Messrs UNITED BANK Ltd. Versus BEGUM JAMILA KHATOON

1. RAIDER ALI PIRZADA, J.‑‑ This appeal under the Law Reforms Ordinance has been filed against the judgment of the learned Single Judge in Suit No. 618 of 1978 dismissing the suit as time‑barred. The facts leading to the present appeal may shortly be stated as follows:

2. The appellant /plaintiff filed a suit against the respondent/defendant for recovery of an amount of Rs. 76,605.64. In the plaint, the appellant averred that the defendant had and still has an account with the appellant's said Bank at I.I. Chundrigar Road, Karachi. On or about April 13, 1964, request of the said respondent granted to her overdraft Rs. 2,50,00 repayable with interest at the agreed rate. The said respondent availed the overdraft facility by operation of her overdraft Account No. 5287 maintained with appellant's said branch and the respondent offered as a security "pledge of shares" of various limited Companies. In para. 6 of the plaint it was averred that the respondent and/or her authorised representatives deposited various amounts in her overdraft account mentioned in that paragraph during the years 1966, 1968, 1970, 1971, 1974 and 1975 towards partial repayment of appellant's dues.

3. The suit came up for final disposal as written statement had not been filed by the respondent.

4. The appellant's officer was examined in support of the appellant's case and the respondent did not examine herself in support of her version.

5. The learned counsel for the parties raised the following three pleas:‑

(i) The suit is time‑barred.

(ii) The accounts have not been proved.

(iii) The plaintiffs have not proved that agreement of defendant for interest charged by the Bank from time to time.

6. The learned counsel for the parties agreed that Article 57 of the First Schedule to the Limitation Act, 1908 is applicable to the claim of the appellant in the suit and according to the learned counsel for the appellant, period of limitation stood extended from time to time on account of part payments made by the respondent and/or her authorised agent as detailed in paras. 6 and 9(b) of the plaint. On the basis of that evidence the learned Single Judge held that the claim of the appellant is barred by limitation and they were not entitled to any relief and accordingly dismissed the suit.

7. Aggrieved by the above judgment, the appellant have filed this high Court Appeal. During the pendency of this appeal, the appellant filed application under Order VI, Rule 17 read with section 151 C.P.C . for permission to amend the plaint for substituting para. 2 of the plaint and for adding clause (d) to para. 9 of the plaint as reflected in the application. The application for amendment of plaint was dismissed on 21‑4‑1986 by a Division Bench of this Court. The learned Division Bench observed that "the suit framed has been found by the learned Single Judge to be time‑barred and the proposed amendment seems calculated at advancing a different case to make the suit within time limit. The proposed amendment would change the complexion of the suit, which is not permitted under law. Accordingly, the application is dismissed".

8. The learned counsel for the appellant raised the following contentions:‑‑

(i) The account in suit was current, mutual and open and the last entry was made on 15‑9‑1977 and as such the suit as per Article 85 of the Limitation Act is within time as from the close of the accounting year i.e. 31‑12‑1977, without prior notice.

(ii) The sale of shares without prior notice was legal and authorised.

9. The learned counsel for the respondent on the other land, contended that the dealings which she had with the appellant's Bank were not mutual, open and current accounts independent transactions and as such the suit was barred by limitation.

10. Mr. Mansoorul Arfin the learned counsel for the appellant contended that the order of dismissal of application did not preclude him to press ground No. XVIII and relied upon the observations of the said Division Bench which are as follows:‑‑

11. "It may, however, be mentioned that the order will not preclude the appellant from agitating at the regular hearing any of the grounds taken in this appeal."

12. We are unable to accept the submissions of the learned counsel for the appellant that the balance was shifting from one side to the other. Some times the plaintiffs were the debtors of the defendant and sometime the defendant was debtor of the plaintiffs and hence the account created mutual and independent obligations against each other. We are of the opinion that when the plaintiffs who came to Court have to establish that: they have pleaded the special facts which bring the suit account into mutual, open and current account. It is also for the plaintiffs to establish that the suit was within time.

