain articles received from the plaintiff).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Prage Lal v. Maxwell | Was a case of equitable set-off (relied on by Defendant No. 1). | The court held the case distinguishable and not applicable: Defendant No. 1's counterclaim for February and March kists could not be treated as an equitable set-off to defeat plaintiff's claim; limitation for recovery of those kists must be determined by reference to the date Defendant No. 1 preferred his counterclaim. |
Court's Reasoning and Analysis
The court placed weight on the Treasury receipt (Ex. P-1) evidencing payment into the Government Treasury in the plaintiff's name and held that the burden lay on Defendant No. 1 to prove the money was his. Defendant No. 1's testimony stated that his agent paid Rs. 109-1-0 to the plaintiff and that he had instructed the agent, but he could not swear that payment occurred in his presence and did not call the agent to prove the transaction. Defendant No. 1 produced a copy entry from his account-books, but the court found the entry unproved because it was not in his handwriting and he had no personal knowledge of the transaction. The court applied the principle under Section 34 of the Evidence Act that mere entries in books of account are insufficient standing alone to charge a person; independent evidence of the transaction is required. Consequently the court concluded Defendant No. 1 failed to discharge the onus and that the Small Cause Court was wrong to hold Defendant No. 1 had paid the January kist.
Regarding inference from the fact that Defendant No. 2 paid Defendant No. 1, the court rejected the inference that such payment meant Defendant No. 1 must have paid the Treasury, noting that Defendant No. 1 might have falsely represented payment to Defendant No. 2 and thus recovered the amount without actually having paid the Treasury, and that no independent proof of Treasury payment by Defendant No. 1 existed.
On limitation, the court distinguished Prage Lal v. Maxwell as a case of equitable set-off and found it inapplicable. It reasoned that while Defendant No. 1's contention that he (not the plaintiff) paid the January kist could, if proved, be a defence, his claims for February and March were separate recovery claims (counterclaims) and their limitation must be measured from the date of his counterclaim. Applying that rule, the February claim (paid 21 Feb 1921; counterclaimed 18 Mar 1921) was barred, while the March claim (paid 31 Mar 1921) was within time.
The court calculated the amounts due: plaintiff's amount for the January kist plus interest at 2% per mensem came to Rs. 185-12-0; Defendant No. 1's amount for the March kist plus interest came to Rs. 185-13-8. Netting these resulted in Defendant No. 1 being entitled to Re. 0-1-8 against the plaintiff. The lower court's decree was modified accordingly. The court also addressed the plaintiff's separate suit (Suit No. 1286 referenced in the text), noting it was not disputed before the revising judge and reversing the lower court's decree in that suit by decreeing that Defendant No. 1 pay Rs. 88-12-0 to the plaintiff and bear costs of both Courts.
Holding and Implications
Holding: The decree of the lower Court is modified. Defendant No. 1 is entitled to Re. 0-1-8 against the plaintiff; parties will share costs of both Courts in proportion to their success. The lower Court's decree in the plaintiff's separate Suit No. 1286 (as referenced) is reversed; Defendant No. 1 is decreed to pay Rs. 88-12-0 to the plaintiff and to bear costs of both Courts. Decree modified.
Implications: The direct effect is the modification of the Small Cause Court's decree to the amounts specified above and reversal of the decree in the plaintiff's separate suit. The opinion distinguishes an earlier equitable set-off case (Prage Lal v. Maxwell) but does not purport to establish a broader new precedent beyond the application of established evidentiary and limitation principles to the facts of this dispute.
1. Defendant No. 2 was given a license to carry on the liquor shop at Kharkala Tahsil Harsud for the year 1920-1921. Under the berms of the license, he had to pay Rs. 108 per month to Government as license-fee and Defendant No. 1 stool as his surety for punctual payment of this sum. As Defendant No. 2 failed to make punctual pay men be, Defendant No. 1 moved the Government to remove Defendant No. 2 and to permit him to carry on the liquor shop for the remaining term of the license, and the Government did accordingly. However, as plaintiff was related to Defendant No. 2, it was agreed between the parties that Defendant No. 1 should permit Defendant No. 2 to carry on the liquor shop and that plaintiff should be responsible for payment of Government demand if Defendant No. 2 failed to pay it in time. It was farther agreed between the parties that if plaintiff paid the Government demand, Defendant No. 1 should recover it from Defendant No. 2 and pay it to the plaintiff. Plaintiff alleged that he paid the kist for January 1921, viz., Rs. 108, on 24th January 1921 and he brought a suit for recovery of this sum together with interest thereon at Rs. 2 per cent, per mensem from both the defendants on the allegation that although Defendant No. 1 recovered that kist from Defendant No. 2 he failed to pay the same to him (plaintiff).
2. Defendant No. 1 admitted that plaintiff paid the kist of January 1921 but pleaded that the money so paid by plaintiff was not plaintiff's money but his own money.
3. He also alleged having paid the kists of February and March 1921 and he claimed from the plaintiff the money paid by hind for the kists of January, February and March 1921 after giving him deduction for Rs. 55-9-6 on account of certain articles received from him.
4. Plaintiff alleged in reply that he had Paid the Mat for January 1921 out of his own pocket. He denied that the money so paid by him was Defendant No. 1's money. He admitted that Defendant No. 1 had paid the kists for February and March 1921, but denied his liability to pay the same on the ground that Defendant No. 1 forcibly took possession of the liquor shop from Defendant No. 2, and did not allow the latter to carry on the shop. He also brought a separate suit against Defendant No. 1 for Rs. 65-4-0 on account of the price of certain articles taken from him by Defendant No. 1 plus interest thereon at Rs. 2 per cent, per mensem (Suit No. 1286 of 1921 in the Court of Small Causes, Khandwa, decided on 9th September 1924).
