Puran Chandra Burman vs Deepak Bhargava

Shyamal Kumar Sen, J.—The facts involved in this suit, inter alia, are that on October 11,1966 it was agreed in writing between Mr. A.P. Bhargava and Mr. P.N. Bhargava (both since deceased), the predecessor-in-interest of the Defendants, of the one part and the Plaintiff of the other part that the Plaintiff would develop their land at No. 19, Dum Dum Road, Calcutta and would arrange for sale of the- plots of land divided under development scheme, at a price not below Rs. 7000 per cottah for the portion situated on 30'' wide Road (Front) and at a price not below Rs. 4000 per cottah for the other portion situated on the back side of the said road.

The Plaintiff would be paid by the said Bhargavas as remuneration 5% of the total price of the said plots, and the Plaintiff shall also be entitled to such part of the ''price as would be in excess of Rs. 7000 per cottah or Rs. 4000 per cottah of the said plots.

Agreement dated October 11, 1966 was proved and tendered (Ext.''A'').

It is the case of the Plaintiff that pursuant to the said Agreement, the Plaintiff framed a scheme of development of the said land into small plots and got the plan in respect thereof sanctioned by the Corporation of Calcutta at his. own costs and expenses as agreed between the parties.

It is the further case of the Plaintiff that in terms of the agreement, the Plaintiff sold all the plots except one or two plots. After payment to the said Bhargavas the sale proceeds of the said plots of land, in 1976, sum of Rs. 1,61,237.04 paisa became due and payable by the owners, the predecessors of the Defendants, to the Plaintiff.

By letter dated July 5, 1984, the Defendants Nos. 1, 2 and 3 acknowledged in writing their liability to pay the Plaintiff the sum of Rs. 1,53,830.30 paisa as on January 6, 1984.

Letter dated July 5, 1984 was proved and tendered and the same was marked as Ext.''B''.

Subsequent to the said acknowledgement, the said Defendants paid to the Plaintiff between January 28, 1986 and May 26, 1986 the total sum of Rs. 36,955.93 by four Account Payee Cheques. After giving credit to the Defendants for the said sum of Rs. 36,955.93, sum of Rs. 1,16,882.37 remained due and payable by the Defendants to the. Plaintiff. Letter dated November 16, 1992 written by Hongkong Bank alongwith four cheques were proved and tendered. The same were marked as Ext. ''C collectively.

Copies of receipts dated March 31, 1-986, April 5, 1986 and July 16, 1986 which are annexed to the affidavit affirmed by� Defendant No. 3 Parveen Bhargava on July 7, 1988 showing the receipt of the above sums by the Plaintiff, were tendered and collectively marked as Ext. ''D''.

Written statement was filed on behalf, of the Defendants Nos. 2 and 3. But at the end of the written statement, it appears that Bijoy Bhargava, the Defendant No. 2 signed the said written statement on behalf of Deepak Bhargava, Parveen Bhargava, Bandana Chopra and Anju Bhargava, the Defendants Nos. 1, 3, 6 and 7. The said Defendants did not deny the existence of the terms and conditions of the agreement (Ext. ''A'').

In para.9 of the written statement the following allegations were made:

It is denied that the owners have failed and neglected to pay the Plaintiff the said alleged balance sum or that the said amount is still due and payable to the Plaintiff.

The Defendant has relied upon and annexed to the written statement the receipts granted by the Plaintiff as also a statement showing payment made to the Plaintiff showing that last payment was made to the Plaintiff on May 16, 1986.

It has been alleged that nothing is due and payable to the Plaintiff.

Finally, it has been alleged that the claim of the Plaintiff is barred by Limitation.

In this suit the Plaintiff made an application for final judgment under Ch. XIIIA (13A) of the Original Side Rules of this Court., On September 27, 1988, a decree was passed against the Defendants in the said application. The Defendants preferred an appeal against the said decree. The Court of appeal allowed the said appeal. The Court of Appeal, inter alia, held as follows:

At least so far as the question of Limitation is concerned, it cannot be said that there is no triable issue or bona fide defence.

