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1953 Supreme(P&H) 145
PUNJAB & HARYANA HIGH COURT
D.Falshaw, J.
Punjab National Bank Ltd.Through The Manager Or Other Principal officer Of The Bank
Versus
Kirpa Ram
Second Appeal from Order No. 1 of 1952,
Decided On : DECEMBER 10, 1953
In extraordinary circumstances, such as those arising out of the partition of India in 1947, a suit for accounts may lie by a constituent against a bank, where the constituent is a displaced person who had pledged goods with the bank as security for loans advanced to them in Pakistan, and the bank's account books are the only source of information regarding the value of the pledged goods and the amount due from the constituent.
Headnote:
SUIT FOR RENDITION OF ACCOUNTS - CIRCUMSTANCES JUSTIFYING - DISPLACED PERSONS - LOANS ADVANCED IN PAKISTAN - GOODS PLEDGED AS SECURITY - BANK'S ACCOUNT BOOKS - ONLY SOURCE OF INFORMATION - SUIT FOR ACCOUNTS MAINTAINABLE.
Fact of the Case:
Two suits were filed against the Punjab National Bank Limited, one by the members of a joint Hindu Family firm trading under the name of Kirpa Ram-Wishan Das, and the other by the members of a joint Hindu family firm trading under the name of Mehnga Ram-Jiwan Das. Both the suits were for rendition of accounts. The plaintiffs alleged that they had pledged goods with the bank as security for loans advanced to them, and that the value of the pledged goods exceeded the amount due from them to the bank. The bank raised preliminary objections that a suit for accounts did not lie and that in each case the guarantee broker was a necessary party.
Finding of the Court:
The court held that a suit for accounts would lie in the present circumstances, as the plaintiffs were claiming that something was due to them from the bank on account of the fact that the goods pledged by them as security for their loans exceeded the amount of the loans as they stood in August 1947, but they are in no position, and only the bank is in a position, to show from its accounts what the balances in favour of the plaintiffs ought to be.
Issues: Whether a suit for accounts would lie in the present circumstances, where the plaintiffs were displaced persons who had pledged goods with the bank as security for loans advanced to them in Pakistan, and the bank's account books were the only source of information regarding the value of the pledged goods and the amount due from the plaintiffs.
Ratio Decidendi: The court relied on the following principles in reaching its decision: * Ordinarily, a suit for rendition of accounts will not lie by a constituent against a bank. * However, in extraordinary circumstances, such as those arising out of the partition of India in 1947, where constituents and banks find themselves in a position where sums of monies were advanced to constituents in Pakistan on the security of goods pledged on the spot, and now the constituents are displaced persons living in India, and the banks have also lost possession of their branches in Pakistan, and also consequently lost possession of goods pledged with them as security for loans, a suit for accounts may lie. * The circumstances in these suits are such as to justify the conclusion that a suit for accounts would lie, since both sets of plaintiffs were claiming that something was due to them from the bank on account of the fact that the goods pledged by them as security for their loans exceeded the amount of the loans as they stood in August 1947, but they are in no position, and only the bank is in a position, to show from its accounts what the balances in favour of the plaintiffs ought to be.
Final Decision: The court dismissed both the appeals and left the parties to bear their own costs to this Court.
Falshaw, J.
1. This judgment will deal with two appeals in which a similar point of law arises. Two suits were instituted against the Punjab National Bank Limited of Delhi, the first by the members of a joint Hindu Family firm trading under the name of Kirpa Ram-Wishan Das, and the second by the members of a joint Hindu family firm trading under the name of Mehnga Ram-Jiwan Das. Both the suits were for rendition of accounts. In the case of the firm Kirpa Ram-Wishan Das the allegation was that the firm had been in business before the partition at Vihari in Multan District, and had a cash credit account which started in December 1946 with the Vihari branch of the defendant bank, in which the bank advanced various sums to the firm, which in turn pledged goods of various kinds with the bank as security.
The case of the firm was that in August 1947 goods of various kinds valued at Rs. 8,79,030/- were lying pledged with the bank, and while the plaintiff firm was of the opinion that the pledged goods exceeded in value the amount due at that time from the plaintiff firm to the bank, it had no means of ascertaining what this sum was in the absence of its own account books and also of knowledge of how the pledged goods liad been treated in the accounts of the bank, and therefore it was prayed that a decree for rendition of accounts should be granted, followed in due course by a decree for the amount found to be due to the plaintiff from the bank.
2. The second suit was of a similar type, the firm which worked at Mian Channu, also in Multan District, having opened a cash credit account with the branch of the bank there in 1945. No specific allegation was made by this plaintiff regarding the amount of the goods lying pledged with the bank, and the suit was filed for rendition of accounts after the bank had sent a demand for Rs. 46,000/- to the plaintiff without making any mention of the pledged goods. In both the suits the defendant bank raised preliminary objections that a suit for accounts did not lie and that in each case the guarantee broker was a necessary party.
3. In the suit of Messrs. Kirpa Ram Wishan Das the trial Judge, Mr. A. N. Bhanot, overruled the defendants objection that the guarantee broker was a necessary party, but, holding that a suit for accounts did not lie, dismissed the suit. The plaintiffs appealed, and by his order dated 11-2-1952 the learned second additional District Judge reversed the finding of the trial Court that a suit for accounts did not lie, and remanded the suit for decision on the merits.
4. In the second suit a different Subordinate Judge, Mr. Mehar Singh Chaddah, overruled both the preliminary objections of the defendant and proceeded forthwith to grant the plaintiffs a preliminary decree for rendition of accounts, and also appointed a local commissioner to go into the accounts. The defendant bank appealed, and by his order dated 9-2-1952 the same learned Additional District Judge, while upholding the decision of the trial Court on the point that the suit for accounts lay, held that a preliminary decree should not have been granted immediately, as there were still disputed questions of liability to be determined between the parties which could only be decided by the Court and not by the local commissioner, who could only go into figures. The banks appeal was accordingly accepted to the extent that the preliminary decree was set aside, and the suit remanded for issues on the contested facts between the parties to be framed and decided after the recording of evidence. The bank has filed these second appeals against both these orders, contending that it should be held that no suit for rendition of accounts lies and that the suits should be dismissed.
5. There is no doubt that ordinarily a suit for rendition of accounts will not lie by a constituent against a bank, but at the same time there is equally no doubt that an extraordinary state of affairs came into existence with the partition in Aug
