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2017 Supreme(Ker) 256
IN THE HIGH COURT OF KERALA AT ERNAKULAM
V.CHITAMBARESH & SATHISH NINAN, JJ.
G.S.PANICKER, PRODUCER AND PROPRIETOR NEO FILMS – APPELLANT
Versus
K.PRABHAKARAN, S/O KUNJU – RESPONDENT
A.S. Nos.9 & 498 of 1997
Decided On : 27-01-2017
For the Appellant : ADVS. SRI. L. MOHANAN, SRI. D. RAJEEV
For the Respondent: ADV. SRI. R.S. KALKURA, ADV. SRI. M. RAMASWAMY
The main legal point established in the judgment is the importance of properly considering the nature of the relationship between the parties and the settlement of accounts, including the amounts spent by both parties, in determining the maintainability of a suit for settlement of accounts.
Headnote:
settlement of accounts - film production - Partnership - [Partnership, Settlement of Accounts] - The court discussed the nature of the relationship between the parties and the maintainability of the suit for settlement of accounts. It highlighted the presence of partnership elements in the agreements and the need for proper consideration of the nature of the relationship between the parties. The court also emphasized the importance of settling the accounts between the parties, including the amounts spent by both parties.
Fact of the Case:
The plaintiff, a film producer, filed a suit for settlement of accounts and recovery of money against the defendant, who had advanced amounts for the production of a film. The court below awarded the plaintiff Rs.27,500/- with 12% interest and proportionate costs, which was challenged by both parties.
Finding of the Court:
The court found that the relationship between the parties seemed to indicate elements of a partnership, and the suit for settlement of accounts was maintainable. However, it held that the court below had not properly considered the nature of the relationship between the parties and the amounts spent by the plaintiff.
Issues: The issues revolved around the maintainability of the suit for settlement of accounts, the nature of the relationship between the parties, and the consideration of the amounts spent by the plaintiff.
Ratio Decidendi: The court emphasized the need for proper consideration of the nature of the relationship between the parties and the settlement of accounts, including the amounts spent by both parties, in determining the maintainability of the suit.
Final Decision: Both the Appeals Suits were allowed, the judgment and decree were set aside, and the matter was remitted to the court below for disposal de novo.
SATHISH NINAN, J.
Decree in a suit for settlement of accounts is under challenge by the plaintiff as well as the defendant therein.
2. Plaintiff in O.S. No.300 of 1985 is the producer of M/s.Neo Films. For the production of the film "Sahyante Makan", amounts were advanced by the defendant. An agreement dated 25.03.1982, Ext.B31, was executed with regard to the transaction. The original estimate for production of the film was Rs.1 lakh. Expenses were to be shared in equal proportion by the plaintiff and defendant. Since the plaintiff was not in possession of funds, amounts were to be raised by the defendant on behalf of the plaintiff on the agreement that it would be paid off by the plaintiff. Subsequently, Ext.B15 agreement dated 03.07.1984 was executed between the parties wherein they acknowledged that for the production of the film though the estimate was Rs.1 lakh, the same has went up to more than Rs.3 lakhs. A Power of Attorney was executed by the plaintiff in favour of the defendant to enable him to receive money from the Director of Public Instruction for the supply of 20 prints of the film. The amounts were to be expended by the defendant on convincing the plaintiff regarding the accounts. Plaintiff claims that the defendant has not accounted for the money, that on settling the accounts the plaintiff would be entitled to not less than Rs.2 lakhs. Accordingly the suit was filed for settlement of accounts and recovery of money.
3. The court below after considering the oral and documentary evidence, held that the plaintiff is entitled to recover Rs.27,500/- with 12% interest and proportionate costs from the defendant. Plaintiff challenges the decree on the ground that the quantum awarded is low and that the settlment of accounts is not proper. Defendant challenges the decree granted against him.
4. Exhibits B31 and B15 are the documents which govern the relationship between the parties. Though the genuineness of Ext.B31 agreement dated 25.03.1982 is disputed by the plaintiff, Ext.B15 agreement dated 03.07.1984 acknowledges Ext.B31 agreement. Therefore, the contention of the plaintiff against genuineness of Ext.B31 is without any substance and is unsustainable.
5. Though the defendant has raised a contention in the written statement regarding the maintainability of the suit and an issue was raised in the said regard, the court below, observing that the relationship between the parties especially in view of the Power of Attorney executed by the plaintiff in favour of the defendant is that of Principal and Agent, held that the suit for settlement of accounts was maintainable.
6. Smt. R. Bindu, learned counsel for the appellant in A.S. No.498 of 1997/defendant in the suit relying upon the decisions in Brothers Chitty Fund v. Jacob Mathew (2004 KHC 9) and K.C. Skaria v. State of Kerala and Another (2006 KHC 92) would contend that finding of the court below that the relationship between the parties is that of Principal and Agent is without any basis, that a fiduciary relationship does not exist between the parties and that the suit for settlement of accounts is not maintainable. According to her, the plaintiff could have at best maintained a suit for realisation of a specified amount of money. On the other hand, Shri Anil S.Raj, learned counsel for the appellant in A.S. No.9 of 1997/plaintiff in the suit would contend that under the arrangement between the parties, the defendant was permitted to expend amounts on behalf of the plaintiff also with a specific provision that he is liable to account to the plaintiff. According to him, the proper remedy is a suit for settlement of accounts.
7. As noted above, the relationship between the parties is governed by Exts.B31 and B15 documents. A reading of the said documents seem to indicate that they joined together on a particular venture, viz., production of a film (Sahyante Makan). The agreements further indicate that one is acting on behalf of the other and that there is an agreem
