Triloki Nath Dhar vs Dharmarth Counsel, Srinagar and others

Mian JalaludDin, J.

(1) This is a plaintiff's second appeal and arisen 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 distressed the appeal.

(2) 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 the 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.

(3) 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

195657 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 Satnadhi 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 outstandings 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 applicant to settle accounts with him, there was no response from the

defendant's side, Hence the suit.

(4) The defendants Contested the suit on various grounds interalia that the applicant had received final payment regarding the work of Basant Bagh

as evidence by the measurement book and as such there was no amount outstanding against the defendant en account of this work Regarding the

work of wall surrounding Samadhi Rambagh it was pleaded that the plaintiff had already over drawn amount of Rs. 49353 and that the plaintiff had

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

accounts was not maintainable.

(5) 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 the aforesaid works and had

received full and final pay omit for office building at Basant Bagh in token thereof the plaintiff executed receipt in his own hand on page Mo 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 Additional 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.

(6) 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 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 AIR 1967 Supreme Court 333 in support of his case.

(7) 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 plaintiff does 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 be 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 motrgagee between cestui 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 In AIR 1925 Lahore 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 claimed when the relationship between the parties is such that this is the only relief which would enable the 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.

(8) I, therefore, donot 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.

(9) 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

account 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 outstanding. 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.

(10) 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 bow the view taken in AIR 1971 J&K (Supra) is net sound The principle enunciated in the said authority does not militate against

what has been observed it; AIR 1966 SC 333 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 return 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 mar 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.

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