M.K. Chawla, J.
(1) Justice delayed is justice denied' is a well known proverb in judicial parlance. Many researches have been made. Commissions constituted, Seminars held. Conferences convened and resolutions adopted to find ways and means to cut delays in order to administer speedy justice, Even legislative amendments in various Acts have been enforced to achieve this object. But nothing appears to have been thought of or effective steps taken to avoid delay, in large number of cases wherein a party succeeds in obtaining a decree but fails to reap the fruits of it in his life time. It has rightly been observed that 'it is easier to obtain a decree, of whatever nature it may be, but difficult to execute if.
(2) The present case is one of the many examples of the cases falling under the second category. Relevant facts given in chronological order will fully demonstrate the agony being faced by the poor decree holder in getting his dues. Late Dr. J. B. Rajam was the author of three books entitled- Atomic PHYSICS', Modern PHYSICS' & Heat The defendants M/s. S. Chand & Co. had taken these books for publishing against three separate agreements with Shri Rajam dated 11-2-1957, 3-4-1957 and 7-1-1958 respectively. Dr. Rajam had died on 25-11-1965 leaving behind a will wherein the Archbishop of Delhi was appointed as the Executor. By means of the said Will Dr. Rajam bequeathed the royalty of his books for charitable, educational and religious purposes. In the year 1966 the Archbishop of Delhi applied for Probate with the Will annexed for Realizing the arrears of royalties due from the defendant w.e.f, 1.9.1964. The probate was ultimately granted in favor of the plaintiff by the Court of the District Judge, Delhi on 16-9-1970. Before that the defendant agreed to disclose the royalty account to the plaintiff in case he succeeds in obtaining the Probate. After the grant of the Probate many requests and notices were issued to the defendants for rendition of accounts but the defendants did not care to comply with the said requests. The plaintiff ultimately was forced to file a suit for rendition of accounts of the royalties of the estate of the deceased Dr. J. B. Rajam, against the defendants on 4-1-1972. The said suit was hotly contested by the defendant. However, after a lapse of about 5 years the plaintiff succeeded in obtaining a preliminary decree for rendition of accounts from the Court of Shri Ajit Bharihoke, Sub- Judge 1st Class, Delhi on 22-8-1977. Shri 0. P. Gupta, Advocate was appointed as the Local Commissioner to settle the accounts of royalties due to the estate of Dr. Rajam w.e.f. 1-9-1964 till date. The defendants preferred to file the first appeal in the Court of the District Judge, Delhi which was dismissed by the Judgment of Shri Mohd. Shamim, A.D.J. on 11-4-1979. The defendants' second appeal in the High Court met the same fate on 8-1-1980. The defendants' Petition for special leave to appeal was also dismissed by the Supreme Court of India.
(3) During the course of the proceedings before the learned Local Commissioner the defendants admitted that a sum of Rs. 2,77,544.63 is due for the period 1-9-1964 to 31-7-1973. The plaintiff immediately moved an application under Order 12 Rule 6 Civil Procedure Code for the passing of a decree of the amount which is due to the plaintiff as per the statement of account of the defendants. This application was rejected by the lower court. But in the Civil Revision Petition No. 599/1981, N. N.Goswami, 7. directed the trial court to pass a decree of the admitted amount in favor of the plaintiff. This order was duly complied with by the additional District Judge on 24-1-1982. On the objection of the defendant/Judgment Debtors the plaintiff paid the court fee on the said amount as far back as 26-4-1982. The defendants/ Judgment debtors even then did not care to pay the said amount incipit of the repeated reminders. The plaintiff ultimately applied for execution of the decree by arrest and detention in civil prison of the defendants on 13-9-1982. The defendants took objection that the decree was without jurisdiction as the Additional District Judge, Delhi could not pass a decree for more than a lakh of Rupees. This objection was over-ruled and the three partners were ordered to be detained in Civil prison by the Order of the executing court dated 4-3-1983. The defendants immediately came to this court and by the consent of the parties the proceedings subsequent to the High Court's order dated 26-10-1981 were quashed and the suit was transferred to this Court by order dated 18-5-1983 of G.C. Jain. J.
