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C.i. Abraham Vs. K.A. Cheriyan - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKerala High Court
Decided On
Case NumberA.S. No. 88 of 1979
Judge
Reported inAIR1986Ker60
ActsContract Act, 1872 - Sections 70
AppellantC.i. Abraham
RespondentK.A. Cheriyan
Appellant Advocate T.K. Kurikesu, Adv.
Respondent Advocate C.S. Thomas and; D. Peethambaran, Advs.
DispositionAppeal dismissed
Excerpt:
.....is related to the defendant and in view of the circumstances and probabilities of the case, it is difficult to accept the defendant's case that the plaintiff had agreed to give him 5% commission as well as annual remuneration. as the plaintiff is satisfied with the decree granted in his favour it has to be considered how far the defendant has established his claim. section 70 of the contract act applies to cases irrespective of any contract or agreement where a person lawfully does for another person or delivers anything which was never meant to be gratuitous and the other person has enjoyed the advantage. 9. section 70 of the contract act is based on the doctrine of 'quantum meruit'.though it may be argued that a liberal interpretation is necessary with respect to the application of..........his non-residential account with the grindlays bank. plaintiff undertook to deposit the monthly rent of the building in the bank. it is not disputed that the defendant was entrusted to collect the rent and to remit the same in the plaintiffs bank account. it is the case of the plaintiff that though defendant collected rent, he failed to deposit the same in the bank. according to the plaintiff, rent collected from april 1967 to december 1972 would amount to rs. 38,806.50. in para 8 of the written statement, defendant contended that he received rs. 6,3257- only as rent from tenant rajamma. defendant examined as d.w. 1 deposed that rajamma did not pay three months rent when she vacated the building. it is not disputed that rajamma was in possession of the building from 1-7-1967 to.....
Judgment:

Pareed Pillay, J.

1. Appellant is the defendant in O.S. 277 of 1975 of the III Additional Sub-Court, Ernakulam. The plaintiff (respondent herein) filed the suit for rendition of accounts, and to recover Rs. -19,0997- or such further amount as would be found due to him, on settlement of accounts with the defendant together with 6% interest thereon. The learned Sub-Judge decreed the suit for Rs. 19,099.89 with 6% interest from 9-10-1975 and costs against the defendant. Aggrieved by the same the above appeal has been filed by the defendant.

2. The plaintiff filed the suit for rendition of accounts by the defendant and to recover the amount as per Ext. B4 or such other sum as found due to him from the defendant on settlement of accounts. Appellant died and his legal representatives were impleaded as additional appellants 2 to 4 Defendant admitted the settlement evidenced by Ext. B4 and contended that out of the said amount Rs. 11,0007- is due to him by way of commission and remuneration for the services rendered by him in purchasing a building for the plaintiff and the consequent management and supervision of the same during plaintiffs absence from India. Though plaintiff contended in the suit that the defendant is liable to rendition of accounts and that he (plaintiff) is entitled to the amount so determined he took the stand by Ext. B4 and was satisfied with the amount mentioned in it.

3. It is common case that plaintiff was employed in Ethiopia from 1950 onwards and that he used to visit his native place during vacations. He desired to purchase a building for his residence at Ernakulam after retirement. 'He requested the defendant who is a relative to help him to purchase a building. Substantial portions of the money for purchasing the building was drawn by the plaintiff from his non-residential account with the Grindlays Bank. Plaintiff undertook to deposit the monthly rent of the building in the bank. It is not disputed that the defendant was entrusted to collect the rent and to remit the same in the plaintiffs bank account. It is the case of the plaintiff that though defendant collected rent, he failed to deposit the same in the bank. According to the plaintiff, rent collected from April 1967 to December 1972 would amount to Rs. 38,806.50. In para 8 of the written statement, defendant contended that he received Rs. 6,3257- only as rent from tenant Rajamma. Defendant examined as D.W. 1 deposed that Rajamma did not pay three months rent when she vacated the building. It is not disputed that Rajamma was in possession of the building from 1-7-1967 to 31-10-1968. The rent for that period at the rate of Rs. 575/-per month would come to Rs. 9,200/-. The trial Court accepting the evidence of D.W. 1 that Rajamma had not paid three months rent held that defendant had collected Rs. 37,081.50 towards rent from the various tenants.

