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Pochalal Ranchhod Vs. Umedram Kalidas - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberSecond Appeal No. 962 of 1925
Judge
Reported inAIR1928Bom476; (1928)30BOMLR1284
AppellantPochalal Ranchhod
RespondentUmedram Kalidas
Excerpt:
court-fees act (vii of 1870), section 7(i), section 7(i)(f)-suit for money-suit for account-suit by communion agent-court fee paid ad valorem-preliminary decree for accounts-appeal against the decree valuation of claim in appeal.;the plaintiffs sued as commission agents to recover a sum of money from the defendants as the balance of accounts between them, and paid ad valorem court-fees on the amount of the claim. the defendants denied their liability. the trial court passed a preliminary decree ordering accounts to be taken between the parties. the defendants appealed disputing their liability and valued the claim in appeal at rs. 130 for purposes of court-fees :-;by baker j., agreeing with fawcett j, but differing from mirza j., that the suit was one for money falling under clause (i) of.....fawcett, j.1. the plaintiffs, who carry on the business of a commission-agency, sued the three defendants to recover the sum of rs. 3,370-14-0 as balance due on a current account between the parties, the plaintiffs valued the claim at this sum of ks. 8,370-14-0 and paid court-fee thereon. the defendants, among their objections, pleaded that the suit was time-barred. the subordinate judge decided against this contention and passed a preliminary decree for accounts against defendants nos. 1 and 2, he held that defendant no. 3 was not liable. defendants nos. 1 and 2 appealed to the district court of ahmedabad, and among the grounds of appeal were (1) that necessary parties had not been joined and the lower court ought to have dismissed the suit on that account, and (2) that the lower court.....
Judgment:

Fawcett, J.

1. The plaintiffs, who carry on the business of a commission-agency, sued the three defendants to recover the sum of Rs. 3,370-14-0 as balance due on a current account between the parties, The plaintiffs valued the claim at this sum of Ks. 8,370-14-0 and paid Court-fee thereon. The defendants, among their objections, pleaded that the suit was time-barred. The Subordinate Judge decided against this contention and passed a preliminary decree for accounts against defendants Nos. 1 and 2, He held that defendant No. 3 was not liable. Defendants Nos. 1 and 2 appealed to the District Court of Ahmedabad, and among the grounds of appeal were (1) that necessary parties had not been joined and the lower Court ought to have dismissed the suit on that account, and (2) that the lower Court erred in holding that the suit would be in time, if it was brought within three years of the last item in the accounts. Before the Assistant Judge a contention was raised that the claim in appeal had not been properly valued.

2. The defendants valued the claim in appeal as a declaratory relief at Rs. 130 and paid a Court-fee of Rs. 10 only. The Assistant Judge held that the suit was one falling under Clause (i) of Section 7 of the Court-fees Act, 1870, viz., a suit for money, and was not one for accounts falling under Clause (iv)(f) of the section. He also relied on the decision in Srinivasaeharlu v. Perindevamma I.L.R (1915) Mad. 725 that, in a suit coming under Clause (iv), Section 7, of the Court-fees Act, when the plaintiff has valued the relief prayed for and obtained a decree, in that instance a preliminary decree for an account, and the defendant appeals against the whole decree, he is bound by the valuation in the plaint, Accordingly, he directed that the appellants should, within eight days, make up the deficit Court-fee on that basis. Though time was extended, this was not paid, and the appeal was, therefore, dismissed, The defendants have come to us in second appeal.

3. The main question is whether this is a 'suit for money' falling under Clause (i) or a 'suit for accounts' falling under Clause (iv)(f) of Section 7. A subsidiary point is whether, supposing it is a suit for accounts, appellants are bound by the valuation of the claim made by the plaintiff', when he filed the suit, In ray opinion, the suit as brought being one for a definite sum of money, as balance due on a current account, is a suit for money falling under Clause (i) of h. 7, and not for a suit for accounts falling under Clause (iv)(f) of n. 7.

4. The main test is what is sued for, because the word used is 'suit,' and the test has reference to what is asked for in the plaint and not to any question or dispute that may arise upon any pleading of the defendant. In the present case, the plaintiffs say that they have their own accounts and that on these accounts a certain sum of money is due to them from the defendants. They do not ask the Court to take any accounts. The mere fact that, because the defendant disputes the correctness of the plaintiffs' accounts, it may be necessary to go into accounts, and that the lower Court has passed a preliminary decree under Order XX, Rule 16, is, in my opinion, entirely irrelevant.

