Statement Of Account Alone Insufficient To Fasten Liability In Recovery Suits Without Proof Of Delivery: Madras High Court

"Statement of account, standing alone, is insufficient in law to fasten liability. Ex. A2, being a general acknowledgement of outstanding dues, cannot dispense with proof of the individual transactions constituting the suit claim." Madras High Court, in a judgment, has held that a plaintiff in a recovery suit cannot succeed merely by relying on a statement of accounts or a general acknowledgment of debt without producing primary evidence of supply.

A bench of Justice A.D. Maria Clete observed that under Section 34 of the Indian Evidence Act, entries in books of account are relevant but cannot, by themselves, fasten liability unless supported by independent evidence such as invoices or delivery challans.

The appellant, M/s. Sri Devi Ram Enterprises, a partnership firm, filed a suit for recovery of Rs. 10,24,264.57 against M/s. Firenze Shoes Limited for the supply of moulded shoe insoles between 1996 and 1997. The plaintiff relied on a statement of account and a fax communication from the defendant allegedly acknowledging the debt to overcome the bar of limitation. The trial court dismissed the suit in 2018, finding it barred by limitation and lacking in evidence, leading to the present appeal.

The primary question before the court was whether the plaintiff proved the supply of goods and the existence of a legally recoverable debt. The court also examined whether a fax message (Ex.A2) constituted a valid acknowledgment of liability under Section 18 of the Limitation Act, 1963. Finally, the court considered the effect of the defendant's failure to prove a separate plea regarding the maintainability of the suit in light of alleged Company Law Board proceedings.

Requirement of Independent Corroboration for Books of Account

The court emphasized that while the plaintiff claimed to have supplied goods under various invoices, not a single original invoice, delivery challan, or transport receipt was produced during the trial. The court noted that no explanation was offered for withholding these primary documents, which are essential to prove the actual delivery of goods and the resulting liability.

Court Explains Scope Of Section 34 Evidence Act

The bench observed that the statement of account produced by the plaintiff was merely an entry in its own books and could not be the sole basis for a decree. Under Section 34 of the Indian Evidence Act, such entries require independent corroboration. The court held that the statement of account, standing alone, is insufficient in law to fasten liability upon the defendant.

General Acknowledgment Does Not Prove Specific Debt Amount

Regarding the fax message (Ex.A2) dated November 1, 1997, the court noted that while it referred to "outstanding dues" and "pending payments," it failed to specify the amount due or identify the specific transactions it related to. The court held that such a document does not enable the court to correlate the acknowledgment with the exact sum claimed in the suit.

Plaintiff Must Prove Individual Transactions On Merits

The bench clarified that even if a document extends the period of limitation under Section 18 of the Limitation Act, the plaintiff must still prove the case on merits. In an action for the price of goods sold and delivered, the plaintiff cannot succeed by relying on a general acknowledgment. The court must be satisfied that the individual transactions and the quantum claimed are proved by acceptable evidence.

Failure to Prove Primary Documents Prevents Shifting of Burden

The court rejected the appellant's contention that the burden had shifted to the defendant to prove payment once the supply was allegedly admitted. It held that since the defendant had specifically denied the proof of alleged supplies in its written statement, the burden never shifted from the plaintiff. The plaintiff remained obligated to establish the supply of goods through contemporaneous records.

Pleadings Are Not Evidence Without Material Proof

The court also addressed the defendant's plea that the suit was not maintainable due to an order by the Company Law Board. The bench observed that the defendant had failed to produce the alleged order or examine any witness to speak to its legal effect. Reiterating the principle that "pleadings are not evidence," the court rejected the defendant's maintainability plea for want of proof.

Rejection of Defendant's Plea Does Not Automatically Entitle Plaintiff to Decree

The court held that even though the defendant failed to prove its specific plea regarding the Company Law Board order, this did not advance the plaintiff's case. The plaintiff was still required to independently establish the supply of goods and the outstanding liability. Since the foundational evidence was absent, the plaintiff was not entitled to a decree.

In its concluding remarks, the High Court confirmed the trial court's dismissal of the suit, albeit for partly different reasons. It held that the lack of primary evidence like invoices and delivery challans was fatal to the plaintiff's claim for recovery of money. The appeal was dismissed without costs, and all connected miscellaneous petitions were closed.

Date of Decision: 06.07.2026