Arjan Singh vs Jagatjit Singh

R.L. Anand, J.—Arjan Singh defendant, in the trial Court, has filed the present Regular Second Appeal against his real brother Shri Jagatjit Singh and it has been directed against the judgment and decree dated 15.9.1999, passed by the Court of Additional District Judge, Chandigarh, who dismissed the appeal of the defendant-appellant and affirmed the judgment and decree dated 20.4.1998, passed by the Court of Sub Judge, 1st Class, Chandigarh, who granted a money decree for a sum of Rs.74,087.51 in favour of the plaintiff along with interest at the rate of 18 per cent from the date of the filing of the suit.

The first appellate Court, however, while affirming the judgment and decree of the trial Court, called upon the plaintiff to make good the deficiency in the court-fees within seven days from the date of the judgment and decree dated 15.9.1999, failing which the plaint shall stand rejected right from its inception.

The brief facts of the case are that plaintiff Jagatjit Singh filed a suit for settlement of accounts against his Brother at the first instance on the allegations that there was a partnership concern known as M/s Bhagat Singh and Company and the partnership deed was executed on 1.4.1977 among late Shri Bhagat Singh, who had a 10 per cent share in the partnership business. The plaintiff had a share of 66 per cent. Late Shri Bhagat Singh executed a Will dated 25.5.1985 and according to the Will 10 per cent share of Shri Bhagat Singh was bequeathed to the plaintiff and in this manner the plaintiff became the owner of the partnership business to the extent of 24 per cent with effect from 10.3.1987. The plaintiff is entitled to 24 per cent share in the business w.e.f. 1.4.1986 to 9.3.1987 and 34 per cent share w.e.f. 10.3.1987 onwards. The dissolution deed was executed between the parties and dissolution "was to take effect w.e.f. 10.3.1987 and according to the dissolution deed, the defendant agreed to pay the dues to the plaintiff within a period of three months but dues were not settled as the dissolution deed was without consideration and the same had no force in the eyes of law. The plaintiff alleged that he is still partner of the concern. He requested the defendant to render the accounts according to the partnership deed dated 1.4.1977. As per Clause 5 of the partnership deed the firm was supposed to maintain regular account books which were supposed to, be closed every year. According to the said clause, each year''s account was to be prepared because both the parties, are income tax assessee and the profits and losses are to be shown in the income tax return also. In these circumstances the plaintiff is entitled to the settlement/rendition of accounts of each year w.e.f. 1.4.1986 to 31.3.1991. The plaintiff requested the defendant several times to do the needful but he refused to do so. The defendant maintained the regular account books. On account of non-payment of the amount, the plaintiff has already moved one application u/s 20 of the Arbitration Act for the rendition of accounts w.e.f. 1.4.1986 of 31.3.1991. The matter was not covered by the arbitration clause, therefore, the present suit was filed. The plaintiff also prayed that a preliminary decree may be passed in his favour and against the defendant or that he may be granted some other relief which may be deemed fit by the Civil Court in his favour.

The suit was contested by the defendant on the plea that the suit was not maintainable as the partnership had already been dissolved on 31.3.1987 effective from 10.3.1987; that the suit was barred by limitation; that the suit was not maintainable in the present form; that the suit had not been properly valued for the purposes of Court fee and jurisdiction and it was barred by the principle of res judicata. The defendant, however, admitted the partnership deed dated 1.4.1977 and the respective shares of the parties. The defendant denied that Shri Bhagat Singh executed a Will dated 25.5.1985. It was denied that the plaintiff was entitled to any share or the assets or liability of the firm. The defendant admitted that the dissolution deed was executed and it was effective from 10.3.1987 and the defendant also agreed to pay the dues within 3 months of the execution. The defendant alleged that the present suit has been instituted as a counterblast to the suit instituted by him for recovery of Rs.4,53,000/- against the plaintiff and that said (suit) has been decreed by the Court against the plaintiff.

Plaintiff filed a rejoinder to the written statement of the defendant in which he re-iterated the allegations made in the plaint by denying those of written statement.

On the pleadings of the parties the following issues were framed:-

Whether the plaintiff is entitled to the settlement of accounts as prayed for? OPP

Whether Sh. Bhagat Singh executed a Will dated 25.5.1985? OPP

Whether the partnership in question was dissolved by a dissolution deed dated 31.3.1987? OPP

Whether the suit is not maintainable in the present form? OPD 5-A Whether the suit is barred by principle of res judicata ? OPD.

5-B Whether the plaintiff is entitled to alternative remedy, if so to what extent? OPD

Relief.

