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Moti Lal Vs. Radhey Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAllahabad
Decided On
Reported inAIR1933All642; 147Ind.Cas.529
AppellantMoti Lal
RespondentRadhey Lal and ors.
Cases ReferredIn Subha Row v. Rama Row
Excerpt:
- - these three documents clearly go to show that both sides were anxious about the grain as the rates were going down. in my opinion, the learned subordinate judge has given good reasons for holding that it was proved that these bags had been sent to calcutta for sale under the orders of the firm of mithu lal gopal dass. for the reasons given above, i hold that the deed of assignment, so far as it relates to the transfer of the assignors' right in respect of the first transaction, is good and valid. the plea of set off is a good ground for defence. the plaintiff and the contesting defendants will pay and receive costs in both courts according to their success and failure......29th january 1925, when the plaintiff's assignors were told about the sale of the last lot of the wheat bags. but this plea is not correct. the evidence of ram prasad, the munim of the defendants, is that several days after the sale of 'the bags in calcutta mithu lal went to the defendants and when he was offered rs. 356 he did not take it saying that he would transact further business with them: see p. 27 of the paper book. in view of this statement of ram prasad, it is not correct to contend that the agency had terminated on 29th january 1925. the contesting defendants have not given any evidence to prove the exact date on which, according to them, the agency terminated. so, it will be taken that the agency continued till the demand for accounts made by the assignors of the plaintiffs.....
Judgment:

Rachhpal Singh, J.

1. This is a plaintiff's appeal arising out of a suit for rendition of accounts. The defendants, second party, a firm styled Mithu Lal Gopal Dass purchased 1153 bags of wheat, 9 bags of arher and 4 bags of gram on different dates between 14th June and 9th July 1924 through the agency of the defendants, first party, a firm styled Gobind Ram Brij Lal, and carrying on business as commission agents. These goods were sold by the firm of Mithu Lal. The trial Court has found that in respect of this transaction, a sum of Rs. 1,771-13-6 remained due to the firm of Mithu Lal Gopal Dass from the firm Gobind Ram Brij Lal. This finding of the learned Subordinate Judge has been accepted by both the parties in this Court. Between the 5th of July and 15th of September 1924, the firm of Mithu Lal purchased 887 bags of wheat on the various dates through the agency of the firm of Gobind Ram Brij Lal. The dispute between the parties is mainly confined to this second transaction. Mithu Lal, plaintiff, in the case is an assignee of the interest of the firm of Mithu Lal Gopal Dass under a deed of assignment dated 1st Fe bruary 1928.The plaintiff's case was that on 19th February 1925, the firm of Mithu Lal Gopal Dass sent telegraphic instruc- tions to the firm of Gobind Ram Brij Lal directing them to sell the 887 bags of wheat. These instructions were not complied with. On the other hand, the firm of Gobind Ram Brij Lal wrongly asserted that the goods had already been sent to Calcutta and sold there under the instructions of the firm of Mithu Lal. The plaintiff sued to1 recover the following items:

1. Rs. 1,800 on account of the first transaetion.

2. Rs. 2,100 on account of the second transaction relating to 887 bags of wheat. The plaintiff calculated his profits with reference to the rate at which wheat was sold in Sambhal town on 19th February 1925, the date on which the firm of Mithu Lal had given instructions for the sale of 887 bags to the firm of Gobind Earn by wire,

3. Rs. 75 on account of the price of nine bags of arher.

4. Ks. 40-10-0 on account of the price of four bags of gram.

5. Rs. 1,075 by way of interest at twelve annas per cent per mensem.

Total Rs. 5,090-10-0.