5. A similar question has arisen in regard to suits which are not cognisable by Small Cause Court under the Provincial Small Cause Courts Act IX of 1889. Article 31 of Schedule II to that Act excludes from the cognizance of a Small Cause Court 'any other suit for an account, including a suit by a mortgagor, after the mortgage has been satisfied, to recover surplus collections received by the mortgage, and a suit for the profits on immunize-able property belonging to the plaintiff which have been wrongfully received by the defendant.' The word 'other' is introduced because Article 30 excludes 'a suit for an account of property and for its due administration under decree.' The question, therefore, arose what is a 'suit for an account' within the meaning of this Article 31; and it has been held by the High Courts of Bombay, Calcutta, Allahabad and Madras, as well as other Courts, that a suit for the recovery of a specific sum of money does not assume the character of a suit for accounts merely because in the determination of the question in controversy, accounts may have to be examined. It is sufficient for the purposes of this judgment to refer to what is said on this point id Kahetranath Banerjee v. Kali Dasi Dasi (1916) 21 C.W.N. 784 where a large number of decisions to that effect are cited. In the same judgment, it is said (p. 786):-

There cannot in accounts be a suit for account a by the plaintiff against the defendant, unless the defendant is under a liability to render accounts to the plaintiff.

6. Then, a series of decisions are cited in support of that proposition. This is borne out by the origin of the term 'a suit for account.' It was a recognized form of action in English common law, and its history is fully given in Story's Equity Jurisprudence, Vol. I, at pages 416 to 420. At first, it was a very limited kind of suit, but it gradually got extended to any suit which depended upon a liability of the defendant to furnish an account. Thus it is stated in Bullen and Leake 'Precedents of Pleadings,' 7th Edition, page 47, foot-note (a):-

And now, since the Judicature Act, the action of account may be brought, in a great variety of case a in nil Divisions of the High Court. Thus, if a rent collector, a commercial travelers, or any other agent or trusteo, has received money on behalf of the plaintiff', he is an 'accounting party,' that is, he is bound within a reasonable time after demand to render a detailed account of all moneys received by him in that capacity, showing how much he has paid over to the plaintiff and how much he still has in hand.

7. In the present case, the plaintiff is not suing an 'accounting' party.' He is the 1: accounting party' himself, suing the defendant for a definite sum of money, which he says is due to him; and, in fact, according to Seton's 'Judgments and Orders,' Vol. II, page 1331, 'an agent cannot sue his principal for an account on the ground of the relation between them.' In saying this, 1 do not mean to say that you cannot have a case, where both the parties to a suit are accounting parties, for in-' stance, two merchants each keeping his own accounts of their mutual transactions. In such cases there is a mutual account, and there is an obligation on each side to render accounts to the other, such as is referred to in Maniram Seih v. Seth Rupchand I.L.R (1906) Cal. 1047: 8 Bom. L.R. 501 also reserve the possible exception of a suit in which the plaintiff, though not an accounting party, cannot state the precise amount due to him, without the accounts of the parties being examined. But, the present case is not one of those kinds, and, in my opinion, for the above reasons this cannot bs said to be a 'suit for an account.'

8. In this connection, I may briefly refer to the Full Bench decision in Hatimbhai Hasmnally v. Framroz Eduljee I.L.R (1926) Bom. 516: 29 Bom. L.R. 498, as to the words a 'suit for land' within the meaning of Clause 12 of the Letters Patent. Mr. Justice Blackwoll in his judgment at page 675 holds that those words have a natural, ordinary and unambiguous meaning of a suit to obtain land, and he cites the cases of a suit for an injunction meaning not a suit relating to an injunction but a suit to obtain an injunction, and a suit for possession being neither a suit substantially for possession nor one relating to possession, but a suit to obtain possession, and so on. It is true that in that case I and my learned brother differed from Black-well J. on this point and held that, in view of other legitimate aids to the construction of this expression 'suit for land,' its real meaning was more a suit relating to land than a suit to obtain land. In my judgment at page 571, I have stated cases where the word 'for' in connection with a suit might undoubtedly bear the meaning 'concerning' or 'relating to,' Therefore, I do not go so far as to say that merely because we have the words 'suit for accounts' in Clause (iv)(f) it is necessarily confined to the case of a suit to obtain accounts. But I can find no basis or consideration that would justify us in holding that this expression means a suit relating to accounts, as opposed to a suit to have accounts taken. I have already referred to the principles that govern the question of what is a suit for account in England, and I think the Legislature obviously means the same in Section 7 of the Court-fees Act. Section 11 of that Act, in my opinion, supports this view. It says :-

In suits for mesne profits or for immoveable property and mesne profits, or for an account, the profits or amount decreed are or is in excess of the profits claimed or the amount at which the plaintiff valued the relief sought, the decree shall not be executed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits or account so decreed shall have been paid to the proper officer.