It has been submitted on behalf of the Plaintiff that it is apparent from the written statement of the Defendants that the agreement is admitted and the liability of the Defendants to pay the commission to the Plaintiff is also admitted. Following defenses were noted: (i) Full payments have been made and (ii) if not, the claim is barred by Limitation.

Issues settled are as follows:

(a) Is the sum of Rs. 1,16,88.3.00 or any other sum due to the Plaintiff from the Defendants ?

(b) Is the claim of the Plaintiff barred by Limitation ?

Mr. H.M. Dutta, learned Advocate on behalf of the Plaintiff has submitted that Defendants are admittedly the heirs and legal representatives of Mr. A.P. Bhargava and Mr. P.N. Bhargava, both since deceased. P.N. Bhargava was the son of A.P. Bhargava. A.P. Bhargava by his will, which has been probated, divided and bequeathed all his properties to his grandsons'' the Defendant, Nos. 1, 2 and 3 (para. lA of the plaint as amended). This statement has not been denied by the Defendants in their written statement. Defendant No. 4 is the widow of P.N. Bhargava and the Defendants Nos. 5, 6 and 7 are the daughters of P.N. Bhargava.

It has also been submitted on behalf of the Plaintiff that as heirs of A.P. Bhargava and P.N. Bhargava, the Defendants are liable to pay the dues of the Plaintiff out of the estate belonging to the said deceased, which have come in their hands.

The learned Advocate for Plaintiff has referred the letter dated July 5, 1984, being Ext. ''B''. It has submitted that the Defendants Nos. 1, 2 and 3 admitted that as on January 6, 1984 the sum of Rs. 1,53,830.30 is payable to the Plaintiff by Late P.N. Bhargava in his individual capacity being 50% of the said amount and balance 50% by M/s. P.N. Bhargava and others.

The further contention of Mr. Dutta, the learned Advocate for the Plaintiff is that admittedly the Defendants thereafter paid to the Plaintiff further sum of Rs. 36,955.93 paisa between January, 1986 and May, 1986 being Ext. ''C.

After deducting the sum of Rs. 36,955.93 from the sum of Rs. 1,53,830.30, the balance amount payable by the Defendant to the Plaintiff is Rs. 1,16,874.37p.

On the question of Limitation it has been argued on behalf of the Plaintiff that it will appear from annexure ''B'' to the written statement that between November 15, 1976 to June 3, 1983 various payments were made to the Plaintiff by the Defendants. On July 8, 1984 the Defendants No. 1, 2 and 3 acknowledged in writing signed by the said Defendant and/or by their, agent duly authorised in this behalf, their liability in respect of the dues of the Plaintiff.

In this connection, learned Advocate for the Plaintiff has referred to Section 18 of the Limitation Act.

The further contention of the learned Advocate for the Plaintiff is that by cheques dated January 28, 1986, March 31, 1986. April 5, 1986 and May 5, 1986, the Defendants paid to the Plaintiff a further sum of Rs. 36,955.93 and the said fact is admitted by the Defendant.

It has also been argued on behalf of the Plaintiff that all the payments mentioned hereinafter were made by cheques and the acknowledgments of such payments on account of dues of the Plaintiff appear in the handwriting of or in a writing signed by the Defendants or by their agent duly authorised in this behalf.

The suit has been filed on May 9, 1988. In the premises, no part of the Plaintiff''s claim is barred by Limitation.

In this connection, learned Advocate for the Plaintiff has also referred to Article 19 of the Limitation Act. In para.8 of the plaint, it has been specifically stated that in the income tax returns filed between March 31, 1976 and March 31, 1981 filed by Bhargavas, Bhargavas acknowledged in writing signed by them and/or by their agent duly authorised in this behalf, their liability in respect of the dues of the Plaintiff.

