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Joti Prasad and anr. Vs. Hardwari Mal and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Judge
Reported inAIR1932All128; 137Ind.Cas.334
AppellantJoti Prasad and anr.
RespondentHardwari Mal and anr.
Excerpt:
partnership - suit for accounts--amounts paid as bribes, whether can be allowed--costs--parties coming with unclean hands--interest after decree--discretion of trial court--interference in appeal--civil procedure code (act v of 1008), sections 34, 35, order xxvi--commission--evidence on debatable points. - - the parties to receive and pay costs in proportion to success and failure. we are clearly of opinion that the view taken by the courts below was equitable and the finding on this point ought not to be disturbed. the commissioner's observations in this connexion are interesting and may be reproduced. i am not supposed to take serious notice of, if once i am satisfied that they were paid, on a consideration of all the facts of the case, i do not feel justified in allowing the sum of..........it has been contended by the defendants that the firm was entitled to a credit of rs. 2,525 spent on bribes to nabus, jamadars and havildars of the military department at dehra dun. it is common ground that bribes used to be given to certain persons from time to time and were indeed a part of the system maintained by the firm. the parties have admitted the existence of this system unblushingly and with utmost coolness. they have also admitted that the object of the bribes was inter alia to defraud the government. (sic) entries in the (sic) as to the payment of these (sic) the correctness of some of these, entries has been repudiated by the plaintiffs. according to the plaintiffs, these entries may be classified under two denominations: ba-badal and be-badal. when bribe is offered.....
Judgment:

Sen, J.

1. This is an appeal by the defendants from a final decree in a suit for rendition of accounts upon a dissolved partnership. It is not controverted that the parties took a contract to supply firewood to the Military Department at Dehra Dun in the names of the defendants for the financial year commencing on 1st April 1921, and ending on 31st March 1922, and were partners in the profit and loss in equal moieties. The plaintiffs also claimed to be the partners with the defendants in a contract for supplying grass to the Military Department. The defendants contended that the plaintiffs had no concern with the grass contract; that no interest between the parties had been agreed upon and that accounts between the parties had already been settled. The Court of first instance upheld the contention that there was no partnership in the gross concern. It held that there was an agreement to pay interest at the rate of annas 12 per cent per month and that no accounts had been rendered by the defendants to the plaintiffs. Upon these findings, it passed a preliminary decree in favour of the plaintiffs on 30th April 1924.

2. The partnership was dissolved on 1st April 1922. The suit was instituted on 16th June 1923.

3. Plaintiffs preferred an appeal impugning the finding, relating to the alleged partnership for supply of grass to the Military Department. The defendants prefsrred a crossobjection in which they challanged the finding of the trial Court relating to interest. The appeal and the cross-objection were dismissed on 6th January 1926.

4. A Commissioner was appointed and the case was referred to Babu Triloki Narain to examine the accounts and to report what sum of money, if any was due from the defendants to the plaintiffs. The Commissioner submitted two reports, the first, dated 19th April 1926 and the second, dated 16th June 1926. Both parties had grievances about the report and filed objections. After considering the objections the trial Court passed the following decree in favour of the plaintiffs on 25th June 1926:

Suit for the recovery of Rs. 6,630-4-6 with interest at 9 per cent per annum from 1st April 1922 to 16th June 1923, the date of institution of this suit, and also interest pendente lite excluding the period occupied by plaintiffs' appeal; and future interest at 8 annas per cent per mensem is decreed. The parties to receive and pay costs in proportion to success and failure.

5. The defendants filed an appeal. The plaintiffs preferred a cross-objection under Order 41, Rule 24, Civil P.C. The lower appellate Court allowed the appeal in part and dismissed the cross-objections and directed that the parties should bear their own costs.

6. The defendants have preferred an appeal and the plaintiffs have filed a cross, objection.

7. The points which emerge from the arguments of the parties will be dealt with in seriatim.

8. The defendants contended that Rs. 720 should be debited against the firm for conveyance allowance. The conveyance in question was not exclusively used by the firm. It was also in the private use of the defendants. The Courts below in agreement with the Commissioner allowed Rs. 360 to be debited against the firm. We are clearly of opinion that the view taken by the Courts below was equitable and the finding on this point ought not to be disturbed.

9. It has been contended by the defendants that the firm was entitled to a credit of Rs. 2,525 spent on bribes to Nabus, jamadars and havildars of the Military Department at Dehra Dun. It is common ground that bribes used to be given to certain persons from time to time and were indeed a part of the system maintained by the firm. The parties have admitted the existence of this system unblushingly and with utmost coolness. They have also admitted that the object of the bribes was inter alia to defraud the Government. (sic) entries in the (sic) as to the payment of these (sic) The correctness of some of these, entries has been repudiated by the plaintiffs. According to the plaintiffs, these entries may be classified under two denominations: ba-badal and be-badal. When bribe is offered to a Government employee in return for material gain or benefit to the firm it is said to be ba-badal. When there is no return of that kind, it is said to be be-badal. The plaintiff's do not object to the entries in the account books relating to the payment of bribes which are ba-badal and sums shown to have been paid under this head have been allowed as duly accounted for. The Commissioner's observations in this connexion are interesting and may be reproduced.