The learned trial Court decreed the suit vide judgment and decree dated 20.4.1998 holding that though the plaintiff is not entitled to the rendition of accounts but he is entitled to a specific amount of Rs.74,087.51 i.e. Rs.67,838.84 toward him and Rs.6,248.67 towards late Shri Bhagat Singh, father of the parties. In this view of the matter, a money decree was granted in favour of the plaintiff along with costs and interest at the rat6 of 18%. Aggrieved by the judgment and decree of the trial Court, the defendant-appellant. Arjan filed an appeal in the Court of Additional District Judge, Chandigarh, who, for the reasons given in paras 8 to 14 of the judgment, dismissed the appeal by affirming the judgment and decree of the trial Court.

Aggrieved by the judgment and decree of the first appellate Court, the present appeal has been filed by Arjan Singh defendant.

I have heard Shri L.M. Suri, Senior Advocate, on behalf of the appellant and with the his assistance have gone through the paper-book of this case.

Before I deal with the submissions raised by the learned counsel for the appellant, it will be proper for me to reproduce paras 8 to 14 of the judgment of the first appellate Court in verbatim:-

"8. After considering the arguments of both the sides and appraising their evidence, it is clear that the earlier proceedings were conducted on application u/s 20 of the Act and that was not a suit. So, technically, the decision of the application cannot bar the present suit on account of principle of res judicata.

If it is taken that the suit for rendition of accounts could not be filed on account of the bar of principle of res judicata even then the suit for recovery of the amount admitted due to the respondent by the appellant could be decreed on the basis of documents Ex.P-1 to Ex.P-4 which are the copies of balance sheets for the year ending on 31st March, 1987 to 31st March, 1990, respectively. In these documents the appellant has admitted the respondent to be a creditor to the extent of Rs.67,838.84 and deceased Bhagat Singh to the extent of Rs.6,248.67. It means on 31.3.1990 the firm of the appellant was liable to pay a sum of Rs.67,838.84 to the respondent and Rs.6,248.67 to deceased Bhagat Singh or to his legal heirs.

From Ex.P-9 which is the copy of partnership deed which is not disputed, it is clear that deceased Bhagat Singh Was having 10% share, respondent 24% and appellant 66% share in the profit and losses of the business of the firm M/s Bhagat Singh and Company. From the deed of dissolution which has been proved on the file as Ex.P-1 and admitted to be correct it has been mentioned that the 10% share of deceased Bhagat Singh fell to the share of respondent. This is also clear from the will which has been proved on the file Ex.P-11 in the statements of the PWs. So, it is clear that the 10% share of deceased was inherited by the respondent. There are, the respondent was entitled to the amount of Rs.6,248.67 belonging to the deceased Bhagat Singh.

When the appellant himself has admitted on 31.3.1987 that the firm M/s Bhagat Singh and Company was liable to pay the sum of Rs.67,838.67 to the respondent and Rs.6,248.67 to deceased Bhagat Singh, therefore, the respondent was entitled to recover a sum of Rs.74,087.51 from the appellant. Thus, the findings of the learned Lower Court regarding the recovery of this amount cannot be said to be wrong.

The suit for rendition of account might be barred by limitation because it was filed after three years of the dissolution of firm but when the appellant has mentioned in the last balance sheet for the year ended 31.3.1990 that his firm was owing Rs.74,087.51 to the respondent and the deceased Bhagat Singh then the decree for recovery of this amount could be passed as the suit was filed within three years of the admission of this amount on 31.3.1990. As observed by the Hon''ble Andhra Pradesh High Court in SEMAKURTI SOMANNA AND OTHERS Vs. VANKADARI SUBBARAO AND ANOTHERS., the debt shown in the statement filed in the Income Tax Department constitutes admission of liability to the creditor. Thus, the fresh period of limitation started on 31.3.1990 for filing the suit for recovery of the amount from the appellant. As such the suit is well within the limitation.

It is well settled the Court can mould the relief if the situation warrants. In this case through the suit was for settlement of account and passing for preliminary as well as final decree pertaining to the amount found due but the learned Lower Court has rightly granted the appropriate relief for the recovery for Rs.74,087.51. The learned Lower Court has rightly granted the interest at rate of 18 per cent per annum in view of the Clause 5 of the deed of dissolution of the firm, the copy of which is Ex.P-10 because in this clause it has been mentioned that if the continuing partner does not pay the amount due. within a period of three months, then he would be liable to pay the amount respondent is entitled to recover with the interest as observed by the Hon''ble Apex Court in Addanki Narayanappa and Anr. v. Bhaskara Krishnappa (dead) and Hon''ble Privy Council in Lala Hakim Rai v. Lala Ganga Ram AIR 1942 PC 61. Hence the learned Lower Court has rightly granted the interest as stipulated between the parties.

