Case Note & Summary
The litigation arose from a suit filed by the Gauhati Bank Limited against Chandradhar Goswami and others for recovery of Rs.40,000 based on a mortgage deed and an alleged further advance. The appellants were members of a joint family whose karta had an open, mutual and current account with the bank. On 1 March 1947, a sum of Rs.15,956/7 was due to the bank, and to secure that amount, the appellants executed a mortgage deed in favour of the bank. The deed also permitted further advances up to Rs.16,000 and provided for interest at 6% per annum with monthly rests. The bank claimed that on 19 March 1947, a further sum of Rs.10,000 was advanced to the appellants. The bank further alleged that on 24 November 1949, the appellants repaid Rs.100, which, according to the bank, saved limitation. The bank filed the suit on 9 April 1953, seeking recovery of Rs.40,000, sale of mortgaged properties, and personal liability for any deficiency.
Headnote
A) Evidence - Bankers' Books Evidence - Certified Copy of Bank Entry - Sections 4, Bankers' Books Evidence Act, 1891; Section 34, Indian Evidence Act, 1872 - Certified copy of bank account entry is prima facie evidence of existence but not sufficient to charge liability; independent evidence required to prove actual loan. The appellants denied correctness of accounts and no other evidence was produced; therefore the claim for Rs.10,000 advance failed. Held that the bank could not rely solely on the certified copy to prove the loan (Paras 899-903).
B) Limitation - Mortgage Suit - Articles 116 and 138, Limitation Act, 1908 - Suit for sale of mortgaged property filed within 12 years of mortgage execution was within time under Article 138; personal liability under mortgage deed filed more than six years after execution was barred under Article 116. The bank filed suit on 9 April 1953, beyond six years from mortgage dated 1 March 1947, so personal claim was time-barred but mortgage sale claim was maintainable. Held that personal liability was barred while mortgage sale was within limitation (Paras 899-903).
C) Limitation - Acknowledgment and Part Payment - Sections 19 and 20, Limitation Act, 1908 - Entry of payment of Rs.100 in bank's accounts did not constitute acknowledgment or part payment because no writing signed by the appellants or in their handwriting was proved. Therefore the payment entry could not extend limitation for the personal liability. Held that the entry of payment was of no value to save limitation (Paras 899-903).
D) Evidence - Burden of Proof - Section 34, Indian Evidence Act, 1872 - Where defendant challenges correctness of accounts, the party relying on entries must produce independent evidence to substantiate them. The bank produced only certified copies under Section 4 of Bankers' Books Evidence Act; no witness or document corroborated the actual advance. Held that the bank failed to discharge the burden and the entry could not charge liability (Paras 899-903).
Issue of Consideration
Whether a certified copy of a bank account entry is sufficient to prove a loan under Section 34 of the Indian Evidence Act, 1872 and Section 4 of the Bankers' Books Evidence Act, 1891; and whether the suit was within limitation for the mortgage sale and personal liability claims.
Final Decision
Appeal allowed in part. The claim for Rs.10,000 as further advance was not proved merely by certified copy of bank account and could not be charged against the appellants. The suit for sale of the mortgaged property was within time under Article 138 of the Limitation Act, 1908, but the claim for personal liability under the mortgage deed was barred by limitation under Article 116. The payment of Rs.100 did not constitute acknowledgment or part payment under Sections 19 or 20 of the Limitation Act to extend limitation.
Law Points
- Legal points not extracted
- Section 34 of Indian Evidence Act
- 1872
- entries in books of account alone insufficient to charge liability
- Section 4 of Bankers' Books Evidence Act
- 1891
- certified copies admissible only to same extent as original entries
- independent evidence required to prove actual advance
- payment entry of Rs.100 not acknowledgment under Sections 19 or 20 of Limitation Act
- 1908 without signed writing
- mortgage sale suit within 12 years under Article 138
- Limitation Act
- 1908
- personal liability claim barred after 6 years under Article 116
Case Details
1966 LawText (SC) (09) 40
Civil Appeal No. 733 of 1964
Ramaswami, V., Shah, J.C., Wanchoo, J.
Citation not available, 1967 AIR 816, 1967 SCR (1) 921
Naunit Lal, R. Gopalakrishnan
Chandradhar Goswami & Ors.
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Nature of Litigation
Civil suit for recovery of money based on mortgage deed and alleged further loan, filed by bank against debtors.
Remedy Sought
Bank sought recovery of Rs.40,000, sale of mortgaged properties, and personal decree for any deficiency.
Filing Reason
The bank alleged that the appellants borrowed Rs.15,956/7 under a mortgage deed dated 1 March 1947, took a further advance of Rs.10,000 on 19 March 1947, and failed to repay; the suit was filed to recover the amount.
Previous Decisions
Trial court decreed the suit holding Rs.32,000 due and that payment of Rs.100 on 24 November 1949 saved limitation; High Court dismissed the appeal, holding that the certified copy of account proved the Rs.10,000 advance and the suit was within limitation.
Issues
Whether the bank proved the loan of Rs. 10,000 advanced on 19 March 1947 merely by producing a certified copy of the account entry, in view of Section 34 of the Indian Evidence Act, 1872.
Whether the suit was within limitation, specifically whether the payment of Rs. 100 on 24 November 1949 saved limitation and whether the claim for personal liability was barred.
Submissions/Arguments
Appellants contended that no independent evidence beyond the certified copy of accounts was adduced to prove the Rs.10,000 advance, and they had challenged the correctness of the accounts.
Appellants contended that the payment of Rs.100 on 24 November 1949 was not proved and no signed acknowledgment or part payment in handwriting of appellants was established under Sections 19 and 20 of the Limitation Act, 1908.
Bank contended that the certified copy under Section 4 of the Bankers' Books Evidence Act, 1891 was prima facie evidence of the entries and proved the advance, and the payment of Rs.100 saved limitation.
Ratio Decidendi
Certified copies of bank entries under Section 4 of the Bankers' Books Evidence Act, 1891 are admissible only to the same extent as original entries under Section 34 of the Indian Evidence Act, 1872. Since original entries alone are insufficient to charge any person with liability, certified copies likewise cannot charge liability absent independent evidence. A mere entry of payment in bank's account does not constitute an acknowledgment or part payment under Sections 19 or 20 of the Limitation Act, 1908 unless signed by the debtor. The suit for sale on mortgage filed within 12 years is within time under Article 138, but personal liability claim beyond 6 years is barred under Article 116.
Judgment Excerpts
Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability.
Original entries alone under s. 34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced under s. 4 of the Bankers’ Books Evidence Act obviously cannot charge any person with liability.
The suit was clearly within time insofar as the liability for sale under the mortgage deed was concerned as it was filed within 12 years of the execution of the mortgage as allowed by Art. 138 of the Limitation Act of 1908.
As to the personal liability under the deed that was beyond time as the suit was filed more than six years after the execution of the mortgage allowed by Art. 116.
Procedural History
Respondent bank filed suit on 9 April 1953 for recovery of Rs.40,000 based on mortgage deed dated 1 March 1947 and alleged further advance of Rs.10,000 on 19 March 1947. Trial court framed seven issues and decreed the suit, holding Rs.32,000 due and that payment of Rs.100 on 24 November 1949 saved limitation. Appellants appealed to Assam High Court, which dismissed the appeal on 1 August 1960, holding that certified copy of account proved the advance and limitation was not barred. Appellants obtained special leave to appeal to the Supreme Court.
Acts & Sections
- Indian Evidence Act, 1872: Section 34
- Bankers' Books Evidence Act, 1891: Section 4
- Limitation Act, 1908: Section 19, Section 20, Article 116, Article 138
