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Mathuramohan Chakravarti Vs. Lalmohan Chakravarti and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1938Cal597
AppellantMathuramohan Chakravarti
RespondentLalmohan Chakravarti and anr.
Excerpt:
- .....properties in suit up to 5th december 1930. as soon as the papers go down to the court of the learned subordinate judge, the learned judge will proceed to call upon the defendant to put in court the entire amount of money which may be in his hands as representing the proceeds of the business and the properties since 6th december 1930 and up to the date on which such deposit is to be made. the learned judge on receiving the said amount from the defendant will divide the same equally amongst the three parties, namely the two plaintiffs and the defendant, and will proceed to discharge the defendant from his position as such receiver. it should be mentioned here that the last part of this order is also passed by consent of parties.4. the case then went back to the subordinate judge. on.....
Judgment:

Nasim Ali, J.

1. These two appeals are against the decision of the Subordinate Judge, Fifth Court, Dacca, dated 31st August 1936. Three brothers Lalit Mohan Chakravarti, Mathura Mohan Chakravarti and Lal Mohan Chakravarti were members of a joint Hindu family governed by the Dayabhaga School. Lalit was the eldest, Mathura the second and Lal Mohan the youngest. In 1308 B. S. corresponding to 1901 A. D. they started a business called Shakti Oushadhalay a for preparation of some Ayurbedic medicines with a small capital derived from the income of the properties left by their father and other properties acquired by them as members of a joint Hindu family after the death of their father. Within a very short time the business became prosperous and began to yield large income. Many moveable and immovable properties were acquired out of the income of the joint properties and business. Lalit died in 1324 B. S. corresponding to 1917 A. D. leaving a minor son Fanindra Mohan as his only heir. Mathura is managing the joint family property as well as the joint family business from a very long time. In the year 1926 Lal Mohan and the widow of Lalit as next friend of Fanindra instituted a suit (Title Suit No. 167 of 1926) in the First Court of the Subordinate Judge at Dacca against Mathura for partition of the joint family properties, accounts and other reliefs. On their prayer two pleaders were appointed receivers by the Subordinate Judge on 20th January 1927. Mathura appealed against this order of the Subordinate Judge to this Court. This Court concurred with the Subordinate Judge that a receiver should be appointed but directed the Subordinate Judge to appoint Mathura as receiver if he would agree. Mathura was appointed receiver with his consent by the Subordinate Judge on 11th April 1927.

2. The suit was subsequently transferred to the Fifth Court of the Subordinate Judge and was renumbered as Suit No. 1 of 1930. It was decreed by the Subordinate Judge on 19th September 1930. Mathura appealed against this decree to this Court. It was numbered as F. A. 253 of 1930. The parties to the appeal filed a petition of compromise in this Court. The terms of the compromise were found by this Court to be for the benefit of the minor plaintiff and the appeal was disposed of in accordance with them on 2nd February 1936. The terms of the compromise, so far as they are relevant for the purpose of the two appeals before us are as follows:

(1) Plaintiffs and the defendant shall each be entitled to one third share in all moveable and immovable properties in dispute including the Shakti Oushadhalaya business, Shakti Press, money lending business, shares of companies and claims of the estate in dispute. (2) All savings during the minority of the minor plaintiff will be deposited in the Imperial Bank in the names of the two adult brothers and in the names of all three after attainment of majority of the minor plaintiff. (3) The defendant is to be absolved from all liability for accounts of the business and the other properties in suit up to 5th December 1930. (4) Shakti Oushadhalaya firm will pay Rs. 500 per month to each of the three partners within the first week of every Bengali month. There will be annual Nikash of the income of the joint properties including the business and the balance sheet is to be prepared, accepted and signed by the partners by the month of next Ashar each year and the net profit shall be divided and paid annually. (5) Income from other sources shall be divided equally as soon as the dues are realized. (6) The management of the business is to be conducted by the defendant in consultation with plaintiff 1 and plaintiff 2 after he attains majority.