The observations made by own Hon''ble High Court in Anant Ram Munshi Vs. Spedding Dinga Singh and Company and Others, are not relevant in the case in hand because this suit for rendition of accounts has been dismissed by the learned Lower Court and it has passed the decree in favour of the respondent and against the appellant for recovery of Rs.74,087.51 alongwith interest at the rate of 18% per annum from the date of filing of the suit till its realisation."

The learned counsel for the appellant submitted at the first instance that the Courts below have committed patent illegality in granting a money decree in favour of the plaintiff when the prayer made by the plaintiff in the plaint itself was to a different effect. The counsel submitted that the suit was for the rendition of accounts of a dissolved firm and in these circumstances the proper course for the Courts below was to pass a preliminary decree and then the pass a final decree and it should have been held by the Courts below as to who was the accounting party to each other and till this finding is not given the money decree could not be granted to the plaintiff-respondent. He also invited my attention to the documents Ex.P-5 and P-6 and submitted that some amount was due to the defendant from the plaintiff and it is yet to be decided as to whether the defendant is to pay the amount to the plaintiff or not, The argument of the learned counsel for the appellant was misplaced. Under Order 7 Rule 7 C.P.C. if the Court comes to the conclusion that when a relief which is open to the plaintiff though not claimed for, is available, there is no bar in granting that relief to the plaintiff. It is true that initial suit of the plaintiff was for the rendition of accounts against the defendant but if from the admission of the defendant itself, the legitimate amount is due to the plaintiff there is no bar under the Code the Civil Procedure or under the law that the Courts are helpless in giving that relief to the plaintiff. The plaintiff produced balance sheets Ex.P-1 to P-4 starting from 31.3.1987 to 31.3.1990 and a reading of the same would show that the appellant himself admits that respondent-plaintiff is entitled to receive a sum of Rs.67,838.84 and a sum of Rs.6,248.67 was due to late Shri Bhagat Singh, father of the parties. The partnership deed P-9 further shows that deceased Bhagat Singh had 10 per cent share in the business while plaintiff had 24 per cent and the defendant-appellant had 66 per cent. In the deed of dissolution Ex.P-10, which has been admitted to be correct by the defendant it is mentioned that 10 per cent share of deceased Bhagat Singh will go to the share of the plaintiff and this is also clear from the Will Ex.P-11 which has been proved on the record. In these circumstances, when nothing more was to be adjudicated or investigated and also when the parties are not at issue on a particular point, the Civil Court could pass a decree in favour of the plaintiff irrespective of the fact that plaintiff had not asked for the money decree in the initial suit. There is also a categorical admission on the part of the defendant-appellant that M/s Bhagat Singh and Company was liable to pay a sum of Rs.67,838.84 to the plaintiff and Rs.6,248.67 to the deceased Bhagat Singh. In these circumstances, the admission can be well acted upon in view of the judgment in Narayan Bhagwantrao Gosavi Balajiwale Vs. Gopal Vinayak Gosavi and Others, , in which it has been laid down that admission is a conclusive proof and can be successfully relied upon by the opposite party unless it is withdrawn successfully by the marker thereof. The last balance sheet dated 31.3.1990 submitted by the firm before the Income Tax Authorities clearly indicated that firm owes a sum of Rs.74,087.51 to the plaintiff. It is an admission of the partners of the firm and this extends limitation because it is an admission of liability to the creditor. The documents which have been relied upon are with regard to different firm of the family. If the defendant wants any amount to claim from the plaintiff, from a different cause of action, it is always open to the defendant to file a separate suit for recovery or any other suit claiming the relief against the plaintiff but so far as the present controversy is concerned, the parties are not at issue or variance with regard to the amount decreed by the Courts below. The defendant admitted in the shape of balance sheet submitted before the Income Tax Authorities that a sum of Rs.74,087.51, was due to the plaintiff and to Shri Bhagat Singh deceased. In these circumstances, the suit has rightly been decreed by the Courts below. Of course, the plaintiff did not pay the requisite court-fees and that defect has been rectified by the first appellate-Court when it ordered the plaintiff to pay the court-fee. There is no dispute that deficiency in Court-fee has not been made good by the plaintiff. Even the interest which has been awarded to the plaintiff cannot be held to be excessive or harsh. The firm was running a commercial business. Resultantly, I do not see any merit in this appeal and dismiss the same in limine. No order as to costs.