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Firm Munshi Ram Ruplal Vs. Firm Madanlal Chaman Parkash Sethi and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 501 of 1954
Judge
Reported inAIR1960P& H15
ActsIndian Contract Act - Sections 213
AppellantFirm Munshi Ram Ruplal
RespondentFirm Madanlal Chaman Parkash Sethi and ors.
Cases ReferredInder Sain v. Piare Lal
Excerpt:
.....however, the accounts were all on one side and inasmuch as the accounts were maintained by the defendant the plaintiff who was an agent was allowed to seek rendition of accounts......court has got jurisdiction to try this suit? (2) whether the plaintiff-firm has a right to bring a suit for rendition of accounts and the defendants are accounting parties? (3) whether this suit is bad for misjoinder of causes of action? the trail court held that the suit related to two different types of transactions and that so far as these transactions in which the defendants are said to have acted as commission agents for the plaintiff's are concerned, the court has no jurisdiction because a suit for rendition of such accounts will lie at srinagar and so far as the transactions in which the plaintiff's has acted as commission agents, courts at jullundur will have jurisdiction. it was, however, held that the plaintiff's has no right to demand any accounts for these transactions from.....
Judgment:

(1) The facts giving rise to this second appeal are as follows: Plaintiff-firm is working as commission agents at Jullundur City and the defendant-firm carries on business at Srinagar. On various dates between 12-10-1949, and 20-6-1952, the defendant-firm sent raw hides to the plaintiff-firm which the latter sold as commission agents and remitted to the defendant-firm amounts in cash and also sent certain goods towards the price of the raw hides received from the defendant-firm.

Inter alia the plaintiff-firm sent, by three different drafts, dated 4-9-1951, 3-5-1951 and 6-10-1951, a total sum of Rs. 13,000/-. The plaintiff-firm in April, 1952, also sent 34 bundles of dhauri (finished leather) to the defendant-firm. On 6-5-1953, the plaintiff-firm sent a notice, Ext. D.1, to the defendant-firm claiming that Rs. 2,589/11/9 were due to the plaintiff-firm as balance from the defendant-firm. In reply the defendant-firm wrote back Ext. D2, wherein they denied their liability to pay anything & also the correctness of the balance of the amount and asked for details to be furnished to them as to how the amount was arrived at.

On 11-6-1953, the suit, out of which the present appeal has arisen, was filed by the plaintiff-firm alleging that Rs. 13,000/- had been sent to the defendant-firm for the purchase of certain goods and in addition to this, other sums had been remitted towards the price of the raw hides received from the defendant-firm and sold on their behalf and that the defendant-firm had rendered no account either of Rs. 13,000/- or of the sale proceeds of 34 bundles of dhauri. They asked for rendition of accounts on the ground that no regular accounts had been rendered between the parties.

The defence taken up on behalf of the defendant-firm was that it was for the plaintiff-firm to render account to them for the sale of raw hides and for which the defendant-firm will file a separate suit. They admitted the receipt of Rupees 13,000/- by means of the three drafts as alleged, but denied that the amount was sent to them for making any purchases on behalf of the plaintiff-firm and averred that this amount was due to the defendant-firm towards the price of the raw hides. As regards 34 bundles of dhauri, they did not deny that the same were received by the defendant-firm for sale on behalf of the plaintiff-firm, but averred that the plaintiff-firm had overdrawn and were liable to refund the excess. The right of the plaintiff-firm to seek rendition of accounts and the jurisdiction of the Court were challenged. As a result of these pleadings, the following preliminary issues were framed:

(1) Whether this Court has got jurisdiction to try this suit?

(2) Whether the plaintiff-firm has a right to bring a suit for rendition of accounts and the defendants are accounting parties?

(3) Whether this suit is bad for misjoinder of causes of action?

The trail Court held that the suit related to two different types of transactions and that so far as these transactions in which the defendants are said to have acted as commission agents for the plaintiff's are concerned, the Court has no jurisdiction because a suit for rendition of such accounts will lie at Srinagar and so far as the transactions in which the plaintiff's has acted as commission agents, Courts at Jullundur will have jurisdiction. It was, however, held that the plaintiff's has no right to demand any accounts for these transactions from the defendants because the former are an accounting party and they should bring a suit for the specific amount that they claim from the defendants. On issue No. 3 it was held that the suit was not bad for misjoinder of causes of action. Consequently the suit, so far as it related to rendition of accounts of the transactions in which the plaintiff-firm had acted as commission agents was dismissed because the same did not lei and so far as the suit in which the defendant-firm had acted as commission agents, the plaint was ordered to be returned to be presented to the Court of competent jurisdiction. The plaintiff's appeal to the Senior Subordinate Judge, Jullundur, was dismissed and the findings of the learned trial Court were confirmed.

(2) In this second appeal it was urged on behalf of the plaintiff-firm that the present case was a peculiar one in which both the plaintiff's and the defendants were the accounting parties. Some goods were sent by the defendants to the plaintiff's for sale as commission agents whereas certain other goods were sent by the plaintiff's to the defendants for sale at Srinagar.

