Triloki Nath Dhar vs Dharmarth Counsel, Srinagar and Others

Mian Jalal-Ud-Din, J.—This is a plaintiffs second appeal and arises out of a suit for rendition of accounts brought by him in the court of City

Munsiff Srinagar. The suit was dismissed by the trial Court on the ground that the claim for rendition of accounts did not lie. On appeal the

Additional District Judge, Srinagar affirmed the judgment and decree of the trial Court and dismissed the appeal.

The appeal was originally heard by His Lordship the Hon'ble Chief Justice who was of the view that the appeal involved a substantial question

of law as to the maintainability of a suit for accounts by an agent against the principal. The soundness of the view taken by a Division Bench of this

court in AIR 1971 J.& K. 71 was challenged before His Lordship, The case was therefore, referred to the Full Bench. This is how the case has

come before us.

Briefly speaking the facts of the case are that the plaintiff appellant brought a suit for rendition of accounts. The plaintiff averred that in the year

1956-57 tenders were invited by Mohtmim Dharmarth defendant respondent for the construction of two works namely; (1) ""Construction of office

building at Basant Bagh"" and (2) ""construction of surrounding wall Samadhi Rambagh."" Consequent upon the submission of tender by the appellant

which was accepted the appellant deposited Rs. 400/- as earnest money with the defendant respondent and executed agreements for the

construction of the aforesaid works. The appellant completed both the works in accordance with the terms of the agreements and the defendant

respondent paid some amount of money to him on account, but no accounts were settled. The plaintiff further averred that there were huge out

standings against the defendant on account of the said works. The plaintiff was not certain about the actual outstanding due to him. Although he

called upon the defendant to settle accounts with him, there was no response from the defendant's side. Hence the suit.

The defendants contested the suit on various grounds inter alia that the appellant had received final payment regarding the work of Basant Bagh

as evidenced by the measurement book and as such there was no amount outstanding against the defendant on account of this work. Regarding the

work of wall surrounding, Samadhi Rambagh it was pleaded that the plaintiff had already over drawn an amount of Rs. 493-5-3 and that the

plaintiff had furnished a written undertaking agreeing that the amount be set off against him from the cost of material and earnest money. The suit for

rendition of accounts was not maintainable.

After raising the necessary issues in the case the trial Judge found that there was no relationship of principal and agent between the parties. It

was, however, established from the evidence on record, that the plaintiff had maintained regular accounts about both the aforesaid works and had

received full and final payment for office building at Basant Bagh in token thereof the plaintiff executed receipt in his own hand on page No. 35 of

the Measurement Book The plaintiff had failed to appear in the witness box to explain the position and he had also withheld the accounts.

Therefore, in view of these facts suit for rendition of accounts did not lie. On appeal the learned Addl. District Judge concurred with this view of

the trial Judge and relying upon the observations made in AIR 1971 J. & K. 71 dismissed the appeal

Shri J.L. Chowdhary appearing for the appellant has submitted that in the present case the relationship between the parties was that of Principal

and agent. The defendant was under statutory obligation to render accounts to the plaintiff. The plaintiff had stated in the plaint that the accounts

were with the defendant and therefore he was not in a position to know the exact amount due to him from the defendant on account of the works

executed by him for the defendant. He has challenged the correctness of the view taken in AIR 1971 J.& K. 71 and has relied upon Narandas

Morardas Gaziwala and Others Vs. S.P. Am. Papammal and Another, in support of his case.

On a careful consideration of the matter I am of the view that the proposition enunciated by the learned counsel that the suit for rendition of

accounts in the present circumstances is maintainable does not hold good as no relationship of principal and agent is found to subsist between the

parties.

The plaint does not disclose the existence of any such relationship. According to the plaintiff he undertook to execute two 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 behalf 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 cestui que trust against:

a trustee and between principal against an agent. But no suit for account can be maintained by a promise against a promisor or as between two

contracting parties. In AIR 1925 Lah 100 it was held that a suit for rendition of accounts brought by the sons of certain contractor who had done

some building work for the defendant was not maintainable. It was observed that a right to claim a statement of accounts is unusual form of relief

only granted in certain specific cases and is only to be churned when the relationship between the parties it such that this is the only relief which

would enable die claimant to satisfactorily assert his legal rights. In that case it was found that there was no duty cast upon the defendant under the

law to keep an account and that the proper relief to claim for the plaintiffs was to have brought a suit for specific amount and not to have asked the

defendant to produce his accounts book as evidence in support of their case. In the instant case the plaintiff has not been able to show that there

was a statutory obligation on the defendant to have maintained the accounts and that the plaintiff could not maintain any such accounts.

I, therefore do not subscribe to the view propounded by the learned counsel for the plaintiff appellant that the only relief available to the plaintiff

in the present case was to bring a suit for rendition of accounts. There is, therefore, no merit in the contention raised before us.

Again, on facts as well the suit is not found maintainable because as affirmed by the plaintiffs own witness namely Jia Lal Mattu the plaintiff did

maintain the accounts for both the aforesaid works. The trial Judge found that the plaintiff received full and final payment for the office building at

Basant Bagh in token whereof he executed personally the receipt in his own hand on the measurement book. The plaintiff did not produce the

accounts maintained by him in the court. He even did not appear as his own witness to explain his stand in the matter. The presumption is that the

plaintiff knew as to what was the amount cut-standing. He only pretended to know nothing about the matter and therefore clothed his suit with a

prayer for rendition of accounts although the sum was ascertainable and could be ascertained from looking into the accounts maintained by him.

For the foregoing reasons it is found difficult to accede to the contention raised by the learned counsel for the plaintiff. Nothing has been shown

as to how the view taken in AIR 1971 J. & K, 71 (supra) is not sound. The principle enunciated in the said authority does not militate against what

has been observed in Narandas Morardas Gaziwala and Others Vs. S.P. Am. Papammal and Another, . There can be no dispute with regard to

the proposition that a principal can sue an agent for rendition of accounts. This is recognised by law relating to the contract. The Supreme Court

has also held that the right of an agent to sue the principal for accounts is an equitable right arising under special circumstances and is not a

statutory right. Where, therefore, all the accounts are in possession of principal and the agent does not possess accounts to enable him to

determine his claim for commission against principal a suit for rendition of accounts is maintainable. But that is not the case before us. As already

observed above the relationship of the parties is not as that of principal and agent but is purely on contractual basis, therefore the authority of the

Supreme Court relied upon by the appellant is of little help to him in so far as its application to the facts of the case before us are concerned.

For the foregoing reasons I see no force in this appeal which is hereby dismissed with costs.