1. This is an application to set aside an ex parte decree made by me on the 28th of November, 1927, on the ground that such decree was obtained improperly, and to some extent fraudulently by the plaintiffs in the suit. So far as the latter allegation is concerned, it was not seriously or at any rate very strenuously pressed by Mr. Ghosh on behalf of the defendants, who are the applicants in this matter. The only allegation with regard to that seems to have been that in the course of a somewhat provocative correspondence between the attorneys to the parties the attorney for the plaintiff concealed the fact that he was intending to apply for the decree in question. The main ground upon which the application is founded is that no notice was given under Rule 30, Chap. X of the Rules of this Court, That rule provides that certain suits and matters should be placed in the Special Peremptory Lists for the Courts to which they are assigned, (and amongst such suits and matters are those defined in Sub-clause (c) as being 'suits which stand for confirmation or further consideration upon the report of an officer or other Referee, and testamentary and intestate matters for argument on caveat where grounds in support of the caveat have been filed) on the requisition in writing of the attorney for any party or any party acting in person, of which notice in writing shall be given by the party applying to the other party or parties.'
2. It is conceded that in the present instance, notice in writing was not given by the party applying, that is to say, the plaintiffs in the suit, and the defendants in fact had no notice that an application was being made for the suit to be put into the Special Peremptory List for confirmation of the report of the Assistant Referee, who had been appointed by a decree dated the 23rd June, 1926, to take an account of the dealings and transactions between the parties.
3. The suit was originally brought for the recovery of Rs. 3,451-6-3 and the Assistant Referee in his report, with the consent of the parties stated that there was due by the defendants to the plaintiffs the sum of Rs. 664 8. Now, having regard to the fact that no notice was given by the plaintiffs to the defendants as required by Rule 30, Chap. X, it was quite clear that the decree had been irregularly obtained. Therefore, on the face of it, the defendants were entitled to have it set aside. But on the last occasion it was agreed by the parties that this application should be treated rather as an application for the re-hearing of the consideration of the report of the Assistant Referee, so that if it appeared that despite the irregularity arising from the want of notice the decree was a proper one in the circumstances of the case, the decree should not actually be set aside but should stand as originally made. If, on the other hand, the circumstances warranted a variation of the decree then such variation should be made accordingly.
4. The real point of substance in the application is the question of whether or not the decree should hold good in so far as it ordered the defendants to pay to the plaintiffs the costs of the suit and of the reference upon the footing of scale No. 2. It was argued by Mr. Ghosh on behalf of the defendants that the matter is one to which Section 22 of the Presidency Small Cause Courts Act applies, and that, therefore, seeing that the plaintiffs, in fact, were found entitled to recover the sum of Rs. 664 8 only, which is a sum lees than Rs. 1,000 the plaintiffs were not entitled to any costs at all by reason of the fact that the suit might have been brought in the Presidency Small Cause Court. It was not disputed by Mr. Roy on behalf of the plaintiffs that the criterion to be applied for the purpose of ascertaining whether Section 22 applies or not the amount which a plaintiff claims but the amount which he in fact recovers, and upon this point I desire to affirm the decision which I gave in the case of Misrilall v. Mackintosh Burn, Limited, on the 31st March, 1927, (Suit No. 537 of 1925). In the course of that suit it became necessary for me to express an opinion as to whether or not the 'cognizability'of a suit to which Section 22 applied depended on the amount claimed or on the amount actually recovered. In the course of the judgment which I gave in that case I said this:
