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Shamaldhone Dutt Vs. Lakshimani Debi - Court Judgment

LegalCrystal Citation
Decided On
Reported in(1909)ILR36Cal493
AppellantShamaldhone Dutt
RespondentLakshimani Debi
Cases ReferredMonohur Doss v. Romanauth Law
attorney and client - settled account, re-opening of--accounts settled on basis of untaxed bills--fiduciary relationship--onus of proof in transactions between attorney and client--independent advice--assignment of promissory notes, validity of--'final decree,' meaning of--contract act (ix of 1872), section 16--evidence act (i of 1872), section 111. - .....monohur doss v. bomanauth law (1878) i.l.r. 3 calc. 473 that the plaintiff ought to have had his bills taxed, and that as he did not have them taxed the accounts of the third further charge should be re-opened. accordingly he directed that the accounts relating to the third further charge should be re-opened, that the plaintiff should get his bills taxed and then refile them in court; that then a commissioner should he appointed to take accounts and thereafter that a decree should be drawn up under section 89 of the transfer of property act.5. the plaintiff then applied for the taxation of his bills. but we are told that after this lapse of time, the taxing officer declined to tax his bills without the orders of the court. as the bills were old bills and related to several cases, the.....

Coxe and Doss, JJ.

1. This was originally a case of considerable complexity, but for the purposes of this appeal the matters essentially in dispute may be stated at no great length.

2. The plaintiff, Babu Shamaldhone Dutt, was the attorney of one Radhanath Mukherjee, a gentleman, who apparently devoted much of his life to litigation. The indulgence of this taste involved him in great expenditure, and the plaintiff advanced him considerable sums towards meeting it. For these advances, Radhanath Mukherjee executed at first a mortgage and then three further charges in favour of the plaintiff, and the plaintiff brings this suit to recover the money due on these securities. We are not concerned in this appeal with the original mortgage and the first two further charges.

3. The third charge was executed on the 3rd August 1903 for a consideration of Us. 21,000 which, excluding fractions, was made up as follows:


Interest on mortgage and previous two charges 6,468

Promissory notes executed by Radhanath for

advances made by the plaintiff from time to

time ... ... ... ... 14,870

Interest on the same... ... ... 1,451

Promissory notes executed by Radhanath in

favour of Prakash Ghosh with interest 6,163

Costs due to plaintiff ... ... ... 13,593

Total ... 42,545

Deduct sum received by plaintiff from Radha

Nath's estate ... ... ... 14,452

Remitted by plaintiff out of the sum of Rs.

13,593 above ... ... ... 7,093


Balance ... 21,000

4. The Subordinate Judge with respect to the first item of Rs. 6,468/- has left the calculation of the proper amount to be settled when accounts are taken. He is apparently satisfied of the liability of Radhanath on the hand notes, but with respect to the sum of Rs. 13,593 he has held on the authority of Monohur Doss v. Bomanauth Law (1878) I.L.R. 3 Calc. 473 that the plaintiff ought to have had his bills taxed, and that as he did not have them taxed the accounts of the third further charge should be re-opened. Accordingly he directed that the accounts relating to the third further charge should be re-opened, that the plaintiff should get his bills taxed and then refile them in Court; that then a commissioner should he appointed to take accounts and thereafter that a decree should be drawn up under Section 89 of the Transfer of Property Act.

5. The plaintiff then applied for the taxation of his bills. But we are told that after this lapse of time, the Taxing Officer declined to tax his bills without the orders of the Court. As the bills were old bills and related to several cases, the orders of the Court could not have been obtained without several applications, and as this would have cost money, and the result was doubtful, the plaintiff decided to present this appeal. The appellant takes objection to the finding of the Subordinate Judge on various questions of fact, but the main ground of the appeal is that the Court should not have ordered the accounts relating to the third charge to be re-opened.