3. While disposing of the appeal this Court made the following orders:

It is necessary that we should also pass some orders relating to the discharge of the defendant from his position as receiver in respect of the properties which form the subject-matter of the suit. It appears that in para. 7, sub-para. (3), the parties have expressed their willingness that the defendant be absolved from all liabilities for accounts of the business and the other properties in suit up to 5th December 1930. As soon as the papers go down to the Court of the learned Subordinate Judge, the learned Judge will proceed to call upon the defendant to put in Court the entire amount of money which may be in his hands as representing the proceeds of the business and the properties since 6th December 1930 and up to the date on which such deposit is to be made. The learned Judge on receiving the said amount from the defendant will divide the same equally amongst the three parties, namely the two plaintiffs and the defendant, and will proceed to discharge the defendant from his position as such receiver. It should be mentioned here that the last part of this order is also passed by consent of parties.

4. The case then went back to the Subordinate Judge. On 21st April 1931 the Subordinate Judge directed the defendant to deposit the money lying in his hands within three weeks from that date. On the defendant's petition, time was extended up to 1st June 1931 for depositing the amount. On 30th May 1931 the learned Judge directed the defendant to produce the account papers and the vouchers for inspection of the plaintiffs. On 1st June 1931 Mathura deposited in Court Rupees 2850-6-0 alleging that that amount was the entire amount in his hands up to that date as proceeds of the business and other joint properties. He however did not produce the account books as directed by the Court. On 1st June 1931 the learned Judge thereupon made the following orders:

The account papers of the business and the other properties in suit since 6th December 1930 and up to this date together with the papers mentioned in the plaintiff's petition of date and vouchers are, in my opinion, essentially necessary to enable the Court to ascertain the truth of the defendant's allegation as to the entire amount of money now in his hands. The defendant is therefore directed to produce in course of this day in Court the account papers for the said period .... After these account papers are filed in Court, and the plaintiffs have inspected the same, I will consider whether it is at all necessary to direct the defendant receiver to produce in Court the account papers etc. of the business and the other properties in suit prior to 6th December 1930. It is to be distinctly understood that the defendant cannot be and will not be discharged from his position as receiver unless and until he produces in Court the account papers of the business and the other properties in suit together with other papers mentioned above.

5. The defendant then filed the account papers and the vouchers on 2nd June 1931. Lal Mohan and Fanindra took objection to the deposit made by the defendant on 1st June 1931 stating that the amount actually in the hands of Mathura was much in excess of the amount deposited. They also took various objections to the entries in the account books filed by the defendant. On 13th July 1931 the learned Judge appointed a Commissioner to examine the account books from 6th December 1930 to 1st June 1931 with reference to the vouchers and other papers filed by the defendant and also to consider the objections taken by plaintiffs and to submit his final report. On 27th November 1931 on the prayer of Lal Mohan and Fanindra the learned Subordinate Judge discharged the defendant from the receivership subject to the condition that he would be liable for such further sum, if any, as would be found due to him on adjustment of the accounts later on. On 28th April 1932 the Commissioner submitted his final report stating that besides Rs. 2850-6-0 deposited by Mathura in Court on 1st June 1931, he had in his hands on that date a further sum of Rs. 1245.11-4. This report was accepted by the Subordinate Judge on 30th August 1932 and he directed the defendant to deposit this amount within 15 days from -that date. On 17th September 1932 this money was deposited by the defendant and he was discharged from the office of receiver. Lal Mohan and Fanindra filed an appeal to this Court against this order on 28th April 1932 (M. A. 508 of 1932). There was also a petition by them to this Court for revising this order. On 31st January 1934 they raised another suit against Mathura in the first Court of the Subordinate Judge being Title Suit No. 13 of 1934. F. A. 217 of 1936 arises out of this suit. The material allegations of the plaintiffs in this suit are

(a) That although the defendant was absolved from all liability of accounts up to 5th December 1930 by the compromise in Title Suit No. 167 of 1926, he was still liable to pay to the plaintiffs the two-third share of the money that was in his hands on 5th December 1930. (b) That the defendant was liable to render accounts to the plaintiffs from 6th December 1930 to 13th April 1938. (c) That the defendant has violated many of the conditions laid down in the compromise decree made in Title Suit No. 167 of 1926.

