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2010 DIGILAW 315 (JK)

Gulzar Ahmad Dar v. Haji Mohi-ud-din Bhat

2010-05-24

Hasnain Massodi

body2010
1. The appellant, on the strength of averments made in the plaint, filed a suit for rendition of accounts on 27th of July 1999 against the respondent herein. The appellant prayed that after the accounts are settled, the respondent be directed to pay the net amount payable to the appellant alongwith the interest @ 18% per annum from the date the amount found recoverable, was till full and final realization of the decretal amount. 2. The appellant also asked for costs of the suit. The respondent, while admitting business transaction with the appellant, insisted that the accounts were settled and an amount of Rs.1,25,705/- was recoverable from the appellant. The respondent even claimed to have served a Legal Notice on the appellant through his counsel asking for payment of the amount due. 3. It appears that on 23rd of October 1999, the Trial Court, at the joint request of the parties, passed a Preliminary Decree and appointed Shri Gul Mohammad, Advocate, to settle the accounts between the parties and submit his report to the Court, to be followed by a final decree. The Commissioner submitted his report on 17th February 2000 and the Court proceeded to pass the final judgment and decree on 22nd February 2000. The Trial Court held the defendant entitled to receive an amount of Rs. 1,25,701.57 from the plaintiff and passed the decree to the said extent, without any order as to costs. 4. The judgment and decree dated 22.2.2000 are assailed by the judgment debtor/plaintiff on the grounds that the Learned Trial Judge has not applied his mind to the facts of the case and placed exclusive reliance on the report submitted by the Commissioner. It is insisted that the Learned Trial Judge, after receipt of the Commissioner’s report ought to have given opportunity to the parties to file objections to the Commissioner’s report and Learned Trial Judge, by denying that opportunity to the parties, has fallen in gross error and followed the course not permitted under law. The appellant even assailed the very jurisdiction of the Court to appoint Commissioner and questioned the report submitted by the Commissioner on the ground that the Commissioner did not afford fair and adequate opportunity to the appellant to project his case. The Commissioner is said to have ignored to make perusal of the accounts, submitted by the parties. The appellant even assailed the very jurisdiction of the Court to appoint Commissioner and questioned the report submitted by the Commissioner on the ground that the Commissioner did not afford fair and adequate opportunity to the appellant to project his case. The Commissioner is said to have ignored to make perusal of the accounts, submitted by the parties. It is insisted that the judgment and decree could not have been passed in the mode and manner, in which it has been passed by the Learned Trial Judge. The decree holder/ judgment debtor, by ignoring to pay the court fee on the decretal amount, is said to have rendered the decree illegal. 5. Heard and considered. Learned Trial Judge admittedly after receipt of the Commissioner’s report has not found it necessary to ask the parties to give their objections/response, if any, to the Commissioner’s report. The Learned Trial Judge rather decided Suit in terms of the Commissioner’s report. The course followed by the Learned Trial Judge is evident from his following observations: "After receiving the report of the Commissioner, I do not deem it necessary to issue notice to the plaintiffs except disposing of suit itself for the reason that the Commissioner was appointed by the consensus of the parties who proposed his name as well. Therefore, neither of the parties is admitted to an exception of their own choice". 6. The Court thus did not give an opportunity to the parties to file their objections/ response, if any, to the Commissioner’s report for the reason that the Commissioner to take the accounts, was appointed on the consensus of the parties, who had even agreed on the name of the Commissioner. Whether the Trial Judge in a suit for accounts, after preliminary decree has been passed with the consent of the parties, is under any legal obligation to afford an opportunity to the parties to file their objections/response to the Commissioner’s report is the short controversy, on which the answer fate of present appeal is hinged. 7. Whether the Trial Judge in a suit for accounts, after preliminary decree has been passed with the consent of the parties, is under any legal obligation to afford an opportunity to the parties to file their objections/response to the Commissioner’s report is the short controversy, on which the answer fate of present appeal is hinged. 