It is pointed out to me by Counsel for the plaintiff that there is a decision of Mr. Justice Page, which is reported as Chandmull Kangoria v. Debi Chand : AIR1924Cal405 in which case Mr. Justice Page said in the course of his judgment that the law and practice in British India, in his opinion, were in favour of the view that the question whether a cause fell within the ambit of the jurisdiction of the Small Cause Court depended not on the amount or value actually recoverable or ascertained at the trial, but on the amount or value which was claimed by the plaintiff and set out in the plaint, and the learned Judge took the view that the provisions of the English County Courts Act differ so materially from those contained in the Statute relevant to the issues raised in the case then before him, that he did not think it necessary to refer to the decision thereunder.' I said at the time that it was clear that Mr. Justice Page, in his judgment; in the case of Chandmull Kangoria v. Debi Chand (I) was of opinion that the question whether or not a suit was cognizable in the Small Cause Court depends not on the amount ultimately recovered but on the amount originally claimed. I referred to that decision of my learned brother on the previous occasion and with very great respect to him I still cannot agree with his view as to the meaning of a. 22. I prefer to follow the decision of Mr. Justice Buckland in Suit No. 1657 of 1922 which unfortunately was not reported but is referred to by Mr. Justice Page in Chandmull Kangoria v. Debi Chand : AIR1924Cal405 . I pointed out in the case of Misrilall v. Mackintosh Burn, Limited, that there is a case in the Bombay High Court Shridhan Gopinath v. Gordhan Das 26 B. 235 : 3 Bom., L.R. 893 in which Sir Lawrence Jenkins, C.J., and Mr. Justice Russell took a view contrary to that of Mr. Justice Page. The learned Judges there clearly state that the real criterion as to whether or not a case was cognizable by a Small Cause Court was not the amount originally claimed but the true amount or value of the subject matter of the action is ultimately ascertained after investigation at a trial. The learned Judges in the Bombay case further pointed out that such a conclusion was in accordance with the decision of the Court of Appeal in England on a cognate point in the case of Soloman v. Mulliner (1901) 1 Q.B. 76 : 70 L.J.Q.B. 165 : 49 W.R. 364 83 L.T. 493;17 T.L.R. 87. I desire to say quite definitely that in my view, the real meaning of Section 22 of the Presidency Small Cause Courts Act is analogous to that of the corresponding section of the English County Courts Act of 1919, that is to say, s. II of that Act, and that it is the amount recovered and not the amount claimed which is to be the dominating and deciding factor for the purpose of determining whether or not a suit is cognizible by the Small Cause Court.
5. Mr. Roy contended that even accepting that view of the law this present suit, nevertheless was not a suit cognizable by the Small Cause Court by reason of the fact that, in effect--in substance though not in form--the plaintiffs were claiming an account, and he referred me to a case in Kailas Chandra Mandal v. Keranenda Ghosh 10 Ind Cas. 883 : 24 C.L.J. 187 where Mr. Justice Mukerjee and Mr. Justice Caspersz decided that whether a suit is one for accounts within the meaning of Article 31 of Schedule II of the Provincial Small Cause Courts Act (Act IX of 1887) must depend on the relation to which the parties stand with each other, and the nature of the investigation required to afford relief to the plaintiff, and that if in order to grant relief to the plaintiff it is necessary to take accounts, the suit is one for accounts within the meaning of that Article, even though the plaintiff may have chosen to put a definite money value upon his claim. Now that Article and that Act, of course, have no application here Apparently there is no definite authority indeed no authority at all, for maintaining that a suit for an account cannot be heard and determined in the Presidency Small Cause Court. That is to say, the precise form of the plaint in the present suit is immaterial, Actually the plaintiffs claimed a specific sum, namely, Rs. 3,45l-6-3, but it is obvious from the nature of the suit that the question of whether that sum was or was not due to the plaintiffs could only be determined by the taking of an account between the parties, having regard to the nature of the defence which was set up in the written statement.