Mr. H.M. Dutta, learned Advocate for the Plaintiff has also referred to the affidavit affirmed by Defendant Nos. 2 and 3 in the Estate Duty proceedings. It has been submitted by him that the file in respect of said proceeding was produced in the Court. There was no suggestion in cross-examination disputing the correctness of the said affidavit it has been submitted that said files were not produced before the Trial Court dealing with the Chap. XIIIA application.

It has been submitted that ''since the other Defendants did not put any suggestion in respect of the same, it must follow that the facts in respect of their stand remain undisputed.

In support of his contention he has relied upon the judgment and decision in the case of A.E.G. Carapiet v. A.Y. Derderian.

The learned Advocate for the Plaintiff has further submitted that by letter dated August 20, 1987 the Plaintiff gave notice under Interest Act, 1978. The said letter has been proved and tendered. The Plaintiff claimed interest at the rate of 12% per annum.

Accordingly the learned Advocate has submitted that decree for Rs. 1,16,874.37 with interim -interest thereon and interest on judgment should be passed in favour of the Plaintiff with costs.

Mr. Malay Ghosh, learned Advocate for the Defendant, on the other hand, has submitted that in view of the said order dated August 31, 1990 passed by the Appellate Court the Defendants are entitled to raise all the points in defence including the point of limitation in the present suit.

The learned Advocate for the Defendants has referred to the following Clauses in the agreement dated October 11, 1966:

As remuneration of this work the owners shall pay to the agents 5% of the total sale price of the said plots which would be calculated on the basis following.

The agent will also be authorised to arrange'' for sale of the several offers of land divided from and (1) A.E.G. Carapiet Vs. A.Y. Derderian, carried out of the said premises No. 19, Dum Dum Road, Calcutta to such persons as he thinks fit at a price not below Rs. 7000 per cottah for those situated on 30'' wide Road and 40'' wide Road and not below Rs. 4000 per cottah for those plots which are on the back side of the Main Road.

The agent shall absolutely be entitled to such part of the said price as is in excess of Rs. 7000 per cottah or Rs. 4000 per cottah as the case may be and the owners shall only be entitled to price calculated @ Rs. 7000 per cottah @ Rs. 4000 per cottah as the case may be.

Relying upon the said Clauses in the said agreement the learned Advocate for the Defendant has submitted that there is no provision in the said agreement dated October 11, 1966 for payment of any interest to the Plaintiff.

It is the contention of the learned Advocate for the Defendant that the Plaintiff has admitted in the plaint as well as in evidence that on March 31, 1976 dues of the Plaintiff amounted to Rs. 1,20,737.04 after giving credit for Rs. 40,000 and something. Therefore, according to him the balance amount payable to the Plaintiff as on March 31, 1976 was Rs. 1,20,737.04. The learned Advocate for the Defendant has also referred to para.7A of the plaint and has submitted that the Plaintiff has Admitted that between November 15, 1976 and June 2, 1983 several ^payments aggregating Rs. 84,560.00 were made to the Plaintiff.

Thus, the balance amount payable to the Plaintiff as on June 2, 1983 was Rs. 1,20,737.04 -- Rs. 84,560.00 = Rs. 36,177.04.

It is the contention of the learned Advocate for the defendants that the Defendants have paid Rs. 36,955.93 being aggregate amount payable by the Defendants to the Plaintiff on different dates particulars of which are mentioned herein below:

Date of Payment Amount paid (Rs. ) Exhibit No.

January 28", 1986 10,000.00 Ext. 2

March 31, 1986 8,000.00 Ext, D

April 5, 1986 2,000.00 Ext, D

May 16, 1986 16,955.93 Ext. D

36,955.93

The learned Advocate has referred to answers to questions Nos. 83, 84, 85 and 86 in cross-examination wherein the Plaintiff has admitted that the amounts mentioned in three receipts dated March 31, 1986, April 5, 1986 and May 16, 1986 (all included in Ext.-D) were received by the Plaintiff on the dates mentioned therein in part payment of his commission in terms of the agreement dated October 11, 1966 (Ext.-A).

