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Thirukumaresan Chetti and anr. Vs. Subbaraya Chetti and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in(1897)ILR20Mad313
AppellantThirukumaresan Chetti and anr.
RespondentSubbaraya Chetti and ors.
Cases Referred and Bam Chunder Shaha v. Manick Chunder Banikya I.L.R.
Excerpt:
.....would have been to take an account of all receipts of twists from. the explanation given by the subordinate judge in the 59th paragraph of his judgment may be well founded; 6. it is somewhat difficult to say what should be done with the decree framed by the subordinate judge, which cannot be allowed to stand as a final decree, it appears to us best to treat it as a preliminary decree and to have a final decree drawn up, when the inquiries yet to be made have been completed and the out-standings have been collected by the receiver. the subordinate judge does not say distinctly that he accepts the explanation given, but we must take it that he meant to do so. 11. the quantity sent from kumbakonam must be within the knowledge of the plaintiffs and as they are not satisfied with the..........and to take a similar account of all debits of twists to the palliam shop, as stated, in the kumbakonam accounts, and then to compare one with the other.' this course was not adopted, and what is more important, the defendants have, as far as we can learn, never vouchsafed any explanation. the explanation given by the subordinate judge in the 59th paragraph of his judgment may be well founded; but, as it stands, it is no more than a suggestion based on no evidence to which we are referred.3. as regards the next item--the rs. 1,000 mentioned in paragraph 67 of the judgment--we see no reason to differ from the subordinate judge. nor do we see any reason to differ as to the finding in the next paragraph to which objection was taken on behalf of the respondents.4. with regard to the.....
Judgment:

1. This is a suit brought by two of the partners of a firm against the remainder for an account of the partnership business. The partnership was dissolved before the date of the suit. Although, in the first instance, certain issues were raised, those issues were not tried, and, in the result, nothing remained except to take an account. Under these circumstances, the proper course for the Judge to have adopted was to pass a decree under the 15th Section of the Code of Civil Procedure, in accordance with the form given in the schedule. The decree should have directed an account to be taken of all dealings and transactions between the partners, between the dates agreed upon by them, viz., the date of the settlement in Parthiva and the 27th Margali (9th January 1889), and also an account of the credits, property and effects due and belonging to the partnership; and further it should have directed the appointment of a receiver of the outstanding debts and effects (see Daniell's ' Chancery Practice,' chap XXI, Section 10, and Bam Chunder Shaha v. Manick Chunder Banikya I.L.R. 7 Cal. 428 . Some of the directions, which are given in the actual decree, while finding proper place in a preliminary decree are most inappropriate in a final decree. The preliminary decree being drawn up, the next step was for the Court either to take the account itself or to appoint a Commissioner. A Commissioner was appointed and the usual directions were given him. The course taken by the Commissioner, as far as can be gathered from his report, was not, however, the convenient and proper one. Having found that the business at Udayarpalaiyam was conducted entirely by the defendants he ought to have called upon them to render an account, and not merely to give up their books for examination. When this was done, the plaintiffs would have been in a position to make their charges which, of course, opportunity should have been given to the defendants to meet. In all the steps taken, the statements made by either party ought to be supported either by affidavit or. by evidence duly taken. Instead of pursuing this course, the Commissioner, after some examination of the defendants' books, seems to have called upon the plaintiffs to make charges against the defendants, and then proceeded to consider whether those charges were substantiated. By this procedure, the plaintiffs must have been seriously prejudiced, for the burden was cast upon them whereas the burden of discharging themselves ought to have been cast on the defendants. For instance, with regard to the debts said to be due to the firm, which form one of the subjects of appeal, there does not seem to be any account verified by the defendants showing what amount remained uncollected The Commissioner gives no particulars (p. 48, para. 22 of the book of documents). The Subordinate Judge dealing with the matter in paragraph 73 of this judgment observes that the plaintiffs have no proof of the defendants having collected more than Rs. 27,757-2-6. He does not- say that the defendants swear they had not collected the balance of Rs. 5,505-2-1, still less that they explained why they had not done so, although, in the circumstances of the case, they ought to have been called upon for such explanation. The defendants' vakil was unable to refer us to any evidence on the point. It was apparently in consequence of the unsystematic mode of inquiry adopted by the Commissioner that the Judge had to refer the accounts to another Commissioner, as explained by him in paragraph 53. The point on which this reference was made is the most important point raised in the appeal. It relates to the sum of Rs. 12,515-13-6, representing the value of twist sent from Kumbakonam to the Udayarpalaiyam shop. The accounts of the latter shop were, it is admitted, kept entirely by the defendants, under whose control the business was.