2. The claim was resisted by the firm of Gobind Ram Brij Lal. The principal defence was that 887 bags of wheat had been sold by the contesting defendants in November 1924 and January 1925 under the orders of the firm of Mithu Lal Gopal Dass. The goods were sent to Calcutta under the supervision of Mithu Lal himself and were sold there. At the time, the prices of grain had gone down and the sales were made at a loss. Later on the prices rose and so the firm of Mithu Lal, dishonestly, and in order to evade the loss, sent a wire saying that 887 bags of wheat should be sold. The contesting defendants asserted that accounts were explained to the firm of Mithu Lal and that only a sum of Rs. 356-1-3 was due, that the plaintiff had purchased a mere right to sue which was not transferable under the provisions of Section 6, T. P. Act, and so the plaintiff was not entitled to maintain the suit and that the suit was not within limitation. The learned Subordinate Judge came to the conclusion that out of the 887 bags, relating to the second transaction, 864 were sold by the firm of Gobind Ram under instructions from, the firm of Mithu Lal. According to his view, the plaintiff, the assignee of the firm of Mithu Lal Gopal Dass was entitled to recover from the firm of Gobind Ram the price of 28 bags of wheat and Rs. 356-1-3. But he held that the assignment in favour of the plaintiff by the firm of Mithu Lal Gopal Dass was not valid, and he therefore dismissed the suit. On the question of limitation, he held that the suit was within limitation. The plaintiff has come in appeal to this Court. In dealing with the first transaction, the learned Subordinate Judge has taken into account the price of four bags 'of gram, 9 hags of arher and 353 empty bags. As already remarked, he held that only a sum of Rs. 1,771-13-3 was due to the plaintiff in respect of the first transaction. Both sides accept this position. The real dispute between the parties is about 887 bags of wheat. What I have to see is whether the finding of the Court below about the sale of 864 bags is correct. I may state here that when the firm of Mithu Lal. started purchasing grain through the agency of the contesting defendants, they had deposited a sum of Rs. 1,300 as cover or margin money. The purchases were made by the contesting defendants. To the sellers of the grain the contesting defendants were liable for the price. 887 bags of wheat has been purchased on different dates between 5th of July and 15th of September 1924. At the time, wheat was selling at the rate of '6 seers and 2 chhataks per rupee. The evidence of Radha Kishen, one of the contesting defendants, is that after this purchase, the rates began to fall. In November 1924, the rate of wheat had become cheap. It was being sold at 6 seers and 11 or 12 chhataks per rupee. To the same effect, we have the evidence of Ram Prasad, the munim of the contesting defendants, who says that the rates had begun to fall. I do not see any reason for not accepting this statement of these two witnesses.

3. The contesting defendants keep a bahi in which extracts of letters sent by them are noted. At p.71 of the paper books, extracts from two letters are given. One is from a letter dated 5th October 1924. In this letter, which was sent to Mithu Lal Copal Dass, the contesting defendants ask that a sum of Rs. 3,000 be sent to them. Information is also conveyed that 'worms have begun to cat into your wheat.' Radhe Kishen, defendant, in his evidence says that the demand for Rs. 3,000 was made after 232 out of 887 bags had been sold but this appears to be incorrect. The second letter is dated 21st October 1924. In this letter, again a demand is made for Rs. 3,000. The firm of Mithu Lal is also warned that if the demand is not complied with then the wheat lying would be sold at market rate. Mithu Lal admits having received the two letters of which the extracts are printed at p. 71 of the paper book. The evidence of Radhe Kishan, defendant, and Ram Prasad munim goes to show that when these letters were written, the rates had gone down and as the firm of the contesting defendants had invested a large sum of money in purchasing wheat for the firm of Mithu Lal, they were anxious and so the firm demanded that Mithu Lal should send another sum of Rs. 3,000 as margin money. At p.50 of the paper book, we have a post card sent by Mithu Lal to the contesting defendants on 15th October 1924. In this Mithu Lal shows keen interest in ascertaining the current market rates and informs the contesting defendants that he would arrive at Sambhal as soon as the railway line was re-opened. We are told that in that month there had been a breach in the railway line to Sambhal owing to heavy floods. These three documents clearly go to show that both sides Were anxious about the grain as the rates were going down.

4. The evidence produced in the case establishes that the contesting defendants sent to Calcutta for sale 232 bags of wheat in the month of November 1924, and 632 bags in January 1925. Total 864 bags. The question to be decided is whether these were sold according to the instructions of the firm of Mithu Lal as alleged by the contesting defendants. In my opinion, the learned Subordinate Judge has given good reasons for holding that it was proved that these bags had been sent to Calcutta for sale under the orders of the firm of Mithu Lal Gopal Dass. Radhe Kishen, defendant 1, and Ram Prasad, munim, stated that these bags were sent to Calcutta under the personal supervision of Mithu Lal who had himself gone to Sambhal and had orally asked the contesting defendants to send the bags to Calcutta for sale. (After considering the evidence, the judgment proceeded). For the reasons given above, I am of opinion that the finding of the learned Subordinate Judge to the effect that bags of wheat were sent to Calcutta by the contesting defendants with the oral permission of the firm of Mithu Lal Copal 'Dass and under its personal supervision is correct and should be affirmed. The contesting defendants have proved that 864 bags of wheat were sent to Calcutta in November 1924 and January 1925 under the instructians of the firm of Mithu Lal Gopal Bass. They further wished to show that out of the 887 bags belonging to Mithu Lal, 28 bags of wheat had been eaten up by moth larvae. The learned Subordinate Judge did not al-low the contesting defendants to produce any evidence to prove that 28 bags of wheat was eaten by moth larvae as no such plea had been taken in the defence. Now, it appears to me that the probabilities are that some wheat must have been eaten up by moth larvae because we find that in the letter which was written to Mithu Lal on 5th October 1924, it was mentioned that moths had begun to eat his wheat. But I think that as no such plea had been taken in the written statement, the Court below was justified in not allowing the defendants to make out a case not set out in the statement. So, the contesting defendants are liable to account to the plaintiff for the price of 28 bags of wheat in addition to the sum of Rs. 356-1-6 admitted to be due.