6. A preliminary objection is taken that no appeal lies as the order of the Subordinate Judge does not amount to a decree as defined in the Civil Procedure Code. It is urged that all that the Subordinate Judge has done is to order the plaintiff to have his bills taxed and that the stage of directing accounts to be taken has not yet been reached, nor has any right claimed been as yet adjudicated upon, so far as the third charge is concerned. Reliance is placed on the decision in Coverji Luddha v. Morarji Punja (1885) I.L.R. 9 Bom. 183. But if that case can still be regarded as a correct statement of the law after the decision in Rahimbhoy Habibbhoy v. Turner (1890) I.L.R. 15 Bom. 155; L.R. 18 I.A. 6, it does not really help the respondent much. In that case the defendants were held liable to pay half of whatever sum the Government Surveyor might certify to be due for certain work. Further enquiries were made and a final decree was made later. The defendants appealed, and it was argued that the first order was a decree and that an appeal against it was barred by limitation. The Court held that it was not an adjudication that decided the suit, and on the point whether it was an order directing accounts to be taken they observed: 'The words directing accounts to be taken 'are precise and technical, and as the order does not fall within that description we must hold that it is not a decree.' The natural inference is that if the order had, in precise terms, ordered accounts to be taken, as is the case here, the Court would have regarded it as a decree. And clearly a Court would be disposed to construe the definition of a decree with extreme strictness far more in such a case, where if the order complained of was regarded as a decree, the appeal was barred by limitation, than in a case like the present, where the sole question is whether the appeal should be made now or a little later when some further orders, more or less of a formal character, have been made. It must be remembered that the plaintiff has endeavoured to carry out the orders of the Court, and that it is only when he has found that they cannot be carried out without expense and risk that he has preferred this appeal.

7. The matter, however, may be put on a wider ground. The point on which this appeal almost exclusively turns is the question whether the accounts relating to the third charge should be re-opened. The third charge contains a formal covenant to pay Rs. 21,000, and the effect of the learned Subordinate Judge's decision is that the defendants are held not liable to perform this contract, as it stands, because the plaintiff being in a position of active confidence towards Radhanath Mukherjee has failed to prove that he exercised no undue influence. This seems to us a clear adjudication, deciding the suit so far as the third charge is concerned. The fact that the learned Subordinate Judge intends hereafter to adjust the equities arising out of the contract does not in any way do away with his adjudication that the contract, as it stands, is not binding on the defendants. We think therefore that the Subordinate Judge's order is a decree, and that the objection, that no appeal lies, must fail.

8. We turn now to the main point in dispute, namely, whether the defendants, who are the successors in interest of Radhanath Mukherjee, are entitled to have the accounts relating to the further charge reopened, on the grounds that the plaintiff ought to have had his bills of costs taxed, and that, as he did not have them taxed, they must be further examined before they can be accepted as sufficient consideration for the mortgage.

9. Several English and Irish cases have been laid before us on this point. But in our opinion the authorities cited do not bear out the defendants' case. The contention of the defendants is that an attorney, being bound to have his bills taxed, is liable to have his bills re-examined, if he sues on a bond to pay a sum found on a settlement of untaxed bills to be due to him. Now, the decision in In re Webb. Lambert v. Still [1894] 1 Ch. 73 is wholly against the contention, but the learned pleader for the respondent relies on Lawless v. Mansfield (1841)1 Dr. & War, 557; 58 R.R. 303. That case certainly goes a great way in his favour, but it is not of so high an authority as the decision in Lambert v. Still [1894] 1 Ch. 73, and even in Lawless v. Mansfield (1841)1 Dr. & War, 557; 58 R.R. 303 all that was decided was that 'where the relation of attorney and client subsists, in questions of accounts between the parties the common rule (that accounts will be re-opened only on errors being proved) does not prevail. Though the party only alleges generally that the accounts are erroneous, the Court will make a decree opening the accounts, if sufficient cause be shown.' It is not laid down that the mere existence of the relation of attorney and client is sufficient, in the absence of all reasons for suspicion, to justify disregard of a formal contract and the re-examination of the accounts on which it is based. That the words 'if sufficient cause be shown' are not mere surplusage was pointed out in Morgan v. Higgins (1859) 1 Gif. 270 and in Blagrave v. Routh (1856) 8 De. G. M, & G. 620 it was held that what was said in Lawless v. Mansfield (1841)1 Dr. & War, 557; 58 R.R. 303 was not meant to apply and could not apply to a mortgage for bills of costs only.

10. In our opinion, therefore, these cases do not justify us in holding, in the absence of evidence that there is anything open to suspicion in the third further charge that the plaintiff is bound to show that the bills, for the payment of which the bond in suit was in part given, were just and reasonable.

11. Passing from the consideration of these cases, which after all are a safe guide in this country only in so far as they are in accordance with the provisions of the Contract Act, we may add that nothing in the Contract Act requires the re-opening of the accounts. Section 16 only presumes undue influence by a person in a position to dominate the will of another, when the contract appears on the face of it to be unconscionable. Section 111 of the Evidence Act throws upon a person standing in a fiduciary relation to another the burden of proving that he acted in good faith. The expression 'good faith' is not defined in the Evidence Act, but to prove the good faith of a contract it certainly is not necessary to prove that all the accounts on which the contract is based are correct.

