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Noor Abdul Jaleel Vs. V. Achuthan - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberFirst Appeal No. 101 of 1974
Judge
Reported inAIR1982Kant237; ILR1982KAR709
ActsCode of Civil Procedure (CPC), 1908 - Order 1, Rule 10-A - Order 3, Rule 4 - Order 6, Rule 4
AppellantNoor Abdul Jaleel
RespondentV. Achuthan
Appellant AdvocateKalasa Shamanna, Adv.
Respondent AdvocateV. Krishna Murthy, Adv.
Excerpt:
.....of the matter. we are clearly not concerned with the matters set out in sub rule (4) of r. an account stated may only lake the for of a mere acknowledgement, of a debt, and in those circumstances though is quite true, it amounts to promise and the existence of a debt may be inferred, that can he rebutted, and it may very well turn out that there is no real debt at all, and in these circumstances there would be no, consideration and no lending promise. the items on the smaller side are all off and deemed to be paid by the items on the larger side, and there is a promise for good consideration to pay the balance arising from the fact that the items have been so set off and paid on the way described. ' justify setting any other (underlining is ours) it is clearly involved in these..........from the case and 2. whether on the material on record the defendant was entitled to have the suit accounts reopened? 8. as to the first point, mr. shamanna for the appellant depends both on practice and procedure of the court. he urges that the court ought to have issued a notice to the defendant when his advocates were permitted to retire for want of instructions. in support of this submission, the counsel adopts what this court observed in krishna venkatesh pai v. devappa ayyu naik, (1967) 1 mys lj 236: (air 1968 mys 188) and yellappa v. murigeppa, (1977) 2 kant li 9 at p. 12, para 7. in krishna venkatesh pai's case govinda bhat, j., (as he then was) has laid down some guidelines for counsel and courts to follow before seeking and granting leave to retire from the appeal for want.....
Judgment:

Jagannatha Shetty, J.

1.This appeal by the first defendant has beer, preferred against the judgment and decree Dt. Mar. 5, 1974 made in O. S. No. 1 of 1973 by the District Judge at Chickmagalur.

The facts are shortly as follows:-

2. V. Achutan, the plaintiff, instituted a suit for recovery of a sum of Rs. 23,700/- with interest payable thereon. The suit was based on a settled account as between the parties. The suit was originally brought against defendants 1 to 5 but subsequently it was withdrawn against defendants 2 to 5. The plaintiff alleged that defendant 1 for the purpose of maintaining his estate called 'Hosangadi Estate' and for his family necessity had several transactions and maintained accounts with the plaintiff from 1964 to 1968 and finally the accounts were settled and outstanding balance was struck on Nov. 22, 1968. Defendant-1 thereunder signed acknowledging his liability to pay the balance, but failed to pay despite repeated demands.

3. Defendant-1 who resisted the suit, denied having any transactions with the plaintiff. He has, however, admitted his signature in the accounts taken and at the balance struck; but he said that he signed it without looking into the particulars of the accounts. He gave thus his explanation that there was cordial relationship between his father and the plaintiff and the former had reposed implicit confidence and trust on the latter, and that relationship continued even as between defendant-1 and the plaintiff. He was, therefore, never looking into the accounts maintained by the plaintiff, but giving his signature whenever the plaintiff asked him to do so. In the statement of accounts furnished to him, he has discovered that many of the entries therein were false and bogus and the plaintiff had played fraud upon him by abusing the confidence reposed. Along with the written statement, he filed a list containing what he terms as incorrect or false entries that are found in the plaintiff's account.

4. In the light of these contentions, the Court below framed the following among other issues:-

(1) Are the entries from 4-7-1964 to 22-11-1968 of 'A' schedule and debit entry Dt. 23-12-1968 of Rs. 3,000/- and the entries in the 'B' schedule true an correct, and had the first defendant carried on the transactions as mentioned there in ?

(2) Does the -plaintiff prove that accounts were struck on 22-11-1968 and that the defendants were found due in a sum of Rs. 19,098-58 P. and that the first defendant as Power of Attorney Holder acknowledged the liability?

(3) Has the first defendant put his signature in the circumstances pleaded by him in para 5 of the written statement, and has the plaintiff played fraud on him?

5. The first two issues were determined in favour of the plaintiff and against the defendant. The Court held that the defendant had acknowledged the correctness of the accounts and the balance thereon by affixing his signature on a receipt stamp. The Court also held that the balance of Rs. 19,098-58 P shown in the account stated included the interest from Dec. 1, 1967 to Nov. 22, 1968 at 19% per annum. In view of this conclusion, the Court found it unnecessary to record a finding on the third issue. The suit was accordingly decreed for Rs. 23,700/- with costs and current interest on the principal at 6% per annum from the date of suit till realisation.

