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PETITIONER: HULAS RAI BAIJ NATH

       Vs.

RESPONDENT: FIRM K. B. BASS & CO..

DATE OF JUDGMENT: 03/05/1967

BENCH: BHARGAVA, VISHISHTHA BENCH: BHARGAVA, VISHISHTHA BACHAWAT, R.S. SHELAT, J.M.

CITATION:  1968 AIR  111            1967 SCR  (3) 886  CITATOR INFO :  RF         1973 SC 643  (6)

ACT: Code  of Civil  Procedure, 1908 (Act 5 of 1908),  O 23  r.1- Suit  for  rendition of accounts-Defendant  pleads  accounts settled,  money due to him, and prays for decree  of  amount due-Preliminary  decree  not  passed-Whether  plaintiff  can withdraw suit.

HEADNOTE: In  a suit for rendition of accounts, the defendant  pleaded that  accounts, had been settled and he was to  get  certain money  from the plaintiff; that there could be no  rendition of accounts; and that if the court concluded that  rendition of account was necessary, a decree for the amount which  may be found due to the defendant with costs and interest may be passed in favour of the defendant after necessary court  fee was  realised  from  the defendant.   While  no  preliminary decree  for rendition of accounts had ’been passed, and,  in fact,  the defendant was .still contending that there  could be  no  rendition  of accounts in the  suit.  the  plaintiff applied  for withdrawal of the suit.  The defendant  opposed the  withdraw  claiming that in a suit of this  nature,  his position  became that of a plaintiff and he became  entitled to have the accounting done and to obtain a decree, and  the withdrawal  after  protracted duration was  to  defeat  this right  of  the  defendant.   The  trial  Court  allowed  the withdrawal,  which was upheld by the High Court.  In  appeal by the defendant, this Court HELD  :  At the stage of withdrawal of the suit,  no  vested right in favour of the defendant had come into existence and there was no ground on which the Court could refuse to allow withdrawal of the suit. There  is no provision in the Code of Civil Procedure  which requires the Court to refuse permission to withdraw the suit in such circumstances and to compel the plaintiff to proceed with  it.   It  is,  of  course,  possible  that   different considerations  may  arise  where a set-off  may  have  been claimed under 0.8, C.P.C., or a counter-claim may have  been filed,,  if permissible by the procedural law applicable  to proceedings  governing the suit.  In the present  case,  the

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pleadings did not amount to a claim for set-off.  Even if it be  assumed that the defendant could have claimed  a  decree for the amount found due to him after rendition of accounts, no such right can possibly be held to exist before the Court passed  a preliminary decree for rendition of accounts.   In the  case of a suit between principal and agent, it  is  the principal  alone  who  has  normally  the  right  to   claim rendition  of  accounts from the agent.   The  agent  cannot ordinarily claim a decree for rendition of accounts from the principal and, in fact, in the suit, the defendant, who  was the agent of the respondent, did not claim any rendition  of accounts from the plaintiff. [888F-H] 889B-D] Seethai  Achi  v. Meyappa Chettiar and Others,  A.I.R.  1934 Mad, 337. refered to

