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Popsingh Mahadeo Prasad Vs. Dipchand Ray and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtOrissa High Court
Decided On
Case NumberFirst Appeal No. 55 of 1951
Judge
Reported inAIR1960Ori123; 26(1960)CLT471
ActsPartnership Act, 1932 - Sections 69(2); Limitation Act, 1908 - Articles 61 and 64; Code of Civil Procedure (CPC) , 1908 - Sections 9
AppellantPopsingh Mahadeo Prasad
RespondentDipchand Ray and anr.
Appellant AdvocateL.K. Dasgupta, Adv.
Respondent AdvocateR.N. Misra, Adv.
DispositionAppeal dismissed
Cases ReferredLaksbmiji Sugar Mills v. Banwari Lal Tandon. In
Excerpt:
.....of the indian partnership act as well as of limitation. according to the defendant, the plaintiff popsing mahadeo prasad is a partnership firm and the suit is bound to fail since the said firm has not been registered as required under the indian partnership act, 1932 (act iv of 1932). sub-section (2) of section 69 of the act lays down that no suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and persons suing are or have been shown in the register of firms as partners in the firm. ' thus, according to the plaintiff the final refusal was on 24-9-47. the suit having been filed on 27-9-50 is clearly barred. in my opinion clearly article 61 applies and the suit is barred by..........but it was the name of a registered firm.he also admitted that he was the managing partner of the firm popsing mahadeo prasad. the certificate of registration has not been filed in this case. hence, there is nothing on record to prove that popsing mahadeo prasad is a registered firm. on the contrary p. w. 3 biehhand chhatar the manager of the plaintiff frankly admitted that popsing mahadeo prasad is not a registered firm. mahadeo prasad is the managing partner of the firm popsing mahadeo prasad.lachmi narayan, p. w, 4, a partner in the firm of popsing rice mill with mahadeo prasad also admitted that he had no definite share in the business of popsing mahadeo prasad, although he had four annas interest in the popsing rice mill. thus, from the above evidence it is fairly clear that.....
Judgment:

Das, J.

1. This is a plaintiff's appeal against an order of the Additional Subordinate Judge, Balasore, dismissing his suit. The facts leading up to this appeal are these.

2. The plaintiff was appointed as a sub-agent under Raghunath Rai Hargovind Ltd. (defendant No. 1) who was appointed as a purchasing agent by the State of Orissa acting through the Collector of Balasore (defendant no. 2). This appointment was made under the Central Purchasing Scheme for the year 1943. According to the terms and conditions of the agreement the plaintiff was to procure stocks of rice and paddy requisitioned or otherwise, despatch and dispose of the same from time to time under the orders and directions of the defendants. The defendants were to pay to the plaintiff the prime costs, as well as other incidental charges such as costs of sewing, bagging handling, storage and all other costs of transport including the charges for gunny incurred by him from time to time in connection with the sub-agency.

The plaintiff was to get commission at the approved rate. At the termination of the agency, the defendants were to re-settle the accounts with the plaintiff and pay the balance if any. Thus, it is alleged by the plaintiff that in pursuance of the said agreement the plaintiff procured and disposed of 4294 maunds and 19 seers of paddy and 35, 603 maunds and 26 seers of rice in accordance with the directions of the defendants and incurred certain, incidental charges for sewing, bagging, storage and handling etc.

Out of the total costs of Rs. 1,25,545-12-3, the plaintiff has been paid a sum of Rs. 1,10,500-10-3 including the price of 990 maunds of rice disposed locally and a cash advance of Rs. 10,000/- received from the first defendant. Accordingly the plaintiff claimed recovery of the balance amount of Rs. 15,045-2-0 or in the alternative the amount that would be found due to him on taking accounts from the defendants.

3. Both the defendants contested the suit. It, was contended On behalf of the State of Orissa (defendant no. 2) that the suit is bad for mis-joinder and defendant No. 2 is not a necessary party to the suit. There was no privity of contract between the plaintiff and the second defendant and as such the plaintiff cannot claim any relief against the second defendant.