6. Here we must give some more facts. The suit was originally filed in the Court of the Civil Judge, Chickmagalur, and later it was transferred to the Court of the District Judge, Chickmagalur by the direction of the High Court in C.R.P. No. 3 of 1973. Both the Courts were located at the same place in the same building. The learned District. Judge after receipt of the records, however, again issued notices to the Advocates. Representing the parties. When the suit was called on Jan. 81 1974, the notices were found to have been served on the Advocates, but the suit was adjourned to Jan. 23, 1974. On that day, defendants 2 to 5 were deleted at request and defendant-1 was represented by two Advocates (M/s. K. S./T. M. K.). The suit was again adjourned to Feb. 27, 1974onwhich date Sri T. M. K. filed a memo seeking leave of the Court to retire from the case for want of instructions. Defendant-1 was also not then present. The Court acceded to his request and permitted him to retire and adjourned the case to Mar. 21 1974. On Mar. 2, 1974, it was the turn of the other Advocate Sri K. S. to move the Court for permission to retire for want of instructions. The Court acceded to his request also and granted leave to retire from the case. Then defendant-1, as usual, was called and found absent. The plaintiff, who was present, was tendered for further cross-examination, but none was there on behalf of defendant-1 to cross-examine him. So the evidence on behalf of the plaintiff was closed, and the case was adjourned to Mar. 4, 1974 for defendant-1 to lead evidence. It may be relevant to state that the plaintiff was already examined and cross-examined at great length in the Court of the Civil Judge before the suit was transferred to the Court of the District Judge. When the suit was taken up on Mar. 4, 1974, the plaintiff and his Advocate were present, but not defendant I or anybody on his behalf. The plaintiff's Advocate addressed his arguments and the Court adjourned the case to Mar. 5, 1974 on while day, the judgment was pronounced decreeing the suit for Rs. 23,700/- with costs and current interest at 0% per annum. The defendant in this appeal, has challenged the validity of that decree.

7. Upon the submissions made by counsel on both sides, the following two Points arise for consideration:

1. Whether the defendant was entitled to a Court notice after his Advocate was permitted to retire from the case

And

2. Whether on the material on record the defendant was entitled to have the suit accounts reopened?

8. As to the first point, Mr. Shamanna for the appellant depends both on practice and procedure of the Court. He urges that the Court ought to have issued a notice to the defendant when his Advocates were permitted to retire for want of instructions. In support of this submission, the counsel adopts what this Court observed in Krishna Venkatesh Pai v. Devappa Ayyu Naik, (1967) 1 Mys LJ 236: (AIR 1968 MYs 188) and Yellappa v. Murigeppa, (1977) 2 Kant Li 9 at p. 12, para 7. In Krishna Venkatesh Pai's case Govinda Bhat, J., (as he then was) has laid down some guidelines for counsel and Courts to follow before seeking and granting leave to retire from the appeal for want of instructions. The learned Judge observed that where a counsel has in an appeal and if, for wants to report no instruction duty to notify the appeal then seek leave of the been engaged any reason , it is his first and Court to retire from the case. He also observed that the Court before dismissing the appeal for non-prosecution, should take steps to protect the interest of the appellant by issuing notice to him or direct counsel to file proof of having issued notice of his intention not to proceed with the appeal. Venkataswami J, in Raghu Rao v. Krishna Bhatta Ringe, W. P. No. 1553 of 1972 disposed of on Nov. 8, 1973, extended those principles even in the matter of original suits. The learned Judge said:

'The requirement of the protection of the interest of the litigant is common to both types of matters and that even in original proceedings where the counsel seeks leave of the Court to retire, the Court must follow one of the two alternatives, namely, either refuse to grant permission to retire and proceed with the case; or adjourn the case to enable the counsel to notify his client of his intention to retire fr om the case'.

The correctness of those observation came up for consideration before a Bench of this Court (Honnaiah, Ag. C. J., and Venkatachaliah, J, in Yellappa V. Murigeppa (Ibid Note 2). Venkatachalliah, J., speaking for the Bench while broadly accepting the norms laid down in Raghu Rao's (W. P. No. 1553 of 1972, disposed of on Nov. 8, 1973) case as salutary and necessary to promote the ends of justice, however, warned:

