MOHAN SINGH Vs. FIRM BANWARI LAL SATRUP

JUDGEMENT

(1.) THE plaintiff's suit for accounting for certain transactions done by defendants from Banwari Lal, represented through the 3rd defendant Satrup son of Banwari Lal, was decreed at the trial Court, but reversed in the appellate Court resulting in dismissal of the plaintiff's suit. The plaintiff had filed the suit for himself and as defendants 4 to 6 on a claim that they were co-owners and they had entrusted with the defendants 1 to 3 the work of selling their grains and fertilizers in the market. The plaintiff would contend that the defendants were Commission Agents and that on 06.01.1978, they had given Rs.18,000/- to him and had also entrusted 5 bags of chemical fertilizers valued at Rs.5,200/- for sale. The defence was that the defendants were pucca arhatias and the only entrustment that had been made was with reference to wheat grains given to them on 16.05.1978 of the value of Rs.5,716/-, that there had been mutual credits and debits and at one time, the plaintiff owed the contesting defendants Rs.40,240/- and when the demand was made by the defendants, the plaintiff had filed a case on untenable contention that they are liable to account. Some accounting entries were disputed at the trial Court and, therefore, an expert was also examined. This was to vouch for the genuineness of entries in the account book maintained by the plaintiff. The document had been received subject to objection from the defendant,s but the trial Court, while passing the decree, did not make any reference to the genuineness or otherwise of the entries, but found that the defendant was accountable.

(2.) IN the appellate Court, the contention was that the defendants 1 to 3 were not katcha arhatiyas, who could be characterized as agents who sell the grains in the presence of owners and take a commission. However, in the case of pucca arhatiyas, the transactions between an owner and arhatiya is a principal to principal and in the sale which the arhatiya ultimately makes to any third party, there is no privity of contract between the owner and the ultimate purchaser. On the basis of the finding that defendants 1 to

(3.) ONE aspect that stands out as admitted is that the plaintiff and the defendant had transactions relating to the entrustment of grains or fertilizers by the plaintiff to the defendant. That the defendant had actually sold the goods of the plaintiff is also an admitted fact. Whether in the manner of adjusting the mutual credits and debits, there was any amount due and payable by the defendant to plaintiff had not been fully considered. The finding of relationship between the plaintiff and the defendants as principal to principal does not take away the requirement to adjudge on a duty for settlement of accounts between the parties. It is not merely a principal and agent relationship that give rise to a claim for accounting. A principal dealing with another principal entrusting his goods and the latter principal selling the goods in his own right as a person holding custody of the goods and recovering money from the purchaser still becomes accountable to the first principal, who entrusted the goods, for the amount that was payable for the initial entrustment. If there had been any amount realized by the principal provisionally at the time of entrustment and secured to himself a credit, if ultimately the sale by the arhatiya turned out to be for a value less than what was entrusted, the settlement would result in marking debits in the excess amounts realized by the first principal. If the sale value was more, the first principal will be entitled to a credit. Either way, the appellate Court was erroneous in assuming that there would be no liability for an accounting by the defendants 1 to 3 for the entrustment. The Court failed to note that the defendants themselves were contending for a position that the plaintiff had availed to himself large credits than the goods entrusted and, according to the defendant, an amount of Rs.40,240/- payable. A decree for accounting only settles the mutual credits and debits and is not the same thing as granting decree for money for the plaintiff. Consequently, the appellate Court was not justified in dismissing the suit when the defendant himself was also trying to give evidence that some money was due from the plaintiff to the defendant.