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 897 of 1964. 887 Appeal  by special leave from the judgment and  order  dated November 14, 1961 of the Allahabad High Court in Civil Revi- sion No. 686 of 1953. Bishan Narain and M. I. Khowaja, for the appellant. Niren  De.   Addl.   Solicitor-General, M.  V.  Goswami  and Yogeshawr Parshad, for the respondent. The Judgment of the Court was delivered by Bhargava,  J.  The  respondent  firm,  K.  B.  Bass  &  Co., instituted  a  suit on 13th April, 1951,  for  rendition  of accounts  against the appellant firm, Messrs Hulas Rai  Baij Nath,  alleging that the appellant was the commission  agent of  the respondent and that the accounts between  respondent as  the  principal and appellant as the agent had  not  been settled  since the dealings be-an in the year 1941  onwards. Tentatively, a sum of Rs. 2,100/- was claimed in the plaint. In  the written statement filed on behalf of the  appellant, the  suit  was  contested on various grounds;  but  for  the purposes of this appeal, we need mention the pleas taken  in only  two  paragraphs  8 and I 1. In  paragraph  8,  it  was pleaded  that  one  Lala  Shiva Charan,  a  partner  of  the respondent  firm,  had  come with a Munim in  the  month  of Agahan  last and account.,; were fully explained to  him  as worked  out  upto  Kartik Sudi 15.  Sambat  2007.   In  that statement of account, a sum of Rs. 10,677-14-3 was found due to the appellant from the respondent and the representatives of the respondent asked for two months’ time for making  the payment  of  the amount found due.  It was thus  urged  that there  was  no occasion for rendition of  accounts  and  the plaintiff’s  suit was not fit to proceed according  to  law. In  paragraph  I 1, the appellant pleaded that "if,  in  the opinion of the court, the court has jurisdiction to try  the suit  and  it  is necessary to tender the  accounts,  it  is equitable  that a decree for the amount which may  be  found due   to  the  contesting  defendant,  after  rendition   of accounts,  together  with costs and interest  be  passed  in favour  of the contesting defendant, after necessary  court- fee  being realized from the defendant." A number of  issues were  framed  and  the case was taken up  for  recording  of evidence  on several dates of hearing.  Some of  the  issues were  even given up during the ’trial.  Ultimately,  on  5th May, 1953, after a considerable amount of evidence had  been recorded,  an  application was presented on  behalf  of  the plaintiff-respondent,  for  withdrawal  of  the  suit.   The -round given for withdrawal was that the respondent firm was

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in  the charge of one Bhagwat Charan who had  colluded  with the  appellant  and  litigation was  going  on  between  the respondent and Bhagwat Charan for effecting partition of the business.   Consequently, it was difficult to prosecute  the suit,  No  prayer was made for permission to  file  a  fresh suit.  The appellant filed an application objecting to  this application for with. L9Sup.  CI/67-13 888 drawal.    The  main  ground  taken  for   contesting   this application  for  withdrawal  was that, in a  suit  of  this nature, it is permissible to pass a decree in favour of  the defendant  if, on accounting, something is found due to  him against  the  plaintiff,  and  it  followed  that,  if   the defendant paid court-fee on ’the amount which was found  due to  him from the plaintiff, his position became that  of  ,A plaintiff  himself  and  he became  entitled  to  have  ’the accounting  done and to obtain a decree.  It was urged  that the   plaintiff’s  game  in  withdrawing  the   suit   after protracted duration and considerable expenditure on the part of the defendant was to defeat this right of the  defendant. The trial Court held that the right of the plaintiff in this suit  to  withdraw under 0. 23, r. 1 of the  Code  of  Civil Procedure  was inherent and such a right could be  exercised at any time before judgment.  All ’that the defendant  could claim  was  an order for costs in his  favour.   The  Court, therefore, dismissed the suit, awarding costs of the suit to the appellant.  The appellant filed a revision in ’the  High Court  of Allahabad against this order, with a  prayer  that the  High Court may set aside the order of the  trial  Court and  remand the suit for trial according to law.   The  High Court  dismissed  the  application  for  revision;  and  the appellant has now come tip to this Court in ’this appeal  by special leave. The  short question that, in these circumstances, falls  for decision is whether the respondent was entitled to  withdraw from the suit and have it dismissed by the application dated 5th  May, 1953 at the stage when issues had been framed  and some  evidence had been recorded, but no preliminary  decree for rendition of accounts had yet been passed.  The language of  0.23,  r. 1. sub-r. (I ), C.P.C., gives  an  unqualified right  to  a plaintiff to withdraw from a suit  and,  if  no permission to file a fresh suit is ,-ought under sub-r.  (2) of that Rule, the plaintiff becomes liable for such costs as the  Court may award and becomes precluded from  instituting any fresh suit in respect of that subject-matter under  sub- r.  (3) of that Rule.  There is no provision in the Code  of Civil   Procedure  which  requires  the  Court   to   refuse permission  .to withdraw the suit in such circumstances  and to  compel  tile plaintiff to proceed with it.   It  is,  of course,  possible  that different considerations  may  arise where a set-off may have been claimed under 0. 8 C.P.C.,  or a  counterclaim may have been filed, if permissible  by  the procedural  law applicable to the proceedings governing  the suit.   In the present case. the pleadings in  paragraphs  8 and  II of the written statement. mentioned  above,  clearly did not amount to a claim for set-off.  Further, there could be  no  counterclaim, because no provision  is  shown  under which  a  counter-claim could have been filed in  the  trial Court in such a. suit.  There is also the circumstance  that the application for withdrawal was moved at a stage when  no preliminary decree had been passed for rendition of  account and, in fact, the appellant 889 was  still  contending that there could be no  rendition  of