13. It is an admitted position that the appellants/plaintiffs averred in their plaint that the respondent had an account and the appellants at the request of the said respondent, granted an overdraft facility upto the limit of Rs. 2,50,000 repayable with interest at the agreed rate. It was further averred that the respondent availed the said overdraft facility by operation of her overdraft Account No. 5287 maintained in the appellants' Branch. The respondent offered as a security "pledge of shares" of various limited companies.

14. P.W.1 Mohsin Ali who was examined as the sole witness on behalf of the appellants deposed that "we had granted an overdraft limit of Rs. 2,50,000 to the respondent. She was a broker in shares. The overdraft facility was granted against the security of shares". The witness produced copy of notice (Ex. 141) by which she was informed that unless she liquidated this liability her shares would be disposed of. A sum of Rs. 76,605.64 was outstanding against the respondent. The witness also deposed that the respondent had deposited various amounts. In cross‑examination the appellants' officer P.W. 1 deposed that the overdraft was sanctioned in the year 1964. The overdraft was granted in lump sum. The witness further deposed that the nature of operation of the account was that the broker used to sell shares and proceeds uses to be credited in the account of the respondent.

15. The respondent did not adduce any oral evidence. This is all the evidence on record on the basis of which the question whether the suit account is or is not a mutual, open and current account, has to be decided.

16. The applicability of Article 85 of the First Schedule to the Limitation Act depends upon special facts. What those special facts are, can be seen from what has been said by Rankin' CJ. in the case of Tea financing Syndicate Ltd. v. Chandramal AIR 1931 Cal. 359=ILR (1931) Cal. 1649.

17. "There can, I think, be no doubt that the requirement of reciprocal demands involves, as all the Indian cases have decided, following Holloway, Ag. 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:"

18. Those special facts that have to be pleaded and proved by the appellants/plaintiffs who claim the account to be mutual, open and current account are: (a) there must be transactions on each sides, (b) the transactions must create independent obligations on the other, and (c) there should not merely be transactions which create obligations on one side and those on the other being merely complete or partial discharge of such obligations. In the instant case the learned counsel for the appellants had to admit that no such plea was raised or put in issue. Even the contention was not raised at the stage of arguments. It was urged that the fact that there was a continuous running account is patent on the record. This contention seems to have no force. The question is one of fact and the defendant/respondent was certainly entitled to have a notice of the plea at the proper time if the plaintiffs intended to rely on it. The appellants/plaintiffs even did not state that the account is a mutual, open and current account. The plaintiffs did not plead the special facts which go to establish that the account is a mutual, open and current account. The plaintiffs did not plead the special facts which go to establish that the account, on the basis of which the suit claim was made, was a mutual, open and current account. P.W. 1 clearly says that the bank had granted an overdraft limit of Rs. 2,50,000 to the respondent. The overdraft facility was granted against the security of shares.

19. On the above pleadings and proof itself, we should hold that the account on the basis of which the appellants had filed the suit was not a mutual, open and current account. However, we will examine the cases cited by the parties in support of the respective stands taken by them.

20. In Govinda Nadan v. A.Y.R.M.R.M. Ramaswamy Chetty AIR 1926 Madras 224 the facts of the case were that the suit was brought by the plaintiff for a sum of Rs. 795 which was said to be due to him from the defendant, a money lender. The course of business between the parties was apparently that the plaintiff should draw money whenever he wanted it and should also deposit money with the defendant. Mr. Odgers, J. held as follows:‑‑

21. "But the account, as far as I have been able to see, resembles exactly a bank pass book where deposits of money are made and withdrawals of moneys take place from time to time, the balance being in favour either of the customer or of the bank as the case may be at any given moment. I, therefore, agree with the learned District Judge that there do not appear to be independent obligations on both sides and that a mere shifting of the account from one side to the other is not enough to constitute mutual obligations."

