JUDGMENT 1. Can an Agent maintain a suit against the principal for accounts? 2. The defendant, the Kerala State Electricity Board, against whom a preliminary judgment and decree in a suit for rendition of accounts was passed by the Subordinate Judge's Court, Thiruvananthapuram in O.S.392/90, challenged it in appeal before the District Court, Thiruvananthapuram, through A.S.422/05. 3. The case of the appellant, in short, is that the appellant is a contractor employed by the respondent herein for carrying out the construction works of Vydyuthi Bhavan at Thrissur. After the piling works of the said building, the continued works were abandoned by the earlier contractor and thereafter the appellant had stepped in. Initially, though a contract period of 24 months were prescribed as duration under which the construction of the building had to be completed, as there were short supply and non-supply of materials in time as agreed to by the respondent, the works had to be prolonged and thereby a period of 12 more months was fixed by the respondent as extended duration for the completion of the work. Even prior to the lapse of that extended period, the entire works of the building were completed by the appellant and the building was handed over to the respondent. According to the appellant, huge amounts were due to him from various items of works in respect of the construction made by him and as there were reciprocal promises and contracts from the part of the respondent also regarding the supply of materials from their store, unless and until the accounts are renditioned, the actual amounts due to the appellant cannot be quantified. The learned Subordinate Judge passed a preliminary judgment and decree for rendition of accounts. 4. In appeal, the learned Additional District Judge, by relying on the decision in K.C. Skaria v. Govt. of State of Kerala and another[ (2006) 2 SCC 285 ] held that a suit for rendition of accounts by a contractor against an employer is not maintainable in view of S.213 of the Indian Contract Act. The observations made in the impugned judgment, in effect, virtually tend to non-suit the plaintiff. However, the learned Additional District Judge has chosen to set aside the preliminary judgment and decree and to remit the matter to the trial court for a fresh consideration, in accordance with law, after levying proper court fee and after recording additional evidence, if any. The observations made in the impugned judgment, in effect, virtually tend to non-suit the plaintiff. However, the learned Additional District Judge has chosen to set aside the preliminary judgment and decree and to remit the matter to the trial court for a fresh consideration, in accordance with law, after levying proper court fee and after recording additional evidence, if any. 5. Heard the learned counsel for the appellants Sri.Liju v. Stephen and the learned Standing Counsel for the K.S.E.B. Sri. S. Sharan. 6. The learned counsel for the appellant has pointed out that the court below has totally misread the decision rendered by the Apex Court in K.C. Skaria (supra) and has failed to consider the said decision in its correct perspective. It has also been pointed out that through the impugned judgment even though the matter has been remitted to the trial court, the appellant has been virtually non-suited in entering a finding that the suit is not maintainable in view of the decision in K.C. Skaria (supra). It is argued that instead of remitting the matter by entering such a finding, the first appellate court ought to have disposed of the appeal on merits. 7. Per contra, the learned Standing Counsel for the K.S.E.B. has argued that the plaintiff has, in fact, caused revenue loss to the Government in not making payment of the required court fee even though certain quantified amounts were specifically claimed as certain items in the plaint. It has also been argued that when the amounts can be quantified, there does not arise a question of rendition of accounts. 8. By making a specific averment in paragraph 75 of the plaint that the amounts could not be quantified and therefore, the proper court fee that should be paid could not be ascertained, the appellant undertook to pay the required court fee as and when it is levied on him, on such rendition of accounts. Of course, in such a suit for rendition of accounts a preliminary judgment and decree has to be passed and thereafter, the amounts have to be quantified and then only a final decree can be passed. At the time of passing of the final decree, the court can levy the required court fee on the party, in favour of whom the final decree has to be passed. At the time of passing of the final decree, the court can levy the required court fee on the party, in favour of whom the final decree has to be passed. The said position is discernible from Section 35(2) of the Kerala Court Fees and Suits Valuation Act, 1959. Therefore, there is no merit in the argument forwarded by the learned counsel for the respondent that revenue loss has been caused to the Government by the appellant by not making the payment of required court fee. 9. The learned counsel for the appellant has pointed out that in paragraph 72 of the written statement filed by the respondent, it has been specifically admitted that the respondent is all along ready and willing to settle all the claims and liabilities in the matter. That itself clearly denotes that the claims and liabilities were to be settled. When there is a liability cast upon the appellant as against his claims, he naturally claim only the balance amount for which the court fee has to be paid. When the final decree has to be passed after arriving at the actual amount due to the appellant, the court can call upon the appellant to pay the required court fee so that there may not be any instance for revenue loss to the Government in the matter. The specific admission from the part of the respondent in paragraph 72 of the written statement that the respondent is ready to settle the claims and liabilities, will clearly reveal that there is necessity for rendition of accounts in the matter. 