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Gokul Chand Vs. Jagdish Chandra and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 2676 of 1969
Judge
Reported inAIR1978All485
ActsRegistration Act, 1908 - Sections 17(1) and 17(2); Code of Civil Procedure (CPC) , 1908 - Sections 11; Limitation Act, 1908 - Schedule - Articles 89 and 116
AppellantGokul Chand
RespondentJagdish Chandra and anr.
Appellant AdvocateV.K.S. Chaudhary and ;M.P. Srivastava, Advs.
Respondent AdvocateS.N. Verma, Adv.
DispositionAppeal allowed
Excerpt:
.....required as compromise is regarding immoveable property which is a subject matter of a suit. (ii) suit for accounts - limitation - articles 116 and 89 of limitation act, 1908 - suit for accounts on the basis of 'mukhtar-nama-aam' - no express liability to render accounts - suit not governed by article 116 - suit filed beyond a period of three years - suit barred by limitation act. - - it was further held that the appellant was liable to render account to the plaintiff as well as to the respondent no. 46 of 1956 it is not necessary to enter into the question of limitation but since it has been argued at some length by the learned counsel for the parties i would like to express my view about it also. this will be clearly a case of breach of contract on the basis of a registered bond..........as agent and manager for the period between 5-1-1948 and 6-3-1960. it was also prayed that the suit be decreed if the amount was found due after rendition of accounts. 2. the appellant in the course of the written statement contested the suit and claimed that the respondent no. 1 was not entitled to any relief for rendition of accounts and the compromise decree passed in suit no. 46 of 1956 on the basis of a compromise on 26-2-1960 to which the plaintiff-respondent was a party was binding on the parties. the respondent no. 1 never inherited any property. the gift deed mentioned in the plaint was obtained by fraud from smt. jamuna kunwari. smt. jamuna kunwari had herself brought a suit in 1957 for the cancellation of the gift-deed. that suit was disposed of in terms of the compromise.....
Judgment:

M.M. Gupta, J.

1. This second appeal has been filed by one Gokul Chand against whom suit for rendition of accounts has been decreed by the trial court and excepting for slight modification in the decree the lower appellate court has also confirmed the decree. According to the allegations made in the plaint, the property was originally owned by Kunwar Kekai Nandan Sahai, He died in the year 1947, leaving behind three sons, namely Jagdish Chandra, plaintiff-respondent No. 1, Gokul Chand, appellant and Keshav Chandra, defendant-respondent No. 2. Sri Kekai Nandan Sahai had also left behind a widow, Smt. Jamuna Kunwari. It is claimed that properties mentioned in Schedule I were inherited by Smt, Jamuna Kunwari who died in 1973 and by the three sons who are parties to this litigation. Each one of the sons had 1/4th share in properties mentioned in Schedule I. The properties mentioned in Schedule No. 2 was gifted by means of registered gift-deed dated 9-4-1948 in favour of the plaintiff-respondent Jagdish Chandra. On 5-1-1948 the plaintiff respondent and respondent No. 2 Kesheva Chandra jointly appointed the appellant as agent and Mukhtar Aam for collecting rents of house, agricultural and zamindari-properties and manage and to do all incidental acts relating thereto in all courts and office. This Mukhtar-in-nama Aam was duly registered. The Mukhtiar-nama Aam was revoked on 5-3-1960. During the period that the appellant was the Mukhtiar-in-Aam of the respondents he made realization of the profits and income ofthe share of the respondents and handled the cash that was left by Sri Kekai Nandan Sahai, including, deposits in Calcutta National Bank. The appellant also realized revenues and other income of the villages during the zamindari days. A notice of demand was sent to the appellant but he did not accept it and did not render accounts. A suit was, therefore, filed for rendering of true and full accounts of money realized by the appellant as agent and manager for the period between 5-1-1948 and 6-3-1960. It was also prayed that the suit be decreed if the amount was found due after rendition of accounts.