9. Here, the words 'suits for mesne-profits, or for immoveable property and mesne-profits 'obviously mean suits to obtain such mesne-profits, or immoveable property and rennet-profits, and the words 'for an account,' in my opinion, have the same meaning of a suit to obtain an account. The underlying idea is that a plaintiff suing for an account may not be able to say definitely what is the amount due to him, and therefore he is allowed to put his own valuation on the relief sought, and only has to pay any deficiency in the Court-fees when the decree is executed. The whole basis for this privilege vanishee, when a plaintiff is able from his accounts to say what is due from the defendant and sues to recover a definite sum. Again, if a suit for an account is taken to mean any suit, in which the Court may for proper reasons order an account to be taken, or in which any disputed items in the plaintiff's accounts have to be gone into by a Court, then obviously there will be very wide consequences; for instance, a suit to which the Dekkhan Agriculturists' Relief Act applies will, in almost every case, be a suit for an- account, because notwithstanding any agreement between the parties, except in very special cases, the Court has to take an account. It seems to me absurd that, although the plaintiffs are suing to recover a definite sum of money, their suit should be held to be one for an account, on which they could place a valuation of Rs. 5 and so avoid paying full Court-fees leviable under Clause (i) of Section 7. Even a suit for the recovery of money, the precise amount of which could not be ascertained unless the accounts of the parties were examined, has been held to be a suit cognizable by a Small Cause Court and not excluded by Article 31 of the Provincial Small Cause Courts Act, 1887: cf. Sheo Bodh v. Surjana (1913) 11 A.L.J. 238. I need not in the present case go as far as that; it suffices to hold that a suit like the present, where the plaintiff does not ask for any accounts to be taken, and sues for a definite sum of money to be paid by the defendant, is a suit for money; and that the fact that the record of the suit transactions, in the form of a written account, may have to be gone into, does not turn it into a suit for an account. I should have mentioned the Bombay ruling in regard to Article 31 of the Provincial Small Cause Courts Act, which, I think, also support my present conclusions. In Girjabai v. Raghunath I.L.R (1905) Bom. 147, : 7 Bom. L.R. 741 the plaintiff'sued to recover three specific sums of money amounting to Rs. 447-11-0, being her share of the revenues and profits of three sets of lands, alleging in her plaint that the money had been wrongly received by the defendant. It was held that the suit was one cognizable in a Court of Small Causes and was not excluded by Article 31. In the judgment a reference is made to the case of Vinayak v. Krishnarao I.L.R (1901) Bom. 625: 3 Bom. L.R. 239 which in the subsequent case of Vasuclea v. Damodar (1904) 6 Bom. L.R. 370 was explained by Sir Lawrence Jenkins. In Vinayah v. Krishna- rao there was a contention that it was a suit for an account, but Sir Lawrence Jenkins explained that the question under Article 31 in the Schedule of the Provincial Small Cause Courts Act is not considered in the judgment in that ease, because it was the opinion of the Court that the suit was not one for an account, but for a definite sum of money and so fell within the ruling of the majority of the Full Bench decision of the Calcutta High Court in Kunjo Behary Singh v. Madhub Chundra Ghose (1896) I.L.R. 23 Cal. 884, f.b. This and the case of Antone v. Mahadev Anant I.L.R (1900) Bom. 85, : 2 Bom. L.R. 683 are mainly concerned with a different point as to the distinction made between a case where the mesne profits on immoveable property are alleged to have been rightly received and one where they nave been wrongly received. I am not concerned with that distinction in the present case. It may be noted that Vinayak v. Krishnarao also decides that a suit for money ' alleged to hi due in respect of profits of land is not turned into a suit for the determination or enforcement of a right to or interest in property, merely because the defendant raises the question of the title to the land. The character of a But is determined by the cause of action and the relief actually sought, and not by any side issues that the defendant may raise.

10. In my opinion, therefore, there is clearest weight of principle and authority in favour of the view that I have taken; and this view agrees with what has already been decided in the Full Bench case of Hiralal v. Ganpat : (1921)23BOMLR995 . It was there ruled that in a suit for a balance due on a Khata, which would ordinarily contain a number of items, each item does not constitute a distinct subject within the meaning of Section 17 of the Court-fees Act, and that the subject-matter of the suit is the balance due on the. account, and the Court-fee is payable on the aggregate amount. This seems to me a distinct ruling that the Court fee in such a case is payable under Clause (i) of Section 7 on the balance actually claimed to be due, and that this is a ruling which binds us. It cannot, in my opinion, be held that the cause of action in a suit of this kind is the existence of the account. The account is merely a record of the transactions which give rise to the claim by the creditor; and the cause of action would, in my opinion, be more properly described as the breach of the promise, whether express or implied, of the debtor to pay the creditor what turns out to be due on balancing the accounts. It is not a case of a stated account, i. e., an agreed account, where one can more rightly say that the cause of action in a suit on such an account is the stated account.