7. Order 20 Rule 16 CPC makes it obligatory for the Trial Court in a suit for accounts, where in its Opinion it is necessary in order to ascertain the amount of money due to or from any party that an account should be taken, the Court shall, before passing its final decree, pass preliminary decree directing such accounts to be taken as the Court thinks fit. Preliminary decree is to precede any final decree in such suit. Order 20 Rule 17 empowers the Court to give special direction with regard to the mode in which account is to be taken or vouched, in the preliminary decree or in any order subsequent to the preliminary decree. Order 26 Rule 11 and 12 CPC sub titled as "Commissions to examine accounts" empowering the Court to issue a commission in any suit in which examination or adjustment of accounts is necessary, to such person as it thinks fit, directing him to make such examination or adjustment. Rule 12 obligates the Court issuing a commission to furnish the Commissioner such part of the proceedings as may be necessary. Order 20 Rule 16 & 17 and Order 26 Rule 11 & 12 are to be read together while dilating on the procedure to be followed in suits for accounts or the suit of like nature, where the Trial court is satisfied that it is necessary that an account should be taken. Though there is no express provision making room for a right either of the parties to the suit to file objections to the report submitted by the Commissioner, following a preliminary decree, yet in the scheme of things contemplated by Order 20 Rule 16 & 17 CPC the parties must have such a right. Once a suit for accounts or a suit of identical nature contemplated by Order 20 Rule 16 CPC is filed, the defendant can come up with a plea that he is not liable to render accounts or that though the parties had a relationship involving money transaction yet the accounts having been already settled. Once a suit for accounts or a suit of identical nature contemplated by Order 20 Rule 16 CPC is filed, the defendant can come up with a plea that he is not liable to render accounts or that though the parties had a relationship involving money transaction yet the accounts having been already settled. It was not necessary in terms of Order 20 Rule 16 to make a direction, taking accounts. The court may either of its own after going through the pleadings and evidence, if any, adduced by the parties or on the consensus of the parties arrived at a conclusion that it is necessary that an account should be taken. In the event such conclusion is arrived at, the Trial court is to pass preliminary decree, directing such accounts to be taken as it thinks fit. The Court obviously has to, while passing a preliminary decree or thereafter, issue a commission in terms of Order 26 Rule 11, to such person as it thinks fit, directing him to take the accounts. The Commissioner, after going through the account books and by affording the parties an opportunity to place before him their case/stand, is to prepare a report, detailing the exercise that the Commissioner was required to make and also reflect his conclusions. The Trial court, after receipt of the Commissioner’s report, is expected to furnish a copy thereof to the parties or allow parties to obtain a copy of the Commissioner’s report, so that the parties go through the report and formulate their response. The parties may agree to the report, in which case the Trial court is not to face any difficulty, and may unless on its own in disagreement with the Commissioner’s report or any part thereof, proceed to pass a final judgment and decree. However, if either of the parties has their reservations regarding Commissioner’s report, the mode and manner taking accounts or for any other reason, the Trial Court is to deal with such objections and thereafter pass the final judgment and decree. In case the Trial Court is said to be under duty to act upon the Commissioner’s report, the role of the Trial Court shall be reduced to mere post office. In case the Trial Court is said to be under duty to act upon the Commissioner’s report, the role of the Trial Court shall be reduced to mere post office. It needs to be pointed out that it is a Trial Court that is approached by the parties to adjudicate upon the matter and issuance of the commission for taking accounts, is only to have Inputs of an expert in the subject for adjudication of the matter. The Trial court is not thus expected to act on the Commissioner’s report in a suit for accounts in a mechanical manner without its objective appraisal. Needles to mention that such an appraisal is not possible without affording a right to parties to file their objections/response to the Commissioner’s report. In AIR 1934 Patna, 35, it has been held that issue of a Commissioner/appointment of a Commissioner does not excuse the Trial Judge from coming to a conclusion himself. The Trial court is required to investigate the Commissioner’s report and consider objections of the parties to such report. The Court held that the parties are entitled to put forward objections and have right to be heard on the objections. It has been held that though the report of the Commissioner, appointed to examine accounts, is to be evidenced, the parties have a right to object to it and not even precluded from adducing the evidence in support of such objections and that the courts are bound to give reasonable opportunity to the parties for so doing and not to bound to accept the report at its face value. 8. In AIR 1922, Madras 219, the Court commencing on the scope of Order 26 Rule 12 CPC held that when the report of Commissioner is objected to, the court should hear and decide objections with the aid of such evidence as it may take. It was observed that the duty to receive and hear objections is the obvious duty of the court as there may be cases in which the Commissioner has totally misconceived his duties, as to render his report useless. 