The plaintiffs have prayed for a judgment and decree against the defendants ordering the defendants to pay to the plaintiffs the sum of Rs.13,77,416.10 ps. and further interest at the rate of 15% per annum or at such other rate as this Hon'ble Court may deem fit on Rs.8,78,453.20 from the date of the filing of the suit till payment and costs of the suit.

2.From the averments in the plaint the suit claim appears to have been based on goods sold, supplied and delivered by the plaintiffs to the defendants from time to time. By three letters dated 10th April 1990, 15th April 1992 and 10th April 1993 addressed by the defendants to the plaintiffs, the defendants had stated that in their account books in the account of the plaintiff during the year ended 31st March 1990 a sum of Rs. 6,12,295.71 was due and similarly for the next two years i.e. year ending 31st March 1992 and 31st March 1993 an amount of Rs.7,86,689.70 and Rs. 8,91,476.20 were shown due to them. By another document which is form No.16A, i.e. a certificate of deduction of tax at source dated 24/4/1995, it was certified that an amount of Rs.14,932/- was paid and deposited with the tax authorities on behalf of the plaintiffs. On the aforesaid basis, the plaintiffs sent a notice on 12th July 1993 to the defendants for payment of the aforesaid amount mentioned in the three letters addressed by the defendants to the plaintiffs. There was no reply to the said notice. Failure to make payment of the aforesaid amount has given rise to the present suit.

3.The defendants on receipt of writ of summons entered their appearance to contest the suit claim. The learned Advocate for the plaintiffs have, thereafter, taken out the above summons for judgment for a decree on the basis that the suit claim was an ascertained, admitted and liquidated amount under the "accounts stated" to be implied as a written contract and that there was no defence of any nature available to the defendants.

4.In support of the summons for judgment, the plaintiffs have filed an affidavit of one Shri Ramesh Shah, partner of the plaintiffs firm. On behalf of the defendants an affidavit of Shri Sameer Shah, their partner, is filed. The plaintiffs have filed a rejoinder on 8th August 2000.

5.Shri Doshi on behalf of the defendants has submitted that his clients are entitled to get unconditional leave to defend the suit as there are following triable issues.

i) Khata-pete is not accounts stated and therefore, such a suit on the basis of the three letters addressed by the defendants to the plaintiffs is not maintainable. Those letters were only acknowledgements of the debt and no summary suit can be maintained on the basis of only acknowledgement of debt as it does not amount to an express written contract.

ii) The letters addressed by the defendants do not constitute a written contract;

iii) These letters are neither expressed or implied contract or terms to pay and therefore, no summary suit will lie.

iv) The suit is barred by limitation as it is filed on 31st March 1998 for recovery of a debt on the basis of the 3 letters dated 10 th April 1990, 15th April 1992 and 10th April 1993. The suit is, therefore, clearly barred by limitation, says the learned Advocate for the defendants and the limitation which has already expired, cannot be extended.

v) The aforesaid three letters are mere acknowledgements and they are not properly stamped and, therefore, they cannot be used as evidence before the court.

vi) The aforesaid three letters were sent by the signatory having no authority to do so.

6.Shri Doshi, therefore, submitted that evidence will have to be recorded on the point of limitation as also on the point of authority of the sender of the said letters. He has, therefore, prayed for an unconditional leave to defend. The learned Advocate has placed reliance on the following judgments:

ILR Vol. VIII page 194

AIR 1938 Bom 460 [LQ/BomHC/1938/61]

1885 ILR Vol.IX

21(b) 201 (FB).

ILR Vol. XLV 374

AIR 1919 NGP 141

AIR 1967 SC 1058 [LQ/SC/1966/265] ;

In the case of 1883 ILR Vol. VIII the point before the Full Bench of this Court was totally different, i.e. what should have been the proper stamp fixed on an acknowledgement in writing. The learned Judges have taken a view that stamp of One Anna was sufficient. This judgment is of no help to the learned Counsel for the defendants.

In the case reported in A.I.R. 1938 Bom. 460, [LQ/BomHC/1938/61] the learned Judges were considering the question of acknowledgement of debt after the period of limitation had expired. It is not so in our case and therefore, this judgment is also of no help to the defendants.

In the case of 1885 ILR Vol. IX, it was a case where the plaintiffs had relied upon his own Khata i.e. account and that was treated only as a evidence available with the plaintiffs and such Khata was not held as account stated. In our case it is the defendants who have stated what amounts were due and payable to the plaintiffs as reflected from their accounts books.

In the case of 21(b) 201 (FB), this judgment was delivered in a reference in the year 1895. The question was whether the acknowledgement of a debt requires stamp under the Indian Stamp Act of 1879 and whether it was admissible in evidence. The ratio of this case also does not lend support to the learned Counsel for the defendant.

In the case of ILR Vol XLV 374, the plaintiffs had relied upon the account in his own books as evidence. Even in this case, the question of proper stamp was raised and decided. This also cannot be applied in the present case.

The judgment reported in A.I.R. 1919 NGP 141 holds that acknowledgements are inadmissible under section 35 of the Stamp Act. The point in the referred case is again different.

