Section 34 of the Indian Evidence Act states that entries in the 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 should not alone be sufficient evidence to charge any person with liability. This section makes it clear that all entries in the books of account regularly kept in the course of business are relevant. But it must be shown that the accounts are in the books, the book must be book of accounts and the accounts must be regularly kept in the course of business. The entries are, however, not by themselves sufficient to charge any person with liability. It is a piece of evidence which the Court may take into consideration for determining whether the amount referred to therein was in fact paid by the plaintiff to the defendant. The regular proof of books and accounts requires that the clerks who have kept those accounts, or some person competent to speak to the facts, should be called to prove that they have been regularly kept and to prove their general accuracy. The quantum of evidence required for corroboration would vary in each case.
7. In Chandradhar v. Gauhati Bank, AIR 1967 SC 1058 -- the Supreme Court has observed as follows (at page 1060):
"It is clear from a bare 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 accounts 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. In the present case, however, the appellants did not accept the correctness of the books of account".
In Shambhu Bhat v. Karnataka Vyavasaya Varthaka Sangha Ltd., 1987 (1) KLT768, Kaliath, J. held as follows :
"The finishing words of Section 34 "shall not alone be sufficient evidence to charge any person with liability" certainly indicate that the evidence of the entries in books of account, though are relevant, cannot be treated as independent and substantial evidence. The evidentiary value of the entries in the account book must therefore be corroborative, supportive or confirmatory in nature. This section evidently makes an exemption to the doctrine that "a man cannot make evidence for himself. To attract this section, it has to be proved that the accounts are written in a book and that book must be a book of account and that account must be one regularly kept in the course of business. To say that the account is regularly kept in the course of business, requires that the accounts are kept according to a set of rules or a system".
Kerala High Court
Arakkan Narayanan vs Indian Handloom Traders And Ors. on 18 November, 1998
Equivalent citations: AIR 1999 Ker 279
Bench: S Sankarasubban
1. This appeal is filed against the judgment and decree in O.S. No. 18 of 1989 on the file of the Principal Sub Court, Tellicherry. The plaintiff is the appellant. The plaintiff is the proprietor of Wardha Textiles, Chirackal, Cannanore. The first defendant is M/s. Indian Handloom Traders. According to the plaintiff he has been dealing in textile goods in Cannanore. The defendants are textile agents and their centre of activities is mainly in New Delhi. The defendants used to book orders. As per those orders, goods were delivered to the defendants. According to the plaintiff, goods were delivered to the defendants between 5-11-1985 and 16-9-1987. The plaintiff has been keeping an account of the amount due from the defendants as well as the amount received from the defendants. The case of the plaintiff is that as on 20-1-1988, there is a balance of Rs. 86,271/- due from the first defendant. On 30-10-1987, the first defendant issued a cheque for Rs. 20,000/- in favour of the plaintiff. But that cheque was dishonoured. Thereafter, the plaintiff preferred a complaint to the police. After the complaint was filed, the defendants made a payment of Rs. 40,0000/- in cash on 2-11 -1988. On 3-3-1988 goods covered by invoice Nos. 503, 505 and 506 were returned to the plaintiff. The value of these goods is Rs. 53,000/ -. Thus, according to the plaintiff, on that day that is on 3-3-1988 the defendants made a further payment of Rs. 15,040/- in cash and there was a balance of Rs. 16,239.50 due to the defendants.
2. Another case of the plaintiff is that the goods returned by the defendants were sold by the plaintiff in open market. By that sale the plaintiff suffered a loss of Rs. 13603.30. Thus the suit is filed for the amount dues to the plaintiff under the above head. A joint written statement was filed by defendants 1 and 2. The defendants admitted that the first defendant has transaction with plaintiff and that the plaintiff used to supply handloom goods. But the allegation of the plaint that on 20-1-1988 there was a balance of Rs. 86,271/- is not admitted. According to the defendants the plaintiff has sent the goods without orders being received from the defendants. The issue of the cheque in favour of the first respondent on 30-10-1987 is admitted. The complaint filed by the plaintiff to the police is also admitted. The case of the defendant is that on the interference of the police, 13 bales of textile goods were returned to the plaintiff, and the matter was compromised by paying an amount of Rs. 16040/-. It is further stated that the plaintiff issued a receipt for the amount of Rs. 16040/- in which he had stated that the entire matter has been settled. The defendants denied that an amount of Rs. 40,000/- was paid on 2-11-1988. The defendants also disputed their liability to pay the difference in amount. On the above pleadings the Court below raised five issues. On behalf of the plaintiff Exts. A1 to A8(a) were marked and P.W. I and 2 were examined. On behalf of the defendants Exts. B1 to B3 were marked and DWs. 1 and 2 were examined. The Court below after appreciating the evidence adduced by both the parties came to the conclusion that the plaintiff has failed to prove the correctness of the accounts kept by him. The Court took the view that no decree can be granted on the basis of Exts. A5 and A6. It also held that the plaintiff is not entitled to loss suffered by him on the re-sale of the returned goods, it is against that this Appeal has been filed.
3. Learned counsel for the appellant Shri. Alex contended that the Court below has not properly appreciated the contention of the parties. He further submitted that the appellant has produced Exts. A5 and A6 accounts books, which will show that the balance claimed by the appellant was correct. Further, according to him, PW 2 has been examined to prove Exts. A5 and A6 account books. The lower Court itself has not held that the burden was on the defendants to prove that the statement in Ext. B1 was correct. The burden has not been discharged. In any event, the appellant isentitled to the reliefs prayed for in the plaint.
