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Report No. 3 81. Article 64.- Article 64 relates to suits on "account stated" between the parties, and time begins to run when the accounts are stated in writing signed by the defendant or his agent duly authorised in this behalf, unless where the debt is, by a simultaneous agreement in writing signed as aforesaid, made payable at a future time and in that event limitation starts when the time arrives. The "account stated" does not extinguish the original debt. The account stated may arise from a mere admission of the debt as correct or out of an agreement for consideration such as by reduction of the amount or from striking a balance by setting off debts against credits. The original debt and its acknowledgment or a fresh agreement to pay are undoubtedly contractual obligations. In Sequira v. Noronha, 1934 ACP 332 the Privy Council described it as "a promise for good consideration to pay the balance". It may also be considered as a settlement from which arises a promise to pay the balance shown in the account which constitutes the consideration for the contract Bishan Chand v. Girdhari Lal, 56 All 376 (PC). The transaction contemplated by Article 64 differs in some respects from an acknowledgment under section 19 of the Limitation Act and an express promise contemplated by section 25 of the Contract Act. An "account stated" is always the result of mutual agreement between the parties. It implies a promise to pay and the promise need not be expressly stated. As Blackburn J., observed in Laycock v. Pickles, (1883) 33 LJ (QB) 43 the real account stated is when several items of cross claims are brought into account on either side and being set against one another a balance is struck and the consideration for the payment of the balance is the discharge on either side; each party resigns his own rights on the sums he can claim in consideration of a similar abandonment on the other side and of an agreement to pay and to receive, in discharge of the balance found due. Such an account stated when in writing and signed by the defendant or his agent is tantamount to a new contract and is a substantive cause of action in itself and a suit can be maintained on it. This establishes that a suit on an account stated is really a suit founded on a contract and the cause of action arises at the time specified in the Limitation Act for this Article.    |
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