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Ramiah Chettyar Vs. Rukmani Ammal, Minor by His Brother and Guardian, Gilladi Krishnaswamy Chettyar - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in18Ind.Cas.138
AppellantRamiah Chettyar
RespondentRukmani Ammal, Minor by His Brother and Guardian, Gilladi Krishnaswamy Chettyar
Cases ReferredProsser v. Edmonds
Excerpt:
.....the right to recover some money which had been omitted from an account. 'as i am very old and too weak to recover the amount by having recourse to such litigation and as i have hereby transferred to you the said sum of rs. but this is clearly not the case..........owing them to the firm. the subordinate judge says that this transfer is invalid as conveying a mere right to sue within the meaning of section 6, clause (e) of transfer of property act. it seems to me that he has fallen into error in this matter. in one place, in his judgment he seems to treat the transfer as a transfer of a right to sue for damages for a tort. it clearly is not that because it is a transfer of the claim against the debtors as well as against the agents. he says in another part of his judgment: 'the assignment in question was made voluntarily with a view to re open a question already closed between the parties by amicable contract,' a statement which seems to me to assume, without any evidence having been taken, that the allegations in the transfer deed are false......
Judgment:

Miller, J.

1. The first and the third plaintiffs are transferees from one Chakrapani Chetty. The Subordinate Judge has held that the transfer deed conveyed nothing to them and on that ground the suit cannot be maintained. No other question has been decided. According to the transfer deed, a partition was made by the transferor of his property between himself and his sons on the 25th January 1908. As a part of that partition, the accounts of some silk and cloth business which were managed on his behalf by two of his sons were rendered by those sons and these were taken into account in making the partition. Subsequently, he has discovered, so he recites in the deed, that certain sums due to the firm, some out-standing debts, amounting to more than Rs. 10,000, were fraudulently concealed and omitted by the two sons from the accounts of the business and he proceeds to transfer to the two plaintiffs the said sums, which were fraudulently omitted of Rs. 10,000, and such other amount as may be found to have been omitted from the account, and which may be recoverable either from the two sons, the agents themselves, or from the debtors owing them to the firm. The Subordinate Judge says that this transfer is invalid as conveying a mere right to sue within the meaning of Section 6, Clause (e) of Transfer of Property Act. It seems to me that he has fallen into error in this matter. In one place, in his judgment he seems to treat the transfer as a transfer of a right to sue for damages for a tort. It clearly is not that because it is a transfer of the claim against the debtors as well as against the agents. He says in another part of his judgment: 'The assignment in question was made voluntarily with a view to re open a question already closed between the parties by amicable contract,' a statement which seems to me to assume, without any evidence having been taken, that the allegations in the transfer deed are false. Then he quotes from a case in which it was said: 'The right to complain of fraud is not a marketable commodity,' failing, I think, to notice that in the present case what is transferred is not the right to complain of fraud but the right to recover some money which had been omitted from an account. It really matters not whether the omission was fraudulent, accidental or with the consent of all the parties; the effect of the transfer is the same. The sums omitted are now alleged to be due and the transferee can take steps to recover them. I am unable to see how this does not fall within the definition of an actionable claim. The monies, the transferor alleges, are his monies put out in his business. They ought to have been brought into account as part of the assets of his business by his agents. They are either in the hands of his agents or still in the hands of the debtors, he dose not know exactly which. This is money in which he has, or alleges that ha has, a present existing interest and that present existing interest together with the right to sue to get it is what he has transferred. That is a claim to a beneficial interest in movable property which is not in his possession and that beneficial interest is existent, I see no reason myself why we should not hold, on the language of the transfer deed alone, that the plaintiffs are transferees of an actionable claim. Now on behalf of the respondents, it is said that what is transferred is merely a right to sue, not altogether on the ground that the Subordinate Judge seems to have put it, but on the ground that to recover the money, if any has been omitted from the accounts, the suit mast be for re-opening of the accounts already settled. In a sense, it may be said that this is so. But I am not prepared to say that, if it be invalid, the re opening of the accounts, on that ground alone the transfer is one of a mere right to sue; but in this case, I do not think that it is necessary to decide that the suit is to re-open a settled account. The transfer alleges in effect in the deed that he is willing to accept the accounts as correct so far as they have gone, but says that there are certain amounts which have not been brought in. It may be said that there is really no difference. I think there is a certain difference between taking a supplemental account and setting aside an account which has already been taken, re-opening it altogether. The difference lies in the fact that it is only items kept out of the former account that are now in question and there is, therefore, no difficulty in taking the view that the so-called settlement was only an acceptance by the principal of the items disclosed and not taken by him to be a final settlement of the whole agency business. I am not saying that it may not be possible to require some re-examination of the accounts, but the plaintiffs only pray that the account books be brought into Court, the amount already accounted for Rs. 62,771 be deducted and the balance, if any, shown to be due be given to them. It dose not appear to me that there is any evidence which shows that the account was really settled as a complete settlement, and that there was really a discharge of the agents from all liability which will have to be set aside. That is certainly not clear from the partition deed and there is nothing else at present in the case to show what was done by the parties. Even if I am wrong in this, still I am not prepared to hold that the mere fact that the accounts have once again to be examined in order to ascertain what the balance due is, should deter me from holding the transfer valid. It seems to me to be transfer of an actionable claim and certainly not a transfer of a mere right to sue. I do not think it necessary to discuss the cases which have been cited in Court and I would reverse the Subordinate Judge's decision and remand the suit for disposal according to law. The casts up to date will be disposed of as costs in the suit.

