N.N. Rm. Narayanan Chettiar vs Arunachalam Pillai

Venkatadri, J.—This civil revision petition is against the order passed by the learned District Munsif, Tuticorin, dismissing the suit filed by the

petitioner herein for recovery of a sum of Rs. 358-23. The allegations in the plaint are as follows. The plaintiff and his brother were jointly

conducting business and they owned salt pans at Tuticorin. The respondent herein was an accountant in the said concern. Subsequently there was

a partition of the concern between the brothers, and the respondent became the accountant of the petitioner herein in respect of his business at

Tuticorin. The respondent was liable to maintain proper accounts and render them when his services were terminated. During his services the

petitioner received a complaint that the respondent did not maintain accounts properly. The petitioner sent his father-in-law to check the accounts

and it was found that he was keeping with him large amounts without depositing them in the bank. Therefore, the petitioner asked the respondent

to go over to his place with all the account books and records and render proper accounts. The respondent complied with the petitioner�s

demand, and it was found that the accounts were not written properly and finally the respondent''s services were terminated. The petitioner,

according to him, when he went through the accounts, found certain discrepancies with regard to some items, which are now the subject matter of

the suit, which he filed. The question for consideration in the Court below was whether the suit was maintainable, The respondent contends that the

suit should be in the form of accounts and the petitioner cannot pickup some items in the accounts and file a suit for recovery of the amounts

covered by those items as if they are amounts due and payable by the respondent to the petitioner. The learned District Munsif dismissed the suit

on the ground that the suit is not maintainable.

Learned Counsel for the petitioner cited a number of decisions, but on going through those decisions, I am convinced that the conclusion arrived

at by the learned District Munsif is correct. In Kshetranath v. Kalidasi AIR 1918 Cal. 1037, the plaintiff claimed a specific sum of money due on

account of salary and house rent and contended that if the correctness of the amount was questioned the amount due might be determined on

examination of the accounts. The defendant contended that the suit was cognisable by a Court of Small Causes and not by a civil Court, and the

Munsif ordered the plaint to be returned to the plaintiff for presentation to the proper Court. In the above decision it was observed as follows at

page 1038:

A suit for recovery of a specific sum of money does not assume the character of a suit for accounts, merely because in the determination of the

question in controversy accounts may have to be examined. This has been pointed out in a long series of decisions......There cannot in essence be a

suit for accounts by the plaintiff against the defendant, unless the defendant is under a liability to render accounts to the plaintiff.

In Bharat Chandra Chakrabarty Vs. Kiran Chandra Rai, it is observed that it is not open to any principal who has got all the accounts of his

agent in his possession to employ the machinery of the Courts for examining his accounts on the off-chance of making his agent liable for any sum

which on such examination may be found due from him. Equally it is settled law that an agent will not discharge himself from the duty of accounting,

by merely delivering to his employer a set of written accounts without attending to explain them, and without producing vouchers by which the

items of disbursements are supported. It is also equally a settled law that a decree passed in favour of the plaintiff without calling upon his agent to

explain his accounts and without finding whether any item requires explanation or has been wrongly or falsely entered is not valid.

In Nalini Kumar Chakrabartty Vs. Gadadhar Choudhury and Others, the principle laid down in Bharat Chandra Chakrabarty Vs. Kiran

Chandra Rai, has been followed. In Shiva Prasad Seth and Others Vs. Hanuman Bux Seth, the plaintiffs filed a suit against their agent, who was in

charge of a shop, for accounts alleging that he had misappropriated a sum of Rs. 5100. The defence to the suit was that all the account books

being with the plaintiff, the defendant could not be sued without giving details of the claim. It was observed by a Bench at page 393 as follows:

Indeed it is true that an agent merely by handing over to his principal a set of account books is not absolved from the liability to explain them ; but

where the principal who is in possession of all the account books sues his agent for accounts he is expected to disclose such particulars as will

establish a prima facie liability of the defendant to account. In the present case, no such particulars are given. There is a bare allegation in the plaint

that on examination of the accounts the plaintiff found that the defendant had misappropriated at least Rs. 5100,

In Godhanram v. Jaharmul Puglia 40 Cal. 335 it was observed at page 339:

It is not disputed that the first defendant as agent was liable to render accounts to the plaintiff of all his dealings in the various transactions carried

on by him as agent on behalf of the plaintiff. But what is argued is that, in the absence of a special contract in that behalf, the plaintiff cannot be

permitted to select capriciously a single transaction and claim the fruits thereof, without an adjustment of the rights and liabilities of the parties in

relation to other transactions. This contention is manifestly sound.

Reviewing the entire case-law on the subject it seems to be that an agent is liable to render the accounts but the principal cannot off-chance pick

up some items and then file a suit for the recovery of the amounts covered by those accounts as if those amounts are debts due and payable by the

defendant to the suit. Mr. Parasaran, Learned Counsel for the petitioner, cited the decision in Subramania v. T.R.M.T.S.T. Firm, Ela, AIR 1935

Rang. 209, where it is observed that if the principal is in the main satisfied with the agent''s accounts, and only takes objection to certain items

therein which he is prepared to specify, then the result of bringing a suit in regard to these particular items only is to relieve the agent of

considerable burden. I am not inclined to follow this decision because no principle has been laid down. But here in this case the respondent is

contending that he is entitled to get some amounts from the petitioner himself. It is an admitted fact that the accounts have not been settled, nor was

he called upon to render an account before the suit was filed. Therefore, considering the case-law on the subject and going through the evidence, I

feel that the conclusion arrived at by the learned District Munsif is correct. The civil revision petition is accordingly dismissed. There will be no

order as to costs.