6. They accordingly prayed for accounts of the joint properties including the business from 6th December 1930 to 13th April 1933 for ascertainment of the amount which was in the hands of the defendant up to 5th December 1930 after taking accounts, for a decree in their favour for their share of the money as would be found due to them after taking accounts, for removal of the defendant from the office of the manager of the joint family properties and business and for injunction. They also prayed for certain other reliefs. The defendant filed his written statement on 10th July 1934. In his written statement he stated inter alia that in view of the compromise decree in F. A. 253 of 1930 the plaintiffs were not entitled to get a decree for accounts for the period up to 5th December 1930. He also alleged that the plaintiffs were not entitled to claim any accounts from him from 6th December 1930 to 1st June 1931 in view of the compromise decree and also by the order of the Subordinate Judge, dated 30th August 1932 in Suit No. 1 of 1930. He also stated that in accordance with the terms of the compromise he prepared the balance sheets for the years 1338 and 1339 B.S. and sent copies of these balance sheets to the plaintiffs and in spite of the notice asking to accept and sign them, the plaintiffs did not do so. He also stated that he did not act in contravention of the terms of compromise.

7. M.A. 508 of 1932 and the application for revision were not proceeded with by the plaintiffs and were dismissed by this Court on 22nd November 1934. On 1st July 1935, Lal Mohan and Fanindra served a notice on Mathura under Section 80, Civil P.C. On 4th September 1935 they instituted another suit against Mathura in the Court of the Subordinate Judge at Dacca being Suit No. 116 of 1935 out of which F. A. 21 of 1937 arises. They repeated in the plaint of this suit their allegations in their plaint in Suit No. 13 of 1934. They further alleged in their plaint in this suit that although the defendant was discharged from his office of receiver on 17th September 1932, he was not made a party in Suit No. 13 of 1934 as receiver and that they were therefore advised to file another suit against him as receiver after serving notice on him under Section 80, Civil P.C. In this suit they prayed for determination of the money lying in the hands of Mathura up to 5th December 1930 by examining the accounts kept by him and also for accounts from 6th December 1930 to 17th September 1932 as receiver and for a decree for their share of the money found due after accounting. In this suit the defendant in addition to the defences taken by him in the previous suit pleaded that a regular suit for accounts against him as receiver was not maintainable, that the notice under Section 80 of the Code was illegal and insufficient and that the suit was not maintainable without the permission of the Fifth Court of the Subordinate Judge who appointed him as receiver. Both these suits were transferred thereafter to the Court of the Subordinate Judge at Dacca. Suit No. 13 of 1934 was renumbered as Suit No. 12 of 1936 and Suit No. 116 of 1935 was renumbered as Suit No. 3 of 1936. These suits were tried together and were disposed of by the same judgment on 31st August 1936. The Subordinate Judge overruled the pleas in bar taken by the defendant and decreed both the suits in part. The material portions of the decrees are:

(a) That a preliminary decree declaring the defendant's liability to render accounts as receiver from 6th December 1930 corresponding to 20th Agrahayan 1337 B. S. to 27th November 1931 corresponding to 10th Agrahayan 1388 B. S. be passed; (b) that a preliminary decree for taking accounts from the defendant as, manager of the business and other joint properties from 28th November 1931 corresponding to 11th Agrahayan 1338 B. S. to 13th April 1933 corresponding to the last day of Chaitra 1339 be passed; (c) that the defendant is directed to deposit in future in the Imperial Bank of India all savings in the name of all the three partners; (d) that the defendant be directed to make over to the plaintiffs their shares of income of all the joint properties other than Shakti Oushadhalaya as soon as the dues are realized by him; (e) that the defendant in conducting the business of the Shakti Oushadhalaya do consult the plaintiffs in the following matters in connexion with the business, namely,

(1) preparation of budget and estimate at the beginning of every year, (2) appointment of an auditor or a firm of auditors for the preparation of Nikash and balance sheet at the end of every year, (3) appointments, dismissals, increment or reduction of salaries of officers and giving bonus and rewards to them, (4) opening and closing of branches, (5) construction of buildings, acquisition of properties, investments, borrowings and any other matter affecting or touching the finances of the business, (6) fixation of the reserve fund, and (7) framing of rules for the conduct and guidance of officers.