'This cannot be understood to operate as an unqualified limitation on the powers of the Court in all circumstances and without reference to and independently of the conduct of the parties. R. 2 of 0. XVII, CPC contemplates the manner in which the Court has to proceed if the parties or any of them fail to appear on any day to which the hearing of the suit is adjourned. R. 3 of 0. XVII CPC envisages that where any party to a suit to whom time has been granted rules to produce his evidence, or to cause the attendance of his witnesses, or to perform any other act necessary for the further progress of the suit, for which time has been so allowed, the Court may, notwithstanding such default, proceed to decide the suit forthwith. In a given situation, owing to the failure of the party, it would become open to the Court to proceed under R. 2 or R. 3, as the case may be, of 0. XVII CPC. That discretion of the Court cannot be circumscribed by a mere signification at that stage of the intention of the counsel to retire from the case without having earlier notified his client in this behalf. The Court must test whether the situation entailing and justifying the attraction and invocation of R. 2 or R. 3 Of 0. XVII CPC is on account of the failure or default of the party concerned or is purely attributable to an unforeseen situation of the counsel signifying his intention to terminate the engagement. Where it appears to the Court that the latter event can reasonably be considered to be merely designed to avert the obvious consequences of the failure or default of the party, the Court would be perfectly justified in proceeding with the matter either under R. 2 or R. 3, as the case may be, of 0. XVII CPC, inasmuch as, in such a case, the retirement of the counsel would not be the immediate and direct cause of the Court proceeding to dispose of the suit either under R. 2 or R. 3 of 0. XVII CPC. To hold otherwise would be to allow the discretion of the Court to be bogged down by mere incantation by the counsel of his intention to retire.'

The learned Judge then having regard to the facts found in that case, observed that the plaintiff who remained absent was not entitled to a Court notice.

9. Mr. Shamanna, however, urged that the case on hand has a different footing. According to him, the Court below after permitting both the Advocates of the defendant to retire from the case ought to have issued a notice to the party and ought not to have proceeded to consider the case on merits without such a notice. Mr. Krishna Murthy, learned Senior Advocate for the respondent sought to answer that contention by submitting that it would be putting a premium on the lethargic attitude of the defendant to protract the litigation.

10. We gave our anxious consideration to these contentions. Considering the f acts and circumstances of the case, in the light of the authorities to which we have called attention, it is, in our judgment, not possible to hold that the defendant was entitled to a notice as contended for. There is no such obligatory duty imposed on the Court to invite a party whose Advocate out of disgust has retired from the case. It is a sound principle, no doubt, that the Court before granting permission for an Advocate to retire, must enquire whether the Advocate has intimated his intention to his client not to proceed with the case. But we cannot accept the submission that the Court after permitting an Advocate to retire from the case, is bound to adjourn the case and direct a notice to the party-in-default. Such a contention, so far as we find, has neither the sanction under law nor the support of any canon of judicial ethics or rules of prudence.

In our system of administration of justice, it is generally for litigants to choose their Advocates and the Advocates are primarily accountable to their parties. If a responsible Advocate seeks leave of the Court to retire from the case and the Court in its judicial discretion permits him to retire, we fail to understand why then the Court should again notify the party-in-default in the absence of any statutory requirement. A word of caution, however, is required to be uttered. We in the world of law should not move mechanically. We must have a little more regard to facts of life and problems of people. We must insist on the proof from the Advocate when he seeks leave to retire. The proof pertains to the intimation of his intention to the party not to proceed with the case. This is more by way of a rule of prudence. Next is the rule of discretion to be observed. The discretion to grant or not to grant leave to retire from the case should be guided by well settled judicial norms. If the leave sought for is granted and if the party remain, un represented and its decision on any matter in issue is likely to affect any suit or proceeding, then the Court would be well advised to request any Advocate to address it on that issue before finally disposing of the matter. Such discretion has been conferred upon Courts under 0. 1, R. 10-A of the Civil P. C. That is all that we intend to state in this context.

11. Mr. Shamanna in support of his contention next relied upon 0. 111, R. 5 (2) of the Civil P. C. as amended by the State of Karnataka. It reads:

'A pleader appointed to act shall be bound to receive notice on behalf of his client in all proceedings in the suit as defined in sub-rule (3) of R. 4. Where, however, such pleader having been served with notice reports to Court absence of instructions from his client under sub-rule (4) of R. 4, the Court shall direct that notice shall be issued and served personally on the party in the manner prescribed for service of summons on defendant under 0. V of this Code.'

We do not think that the above rule is any assistance to the present case. That rule applies to matters set out in sub-rule (4) of R. 4, which in turn provides for the applications for execution of a decree, the applications for review of judgment, and applications for leave to appeal. They are postdecretal proceedings. In all such proceedings it is also the duty of the Advocate appointed by the party to act and receive notice on behalf of his client. But where such Advocate having been served with the notice, reports no instructions from his client, then the Court shall direct that notice shall be issued and served personally on the party. We are clearly not concerned with the matters set out in sub rule (4) of R. 4 and the appellant, therefore, cannot rely upon it. We are concerned with the pedecretal proccedings. The Advocates in tile Present case had taken notice and appeared f air ' the defendant even after the District Judge took urr1her trial the case was only thereafter they mission only one to retire front the case for want of instructions. , They had earlier participated in I lie trial and sufficiently cross-examined the plaintiff. The Court below having regard to the circumstances of the case, could no', but grant leave to retire and proceeded to decide the forthwith on the merit, of the matter. In doing so, the Court did not commit any illegality or irregularity in the procedure followed.