22. In "The Bengal Burma Trading Company and another v. Burma Loan Bank Ltd. and another AIR 1937 Rangoon 340" the facts were that the plaintiffs/respondents bank obtained a decree against the defendants/ appellants for Rs. 247‑2‑3 and Rs. 125 interest at two per cent per mensum from 1933, in all for Rs. 372‑2‑3, the amount due on their bank account overdrawn. The account was closed in May, 1933. The suit w4s filed in February, 1935. The trial Court held that the suit was not barred by Article 85, Schedule I to the Limitation Act, as the account was mutual, open and current. Mr. Mosely, J. held as follows:‑‑

23. "If, however, an account starts with a deposit to the credit of the customer and then consists, as in the present case, of a series of alternate credits and debits, and then for a long period, as in the present case, namely four years consists merely in the debit in favour of the bank being reduced by payments by the customer, I do not think that the account can still be called a mutual one. Although the account started as a mutual one it continued on a different footing and changed its nature."

24. In "The Reliance Bank Ltd. v. Prafulla Kumar Banerjee and others" (P L D 1953 Dacca 200) the admitted facts were that Lai Muhammad Saha who was dealing in rice business, for the purpose of his business, opened a current account with the plaintiff bank on 5‑9‑1939 and between 25‑9‑1939 and 20‑10‑1942 the bank advanced by way of overdraft Rs. 4,169‑4‑9 and the last transaction was on 21‑10‑1941. On the basis of these facts, it was contended in that case that it was a case of mutual, open current account and each party could say that he had a separate account against the other, one being in respect of the current account and other being in respect of the overdraft account, that there ,was an independent obligation of each party arising from each account and that on the basis of the balance of each account the balance of the other could be set off. At was held that as the last transaction was on 20‑10‑1941, the case was within Article 85 of the Limitation Act.

25. In Simplex Manufacturing Company (Private) Ltd. v. The Hindustan Tools Mfg. Co. Ltd (in Liquidation)" (A I R 1960 Punjab 164), the facts were that the petitioner leased out the premises to the respondent company for a period of three years for a total rent of Rs. 1,200. These premises were again taken on rent at a rate of Rs. 200 per mensum between 3‑8‑1946 and 2‑11‑1946. On the third occasion these premises were taken on lease from 17‑1‑1947 till 31‑12‑1947. The respondent company used to supply castings to the petitioner company. The amount due to the respondent company used to be adjusted against the rent payable to the petitioner company. In the financial year ending 31st March 1949, the respondent company had supplied castings to the petitioner company of the value of Rs. 861‑13‑3 in excess of the amounts deposited to the respondent company.

26. It was contended that after giving credit for all sums received and value of material supplied by the respondent company, a sum of Rs. 17,384‑99 exclusive of interest is due to the petitioner company on account of unpaid rent and electric charges upto 31‑10‑1956, as borne out by the statement produced by the petitioner company. It was held that the transactions between the parties were of two kinds. The claim of the petitioner company was on account of rent of the leased premises or compensation for their use and occupation besides electric charges. The demand of the respondent company was on account of the price of the castings fabricated upon both these claims of the two parties were creditors and debtors of each other. The dealings between the two arising out of different kinds of demands were independent. It was held that "the amounts between the parties were mutual, open and current and the claim of the petitioner company is governed by Article 85 of the Limitation Act and is within‑time.

27. In "Nabadwip Chandra Podder and another v. S.D. Ahmed, Official Receiver, Official Liquidator, Dass Bank Ltd:" (P L D 1969 Dacca 529) the facts were that the official Liquidator instituted suit for recovering of Rs. 99,319‑13‑9 alleged to be due from the defendant under an overdraft account. It was held that as the accounts in the case was closed down before the institution of the suit, Article 85 does not apply. It was further held that:‑‑

28. "Of the three sums alleged to have been received by the plaintiff from the defendants, the last payment of Rs. 400 was said to have been made on 4‑11‑1953. Even if the alleged three payments including the last one are true, these could not save the limitation, because the suit was filed beyond 3 years from 4‑11‑1956 the date of the last payment. There is yet another reason why the alleged payments, even if true, could not save limitation. The reason is that none of the alleged payments of Rs. 100, Rs. 200 and Rs. 400 was in accordance with the provisions of section 19 or section 20 of the Limitation Act. In other words, none of the alleged payments was acknowledged in writing, as required by the said sections."