11. The appellants in this case sought to pay Court-fees on Rs. 130 as if in the appeal they wore seeking merely declaratory relief. It is scarcely necessary to quote authority for the proposition that they are not entitled to evade payment of proper Court-fees by any such allegation. But as one authority on the point, I may refer to Anna v. Madhyama Sthititila Paraspara &o.; Mandnli' : (1922)24BOMLR313 where it was said that the appellant cannot get out of paying full fees by saying that he is merely seeking a declaration that he is not liable to account. If, however, it be held that this is a case which fell properly under Clause (iv)(f) of Section 7, the question would still remain whether the appellants were liable to pay Court-fees on the value put on the claim in the plaint. There are two decisions on this point which are referred to in the lower Court's judgment, viz., Srinivaaacharlu v. Perin' devama I.L.R. (1915) 39 Mad. 725 and Kanhaiya Lai v. Seth Ram Sarup I.L.R (1922) All. 542, and we have been asked in the arguments to follow one or other of these two decisions. But, as pointed out in Kuldip Sahay v. Harihar Prasad I.L.R (1923) Pat. 146 these two decisions are not necessarily contradictory. In the Patna and Allahabad cases the appellants did not deny in to their liability to account, whereas in the Madras case the appellant did so deny his liability to account. In the former two cases the appellants only took partial exceptions to the preliminary decrees for accounts, but in the present case the appellants deny in to their liability to account in the suit on the grounds of limitation, and necessary parties not being joined in the suit, I think that a distinction can' rightly be made between the two classes of cases, and that the present case is one falling within the principle of the Madras case as opposed to the Allahabad and Patna cases, where the objections to the preliminary decree for account were only partial and not total.

12. Therefore, in my opinion, even supposing this is a case under Clause (iv)(f), I would hold that the appellants are bound by the plaintiffs' valuation and that the lower Court's decision is right. I would dismiss the appeal with coats.

Mirza. J.

13. The only question arising in this appeal is whether the suit was one for money or for account. The lower appellate Court has held that the suit is for money and the appellants must pay Court-fees on the amount at which the respondents valued the subject-matter. The appellants contend that it is a suit for account and they are entitled to put their own value on the subject-matter in appeal in the lower appellate Court. They contend that the case is governed by Section 7(iv)(f) of the Court-fees Act. The lower appellate Court has held that Section 7(i) would apply.

14. In the plaint there is no prayer for the taking of accounts. The respondents claim a specified sum, viz., Rs. 3,370-14-0. In determining whether a suit is for account regard must be had in nay opinion not only to the prayer in the plaint but also to the relation between the parties in respect of the claim and the nature of the claim formulated in the plaint. There cannot be a suit merely for the taking of accounts. Even where in the prayers of the plaint there is a prayer for the taking of accounts between the parties it has to be coupled with a further prayer that the Court may pass a money decree for the balance alleged to be due at the foot of the account or such other sum as the Court may determine, on going into the accounts. Such a suit would be a suit for account although its main prayer is for a money decree. Tho test to apply in such cases, in my opinion, is of a twofold nature : (1) whether the material allegations in the plaint disclose that the subject-matter of the claim has reference to a relation between the parties whereby one is accountable to the other; (2) whether at the date of the suit the necessity for rendering an account has for some stated cause ceased.

15. The respondents claimed Rs. 3,370-140 as balance due to them at the foot of a commission agency account for the Samvat years 1974 and 1975. They sat out in the plaint certain items from the account and showed Rs. 3,370-14-0 as the balance due. It is not the respondents' case that the balance claimed is the result of a settled or stated account between them and the appellants. The account as set out is clearly an open account. The respondents as agents are liable to account to the appellants, their principals, in respect of this account. The respondents do not allege in their pleading that the appellants have accepted the account as correct or are otherwise debarred from questioning its correctness. The respondents' action is not in respect of specific items independently of the commission-agency account. They route prove every item in the account in order to get a decree for the balance due. On the appellants objecting to the account, which they have a right to do, the Court would have to settle items of credit and debit in the account in order to ascertain what balance, if any, is due. Such a suit, in my opinion, is a suit for account although it does not contain a specific prayer for the taking of accounts.

16. The trial Court has treated the suit as a suit for an account. Appellant No. 1 inter alia contended that he did not accept the respondents' account books as correct and appellant No. 2 contended that proper accounts should be taken. The trial Court passed a preliminary decree ordering accounts to be taken between the respondents and the appellants. It held that in the account the respondents must give credit to the appellants for the sale price of certain bales sold through the respondents. It further hold that until the accounts were gone into and a balance struck the liability of one party to the other could not be determined.

