1. NAIMUDDIN, J.-:-This Inter-Court Appeal under section 3(1) of the Law Refcirms Ordinance, 1972 is directed against the judgment and decree dated 11-3-1974 passed by a learned Single Judge of this Court in Suit No, 168 of 1968.
2. The facts giving rise to suit and relevant to The disposal of this appeal, briefly stated, are as follows :- The appellant appointed the respondents as their Commission Agents at Karachi.
3. ' It was the case of the respondents that appellant was a partnership firm and they in February, 1965 on behalf of the appellant entered into a forward contract through a broker at Karachi for sale of 12 lots of cotton. The transaction was-ultimately settled in March, 1965 and according to the respondents they paid a total sum of Rs, 41,328 as detailed below in settlement of the transaction :- ' Rs, 12,000 paid on 8-3-1965. Rs, 25,848 paid on 16-3-1965. Rs, 3,264 paid on 18-3-1965.
4. ' Rs, 216 ' It was also the case of the respondents that on 30-5-1965, the appellant in writing had admitted the liability to make good the loss and agreed to fully indemnify them for the same.
5. ' Besides the above transaction the respondents in the months of March and April, 1965 admittedly received from the appellant 481 bales of cotton for sale at Karachi, which they sold between 22-7- 1965 and 13-11-1965 for a total sum of Rs, 1,98,870.44 although from time to time they paid to the appellant through bank a total sum of Rs, 2,20,469.84 against railway receipts in respect of 481 bales of cotton and two more amounts of Rs, 1,097 and Rs, 3,840.24, thus making a total of Rs, 2,25,407.08.
6. ' Accordingly, the respondents claimed from the appellant a total sum of Rs, 96,486.80 as detailed below :--
(1) Rs, 41,328 being the amount of loss paid by the respondents on behalf of the appellant.
(ii) Rs, 22,530.08 being the difference between the amounts paid to the appellant and sale proceeds of 481 cotton bales, after adjustment of Rs, 5,000 received from the appellant.
(iii) Rs, 33,622.16 on account of commission, interest, incidental charges and other expenses in connection with the transactions.
7. ' The appellant in his written statement submitted that the appellant firm was a sole proprietary concern and not a partnership firm as alleged. He also questioned the validity of the transaction of 12 lots on account whereof the respondent claimed a sum of Rs, 41,328 on the ground that the same was void being a wagering transaction. He submitted that the appellant had received a total sum of Rs, 2,15,000 as against Rs, 2,62,746 and pleaded that the balance of Rs, 47,746 was not legally recoverable being barred by time. It was also generally pleased by the appellant that the suit was barred by time.
8. ' On the pleadings of the parties the 12 consent issues were filed by the parties and adopted by the Court. However, subsequently on 22-2-1974, issues were recast as follows:-
(1) Whether the defendant firm is/was a partnership firm?
(2) Whether the plaintiff allowed use of their name as alleged in respect of 12 lots of cotton in question in the suit ?
(3) (1) What losses, if any, the defendants suffered in respect of the aforesaid 12 lots of cotton 7 (ii)Whether the plaintiff paid the said losses for and on account of the defendants?
(iii) Whether defendants are liable to reimburse to the plaintiff for the said losses?
(4) What amounts were paid to the defendants or spent paid on their account by the plaintiffs against 481 bales of cotton consigned by the former to the latter to be sold at Karachi?
(5) During that period the aforesaid 481 bales of cotton were sold by the plaintiffs and what amount was realised as sale-proceeds thereof ?
(6) Is the suit or any part of the claim barred by time?
(7) Whether the transactions in question in the suit were all by way of wager and, therefore, void ? If so, is the suit not maintainable ?
(8) To what amount, if any, the plaintiffs are entitled?
(9) What the decree should be ?
9. ' The respondents examined Muhammad Hayat, Abbas Jalali, Wali Muhammad, Abdul F'arooq and Hafeezur Rahman as their witnesses while the appellant examined himself and Tauqir A hmad as his witness.
10. ' The learned Single Judge after reviewing the evidence decreed the suit for the full amount for which decree was prayed in the suit with interest at 6 per cent. And costs from the date of the suit.
11. ' On issue No. 1 the learned Single Judge came to the conclusion that the appellant's firm was not a partnership firm at the relevant time and was a sole proprietary concern. On the issue of limitation the learned Judge came to the conclusion that the suit was not barred by time. On the issue of contract being void the learned Judge came to the conclusion that it was not void. The of the issues were also decided in favour of the respondents.
12. ' On previous date of hearing i,e, 24-2-1981 we had heard Mr. Niamat U. Moulvi, Advocate on several points. On this date Mr. Niamat U. Moulvi had taken time to prepare the case on the question of limitation. On 9-3-1981, it was found out that notice to the respondent was necessary and therefore the hearing was adjourned for today. Accordingly, notice was issued to the respondent but they have remained absent. However, today Mr. Moulvi has confined his arguments only to the question of limitation and has stated that he would not press the other points. Therefore, the only point which requires consideration is 'whether the claim or any part thereof is barred by time'. We may here at the very outset state that the learned counsel did fairly concede and in or opinion rightly so that the claim arising out of transaction of 481 cotton bales was not time barred. He only questioned the claim with regard to the amount of loss of Rs, 41,328 on account of 12 lots sold in forward. He submitted that the total amours claimed on account of this transaction was paid by the respondents on behalf of the appellant on various dates in the month of March, 1965 as detailed herein above and the suit was filed on 30-5-1968. Therefore, so far as this amount is concerned the suit was clearly time barred under Article 61 of the Limitation Act which provides for money payable to the plaintiff for money paid for the defendant, a period of three years from the date of payment of the money, having been filed beyond a period of 3 years.