5. The next question for consideration in this case is whether the plaintiff, an assignee of the firm of Mithu Lal Gopal Dass, has a right to sue. The contention raised by the contesting defendants is that the plaintiff had purchased a bare right to sue which could not be transferred in view of the provisions of Section 6, Clause (e), T.P. Act, and so he is not competent to maintain the suit. The plaintiff contended that what had been assigned to him by his assignors was a debt due to them from their agents on account of transactions of sales and purchases, and, as such, it was an actionable claim which could be transferred. The learned Subordinate Judge accepted the contention of the defendants and dismissed the suit. Before dealing with the legal aspect of the question, it is necessary to look into the terms of the deed of assignment in order to see what the subject-matter of the assignment was. The deed of assignment (pp. 56 and 57) recites that the assignors were assigning their right to the profits in the second transaction and in the accounts and advance of the first transaction. The claim of the assignors, as against the contesting defendants, is valued in the deed at Rs. 5,100 and the sale of the claim is made in favour of the plaintiff for a sum of Rs. 3,000. It is stated in the deed that the assignors several times asked the contesting defendants to render an account but this demand was not acceded to. After a perusal of the deed, I am of opinion that so far as the assignment of the right of the assignors in respect of the first transaction is concerned, the plaintiff is entitled to maintain the suit. The assignors had purchased some grain through the contesting defendants. They also deposited some cover money with the defendants. The grain was sold. The sale money was deposited with the defendants. The assignors were entitled to recover from the contesting defendants an ascertained amount. The assignors assigned to the plaintiff an actionable claim or, in other words, a debt which they were quite competent to do.

6. As regards the assignment of the assignors' right in respect of the second transaction, the case stands on a different footing altogether. Sometime after the first transaction, the firm of Mithu Lal Gopal Das purchased more wheat (887 bags) through the agency of the contesting defendants. At the time of the assignment, under which the plaintiffs come to Court, the assignors asserted that the commission agents had wrongfully sold these bags without their authority. The assignors believed that on taking account a sum of money would be found due to them. In para. 16 of the plaint it is stated:

The defendants first party were repeatedly asked to render an account and to pay the remaining amount due to the defendants second party, of which the plaintiff is the owner by virtue of the sale-deed, after deducting the amount of commission expenses, etc. But they did not render the amount at all....

7. It appears that so far as the second transaction is concerned, what the plaintiff purchased was 'a right to sue for damages after settlement of account.' It is true that in the sale-deed, the assignors have given an estimated value of their claim. But that fact, by itself, cannot convert a mere right to sue into an actionable claim. In substance the sale was of a right to sue for damages which might be found due in case the allegations of the plaintiff about the alleged breach of contract were true. Under the Transfer of Property Act, an actionable claim can be transferred. An actionable claim means a claim to a debt. In its primary senses a debt is a liquidated money obligation, and it is an essential feature of an action for debt that it should be for a liquidated or a certain sum of money. I apprehend that a right to recover an uncertain amount cannot be said to be a debt. In the case before us, the deed of assignment and the frame of the suit go to show that what the plaintiff claims is, so far as the second transaction is concerned, damages, unascertained at the time of the institution of the suit, resulting from a breach of contract on the part of the contesting defendants. The question as to whether or no, the plaintiff was entitled to recover any damages depended on his allegation that the contesting defendants had sold the goods without getting the instructions of the assignors. Till the establishment of that point in plaintiff's favour, it could not be known as to whether any damages were due to him at all. So, it cannot be said that what was sold to the plaintiff under the assignment was an actionable claim as defined in Section 3, T.P. Act.