17. In my opinion the trial Court has correctly interpreted the nature of the suit. If it were on a settled or stated account no doubt it would be a suit for money. But being a suit on an open account the taking of accounts by the Court is its primary incident. It must be reckoned, therefore, to be a suit for account.

18. In Girjabai v. Raghunath I.L.R (1905) Bom. 147: 7 Bom. L.R. 741 this Court has held that every case in which accounts have to be looked into is not necessarily a suit for account. The case there related to a claim preferred in respect of three specific sums alleged to be wrongly received by the defendant. There was no question there of the three specific sums forming part of any commission-agency account between the parties. Each specific sum related to an independent transaction. Similarly in Kshetranaih Banerjee v. Kali Dasi Dasi (1916) 21 C.W.N. 784 the suit was for the recovery of certain specific items for salary, house rent and moneys borrowed. In Sankara Reddi v. Errama Reddi (1909) 19 M.L.J. 113 the plaintiff had sued for certain specific items of money due from the defendant who was his agent after his dismissal alleging that the agent had wrongly credited himself in the accounts with more than what ho actually paid and that he came to know of the matter only after the agent left service. The Court held that it was not a suit for account. With great respect I am unable to agree with this decision. In Konduru Runga Reddi v. Subbiah Setty and Kumbahala Subbamma I.L.R (1904) Mad. 394 the suit was on a settlement of accounts made between the parties. The District Munsif found that there was no settlement but gave the plaintiff a decree for the amount found due to him on examining the accounts. The Court held that it was not a suit for account. In that case the suit as framed was on a settled account and was therefore a suit for money. The Small Cause Court was rightly seized of it in its inception. On the defendant disproving the allegation that the account sued on was a settled account the Court examined the account which consisted of a few items only and passed a decree for the plaintiff. The Appeal Court held that the Small Cause Court was not debarred from looking into accounts, although it could not entertain a suit for account. In Hans Raj v. Ratni alias Jwala DeiI.L.R (1904) All, 200. the plaintiff sued to recover from the defendant, certain books and a sum of Ea 60 which the defendant had recovered from certain clients on behalf of the plaintiff, There was no question of any account. The relationship, however, was one of principal and agent and there was a liability on the defendant to account. The Court held that it was not a suit for account. With great respect I am unable to agree with this decision. In Srinivasacharlu v. Perindevamma I.L.R (1915) Mad. 725, f.b. the Madras High ourt Full Bench held that in appeal against a preliminary decree for an account the appellant is bound by the valuation in the plaint. With great respect this decision appears to me to be against the plain meaning of Section 7(iv)(f) of the Court-fees Act. Kanhaiya Lal v. Seth Ram Samp I.L.R(1922) All. 542 which is a decision on the same point to the contrary, lays down, in my opinion, with great respect, the correct interpretation of that section.

19. I am of opinion that this appeal should be allowed with costs.

Fawcett, J.

20. In view of this difference of opinion on the following two points of law (1) whether the suit was one for money falling under Clause (i) of Section 7 or one for an account falling under Clause (iv)(f) of Section 7 of the Court-fees Act, and (2) whether, if it is a suit for an account, the appellants in the Court below were bound by the valuation put on the claim in the plaint or were entitled to make their own valuation, the case may be referred to some other Judge or Judges, as provided by Section 98(2), Civil Procedure Code.

21. The reference was heard by Baker J.

22. H.V. Divatia, for the appellants. In this case, the very frame of the suit indicates that taking of accounts is necessary. It is a suit between agents and principals, It falls under Order XX, Rule 16, of the Civil Procedure Code, It has ended, as it ought to end, in a preliminary decree for taking of accounts. The preliminary decree is not objected to by the plaintiff by way of cross-objection. The suit is thus in substance a suit for accounts, and governed by Section 7(iv)(f) of the Court-fees Act, 1870.

23. In a suit between a principal and agent for accounts, as soon as the agency is established, it is the duty of the Court to direct an account to be taken of the dealings between the parties: Eajhunath v. Ganpatj I.L.R(1904) All. 374 This can only be done by a preliminary decree, If there 18 no preliminary decree, no appeal can lie: Kaluram v. Gangamm (1913) 16 Bom. L.R. 67 and Narayan v. Gopal : AIR1914Bom36(2) .

24. It does not much matter whether the suit is on or for accounts. In the present case, accounts have necessarily to be taken, for here are mutual dealings on both sides. The plaintiffs admit there was current account between the parties and the trial Court finds that there are credit and debit entries showing reciprocal demands. A preliminary decree has been passed by the trial Court: the amount due is not yet settled. The appellants have appealed from the preliminary decree only.