4. Learned counsel appearing for the respondents, Smt. Sunitha supported the judgment of the Court below. She contended that on the basis of the entries in the account books, a decree cannot be granted. Further, she submitted that under Section 34 of the Indian Evidence Act, the entries in the account books are relevant, but a decree cannot be given on the basis of such evidence alone. She further contended that actually, the suit is for account. There is no pleading that the accounts have been kept regularly in the course of business. According to her, no reliance can be placed on the account books. Further she submitted that Ext. 81 clearly states that the entire transaction between the appellant and the respondents has been settled. The plaintiff admits that it was signed by him. Burden was on him to show that there is no correction or interpretation in Ext. B1.
5. After hearing both sides and after going through the records of the case I am satisfied that the judgment and decree of the Court below are correct. The suit was filed on the ground that the plaintiff had been supplying goods to the defendants from 5-11-1985 to 16-9-1987. According to the plaintiff, as on 3-3-1998 the balance was Rs. 16,230.50. Further, the plaintiff claimed damages or loss to the tune of Rs. 13,603.30. The plaintiff has produced Exts.A1, A1(a) and A1(b) invoices. The plaintiff has also produced Exts. A5 and A6 day book and ledger. Page 51 of Exts. A6 is the relevant page, which contains the entries with regard to the first defendant. That shows, on 1st April, 1987 there was a balance of Rs. 46,306.10. It is true that the three invoices mentioned in the plaint are mentioned in the account. At the same time reverse entries are made with regard to the three invoices, 503, 505 and 506. PW 2 was examined to prove Ext. A6(a). He admits that he wrote Exts. A5 and A6. He stated that the entries regarding the sale of goods were not stated in Ext. A6. He also admitted that the invoices were not written by him. In cross-examination he said that he will not be able to tell what was the balance on 2-3-1988. It is admitted that on 3rd March an amount of Rs. 16,239.50 was paid to the plaintiff by the defendants. According to the defendants, this amount was paid as a result of a settlement entered into with the plaintiff through the intervention of police. It was also under the settlement that the goods contained in three invoices were returned.
6. Ext.B1 is a stamped receipt executed by the plaintiff in favour of the defendants for Rs. 16,040/-. In Ext. B1 it is stated that there was no balance. The plaintiff contended that the last portion in Ext. B1 was a subsequent addition. Excepting for the testimony of PW 1, there was nothing to show what was the addition in Ext. B1. A plain reading of Ext. B1 does not show that the last line was written later. Burden was on the plaintiff to show that this was wrong. Learned counsel for the appellant relied on Ext. A6 to show that the balance as on 3-3-1988 was Rs. 16,239.50. Section 34 of the Indian Evidence Act states that entries in the 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 should not alone be sufficient evidence to charge any person with liability. This section makes it clear that all entries in the books of account regularly kept in the course of business are relevant. But it must be shown that the accounts are in the books, the book must be book of accounts and the accounts must be regularly kept in the course of business. The entries are, however, not by themselves sufficient to charge any person with liability. It is a piece of evidence which the Court may take into consideration for determining whether the amount referred to therein was in fact paid by the plaintiff to the defendant. The regular proof of books and accounts requires that the clerks who have kept those accounts, or some person competent to speak to the facts, should be called to prove that they have been regularly kept and to prove their general accuracy. The quantum of evidence required for corroboration would vary in each case.
7. In Chandradhar v. Gauhati Bank, AIR 1967 SC 1058 -- the Supreme Court has observed as follows (at page 1060):
"It is clear from a bare 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 accounts 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. In the present case, however, the appellants did not accept the correctness of the books of account".
In Shambhu Bhat v. Karnataka Vyavasaya Varthaka Sangha Ltd., 1987 (1) KLT768, Kaliath, J. held as follows :
"The finishing words of Section 34 "shall not alone be sufficient evidence to charge any person with liability" certainly indicate that the evidence of the entries in books of account, though are relevant, cannot be treated as independent and substantial evidence. The evidentiary value of the entries in the account book must therefore be corroborative, supportive or confirmatory in nature. This section evidently makes an exemption to the doctrine that "a man cannot make evidence for himself. To attract this section, it has to be proved that the accounts are written in a book and that book must be a book of account and that account must be one regularly kept in the course of business. To say that the account is regularly kept in the course of business, requires that the accounts are kept according to a set of rules or a system".
8. Thus, on the basis of the above proposition, it has to be found whether the plaintiff has proved the balance. In the plaint, the plaintiff has claimed the amount under two heads. One is that the balance as on 3-3-1988 was Rs. 16,239.50 and the other head is that the loss suffered was Rs. 13,603.30. No doubt PW 2 examined was not able to show anything about the balance and also the amount sustained as loss. He has clearly stated that it will be shown only in the accounts book from 1988. Even the accounts in Ext. A6(a) cannot be accepted as such. There is no evidence to prove how the balance as on first April was arrived at. The balance shown on first April was Rs. 46,306.10. Ext. A1 invoice do not prove this. On the other hand, it is the invoice which was accounted in Ext. A6(a). So also there is nothing to show that loss was incurred by the plaintiff. PW 2 also does not say that the account books were kept regularly in the course of business. It is also found that the entries have not been proved with supportive evidence. In the above view of the facts, it has to be held that the plaintiff has not proved his case. Further, according to me, the burden is on the plaintiff to show that the statement in Ext. B1 was not correct.
In the above view of the matter, I see no merits in the appeal and the appeal is dismissed.
No comments:
Post a Comment