He has also referred to questions and answers Nos. 18-22 in Examination-in-chief wherein the Defendant No. 2 has stated that three receipts dated March 31, 1986, April 5, 1986 and May 16, 1986 (al! included in Ext. D) had been issued as Commission having been paid in terms of the said agreement dated October 11, 1966 (Ext. A).

Mr. Ghosh, learned Advocate for the Defendants has also referred to questions 12-17 in Examination-in-Chief and has submitted that in answer thereto the Defendant No. 2 has categorically stated that the sum of Rs. 10,000 as mentioned in the receipt dated January 28, 1986 (Ext.2) was received by the Plaintiff in terms of the said agreement dated October 11, 1966 (Ext. A).

It has further been submitted that in cross-examination no suggestion to the contrary was put to the Defendant No. 1 in respect of the said receipt dated January 21, 1976 (Ext.2) and the three receipts dated March 31, 1986, April 5, 1986 and May 16, 1986 (all included in Ext.D).

Thus, after payment of the sum of Rs. 40,500 as mentioned in para.7 of the plaint Rs. 84,000 as mentioned in para.7A of the plaint and the sum of Rs. 36,955.53, the Plaintiff has been paid more than Rs. 1,61,237.04, which according to the Plaintiff was due and payable to the Plaintiff by the said owners (as mentioned in para.6 of the plaint) and the suggestion to that effect was put to the Plaintiff in question No. 75 in cross-examination, but the Plaintiff did not agree to the same.

The learned Advocate for the Defendants has further submitted that in the plaint, apart from the agreement dated October 11, 1966 (which does not contain any provision for payment of interest) the Plaintiff has not pleaded any other agreement, verbal or in writing, for payment of any interest to the Plaintiff by the said owners.

He has also answered to question No. 81 wherein the Plaintiff has ^admitted that there is no provision for payment of interest in the agreement dated October 11, 1966.

He has further submitted that in answer to question No. 23 in examination-in-chief the Defendant No. 2 has stated as follows:

Apart from the agreement dated October 11,1966 was there any other agreement between the Plaintiff and the Defendants or their predecessor ? There was no other agreement.

No suggestion has been put to the Defendant No. 2 during the cross-examination about the alleged verbal or separate agreement for payment of interest.

Mr. Ghosh, learned Advocate for the Defendants has relied upon the judgment and decision in the case of A.E.G. Carapiet v. A.Y. Derderian (Supra) and has submitted that the Plaintiff should have put his suggestion in cross-examination to the Defendant No. 2 regarding alleged verbal or separate agreement for payment of. interest, but no such suggestion has been put to Defendant No. 2 on behalf of the Plaintiff, 48. He has also referred to answer to question No. 81 wherein the Plaintiff has stated as follows:

There is no provision in the agreement for interest ? There is no provision in the agreement but they verbally agreed in the year 1976 when I demanded my dues of Rs. 1,20,737.04, Mr. P.N. Bhargava promised to pay interest on the sum of Rs. 1,20,737.04 with effect from April 1, 1976 because he is unable to pay the entire amount forthwith.

In answer to question No. 106 in cross-examination, the Plaintiff has stated as follows:

I further put to you that there was no agreement for payment of interest to you and you are not entitled to-get any interest at all ? This was agreed between me and Late P.N. Bhargava. He has not been able to pay the entire amount of Rs. 1,20,737 and therefore he will pay 12% interest on the amount.

Learned Advocate for the Defendants has also contended that no such amount of evidence can be looked into which was never put forward. In this connection he has relied upon the following decisions:

(a) AIR 1930 57 (Privy Council)

(b) Trojan and Co. Ltd. Vs. Rm. N.N. Nagappa Chettiar, and

(c) Bhagat Singh v. Jaswant Singh AIR 1966 S.C. 1861.

Mr. Ghosh has submitted that no suggestion was put to the Defendant No. 2 in cross-examination to controvert but he has stated in answer to question No. 2S that no amount is payable in terms of the aforesaid agreement dated October 11, 1966.

The said question No. 29 and answer is get out below,:

is there any amount payable by the Defendants or their predecessors to the Plaintiff in terms of the agreement dated October 11, 1966? No.