(4) The learned Local Commissioner started proceedings to determine the amount of royalty due to the plaintiff on 21-81-1977. The defendants after obtaining number of judgments running for a period of about 2 years filed a single sheet of paper containing the consolidated amount of royalty on the three books for 14 years i. e. from 1964-65 to 1977-78 making a total of Rs. 5,39,930/76. This statement of account was filed before the Local Commissioner on 24-9-1979. This was however, not accompanied with any books of accounts, vouchers or other documents. Even thereafter the Local Commissioner granted the defendants number of opportunities for placing on record the books of accounts but the defendants did not care to comply with the said direction. As a last resort the learned Local Commissioner placed the record before the Court for suitable directions. On 10-3-1980 the learned lower court recorded the statement of Shri S.P. Gupta, Counsel for the defendants wherein an undertaking was given that the relevant entries of the accounts relating to the royalty accounts of the defendant Along with the original entries and supporting documents shall be produced before the Local Commissioner within one month. On this undertaking the defendants were required to produce the relevant record before the Local Commissioner on 11-4-1980. On the adjourned date the defendants filed 4 hand written sheets duly singed by Shri Rajinder Kumar Gupta, partner of the defendant, slating it to be the complete account regarding the royalty amount of the three books for the years 1964-65 to 1967-68. However, no books of accounts whatsoever or the supporting vouchers and other documents were filed. As the said summary of accounts had been prepared from the record of a limited company i. e. M/s. S. Chand & Company Ltd. the plaintiff insisted for the filing of the true accounts of the defendants along with the books of accounts. The defendants for the first time took up the stand that in fact they had transferred the rights of publication of the three books to M/s. S. Chand & Co. Pvt. Ltd., Ram Nagar, New Delhi on 9-6-1970. The said company was later on converted into a limited company known as S. Chand & Company Ltd. on 6-5-1976. It was also alleged that the accounts up to 8-9-1976 were with S. Chand & Co, and from 8-9-1970 to 4-5-1976 are with S. Chand & Co. Pvt. Ltd. and of S. Chand & Co. Ltd. from 6-4-1976 onwards. The defendants also alleged that they are liable to render accounts only for 6 years i.e. from 1965-65 to 1969-70 wherein a total royalty amount of Rs. 2,77,544.63 was due. In view of this stand the defendants applied for the amendment of the previous statement under Order 6 Rule 17 Civil Procedure Code . This application was opposed by the plaintiff and by order dated 21-4-1981 the learned Local Commissioner dismissed the application by holding that by allowing the amendment he shall be permitting the defendants to plead that they are riot liable to render accounts while the decree holds the defendants to be so liable. The Decree of the learned lower court dated 22-8-1977 having been confirmed- in the Second appeal by the Delhi High Court the Local Commissioner has no jurisdiction to pass an order which may have the effect of overriding the decree. The evidence of the parties was recorded by the Local Commissioner from 6-8-1981 to 5-11-1982. The Local Commissioner filed his report on ll-5-1983.helding that a sum of Rs. 27,75,546.30 was due as royalty from the defendants to the plaintiff for the period 1-9-1964 to 22.8-1977.
(5) The defendants filed the objections against the report of the Local Commissioner by moving the application 1. A. 2785/1983 on 11-7-1983. The plaintiff filed the reply to the objections, which are now under consideration.