25. The expression 'for accounts' in Section 7(iv)(f) of the Court-fees Act, 1870, should be construed in the light of the words 'for an account of pecuniary transactions between a principal and an agent where it is necessary, in order to ascertain the amount of money due to or from any party, that an account should be taken' in Order XX, Rule 16, of the Civil Procedure Code, 1908. So read, the present suit is one 'for accounts'. Secondly, if it is once conceded that it is a suit for accounts, it is open to a party to value the claim 'according to the amount at which the relief sought is valued in the...memorandum of appeal,'

26. The decision of the Allahabad High Court in Kanhaiya Lai v. Seth Ham Sarwpa I.L.R (1922) All 542 is quite conclusive on the point, The head-note is a paraphrase of Section 7(iv)(f) of the Court-fees Act, So also is Kuldip Sahay v. Harihar Prasad .L.R (1923) Pat. 146 equally clear.

27. In the Madras Full Bench case of Srinivasacharlu v. Perindevamma I.L.R(1915) Mad. 725, f.b. the judgment of Wallis C.J. gives no reasons. It merely follows the earlier case of Samiya Mavaliv. Minammal I.L.R (1899) Mad. 490 The view there taken goes against the very wording of Section 7(iv)(f) of the Court-fees Act 1870.

28. P.B. Shingne, Government Pleader, for the respondents. If we look at the scheme of Section 7 of the Court-fees Act, Clause (i) says that in suits for money, i. e., suits to recover money, fees are payable 'according to the amount clamed:' Clause (iv) refers to six classes of cases where no valuation of the claim can be given. The scope of Clause (iv) is elaborately discussed (pp, 226, 227) by Westropp C.J. in Manohar Ganesh v. Bawa Bamcharandas. I.L.R (1877) Bom. 219

29. In the present case, the claim was for a specific sum of money. The amount claimed was due to plaintiffs at the foot of accounts. Unlike the Allahabad and Patna cases cited, the defendants were denying their liability in toto.

30. The first question to ask ourselves is, is this a suit for money or a suit for accounts? The fact that a preliminary decree has been passed is quite immaterial. Even where a suit is brought or accounts, and the Court passes a decree for a definite sum, it is not open to the losing party to treat the appeal as one for account and avoid payment of Court-fees ad valorem. It is not competent to the appealing party to put a nominal value on his claim : but the Court-fees will have to be paid according to the amount claimed in the suit. The nature of a suit is determined by the plaint, and is not changed by the decree passed in the suit, nor by the memorandum of appeal: Hans Raj v. Ratni alias Jwala Dei I.L.R (1904) All. 200, Vinayah v. Krishnarao I.L.R (1901) Bom. 625,: 3 Bom. L.R. 289

31. If the argument on the other side is to prevail, every suit on a mortgage will be regarded as a suit for account, and Section 7, Clause (ix), will be rendered nugatory.

32. In the present case, a preliminary decree has been passed, not because it is a suit for accounts, but because it is a suit' not hereinbefore provided for' (Order XX, Rule 16), The preliminary decree appealed against is passed in a suit for money; and the appellants are bound to pay Court-fee on the amount of the claim, especially as they have denied the whole claim.

33. The case of Kanhaiya Lal v. Sdh Ram Sarup I.L.R (1922) All 542, is distinguishable. It was a suit for accounts. The defendant did not deny the whole claim. In Kuldip Sahay v. Harihar Prasad < nfcitation>I.L.R (1923) Pat. 146 the suit was for possession of property and for accounts. Its essential character came under Section 7, Clause (iv), of the Court-fees Act. The defendant did not deny his liability in toto. Cancellation of a patta will be a suit for declaration.

34. It has been laid down by the Madras High Court that even in a suit for accounts if a certain sum is found payable then Section 7, Clause (iv), is of no avail, and the appellant has to pay Court-fees on the sum found due.

35. The case of Hiralal v. Ganpa : (1921)23BOMLR995 is in point.

36. Divatia, in reply. In this case the appellants are at present appealing from a preliminary decree, and if they are made to pay Court-fees on the full amount claimed, it would lead to this anomaly that they would again be called upon to pay full Court-fees should they find it necessary to appeal against the final decree. At present, only the preliminary question is decided; and in agitating that question on appeal, the appellant must have freedom to put his own valuation.

37. In effect all suits for accounts are suits for money. And if in such a suit, the plaintiff chooses to put a money claim, the defendant would be penalised into paying higher fees when appealing. The proper test is that where accounts are necessary the suit is one for accounts. In the Allahabad and Patna cases, the plea of limitation was Faweett J. urged, as barring the whole claim. In Hans Raj's case there was no mutual account, but the dispute was as regards certain items only. In Vinayak v. Krishnarao the suit was on a Khafca.

Cur. adv. vult.

Baker, J.

