Report No. 69

Chapter 13

Entries in Books of Account

I. Introductory

13.1. We propose to devote this chapter to an examination of section 34, which deals with entries in certain books of account.

13.2. Section 34 provides that entries in books of account, made regularly 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. There is only one illustration to this section, which is as follows:-

"A sues B for Rs. 1,000 and shows entries in his accounts books, showing B to be indebted to him to this amount. The entries are relevant, but are not sufficient, without other evidence, to prove the debt."

13.3. Section examined with reference to scheme of the Act.-

Examining this section in the context of the general scheme of the Act, we may state that, in a sense, it qualifies the rule in section 21 to the effect that admissions are not relevant in favour of the persons making them. It may also be pointed out that this section is one of the very small number of sections in the Act which specifically provide for the insufficiency of a particular type of evidence. This safeguard seems to have been introduced in view of the consideration that sometimes a party may impose a liability on the other by entries made fraudulently.

13.4. As a general rule, a man's own statement is not evidence for him, though, in certain cases, it may be used as corroborative evidence.1 The section is an exception to this rul.- an exception created on the basis of a principle discussed below.

1. Wm v. Haran, (1869) 11 WR 526 (Cal).

13.5. Principle.-

The principle of admissibility of these entries is the same as the principle underlying the various exceptions contained in section 32,1 namely, the principle of necessity and the principle of circumstantial trustworthiness. The principle of necessity, in this context, could be explained by stating that it would be inconvenient if, to begin with, proof in another form was insisted upon, because, in many cases, the maker of the entry, or the person who witnessed the transaction, may not be available, or it may be that different persons witnessed the different transaction.- all recorded in one boo.- and it would be inconvenient to summon them all for proving the facts recorded in each individual entry.

The principle of circumstantial trustworthiness can be explained by referring to two aspects, namely, the difficulty of committing fraud and the ease with which the fraud, if committed would be detected, and the improbability of inaccuracies in such entries.

1. See discussion as to section 32

13.6. As regards fraud, where the books are regularly kept in the course of business, the system of making such entries in the account books with regularity counteracts the casual temptation to commit a fraud. Moreover, without a systematic and comprehensive plan of false manipulations, it is difficult to make false statements in such books. As regards inaccuracies, the influence of habit prevents inaccuracies. Moreover, often the person making the entry is under a duty to an employer or some other person, so that mistakes would normally be detected. As Tindal C.J. observed in Poole v. Dicas, Bing NC 649, "It is easy to state what is true than what is false; the process of invention implies trouble."

The entries being acts of the party himself, must be received with caution.1

1. Eheero v. Bejoy, (1867) 7 WR 533 (Cal).

13.7. Where it was said that "an account-book is nothing: it is one's private affair and he may prepare it as he likes", the Privy Council remarked1-"It is true that there may be accounts to which that description would apply. Other accounts may be so kept, and may so tally with external circumstances, as to carry conviction that they are true."

1. faszvant Singh v. Sheo Narain, 1894 ILR 16 All 157 (161) (PC).

13.8. Other provisions.-

It will be noted that such entries could be relevant under certain other provisions of the Act als.- for example, section 32(2) as statements made by a person in the ordinary course of busines.- or under section 159, to refresh the memory of a witness, if the entry has been made by that witness himself and relates to some transaction concerning which he is now giving evidence.

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