The learned counsel for the plaintiff-firm further urged that in the present case the plaintiff's are not in a position to bring a suit for a specific amount unless they find out from the defendants as to how the latter had dealt with 34 bundles of dhauri. It is significant to note that in the written statement the defendants, have admitted that they had received 34 bundles of dhauri for sale on behalf of the plaintiff's, but their position is that the plaintiff's have been overpaid for the same. The defendants failed to give any details and it is obvious that unless and until they render account of the sale of these 34 bundles, it is impossible of the plaintiff's to arrive at a correct figure of the amount due from the defendants. The learned lower appellate Court while dealing with this part of the case observed as follows:

'......................... the plaintiffs sent a notice to the defendants at Srinagar.. Exhibit D 1. In that notice Rs. 2,598/11/9 were claimed by the plaintiff-firm from the defendant-firm. In the face of this notice, the suit for rendition of accounts does not lie here. The plaintiff's ought to have brought the suit for Rs. 2,598/11/9.' The Courts below however, seem to have missed the real point in the case. In reply to the notice, Exhibit D. 1, referred to above the defendant-firm denied the correctness of the same and demanded accounts, Furthermore, in view of the fact that where the accounts between the parties were mutual, the final balance cannot possibly be struck unless and until the accounts are rendered by both the parties. It is true that normally speaking an agent cannot bring a suit for rendition of accounts against his principal. In exceptional cases, however, the Courts have held that such a suit does lie. The matter was discussed at length in Gulabrai v. India Equitable Insurance Co., AIR 1937 Sind 51 and at page 53 of the report it is observed as follows:

'Under S. 213, Contract Act, a principal has a statutory right against his agent for an account but the converse does not apply, x x x x.

Nevertheless there are cases x xx xx where it is equitable from the particular circumstances and the relations of the parties that one should account to the other, a suit for an account will lie.' Reliance was placed on Shepard v. Brown, (1862) 7 LT 499. Inter alia in that case the Vice-Chancellor observed as follows:

'It is very true that in Phillips v. Phillips, (1852) 9 Hare 471, Sir G. Turner, V. C. said that, in order to maintain a bill of this nature there must be a mutual demand, and a mutual account means that each of the two parties must have received and paid money on account of the other. The same qualification is to be found in another part of the judgment of the V. C. He says that it would require a strong case for a Court of equity to entertain a bill for an account, when the account is all on one side ........'

In (1862) 7 LT 499, however, the accounts were all on one side and inasmuch as the accounts were maintained by the defendant the plaintiff who was an agent was allowed to seek rendition of accounts. In the Sind case the agent, who was to get commission on all the orders procured by him, filed a suit a for rendition of accounts and it was observed at p.54 of the report-

'If therefore the appellant could satisfy us that all the accounts were in the possession of the defendant-firm and rightly in the possession of the defendant-firm, and that he has not and should not have in his possession accounts which would enable him to determine his claim for commission against them, we think that he will be entitled to sue for an account.

In Basant Kumar v. Roshanlal, AIR 1954 Nag 300, an agent, who worked for a book-seller on commission basis canvassing in certain area for the sales of the books of the book-seller and who did not know how many books were actually sold through his efforts as he did not know how many orders were placed, was allowed to sue for rendition of accounts so as to enable him to find out how much commission was due to him. Similarly in Ram Lal Kapur & Sons v. Asian Commercial Assurance Co. Ltd., AIR 1933 Lah 483, the plaintiffs, who were the insurance agents, and were to be remunerated by a commission calculated on the premia paid on all policies effected or introduced through them, were allowed to sue for rendition of accounts because they could not know which of these policies has lapsed, matured or been forfeited. Again, in Inder Sain v. Piare Lal, AIR 1955 Punj 143., the Plaintiff obtained orders for the defendant for the sale of cycle parts and the profits of the proceeds which accrued as a result of his canvassing and orders obtained, were to be divided in a certain ratio. Some of these orders were sent by the plaintiff and the others were sent direct to the defendant. The plaintiff was allowed to sue for rendition of accounts, on the basis of the principles enunciated in Art. 79 of Bowstead on Agency which lays down as follows :

'Where the accounts between a principal and agent are of so complicated a nature that they cannot be satisfactorily dealt with in an action at law, the agent has a right to have an account taken in equity; but the relation of principal and agent is not alone sufficient to entitle an agent to an account in equity, when the matter can be dealt with in action of law.'

(3) The present case, in my view, is, in a way, stronger than the cases referred to above. Here the accounting is not on one side, but is mutual and the plaintiff's cannot arrive at the correct figures unless and until accounts are rendered by the defendants also. The exact position can only be ascertained after both sides render accounts to each other. The account being mutual, the same cannot be split up into two different sets of accounts, one being rendered at Jullundur and the other at Srinagar. I am, therefore of the view that the Courts at Jullundur where the plaintiff's had chosen to bring the suit have jurisdiction to try the suit as framed.

(4) For the reasons given above, I accept this appeal, set aside the order of the Courts below and remand the case with the direction that the same be re-entered at its original number and proceeded with in accordance with law. As the case has become very old, the learned trial Court will expedite the hearing of the same. The parties will bear their own costs in this Court and the remaining costs will be costs in the cause. Parties counsel will direct their clients to appear in the Court below on 25-5-59 for further proceedings.

(5) Appeal allowed.


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