38. This appeal has been referred to me under Section 98(2) of the Civil Procedure Code, there being a difference of opinion on a point of law between the learned Judges composing the Bench before which it was originally heard. The points referred are:

(1) Whether the suit was one for money falling under Clause (i) of Section 7 or one for an account falling under Clause (iv)(f) of Section 7 of the Court-fees Act, and

(2) Whether, if it is a suit for an account, the appellants in the Court below were bound by the valuation put on the claim in the plaint or were entitled to make their own valuation.

39. Faweett J. was of opinion that the suit was one for money falling under Clause (i) of Section 7 of the Court-fees Act and that the appellants were bound by the plaintiffs' valuation in the first Court. Mirza J. was of the contrary opinion on both points. Hence the reference to a third Judge.

40. The plaintiffs sued the defendants to recover Rs. 3,370 due on a commission agency account. Defendants Nos. 1 and 3 denied their liability, and defendant No. 2 admitted dealings with plaintiffs up to a certain date and contended that an account should be taken.

41. An ad valorem fee on the amount claimed, Rs. 3,370, was paid by the plaintiffs. The suit against defendant No. 3 was dismissed with costs.

42. The first Court held that both defendants Nos. 1 and 2 were agriculturists, and that accounts should be taken. A preliminary decree for accounts was accordingly passed.

43. Defendants Nos. 1 and 2 appealed, and valued the claim in appeal as a declaratory relief at Rs. 180 and paid a stamp of Rs. 10 under Clause (iv)(f) of Section 7 of the Court-fees Act. The lower appellate Court held that the value for purposes of appeal should R. 163 be the same as that in the first Court. The appellants were accordingly directed to pay the deficient stamp As they failed to do so the appeal was dismissed.

44. On second appeal by the defendants to the High Court the learned Judges composing the Bench differed as above stated.

45. A preliminary point has been taken by the learned pleader for the appellants that if this is not a suit for accounts no preliminary decree could be passed, and that this Court has held that if a preliminary decree is not required by the Code there is no appeal: so the lower appellate Court should have dismissed the appeal on that ground.

46. I cannot, however, consider this point. Under Section 98(2) when the Judges composing a Bench differ in opinion on a point of law, they may state the point of law upon which they differ, and the appeal shall then be heard upon that point only by one or more of the other Judges. I am, therefore, required only to decide the points referred and not the whole case, and this point must be argued before the Bench which originally heard the appeal.

47. As to whether the present suit is a suit for money falling under Clause (i) of Section 7 or one for an account falling under Clause (iv)(f) of Section 7 of the Court-fee a Act it is contended that the appeal is against a preliminary decree which does not settle the amount, and reference is made to Rajhunath v. Ganpatji. I.L.R (1904) 27 All. 374

48. The plaintiffs are commission agents who bought and sold cotton on behalf of defendants their principals, and the first Court has pointed out that defendants are bound to pay only the balance remaining due after the sales of bales through the plaintiffs; that until that balance is struck none can know what one owss to the other; and hence the necessity of taking accounts and of passing a preliminary decree for accounts. Relying on this it is argued that the suit is purely one for accounts.

49. It appears to me that when the Court-fees Act uses the word 'suits' and makes a distinction between the Court-fees payable on various classes of suits, it must refer to the nature of the suits as shown by the plaint, and not to the contentions which the defendant may raise in the written statement, The distinction between Clause (i) of Section 7 and Clause (iv)(f) of the same section in that in the one case the plaintiff sues for a definite sum of money which he alleges to be due to him from the defendant and on which he has to pay an ad valorem Court-fee, and in the other the plaintiff is unable to say what the amount due to him from the defend ant is and he is therefore unable to claim a definite sum, and consequently fixes a pro forma or imaginary valuation, which 192 involves a subsequent liability to pay an ad valorem fee on the amount actually found due after taking accounts, if that amount exceeds the value which he has placed on his claim in the plaint. In the present case the plaintiffs claim a fixed and certain amount, which they say is due to them. It would not have been open to the plaintiffs to place their own valuation on the plaint and pay a fee on that under Clause (iv)(f) of Section 7. They would at once have been met by the objection that their suit was improperly stamped as it fell under Clause (i) of Section 7 of the Court-fees Act. The fact that the defendant claimed certain amounts as due to him from the plaintiffs, is, in my opinion, irrelevant. It appears to me that in every case of a suit for money in which the defendant does not admit the claim there must be some taking of accounts with respect to disputed items, and to hold that such taking of accounts converts the suit into a suit for accounts within the meaning of Clause (iv)(f) of e. 7 of the Act would result in converting a large number of ordinary money suits into account suits. It would be anomalous if a plaintiff who claims a fixed amount in his suit and pays an ad valorem, fee on it should be considered as bringing a suit for accounts under Clause (iv)(f) of Section 7, and would result in the plaintiff being forced to pay a Court-fee having no relation to that which is prescribed by Clause (iv)(f) for suits for an account. In my j opinion the essence of a suit for account is that the sum which the plaintiff claims is an unascertained sum, only to be arrived at by the taking of a regular account between the parties, and r this suit does not, in my opinion, fulfil the condition. With respect, I agree with the view of Fawcett J. that the main test is what is sued for, and if the nature of the suit is to be determined according to the contentions which the defendant raises in his written statement, the greatest confusion would arise. As pointed out by Fawcett J. in his judgment the rulings in regard to Small Cause Court cases support this conclusion. It is unnecessary for me to quote these cases, which are set out in his judgment, but I may add that if the contentions of the defendant in a Small Cause Court suit had to be considered in deciding whether the suit was cognizable by a Court of Small Causes or not, the result would be to cause great confusion. That the more fact that accounts may have to be taken for the purpose of ascertaining the amount due to the plaintiff cannot give the suit the character of a suit for an account has been held by the Allahabad High Court in Hans Raj v. Ratni alias Jwala Dei and by this Court in Qirjabai v. Raghunath The ease quoted by the appellant, liajhunath v. Ganpatjim, does not seem to me to apply, as it was a suit for an account aa such. In these circumstances, with respect, I agree with the view taken by Fawoett J. and hold that the suit is not one for an account, but falls under Clause (i) of Section 7 of the Court-fees Act, In view of the finding, the second point does not require to be decided, but if it were necessary, I should have held that the Allahabad case, Kanhaiya Lai v. 8eth Ram, Sarupm, is distinguishable, because there the appellants did not deny in toto their liability to account, while in the present case the appellants totally denied their liability to account, and the case would, therefore, in my opinion, be governed by Srinivasacharlu v. Perindevamma, and the appellants would, therefore, be bound by the valuation in the plaint.