2. The appellant in the course of the written statement contested the suit and claimed that the respondent No. 1 was not entitled to any relief for rendition of accounts and the compromise decree passed in Suit No. 46 of 1956 on the basis of a compromise on 26-2-1960 to which the plaintiff-respondent was a party was binding on the parties. The respondent No. 1 never inherited any property. The gift deed mentioned in the plaint was obtained by fraud from Smt. Jamuna Kunwari. Smt. Jamuna Kunwari had herself brought a suit in 1957 for the cancellation of the gift-deed. That suit was disposed of in terms of the compromise in Suit No. 46 of 1956. The properties in suit were absolute property of Smt. Jamuna Kunwari, the mother of the parties. She had also received assets worth about four lakhs from her maternal grandfather who was a Punjab High Court Judge. Sri Kekai Nandan Sahai held the properties mentioned in Schedule No. 1 as Benami of Smt. Jamuna Kunwari, Suit No. 46 of 1956 was brought by respondent No. 2 claiming rendition of accounts from the appellant in his capacity as Mukhtiar-i-Aam and Karta of the joint family. In the compromise in that suit to which the plaintiff-respondent was also a party and the relief claimed in that suit was in respect of the properties shown at the foot of the plaint and according to the compromise decree in that suit the properties appended to the plaint were treated as the entire property belonging to Smt. Jamuna Kunwari and all incomes were realised by her. That judgment is binding on the parties. The appellant was, therefore, not liable to claim accounts. The pleas of estoppel and res judicata were also raised in view of the decree passed in Suit No. 46 of 1956. The Mukhtar-nama Aam was given for specific purpose for the sale of share in the properties which belonged to the parties' father. That house did not yield any income.

3. Respondent No. 2 claimed that he . and plaintiff-respondent No. 1 were entitled to the rendition of accounts and he was prepared to pay court-fees if any decree was passed in his favour.

4. The learned Additional Civil Judge who tried the suit on the original side framed issues regarding the liability of the appellant for rendition of accounts, maintainability of the suit, bar of the suit by res judicata and estoppel and limitation. There was also an issue relating to the right of the respondent No. 2 to claim accounting. The learned Civil Judge came to the conclusion that the compromise decree in Suit No. 46 of 1956 was a family arrangement and as such it required registration under Section 17. He consequently held that the decree in Suit No. 46 of 1956 operated neither as res judicata nor as estoppel. The present suit was held to be maintainable. It was further held that the appellant was liable to render account to the plaintiff as well as to the respondent No. 2. On the question of limitation it was held that the suit was within limitation under Article 116 of the Indian Limitation Act 1908 which provided six years limitation and since the suit was brought within six years oi the compromise decree passed in Suit No. 46 of 1956 it was within limitation. The lower appellate court held that the compromise decree in Suit No. 46 of 1956 affected the rights of the parties from that date and it did not mean that plaintiff or defendant No. 2 had no interest in the property before that decree. It was, therefore, held by the lower appellate court that the appellant was liable to render the accounts for the period of Mukhtar-nama Aam from the date of its execution, that is, 5-1-1948 to 26-2-1960 the date on which the decree in Suit No. 46 of 1956 was passed. The lower appellate court also agreed with the view of the trial court that Article 116 of the Indian Lim. Act 1908 applied and the suit was, therefore, held to be within time. Excepting for this slight modification in the decree of the trial court, the decree of the trial court was upheld.

5. The two questions that have been agitated at the Bar in this appeal are whether the compromise decree in Suit No. 46 of 1956 operated as res iudicata or estoppel against the respondents and whether the suit was barred by limitation. The trial court was not right in taking the view that the compromise decree could not be taken into account for want of registration. He did not care to read the provisions of Section 17(2) of the Indian Registration Act. Section 17(1) of the Indian Registration Act deals with registration of the documents which compulsorily require registration. Among other documents Section 17(1)(b) of the Indian Registration Act requires compulsory registration of non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property; and, its Clause (c) requires compulsory registration of non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest. Sub-clause (vi) of Sub-section (2) of Section 17 of the Indian Registration Act applies to any decree or order of a Court except a decree or order expressed to be made on a compromise and compromising immoveable property other than that which is the subject-matter of the suit or proceeding. This means that any decree or order of a court affecting the rights mentioned in Section 17(1)(b) and (c) would not require registration. It will, however, require a registration where the decree or order on the basis of compromise affects the immoveable property other than that which is the subject-matter of the suit. It is not the case of any of the parties that the decree passed in Suit No. 46 of 1956 affected the immoveable property other than that which was the subject-matter of that suit. Thus the compromise decree did not require registration.