12. This takes us to the second question. The question is whether the defendant was entitled to reopen the accounts on which the suit was based against him. The plaintiff instituted the quit to recover the money payable under the account stated. It is not in dispute that the defendant has signed at the balance struck after taking into consideration the credit and debit entries in the accounts maintained by the plaintiff. The defendant's plea, however. was that of, did not verify those accounts and the plaintiff by abusing confidence has Played fraud upon him. it is now necessary to state the scope of a suit based on an account stated and the defence that is normally available for a contesting parties in such a suit. There are two Privy Council decisions art this matter. The principle of law was first laid down in Fvira Rodrigues Siqueira. v. Godnicalo Hypolito Constincio Noronha AIR 1934 PC 144: 151 Ind Cas 40 where Lord Atkin said:

'Their Lordships think that what has been forgotten is that there are two forms of account stated. An account stated may only lake the for of a mere acknowledgement, of a debt, and in those circumstances though is quite true, it amounts to promise and the existence of a debt may be inferred, that can he rebutted, and it may very well turn out that there is no real debt at all, and in these circumstances there would be no, consideration and no lending promise.'

The learned Judge in fact distinguished and pull on one side that form of account stated which constituted a mom acknowledgment of a debt, Then he thus stated what would property he described as a real. account stated,

'But on the other hand. there is another form Of account stated which is a very usual form as between merchants in business in which the account stated is all account which contains entries on both sides, and in which the parties who have stated the account between them have agreed that the items on one side should be set against the items upon the other side and the balance only should he paid: the items on the smaller side are all off and deemed to be paid by the items on the larger side, and there is a promise for good consideration to pay the balance arising from the fact that the items have been so set off and paid on the way described.'

Lord Atkin quoted the language of Viscount Cave in Camillo Tank S. S. Co. Ltd. v. Alexandria Engineering Works, (1921) 38 TLR 134:

'There is the second kind of account stated, where the account contains items both of credit and debit, and the figures on both sides are adjusted between the parties and a balance struck'.

While explaining further these propositions, Lord Wright in Bishun Chand Girdbar; Lal.

'Indeed, the essence of an account stated is not the, character of the items 01-1 one side or the other, but the fact that there are cross items of account and that the parties mutually agree the several amounts of each and, by treating the items so agreed on the one side as discharging the items on the other side pro tant, go on to agree that the balance only is payable. Such a transaction is in truth bilateral, and creates a new debt and a new cause of action, There are mutual promises, the one side agreeing to accept the amount of the balance of the debt as true (because there in such cases be, at least in the end, a. creditor to whom the balance is due) and to pay it, the other side agreeing the entire debt as at a certain figure and then agreeing that it has beer,, discharged to such and such an extent. so that there will be complete satisfaction on Payment of the agreed balance. Hence, there is mutual consideration to support the promises on either side and to constitute the new cause of action. The account stated is accordingly binding, save that it may be reopened on an ground for instance , fraud or mistake which would agreement.' justify setting any other (Underlining is ours)

It is clearly involved in these observations that whatever the consideration for each item in the account, if the parties have mutually agreed by treating the items on the one side as discharging the items on the other side and they have gone to agree that the balance alone is payable then such an account stated is binding on the parties save that it may be reopened on any ground which would justify setting aside any other agreement. This is because an account stated is no more than an agreement to accept the amount of balance as true and to pay it over to the other side agreeing that the debt has been discharged to such and such extent and the balance alone is payable. That is why, it is said the defendant in such a suit will not be entitled to show that such and such item in the account is incorrect or without consideration. He could, however, show that there never was any transaction which would give rise to an account stated and that he could show only on the ground of fraud or mutual mistake.

13. In the present case, the defendant has no doubt challenged the correctness of the several items in the accounts maintained by the plaintiff. He has also alleged fraud and abuse of confidence. But he has not led any evidence in support of his contention. The allegations of fraud and abuse of confidence remained only as allegations with no evidence to support. He was, therefore, not entitled to have the suit account reopened. We have already held that the defendant alone was to be blamed for denying himself the opportunity to lead evidence. We are unable to help him.

14. On the material on record ' the suit could not but be decreed against the defendant and the Court below was justified in doing so.

15. In the result, the appeal fails and is dismissed with costs.

16. Appeal dismissed.


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