12. The main-stay of the respondent's case on this point is the decision in Monohur Dass v. Romanauth Law (1878) I.L.R. 3 Calc. 473 already cited. Under the rules of this Court on the Original Side (Belchambers 328) attorneys have to have their bills taxed every year, and if an attorney receives payment for untaxed costs he is liable to be struck off the rolls. To this rule, however, there is a note affixed that the rule has not been observed since 1862, that in all cases taxation is deemed to be optional, and bills of costs are not infrequently adjusted without taxation. In the case cited the attorney offered to have these bills taxed, but his client refused. His client had no independent legal advice and was the client of the attorney till the latter sued on the mortgage which the former had given him for the amount due on his bills of costs, and he had a case before the attorney as arbitrator. It was held that the client was entitled to have the bills re-opened and taxed. In the present case, however, the attorney had done a good deal more than offer to have his bills taxed. He had filed the bulk of them in the taxing office, and he swears that he pressed his client during the considerable period that they lay in that office to have them examined. As he had paid the tax himself in advance, it is natural to suppose that the delay in the examination of the bills was not due to him. Another point of difference between this case and that cited is that the client had independent legal advice, or at any rate the opportunity of getting it.

13. It appears to us that the defendants are bound to make out a prima facie case that the bills were extortionate, or at any rate incorrect, before they can ask the Court to re-examine them in a suit on a mortgage bond given for their discharge. We may say at the outset that they have failed in our opinion to make out any such case. The bills have been produced, but though the plaintiff has been subjected to a long and harassing cross-examination, not a question has been put to impugn the accuracy of the items in the bills. We might perhaps leave the matter there, but as it has been discussed at length we think that we should, in justice to the plaintiff, deal with the evidence on the other side, which in our opinion shows conclusively that the plaintiff took no advantage of Radhanath, but in fact treated him with liberality.

14. The negotiations which terminated in the third further charge began in April 1902. At that time Radhanath's property was in the hands of Mr. Bedchambers, who had been appointed Receiver, as far back as 1895, in a suit brought by Raja Srinath Roy.; The plaintiff swears that Radhanath at that time examined the accounts and the draft bills, the bulk of the original bills being in the taxing office, and agreed to pay Rs. 6,500 in full discharge of them, the sum of Rs. 7,093 being remitted by the plaintiff at the entreaty of Radhanath. This story is corroborated by the plaintiff's partner and by Satya Charan, Radhanath's mother's first cousin. This gentleman lives in a house of the plaintiff, and his independence is attacked. There is also a slight discrepancy as to whether the transaction was effected in the house or the office, but we attach no importance to it. It is probable that the business was not finished in a day and was discussed both at home and at office. If this evidence stood by itself we should consider it entitled to respect, even if it were not regarded as conclusive. The witnesses are respectable people, and their evidence stands wholly uncontradicted. But it does not stand by itself, but is, on the contrary, strongly corroborated by all the circumstances of the ease. In the first place Radhanath was not the man to agree to pay Rs. 6,500 without good reason. An attempt has been made to represent him as incapable of business. But the evidence of Mr. Belchambers shows that he was a man of ordinary intelligence. He seems to have been always engaged in litigation. Priyanath, the principal witness for the defendants, says that he used not to listen to anyone, and that though he took advice he did not act upon it. The description given of Radhanath by this witness suggests rather an obstinate, headstrong man, not prone to take advice and not likely to enter into agreements to pay large sums of money for the asking. Yet not only did he agree to the payment of Rs. 6,500 on account of these bills, but he repeated that agreement a year later, and during his life never showed any signs of desiring to resile from it. The further charge was recognised in a written statement filed by him a year later, in June 1904, and interest was paid on it up to July 1904, a few months before his death. It is not improbable that if he had lived, this defence would never have been set up. The bulk of the bills, as we have said, had long been deposited in the taxing office, and the tax had been paid in advance. No reason for depositing them there can be assigned except that the plaintiff desired to have them taxed. This fact itself suggests that the bills were not extortionate, for if the total of a bill is reduced by a sixth by the Taxing Officer, the attorney has to pay the whole tax. Included in the accounts of the third charge are some taxed bills, and the largest of them was reduced by 10 per cent, only. This is an indication, so far as it goes, that the plaintiff's bills, at any rate those sent in to the Taxing Officer, were not extortionate.

