Vatakkethala Thottungal Chakku's Son Mathu vs Achu and Others

Madhavan Nair, J.—The plaintiff is the appellant. Defendants 1 to 6 are the heirs of one Veeran Haji. The plaintiff''s suit out of which this

appeal arises was for rendition of accounts by defendants 1 to 6 and for recovery from them personally and from the assets of the deceased

Veeran Haji the sum found due on taking accounts which is estimated to be about Rs. 25,000. The plaintiff sued as the assignee of the rights of

defendants 7 to 11.

The facts are these : The deceased Veeran Haji who died in 1927 was a railway contractor. He had entered into a contract with the S.I. Ry.

Co. in 1924 for doing ""earthwork in the Shoranur-Nilambur line."" In connexion with this work he appointed as his sub-contractors defendants 7

and 8 and one Antony, the deceased husband of defendant 9 and father of defendants 10 and 11. Under the terms of the contract Veeran Haji,

after taking a commission of ten per cent. on earth-work"" and 2 1/2 per cent, on ""culvert work"" on the amount of money paid by the railway

company had to give the whole of the balance amount to the subcontractors. It is alleged in the plaint that deducting the sum of Rupees 61,424-

14-0 received on several occasions from the deceased Veeran Haji, a sum of Rs. 25,000-7-8 is still due to defendants 7, 8 and 9 to 11 for the

work, done by them.

In O.S. No. 76 of 1927 defendant 8 sued defendants 7, 9, and 10 and 11 for dissolution of the sub-contract partnership entered into between

defendants 7 and 3 and the deceased Antony and for recovery of his share of the profits. Defendant 8 was appointed receiver by the Court. Under

the orders of the Court, he sold the right of the contractors to recover the amount of debt from Veeran Haji (i.e., due from his heirs and from his

assets) in public auction. The plaintiff in the present suit purchased this right for Rs. 8,700 and deposited the sale value in Court. After the

confirmation of the sale the receiver under the orders of the Court executed an assignment deed to the plaintiff authorizing him to recover the debt.

This assignment deed referred to as Ex. A in the judgment of the lower Court, but not admitted by it in evidence, has been admitted by us for the

purpose of this appeal subject to the proof of its genuineness. The plaintiff''s suit to recover the amount claimed is based on this deed of

assignment. Ex. A, the assignment deed, after reciting the sub-contract between the deceased Yeeran Haji and defendants 7, 8 and Antony and

referring to O.S. No. 76 of 1927, proceeds as follows:

In that suit I was appointed receiver for realizing the above amount from Veeran Haji as also for performing other duties regarding the partnership.

On sale by auction after due advertisement within the Court premises, the amount thus due from Veeran Haji under-orders from Court to sell it by

public auction as a debt due to the partnership, you hare bid for Rs. 8,700 and deposited the whole purchase money under orders from Court.

Hereby also I empower you under orders from Court to recover the debt (Edavadu) sold under orders from Court by me as receiver and

purchased by you in auction and assign to you the same. None of us but you alone have hereafter any right or voice in realizing the full amount as

per accounts due to Anthappan, the heirs of the deceased Antony and me as sub-contractors under Veeran Haji from Veeran Haji''s heirs and

assets or to alienate it in any way. This assignment deed is executed under orders from Court.

Defendants 1 to 6 contended inter alia that the assignment in favour of the plaintiff is not valid and that the plaintiff is not entitled to institute the

suit. Issue 7 relates to this plea and it runs as follows : ""Is the assignment relied upon by the plaintiff true and valid?"" Treating this as a preliminary

issue, the validity of the assignment deed was attacked on the ground that it offended the provisions of Section 6(e), T.P. Act, which says that ""a

mere right to sue cannot be transferred."" It was contended on behalf of defendants 1 to 6 that having regard to the terms of Ex. A the suit is not to

recover a debt or a liquidated sum, that the assignment of a right to recover an unliquidated sum is only an assignment of a bare right to sue and is

therefore invalid. On the contrary, the plaintiff oontended that having regard to the facts of the case, there was clearly a> debt due from the

deceased Veeran Haji to defendants 7, 8 and 9 to 11 and that it was this debt that had accrued that, was transferred under Ex. A and the suit does

not therefore offend the terms of Section 6(3), T.P. Act. The learned Subordinate Judge held that it is clear from the assignment deed itself that

what has been really sold is the right to recover the amount that might be found due by Yesran Haji on the taking of accounts and not merely Rs.

25,000 at which the amount due has been estimated and being of that opinion he dismissed the suit accepting the contentions of defendants. 1 to 6.