6. In order to appreciate whether the decree passed in Suit No. 46 of 1956 operated as res judicata or estoppel we will have to look into the basis of Suit No. 46 of 1956. That suit was filed by respondent No. 2 Kesheo Chandra impleading the present appellant, plaintiff-respondent, Smt. Jamuna Kunwari and the appellant's son Vinai Kumar. In that suit it was claimed that after the death of Sri Kekai Nandan Sahai in 1947 the family continued as joint family of which Gokul Chandra appellant of this appeal was the Karta Khandan and was in possession of the properties belonging to the jointfamily. Kesheo Chandra respondent No. 2 of this appeal and Jagdisih Chandra, plaintiff-respondent No. 1 had also executed a Mukhtar-in-nama Aam on 5-1-1948, in favour of the appellant of this appeal who was defendant No. 1 in that suit. It was also alleged that the appellant of this appeal was refusing for the accounting of income and profits from the properties. The suit was, therefore, brought for the partition of the property and for accounting of income and profits misappropriated by the present appellant. The properties which were the subject-matter of that suit are also the same. Smt. Jamuna Kunwari had filed the written statement, the copy of which is Ex. A-3 on the record. She had claimed that, barring one house which was ancestral of Kekai Nandan Sahai, rest of them were owned by her and were her ancestral properties. It was also claimed that the gift deed obtained by the respondents of this case from her was fictitious and was obtained by fraud.

7. As a result of the perusal of the pleading in suit No. 46 of 1956 it would appear that the property involved in the suit was the same as the subject-matter of the present litigation. The plaintiff claimed share in that property and also claimed accounting against the appellant, of this appeal. The compromise on the basis of which a decree in Suit No. 46 of 1956 was passed was as below:--

'Tamam Jaydad Nibai Ki Income Apne Jeewan Bhar Prativadi No. 3 Smt. Jamuna Kunwari Pavegi Is Income Ko Unko Tasrruph Karne Ka Pura Adhikar Hoga Jayadad Nijai va Intasanaya Jaydad Kimati Va Kadar (20,000) Bis Hajar Rupaya Men vadi Aur Prativadigarn 1 to 3 Ka Barabar Barabar Hissa Hai Yani Har Ek i Hissa Ka Malik Hai.

2. Rupaya 20,000/- Rupaye (Bis Hajar Rupaya) Ki Ukta 20,000 Rupaye Ki Jayadad Va Apne Uprokta Hisse Ki Jayadad Ki Malik Kamil Prativedi No. 3 Hai.

(3) Smt. Jamuna Kunwari Apne Jiwan Bhar Kul Jaydad Nijai Par Kabij Rahegi Aur Vah Hi Eska Intjam Karegi.

(4) Vadi Is Samaya Civil Line No. 52 Kothi Ke Pichihle Hisse Main Rah Rahe Hain Unko Yah Kafc Diya Jata Hai Ki Yadi Is Kothi Ke Agle Hisse Ko Jismen Is Samaya Sri H.B. Joshi Excise Inspector Kiraya Par Rah Rahe Hain Vah Government Se Release Kar Le To Is Portion Men Apni Sakunat Rakh Sakenge Aur Us Soorat Men Bank Portion Kisme Ki Vah Is Samaya Rah Rahe Hai Us Ko KhaliKar Denge Vadi Se Na Bank Portion Ka Aur Na Front Portion Ka Jo Bhai Us Ke Kabji Me Rahe Kiraya Smt. Jamuna Kunwari Naihi Lengi.

(5) Vadi Smt. Jamuna Kunwari Se Apne Khane Pane Ke Liya Bhi Koyi Claim Nahin Kar Sakenge.

(6) Kharcha Phareekain Jumme Phareekain Rahega.

(7) Mukadama No. 17/57 Jamuna Kunwari Banam Gokul Chand Vagairah Bhi Isee Phaisle Ke Bamujib Taye Kiya Jave Us Mukadame Me Jis Property Ka Bare Me Dispute the Vah Mukdama No, 46/56 Men Samil Hai.

(8) Mukdama No. 17/57 Ka Kharcha Bhi Jumme Phareekain Rahega.'

