C.S. Nair vs Travancore Devaswom Board

Viswanatha Iyer, J.—This appeal is by the plaintiff. The suit was one laid by him for settlement of accounts in regard to the construction of pilgrim shelters at Pamba and Sabarimala, for the defendant, namely the Travancore Devaswom Board, and for recovery of amounts adjudged due on such settlement. Pursuant to invitation for tenders for the construction of pilgrim shelters at Pamba and Sabarimala, the plaintiff was entrusted with the work of constructing shelters Nos. 1 to 10 at Pamba and 11 to 20 at Sabarimala. The work was to be completed within four months from 29-9-1978. The plaintiff moved to the site immediately after the work was awarded to him with all his men and machinery for the purpose of beginning the work. However, the defendant committed default in various respects. The site was not handed over free and unhindered to enable the plaintiff to start the work. The defendant did not obtain sanction to cut and remove the various timber trees on the site. The defendant was under an obligation to provide quarry for collection of rubble, but when the plaintiff started collecting the rubble, the forest authorities objected, which compelled the defendant to get sanction for opening another quarry. Sufficient quantity of rubble was not however available in the quarry so opened. All this led to delay in the execution of the work besides additional expenses. The quantity of earthwork to be done in relation to shed Nos. 1 to 10 was far beyond the estimates envisaged by the parties The nature of the soil was hard marital in some areas, involving heavy extra expenditure towards labour charges. Defendant did not make available the necessary cement and M. S. rods as agreed to, which the plaintiff had therefore to procure elsewhere. Because of these defaults on the part of the defendant the work had to be done in a period different from that originally contemplated, involving heavy expenditure towards cost of materials, labour charges and other items, which the Plaintiff had to ray at the enhanced rates prevalent at the period when the work was actually done. Despite the defaults on their part, and after the plaintiff had completed about 90% of the work undertaken by him, the defendant wrongfully terminated the contract causing heavy loss to the plaintiff. On account of these defaults of the defendant, plaintiff had incurred loss amounting to Rs. 3,20,000/-. The plaintiff issued lawyer''s notice for settlement of accounts, but the defendant did not heed to the request, and hence the suit was filed as stated above for a decree for settlement of accounts and for realisation of the amount found due.

The defendant filed written statement contending inter alia that the suit, as framed, for settlement of accounts, was not maintainable. They also denied the various allegations of default, and breach of contract, on their part.

Issue No. 4 in the suit was whether the defendant Board was liable to account to the plaintiff. Issue No. 5 was whether the claim, in the plaint was vague. These two issues were dealt with by the lower court, and it was found that the suit for accounts was not maintainable, when the plaintiff had given a specific amount as the loss he had incurred on account of the defendant''s defaults. The lower court also held that a suit by a contractor for settlement of accounts was not maintainable against the person who awarded the contract to him. In view of these findings, the lower, court did not go into the merits of the case relating to breach of contract, and dismissed the, suit as not maintainable.

Counsel for the appellant challenges this decree of the lower court on the basis of the decision of this court Kerala State Electricity Board v. Marshall Sons & Co. (India) Ltd. 1985 KLJ 930 and in C. R. P. No. 1110 of 1969. The first of these cases was one where the respondent-plaintiff had filed a suit against the electricity Board, for settlement of accounts in respect, of transactions relating to supply of spares to the Board. One of the contentions in defence was that the suit for settlement of accounts was not maintainable. It have even boxed as this stage that when the plaintiff pressed for payment of the amounts due by way of price, the defendant had, read counter claims for damages,on the ground, of delay in the supply by this plaintiff, and defects in the goods, supplied. In fact, the contrast between the parties had prowled that the materials, if they were supplied after the scheduled delivery period will be accepted by the defendant Board only on condition that the price of such materials will be fixed talking into consideration the market value of such materials on the date of the actual supply, or at the pries noted in the order, whichever was lower. All the supplies in that case were beyond the delivery period and therefore the price payable remained unsettled. The maintainability of the suit was upheld by the lower court in the view that so long as the compensation payable to the defendant Board could not be ascertained by the plaintiff their remedy necessarily was to file a suit for settlement of accounts. This court held, having regard to the totality of the circumstances of the case, that it was impossible to proceed on the basis that a specified sum of money by salary of price was due for the goods supplied by the plaintiff, and that a suit for accounts was maintainable.

It is true that the pristine view that a suit for accounts will lie only, when certain specified jural relationships existed, was not accepted by this court. It was held that this old concept has many exemption carved out, having regard to various situations, which would constitute exceptional circumstances justifying a suit for accounts. However, it has to be noted that this court did not hold that a suit for accounts will lie when the plaintiff had claim for an ascertained sum or when the plaintiff was in the know of the amount of damages to which he was entitled in law. The facts of the case dealt with by this court were peculiar, in that, the amount due to the plaintiff could not be ascertained by them to enable a suit being field for a specific amount. The facts of that case are therefore, distinguishable from the present, where the amount of damages due to the plaintiff was known and ascertained and set forth in the plaint itself.