Abdur Rahim, J.

2. I agree in the conclusion arrived at by my learned brother. The principal question which seems to me to require decision is what was transferred by Exhibit A. Was it merely a right to sue or any right or interest in property? A number of cases have been discussed before us but none of them, in my opinion, apply directly to the facts of this case; and, of course, to ascertain what is the subject of transfer in a particular case, one has to look to the 'nature of the transfer' in that case. Exhibit A, the deed of assignment, shows that accounts had been settled between the principal defendants and the transferor of the plaintiffs at the time of partition but it is alleged that certain outstandings over Rs. 10,000 were not brought into account and are, therefore, still due to the plaintiff's transferor and that sum is assigned to the plaintiffs. The language is this: 'As I am very old and too weak to recover the amount by having recourse to such litigation and as I have hereby transferred to you the said sum of Rs. 10,000 that is now disclosed (as having been omitted) in the said documents and such other amount as may hereafter be disclosed to have been omitted in order that you may yourselves recover and derive the same exclusively.'

3. No doubt, it is also mentioned that the sum was omitted from the accounts fraudulently. But how this omission was brought about is not the important question if, as it seems to me, on the terms of the document, what was purported to be transferred was a sum of Rs. 10,000 or more which may be found due as belonging to the plaintiff's transferor. If that is the right construction of Exhibit A, there can be no difficulty in holding that the transfer was valid according to law, as it cannot be said to be the transfer of a mere right to sue. It is a transfer of a certain sum of money though it may be that the exact amount that is recoverable is found to be less or more than the sum mentioned; a mere uncertainty as to the amount cannot be said ipso facto to change the nature of the transfer. The question what is mere right to sue as distinguished from a right to or interest in property, has arisen in this Court in various ways. For instance, it has been held that the transfer of a right to recover damages on the basis of tort is a transfer of a mere right to sue. But this is clearly not the case here. It was indeed attempted by Mr. Govindaraghava Iyer who appeared for the respondents to show that the present suit was really a suit for damages. But I cannot accept that contention as correct. The right to call for account from an agent, supposing this is the nature of the right involved in this suit, is not a right to recover damages. It is substantially a right to money belonging to the plaintiff which is in the hands of his agent. It has been held, in Parvatheesam v. Bapanna 13 M.k 447 that the right to sue for account against a partner is heritable and is liable to be attached in execution of a decree. That case has been followed in Jagat Chander Roy v. Iswar Chander Roy 20 C.k 693. It has also been held, in Shib Chandra Roy v. Chandra Narain Mukerjee 1 C.C.L.J. 232 that a suit against an agent for an account is a suit for movable property, which includes money within the meaning of Article 89 of Schedule II to the Limitation Act; and, in my opinion, there can be no doubt as to the correctness of these decisions. There is, however, this further fact, no doubt, in this case that the outstandings are alleged to have been fraudulently suppressed at the time of the partition and Mr. Govindaraghava Iyer, therefore, argues that this suit is substantially one for setting aside or re-opening a settlement of accounts on the ground of fraud, and if that is so, he contends, on the authority of two English cases, Hill v. Boyle 4 L.R. Eq. 260 and Prosser v. Edmonds 1 Y. & C. 481 that such a right is not transferable. As regards the applicability of these cases, it seems to me in the first place that the scope of the present suit is not really one to set aside a formal release or discharge on the ground of fraud as was the case in Prosser v. Edmonds 1 Y. & C. 481 but to recover such sum of money as may be still due from the defendants. It may be that, before it can be ascertained what sum is due, accounts have to be taken again to a certain extent, if necessary, but this fact would not by itself turn the transaction into a mere right to sue. There is also this observation to be made with reference to those English decisions that they appear to be based on the English law of champerty and maintenance which has been held not to be the law in India. I, therefore, agree that the decision of the learned Subordinate Judge should be reversed and the case mast be disposed of according to law.


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