This compromise on the basis of which decree in Suit No. 46 of 1956 was passed was signed by Smt, Jamuna Kunwari and all the three parties to this litigation. Under this compromise every claim for rendition of accounts which was claimed against the appellant of this appeal was impliedly given up and the claim for partition which was one of the reliefs claimed in this case was also given up. The interests of the plaintiff in that suit and plaintiff of this suit were the same. There is no suggestion whatsoever that this compromise was not 'voluntarily signed by the parties who are men of education. The relief in the instant litigation also is for rendition of accounts which was in that suit. I do not see any reason why the compromise decree passed in Suit No. 46 of 1956 is not binding on the plaintiff-respondent No. 1 or respondent No. 2.

8. The principles laid down by the Calcutta High Court in Secretary of State v. Ateendra Nath Das, ((1936) ILR 63 Cal 550 at p. 558) were approved in Sailendra Narayan Bhanj Deo v. State of Orissa : [1956]1SCR72 which were as below (at p. 351):

'On this authority it becomes absolutely clear that the consent order is as effective as an order passed on contest not only with reference to the conclusions arrived at in the previous suit but also with regard to every step in the process of reasoning on which the said conclusion is founded.

When we say 'every step in the reasoning' we mean the findings on the essential facts on which the judgment or the ultimate conclusion was founded. In other words, the finding which it was necessary to arrive at for the purpose of sustaining the judgment in the particular case will operate estoppel by judgment.'

9. On the principles enunciated above, I am not prepared to agree with the learned counsel for the respondents that the decree in the aforesaid judgment is not binding on the parties. In the compromise decree the right of partition or rendition of accounts against the appellant was impliedly given up. Smt. Jamuna Kunwari has asserted her own absolute right in the property. She was held entitled to entire income and her rights in the properties were also recognized. The question of claiming accounts therefore does not arise. I am not prepared to agree with the inference drawn by the learned Additional District Judge that the decree operated from the date on which it was passed and it did not affect the past rights. If we look into the plaint allegations of Suit No. 46 of 1956 and the terms of the decree, it leaves no doubt that the question of rendition of accounts in the present suit could not; arise. The judgment and decree in Suit No. 46 of 1956 must operate as estoppel against the respondents. Both the courts, therefore, committed illegality in decreeing the suit for rendition of accounts.

10. I may also point out here that by passing a preliminary decree for accounting, the trial court has also noted that the question in what properties what share the plaintiff and defendant No. 2 had shall be determined during the proceedings under Order XX, Rule 17, C. P. C. It is the duty of the court to determine the shares in various properties of the parties while passing the preliminary decree. The determination of shares cannot be left for determination in the final decree.

11. After my above finding on the binding nature of the decree in suit No. 46 of 1956 it is not necessary to enter into the question of limitation but since it has been argued at some length by the learned counsel for the parties I would like to express my view about it also.

12. The lower courts have considered the application of Article 116 of the Indian Limitation Act, 1'908. That Article is equivalent to Article 55 of the Indian Limitation Act, 1963 which repealed the earlier Act. The words in both the Articles are the same, that is, for compensation for the breach of any contract in writing registered -- period of limitation under the Old Act was six years from the date when the limitation began to run against the suit brought on a similar contract not registered. Under Article 55 the period of limitation has been reduced to three years and the time would run from the date when the contract is broken or when the breach in respect of which the suit is instituted occurs or when it ceases. On the basis of the provisions of Section 30 of the Indian Limitation Act 1963 which provides that,

'Notwithstanding anything contained in this Act:-- (a) any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908, may be instituted within a period of seven years next after the commencement of this Act or within the period prescribed for such suit by the Indian Limitation Act, 1908, whichever period expires earlier.'

Thus, it is claimed that six years limitation given under Article 11'6 of the Old Act would be applicable to this case. Both the courts below have accepted this contention. The learned counsel for the appellants has, however, contended that the case would be governed not by Article 55 or Article 116 of the Indian Limitation Act but by Article 3 of the present Act corresponding to Article 89 of the old Act. Article 89 provides three years limitation when the suit relating to accounts is instituted by a principal against his agent for moveables received by the latter and not accounted for. The limitation would run on the date of demand and refusal to render the accounts or when the agency terminates. The same is the provision under Article 3 of the Indian Limitation Act, 1963. It is, therefore, to be determined in this case for the application of Article 116 if the suit is one for compensation for the breach of a contract in writing registered. The words, 'in writing registered' have been omitted from Article 55.