4. Defendant 1 was the main contesting defendant. He pleaded amongst others that the plaintiffs' suit is not maintainable and their claim, it any, is barred by limitation, It was further alleged that the plaintiff worked as a sub-agent under Raghunath Rai Hargovind Ltd. on condition that he would render accounts to the purchasing agent regarding the stock of rice and paddy procured and finally disposed of under their orders. The plaintiff failed to render such accounts in spite of repeated demands. This defendant, however, denied the accounts as given in the schedule to the plaint.

Regarding the stocks procured and disposed of by the plaintiff and other incidental charges alleged to have been incurred and claimed by the plaintiff, he further pleaded that the plaintiff committed fraud in respect of the stock of rice belonging to Messrs. Ispahani which was to come to the accounts of the purchasing agent and has filed the suit with a view to avoid the legal steps which this defendant was contemplating to take against him for misappropriation of money.

5. On these pleadings several issues were raised; the main being issue no. 2 regarding limitation and maintainability. The trial Judge on a careful analysis of the evidence on record, came to the conclusion that the suit is clearly barred under Sub-section (2) of Section 69 of the Indian Partnership Act. He also held that whether Article 61 or Article 64 of the Limitation Act was applicable, the suit is barred by limitation. He further held that the plaintiff has not been successful to establish all the items of claim by production of satisfactory account. Accordingly he dismissed the plaintiff's suit. It is against this judgment that the present appeal is filed.

6. Mr. L. K. Dasgupta, learned counsel on behalf of the plaintiff-appellant, did not want to press this appeal against the State of Orissa (defendant No. 2). He confined his argument only in respect of defendant no. 1 and challanged the finding of the trial judge in respect of both the bar under Sub-section (2) of Section 69 of the Indian Partnership Act as well as of limitation. He argued that the suit though filed in the name of Popsing Mahadeo Prasad it was an individual suit by Mahadeo Prasad since in the plaint Popsing Mahadeo Prasad had been described as the son of Popsing.

His whole contention was that it was Mahadeo Prasad who filed the suit in his individual capacity and not as a partner of the firm of Popsing Mahadeo Prasad. According to the defendant, the plaintiff Popsing Mahadeo Prasad is a partnership firm and the suit is bound to fail since the said Firm has not been registered as required under the Indian Partnership Act, 1932 (Act IV of 1932).

Sub-section (2) of Section 69 of the Act lays down that no suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and persons suing are or have been shown in the Register of Firms as partners in the firm. It was argued that no such specific plea was taken in the written statement filed on behalf of the first defendant. The evidence in this case, however, was that Mahadeo Prasad verified the plaint as the managing partner of the firm.

It is clear from the evidence of D. Ws. 1 and. 2, the accountant of the Civil Supplies Office, Ralasore, and Dayanidhi Bal, a zamindar of Chandbali respectively that it was the firm of Popsing Mahadco Prasad who was appointed the Sub-agent, for Bhaurak area and D. W. 2 categorically stated that Mahadeo Prasad is never called or known as Popsing Mahadeo Prasad. An attempt, however, was made by the plaintiff who examined himself as P. W. 1 to show that he is known as Popsing Mahadeo Prasad but he was constrained to admit in his cross-examination that Popsing Mahadeo Prasad is not the name of any individual but it was the name of a registered firm.

He also admitted that he was the managing partner of the firm Popsing Mahadeo Prasad. The certificate of registration has not been filed in this case. Hence, there is nothing on record to prove that Popsing Mahadeo Prasad is a registered Firm. On the contrary P. W. 3 Biehhand Chhatar the manager of the plaintiff frankly admitted that Popsing Mahadeo Prasad is not a registered firm. Mahadeo Prasad is the managing partner of the Firm Popsing Mahadeo Prasad.

Lachmi Narayan, P. W, 4, a partner in the firm of Popsing Rice Mill with Mahadeo Prasad also admitted that he had no definite share in the business of Popsing Mahadeo Prasad, although he had four annas interest in the Popsing Rice Mill. Thus, from the above evidence it is fairly clear that Popsing Mahadeo Prasad is an unregistered firm and it is the said unregistered firm which was appointed as the sub-agent under the first defendant with the concurrence of the second defendant. The suit has been filed by the unregistered firm Popsing Mahadeo Prasad. From Ext. 17 the letter of appointment it is evident that the firm of Popsing Mahadeo Prasad was appointed the Sub-agent. Ext. 17 runs as follows:

'Whereas the Government of Orissa have been pleased to appoint me purchasing agent for the district of Balasore under the central purchasing scheme and whereas I have appointed you my sub-agent for purposes of the scheme, I do hereby authorise you Popsing Mahadeo Prasad to purchase on my behalf all available food-grains for the Government of Orissa, this day, the 21st May, 1943.