8. Preliminary decrees were drawn up and signed by him accordingly in the two suits. Hence these two appeals by the defendant. The plaintiffs have also filed cross-objections. The first point raised by Dr. Basak on behalf of the appellant in these two appeals is that the learned Sub-ordinate Judge was in error in passing a decree for accounts against the defendant from 6th December 1930 upto 1st June 1931. This contention is well founded. During this period the defendant was admittedly the receiver of the joint properties and the joint family business. He submitted his accounts to the Court. The plaintiffs took exceptions to the accounts. A commissioner was appointed to examine the accounts in the light of the objections taken by them. The commissioner submitted a report stating that an additional sum of Rs. 1245-11-0 was due from the defendant. This report was accepted by the Subordinate Judge. The defendant deposited the additional amount and was discharged from the office of the receiver. The plaintiffs withdrew their share of the money. The learned Subordinate Judge has made the defendant liable for accounts for this period on the ground that the propriety or otherwise of the various expenses mentioned in the account books filed by the defendant was not inquired into by the Court at the time when the defendant's accounts were passed and he was discharged. From what has been stated above it is clear that this view of the learned Subordinate Judge is not at all correct. Before the defendant was discharged, objections were taken by the plaintiffs to the propriety of the entries in the accounts filed by the defendant. They were referred to the commissioner and were dealt with by him. The plaintiffs' objections were also considered by the Court. It cannot therefore now be said that the propriety of the accounts were not considered by the learned Judge at the time when the defendant's accounts were passed and he was discharged. Further it seems to me that this Court while disposing of the appeal arising out of Title Suit No. 167 of 1926 intended that the defendant's liability for accounts upto the date of his discharge was to be determined on the accounts filed by him.

9. It is true that if there is any liability attached to the receiver other than which appears on the face of the accounts and if such liability is not inquired into or determined by the Court at the time of discharging the receiver, a separate suit for determination of such liability will lie. There is however no allegation or evidence in this case about such liability. There is no allegation or evidence about any wilful' default or negligence by the defendant. Under these circumstances I am clearly of opinion that the plaintiffs' claim for accounts in these two suits from 6th December 1930 to 1st June 1931 is not maintain, able. The second contention of the appellant in these two appeals is that the defendant is not liable at all to render accounts for the period commencing from 2nd June 1931 to 13th April 1933 either as receiver or as manager and that even if he is liable, the order of the trial Court to take accounts-from the defendants for this period is vague and misleading. In course of the hearing of the appeals before us the learned advocate-for the appellant and respondents agreed that the order of the learned Judge relating to this matter should be varied in the-manner following : The plaintiffs or their agent will examine the account books and. vouchers which have been filed by the defendant in the lower Court for the period commencing from 2nd June 1931 and end ing on 13th April 1933 in the presence of the defendant or his agent and file their objections, if any, to the entries in the balance sheet and to the profit and loss accounts for the said period within two months from the date of the arrival of the record of these two suits in the lower Court. These objections are to be confined only to falsifying entries in the account books relating to this period. If no such objections are filed within the period aforesaid, the claim for accounts for this period will stand dismissed. If objections are filed, they will be considered by the learned Judge and a final decree will be made by him in accordance with his decision on these objections. If the Subordinate Judge thinks that these objections cannot be conveniently dealt with by him without a report from a commissioner, he will appoint a commissioner for that purpose and then dispose of the objections after taking the report of the commissioner into consideration.