4. It is the contention of the defendant that the plaintiff had agreed to give him Rs. 1,000/- as remuneration for supervision and management of the property. It is also his case that he is entitled to 5% of the total value of the land and building as brokerage commission fee for the services rendered by him. In para 14 of the written statement defendant stated that settlement of accounts between him and the plaintiff was reached in 1974 and he was willing to pay the amount due to the plaintiff after deducting Rs. 11,000/-due to him from out of the said amount. It is the case of the plaintiff that there was no agreement to pay any commission to the defendant. It is also his case that there was no promise to pay any annual remuneration. Defendant has not produced any documentary evidence to substantiate his contentions. In the absence of any documentary evidence and also in view of the absence of reliable oralevidence, it is really difficult to hold that the plaintiff had' agreed to pay 5% commission as well as annual remuneration to the defendant for the services rendered by him. Admittedly, plaintiff is related to the defendant and in view of the circumstances and probabilities of the case, it is difficult to accept the defendant's case that the plaintiff had agreed to give him 5% commission as well as annual remuneration.

5. D.W. 1 deposed that he employed three sub brokers and they were paid 3% out of 5% commission which was promised to him by the plaintiff. D.W. 1 did not examine any one of them. D.W. 1 stated that one of the brokers was dead and another was laid up in a hospital. Regarding the third broker there is no explanation. Trial Court on a consideration of the evidence of D.W, 1 has rightly held that the defendant has never acted as a broker and commission agent of the plaintiff.

6. As regards the contentions of the defendant, there is formidable, difficulty for him as evidenced by Ext. B4. Ext. B4 dt. 5-2-1975 shows that Rs. 19,099.89 is due from the defendant to the plaintiff. D.W. 1 had the audacity to say in cross-examination that he saw Ext. B4 for the first time. If that be so, it is really intriguing as to how the said document was produced on the defence side. He had even gone to the extent of saying that Ext. B4 document was not produced on his side. He pleaded ignorance about the very existence of Ext. B4. In the next breath he admitted that Rs. 19,099.89 mentioned in Ext. B4 is correct and that amount is due to the plaintiff from him. The above admission is really the Waterloo of the defendant so far as his case is concerned. Of course, D.W. 1 stated that out 'of the aforesaid amount, the amount due to him should be deducted. Learned counsel for the defendant has taken up the stand that the amount mentioned in Ext. B4 deducting Rs. 11,000/- due to the defendant is the real amount due from him to the plaintiff. Ext. B4 is conspicuously silent about the claims of the defendant. D.W. 1 in cross examination admitted that Ext. B4 was given to him by the plaintiff. Evidence of D.W. 1 does not inspire confidence and it is really difficult to accept his contention that plaintiff has to pay him Rs. 11,000/- as stated in the written statement.

7. D.W. 1 admitted that there is nodocumentary evidence to show that plaintiff had agreed to give him 5% brokerage commission. It is also admitted by him that there is no documentary evidence regarding the promise 'made by the plaintiff to give him Rs. 1,000/- annually for supervising his property. Learned counsel for the plaintiff pointed out that the total rent collected by the defendant all along was with him and besides that, plaintiff had sent him a draft for Rs. 5,000/- and the defendant paid him only Rs. l5,625/- and hence much more amount than what has been stated in Ext. B4 is really due to him and he was only fair enough to accept the amount mentioned in Ext. B4 and therefore the trial Court's judgment and decree do not at all call for interference. Admittedly, defendant had remitted only Rs. 15,625/' in-the plaintiffs bank account. As Ext. B4 shows-that defendant was liable to pay Rs. 19,099.89 to the plaintiff the learned Sub-Judge held that the defendant has accounted for Rs. 22,981.61 out of Rs. 37,081.50 collected by him as rent and Rs. 5,000/- received as loan from the plaintiff. On that basis, the suit was decreed. As the plaintiff is satisfied with the decree granted in his favour it has to be considered how far the defendant has established his claim. There is no acceptable evidence to hold that D.W. 1 was at any time acting as a broker in real property. As already pointed out there is hardly any evidence to hold that the plaintiff had agreed to pay the defendant 5% brokerage commission or Rs. 1,0007- annually as remuneration.