The last judgment on which reliance is placed is reported at A.I.R. 1967 S.C. 1058, where the plaintiffs had relied upon their own entries in their own books. It was observed by the Supreme Court that no person can be charged with liability more particularly on the basis of entries in books of account, even where such books of account were kept in the regular course of business. It was further observed that there has to be further evidence to prove payment of the money appearing in the accounts book. In our case the plaintiffs have relied upon the letters addressed by the defendants themselves showing the exact position of the plaintiffs accounts in the books of the defendant. The defendants have informed the plaintiffs that they have to pay to the plaintiffs the amounts mentioned in the books of account of the defendants.

7.The learned Advocate also relied upon the judgment of our Division Bench in Appeal No.902 of 1990 in Summons for Judgment No.205 of 1990 in Summary Suit No. 551 of 1990. The learned Judges have observed as under :

"There are two acknowledgements. Neither the receipt nor the acknowledgements make for an agreement in writing. The suit is, therefore, outside the purview of Order XXXVII of the Code of Civil Procedure and the Appellant was entitled to unconditional leave to defend the suit."

The above referred suit was based upon receipt of Rs.37,000/- as a loan. It was held that the summary suit did not lie within the purview of Order XXXVII Rule 2 of the Code of Civil Procedure, 1908.

8.The learned Advocate also drew my attention to another judgment of our division bench dated 11th August 1986 in Appeal No.712 of 1986 in Summons for Judgment No.274 of 1986 in Summary Suit No. 2506 of 1985. The learned Judges have held that the suit on the item of a bill discounting facility in respect of which there was an account maintained by the bank could not be filed as a summary suit. Such a defence was held to be a substantial defence.

9.As far as the question of limitation is concerned, Shri Kadam has pointed out that the certificate of deduction of tax at source under section 203 of the Income Tax Act, 1961 is dated 24-4-1995. This payment is made by the defendants on behalf of the plaintiffs to the tax authorities for the amounts held in the credit of the plaintiffs in the books of accounts of the defendants. According to Shri Kadam, the limitation would run from 24-4-1995 or from the date of the payment i.e. 31-3-1995. Filing of the suit, therefore, is not barred by limitation, according to Shri Kadam. As far as merits of the contention, Shri Kadam has placed reliance on the judgments reported in A.I.R. 1953 S.C. 225. Para 11 of the judgment lays down the law on the point after discussing the whole case law in earlier paragraphs. The Supreme Court says:

"Mr. Bindra next urged that the plaintiffs suit should have been dismissed because it could not be maintained merely on the basis of an acknowledgement of liability, that such an acknowledgement could only save limitation but could not furnish a cause of action on which a suit could be maintained. The Judicial Commissioner took the view that an unqualified acknowledgement like the one in the suit, and the statement of the account under which the entry had been made, were sufficient to furnish a cause of action to the plaintiffs for maintaining the present suit. We are satisfied that no exception can be taken to this conclusion. It was held by the Privy Council in Maniram vs. Seth Rupchand 33 Ind. App. 165 (P.C.)(c) that an unconditional acknowledgement implies a promise to pay because that is the natural inference if nothing is said to the contrary. It is what every honest man would mean to do. In Fateh Mahommed Vs. Ganga Singh, A.I.R. 1920 the same view was taken. It was held that a suit on the basis of a balance was competent. In Kahanchand Dularam vs. Dayaram Amritlal, A.I.R. 1929 Lah. 263(E), the same view was expressed and it was observed that the three expressions "balance due", "account adjusted" and "balance struck" must mean that the parties had been through the account. The deft. there accepted the statement of account contained in the plaintiffs account book, and made it his own by signing it and it thus amounted to an "accounts stated between them" in the language of Art.64, Limitation Act. The same happened in the present case. The acknowledgement which forms the basis of the suit was made in the ledger of the plaintiffs in which earlier mutual accounts had been entered and truly speaking, the suit was not based merely on this acknowledgement but was based on the mutual dealings and the accounts stated between and was thus clearly maintainable."

In my humble opinion, the Supreme Court has considered the similar point which is urged before me. It is held that an unconditional acknowledgement implies a promise to pay because that is the natural inference, if nothing is said to the contrary. The Supreme Court has further gone on to say "It is what every honest man would mean to do". Nothing more is required to be stated as the judgment is a complete reply to the contentions raised on behalf of the defendants.

10.According to me, to take any other narrow, pedantic or technical view of the matter would be to encourage dishonesty and immorality in life. I fail to understand how the defendants having written to the plaintiffs that certain amounts were shown payable by the defendants to the plaintiffs, can now turn about and say that no suit will lie for recovery of the said amounts shown to be the liability of the defendants towards the plaintiffs. To accept such contention would amount to encourage and accept dishonesty and immorality. Times have changed. Courts of law have to watch with utmost care that the social life is not drifted to dishonesty and immorality and the people are not driven to antisocial elements and parallel machinery of muscle power for recovery of genuine claims of honest people. The law is based on morals and if the foundation of the law is shaken or removed, there will be utter chaos in the society and in life. I may add here that such dishonest contentions by the debtors have given rise to parallel machinery of muscle power for recovery of the debts by the creditors.