5. The Small Cause Court held that Defendant No. 1 and not the plaintiff had paid the kist for January 1921. Accordingly it dismissed plaintiff's claim and gave Defendant No. 1 a decree for Rs. 335-14-0 against the plaintiff after allowing the latter deduction for the price of articles taken by the former from the latter and dismissed plaintiff's Suit No. 1286 of 1924 as well. Plaintiff has now come up in revision.
6. It is urged on behalf of the plaintiff that the Small Cause Court was wrong in holding that Defendant No. 1 had proved that the money paid for the January kist of 1921 was his money. In my opinion, this contention is sound and must prevail. The kist for January 1921 was admittedly paid into the Government Treasury by the plaintiff and the Treasury Officer passed a receipt for the same in his favour and he has filed it in Court (Ex. P-1). Under these circumstances, the onus lay heavily on Defendant No. I to prove that it was his (Defendant No. 1's) money which plaintiff paid into, the Treasury. In order to discharge this onus, Defendant No. 1 examined him self and filed a copy of an entry in his account-books. His evidence does not prove that he or somebody else on his behalf handed over Rs. 108 to plaintiff for payment of the kist of January 1921 into the Treasury. He deposes as follows:
“The sum of Rs. 109-1-0 (i.e Rs. 108 for kist, Re. 1 for warrant and anna 1 on account of writing fee for the treasury challan) was paid by my agent to plaintiff and not by me. I had instructed him to do so. I cannot say whether I was present when he paid the money.”
7. In other words, he is not prepared to swear that the sum of Rs. 109-1-0 was paid by his agent to the plaintiff in his presence. He has not examined his agent to prove payment of money to the plaintiff. He has no doubt filed copy of the entry in his books of accounts in regard to payment of this sum to the plaintiff. But the entry is not in his handwriting and he has no personal knowledge of the transaction to which the entry relates. In omer words, the entry has not been proved. Mere entries in books of account are not by themselves sufficient to charge any person with liability (vide Section 34 of the Evidence Act). The reason is that man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of third parties. There must be independent evidence of the transaction to which the entries relate and as no such evidence has been adduced in this case the Court below was wrong in holding that Defendant No. 1 had paid money to plaintiff for payment of the kist for January 1921. Plaintiff's claim for that kist should have been decreed against Defendant No. 1 as it is admitted that he had realized the amount due for that kist from Defendant No. 2 and was liable under an agreement between the parties to pay that amount to the plaintiff.
8. It is contended that the fact that Defendant No. 2 paid the January kist to Defendant No. 1 shows that Defendant No. 1 must have paid money for payment of that kist into the treasury to the plaintiff. This inference is wholly fallacious. Defendant No. 1 may have falsely represent to Defendant No. 2 that he had paid the kist for January 1921 and may have thus recovered the amount of that kist, from Defendant No. 2. The Court below was clearly wrong in acting on such an inference only when it had no independent proof of payment before it.
9. It is next urged on behalf of the plaintiff that the lower Court should have dismissed Defendant No. 1's claim for the kist of February 1921 as it was barred by time on the date on which he filed his written statement claiming that sum think this contention is sound and must prevail. The case of Prage Lal v. Maxwell(1) On which reliance has been placed on behalf of Defendant No. 1 was a case of an equitable set-off and is clearly distinguishable from the present case. In this case it must be remembered that Defendant No. 1 claimed set-off not morely as a ground of defence. His defence that he and not the plaintiff had really paid the January kist was, if proved, a sufficient defence to defeat plaintiff's claim. But instead of resting satisfied with ttis defence, he counter-claimed for the kists of January, February and March 1921. Even if the claim for January kist be treated as a defence in the alternative, that for the February and March kists can in no sense be treated as a defence, and limitation in regard to the recovery of the latter two kists must be determined by reference to the date on wbibh Defendant No. 1 preferred his counter claim and not the date on which plaintiff instituted his suit. According to this view his claim for recovery of the February kist, which he paid on 21st February 1921, and for which he preferred his claim on 18th March 1921, must stand dismissed. His claim for recovery of the January kist fails because I have held that plaintiff and not he (Defendant No. 1) paid that kist. The claim for recovery of the March kist, which was paid by Defendant No. 1 on 31st March 1921, is within time and must be allowed.
10. The amount due to plaintiff for the January kist of 1921 plus interest thereon at Rs. 2 per cent, per mensem comes to Rs. 185-12-0 and that due to Defendant No. 1 for the March kist of 1921 plus interest thereon at Rs. 2 per cent, per mensem comes to Rs. 185-13-8. Defendant No. 1 is, therefore, entitled to a decree for Re. 0-1-8 only against the plaintiff. The decree of the lower Court is therefore modified by substituting Re. 0-1-8 for the sum decreed by that Court in favour of Defendant No. 1. Parties will share costs of both Courts in proportion to their success, plaintiff's claim in Suit No. 1286 of 1923 has not been disputed before me by Defendant No. 1. The decree of the Court below in that suit is reversed, and it is hereby decreed that Defendant No. 1 do pay Rs. 88-12-0 to the plaintiff and bear costs of both Courts.
11. Decree modified.
Alert