8. The learned counsel for the appellant next contended that the appellant (defendant) who rendered service to the plaintiff and thereby benefiting him is at any rate entitled to compensation as provided under Section 70 of the Contract Act. Section 70 of the Contract Act provides that where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered. Learned counsel for the appellant contended that terms of Section 70 are wide enough and the court can apply the same with discretion in appropriate cases and so far as this case is concerned the court should interfere to do substantial justice between the parties. Learnedcounsel for the plaintiff argued that so long as there is no evidence to show that defendant rendered service to the plaintiff not intending to do gratuitously, Section 70 cannot have any application. Evidence in the case would show that plaintiff who was in Ethiopia, was helped by his relative the deceased in the purchase of the property and later in the collection of rent. But, there is hardly any evidence to show, that at any time defendant informed the plaintiff that he has been rendering the service not intending to do so gratuitously. Section 70 of the Contract Act applies to cases irrespective of any contract or agreement where a person lawfully does for another person or delivers anything which was never meant to be gratuitous and the other person has enjoyed the advantage. The three essential conditions for invoking Section 70 are :

(1) The goods are to be delivered lawfully or something has to be done for another person lawfully;

(2) The thing done or the goods delivered must be done or delivered not intending to do so gratuitously; and

(3) the person to whom the goods are delivered enjoys the benefit thereof.

It is needless to say when all the above three ingredients are pleaded and established in a case, Section 70 of the Contract Act can be invoked. So far as the case in hand is concerned, the second condition has not been .established by the appellant. There is not a single document or other evidence to show that plaintiff was made aware by the defendant that he was rendering service not intending to do so gratuitously.

9. Section 70 of the Contract Act is based on the doctrine of 'quantum meruit'. Though it may be argued that a liberal interpretation is necessary with respect to the application of Section 70, there cannot be any two opinions that the three essential conditions have not been satisfied in this case so as to invoke the benefit of Section 70 of the Contract Act in favour of the defendant-appellant. Section 70 is not found on contract but embodies the equitable principles of restitution and prevention of unjust enrichment There is not even slender evidence in this case to hold that at the expense of the defendant, plaintiff enriched himself. On the other hand, there is ample evidence to hold that defendant collected the rent from varioustenants for a considerable length of time and only a portion of it he paid to the plaintiff much later. In other words, defendant was able to utilise the amounts collected by him for his purposes while withholding regular deposits in the plaintiffs bank.

10. Existence of a valid contract may not be there for the application of Section 70 of the Contract Act. But, in a given case, there must be evidence and circumstances to hold that a lawful relationship existed between the two parties and one of the parties rendered services to the opposite party not intending to do so gratuitously and by that action the opposite party has been benefited. The evidence in the case is insufficient to hold that defendant-appellant can fall back on Section 70 of the Contract Act to claim compensation from the respondent-plaintiff.

11. Counsel for the plaintiff pointed out that even if Section 70 of the Contract Act is assumed to be applicable in this case, it cannot improve the position of the appellant as his pleading is barred by limitation. It has to be noted that the defendant introduced an alternative case basing upon Section 70 of the Contract Act by filing additional written statement. The trial Court allowed the additional written statement to be filed without prejudice to the contentions regarding limitation urged by the plaintiff. Ext. B4 evidences that a settlement of accounts was reached between the plaintiff and the defendant on 5-2-1975. Amendment of the written statement claiming benefit under Section 70 of the Contract Act was made on 19-10-1978. The period of limitation prescribed for a suit for compensation based on Section 70 of the Contract Act is 3 years and the defendant should have made the claim for compensation within 3 years after the date of Ext. B4. Obviously, that has not been done. That was not done even within 3 years after the date of the institution of the suit by the plaintiff. Suit was instituted on 11-10-1975. Amendment of the written statement was made only on 19-10-1978. Trial Court was right in holding that the alternative case by the defendant claiming compensation under Section 70 of the Contract Act is barred by limitation.

12. Counsel for the appellant pointed out that Rs. 10.000/- was deposited by the appellant during the pendency of the appeal before this Court and therefore that amount may be givencredit of from the amount found to be due to the plaintiff. Counsel for the plaintiff submitted that there is no objection for the above submission provided it is found that the amount has been deposited.

We do not find sufficient reasons to interfere with the judgment and decree of the trial Court. In the result, the appeal is dismissed with costs confirming the judgment and decree of the trial Court.


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