29. In Robert Cotton Associates Ltd. v. Khan Karam Hussain Khan and 2 others (P L D 1972 Supreme Court 109) the facts were that Robert Cotton Associates Limited owned ginning factory at Khanewal and was dealing in Cotton and Cotton‑seeds. On 6‑i1‑1963 a sum of Rs. 25,000 was advanced by' it to Nawazish Ali father of respondents 2 and 3 for the supply of cotton to firm. By way of security, Khan Karam Hussain Khan respondent No. 1 executed a Kafalatnama. The account maintained by the firm showed‑ that there were several credit and debit entries. In June, 1964 when the account was closed and the balance was struck, it was found that a sum of Rs. 12,600‑04 was due from Nawazish Ali Khan. By that time Nawazish Ali Khan had died leaving respondents 2 and 3 as his legal representatives. As the respondents had failed to pay this amount, the appellant firm brought a suit against them.

30. Dealing with the contentions, Mr. Sajjad Ahmed, J. (as he then was) speaking for the Supreme Court observed that:‑‑

31. "Having carefully weighed the judicial tests laid down for the determination of a mutual, open and current account, as envisaged in Article 85, we arc prone to think that all that is necessary to be proved is that there should be an open current account between two persons consisting of mutual items of debit and credit in the course of dealings between them, the credits to be made as such and not in discharge of the one‑sided debit. The credit and debit transactions need not necessarily give rise to independent obligation, nor need the balance shift from one side to the other at any stage of the dealings. So long as there is a possibility of the shifting of the balances from one side to the other, mutuality of transactions is maintained. There need not be a mutuality of balances in the sense that balances should also shift from one side to the other from time to time."

32. In the case of Karachi Flour Millers' Union and 3 others v. Province of Sind, Department of Food, Government of Sind, Karachi and 4 others (P L D 1976 Karachi 623), Mr. I. Mahmud, J. held that:

33. The judicial test with regard to a mutual account has been laid down by their Lordships of the Supreme Court in Robert Cotton Associates Ltd. Khanewal v. Khan Karam Hussain Khan and 2 others. Mr. Ajmal Mian has not satisfied me as to what were the transactions to be performed by or on behalf of the Pakistan Government which created independent obligations in favour of the plaintiffs. As I see it, the Government supplied wheat on credit to the plaintiffs and debited them in its account with the cost of the wheat at the issue prices, against which were credited lump sum payments made by the plaintiffs from time to time of account, in discharge of the debit. That plaintiffs have not shown by producing their accounts that they were crediting the Government with the actual sale proceeds of the wheat products realised by them and, after deducting their milling charges from it, were adjusting the balance against the cost of wheat supplied to them. The facts on the contrary, show that they were merely making payments of lump sum amounts against the cost of wheat supplied to them."

34. In the case of Qureshi Brothers v. Khairpur Textile Mills Ltd. (P L D 1980 S C 286) the facts were that the appellants were dealers and commission agents in cloth and yarn in the town of Khairpur and the respondents carried on business of manufacture of cloth and yarn at Khairpur. The managing partner of the appellants was a shareholder and director in the respondent company, By an agreement between the parties the appellants were to work as commission' agents. The dealings between the parties commenced from 1‑2‑1952. Subsequently the appellants became dealers of the respondent as well and it is stated that an oral agreement was reached in 1953 to the effect that the agency and the dealer account would be one mutual, open and current. Until the dealings continued between the parties i.e. upto 1‑12‑1957, a sum of Rs. 63,325‑6‑5 became due to the respondents from the appellants. In July, 1957, the respondents made a demand of the dues which if not paid would attract interest at the rate of Rs. 6 1/2. An amount of Rs. 15,367‑6‑6 was claimed by way of interest from July 1957 to November 1960. On 28‑11‑1960 the respondents filed a suit for the recovery of Rs. 73,692‑12‑6. Three credit entries in the account in favour of the appellants dated 30‑5‑1957, 23‑11‑1957 and 1‑12‑1957 respectively of Rs. 30,000, Rs. 15,000 and Rs. 649‑3‑0 were relied upon by the respondents and in the suit it was pleaded as within limitation on the basis of the last entry dated 1‑12‑1957. In its written statement, however, the appellants disputed these entries on the ground that they were incorrect and unauthorised.. Leave was granted by the Hon ble Supreme Court in the following terms:‑‑