Learned Advocate for the Defendants has submitted that the allegations contained in para.7 of the plaint does not constitute any pleading to the effect that there was any agreement - verbal or written between the Plaintiff and Mr. P.N. Bhargava, deceased.

He has further submitted that it has only been alleged by the Plaintiff inter alia that the Plaintiff made demand for payment by a letter dated May 4, 1976 addressed to Mr. P.N. Bhargava as Karta of the Defendant and the Plaintiff also gave notice that if inspite of demand, no payment was made forthwith, the Plaintiff would charge interest on his dues at the rate of 1% per month.

It has been further submitted that under Order 8, Rule 5(1) of the Code of Civil Procedure, the Court may in its discretion require the allegation of facts in the plaint to be proved by the Plaintiff. Plaintiff has been examined as witness but the alleged letter dated May 4, 1976 has not been tendered exhibited in evidence. It has been submitted, that the Court may not take into consideration the allegations made in para.7 of the plaint regarding the alleged letter dated May 4, 1976.

The learned Advocate for the Defendants has submitted that in terms of the agreement dated October 11, 1966 the Defendants has paid the balance� principal amount to the Plaintiff by May 5, 1986 and there was no amount due from and payable by the Defendants to the Plaintiff in terms of the agreement dated October 11, 1966 after May 5, 1986. There being no principal amount payable by the Defendants to the Plaintiff in terms of the agreement dated October 11, 1966 after May 5, 1986. There being no principal amount payable by the Defendants to the Plaintiff in terms of the agreement dated October 11, 1966 and as on August 20, 1987, and, there being no provision for payment of any interest in the said agreement dated October 11, 1966 and no other agreement either verbal or in writing, for payment of interest to the Plaintiff, the Plaintiff is not entitled to claim or get the sum of Rs. 1,16,882.37 (as mentioned in the said letter dated August 20, 1987 being Ext. ''E'' and in para.9 of the plaint) or any portion thereof or any interest thereon.

The Defendants have further denied that by letter dated July 5, 1984 (Ext. B) the Defendants acknowledged in writing and promised to pay the Plaintiffs dues of Rs. 1,53,838.30 with accrued interest after adjustment of payment made by the Plaintiff from time to time.

In the written statement, the Defendants have also disputed and denied acknowledgments and it has been submitted that the Plaintiff had all along been an employee and was getting monthly salary of Rs. 250 per month. Learned Advocate for the Defendants have further submitted that in para. 11 of the written statement it has been stated that the affidavit of assets and Estate Duty return were prepared and filed on the instruction of the Plaintiff and the Plaintiff is trying to take undue advantage of his own wrong. The Defendants have further stated that the letter dated July 5, 1984 and the documents were prepared by the Plaintiff and the Plaintiff got it signed by the Defendants without disclosing true facts of the payment made from time to time and/or without making any adjustment of the payments made to the Plaintiff by and/or on behalf of the Defendants.

Learned Advocate for the Defendants relied upon question No. 28 in Examination-in-Chief of the Defendant No. 2 answer thereto and also on question Nos. 38-40 and submitted that said documents were prepared by the Plaintiff and the Defendants relied upon the Plaintiff as a trustee worker and accepted the same.

It has also been submitted that in fact the Plaintiff has admitted handing over the confirmation and that the confirmation was made for the purpose of submission of income tax return of the Defendants.

learned Advocate for the Defendants has also tried to make out a case that the said document was manufactured on the basis that signature portion of the said letter dated July 5, 1984 being exhibited is in blue ink and the same was made by the fountain pen and the blank space at the bottom of the said letter has been filled by black ink.

It has been submitted that the agreement dated October 11, 1966 does not contain any provision for payment of interest and the Plaintiff has not pleaded and has not been able to prove that there was any other agreement (either verbal or in writing) for payment of interest to the Plaintiff. Accordingly, the Plaintiff is not entitled to claim or get any amount on account of interest on the basis of the alleged acknowledgement in writing dated July 5, 1984 (Ext. B).