(6) In nutshell the report of the Local Commissioner is that as the defendants failed to produce the relevant books of accounts i. e. the royalty register, royalty ledgers, royalty statements, cash books, credit memos, cash invoices, printers and binders' bill which is primary evidence for this case, the correctness of the statements filed by the defendants vide Ex. D.W. 2/1 to E.W. 2/6 cannot be accepted as the last word on royalty accounts of the books in question. The Explanationn about the destruction of the record after the lapse of 3/4 years was not considered as genuine or bonafide. The admission of the defendants that a sum of Rs. 2,77,554/63 became due to the plaintiffs as royalty on the three books was held to be imaginary. The Local Commissioner on the basis of the evidence before him concluded that during the period 1-9-1964 to 31-8-1970 a sum of Rs. 5,55,109.26 became due to the plaintiff. For the subsequent period i.e. from 1-9-1970 to 22-8-1977 the learned Local Commissioner reported that the royalty on these books would be atleast 4 times the royalty due for the previous period. As a result of the above discussion the Local Commissioner allowed a sum of Rs. 27,75,546.30 to the plaintiff. However, the request of the plaintiff to go into the accounts subsequent to 22-8-1977 up to the date of the order was not accepted, in view of the wording of the preliminary decree. The plaintiff also preferred to file objections (1. A. 3116/ 1983) to the report of the Local Commissioner. According to him the Local Commissioner not only should have gone into the accounts up to the date of the Order but also should have allowed the compound interest for each year of royalty due from 1-9-1964 18% per annum.
(7) Both the objection petitions (No. 2784/83 filed by the defendants as well as 1. A. No. 3116/1983 filed by the plaintiff) are required to be gone into in this Order.
(8) The grounds which have been made the basis for the setting aside of the report of the Local Commissioner by the defendants in brief are as under :-
(A)It is not within the province of a Local Commissioner to make a guess about the royalty due without basing it on some evidence or material on record ; (b) The duty of the Local Commisssioner is only to deal with the accounts produced before him and to calculate the amount due on the basis of such accounts. He has no jurisdiction to comment on the accounts to make a guess about what the royalty might be due ; (c) The arguments raised by the Commissioner to reject the entries Bx. D. W. 1/1-A to E. W. 1/6, as true and correct evidence are all wrong, unwarranted by facts and law ; (d) The Explanationn given by the defendants for non-production of supporting registers and documents should have been accepted and (e) The defendant's evidence with regard to the assignment and transferring of the publishing work to a limited company which came into existence on 9-9-1970 by the name of M/s. S. Chand and Company Pvt. Ltd. and later as M/s. S. Chand & Company Ltd., who continued publishing and selling the books in question should have been accepted and the defendants could not have been held liable to pay the royalty after 9-9-1970.
On the other hand the plaintiff's prayer in his objection petition in brief is that the report of the Local Commissioner for accounts be admitted and a final decree for the recovery of Rs. 27,75,546.30 be passed on account of royalty on the three books for the period 1-9-1964 to 22-8-1977. The Local Commissioner in compliance with the point No. 6 framed for determination of the royalty account up to 30-8-1979 should have gone into. It is also alleged that the Local Commissioner should have allowed the plaintiff compound interest on the decretal amount for each year of royalty due from 1-9-1964 @ 18% per annum along-with cost of the suit.
(9) I have heard the arguments of the learned counsel for the parties and with their help gone through the record carefully.
(10) It is not disputed that the defendants are the accounting party. It was their duty to have produced all the relevant records required for arriving at a correct conclusion about the amounts which became due to the plaintiff against the royalty of the three books. From the very start of the case as well as before the Local Commissioner the intention of the defendants was not to come out with the true statement of accounts of royalty. The defendants not only withheld the account books but also tried to put forth excuses which prima facie were found to be false. As far back as 29-5-1972 the plaintiff moved an application under Order Ii Rule 12 and]4re.adwith0rderl2 Rule 8 Civil Procedure Code . for the discovery and production of the account books relating the publication .and disposal of the three books in question in order to determine the royalty due to the plaintiff. inspire of the orders of the court as well as the direct jobs of the Local Commissioner ' the defendants failed to produce the books of accounts. As per the interim report of the Local Commissioner the defendants were granted as many as 9adjournmentsrunningfrom 29-1-1977 to 24-9-1979 but on one pretext or the other the defendants did not produce the accounts books. They only preferred to file a sheet of paper staling to be the account of royalty. Having failed to pursuade the defendants to produce the account books, the Local Commissioner referred the matter to the Court and directed the parties to seek appropriate directions. The learned lower court succeeded in getting an undertaking from the learned counsel for the defendants that his clients will produce the relevant entries of the account book relating to royalty account of the plaintiff Along with the original entries and supporting documents on record within one month. This prayer was acceded to by the court. Even this undertaking had no effect on the defendants.