35. "The principal ground raised is that the application of Article 85 of the Limitation Act, as to bring the suit within limitation on the basis of a `mutual, open and current' account is incorrect, having regard to the facts. As the judgments of the Courts below are concurrent as to facts, leave can only be granted where a substantial question of law arises. In this case, such a question does rise, namely, whether the incidents necessary to establish a "mutual, open and current" account have been shown to exist."

36. The Hon'ble Supreme Court held as follows:‑‑

37. "The evidence on record and particularly Ex. 19 establishes that the respondent and the appellant were dealing with each other in two different capacities viz: principle and agent and seller and purchaser with each having demands against the other. While the respondents had demands for the price of goods sold on credit to the appellant, the appellant had demands against the respondent on account of commission on all sales made on its behalf and also incidental expenses incurred in respect of such relationships created reciprocity of accounts between the parties and. showed that a mutual, current and open account was maintained. "

38. In the case of Muhammad Naeem Butt v. Allied Bank of Pakistan P L D 1985 SC 298 the facts were that the appellant opened a current account at the Chowk Abreshamgran Branch of the respondent. The appellant was given credit by the respondent bank by way of overdraft facility,, secured against cheques and demand drafts sent for collection through the said branch. The appellant availed the credit facility thus extended from time to time and carried on transactions with the bank, so that their dealings resulted in an open, mutual and current account. According to the respondent the last transaction between the parties consisted of a credit deposit of a cash amount of Rs.24,000 in the account on 13‑4‑1974. As the appellant stopped operating on his account a balance was struck by the respondent, according to which a sum of Rs. 1,15,194.52 was due and payable by the appellant on. 29‑12‑1967. The respondent filed a suit on 24‑1‑1977. The appellant denied his liability and contested the suit on a general plea that the statement of account on which the suit was based was false, fictitious and incorrect. The trial Court dismissed the suit as time‑barred. The respondent went up in appeal before the Peshawar High Court. The learned Judges of the High Court did not agree with the finding of the trial Court and held that the deposit in question was made by the brother of the appellant who was duly authorised to make the payment on behalf of the appellant. Leave was granted by the Hon'ble Supreme Court. The Hon'ble Supreme Court held:‑‑

39. "It will be seen from the above that the limitation for a suit for the balance due on a mutual, open and current account is three years from 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. This being a case in which a scheduled bank is involved, it is clear that the accounting year was the normal financial year commencing from Ist July to 30th June, therefore, if the last item in the account was dated 13‑4‑1974, the suit could be brought within three years with effect from the close of the accounting year, namely, 30‑6‑1974. On the other hand, if the said entry was not proved to be with the consent and privity of the account‑holder, then the limitation will have to be computed with reference to the date when the last cheque was drawn, namely, 27‑11‑1972. By the last mentioned reckoning the closing date of the said year will be 30‑6‑1973 and the suit would, therefore, be obviously barred by time. The purpose of pointing out this aspect is to highlight the fact that the stringent requirements of section 20 of Limitation Act are not attracted in the present case."

40. Again further:‑‑

41. "Be that as it may, even if section 20 of the Limitation Act is attracted in this case, we feel that it has been established on the record that the aforesaid disputed payment constituted an acknowledgment as it was made by duly authorised agent of the appellant. The strongest argument of the learned counsel for the appellant was that as the voucher supporting this payment (Ex.P.W. 1/D‑1) was neither proved to be in the handwriting of the appellant nor was signed by him or his authorised agent, the requirements of the proviso to section 20(1) have not been satisfied."

42. It is therefore, obvious that the above view of the Supreme Court was based on the particular circumstances of that case where open, mutual and current account between the parties had been proved and acknowledgment of debt by agent was also taken as proved. But in the case before us neither there is any acknowledgment nor the account has been proved to be mutual, open and current one and hence cited Supreme Court case is distinguishable from present case.