15. There is also another circumstance in the plaintiff's favour. The settlement of accounts was in April 1902. In the following month the estate of Radhanath was released from the charge of the Receiver, and handed over to the joint management, of Radhanath and the plaintiff. The plaintiff was in, sole charge of the receipts and expenditure, paying Radhanath a fixed monthly allowance. This arrangement was of course favourable to the plaintiff, and it may reasonably be inferred that he and Radhanath had arranged together for the payment of Raja Srinath Roy, and the transfer of the estate from the Receiver to their hands. All this must have taken some time. It seems very unlikely that the plaintiff would have selected this occasion of all others to try to obtain Radhanath's assent to pay off his dues, if those dues were really extortionate. Radhanath might easily have discovered the fact, if really he was being cheated, and in that ease the plaintiff's chances of obtaining with his aid joint possession of the property as security for his advances would have been seriously jeopardised. He had every reason at that time to keep Radhanath in good humour, an object which an untimely insistence or an extortionate bill would probably have frustrated. All these circumstances indicate that the bills were reasonable. No doubt if they had been taxed the sum of Rs. 13,593 would have been reduced probably by a sum between one and two thousands. But we have no doubt that Radhanath was greatly benefited by this agreement to pay only Rs. 6,500.

16. This suit, however, is not based on the promissory note for Rs. 6,500 which Radhanath executed in April 1902, but on the further charge which was executed 1 years later. If really the promissory note was extortionate, it is difficult to believe that Radhanath would not have discovered the fact by July 1903. The conduct of the plaintiff at the time that the further charge was executed completely exonerates him in our opinion from any suspicion of bad faith. He advised Radhanath to consult another attorney and accordingly Radhanath went to Mr. J.C. Dutt. Mr. Dutt examined the draft, suggested alterations and examined the zemindari accounts. As to whether he examined the plaintiff's bills of costs, there is some conflict of evidence. Mr. Dutt says that he did so, while the plaintiff and his partner say distinctly that Mr. Dutt did not examine the bill. But it is possible that they may not have known the facts. The bills, if they were examined at all by Mr. Dutt, were examined by him at his own office and were brought to him by Radhanath. Radhanath may well have had some diffidence in re-examining bills which he had agreed to pay a year before and may have obtained them surreptitiously from the plaintiff's office. This is of course a mere conjecture, but some such conjecture is necessary to explain the facts. Not only does Mr. Dutt swear that he examined the bills, but it appears that this matter of Radhanath's liability for Rs. 6,500 on account of these bills was entered in the draft by Mr. Dutt himself, and it is difficult to see where he obtained this information if he was not consulted on this very point by Radhanath. The plaintiff evidently did pot suggest the inclusion of this liability in the further charge.

17. Finally, it is not suggested that Mr. Dutt is in collusion with the plaintiff. There is nothing to rebut the plaintiff's statement that he did not advise Radhanath to consult any particular attorney. Radhanath apparently went to Mr. Dutt of his accord and consulted him. Even assuming that Mr. Dutt did not examine the bills there is nothing to show that the bills-were withheld from him, or that he would not have been given full opportunities for examining them if he or Radhanath had asked to see them. In these circumstances, even if Mr. Dutt did not examine the bills, the fact is of no importance. An attorney may be bound in certain circumstances to advise his client to take independent advice. But when he has done so more cannot be required of him. It is not his business to see that the attorney selected by his client fulfills his duties to his client and is guilty of no remissness or negligence. If he sends his client to another attorney and is ready to comply with all reasonable demands for information, he cannot be expected to do more or to be responsible for another's omissions.

18. With regard to this question of the costs due to the plaintiff, it is urged that, though he received Rs. 7,100 from the Manager of the Junsi Estate as costs, he credited Radhanath with only Rs. 4,860. To this it is replied that the sum of Rs. 4,860 was paid by the Receiver in advance, and when it was recovered from the Junsi Estate the sum was credited to Radhanath. The rest was due to the plaintiff as costs between party and party incurred after December 1901, and therefore had nothing; to do with the account of the sum of Rs. 6,500 which related to costs between attorney and client incurred up to December 1901. The materials on the record do not justify any clear finding on this point, and therefore do not justify the re-opening of the account of the plaintiff's bills of costs.

