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Gajanand Vs. Biharilal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Appeal No. 40 of 2006
Judge
Reported inAIR1952Raj64
AppellantGajanand
RespondentBiharilal
Appellant Advocate Bhandari, Adv.
Respondent Advocate Agarwal, Adv.
DispositionAppeal dismissed
Excerpt:
- - it was conceded that the decree of the first court was bad inasmuch as the whole suit was dismissed. a party, who wishes to reopen a settled account, has therefore to make out a very strong case on the ground of either fraud or substantial mistake of both the parties. if a party wishes to settle the accounts, he has to specify clearly the grounds, on which he claims permission to re-open and the items to which he takes objection as being entered fraudulently or through mistake. (bhul chuk leni deni). this clearly shows that the accounts had not been finally settled. 16. to my mind, the learned lower court was perfectly justified in holding that the suit had been wrongly dismissed......was given by the plaintiff to the defendant and it was held that it was either the result of a settled account or settlement by compromise and so the accounts could not be opened in the absence of fraud or important mistake.8. the learned counsel for the appellant also referred to 'bhagwan baksh singh v. damo-dar joshi', air (6) 1919 all 1. in that case, too, it was found that the accounts had been settled between the parties and it was held that the settled accounts between the two parties may be re-opened on the ground of substantial error or fraud.9. reliance was also placed on 'bachelal v. gundumal', air (20) 1933 oudh 557. in that case, too, a sarkhat for rs. 2000/- had been executed by the defendant in favour of the plaintiff's sons and a promissory note for rs. 2000/- in.....
Judgment:

Sharma, J.

1. This is the defendant's appeal against the order of remand made by the learned Civil Judge Nim-ka-thana and arises under the following circumstances: There was partnership between Gajanand defendant-appellant and Biharilal plaintiff-respondent, which was dissolved on 18-4-1948, and a writing was made evidencing the dissolution of partnership and stating that Rs. 1246/- were due from the plaintiff to the defendant and were paid, and that an accounting was yet to be made about a transaction of 80 bags of sugar. It was agreed that the plaintiff would be entitled to inspect the Bahi Khatas within 20 days from the date of the document and he would be entitled to recover any sum which might be found due on their inspection. It was also provided that if there was any mistake in accounting, the parties would be entitled to pay and receive whatever sum might be correctly found out from the accounts. The exact words used in Hindi are 'Bhul chuq leni deni'. The plaintiff brought the present suit on 6-5-1948, i.e., within 20 days of the agreement on the allegation that he called upon the defendant to give him an inspection of the account-books according to the agreement, but the latter did not comply with the request. The accounts should, therefore, be gone into and the plaintiff should be awarded whatever is found due to him.

2. The defendant contended, inter alia, that the document dated 18-4-1948 recorded a settlement of accounts and the plaintiff was not entitled to call for accounts of any other transaction excepting that of 80 bags of sugar.

3. The learned Munsif Nim-ka-thana dismissed the suit on the ground that the accounts, excepting those relating to 80 bags of sugar, had been settled and could not be re-opened, unless the plaintiff could point out any fraud or substantial mistakes in the accounts. He, therefore, dismissed the whole suit.

4. The plaintiff went in appeal and the learned Civil Judge Nim-ka-Thana, who heard the appeal, reversed the decree of the first Court and remanded the suit to it for decision according to law. Against this order of remand the defendant comes in appeal to this Court.

5. It has been urged by the learned counsel for the appellant that the document dated 18-4-1948 recorded a settlement of accounts and the accounts could not be re-opened, because the plaintiff has not alleged any fraud or substantial mistakes in the accounts. It was conceded that the decree of the first Court was bad inasmuch as the whole suit was dismissed. The suit should have been decreed only for accounts relating to 80 bags of sugar. I have been referred to the ruling reported in 'HENRY McKELLAR v. JOHN WALLACE AND JOHN SPENCE', 5 MOO Ind App 372, in which their Lordships of the Privy Council held that either when the accounts have been settled or a compromise has been made at a particular figure without going into the accounts, no suit lies for rendition of accounts. In that case a particular sum had been agreed upon between the parties and a bill had been given in respect of it. It was found that the parties had settled, the accounts or they had compromised on the particular figure, for which the bill was made. The plaintiff could not, therefore, re-open the accounts in the absence of fraud.

6. Reliance was next placed upon 'WILLIAM-SON v. BARBER', (1878) 9 Ch 529, in which it was held that where the accounts are impeached and it is shown that they contain error ol considerable extent, both in number and amount whether caused by mistake or fraud, the Court will order such accounts, though extending over a long period of years, to be opened, and will not merely give liberty to surcharge and falsify, and supposing that a fiduciary relation exists between the parties, the Court will make a similar order if such accounts are shown to contain a smaller number of errors or if they contained any fraudulent entries.

7. The ruling reported in 'MAGNI RAM KHUP CHAND v. LAXMI NARAYEN RAM PRATAP', 32 Bom 353 is also to the effect that the accounts, once settled, can be re-opened only on the ground of fraud or substantial mistake. In that case a promissory note was given by the plaintiff to the defendant and it was held that it was either the result of a settled account or settlement by compromise and so the accounts could not be opened in the absence of fraud or important mistake.