43. For another reason also we think that the suit is barred by limitation. The nature of the account attracts, in our view, Article 57 of the Limitation Act. We were taken through the accounts. These accounts show that the respondent was depositing money with the appellants‑Bank from time to time upto April 1968 and the Bank was allowing her to draw money in excess of the deposits with the result that the balance was frequently in favour of one or the other. The overdraft facility which was allowed by the Bank and the pledge of shares by way of security for overdraft unmistakably point out that the overdrawing of the amount was not merely accidental but it was an understanding between the parties that the respondent would be at liberty to borrow money from the appellants Bank for the purpose of her business by overdrawing on her account. The title of the account itself suggests that it was overdraft account. That it was so is not in dispute. The respondent was under independent obligations to repay the amount of the cash deposits. There was thus transactions on each side creating independent obligations on the other, and both sides of transactions were entered in the same account up to April 1968. The deposits made by the respondents were not merely complete or partial discharges of her obligations to the appellants. There were shifting balances; on many occasions the balance was in favour of the appellants and on many other occasions, the balance was in favour of the respondent. This was fairly active up to 3rd June, 1968. It is not shown that the account continued to be mutual thereafter.

44. On examining the accounts in the present case we are of the opinion that the account after 3‑6‑1968 between the parties is not such as to consist in reciprocity of dealings between the parties and it consists merely of items on one side made up of debits.

45. We are of the opinion that for the creation of an open, mutual and current account there must be an intention between the parties, either express or implied, which may be deducible from the course of dealings, to have mutual dealings creating reciprocal obligations independent of each other with the intention that these transactions are to continue and are not to be closed until the parties decide to close their account. Such an intention must be evident from the time of commencement of such dealings. Few stray transactions, which normally persons engaged in business have to carry out for the sake of good friendly business relations with other party cannot be termed as reciprocal or mutual obligations but are merely isolated transactions and do not fall within the compass of their normal business dealings.

46. For another reason also we think that the suit is barred by limitation. The entries of payment of Rs. 3,700 on 22‑6‑1974, Rs. 1,850 on 27‑3‑1975 and Rs. 3,700 on 15‑9‑1975 do not help the appellants in this behalf. These entries are of no value under section 19 or section 20 of the Limitation Act for neither a writing signed by the respondent nor an acknowledgment of payment in the handwriting of the respondent or in a writing signed by her has been proved. Nor Article 85 of the Limitation Act helps the bank. Assuming this is a case of an open, current and mutual account, the last payment was made on 1‑10‑1971. Article 85 gives limitation of three years for the close of the year in which the last item admitted or proved is entered m the account. The account in this case shows that the year was calendar year. The mutuality in this case came to an end in the year 1971 for we find from the account that thereafter there are only entries of interest due to the bank. So the appellants would get three years from the end of 1971 under Article 85 and as the suit was filed on 3‑7‑1978, this entry will be of no help to the appellants.

47. We, therefore, hold that the account on the basis of which the money suit was filed, was an overdraft account and not a mutual, open and current account within the meaning of Article 85 of the Limitation Act. The suit was barred by limitation and the learned Single Judge was right in dismissing the plaintiffs suit.

48. Mr. Mansoorul Arfin the learned counsel for the appellants contended that the observations to be found by the Bench of this Court constituted the ratio of the decision of the Division Bench and are binding on us. It is to be noted that the Division Bench dismissed the amendment application on merits. We are of the opinion that the observations of co‑ordinate Bench are not part of ratio decidendi but rare in the nature of obiter dicta and hence not binding on us.

49. It appears to be unnecessary to consider these observations merely on the footing of obiter dicta and therefore not binding on us. In any case the observations are of little assistance to the learned counsel for the appellants.

50. Mr. Mansoorul Arfin for the appellants contended that the payments on 22‑6‑1974, 27‑3‑1975 and 15‑9‑1975 have been proved by evidence to have been made by respondent and/or her authorised representative. In support of his contention he invited our attention to letter of respondent (Ex. 3/10) and according to him the terms in the letter empowering the appellants to sell the shares/securities for realizing the debt due from the respondent being unqualified, it was not necessary to comply with the provisions of section 176 of the Contract Act.

