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K.V. Ramachari Vs. K.V. Krishnamachari and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1924Mad846; (1924)47MLJ460
AppellantK.V. Ramachari
RespondentK.V. Krishnamachari and anr.
Cases ReferredEnamul Huq v. Ekramul Huq I.L.R.
Excerpt:
.....and partly on the ground that the result of its orders may be wholly unnecessary and irremediable damage to 1st defendant's business interests. the court has no right to assume that plaintiff is a partner, and, if it must hold that he is not unless and until he proves that he is, clearly it is unjustified in law in allowing a stranger, merely on the allegation that he is a partner, permission to inspect all the trade accounts of 1st defendant. the conduct of business would be impossible under such conditions and the court has clearly lent itself to a course which is wholly opposed to public policy, and it is therefore necessary for this court to interfere. 7. the various rulings of english courts which have been cited to me clearly establish the proposition that a court can and must..........i am strongly of opinion that, until and unless plaintiff establishes that he is a partner of the firm, mannar aiyar is, from his previous connection with the firm, a wholly undesirable person to allow to inspect the accounts for plaintiff. if, however, plaintiff establishes that he is and was a partner, then as such partner he is entitled to the fullest scrutiny and knowledge of the firm's accounts and affairs, and the objection to an inspection of all the firm's books on his behalf by mannar aiyar, who would then in his connection with the firm have been servant of plaintiff as much as of 1st defendant, would disappear.8. i must therefore reverse the order under revision in c.r.p. no. 86 of 1924 also and order that unless and until plaintiff establishes his plea of partnership,.....
Judgment:

Wallace, J.

1. First defendant in O.S. No. 8 of 1923 on the file of the Second Additional Subordinate Judge's Court, Madura, has put in two revision petitions Nos. 86 and 87 of 1924 asking for revision of two interlocutory orders of the Subordinate Judge with reference to inspection of his documents by plaintiff. Interference by this Court with the proceedings of a lower Court during the pendency of a suit is to be deprecated unless strong reasons are made good, but in the present case I think that the revisional powers of this Court must be exercised, partly on the ground that the lower Court has not properly understood the provisions of Order 11, Rule 14, of the Civil Procedure Code, and partly on the ground that the result of its orders may be wholly unnecessary and irremediable damage to 1st defendant's business interests.

2. There are two main contentions in the suit--(a) that plaintiff is really a partner in 1st defendant's firm and trade, (b)that plaintiff is therefore entitled to a taking of the partnership accounts. In his written statement 1st defendant referred, without giving particulars, to a number of documents on which he proposed to rely. Later on he filed various lists of them at various times and produced about 1,400 documents and put in a final affidavit of documents on 20th September, 1923, in which he prayed the Court that it should not allow inspection of any document by plaintiff without specific orders and without notice to him. On 24th October, 1923, plaintiff, without filing any affidavit, put in a memo. asking for inspection of all documents filed in Court by defendant and followed that up on 1st November, 1923 by an affidavit in which he requested that one Mannar Aiyar be permitted to inspect on his behalf. On that the lower Court on 2nd November, 1923 passed the first order now under revision, permitting plaintiff to inspect 212 documents, but refusing to allow Mannar Aiyar to inspect as he was not a power-of-attorney agent for plaintiff.

3. I cannot assent to the proposition that, when a party was produced in Court under Order 11, Rule 14, documents in his possession but has urged that inspection should not be allowed before hearing his objections, the Court has a right to ignore that protest and the other party has a legal right to inspect all documents relating to all issues and to all stages of the trial of the suit, i.e., that the mere production by one party gives an immediate and indefeasible right of inspection to the other. I do not read Order 11, Rule 14, as justifying any such conclusion. As the Court was proceeding according to the usual practice in the moffussil, to allow inspection in Court under Order 11, Rule 14, and not under Rule 15, I hold it was bound to consider 1st defendant's objections to inspection and especially bound to consider whether plaintiff was entitled to inspect all these documents at that stage of the case, viz., before trial had begun. As pointed out above, the first point to be decided in the case is whether plaintiff is or was a partner in 1st defendant's trade. Until that is decided, in plaintiff's favour, obviously plaintiff has no right whatever to be allowed to inspect the trade accounts, apart from those which bear on the question of partnership. The Court has no right to assume that plaintiff is a partner, and, if it must hold that he is not unless and until he proves that he is, clearly it is unjustified in law in allowing a stranger, merely on the allegation that he is a partner, permission to inspect all the trade accounts of 1st defendant. The conduct of business would be impossible under such conditions and the Court has clearly lent itself to a course which is wholly opposed to public policy, and it is therefore necessary for this Court to interfere.