(11) While appearing as a witness before the Local Commissioner for the defendants, Shri R. K. Gupta, admitted that the defendants maintain royalty ledgers and royalty Statements. He further admitted that royalty statements used to be prepared from the sales record which were based on cash book, cash, memos, invoices, credit memos and credit notes etc. He also admitted that the number of books published at any particular time could be ascertained from printers' and binders' bills. Similar is the statement of Behari Lal Gupta, appearing for the defendants. Unfortunately these books and records have so far not been produced before the Local Commissioner. In the final stages of the proceedings the defendants came out with the plea for the non-production of the books of accounts that all the records were destroyed from time to time, 4/5 years after the completion of the Income Tax assessments. The Explanationn has been held to be a vague one, evasive and not convincing by the Local Commissioner. In the opinion of the Local Commissioner the accounts were suppressed because they would have shown larger amounts to be due to the plaintiff on royalty account. He was also of the opinion that the nature of accounts produced before him was such that it could be prepared at one sitting. The plea was further held to be unacceptable as the accounts produced related to the year 1972 whereas the suit was filed in the year 1975. Even though the Income Tax assessments of the defendants had been completed but the claim of royalty about the books in question had not been settled and the defendants were aware that they could be called upon to render the accounts by suit or otherwise. The learned Local Commissioner was justified in rejecting the plea for the non-production of the books of accounts, with which reasoning I entirely agree.
(12) In face of this situation what else the Local Commissioner could do except raising an adverse presumption under Section 114 of the Indian Evidence Act that if these books had been produced that would have been unfavorable to the defendants. No plausible Explanationn is forthcoming from the side of the defendants. Rendition of accounts by an agent means something more than merely signing the accounts or making over the accounts books to the principal; it means and includes submitting and explaining the accounts to the principal and paying over to him any balance which might be found due from the agent upon the taking of accounts. The mere furnishing of a loose sheet alleged to contain the entries from the account books will not absolve the defendants from the liability to explain those entries by producing the relevant account books from which the said statement has been drawn. I he defendants who are in possession of all the books of accounts were expected to disclose such particulars as will establish a prima facie defense. The defendants having failed to come out with the true state of affairs, the learned Local Commissioner was justified to presume everything most unfavorable to the defendants, consistent with the established facts.
(13) I do not agree with the next submission of the learned Counsel for the defendants that they were not required to furnish accounts after 31-8-1970 as they ceased to publish and sell these books. The publishing rights according to the learned Counsel for the defendants were transferred to M/s. S. Chand & Co. Pvt. Ltd. and later on to M/s. S. Chand & Company Ltd. To achieve this object the defendants have moved an application under Order 6 Rule 17 Cpc for the amendment of their statement of account of royalty already filed in respect of the three books. This application after contest was dismissed and in my opinion rightly so. By the Preliminary decree the defendants were held liable to render accounts from 1-9-1964 up to date. The partners of the defendant firm having made statements on oath admitting their liability for the amounts due and as shown in the summary of the accounts cannot now get out of their admission. Even otherwise a party to a contract cannot be allowed to transfer his liability therein without the consent of the other party. Such liabilities can only be transferred by a tripartite agreement which in such cases will amount to a novation of contract. Under the provisions of Section 32 of the Indian Partnership Act a partner may retire-d) with the consent of all parties; (2) by virtue of an express agreement between the partners and (3) in case of a partnership at Will. by giving notice in writing to all other partners of his intention to retire. Such a partner however, continues to be liable to third parties for the acts of the firm, after his retirement, only before notice of his retirement as required by Section 72 has been given, either by himself or by the other partners. Even where the partners agree amongst themselves that the continuing partners shall be liable for the obligation of a retiring partner, such an agreement cannot per se affect the rights of the creditors being rest inter alias acta. Such agreements may be either express or may be implied by a course of dealings between the third parties and the new firm, after knowledge of his retirement. But it will not be presumed, and if it exists will have to be strictly proved.