51. Section 176 of the Contract Act provides that if the pawner makes a default in payment of the debt in respect of which the goods were pledged, the pawnee may bring a suit against the pawner upon the debt, or he may sell the thing pledged on giving the pawner reasonable notice of the same.

52. As regards the terms of the letter/agreement under which the pawnee had been authorised to sell the securities in case the credit balance of the respondent fell below the margin, it could not avail the appellant' Bank in acting contrary to law. An agreement of the character would be inconsistent with the provisions of the Contract Act, and, as such, would be wholly void and unenforceable.

53. We are, therefore, clearly of the opinion that the sale of the securities by the appellant' Bank without reasonable notice to the respondent was bad and was not binding on her. What is contemplated by Section 176 is not merely a notice but reasonable notice meaning thereby a notice of intended sale of the security by the creditor within a certain period so as to afford an opportunity to the debtor to pay up the amount within the time mentioned in the notice. No such notice was given by the appellants to the respondent till 16‑7‑1976. There can then be no escape from the conclusion that the sale of the securities by the appellants was against law and not binding on the respondent. The credit entries are unauthorised and cannot be termed as acknowledgment by the attorney or the authorised representative. The conclusion reached by the learned Single Judge was, therefore, legal and sound.

54. Mr. Namazi, the learned counsel for the respondent urged before us that there is no evidence besides the certified copy of the account to prove that sum of Rs. 76,605.64 was due and payable to the appellants and therefore in view of section 34 of the Evidence Act, the respondent cannot be saddled with liability for that amount. Section 34 reads as under:‑‑

55. "34. Entries in books of account when relevant. ‑‑ 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."

56. It is clear from the perusal of the section that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account, are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them The respondent though did not file written statement but took the plea that the accounts have not been proved. The respondent had not admitted the correctness of the accounts filed by the appellants' Bank, particularly after 1‑10‑1971, the appellants had to prove credit entries dated 22‑6‑1974, 27‑3‑1975 and 15‑9‑1975, if it wanted to charge the'respondent with liability for the balance amount of Rs. 76,605.04. But all that the appellants did was to produce a certified copy of account (Ex. 31/6) under Section 4 of the Bankers' Books Evidence Act, No. XVIII of 1891. Section 4 of the Act reads thus:‑

57. "4. Subject to the provisions of this Act, a certified copy of any entry in a bankers book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise."

58. It is clear from a bare perusal of the section that it gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prime facie evidence of the existence of the original entries in the account and are admitted as evidence of matters, transactions and accounts therein but such admission is only where, and to the same extent as the original entry itself would be admissible by law and not further or otherwise. Original entries alone a/s 34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced a/s 4 of the Bankers' Books Evidence Act obviously cannot charge any person with liability. We are of the opinion that when the entries are not admitted it is the duty of the Bank if it relies on such entries to charge any person with liability to produce evidence in support of the entries to show that the money was advanced or overdrawn as indicated therein and thereafter the entries would be of use as corroborative evidence. But no person can be charged with liability on the basis of mere entries whether the entries produced arc the original entries or certified copies under section 4 of the Bankers' Books Evidence Act. The respondent has challenged the accounts. In these circumstances the appellants had to prove that the sum of Rs. 76,000 was in fact outstanding and the appellants could not rely on mere entries in the books of account for that purpose. This is clear from the provisions in section 34 of the Evidence Act. The appellants were thus obliged to produce other evidence to corroborate the entries, but, as observed earlier, oral evidence produced on behalf of the appellants does not at all inspire confidence. The witness for the appellant admitted in his cross‑examination that there is an entry of Rs.12,977. But it reads as Rs. 12,09,077.

59. For the above reasons, we hold that the account had long ceased to be mutual one, and that Article 85 does not apply.

60. This appeal will, therefore, be dismissed and the plaintiff's suit dismissed. In the circumstances of the case the parties shall bear their own costs.

61. AA./U‑36/K

62. Appeal dismissed.