50. In the present case the plaintiffs claim a fixed and certain amount, which they say is due to them. It would not have been open to the plaintiffs to place their own valuation on the plaint and pay a fee on that under Clause (iv)(f) of Section 7. They would at once have been met by the objection that their suit was improperly stamped as it fell under Clause (i) of Section 7 of the Court-fees Act. The fact that the defendant claimed certain amounts as due to him from the plaintiffs, is, in my opinion, irrelevant. It appears to me that in every case of a suit for money in which the defendant does not admit the claim there must be some taking of accounts with respect to disputed items, and to hold that such taking of accounts converts the suit into a suit for accounts within the meaning of Clause (iv)(f) of Section 7 of the Act would result in converting a large number of ordinary money suits into account suits. It would be anomalous if a plaintiff who claims a fixed amount in his suit and pays an ad valorem, fee on it should be considered as bringing a suit for accounts under Clause (iv)(f) of Section 7, and would result in the plaintiff being forced to pay a Court-fee having no relation to that which is prescribed by Clause (iv)(f) for suits for an account. In my opinion the essence of a suit for account is that the sum which is the plaintiff claims is an unascertained cum, only to be arrived i at by the taking of a regular account between the parties, and this suit does not, in my opinion, fulfil the condition. With respect, I agree with the view of Fawcett, J. that the main test is what is sued for, and if the nature of the suit is to be determined according to the contentions which the defendant raises in his written statement, the greatest confusion would arise. As pointed out by Fawcett J. in his judgment the rulings in regard to Small Cause Court cases support this conclusion. It is unnecessary for me to quote these cases, which are set out in his judgment, but I may add that if the contentions of the defendant in a Small Cause Court suit had to be considered in deciding whether the suit was cognizable by a Court of Small Causes or not, the result would be to cause great confusion. That the more fact that accounts may have to be taken for the purpose of asoertaining the amount due to the plaintiff cannot give the suit the oharacter of a suit for an account has been held by the Allahabad High Court in Hans Raj v. Ratni alias Jwala Dei I.L.R (1904) All. 200 and by this Court in Girjabai v. Raghunath I.L.R (1905) Bom. 147 :Bom. 147 The ease quoted by the appellant, Rajhunath v. Ganpatji I.L.R (1904) All. 374, does not seem to me to apply, as it was a suit for an account aa such. In these circumstances, with respect, I agree with the view taken by Fawoett J. and hold that the suit is not one for an account, but falls under Clause (i) of Section 7 of the Court-fees Act.

51. In view of the finding, the second point does not require to be decided, but if it were necessary, I should have held that the Allahabad case, Kanhaiya Lai v. Seth Ram, Sarup I.L.R (1922) All. 542, is distinguishable, because there the appellants did not deny in toto their liability to account, while in the present case the appellants totally denied their liability to account, and the case would, therefore, in my opinion, be governed by Srinivasacharlu v. Perindevamma I.L.R (1915) Mad. 725 and the appellants would, therefore, be bound by the valuation in the plaint.


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