The right to discovery arises from the principal and agent relationship, and the production of documents is essential for determining the issue of settled account.

Venkatasubba Rao, J.

1. The question raised is as regards the right to discovery and inspection. The plaintiff is the commission agent of the defendant and sues him on a promissory note said to have been executed in pursuance of a settlement of account. The dealings consisted in the defendant sending the plaintiff timber for sale on commission and monies being advanced by the plaintiff to the defendant. The defendant pleads that the plaintiff, while professing to sell the timber to third parties, sold it on various occasions to himself and that owing to such and other acts of fraud on his part, he, the defendant, is not bound by the settlement. On a previous application by the defendant, inspection was ordered of the plaintiffs ledger and fair day-books. The discovery now sought relates to certain other books such as the plaintiffs rough day-books and shop-books. The question is whether the defendants request should be granted.

2. There are at least three English cases bearing directly on this point. In each of them there was a settled account an3 the question was raised by the principal as against his agent. In Whyte v. Ahrens (1884) 26 Ch. Dn. 717 Bacon V.C. points out that the right to discovery arises from the relation of principal and agent and that the settled account is no answer to that right. From his order for production of accounts the defendants appealed. Cotton, L.J. observes that according to the old practice in the Court of Chancery, production would have been ordered even in the absence of specific charges of fraud. Then comes the question, has the law been altered? Referring to Order 31, Rule 20 of the Rules of the Supreme Court (corresponding to Order 11, Rule 20 of the Civil Procedure Code) which says that if the right to the discovery sought depends on the determination of any issue, the Court may order that such issue be determined first and reserve to a later stage the question as to the discovery, the learned Lord Justice goes on to observe, "Is there a plea that should be settled first which bars the discovery?" For determining the very issue of the settled account, the production of the documents is essential and therefore that rule does not operate as a bar. There were two applications in that case, one by the agent for particulars and the other by the principal for discovery; the former application was ordered to stand over till the production of the books.

3. In Leitch v. Abbott (1886) 31 Ch. D. 374 Bewen, L.J. explains, as did Bacon,. V.C. in the previous case, that the plaintiffs right to discovery arises not out of fraud but out of the relation of principal and agent. He further points out that the very fact that the principal is unable to plead except in general terms, is in many cases the most cogent reason why he should have discovery from the other party. Referring to Order 31, Rule 20, he observes that the discovery is wanted for the determination of the very issue relating to the settled account.

4. In Sachs v. Speilman (1887) 37 Ch. Dn. 295 the statement of claim in an action by the principal against his stock-brokers to open settled accounts, alleged fraud but the plaintiff was unable to give particulars before discovery. On an application by the defendants for particulars, North, J., observes that the particulars in question are all in the knowledge of the defendants and the plaintiff must have the opportunity of knowing what the facts are, in order to enable him to furnish particulars if necessary.

5. In Millar v. Harper (1888) 38 Ch. Dn. 110 the same rule was applied, although the action was not between a principal and his agent. The question generally arises in this form, namely, whether particulars should precede discovery or discovery should precede particulars. In Waynes Merthyr Co. v. D. Radford & Co. (1896) 1 Ch. Dn. 29 it was contended that except in cases where a fiduciary relationship exists, particulars always precede discovery. This contention was repelled by Chitty, J.,