10. As per Section 213 of the Indian Contract Act an agent is bound to render proper accounts to his principal on demand. At the same time, there is no identical provision in the Indian Contract Act for casting any such liability on the part of the principal towards the agent. The said provision was dealt with by a Full Bench of this Court in A.V George & Co. Ltd. v. Peter Kuruvill [ 1956 KLT 466 ]. It was held in paragraphs 5, 6 and 7 of the said judgment as follows: "5. It is no doubt true that an agent is bound to render proper accounts to his principal on demand and there is no provision for a converse proposition that a principal is liable to render account to his agent. It was held in paragraphs 5, 6 and 7 of the said judgment as follows: "5. It is no doubt true that an agent is bound to render proper accounts to his principal on demand and there is no provision for a converse proposition that a principal is liable to render account to his agent. Nevertheless, it seems to me that it cannot be laid down as an universal proposition that an agent could never have a right to account as against his principal. It must depend upon the nature of the transactions in which the agent had been engaged on behalf of the principal during the course of the agency as to whether in a particular case the agent can have an accounting from the principal. 6. Halsbury's Law of England, 3rd edition, p. 196 states without qualification that an agent has a right to have an account taken. In Bowstead's Agency at page 165 of the 10th edition we find the following proposition stated: "where the accounts between a principal and agent are of so complicated a nature that they cannot be satisfactorily dealt with in an action at law, the agent has a right to have an account taken in equity, but the relation of principal and agent is not alone sufficient to entitle an agent to an account in equity, when the matter can be dealt with in an action at law" and this is because as mentioned in the footnote, the right of the principal may be founded on the fiduciary character of the agency. Story's Equity Jurisprudence, 14th edn., Vol. II, p. 31 S.617 states: "There are usually exceptions to all rules, and where the principal has kept the accounts between him and his agent and the matters and things transacted in the course of the agency are within his own peculiar knowledge, the agent may ask for accounting". 7. The general rule therefore may be taken to be that the agent will not be entitled to an account against his principal. 7. The general rule therefore may be taken to be that the agent will not be entitled to an account against his principal. But this rule is however subject to exceptions in cases in which the relation between the agent and the principal is of a fiduciary character or the transactions between the parties are so involved and complicated that the right of accounting will alone serve to administer complete justice and we may also add where the accounting sought is ancillary to the main purpose of the action. Thus in Ram Lal v Asian Assurance Co., 1933 Lah. 483 where the plaintiffs who were insurance agents were to be remunerated by a commission calculated on the premia paid on all policies effected or introduced through them, it was held that as the plaintiffs cannot certainly know which of these policies had lapsed, matured or been forfeited, they were entitled to call on the defendants for rendition of accounts as this was the only relief which will enable the plaintiffs to satisfactorily assert their rights". Tapp, J. observed during the course of the judgment "while the principal is under no statutory obligation to render accounts to his agent, he does become as accounting party in special circumstances or under trade usage or a definite contract" 11. The said proposition again came up for consideration before the Apex Court in Narandas Morardas Galiwala and others v. S. P A. M. Papammal and another [ AIR 1967 SC 333 ] wherein it was held, "The Principal's right to sue an agent for rendition of accounts is recognised by the Contract Act, in as much as S. 213 thereto specifically provides that an agent is bound to render proper accounts to his principal on demand. There is no such provision in the Act which enables an agent to sue his principal for accounts. The statute is not exhaustive and the right of the agent to sue the principal for accounts is an equitable right arising under special circumstances and is not a statutory right. In English law an agent has a right to have an account taken and where the accounts are of a simple nature they can be taken in an ordinary action in a Queen's Bench Division. The legal position in India is not different. In English law an agent has a right to have an account taken and where the accounts are of a simple nature they can be taken in an ordinary action in a Queen's Bench Division. The legal position in India is not different. Though an agent has no statutory right for an account from his principal, nevertheless there may be special circumstances rendering it equitable that the Principal should account to the agent. Such a case may arise where all the accounts are in the possession of the Principal and the agent does not possess accounts to enable him to determine his claims for commission against his principal. The right of the agent may also arise in an exceptional circumstance where his remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into." (emphasis supplied) 12. By referring and relying on the decision in Narandas Morardas Galiwala (supra), the decision in K.C. Skaria (supra) was rendered wherein it was held, "It is now well-settled that the right to claim rendition of accounts is an unusual form of relief granted only in certain specific cases and to be claimed when the relationship between the parties is such that the rendition of accounts is the only relief which will enable the plaintiff to satisfactorily assert his legal right" It was further held therein, "Even where there is no specific provision for rendition of accounts, courts have recognised an equitable right to claim rendition of accounts. In Narandas Morardas Gajiwala v. S.PA.M. Papammal ( AIR 1967 SC 333 ), this Court considered the maintainability of a suit by an agent against the principal for accounts. Negativing the contention that only a principal can sue the agent for rendering proper accounts and not vice versa, (as Section 213 of the Contract Act provided that an agent is bound to render proper accounts to his principal on demand without a corresponding provision in the Contract Act enabling the agent to sue the principal for accounts), this Court held :(SCR Public Prosecutor. 