9. In AIR 1956, Madhya Bharat, 77, in a suit for rendition of accounts, a Commissioner was appointed to examine the accounts and on the Commissioner’s report, the Trial Judge passed the decree. 9. In AIR 1956, Madhya Bharat, 77, in a suit for rendition of accounts, a Commissioner was appointed to examine the accounts and on the Commissioner’s report, the Trial Judge passed the decree. The decree was assailed on the ground that Trial Judge, without considering objections of the parties, adopted it without discussing the evidence on the various points and without analyzing the report. The Court in the context of the case, set up against the judgment and decree, observed: "I am quite clear in my mind that it is incumbent on a Court to investigate a Commissioner’s report and to consider the objections of the parties to that report and then to come to an independent conclusion. In this case the learned trial Court had not at all taken the trouble of scrutinizing the report. 10. From an overview of law on the subject as laid down in the reported case laws, it emerges that the Trial Court after receiving Commissioner’s report pursuant to the preliminary decree to take accounts, has to scrutinize the report and also afford the parties an opportunity to file objections and thereafter hear the parties on such objections. The right of the parties to file objections to the commissioner’s report in a suit for accounts is not forfeited by them by merely expression their willingness to grant of a preliminary decree for taking the accounts or even recorded agreement on the name of the person, asked to take the accounts. What the parties consent to is their no objection to taking of the accounts or taking of accounts by a nominated person, and not to the mode and manner, in which such person takes the accounts. The parties to a suit for accounts cannot be said to have abdicated their right to response to the Commissioner’s report by merely agreeing on taking of accounts or the name of the person, asked to take accounts. The parties repose faith in a person, who may turn out to be not quite an expert or not acquainted with fundamental principles to be observed while taking accounts. The parties, in such a case, cannot be penalized only because they have shown grace at a particular point in the proceedings, decided not to burden the Court with unnecessary proceedings and to cut short the matter, so that precious Court time is saved. The parties, in such a case, cannot be penalized only because they have shown grace at a particular point in the proceedings, decided not to burden the Court with unnecessary proceedings and to cut short the matter, so that precious Court time is saved. Any other interpretation is not in tune with basic principles of adjudicatory proceedings or the spirit of Order 20 Rule 16 and 17 CPC read with Order 26 Rule 11 & 12 CPC. 11. The arguments advanced by learned counsel for the respondent that the parties by agreeing on the name of Shri Gul Mohammad, Advocate, and having expressed their willingness to abide by the accounts taken by the Commissioner, should be taken to have settled the matter, is meritless and falls on its own weight. The fact that the parties consented to passing of a preliminary decree by itself indicates that what was intended, was not to compromise the matter but to take the matter so as to find out the respective liability, if any, of the parties inter se. The parties had then consented procedure envisioned for the suit for rendition of account under the CPC. 12. The ground urged in the appeal that appointment of Commissioner was not in accordance with law does not deserve any consideration. It is apt to mention that the appellant consented to the preliminary decree and appointment of Commissioner and did not thereafter question the preliminary decree before the competent court. The appointment cannot be now heard, saying that the appointment of Commissioner was not in consonance with the law, governing the subject. Needless to mention that an Appeal against preliminary decree is maintainable and such an option could have been availed of by the appellant and by filing an appeal against the preliminary decree dated 23rd of October 1999, such an option not having been followed and furthermore the order dated 23-10-1999, being a consented order. The ground is bereft of any substance. 13. For the reasons discussed above the appeal succeeds and is allowed. The Judgment and decree dated 22.02.2000 are set-aside. The ground is bereft of any substance. 13. For the reasons discussed above the appeal succeeds and is allowed. The Judgment and decree dated 22.02.2000 are set-aside. The case is remanded to Learned Trial Judge with the direction to afford the parties an opportunity to file their objections, if any, to the Commissioner’s report and in the event any objections are filed, to deal with such objections after hearing the parties and proceed to finally dispose of the matter in accordance with law. The parties to appear before the Trial Court on 05-06-2010.