It has also been held that the acknowledgement .does not create new right of action but merely extends the period of limitation.

In support of his contention Mr. Ghosh, learned Advocate for the Defendants has relied upon the judgment reported in Lakshmirattan Cotton Mills Co.Ltd. and Behari Lal Ram Charan Vs. The Aluminium Corporation of India Ltd.,

Accordingly the learned Advocate for the Defendants has submitted that the Plaintiff is not entitled to claim any decree against the Defendants and the Plaintiff is not entitled to any relief in the present suit, and in the circumstances the present suit should be dismissed with costs.

I have considered the respective submissions of the learned Advocates for the parties. The letter dated July 5, 1984 being Annexure ''C to the plaint and marked as Ext. ''B'' was signed by Bijoy Bhargava and another coparcener. The question arises as to what is the effect of the said letter whereby it has been alleged by the Plaintiff that the amount due and payable from the said deceased, A.P. Bhargava, and P.N. Bhargava have been acknowledged by their heirs. It may be noted that only defence taken with regard to the said document is that Defendants have relied on the Plaintiff and at their instance they have signed the said document. The said document Ext. ''B'' is not only an admission of liability but this is also an account stated and confirmed, as also of balance confirmation.

It has been mentioned in the said document that a sum of Rs. 1,53,838.30 is payable as at January 6, 1984. In other words, account between the parties upto January 6, 1984 was settled on July 5, 1984.

In this connection, the Division Bench judgment and decision in the case of Bengal Credit Corporation Vs. Central Bank of India, may be taken note of. In the aforesaid decision it has been held:

When the parties signed such an account or confirmed the same, then such a document implied a promise to pay and that constituted a new cause of action.

The Division Bench judgment and decision in the case of Durga Prasad Sarawgi Vs. Fateh Chand Kanoi and Another, relied upon by the Id. Advocate for the Plaintiff may also be taken note of. In the aforesaid decision Division Bench of our Court has also laid down the principle i.e. "the essence of an account stated is to take of an account and then an agreement is made between the parties to constitute the new cause of action."

In any event, the payment is alleged to have been made prior to the said document dated July 5, 1984 which is in the form of account stated and settled between the parties. It is the said subsequent document dated July 5, 1984 which would operate to bind the Defendants. The question, however, arises is that since the said document is signed by only two persons, will it bind the heirs of the deceased unless of course it can be shown that they have authorised the two signatories to issue the said letter of acknowledgment.

The contention of the Defendants that the Plaintiff being employee of the original Defendants prepared accounts and since the original Defendants had confidence upon the Plaintiff, Defendants signed the said document, cannot be accepted. No reasonable man is expected to act in the manner as alleged by the Defendants. Such a plea appears to me to be absolutely untenable and therefore cannot accepted.

The claim admittedly arises out of the transactions Plaintiff had with A.P. Bhargava and P.N. Bhargava both deceased and referred to as owners in the plaint. The said acknowledgment has been signed by Vijay Bhargava as son of Late P.N. Bhargava and others and on behalf of P.N. Bhargava and others as son of'' proprietor.

In the instant case it also appears that payment has been made on the dates already mentioned herein before, thereby creating a fresh period of limitation. Part payments made as aforesaid read together with the said document on July 5, 1984, no doubt saves the limitation but that only binds the signatories to the said document, to the extent of their share in estate left by the deceased for whom such acknowledgment has been made. Accordingly there will be decree for the amount claimed. Relevant Sections in the Limitation Act concerned are set out herein below:

Section 18 - (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872, oral evidence of its contents shall not be received.

Section 19 -- Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duty authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by the person making the payment.

The Plaintiff will therefore be entitled to a decree of Rs,1,16,883 interim interest and interest on judgment at the rate of 6 per cent and costs against the Defendants No. 1, 2 and 3. The said decree, however, will be limited to the extent of the estate of the deceased, A.P. Bhargava and P.N. Bhargava.

The department is directed to draw up and complete the decree expeditiously.

Stay prayed for is considered and refused.