The arguments urged in the lower Court have again been urged before us. We may say that the arguments in support of the appeal advanced by

the learned Counsel for the appellant which we will presently refer to, do not help him. He referred us to two classes of cases one of which relates

to suits where the principal assigned his rights to recover moneys due to him by his agent on taking accounts : see Ramiah v. Bukmani Ammal

(1913) 18 I.C. 138, Madho Das v. Ramji Patak (1894) 16 All. 286 and Rajeswar Saha and Others Vs. Sheik Yadali and Others, . Generally

stated, these oases may be said to proceed on the principle that

the right assigned is substantially a right to money belonging to the principal which is in the hands of the agent and is therefore assignable though it

may be that before it can be ascertained what sum is due, accounts may have to be taken if necessary, but this fact would not by itself turn the

transaction into a mere right to sue: see observation of Abdur Rahim, J., in Ramiah v. Muhmani Ammal (1913) 18 I.C. 138.

It is clear that the case before us does not fall within this principle. Having regard to the facts, on no reasoning can it be said that the position of

defendants 7, 8 and 9 to 11 is that of principals who have assigned their rights to sue their agent for moneys due from him. The second class of

cases elates to the principle now embodied in Section 29(2), Partnership Act, that

if the firm be dissolved, or if the transferring partner cases to be a partner, the transferee Is entitled as against the remaining partners to receive the

share of the assets of the firm to which the transferring partner is entitled, and for the purpose of ascertaining that share, to an account as from the

date of the dissolution.

The argument based on this principle was not advanced before the lower Court. However it may be said that the facts do not show that the

deceased Veeran Haji and defendants 7, 8 and 9 to 11 ever formed a partnership. The relation between them was not that of persons who have

agreed to share the profits of a business carried on by all or any of them acting for all. There was no doubt a partnership between defendants 7, 8

and 9 to 11 but between them and the deceased Yeeran Haji there was no partnership. Yeeran Haji had simply employed them as sub-contractors

to work under him.

Though the above line of argument does not help the appellant we think he is entitled to succeed having regard to one admitted fact in the case,

which in our opinion dearly shows that a debt had accrued to defendants 7, 8 and 9 to 11 by the time of the assignment deed Ex. A, and that such

a debt being assignable in law, the plaintiff''s suit is maintainable. It is not disputed and the fact is referred to in the plaint also that on 12th April

1929, though by that time Yeeran Haji had died the final amount due to him was paid by the railway company. The assignment deed in favour of

the plaintiff is dated 1930. Under the sub-contract, as already stated, Yeeran Haji is entitled to take from the amount paid to him by the company a

commission of ten per cent on earthwork and 2 1/2 per cent on culvert work and the whole of the balance should go to the sub-contractors : see

para. 7 of the plaint. When the value of the work of Yeeran Haji was ascertained and the amount due was paid to him, the sum due to the as.

signors of the plaintiff became definite as it could be found out by process of arithmetical calculation. If this view is correct, as we think it is, then at

the time of the assignment it must be held that a liquidated amount had become due to the assignors of the plaintiff. If so, the assignment of rights

under Ex. A amounts to an assignment of what is more than a mere right to sue for accounts and does not therefore offend the provisions of

Section 6(e), T.P. Act. The data to fix the definite amount due to defendants 7, 8 and 9 to 11 being avail, able, the mere fact that a calculation will

have to be made before determining the exact amount will not make that amount any the less a debt due to defendants 7, 8 and 9 to 11 validly as

signable in law. This reasoning finds support in the decision in the Court of appeal reported in O'' Driscoll v. Manchester Insurance Committee

(1915) 3 K.B. 499 brought to our notice by the learned Advocate-General at the end of the argument. In that case it was held that

where a penal doctor has done work under his agreement with the insurance committee, and the committee have received funds in respect of

medical benefit from the National Insurance Commissioners, there is a debt owing or accruing from the Insurance Committee to the penal doctor

which may be attached under Order 45, Rule 1, notwithstanding that as a matter of calculation the exact share payable to him may not yet have

been ascertained.

It was there contended that ""there, cannot be a debt until the amount has been ascertained."" But this contention, was repelled by Swinfen Eady,

L.J. with the observation:

Here there is a debt uncertain in amount which will become certain when the accounts are finally dealt with by the Insurance Committee.

As in that case the Insurance Company had admittedly ""at all times ample funds in their hands for the purpose of paying what might be found

due to Dr. Sweeny"" and therefore there was in that learned Judge''s opinion ""a debt owing or accruing from the insurance committee to Dr.

Sweeny,"" so in this case after the admitted payment of the money to Veeran Haji (i.e., his heirs), by the railway company they had ample funds in

their hands for the purpose of paying what might be found due to defendants 7, 8 and 9 to 11 and so there was in our opinion a debt owing or

accruing from Yeeran Haji''s heirs to the assignors of the plaintiff and this debt they could validly assign to the plaintiff. If we are prepared to accept

this reasoning, Mr. Venkatarama Sastry frankly admitted that he had nothing to say against it. For the above reasons we set aside the decision of

the lower Court on the preliminary issue and remand the case for disposal after considering the other issues. The respondents will pay the appellant

his costs here and in the Court below. The court-fee will be refunded. Document admitted in evidence, Ex. A, 6th February 1930 certified copy of

the assignment deed.