13. It is contended on behalf of the respondents that Article 116 would apply to this case for the reasons:

1. Mukhtar-in-Aam is a contract

2. It is a registered agreement.

3. Liability to pay plaintiff's share on accounting arises out of a contract. .

4. Accounting is only a mode of arriving at the claim of compensation.

5. The plaintiff's share of money will be compensation for which the breach was committed.

The learned counsel has placed his reliance on Husain Ali Khan v. Hafiz Ali Khan ((188l) ILR 3 All 600) (FB). It was acase of a registered bond on the basis of which the suit for accounting was filed. It was held that since the document was registered, the privilege allowed to the registration by Article 116 would be allowed to the case. This will be clearly a case of breach of contract on the basis of a registered bond and as such the provisions of Article 116 were applied to that case. The reliance is also placed on Bhabani Prosanna v. Sarojini Debya : AIR1944Cal106 , It was also a case relied on by the lower appellate court. In that case, the co-sharers had executed a power of attorney in favour of B who was also a co-sharer by a registered instrument and authorising him to encash a cheque for the amount of Rs. 10,000/- and distribute the money among the co-sharers. It was held that the terms constituted an express contract in writing registered to make payment and therefore had fallen under Article 116 of the Indian Limitation Act. In Mahamed Mozaharal Ahmad v. Mahamed Azimaddin Bhuinya (AIR 1923 Cal 507) it was held that 'Article 116 applies to the suits for recovery of dower debt when there is a registered dower deed, although Articles 103 and 104 would apply when there is no such registered instrument and time runs from the date of death of the lady.'

14. So far as the present suit is concerned it is a suit for accounts on the basis of a Mukhtar-nama Aam. It will have to be determined whether it can be treated as a case for compensation arising out of a breach of contract. The provisions of Article 116 would apply where the suit is brought on the basis of a contract which is already being in writing is also duly registered. The learned counsel for the respondent has contended that it is a case where the appellant was appointed Mukhtar-in-Aam for collecting profits and managing the property. The fact that he should render accounts is implied in the terms of the contract If that liability to render accounts is implied Article 116 would apply. In this connection it will be worthwhile to refer to the provisions of Article 115 which is for compensation for the breach of any contract, express or implied, not in writing and not registered. Article 11'5 expressly mentions the cases where liability is implied. If the intention had been to include the implied liability in Article 116 the Legislature would have clearly mentioned in it as it has mentioned Article 115. So, in my opinion, Article 116 would govern only those cases where the contract for the accounting is express and not where it has tobe applied by implication. Under the terms of the Mukhtar-i-nama Aam, which have been read over to me, there is no express liability to render accounts. Article 116, therefore, cannot govern the case. In Annu Avathanigal v. Somasundara (AIR 1931 Mad 185 (2)) it was held;

'a suit for an account is not a suit for a definite sum of money, but for ordering the defendant to account to the plaintiff for money received by him and the first result is that the plaintiff gets a decree for discovery. An agent when sued as defendant for an account can get a decree for the balance of the account if anything is found due to him, even though he has not claimed it in his pleadings; and that could never happen in a suit merely for compensation for breach of contract.'

It was further held that,

'A suit by a principal against his agent for moveable property received by the latter and not accounted for could not be said to be a suit for compensation for the breach of a contract.'

Thus, I am of the view that the Article 116 of the Old Act did not apply to the facts of this case but Article 89 of the Old Act providing three years limitation applied to the facts of the present case. The period of limitation in this case started running against the plaintiff from 5-3-1960, the date upto which the accounting was decreed by the trial court or from 26-2-1960 the date to which the accounting has been decreed by the lower appellate court. The suit was clearly filed beyond three years on 20-7-1964 when the application for permission to sue in forma pauperis was filed on 20-7-1964. The present suit was registered after payment of court-fees after the application for permission to sue in forma pauperis was rejected. The suit is, therefore, clearly barred by limitation whether governed by Article 89 of the Indian Limitation Act, 1908 or Article 3, Indian Limitation Act, 1963.

15. The appeal is hereby allowed, the decree passed by the courts below are set aside. The plaintiff and the respondents are brothers and have been locked in a legal battle for over two decades, I would order them to bear their own costs.


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