10. The third contention of the appellant in Appeal No. 217 of 1936 is that the trial Court was in error in directing him to make over to the plaintiffs their shares of income of all the properties in dispute other than the Shakti Oushadhalaya as soon as the dues are realized. The learned advocates for the parties asked us to dispose of these objections of the appellant by consent of the parties thus: The two-third share of the plaintiffs in the net income of the properties other than the Shakti Oushadhalaya for each Bengali year is to be paid to them by the defendant by the first week of Jaistha of the year following provided the plaintiffs allowed the defendant to realize the whole income of the properties. The second and third contentions urged by the appellant are accordingly disposed of by consent in the manner indicated above.

11. The fourth contention of the appellant in Appeal No. 217 is that the directions given by the trial Judge upon the defendant to consult the plaintiffs in certain matters specified in the concluding portion of the judgment of the trial Judge should be expunged. One of the terms of the compromise in P. A. No. 253 of 1930 is that the management of the business is to be conducted by the defendant in consultation with the plaintiffs. The plaintiffs in their plaint allege that the defendant has not consulted them and is acting according to his own will. The only relief claimed, by the plaintiffs for non-compliance with this condition of the compromise decree is the removal of the defendant from the position of the manager of the property. At the time of the argument before the trial Court the plaintiffs did not press for the removal of the defendant from the office of the manager. The learned Judge thereupon thought that he should indicate the matters in which the defendant should consult the plaintiffs in conducting the management of the business. He then specified those matters, although there was-no such prayer in the plaint and the defendant had no opportunity of meeting them.

12. I am therefore of opinion that the learned Judge was not justified in giving those directions and they should be set aside. The other grounds taken in the grounds of appeal to this Court by the appellant in these two appeals were not pressed. Only one ground in the cross-objections in F. A. No. 217 of 1936 was pressed. It is ground No. 3 and it is in these terms:

For that the Court below ought to have ordered deposit of all savings in the Imperial Bank in the names of three partners, that is, all daily collections after deducting daily expenditure.

13. The learned advocates appearing for the parties agreed that this objection taken by the plaintiffs should be disposed of by consent in the manner following: The plain-tiffs' share of the net profits in the business for each year as shown in the balance sheet of that year prepared by the defendant in accordance with the terms of the compromise in F. A. No. 253 of 1930 is to be paid by the defendant to the plaintiffs by 15th Sraban of the following year and if the plaintiffs refuse to accept the said payment, the defendant is to deposit the sum in the Imperial Bank of India in the names of the plaintiffs within a week from the date of the refusal and the plaintiffs will be entitled to withdraw the money so deposited under protest. This objection of the respondents is accordingly disposed of by consent in the manner agreed upon by the parties. The cross objections in F. A. No. 21 of 1937 were not pressed. The result therefore is that these two appeals are allowed in part. The cross objections in F.A. No. 21 of 1937 are dismissed. The cross objections in F.A. No. 217 of 1936 are partly dismissed and partly disposed of by consent in the manner indicated above. The appellant will get his full costs in F.A. No. 217 of 1936. Parties will bear their own costs in F. A. No. 21 of 1937 and in cross objections in the two appeals. Let the record be sent down as early as possible. The rule is discharged without costs.

Henderson, J.

14. I agree. I only desire to add a few words about the directions given by the learned Judge requiring the defendant to consult the plaintiffs in regard to certain matters. In my opinion they are misconceived in theory and unworkable in practice. They are misconceived in theory, because the learned Judge treated the partnership as though it were a trust. In my opinion the plaintiffs really took the right view of this matter. The grounds upon which the learned Judge has based his directions were put forward by the plaintiffs as grounds for the removal of the defendant from his position as managing partner. They never suggested that the working of the business should be hampered by directions of this kind. The result was that when the plaintiffs withdrew their prayer for the removal of the defendant, this particular matter was at an end.

15. By consent it is further ordered that the defendant will put in the Imperial Bank in the names of the plaintiffs by the end of Chaitra 1345 B. S. the amount that will be found due to the plaintiffs in their share of the net profits as stated in balance sheets and profit and loss accounts from 1338 B. S. to 1343 B. S. after deducting the amounts that have been paid to them during that period as shown in the said documents and the plaintiffs will be at liberty to withdraw the said amount irrespective of the question of the accuracy of the said documents.


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