SREE RAMAIAH VENKITESHIAH AND CO. Vs. SUNDARESWARAN

JUDGEMENT

(1.) THESE two appeals are directed against the decree of the Subordinate Judge,Quilon,allowing the plaintiff 's suit.A.S.115 of 1962 is filed by the second defendant and the legal representatives of the first defendant.A.S.110 of 1962 is filed by the 4th defendant.The plaintiff is the first respondent in A.S.110 of 1962.Though the plaintiff was not originally impleaded as a respondent in A.S.115 of 1962,he was impleaded as the additional 7th respondent therein by our order dated 13 -12 -1965 passed on C.M.P.1227 of 1965 filed by the appellants in A.S.115 of 1962 for the purpose.

(2.) THE second defendant is the son of the first defendant.In order to appreciate the several questions raised for decision in the two appeals by the contending parties it is necessary to state the averments in the pleadings in some detail.The material averments in the plaint are in these terms.

(3.) THE plaintiff has been carrying on for many years the business of manufacturing and supplying packing cases in wood and tin in Quilon.He owns two Saw Mills one at Asramam and the other at Kadappakada in Quilon and has been maintaining separate accounts for the two factories and a common account at his Head Office,which is also in Quilon.The first defendant who was carrying on business on a large scale in Bangalore,approached the plaintiff along with his son the second defendant in the second half of 1948 at Quilon for the supply of packing cases according to specifications.They took up residence in Quilon and the 3rd defendant who was his confidant was employed by the first defendant as his clerk and agent.The second defendant and the 3rd defendant had no independent business of their own.The first defendant for reasons not known to the plaintiff then wanted to carry on his business with the plaintiff in the names of others and the plaintiff learnt subsequently that the first defendant adopted this method for evading income tax assessment and payment of arrears of Income Tax.The several persons in whose names the first defendant carried on business with the plaintiff were(1)Abdul Salam,( 2)Bharath Timber Trades,Bangalore,( 3)A.C.T.Booth &Co .,Bangalore,( 4)The National Timber Works,Bangalore,( 5)Abdul Azeezkhan(2nd defendant ),and(6)Karunakaran Nair(3rd defendant ).Bharath Timber Trades was represented by the 3rd defendant in all the transactions.The plaintiff was supplying first class quality packing cases to the first defendant in the above names during the period 1948 to 1954 because the first defendant undertook full and sole responsibility for the several transactions in their names and for the whole course of the trade.The plaintiff was maintaining accounts during the period in the Head Office and in the Saw Mills in the several names,for the several transactions.As per the accounts,there was a credit balance of Rs.1,27,000/ - in the name of the second defendant on 31 -12 -1951.As against this,the plaintiff had Rs.10,281 -7 -11 to his credit in the account which stood in the name of Bharath Timber Trades,being the difference between the value of packing cases supplied by the plaintiff from Kadappakada Saw Mills for Rs.1,26,157 -11 -0 and the sum of Rs.1,15,876 -3 -1 received by the plaintiff from the first defendant in the name of Bharath Timber Trades,through Asramam Mills Account.The plaintiff had a further credit balance of Rs.68,956 -0 -5 in his favour being the balance due in the account of Abdul Salam for the supply of packing cases from the Asramam Saw Mills.The first defendant had no dealings with the plaintiff in the name of Abdul Salam after 1951.The debit balance of Rs.68,956 -0 -5 due to the plaintiff in that account was transferred to the plaintiff 's Head Office ledger in the name of the second defendant as per the directions of the first defendant.