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1997 Supreme(Mad) 427

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE AR. LAKSHMANAN AND THE HONOURABLE MR. JUSTICE A. RAMAN
M.P. Abdul Hameed and Co., Puduvayal
Versus
Tamil Nadu Civil Supplies Corporation Limited, Madras and Another
L.P.A.No. 42 of 1993
Decided On : 25-03-1997

M.V. Venkateseshan, A. Shanmugavel, Advocates.

An agent has no statutory right for an account from his principal. However, there may be special circumstances rendering it equitable that the principal should account to the agent.

Headnote:

AGENT - PRINCIPAL - RENDITION OF ACCOUNTS - MAINTAINABILITY OF SUIT - JURISDICTION - REVENUE RECOVERY ACT - INJUNCTION - CONTRACTUAL RELATIONSHIP - HULLING AGENT - AGREEMENT - SHORTAGE OF RICE - LIABILITY - SECTION 52 - SPECIAL CIRCUMSTANCES - EQUITABLE RIGHT - EXCEPTIONAL CIRCUMSTANCES - LOSS OF ACCOUNTS - BURDEN OF PROOF.

Fact of the Case:

The appellant, a rice mill owner, entered into an agreement with the respondent corporation to hull paddy and deliver the resultant rice. The agreement contained various clauses, including a provision for the appellant to maintain accounts of the gunnies received. The appellant filed a suit against the respondent corporation for rendition of accounts, alleging that the corporation had not delivered the entire quantity of paddy and that the appellant was entitled to an accounting to determine the liability of the parties. The trial court granted a preliminary decree in favor of the appellant, but the appellate court reversed the decree and dismissed the suit.

Finding of the Court:

The High Court held that the suit filed by the appellant for rendering of accounts by the principal to the agent will not lie, since the agent is liable to render accounts and not the principal. The court found that there were no special circumstances in the case rendering it equitable that the respondent principal should give accounts to the appellant. The court also held that the appellant was not entitled to an injunction restraining the respondent from taking action under the Revenue Recovery Act, as there was a clause in the agreement between the parties allowing the respondent to recover the money due by the defaulter under the provisions of the Act.

Issues: 1. Whether a suit for rendition of accounts by an agent against the principal is maintainable? 2. Whether the court has jurisdiction to entertain such a suit? 3. Whether the appellant is entitled to an injunction restraining the respondent from taking action under the Revenue Recovery Act? 4. Whether the appellant is entitled to any relief?

Ratio Decidendi: 1. The court held that an agent has no statutory right for an account from his principal. However, there may be special circumstances rendering it equitable that the principal should account to the agent. Such a case may arise when all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim for commission against his principal. 2. The court held that it had jurisdiction to entertain the suit, as the appellant had alleged that the respondent had not delivered the entire quantity of paddy and that the appellant was entitled to an accounting to determine the liability of the parties. 3. The court held that the appellant was not entitled to an injunction restraining the respondent from taking action under the Revenue Recovery Act, as there was a clause in the agreement between the parties allowing the respondent to recover the money due by the defaulter under the provisions of the Act. 4. The court held that the appellant was not entitled to any relief, as the suit was not maintainable.

Final Decision: The High Court dismissed the appeal and confirmed the judgment and decree of the appellate court. The suit filed by the appellant was dismissed.

Judgment :

AR. LAKSHMANAN, J.

This Letters Patent Appeal was filed by the plaintiff/appellant against the judgment and decree dated 15-3-1991 made in A.S. No. 402/81 reversing the decree and judgment dated 26-3-1980 made in O.S. No. 5467/78 on the file of the III Asst. Judge of the City Civil Court, Madras. The respondent is the Tamil Nadu Civil Supplies Corporation Limited represented by its Managing Director. The appellant filed the suit O.S. 5467/78 for rendition of accounts for said sums as found due from the first defendant/first respondent herein to the plaintiff/appellant herein and for interest as determined by the court and for permanent injunction restraining the respondents from taking any action under the Revenue Recovery Act and from interfering with the plaintiff/appellants right to carry on his own private business and costs.

2. The plaint averments in short are : The plaintiff/appellant is running a rice mill in Puduvayal, Ramanathapuram District and in March 1975, the first respondent herein entered into an agreement with the appellant herein/plaintiff for the purpose of hulling paddy procured by the defendant at different centres. The appellant as the agent of the first defendant/respondent Corporation was to make a deposit of Rs. 25,000/-and for the paddy delivered, deliver the resultant rice to the first respondent Corporation. The stocks entrusted to the appellant should be kept under the double lock system, and the respondents should have the right to inspect the premises. The appellant accordingly deposited Rs. 25,000/- on 18-4-1975. The second respondent herein/2nd defendant is the Regional Manager of the first respondent Corporation. From April 1975, the defendant/respondent Corporation started supplying paddy to the appellant. The respondents did not test the quality of the paddy. The first respondent procured paddy without properly weighing and at the mill of the appellant, when weighed, differences were noticed. One of the clauses in the agreement provided for shrinkage and other causes, even though the stock would be under joint custody. Under the agreement all the obligations have been cast on the plaintiff/appellant and all the rights have been reserved to the first respondent corporation. The first respondent did not act according to the principles of trade and practice. The appellant was supplied with a large quantity of paddy for hulling. The appellant took on rent godowns for stocking the paddy. It was kept under double lock system, and the appellant had to spend Rs. 2 ,000/-every month for taking godowns on rent. After the hulling the resultant rice to be transported to the godowns of the first respondent situated in Ramanathapuram, Kamudhi, Sivagangai, Karaikudi, Mudukulathur, Abhiraman and Kovilpatti. For the loading of the lorries and unloading, the appellant had to spend money which would be reimbursed by the first respondent corporation. In the godowns, the consignment is again weighed. Only after the submission of bills for payment of money, the first respondent corporation raised objection. It was not stated by the first respondent corporation that the shortage was due to any default on the part of the appellant. According to the appellant, the shortage was due to the fact that the paddy was wet, that it was stored for a long time in wet condition and the quality was not decided at the time of procurement. The appellant wrote to the first respondent corporation to settle his claim and brought to the notice of the first defendant about the quality of the paddy supplied. According to the appellant, the claim of the appellant and the respondents could be settled only by taking the proper accounts. The first respondent is in possession of all the accounts and other details. The appellant and the first respondent are each liable to account to each other. The account submitted by the appellant was not accepted by the first respondent. The appellant is entitled to demand from the first respon
































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