4. On this part of the case then, viz., on C.R. P. No. 87 of 1924, the proper order is that plaintiff cannot be allowed, unless and until he has established that he is a partner, to inspect any documents which do not bear on this question of partnership, and that as regards documents which do bear on it the lower Court must hear 1st defendant's objections before it passed its order. If and when plaintiff has established his partnership, then the lower Court will similarly consider if plaintiff is entitled to inspect the remaining documents. I reverse the order under revision in C.R. P. No. 87 of 1924 and order accordingly.

5. In C. R. P. No. 86 of 1924 the lower Court has still further wandered from what I regard as the first principles of public policy. Following on its order of 2nd November, 1923, it-passed a further order on 1st December, 1923 permitting Mannar Aiyar to inspect all 1st defendant's documents (Mannar Aiyar having by then obtained a power of attorney from plaintiff), provided plaintiff undertook not to examine Mannar Aiyar as a witness. Plaintiff in his turn has filed C. R. P. No. 116 of 1924 against the imposition of this condition. Now without going into the details of affidavits on the relations of 1st defendant and Mannar Aiyar, the following points are clear :--(a) this Mannar Aiyar was employed in 1st defendant's firm for at least 20 years from 1898 to 1918, writing up and keeping the firm's accounts; (b) he left 1st defendant's service in 1918 and reverted to plaintiff's side in the dispute between the plaintiff and 1st defendant and is now actively supporting plaintiff under circumstances which indicate that he personally ill disposed towards 1st defendant; and (c) that plaintiff wants Mannar Aiyar to inspect the accounts and Mannar Aiyar himself wants to inspect them because he already knows the firm's business so thoroughly that he will be able to detect if there has been any tampering with the accounts.

6. As supra, the Court is for the present to assume that plaintiff is an outsider to the firm, who has been able to gain over to his side a disgruntled former employee of 1st defendant and has given him a power of attorney for the express purpose of setting him to a roving inspection of 1st defendant's accounts and this is what the lower Court is permitting him to do. Such a course seems to me in the highest degree objectionable and contrary to public policy. That any outsider by mere allegations in a plaint should be able to obtain from a Court the power of inspection of all firm's books by a former employee of the firm who knows the firm's business for over 20 years and who is employed by the plaintiff for the purpose of that inspection, not because of his skill as accountant and auditor, but because of his exclusive and intimate acquaintance with all the firm's business, is a position that cannot be defended, and to permit it would be to put an end altogether to any privacy and confidential dealings in business.

7. The various rulings of English Courts which have been cited to me clearly establish the proposition that a Court can and must exercise discretion as to whom it is going to permit to conduct such an inspection and the case in Enamul Huq v. Ekramul Huq I.L.R. (1897) C 294 is to the same effect. The absence of, a power of attorney (as in that case) does not alter the personality of the proposed inspecting agent. I am strongly of opinion that, until and unless plaintiff establishes that he is a partner of the firm, Mannar Aiyar is, from his previous connection with the firm, a wholly undesirable person to allow to inspect the accounts for plaintiff. If, however, plaintiff establishes that he is and was a partner, then as such partner he is entitled to the fullest scrutiny and knowledge of the firm's accounts and affairs, and the objection to an inspection of all the firm's books on his behalf by Mannar Aiyar, who would then in his connection with the firm have been servant of plaintiff as much as of 1st defendant, would disappear.

8. I must therefore reverse the order under revision in C.R.P. No. 86 of 1924 also and order that unless and until plaintiff establishes his plea of partnership, inspection on his behalf by Mannar Aiyar cannot be permitted and such inspection as the lower Court permits must be by some one else.

9. First defendant will get his costs on both these petitions. C. R. P. No. 116 of 1924 is dismissed with costs, Rs 50 being allowed for printing.

10. I must impress on the lower Court that such a privilege as inspection by a party of his adversary's documents is not a matter of routine, but is to be permitted or refused only after a judicial decision not only as to the right to inspection itself, but with reference also to the stage of the case at which such right s to be permitted, and that it is to be exercised so as to result in as little harm as possible to parties who are, entitled to have the protection of the Court in carrying on their lawful pursuits.


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