(14) In the present case the plea of having transferred the rights of publication and sale of the three books in question to M/s. S. Chand & Co. Pvt. Ltd. and later on to M/s. S. Chand & Co. Ltd. came up for the first time before the learned Local Commissioner. This plea was not taken by the defendants either in the written statement or during the course of adducing evidence. This was also not the subject matter of the plea raised in the first appeal or before the High Court and the Supreme Court in a Special Leave Petition. Furthermore those very partners of the defendants firm continued to be the managing partners and partners of the private limited company. At no point of time any information was conveyed to the plaintiff of their having transferred the rights of publication and sale of the books to a third party and admittedly the plaintiff at this stage cannot be said to be a consenting party for the illegal novation of a contract. This transfer, if any, in my opinion is of no consequence and the defendants have rightly been held responsible for the rendition of accounts for the subsequent period also.
(15) The Income Tax Assessment Orders for the accounting years 1964-65 to 1970-71 correspond to the assessment year 1965-66 to 1971-72 respectively show that the sale figures of the publication of the defendants books have been appreciating considerably each year while the total sale of the three books as per D. W. 2/1-A to D. W. 2/6 have been fluctuating for this period. Unfortunately the defendants did not bring on record any circumstances to explain the the fluctuations in respect of these books. Even these figures according to the report of the learned local Commissioner have not been accepted by the Income tax authorities. With this background the learned Local Commissioner concluded that as against the admission of the defendants that a sum of Rs. 2,77,554.63 became due as royalty on the three books a imaginary and presumed that during the period 1-9-1964 to 31-8-1970 the defendants must have earned a sum of Rs. 5,55,109.26 as royalty to the plaintiff on the three books of Shri J. B. Rajam. Similarly for the remaining period from 1-9-1970 to 22-8-1977 he multiplied the figure already arrived at by four fold and made it to a sum of Rs. 22.20,437.04, bringing to a total sum of Rs. 27,75,546.30 as royalty due to the plaintiff. The contention of the learned counsel for the defendants is that the learned Local Commissioner should have arrived at a figure on the statement of accounts available with him and was not within his jurisdiction to presume the figures in the absence of any guidelines. Even this contention of the learned Counsel has no substance. Once the Local Commissioner has concluded that the accounts have been withheld and correct statements have not been filed in order to deprive the plaintiff of his dues, he was justified to reject the accounts. The Local Commissioner under these circumstances was within his right to presume everything most unfavorable to the defendants consistent with the facts of the present case. If there is anything in this finding of the Local Commissioner of speculative nature in arriving at the figures, the defendant has only to thank himself for his failure to maintain and produce proper accounts. On the facts and circumstances of the case and keeping in view the substantial sales of the books for the first 7 years I do not think that the sum awarded to the plaintiff is unreasonable.
(16) As a result of the above discussion I do not find any substance in the objections of the defendants to the report of the Local Commissioner and they are hereby dismissed.
(17) In the objection petition (1. A. No. 3116/1983) filed by the plaintiff the plaintiff not only has prayed for the grant of a decree in the sum of Rs. 27,75,546.30 on account of the royalty of the three books for the period 1-9-1964 to 22-8-1977 but has also sought the issuance of directions to the Local Commission for submitting the report with regard to the royalty dues up to 31-8-1979. Apart from it the plaintiff also claimed interest @ 18% per annum for each year of royalty due from 1-9-1964 with yearly rests, together with costs of the suit and the proceedings before the Local Commissioner.
(18) The defendants took up the stand that no further directions can be issued to the Local Commissioner as by this process the court will be amend ng the preliminary decree already passed and granting a fresh decree for the subsequent years, particularly when the defendants did not publish the books after 8-9-19/0. The claim of the plaintiff to interest and costs was also denied.