11.Shri Kadam has also placed reliance on a judgment of a learned Single Judge of this court (K.K.Desai, J) reported in BLR Vol.XXI page 370. The learned Judge was also called upon to decide the point which I am required to decide. The following paragraphs are important.

"Now, the writing relied upon on behalf of the plaintiffs, in my view, is what is ordinarily known as a "Khata Pete receipt". This kind of writing has been known and understood to continue not only an acknowledgement for receipt of the money but to contain an implied promise that the money having been received "Khata Pete" i.e. "on account' would be repaid by the debtor signing the writing.

The question is as to whether the Khata Pete receipt in this case is not a written contract within the meaning of r.2 cited above. In this connection it may at once be noticed that the writing does not contain express promise to repay the sum of Rs.13,000/-mentioned in the writing. Even so it is apparent that the writing contains an implied promise to repay the sum of Rs.13,000/- mentioned therein This is so because the writing is made in lender's book by the debtor and the debtor states that the amount is received on Sarafi account and is credited to the account of the creditor in the ledger of the debtor. The rate of interest is also mentioned. The writing relates to a fresh loan and has no reference to adjustment or otherwise of accounts of previous dealings. It bears a 4-anna revenue stamp. It is quite clear that the parties did not intend the writing to be and it is not merely a receipt. The writing was executed to create an obligation and promise to repay the amount mentioned therein.

Now, it is true that prior to the amendment of r.2 a summary suit could be instituted in all cases where a debt or liquidated demand in money arose on contract, express or implied. It is quite clear that previously a written contract was not a necessary condition for institution of a summary suit to recover debt or liquidated demand in money. Where express or implied obligation to pay debt or liquidated demand in money arose, even on an oral contract, a summary suit could be instituted. Under the amended Rule, summary suits cannot be instituted when such debt or demand in money arises on oral contracts. Mr.Karanee, however, is not right in his submission that the deletion of the phrase "express or implied" from amended r.2 indicates that when implied obligation to pay debt or liquidated demand in money arises on a written contract, a summary suit cannot be filed. Obligations arising on a written contract can in some parts be express and in other parts be implied by law or otherwise. Such implied obligations, if they create a liability to pay debt or liquidated demand in money, can be enforced by instituting a summary suit having regard to the language of the amended r.2. In my view, it is not correct that implied obligations to pay debt or liquidated demand in money when they arise on a written contract cannot be good causes of action for institution of summary suits."

12.I am in complete agreement with the observations of the learned Judge that such implied obligations, if they create a liability to pay debt or liquidated demand in money, can be enforced by instituting summary suit. This judgment is also a correct and complete reply to the contentions raised.

13.A similar situation had arisen before another learned single Judge of this court (S.H.Kapadia, J.) in Summons for Judgment No.278 of 1995 in Summary Suit No.797 of 1995. The suit was based on the entries reflected in the books of the defendants. By way of defence it was contended on behalf of the defendants that the books of accounts of the defendants were not accurate and that they were numbered on hawala. It was, therefore, contended that suit was on accounts and therefore, summary suit would not lie. The learned Judge has observed as under :

"I do not find any merit in the above defences. The above entries are reflected in the books maintained by the defendants themselves. The defendants have credited T.D.S. and they also credited interest in the Account of the plaintiffs for tax purposes. In the above circumstances, I do not find any merit in the above defences put up by the defendants."

14.In our case, the defendants have themselves addressed the three letters to the plaintiffs pointing out to the plaintiffs the amount stated in their books of accounts to be their liability towards the plaintiffs. I fail to understand why this admission cannot be taken as the basis of a summary suit as an admitted or liquidated claim. The defendants on their own, voluntarily, informed the plaintiffs that the balance in the plaintiffs account as shown as payable by the defendants to the plaintiffs. An honest and straight forward businessman writes to the creditor that the latter is entitled to receive a certain amount from the former. In these circumstances, I am at loss to understand why no summary suit would lie on such a clear cut admission. To take any other view would be contrary to the honest and moral views of the law. I am fully satisfied that the defendants have not disclosed any facts which can be deemed to be sufficient to entitle them to defend the suit. According to me, the defendants have no good defence to the claim of the plaintiffs, though they have raised the above stated technical points, which are not sufficient to entitle them to defend the suit. The aforesaid defence raised by the defendants, is not a substantial defence but is only frivolous or vexatious to grant leave to defend the suit to the defendants. The plaintiffs are entitled to a judgment in their favour. There is no dispute about the documents annexed as Exhibits to the plaint. The learned Counsel has produced original documents which are taken on record and marked as Exh.B colly. I, therefore, make the summons for judgment absolute and decree the suit as prayed in terms of para 14 of the plaint. The suit and summons for judgment both are disposed of accordingly.

Issuance of certified copy of this judgment and decree is expedited. Office to issue execution before sealing of the decree on the learned Advocate for the plaintiffs furnishing draft of the decree within a period of three months. Refund of institution fees as per rules is granted. Concerned parties to act on an ordinarily copy of this judgment and order authenticated by the Chamber Registrar of the court.