Sd. Dipchand Ray

Authorised Agent and General Manager,

Raghunath Ray Hargovind Ltd.'

7. An identical question came up for decisions before a Division Bench of this Court in the unreported case of the Balasore Textile Distributors Association v. Indian Union, First Appeal No. 20 of 1951: (AIR 1960 Orissa 119). In that case no specific plea under Sub-section (2) of Section 69 of the Indian Partnership Act was taken in the written statement, but there was necessary evidence for the application of that Section to be found on the record. Thus the Division Bench to which I was a party, took the view that when the necessary facts for the application of that Section have been brought to the notice of the Court, it cannot be a party to the perpetration of an illegality.

While arriving at this conclusion, we relied upon a decision of the Judicial Committee in the case of Surajmal v. Triton Insurance Co., AIR 1925 P. C. 83. The decision in the aforesaid Privy Council case was subsequently followed by the Nagpur High Court in the case of Mohanlal Jagannath v. Kashiram Gokul, AIR 1950 Nag 71. A passage from the judgment of Lindley, LJ. in the case of Soott v. Brown, Doering McNab and Co., (1892) 2 QB 724 (728) is worth quoting :

'It matters not whether the defendant has pleaded the illegality or whether he has not. If the evidence adduced by the plaintiff proves the illegality, the Court ought not to assist him.'

To the similar effect was a decision by the Calcutta High Court in the case of Gopinath Motilal v. Ram-das, AIR 1936 Cal 133. Mr. Dasgupta, however, contended that that decision of the Division Bench is not a correct decision. I cannot accept this contention. The above decision of a Division Bench of this Court is doubtless binding upon this Bench. Accordingly, there does not appear to be any merit in this contention of Mr. Dasgupta and the suit being by an unregistered firm must be held to be barred under Sub-section (2) of Section 69 of the Indian Partnership Act.

8. Coming to the question of limitation, the suit admittedly was filed on 27-9-50. According to the defendant either Article 61 or Article 64 of the Indian Limitation Act (Act IX of 1908.) is applicable to the facts of this case whereas according to the plaintiff Article 120 is applicable. Thus, the defendant contended that the plaintiff's claim is barred by limitation in either case whether Article 611 or Article 64 applies. The plaintiff by this litigation doubtless seeks to recover a definite sum of money expended by him towards the prime cost and Other incidental charges while working as the Sub-agent under defendant No. 1. In that event according to the defence, the suit must be governed by Article 61 of the Limitation Act.

The plaintiff, however, in the alternative claimed that he is entitled to the money found due from the defendant to the plaintiff on accounts stated between the parties. In that event according to the defence Article 64 would be applicable. The argument on behalf of the plaintiff in essence was that the plaintiff's suit being a suit for accounts is covered by the residuary Article 120. Thus, it comes to this that the plaintiff claimed recovery of a stated sum or in the alternative the amount to be found due on examination of the accounts.

It was not the case of the plaintiff that he ever demanded accounts from the first defendant or the latter is bound to render accounts to him. P. W. 4 admitted that all the expenses including the prime costs and other incidental expenses such as sewing, bagging and transport etc. were paid by the plaintiff on behalf of the purchasing agent and that the plaintiff was to recover all those moneys from the 1st defendant, even if the latter did not receive any payment from the 2nd defendant.

Thus, the trial judge observed that the plaintiff's suit is in essence analogous to a suit by an agent against his principal for recovery of money spent by him in course of such agency. If this suit is deemed to be based on accounts settled and stated it would doubtless come under Article 64. On a fair reading of the plaint it cannot be said that it was the plaintiffs case at any time that the accounts' between the parties were finally settled.