Nor does the decision of Moidu J., in C. R. P No. 1110/69 support the contention of the plaintiff. The suit, in which that decision was rendered was one for settlement of accounts by a contractor, again, against the Electricity Board. Even before filing the written statement, the defendant Board moved the trial court to direct the plaintiff to amend the plaint to convert the suit as one for damages and for recovery of a specific sum of money. That application was allowed and the Plaintiff was directed to convert the suit into one for recovery of a specific sum of money. This order was challenged in revision. This court said that "on the basis of the allegations made in the plaint". It was established that the defendant in that suit was an accounting party to the plaintiff and that therefore the suit for settlement of accounts was maintainable. The plaint had contained an allegation to the effect that the defendant was withholding amounts due to the plaintiff, on account of the plaintiffs'' liability to compensate the defendant for an accident that had occurred during the execution of the work. The amount payable as compensation to the defendant had not been quantified. In this state of affairs, a settlement of accounts was called for before any amount could be decreed to the plaintiff. Moidu J. therefore held that the suit, as framed, was maintainable.

There is no such contingency arising in this case. In fact the suit here is in substance a plain and simple one for damages for breach of contract and the plaintiff himself has alleged that he had incurred damages to the extent of Rs. 3,20,000/-. Plaintiff is in the know of the amounts spent by him and the amount of damages to which be entitled. When which a crystallised amount is due, it is not open to him to lay the suit as one for accounts, in as much as there is no account to be settled between the parties, but only an ascertainment of the quantum of damages.

This view of ours finds support in two decisions of the Jammu & Kashmir High Court. In Trilokinath Dhar v. Dharmarth Council (AIR 1975 Jammu &kashmir & Kashmir 76, F. B.) it was held that no suit for accounts can be maintained by a promisee against a promise or between two contracting parties. In that case, a contractor who had undertaken the construction of certain works for the defendant, filed the suit as one for settlement of accounts contending that he had completed the works undertaken towards which the defendant had paid certain amounts, that there were huge outstandings still due on account of the said works, but that he was not certain about the actual amount outstanding. He therefore sought relief by way of settlement of accounts. The court said:-

According to the plaintiff he undertook to execute we works in respect of which he had submitted the tender. The tender was accepted by the defendant and he was called upon to execute an agreement in favour of the defendant for the construction of the said works. The relationship of the parties is governed by the terms of the agreement. The terms of the agreement do not indicate that the plaintiff was the agent or the principal of the defendant. He was a mere contractor who had contracted to execute the two construction works as envisaged in the agreement. The idea behind the relationship of principal and agent is that the agent must act on he half of the principal and he must represent the principal in any such dealing. That exactly is not the case before us. The defendant did not stand in any fiduciary capacity so as to impose upon him a legal obligation to render accounts to the plaintiff, the relation being only that of a contractor and contractee/promisor and promisee. In such a situation it is doubtful if a suit for rendition of accounts can lie. The scope of suit for accounts is limited to a certain number of cases for instance between one partner against another, between the beneficiary against the executor or administrator, between mortgagor against the mortgagee, between cesti que trust against a trustee and between principal against an agent. But no suit for accounts can be maintained by a promisee against a promisor or as between two contracting parties.

The court approved its earlier decision in State of Jammu and Kashmir v. Tola Ram (AIR 1971 JK 71) which was also a similar case. That was also a case of contractor seeking accounts from the State for whom the work was undertaken on the allegation that the measurements relating to the work had been recorded in the books and registers of the defendant State, and that a settlement of the accounts was therefore called for. The court observed:-

The paragraph (in the plaint) clearly indicates that the plaintiff knew the amount of work that he had done or that at least was recorded in the books of the defendants. The suit should have been for a specific amount which accord Jig to him was due to him from the department. He was working the contract and he knew what work he had done and therefore should have claimed the amount which according to him was due to him from the department................... If this method is allowed to prevail then anybody who has a claim of money against another can easily draft the plaint as a suit for accounts, place his own fanciful valuation on the plaint; thus avoid payment of court fee. A suit for rendition of accounts is a special and unusual form of remedy which can be reported to only in some well recognised circumstances. It is not enough in a suit for accounts to allege that the plaintiff does not know the exact amount that he can claim from the defendant.

We are in agreement with the above decision. The plaintiff who knows the amount of work that he has done, the amount he has spent, and the amount of damages, if any, he has incurred, can only file suit for damages for a specified ascertained sum. He cannot masquerade the suit as one for settlement of accounts, for the reason that there is no account to be settled between the parties. A contractor to whom amounts are due from the contracting party for breach of contract, is bound to sue for damages. There is no obligation on the part of the contracting party to render accounts to the contractor. Such a case is not one of those exceptional ones, in which this court, in Marshall Sons & Co., has justified a departure from the normal rule that a suit for accounts will lie only when certain recognised jural relationships exist. The plaintiff''s remedy was therefore, only to file a suit for realisation of a definite sum of money by way of damages and not for settlement of accounts. The lower court was therefore right in holding that the suit as framed was not maintainable and that it entails dismissal.

No other points arise for decision in the appeal. It is accordingly dismissed.