19. We have no doubt that Radhanath was greatly benefited by the plaintiff's acceptance of Rs. 6,500 in full discharge of his bills of costs. We think that before the further charge, on which this suit was based, Radhanath had a full opportunity of taking legal advice on his liabilities, of which he availed himself as far as he and his adviser thought necessary. The case is therefore quite distinguishable from Monohur Doss v. Romanauth Law (1878) I.L.R. 3 Calc. 473 which decision indeed proceeded on the special circumstances of the case rather than laid down any general principle of law. Taking this view, we find that the defendants are not entitled to have the accounts relating to the third further charge re-opened on the ground that the plaintiff's bills of costs were not taxed.

20. This is by far the most important point in the case, and it is not necessary to discuss the other points at much length. The other items of the accounts are attacked in cross-appeal. With respect to the sum of Rs. 6,465 on account of interest on the former charges, it is said that if the payments of interest made by the Receiver had been credited on the days of payment, the sum due on this account would have been much less. On the other hand it is said that, as the mortgage and charges provided for the payment at certain rests, it was right to credit, the money on the date of the rests and not on the days of payment. The matter has not; been discussed by the Subordinate Judge. No account showing how interest ha$ been over-charged, has been laid before us by the learned pleader for the respondents, and all that we need say on the matter is that we have been given no satisfactory reason for re-opening the account of interest given in the further charge.

21. As regards the sum of Rs. 14,870/- it is urged that there is no proof of the appropriation of the money advanced on the hand-notes to the repairs of the embankment or to the payment of the rent. But most of these notes were executed before the estate was released from the control of the Receiver. The largest sum, namely, Rs. 6100/- was advanced in January 1903, after the estate had been released, but this was paid to satisfy the decree of Harendra Lal Roy, under which the property of Radhanath had been attached. We are informed that this was the property in suit, but the fact that this point has not been fought put in the trial of the case indicates that the opposition to these hand-notes is hopeless. The next largest sum, viz., Rs. 4100/- was advanced while the estate was still in the Receiver's hands and is credited in the Receiver's book.

22. With respect to the payment of Rs. 6,163/- on account of hand-notes executed by Radhanath in favour of Prakash Ghose, the plaintiff's grandson, it is urged that the hand-notes were not really paid off, and that as they were not endorsed by Prakash Ghose in favour of the plaintiff, the payment is not a valid consideration for the mortgage. The first point seems to us of no importance, even if we saw any reason for doubting the unrebutted evidence of the plaintiff and his grandson that the notes were paid off. It is perfectly clear that the money was due and that the parties met to arrange about its payment. If Prakash Ghose told Radhanath that on his executing the mortgage in favour of the plaintiff he (Prakash Ghose) would cancel the hand-notes and Radhanath agreed to this arrangement that would be a perfectly valid contract whether any money changed hands or not. As to the second point, it does not arise at all. It has been pointed out that an assignment of a negotiable instrument can only be effected by endorsement. But here notwithstanding an inaccurate remark in the further charge, there was never any question of an assignment at all. The parties did not wish to negotiate the note, but to put an end to it; and to say that a negotiable instrument can only be put at and to by endorsement, is obviously incorrect.

23. Another objection raised is that the plaintiff had no right under the order of this Court of the 22nd May 1902, to devote a portion of the sum of Rs. 14,452/- in his hands to the payment! of his bills for Rs. 6,500/- as that order authorised the plaintiff to manage the property with Radhanath and to apply the balance of the income after the charges had been paid to the payment of his incumbrances. But, in the first place, the order was an enabling order. It authorizes the plaintiff to apply the balance to his incumbrances, but it did not render it obligatory on him to do so. Secondly, it is clear that there was no real balance at all, and consequently no portion of the balance was applied to the payment of the plaintiff's bills. The plaintiff had advanced at least Rs. 14,870/-a sum in excess of the amount of Rs. 14,452/- in his hands, towards the expenses of the estate, and had no balance over to apply to his mortgage.

24. We think, therefore, that all the grounds put forward for re-opening the accounts relating to the further charge fail. The result is that an account will be taken of what will be due to the~plaintiff or account of the mortgage and three further charges with interest and costs of both Courts on the 7th February 1909. If the defendants fail to pay this sum on or before that date, the plaintiff will be entitled to sell the property hypothecated to him in the usual way.

25. The decretal amount will bear interest at the rate of 6 per cent, after the said date.

26. The cross-appeal will be dismissed with costs.

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