There is no evidence on record that the accounts were ever settled and stated by the parties; but all the same there is no escape from the application of Article 61. It is admitted by P. W. 3 that the last item of payment on account of rice and paddy purchased by the plaintiff under the sub-agency was made on 28-11-44 if the time begins to run from the date of the last payment, then certainly the suit is barred under Article 61. Mr. Dasgupta sought to argue that it is not the date of the last payment, but it is the date of the final refusal by the defendant. In tin's connection, I would refer to the plaint averment in paragraph 7 which runs as follows;--

''That the cause of action for this suit arises on 24-9-47, when the plaintiff received defendant No. 1's letter No. 214 A/Misc. dated 21-9-47 in which defendant No. 1 finally refused to settle accounts of the plaintiff and make payment of the amount found due to the plaintiff as stated below and also on 19-12-47 when the defendant No. 2 tried to avoid by shifting the burden on the defendant No. 1 and arises within the jurisdiction of this Court.'

Thus, according to the plaintiff the final refusal was on 24-9-47. The suit having been filed on 27-9-50 is clearly barred. A question arose if the suit is governed by Article 89, which applies to suits by principal against his agent for movable property received by the latter and not accounted for. It is contended that the same principle ought to apply to suits brought by an agent. The period of limitation in that event would be three years from the date when the account is, during the continuance of the agency, demanded and refused or where no such demand is made when the agency terminates. Article 89 thus applies to suits by principals against agents. There is no provision in the Indian Limitation Act regarding suits by agents against principals. Hence neither Article 89 nor Article 120 would be applicable to the present case. In my opinion clearly Article 61 applies and the suit is barred by limitation.

9. Mr. R. N. Misra, however, contended that there being no provision in the Limitation Act for a suit by the agent against the principal, no suit by the agent would be maintainable unless a special contract is proved. The general law, is, it is only the employer that can call upon his agent for an account and the vice versa is not always correct. An employee is not therefore, entitled to sue his employer for account except under very exceptional and special circumstances. There is, however, nothing in law which prevents an employee or agent from suing his employer or principal for specific sums of money due to him as Commission for specific work done by him.

This view was taken by the Madras Punjab and Allahabad High Courts; vide AIR 1957 Mad 21, Sivasubhramania Pillai v. Panruti Industrial Co., AIR 1955 Punj 143 Inder Sain v. Piare Lal AIR 1959 All 546, Laksbmiji Sugar Mills v. Banwari Lal Tandon. In view of the above position in law the plaintiff's suit, in any view of the matter, must be held to be non-maintainable and barred by limitation.

10. Although Mr. Das Gupta did not argue regarding the exact amounts recoverable, we find that none of the P. Ws. has deposed regarding the genuineness of the claim under each of the item. The plaintiff no doubt sought to establish his claim by the production of some accounts such as ledger, roker, Tipa Khatas, receipt register (Ext. 13), issue register (Ext. 14) besides certain bills of correspondence called for from the custody of the second defendant. The trial Judge on a careful consideration of the evidence came to the conclusion that the ledger, Khatians, Tippa Khatas, Issue Register and Stock Register all being private documents maintained in a slip-shod manner cannot be relied upon to come to any precise finding in proof of the plaintiffs claim.

From the cross-examination of P. W. 4 it is fairly clear that the names of persons from whom rice was procured for the Sub-agency has not been mentioned in the Khatian and the Roker. P. W. 3 stated that on the day the terms of sub-agency were settled with. Dipchand Rai, the latter had given him a copy of the terms and conditions of the Sub-agency. But no such document has been filed by the plaintiff in this case. The trial Judge erroneously thinks that while referring to the copy containing the terms and conditions of the Sub-agency referred to by P. W. 3 he meant the letter of appointment.

I do not agree with the trial judge. The letter of appointment as I have stated earlier is Ext. 17. The copy of the letter embodying the terms and conditions of the sub-agency is quite a different document. The plaintiff, it appears, has deliberately withheld that document. Thus, the trial judge came to the conclusion that the plaintiff has not been successful in establishing all the items of his claim by production of satisfactory accounts.

The accounts produced are maintained in a most haphazard manner and are incomplete. Accordingly it is not safe to place any reliance on these accounts to come to any definite finding. However, the suit not being maintainable under Sub-section (2) of Section 69 of the Indian Partnership Act, and even if it is maintainable, the suit having been barred by limitation these questions really do not arise.

11. In the result, the appeal must be dismissed with costs against defendant 1 only.

Barman, J.

12. I agree.


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