Before dealing with these contentions it may 'be useful to explain the meaning of ba-badal bribe as it is practised in this much respected department. It is practised in this way. The employee concerned to receive the supper on the part of the Government from the contractor gives a receipt for the whole quantity ordered, while he actually receive a shorter quantity. The value of the difference is divided between the contractor and the employee. This amounts to nothing but a conspiracy on the part of the employee and the contractor to defraud the Government to fill their own pockets. In this case large sums of money have been found entered in the name of havildars and jamadars and babus and the number on pounds of firewood released as above in lieu of them are also entered. Now as regards the other bribe. Apart from the moral aspect of the thing, which. I am not supposed to take serious notice of, 'if once I am satisfied that they were paid, on a consideration of all the facts of the case, I do not feel justified in allowing the sum of money. In the first place, I am not satisfied that all this money was paid in bribes, although there is the possibility of something having been paid present to my mind. In such a case allowing anything in a sort of quantum meruit sense is out of. the question.

10. This sum of Rs. 2,525 has not been allowed for by either of the Courts below. The lower appellate Court ruled that an item like this should not be allowed on grounds of public policy.

It is something highly demoralising. Then it is not easy to say how much money was actually spent in bribes.

11. It is of course opposed to public policy to offer bribes to a public servant to corrupt him and to alienate him from the discharge of his duties. An inquiry into the character of the bribes, whether it is ba-badal or ba-badal is entirely beside the mark. The finding that expenditure on bribes is opposed to public policy is irrelevant, and unproductive. The bribe in question is not the consideration of a contract which is sought to be 'enforced by the defendants. If the bribes have been paid out of the assets of the: firm, the partnership funds become reduced in value to the extent of the amounts so paid. If the defendants on. behalf of the firm, with the express or implied consent or concurrence of the plaintiffs, spent Rs. 2,525 or any part of it on bribes, the defendants are entitled to maintain that those sums have been duly accounted for. 4?laintiffs deny that Rs. 2,525 were spent on bribes in whole or in part and that the entries in the defendants' account books are false and fictitious. Neither the Commissioner nor any of the Courts below have gone into the question whether the sum of Rs. 2,525 in whole or in part was spent on bribes as alleged by the defendants. They have not also tried the further question whether the money was spent on behalf of the firm or with the consent, or concurrence of the plaintiffs. If the amount has already been spent as is alleged by the defendants, so much of the money has gone out of the assets and is no longer available for distribution between the parties. If the amounts have been spent for the firm, it will not be fair and just to debit the entire amount so spent against the defendants, simply upon the ground that the defendants happened to be the writers of the account books.

12. This part of the case has not been approached by the Court below from the, proper angle and we think it necessary to remit certain issues to the lower appellate Court. We shall presently indicate these issues.

13. It appears from the Commissioner's report that out of the firewood purchased by the firm about 13,000 maunds have not been accounted for by the defendants. The Commissioner therefore debited against the defendants Rs. 2,400 which represented the value of the firewood not accounted for. The defendants contended that the reason why firewood of this value was not to be found was that it was lost as the result 'of natural waste in conveyance, splitting, storage, driage, etc.' The contention of the defendants, that about 13,000 maunds out of 79,000 maunds vanished in this way borders almost, upon the ludicrous. The point however has not been tried 'or determined on the merits. The point was raised before the Commissioner. No evidence was allowed to be tendered. The defendants asked for permission to prove their allegation in the trial Court, but their application was refused. There is nothing in Order 26, Civil P.C., which prevents the Court from accepting evidence on a debatable point between the parties where a Commissioner has been appointed to examine and report on the accounts. We are of opinion that the defendants have not had any chance to prove this part of the case, and we think it proper to remit an issue on this point as well.

14. The plaintiffs object to the decree of the trial Court on the ground that they should have been allowed interest on the decretal amount for the period between 30th April 1924 and 1st January 1926. They also contend that they were entitled to interest for the period between 17th June and 30th April 1924, at the contrac tualrate. Under Section 34, Civil P.C., it was within the competence of the Court to allow or to disallow interest as also to prescribe the rate of interest for the period allowed. We are of opinion that in the matter of interest, the trial Court was entitled to exercise its discretion and has exercised its discretion. Under the circumstances we shall not be justified in disturbing this part of the decree.

15. The lower appellate Con ft, while modifying the decree of the trial Court, has allowed the parties to bear their own costs. In the ordinary course of events costs should have followed the result. But in this case where both parties come into Court with unclean hands, there was legitimate ground for the Court to order that the parties should bear their own costs. We are therefore of opinion that this part of the decree should not be interfered with.

16. By the decrees of the Courts below, all the outstandings have been allotted to the share of the defendants. It appears that the defendants spent Rs. 460-14-0 on litigations for recovery of certain outstandings. The lower appellate Court has ordered that this sum of Rs. 460-14-0 should be divided half and half between the parties. We are of opinion that t-here was no justification for this order. Where the-defendants instituted suitsfor recovery of outstandings, the amounts legitimately incurred by them must form part of the taxed costs in the decree. There is nothing on the record to show that these costs aggregating to Rs. 460-14-0 do not form part of the decretal (sic) the circumstances it would (sic) to apportion this amount and diagram plaintiffs with half of it. The cross-objection succeeds to this extent.

17. In view of what we have said above, we cannot dispose of this appeal without having findings from the lower appellate. Court on the following issues:

1. Whether Rs. 2,525 or any part of it, and if so how much was actually paid as bribe by the firm or under circumstances which make it a payment by the firm

2. Whether the defendants are entitled to any allowance, and if so, to what extent for loss-caused by natural wastage in conveyance, splitting, storage, driage etc. as claimed by them.

18. Parties will be at liberty to adduce further evidence. The lower appellate Court is directed to submit its findings on these: issues within two months of the arrival of the record. Upon return of the findings ten clays' tune will be allowed for objections.


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