How to prove factum of payment?

There appears to be some confusion about the evidentiary value of the entries in books of account. Though the entries from the books of accounts may be relevant for the purposes of determination of any question, they cannot be the sole basis for fixing the liability upon a person to whose account the payments may have been debited in the books. The provisions of Section 34 are clear enough and they have been constantly interpreted as laying down a rule of evidence that the entries in the books of accounts would not be sufficient for purposes of fixing the liability against a person. There should additional evidence, independent, of those entries which would prove the factum of payment in respect of which the entries are made in books of accounts. Therefore, the Courts have considered that the entries from Books of Accounts are corroborative piece of evidence and they would not by themselves by sufficient evidence on the basis of which a liability can be fixed against a person. The observations of the Supreme Court inChandradhar Goswami & Ors vs The Gauhati Bank Ltd AIR 1967 SC 1058 at p.1060 make it clear that where the entries are not admitted, it is the duty of a party, seeking to enforce the liability of such entries, to produce evidence in support thereof to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. On the plain reading of Section 34, entries in the books of accounts may be 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. In other words, there should be additional independent evidence by which the factum of payment is to be proved, and in that case the entries would be corroborative evidence. It is no doubt true that what should be the nature of additional evidence is always a question of fact depending on the circumstances of each case. It may, as has been held by the Courts, consist of vouchers, receipts, bills or any other oral evidence of witness having personal knowledge of the affairs of the transaction.

Gujarat High Court

Shubhkaran Rameshwarlal Agarwal vs Durgaprasad Private Ltd. on 12 July, 1971

Equivalent citations: AIR 1972 Guj 208, (1972) 0 GLR 179

Bench: B Mehta

10. In my opinion the learned District Judge was in error in treating the statement of accounts, Ex.26, as an additional evidence for purposes of proving the payment of money appearing in the books of accounts in the respondent-Company so as to charge the appellant-defendant with the liability for the amount due at the foot of the said accounts. There appears to be some confusion about the evidentiary value of the entries in books of account. Though the entries from the books of accounts may be relevant for the purposes of determination of any question, they cannot be the sole basis for fixing the liability upon a person to whose account the payments may have been debited in the books. The provisions of Section 34 are clear enough and they have been constantly interpreted as laying down a rule of evidence that the entries in the books of accounts would not be sufficient for purposes of fixing the liability against a person. There should additional evidence, independent, of those entries which would prove the factum of payment in respect of which the entries are made in books of accounts. Therefore, the Courts have considered that the entries from Books of Accounts are corroborative piece of evidence and they would not by themselves by sufficient evidence on the basis of which a liability can be fixed against a person. The observations of the Supreme Court in AIR 1967 SC 1058 at p.1060 make it clear that where the entries are not admitted, it is the duty of a party, seeking to enforce the liability of such entries, to produce evidence in support thereof to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. On the plain reading of Section 34, entries in the books of accounts may be 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. In other words, there should be additional independent evidence by which the factum of payment is to be proved, and in that case the entries would be corroborative evidence. It is no doubt true that what should be the nature of additional evidence is always a question of fact depending on the circumstances of each case. It may, as has been held by the Courts, consist of vouchers, receipts, bills or any other oral evidence of witness having personal knowledge of the affairs of the transaction.

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 11. Appeal partially allowed.
 

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