8. The next point that arises for consideration is whether the transfer of a right to sue to recover unascertained damages for a breach of contract offends against the provisions of Section 6, Clause (e), T.P. Act. Clause (e), Section 6, T.P. Act, lays down that a mere right to sue cannot be transferred. The contention raised by the learned Counsel for the appellant is that a right to recover damages arising out of a breach of contract is capable of a valid transfer and does not offend against the provisionss of Section 6, Clause (e), T.P. Act. In support of his contention, the learned Counsel for the appellant has cited some rulings. The first ruling relied upon by him is the one reported in Churamoni Mandal v. Rajindra Kumar (1917) 42 IC 390. It is a Calcutta case. It was laid down in it that:

the right to recover money, which might be found due on taking accounts from an agent, was not a mere right to sue within the meaning of Section 6, Clause (e), T.V. Act, but was an actionable claim which was capable of transfer and the transferee could maintain a suit in his own name against the agent for the recovery of such amount as might be found due on taking accounts from him,

9. There can be no doubt that the view taken in this ruling supports the contention of the learned Counsel for the plaintiff-appellant. The next case on which the appellant relies is reported in A.I.R. 1930 Bom. 409 (Nagappa v. Badrl Dass ). A careful perusal of this case would show that as a matter of fact it does not support the contention of the appellant. Rather, it goes against him. At. p.410, we find the following observations:

So, on the uncontradicted evidence before the Judge, I think, he was entitled to find that in fact the amounts were ascertained and a sum was arrived at between the parties. That being so, that to my mind would mean apart from any authority, that there was here an ascertained sum. duo from the defendants to the plaintiffs, in other words, a debt.

10. Dealing with the view taken in a Calcutta case, Abu Mahomed v. S.C. Chander (1909) 36 Cal 345, the learned Judge made the following observations:

This was held merely to be a claim for unliquidated damages for breach of contract and therefore not assignable. There to prove the claim, the market price at the date of the breach would have to be ascertained and this might involve calling several witnesses.

11, From these observations it would be clear that the learned Judge who decided that case was of opinion that a claim for unliquidated damages could not be assigned. Having regard to the facts of the particular case before him, he arrived at the conclusion that it was a case in which the plaintiff had assigned a debt already due. It must therefore be held that this ruling is no authority for the contention put forward on behalf of the appellant. Reliance was placed on Jagat Chander Roy v. Iswar Chander (1893) 20 Cal 693. But, in my opinion, that case has no bearing on the point in issue. What the case decided in that case was that the share of a partner in the partnership business was saleable, property within the meaning of those words in Section 266, Civil P.C., and could be attached and sold by an execution creditor in execution of a decree against that partner. The next case relied upon by the learned Counsel for the appellant is the one reported in Madho Das v. Ramji Patak (1894)16 All 286. In that case, it was held that when money is due by an agent or vendee to his principal or vendor, the principal's or vendor's claim against his agent or vendee may be attached and sold in an execution of a decree against the principal or vendor as a debt under Section 266, Civil P.C, and it is not necessary that the exact amount due to the principal or vendor should be ascertained prior to attachment or sale. In the course of the judgment, the learned Judges who. decided that case made the following observations:

What was attached here was, in our opinion, a debt; although the amount of the debt was unascertained, it was capable of being ascertained, and as such debt it was attachable under Section 268. Civil P.C. it was not a mere right to sue for amages which would have been excluded from attachment by the proviso of that section.

12. In my opinion, the ruling reported in Maddho Das v. Ramji Patak (1894) 16 All 286, is not applicable to the case before us. That was not a case in which the claim was to recover unascertained damages on a breach of a contract. It may also, be pointed out that at the time that case was decided, the law on the point was somewhat different. According to the repealed Section 130, T.P. Act, for which the present definition in Section 3 was substituted by the Amendment Act, 11 of 1900, Section 2, any claim which could be recognised by the Courts as affording grounds for relief was an actionable claim. It appears to me that according to the definition of the actionable claim, as given in Section 3, TP. Act, now, the right to damages accruing after the occurrence of a breach is not an actionable claim but. a mere right to sue. Before the Amendment Act 11 of 1900', Clause (e), Section 3, T.P. Act, laid down that a mere right to sue 'for compensation for a fraud or for harm illegally caused' could not be transferred. After the amendment of 1900, Clause (e), Section 6, T.P. Act, is differently worded. The clause, as it now stands, prohibits the transfer of a mere right to sue.

13. Now, let us turn to the ruling cited on behalf of the respondent. The leading case on the point, on which reliance has been placed, is reported in Abu Muhammad v. S.C. Chundur (1909) 36 Cal, 345, in which it was held that a claim for damages for breach of contract, after breach, was not an actionable claim within the meaning of Section 3, T.P. Act, and therefore could not be transferred. The next case relied on is the one reported in Jewan Rani v. Ratan Chand Krishen Chand AIR 1921 Cal 795. In this case, the learned Judges field that there was authority both English and Indian for the view that a claim to unliquidated damages for breach of contract was not asssignable. At one place in the judgment, we find the following observations:

Moreover, when an ordinary commercial contract for sale of goods has been broken and subsists only for the purpose of enforcing a claim to damages, it in to my mind difficult to pay that the right to damages is, standing by itself, anything more than a more right to sue, a right which is not incidental to property but is incidental to abstract right in respect of contracts comparable to the abstract rights to personal safety and immunity from fraud in the region of torts.