40 F and 42 D-E) "In our opinion, the statute is not exhaustive and the right of the agent to sue the principal for accounts is an equitable right arising under special circumstances and is not a statutory right". 13. In paragraph 17 of K.C. Skaria (supra), the Apex Court has laid down the legal proposition, "To summarise, a suit for rendition of accounts can be maintained only if a person suing has a right to receive an account from the defendant. Such a right can either be (a) created or recognized under a statute; or (b) based on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee, or (c) claimed in equity when the relationship is such that rendition of accounts is the only relief which will enable the person seeking account to satisfactorily assert his legal right. Such a right to seek accounts cannot be claimed as a matter of convenience or on the ground of hardship or on the ground that the person suing did not know the exact amount due to him, as that will open the floodgates for converting several types of money claims into suits for accounts, to avoid payment of court fee at the time of institution." 14. A Division Bench of this Court in Brothers Chitty Fund v. Jacob Mathew [ 2004 (1) KLT 64 ] held that a suit for rendition of accounts will not lie in a case wherein the amount due has been crystallized and in such case, it is not open to the plaintiff to lay the suit as one for accounts in as much as there is no account to be settled between the parties. 15. Normally, an agent is liable to account for the principal within the meaning of Section 213 of the Indian Contract Act. At the same time the principles of equity come into play when the agent is put to severe loss in a case wherein reciprocal contracts were there from the part of the principal to the agent and where his remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into. 16. 16. It can be concluded that when the amount due in a case like this has not been crystallized, there is necessity for rendition of accounts when there exists special circumstances rendering it equitable that the principal should account to the agent. Such a case may arise where all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claims for amounts due to him from his principal. 17. In A.V.George & Co. (supra) it was held that the general rule in Section 213 of the Indian Contract Act is however subject to exceptions in cases in which the relations between the parties are so involved and complicated that the right of accounting will alone serve to administer complete justice and where the accounting sought is ancillary to the main purpose of the action. The principle of equity in such cases demands rendition of accounts. As held in Narandas Morardas Galiwala (supra), the Indian Contract Act is not exhaustive and the right of the agent to sue the principal for accounts is an equitable right arising under special circumstances and the same is not a statutory right. Therefore, the right of the appellant in the present case to get the accounts renditioned is a right in equity, even though it is not a statutory right within the meaning of S.213 of the Indian Contract Act. Further, as held in K.C.Skaria(supra) it is well settled that the right to claim rendition of accounts is an unusual form of relief granted only in certain specific cases and the same can be claimed when the relationship between the parties is such that the rendition of accounts is the only relief which will enable the plaintiff to satisfactorily assert his legal right. 18. It is true that towards some items among items 1 to 45 appended with the plaint, accounts are quantified. At the same time, unless and until the reciprocal contracts and the liability which has arisen on the part of the appellant in that aspect are not settled, it cannot be said that even the quantified amount in such circumstances are the correct accounts. It seems that the trial court has laboured much in passing the preliminary judgment and decree. At the same time, unless and until the reciprocal contracts and the liability which has arisen on the part of the appellant in that aspect are not settled, it cannot be said that even the quantified amount in such circumstances are the correct accounts. It seems that the trial court has laboured much in passing the preliminary judgment and decree. The first appellate court has not gone into the merits of the matter and has attempted to nip the suit in the bud by erroneously interpreting K.C.Skaria(supra). The first appellate court ought to have gone into the merits of the matter and decided the appeal. It is too premature to decide the matter that sufficient court fee was not paid. The trial court could have asked the appellant to pay the correct court fee after deciding the matter at the stage of passing the final decree. This court is not making any opinion on the merits or otherwise of the claims of the appellant as it is for the first appellate court to consider the appeal on merits and to pass a proper judgment in the matter. It seems that even without giving any specific direction, the matter has been remitted to the trial court. At any stretch of imagination, the remand order passed by the first appellate court through the impugned judgment cannot be treated as a proper remand within the meaning of Rules 23, 23(a) and 25 of Order XLI of the Code of Civil Procedure, 1908. The remand of the matter made by the first appellate court after virtually non-suiting the appellant has resulted in substantial miscarriage of justice. The impugned judgment and the decree passed by the lower appellate court are only to be set aside, and I do so. 19. In the result, this appeal is allowed and the impugned judgment and decree are set aside. The suit is perfectly maintainable. The appeal is restored and the lower appellate court is directed to dispose of the appeal afresh, in accordance with law, quite untrammeled by any of the observations made by the court below in the impugned judgment. As the matter is an old one, the court below shall dispose of the appeal on merits, after hearing both the sides, within a period of three months from the date of receipt of a copy of this judgment. 20. As the matter is an old one, the court below shall dispose of the appeal on merits, after hearing both the sides, within a period of three months from the date of receipt of a copy of this judgment. 20. The parties shall appear before the court below on 29.08.2014. All the interlocutory applications in this appeal are closed.