2. This matter again the Subordinate Judge deals with as if a charge of misappropriation had to be proved by the plaintiffs; whereas it was for the defendants to explain what had become of the twist. The plaintiffs took exception in March to the manner in which the Commissioner had, in his report of January 1892, dealt with the matter, consequently another commission was issued. The second Commissioner does not pretend to have disposed of the matter finally, for he says ' the better way would have been to take an account of all receipts of twists from. Kumbakonam as given in the Palliam accounts, and to take a similar account of all debits of twists to the Palliam shop, as stated, in the Kumbakonam accounts, and then to compare one with the other.' This course was not adopted, and what is more important, the defendants have, as far as we can learn, never vouchsafed any explanation. The explanation given by the Subordinate Judge in the 59th paragraph of his judgment may be well founded; but, as it stands, it is no more than a suggestion based on no evidence to which we are referred.

3. As regards the next item--the Rs. 1,000 mentioned in paragraph 67 of the judgment--we see no reason to differ from the Subordinate Judge. Nor do we see any reason to differ as to the finding in the next paragraph to which objection was taken on behalf of the respondents.

4. With regard to the sum of Rs. 139-7-6 (paragraphs 41 and 42), it seems to us that the question is whether the plaintiffs or the defendants were in a position to recover the money. It is said that the decree is in the name or under the control of the defendants and that they never put the plaintiffs in a position to recover the money. If this is so, the plaintiff's ought not to be debited with it. There must be an inquiry on that head.

5. The last question relates to interest. The Subordinate Judge has dealt with this question in a rough and ready way. Since, however, it is found that the rate contracted for was generally 12 per cent, per annum, it was for the defendants to prove that a lesser rate had been paid. Here again we find the inconvenience of having no account rendered by the defendants and supported by their affirmation. There must be a proper inquiry with regard to this claim.

6. It is somewhat difficult to say what should be done with the decree framed by the Subordinate Judge, which cannot be allowed to stand as a final decree, It appears to us best to treat it as a preliminary decree and to have a final decree drawn up, when the inquiries yet to be made have been completed and the out-standings have been collected by the receiver. We must direct the Subordinate Judge to return findings on the following questions:

1. Whether the defendants have duly accounted for the twist sent from Kumbakonam to Udayarpalaiyam, and, if not, what sum should be debited against them in respect thereof?

2. Whether the sum of Rs. 5,505-2-1 was, in fact, collected by the defendants, or could, with reasonable diligence on their part, have been collected by them?

3. Whether the plaintiffs were put in a position to recover the sum of Rs. 139-7-6?

4. Whether in respect of any and what debts collected by the defendants, any and what remission of interest was properly made by them and what fair sum (if any) should be debited against them accordingly?

7. Fresh evidence may be adduced on either side.

8. The findings are to be submitted within six weeks from the date of the receipt of this order, and seven days will be allowed for filing objections after the findings have been posted up in this Court.

9. This appeal coming on again for hearing after the return of the findings upon the issues referred by this Court for trial, the Court made the following order:

10. Objections are taken to the findings on all the issues. As to the second, third and fourth issues, we are not prepared to disagree with the Subordinate Judge. The finding on the second issue, we must, however, observe, is not so clear as might be desired. It was for the defendants to explain why they did not collect the outstandings which were recoverable at the date of the dissolution. The Subordinate Judge does not say distinctly that he accepts the explanation given, but we must take it that he meant to do so. As to the first issue, the finding is unsatisfactory. The question still in doubt is as to what quantity of twist the defendants received at Udayarpalaiyam from Kumbakonam. The defendants admit that their own books are incomplete as to these receipts, being complete only as to the sales effected by them and the receipts from other places.

11. The quantity sent from Kumbakonam must be within the knowledge of the plaintiffs and as they are not satisfied with the defendants' account, they must themselves state from such materials as are available what quantities of twist were supplied from Kumbakonam from the 17th July 1885 till the 9th January 1889.

12. Having done this, plaintiffs must go on to show what is the difference, if any, to be accounted for by the defendants.

13. The account must be filed in this Court within two months. Two weeks allowed to the defendants to take objection. Parties to have access to the books.

14. This appeal coming on for hearing after the submission of the accounts, etc., the Court delivered the following judgment

15. Nothing in the shape of an intelligible account is put before us. The plaintiffs, therefore, not having taken advantage of the opportunity given them, we must accept the finding so far as regards the matter of the first issue. The decree must be modified in accordance with the finding of the Subordinate Judge in paragraph 29. Subject to this, the appeal is dismissed with costs.


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