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accounts  in  the suit, because accounts  had  already  been settled.   Even in para 11, the only claim put  forward  was that,  in  case  the  Court found  it  necessary  to  direct rendition  of  accounts and any amount is found due  to  the appellant, a decree may be passed in favour of the appellant for that amount.  In this paragraph also, the right  claimed by the appellant was a contingent right which did not  exist at  the time when the written statement was filed.  Even  if it be assumed that the appellant could have claimed a decree for the amount found due to him after rendition of accounts, no Such right can possibly be held to exist before the Court passed preliminary decree for rendition of accounts.  It  is to be noted that in the case of a suit between principal and agent, it is the principal alone who has normally the  right to  claim rendition of accounts from the agent.   The  agent cannot  ordinarily claim a decree for rendition of  accounts from the principal and, in fact, in the suit, the appellant, who  was  the  agent of the respondent, did  not  claim  any rendition  of  accounts  from  the  respondent.  In   ’these circumstances;  at the stage of withdrawal of the  suit,  no vested  right  in  favour of the  appellant  had  come  into existence  and there was no ground on which the Court  could refuse  to allow withdrawal of the suit.  It is  unnecessary for us to express ,my opinion as to whether a Court is bound to  allow  withdrawal of a suit to a  plaintiff  after  some vested  right may have accrued in the suit in favour of  the defendant.  On the facts of this case. it is clear that  the right  of  the  plaintiff to withdraw the suit  not  at  all affected  by  any  vested right existing in  favour  of  the appellant  and, consequently, the order passed by the  trial Court was perfectly justified.  On  behalf  of the appellant, reliance was  placed  on  the views  expressed  by a Division Bench of  the  Madras   High Court   in Seethai Achi v. Meyappa Chettiar and Others  (1), where the Court held:       "Ordinarily, when the Court finds no impediment to the dismissal of a suit after the announcement of the withdrawal of  theclaim by the plaintiff, it will simply say  that  the suit  is dismissed as the plaintiff has withdrawn  from  it. An  order  as  to costs will also be  passed.   But  several exceptions  have been recognised to this general  rule.   ]n suits,  for  partition, if a preliminary. decree  is  passed declaring  and defining the shares  of the several  parties, the  suit will not be dismissed by reason of any  subsequent withdrawal by the plaintiff, for the obvious reason that the rights  declared  in  favour of  the  defendants  under  the preliminary  decree would be rendered nugatory if  the  suit should  simply  be dismissed. So also in  partnership  suits and  suits  for 890 accounts,  where the defendants too may be entitled to  some reliefs  in  their favour as a result of the  settlement  of accounts, the withdrawal of the suit by the plaintiff cannot end in the mere dismissal of the suit." We  do  not  think, as urged by learned  counsel,  that  the learned Judges of the Madras High Court were laying down the principle  that,  in  a suit for accounts,  a  defendant  is always  entitled  to  relief  in his  favour  and  that  the withdrawal  of  such  a  suit by  the  plaintiff  cannot  be permitted  to terminate the suit.  In the context  in  which that  Court expressed its opinion about suits for  accounts, it  clearly intended to lay down that the dismissal  of  the suit  on  plaintiff’s withdrawal is not  to  be  necessarily permitted, if the defendant has become entitled to a  relief in  his  favour.  But such it right, if at all,  can  in  no

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circumstances be held to accrue before a preliminary  decree for rendition of accounts is passed.  In fact, in mentioning suits  for partition and suits for accounts, the  Court  was keeping  in view the circumstance mentioned in  the  earlier sentence  which  envisaged  that a  preliminary  decree  had already  been  passed defining rights of  parties.   In  any case,  we  do  not think that any defendant in  a  suit  for rendition of accounts can insist that the plaintiff must  be compelled  to proceed with the suit at such a stage  as  the one at which the respondent in the present case applied  for withdrawal of the suit. The appeal, therefore, fails and is dismissed with costs. Y.P.                             Appeal dismissed 891