6. The facts, put very briefly are these: The parties had had business relation, and by a contract dated the 21st January 1922, the plaintiffs had sold a quantity of Australian wheat to the defendants, that is to say, 300 tons of Australian wheat at the rate of Rs. 6-12 per maund on that condition that payment of the price should be made in advance. The defendants actually advanced to the plaintiffs by two sums a total sum of Rs. 56,200 and the plaintiffs delivered a certain quantity of wheat to the defendants and they further paid to the defendants a sum of Rs. 16,000 upon the footing that the defendants had owed the plaintiffs that amount. The defendants by their written statement set up two other contracts, also for the supply of wheat by the plaintiffs to the defendants, and in a statement of accounts annexed to their written statement they showed that various other payments had been made with a view to adjusting the accounts between the parties. In that state of affairs it was said by the plaintiffs, as I have already stated, that there was due to them upon an adjustment of accounts the sum of Rs. 3,451-6-3. The defendants, on the other hand, set up that upon any taking of an account it would be found that nothing was due by them to the plaintiffs but that on the contrary the plaintiffs were still owing money to the defendants upon the basis that the defendants had paid more to the plaintiffs than was warranted by the amount of wheat which had been actually delivered.
7. Mr. Roy invited me to treat the matter as being one of a claim on the one hand and a sort of counter-claim on the other. He did that admittedly in an endeavour to bring the case within the decision which I had given in the case of Misrilall v. Mackintosh Burn, Limited, and in order to put himself in the position of being able to contend that the plaintiffs were entitled to the costs of their claim, and that the defendants in their turn would be entitled to the costs of their counter claim if in fact any sum had been awarded to them. He further said that upon a right view of the report of the Assistant Referee what the Official Referee had decided in effect was that Rs. 664 was due to the plaintiffs and nothing was due to the defendants. Having reached that stage, it was, I think, difficult for Mr. Roy thereupon to contend that upon that footing the case was taken out of the operation of Section 22 of the Presidency Small Cause Courts Act, because in fact the total sum awarded to the plaintiff was this sum of Rs. 664 which is clearly less than Rs. 1,000, the sum referred to in that section. Be that as it may, in any event, I should not have been disposed to treat this case upon the same footing as the case of Misrilall v. Mackintosh Burn, Limited. In that case there was set up by the defendants what, under the extension to the Code of Civil Procedure is called an equitable set-off, and there was a claim for damages which, in my view, to all intents and purposes (at any rate, when it came to a question of costs) was in effect a counter-claim properly so called.
8. There was, however, nothing of the kind in the present instance. The plaintiffs were alleging that a definite sum of Rs. 3,451-6 3 was due to them from the defendants. The defendants, on the other hand, said that no such sum was due, and that if anything, the balance of account was the other way round. Clearly, in order to ascertain what, if any, was the sum due to the plaintiffs, it was necessary that an account should be taken. That was the only method of arriving at the amount to which the plaintiffs are entitled, and the Assistant Referee, apparently with the acquiescence of the parties, arrived at the figure of Rs. 664. I think, therefore, that it is entirely upon the basis of that figure that a decision as to costs ought to be made, especially having regard to the fact that I have not before me, neither in the report nor anywhere else, nor have I any means of ascertaining, without re-trying the whole suit over again, what was the figure which represented the sum due from the defendants to the plaintiffs and what, if any, was the figure representing the sum due from the plaintiffs to the defendants, so that upon a balance the sum of Rs. 664 was due by the defendants to the plaintiffs. For aught I know to the contrary, the Assistant Referee or the Counsel to the parties may have come to the conclusion that the defendants owed the plaintiffs Rs. 664 and that the plaintiffs owed the defendants nothing at all. On the other hand, the Assistant Referee or the Counsel to the parties may have decided that the plaintiffs owed the defendants such a sum as having another sum subtracted from it would leave a balance of Rs. 664 in favour of the plaintiffs. I have no means whatever of ascertaining how this figure was arrived at. I can, therefore, only accept the report of the Official Referee as it stands and treat the matter as being one of a suit, in which after trial of the issues between the parties, it was determined that the defendants owed the plaintiffs the sum of Rs. 664.