8. The learned counsel for the appellant also referred to 'BHAGWAN BAKSH SINGH v. DAMO-DAR JOSHI', AIR (6) 1919 All 1. In that case, too, it was found that the accounts had been settled between the parties and it was held that the settled accounts between the two parties may be re-opened on the ground of substantial error or fraud.

9. Reliance was also placed on 'BACHELAL v. GUNDUMAL', AIR (20) 1933 Oudh 557. In that case, too, a sarkhat for Rs. 2000/- had been executed by the defendant in favour of the plaintiff's sons and a promissory note for Rs. 2000/- in favour of the plaintiff. The plaintiff alleged that the amount of the Sarkhat had been paid, but Rs. 15007-were the balance out of the principal and Rs. 135/ 3/- on account of interest on the promissory note. The defendant contested the suit on the ground that there were numerous mistakes in the account. It was, however, found that there were no mistakes and the account could not be re-opened in the absence of substantial mistakes.

10. My attention was also drawn to '(VATAK-KAM CHIRAYEL PURKUM) KURINDALYAMAL v. T.P.E.N. KUNHIKAMMA', AIR (20) 1933 Mad 142 (Sic). In that case, too, the accounts were settled between the partners & a promissory note was executed by one of them in favour of the other. A suit for accounts was brought on the ground that fraud had been practised upon the plaintiff and holding that fraud had been practised, the accounts were re-opened.

11. Lastly reliance has been placed upon 'BAJ-RANGLAL V. ANANDILAL', AIR, (31) 1944 Nag 124. In that case also the accounts were settled and then followed a promise to pay the amount found due. It was held that the promise afforded a fresh cause of action, on which a suit could be instituted. It was further held that when the parties settled accounts, the presumption is that they have settled the accounts with their eyes open and that they knew what the accounts contained and then decided what the settlement ought to be. A party, who wishes to reopen a settled account, has therefore to make out a very strong case on the ground of either fraud or substantial mistake of both the parties. Mere unreasonableness of some items is no ground for re-opening the accounts. If a party wishes to settle the accounts, he has to specify clearly the grounds, on which he claims permission to re-open and the items to which he takes objection as being entered fraudulently or through mistake. He has then to prove that those items had been entered fraudulently and through mistake. Errors have to be properly alleged and proved.

12. It has been contended that in the plaint there is no mention that there had been any fraud or error in the accounts. The plaintiff inspected the Bahi Khatas which were in possession of the receiver appointed by the Court in the case and yet he could not point out any mistake or fraud Under these circumstances, the suit, excepting that portion of it which related to 80 bags of sugar, was rightly dismissed.

13. The learned counsel for the respondent agreed to the proposition of law enunciated by the learned counsel for the appellant and supported by the authorities cited by him. He, however, argued that the document, Ex, P-1, dated 18-4-1948, did not record the settlement of accounts. The accounts had not been gone into and only a sum of Rs. 12467- was provisionally found against the plaintiff, and it was paid. It was stipulated that the plaintiff had a right to inspect the accounts within 20 days & on inspecting the accounts, if any sum was found due to any party, he would be entitled to get it. The defendant did not give inspection of the account books within 20 days as agreed and therefore the plaintiff was entitled to bring the suit for the recovery of the sum which might be found due to him on the basis of the accounts, it was further contended that the accounts were to be finalized only after the Bahi Khatas had been inspected, as stipulated by the document, Ex. P. 1.

14. So far as the proposition of law is concerned, there is no difference between the parties. Both of them agreed that, once the account is settled between the parties, it cannot be re-opened, unless on the ground of fraud or substantial mistake. The only difference is about the nature of the document, Ex. P-1. Whereas the defendant contends that it records the settlement of accounts, the plaintiff contends that it was only a provisional arrangement and the accounts were to be finalized only after the accounts were inspected. I have, therefore, read the document with great care and have come to the conclusion that it does not record a final settlement of accounts. No doubt, a sum of Rs. 1246/- has been mentioned therein as due from the plaintiff to the defendant which was paid, but it has nowhere been mentioned that this amount was found against the plaintiff after he had scrutinized or even gone through the accounts. The only thing mentioned is that according to the Khata this amount was due from the plaintiff. The document, however, does not say that the accounts had been settled or that the plaintiff had accepted the balance in the Khata as the final word. On the contrary, it has been stipulated that the plaintiff shall have a right to go through the accounts within 20 days from the date of the document, and if any mistake or error is found out, it would be rectified. (Bhul chuk leni deni). This clearly shows that the accounts had not been finally settled. The door was kept open for 20 days from the document Ex. P-1.

15. The plaintiff brought the present suit within 20 days, alleging that he had not been allowed to inspect the accounts and find out what sum was actually due and from which party. The question, therefore, does not arise of re-opening the accounts because they had never been closed. It may be that if the plaintiff had not asked for the inspection of the accounts, within 20 days, it might have been taken, after the expiry of that period, that he had acquiesced in the arrangement which was arrived at as per document Ex. P-1, but the plaintiff did not acquiesce and brought the suit within 20 days. The suit was, therefore, not liable to be dismissed. The learned original Court made one very, obvious mistake inasmuch as it threw out the whole suit because according to both the parties at least an account had to be taken with respect to 80 bags of sugar.

16. To my mind, the learned lower Court was perfectly justified in holding that the suit had been wrongly dismissed. The appeal has no force. It is dismissed with costs to the contesting respondent.


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