13. ' It was argued before the learned Single Judge on behalf of the respondent that there was a series of transactions and the various amounts paid were credited while the amounts spent on account of the appellant were debited in their account and since the last item was the credit of sale proceeds of cotton, dated 19-11-1965, and the suit was for the balance amount the same was not time barred because it was a current and running account between the parties. Reliance was also placed on a writing dated 30-5-1965 claiming the same to be an acknowledgement. While deciding this issue the learned Single Judge observed as follows :- "There can be no doubt that there was a running account of the defendants with the plaintiffs and various sums were being received by the defendants or were being paid to the plaintiffs without settlement of the accounts. It cannot, therefore, be said that each item related to separate and distinct transaction which became time-barred after three years."
14. ' Thus the learned Single Judge decided this issue against the appellant. Before we proceed to examine the contention of the learned counsel for the appellant that Article 61 of the Limitation Act is applicable to the amount of Rs, 41,328 claimed by the respondents, we may here set out the acknowledgement in extenso which reads as follows : "Mian Khairuddin Rukanuddin ' Ghalla Mandi, Hasilpur, ' Dated 30-5-1965.
15. ' Messrs Yousuf Ali & Sons Ltd., Al-Yousuf Building, Karachi.
16. ' We corroborate that 12 lots of cotton at the rate of Rs, 85 may `Wads' and purchase the same has been made @ Rs,
99. This business is from or account and we shall be responsible for its profit and loss.
17. ' For Mian Khairuddin Rukanuddin (Sd.) Illegible.
18. ' Now, we would examine the nature of the claim of the respondent.
19. ' The respondent did not base their claim as being the balance amount due on a current, mutual and open account for they have nowhere alleged in the plaint that the defendant maintained any current, mutual, open accoun B that Article 85 of the Limitation Act could be attracted which provides for the amount due on such account a period of 3 years from the close of the year in which the last item admitted or proved is entered into account ; such year to the computed as in the account. In fact they have in paragraphs 5 and 6 of the plaint pleaded as follows :- "(5) That the plaintiffs called upon the defendants to remit the above sum of money for payment to the purchaser of the above-mentioned 12 lots but the defendants in spite of repeated demands did not do so. The plaintiffs, therefore, had to pay the same on account of the defendants. The plaintiffs made payment of the aforesaid sum of Rs, 37,848 as follows : Rs, 12,C00 paid on 8-3-1965. Rs, 25,848 paid on 16-3-1965.
(6) That the market continued to show an upward trend and keeping in view the negligence of the defendants to remit the amount to make up for the losses suffered by them and to avoid any further loss, the plaintiffs finally settled the above contracts by purchase of 12 lots of cotton on 18- 3-1965, as shown below :- ' 3 lots at Rs, 99.30 premium.
20. ' 1 lot at Rs, 99.20 ' 1 lot at Rs, 99.15 ' 1 lot at Rs, 99.10 lot at Rs, 99.00 ' Consequently, the plaintiffs paid a further sum of Rs, 3,264 to the purchaser to finally settle the above contracts for 12 lots of cotton. The plaintiffs paid a further sum of Rs, 216 on account of commission of the Commission Agent. Thus a total sum of Rs, 41,328 (Rupees forty-one thousand three hundred and twenty-eight) was paid by the plaintiffs on account of the defendants against the above-mentioned 12 lots of cotton and the account of the defendants with the plaintiffs was accordingly debited."
21. ' Thus it is clear that the respondents have separately claimed these amounts and they have not claimed these amounts as being balance on an IC account of the nature mentioned above. Thus Article 61 of the limitation Act is squarely attracted. Even in a running account claim in respect of only those items which are within the period of limitation can be maintain able. It may be stated that the present suit is not one based on account stated.
22. ' As regards the acknowledgement, the same is written by Muhammad Hanif son of the appellant and the finding of the learned Judge is that the firm of the appellant was a sole proprietary concern. Thus to be an acknowledgement under section 19 it has to be by the party himself or by his E duly authorised agent. It is nowhere pleaded in the plaint that Muhammad Hanif was duly authorised agent of the appellant, being a son of a party is not enough. Thus the letter dated 30-5- 1965 could not be treated as valid acknowledgement and no reliance can be placed thereon to save the limitation so far as the amount of Rs, 41,328 is concerned. Further, it is the case of the respondents that they had paid the amount of loss in the month of March, 1965 and settled the contract on 18-3-1965, while this acknowledgment speaks of profits or loss on account of this transaction which means the transaction had not been settled till 30-5-1965. Therefore, this acknowledgment could not be treated as an acknowledgment for the loss arising out of the contract already settled and the amount of loss already paid. In view of the conclusion reached appellant is entitled to deduction of this amount from the amount for which the decree impugned in this appeal has been passed. We accordingly, order that this amount will be deducted from the amount of the decree. In the result there will be a decree for Rs, 55,150.30 with proportionate costs and interest thereon at 6 per cent per annum from the date of the suit till payment. So far this appeal is concerned the appellant shall bear his own costs as the respondents have not come forward to contest the appeal and the success of the appellant here is partial.