9. The being so, the only other question is whether there is anything in this suit to take the matter out of the operation of the substantive part of Section 22 of the Presidency Small Cause Courts Act. Once it is conceded--and it was not disputed at the Bar--for the purposes of this case (if it had not been conceded I should have decided the matter consistently with my previous decision in Misrilall v. Mackintosh Burn, Ltd.) that it is the amount recovered and not the amount claimed which is the determining factor, once that is conceded, it is manifest that on the face of it (prima facie this suit falls within Section 22) as the plaintiffs are entitled to recover from the defendants the sum of Rs. 664 and no more, by reason of the provisions of Section 22, they will not be entitled to any costs at all.
10. The main part of the section says that if a suit which is cognizable by the Small Cause Court is instituted in the High Court, and if in such suit the plaintiff obtains in the case of a suit founded on contract, a decree for any matter of an amount or value less than one thousand rupees, no costs will be allowed to the plaintiff; and if in any such suit the plaintiff does not obtain a decree, the defendant shall be entitled to his costs as between attorney and client.
11. I am unable to follow the reasoning of my learned brother Mr. Justice Page in the case in Chandmull Kangoria v. Debi Chand : AIR1924Cal405 to which I have already referred where he says at page 9 Page of 28 C.W.N.--[Ed.] that 'ample safeguards are provided to meet such a contingency,' that is to say, the contingency of the plaintiff placing a fictitious value on his claim so as to be at liberty to determine the tribunal by which the suit is to be tried. I cannot; see that there are any safeguards of any kind whatsoever in the event of the plaintiff in a suit of this kind overestimating the value of the amount to which he is entitled, because the real amount can only be ascertained after the taking of some elaborate accounts. It is for this reason, amongst others, that I think it is right generally speaking, under the provisions of this section that if a plaintiff does not in the ultimate result recover Rs. 1,000 he should not be entitled to his costs. But in the present suit I think the matter is different and Section 22 of the Presidency Small Cause Courts Act contains an addendum which is in the nature of a proviso. It seems obvious that the Presidency Small Cause Court is not a tribunal intended or devised for the determination of substantial commercial cases, and I think it is the duty of the Court to deal with the question of costs in a matter of this kind, after a careful examination of the issues which were raised between the parties, particularly for the purpose of ascertaining whether then was any under exaggeration or inflation of the claim on the part of the plaintiff in the suit, and whether it was a suitable matter to be tried in the High Court rather than in the Small Cause Court.
12. Now, as far as I can see, in the present case there was a bona fide dispute between two business firms as to the amount which was owed by the one to the other, and in default of an agreement between the parties the amount could only be ascertained by the taking of accounts the doing of which might have developed into a lengthy and possibly a difficult matter. It happens that in the present case the parties were sufficiently well advised to avoid the expense of a protracted trial before the learned Assistant Referee, and they are their Counsel or both came to an agreement as to what the amount due by the defendants to the plaintiffs should be. Some sort of suggestion was thrown out in the course of the hearing that it was intended by this agreement or apparent agreement that the question of costs had also been taken into consideration in arriving at the sum of Rs. 664.
13. I see no reason at all for saying that there was any such idea or intention in the minds of either of the parties to the suit. All that was done when the matter was before the Assistant Referee was for the amount claimed to be ascertained or rather to be agreed.
14. Looking at the matter as a whole, I think that this is a case where I might properly exercise the discretion conferred upon the Court by the last clause of Section 22, and, therefore, while coming to the conclusion that his was a case cognizable by the Small Cause Court and although the plaintiffs were not entitled to a decree for an amount of more than Rs. 1,000, I think I might reasonably say that it was a suit which was properly brought in the High Court. That being so, I see no reason why the decree which has already been made should be disturbed. But, on the other hand, it is clear that the defendants were justified in bringing this matter before the Court having regard to the manner in which the decree was obtained and I accordingly give them the costs of this application, and I further direct that the plaintiffs are not to have any costs in connection with any matters arising subsequent to the report of the Assistant Referee. The defendants are to have costs as between party and party up to the time that the agreement was arrived at and the Referee made his report, including those in connection with the filing of the report.