14. The next case relied on is reported in Khetra Mohan Das v. Biswa Nath Bera : AIR1924Cal1047 . A Bench of two learned Judges of the Calcutta High Court decided that a right to take accounts and to recover such sums as may be found due was not assignable being a mere right to sue within the meaning of Section 6, Clause (e), T.P. Act. The, same view was taken by the Bombay High Court in the case reported in Hirachand. Amichand v. Nemchand Fulchand AIR 1923 Bom 403, and by the Punjab Chief Court in Janglimal v. Pioneer Flour Mills AIR 1914 Lah 510. On a review of the authorities cited before us, I. am of opinion that the correct view is that a claim for unliquidated damages for breach of contract, after the breach, is not an 'actionable claim,' within the meaning of Section 3, T.P. Act, and cannot be transferred because of the provisions of Clause (e), Section 6, T.P. Act. For the reasons given above, I hold that the deed of assignment, so far as it relates to the transfer of the assignors' right in respect of the first transaction, is good and valid. It is invalid in respect of the transfer of the assignors' right about the second transaction.

15. On behalf of the contesting defendants, it was urged that the suit of the plaintiff was not within limitation as it was governed by Article 62, Limitation Act. It was said that the agency terminated on 29th January 1925, when the plaintiffs' assignors are said to have been informed of the sale of the last lot of wheat bag. In my opinion, Article 62, Limitation Act, is not applicable to the case. In Subha Row v. Rama Row (1917) 40 Mad 291, it was held that Article 62 could only apply to cases where a definite sum of money had been received by the defendant and which he was to hold for the use of the plaintiff, and that it was not applicable to cases where the defendant was asked to account for moneys and where the person collecting was entitled to just allowances. In my opinion, the learned Subordinate Judge was right in holding that Article 89, Limitation Act, applied to the case in suits for accounts between principal and agents. It has been found that the contesting defendants credited the plaintiff's assignors with the proceeds of sale of nine bags of arher on 26th Septemhcr 1925. Thus it will be seen that till at least that dale the agency did not terminate. The suit having been instituted within three years from that date is within limitation.

16. Under Article 89, the period begins to run from the date on which accounts are demanded and refused during the continuance of the agency, or from the date on which the agency terminates. The defendants contended that the agency terminated on 29th January 1925, when the plaintiff's assignors were told about the sale of the last lot of the wheat bags. But this plea is not correct. The evidence of Ram Prasad, the munim of the defendants, is that several days after the sale of 'the bags in Calcutta Mithu Lal went to the defendants and when he was offered Rs. 356 he did not take it saying that he would transact further business with them: See p. 27 of the paper book. In view of this statement of Ram Prasad, it is not correct to contend that the agency had terminated on 29th January 1925. The contesting defendants have not given any evidence to prove the exact date on which, according to them, the agency terminated. So, it will be taken that the agency continued till the demand for accounts made by the assignors of the plaintiffs on 2nd March 1925, was refused. The suit is therefore within limitation. The learned Subordinate Judge has found that about the first transaction a sum of Rupees 1,771-13-3 is due to the plaintiff. But the defendants have established that the wheat purchased by the assignors of the plaintiff at the time of the second transaction was sold at a loss. They are entitled to claim an equitable set off in respect of such loss. The plea of set off is a good ground for defence. If established it affords an answer to the plaintiff's claim wholly or protanto. In the case before us the contesting defendants have proved by their account books that on taking account in respect of both the transactions only a sum of Rupees 356-1-3, is due to the plaintiff. The plaintiff is entitled to recover this sum from the contesting defendants together with the price of 28 bags of wheat not accounted for by the defendants. The price of these 28 bags of wheat (each containing 21/2 mds.) according to the rate agreed upon by the parties, comes to Rs. 553 (see the statements of the pleaders for par-tics at p. 19). Thus the total amount due to the plaintiff from the contesting defendants comes to Rupees 909-1-3. The plaintiff is, in my opinion, entitled to a decree for this amount. I therefore allow the appeal, modify the decree of the Court below and grant the plaintiff a decree for Rs. 909-1-3. The rest of his claim stands dismissed. The plaintiff and the contesting defendants will pay and receive costs in both Courts according to their success and failure.

Niamatullah, J.

17. I agree.


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