(19) There is much substance in the submission of the learned Counsel for the plaintiff. The date of the preliminary decree is 22-8-1977. This decree was affirmed in appeal by the Additional District Judge on 11-4-1979. In the course of the judgment dated 8-1-1980 in R.S.A. No. 272/1979 R.N. Aggarwal, J. observed that there is no reason why the plaintiff be not held entitled to accounts up to the passing of the decree. Even otherwise it is the cardinal principle of law that a decree of the lower court merges with the decree of the appellate court and it is the decree of the appeal court which has to be given effect for all purposes. It is well established principle of law that when an appeal is made, the appellate authority can do one of the three things, namely-(i) it may reverse the order under appeal; (ii) it may modify that order and (iii) it may merely dismiss the appeal and thus confirm the order without any modification. In all these three cases after the appellate authority has disposed of the appeal, the operative order is the order of the appellate authority whether it has reversed the original order or modified or confirmed it. In view of this legal proposition there appears to be no justification in depriving the plaintiff of his right to get the royalty accounts produced from the defendants up to the decision of the second appeal. This proposition was in the mind of the counsel for the parties as well as of the Local Commissioner when the points for determination were framed on 12-5-1981. Point No. 6 reads as under '-
'WHAT amount of royalty, if any, accrued to the plaintiff during the period 1-9-1964 to 31-8-1979 on the three books in question,'
The Local Commissioner however, did not go beyond 22-8-1977 as according to him he was bound by the terms of the preliminary decree. That may be so but certainly in view of the well settled principle of law referred to above there is no impediment in the way of this Court directing the Local Commissioner to submit the report about the royalty amount due to the plaintiff up to 31-8-1979.
(20) There is also no ground to deprive the plaintiff of the interest on the amounts which were legally due to them but were withheld for sufficiently long time by the defendants with a view to earn more profits on investments or by way of interest. inspire of unqualified undertakings given before the Court as well as before the Local Commissioner, the defendants did not care to furnish the accounts to the plaintiff. The defendants also successfully continued creating hurdles in the completion of the commission proceedings with the only object of delaying the payment of legal dues which according to them were due to the plaintiffs. Even the amounts admitted by the defendants was not paid till the orders of their arrest was passed in the execution proceedings. The contest of the defendants throughout the proceedings has not been fair. The Power of the court to order payment of interest on a sum found due from the defendant exists in the court. Although the report of the Local Commissioner declaring the liability contains no directions for payment of interest. On the facts and circumstances of the present case in my opinion it is a fit case in which the defendants be burdened to pay interest @ 12% on the amounts due to the plaintiff with yearly rests. The plaintiff shall also be entitled to the costs of the proceedings before the Court as well as the Local Commissioner which I assess at Rs. 5,000.00 .
(21) As a result of the above discussion I hereby pass a decree in the sum of Rs. 27,75,546.30 in favor of the plaintiff and against the defendants with costs. The plaintiff shall also be entitled to interest @ 12% per annum with royalty rests from 1-9-1964 up to date. The plaintiff shall also be entitled to future interest @ 18% per annum from the date of the decree till realisation.
(22) The proceedings are remanded back to the Local Commissioner with a direction to determine as to what amount is due to the plaintiff from the defendants on rendition of accounts of royalty due to the estate of the deceased J. B. Rajam from 22-8-1977 to 31-8-1979 in respect of the three books entitled. Atomic Physics, Modern Physics', and 'Heat'.
(23) In the report the learned Local Commissioner has also prayed for the payment of further fee looking into the nature of the proceedings and the quantum of the work put in by him. It is not disputed that the Local Commissioner started the proceedings on 27-11-1977 and finally submitted his report on 11-5-1983, he has put in labour for a period of about 6 years. He has already been paid a sum of Rs. 10.500.00 which appears to be a meagre sum looking into the labour and the time spent by the Local Commissioner in finalising the report. Keeping in view the circumstances of the case I hereby direct the parties to pay a further sum of Rs. 3,000.00 each to the Local Commissioner as his fee for carrying out the orders of this Court. The parties shall also pay a further sum of Rs. 2,000.00 each to the Local Commissioner as his provisional fee for going into the accounts as directed.