C JAGANNADHAM PILLAI Vs. OFFICIAL ASSIGNEE

JUDGEMENT

(1.) These three appeals, arising out of two suits tried by Beasley, J., as he then was, may be disposed of together since they relate to the same set of transactions. Jaganntham Pillai and one Somasundaram Chetti (now dead) carried on a hardware and machinery business in partnership from 1913 to 1923. One of the two suits (O.S. No 358 of 1921) was brought by Jagannadham Pillai for dissolution of this partnership and for accounts. At the trial it was agreed that the partnership was no longer subsisting so that it became a suit for accounts only. The case for the defendants, who were the. sons of Somasundaram Chetti was that the accounts had already been settled between the partners and indeed on two occasions. In 1920 there was a settlement with effect to the end of December 1918, with the result that Jagannadham Pillai received Rs. 13,800 as his share of the profits. Again in 1923 there was. a second settlement up to the termination of the partnership; and, probably because post war conditions were not favourable to a business of this kind, a considerable loss had to be divided and Jagannadham Pillai made himself liable, by means, to which I will subsequently refer, for the share to which his partnership related. He now repudiates both these so called settlements of account on the ground that he was in fact no party to them and that they are in fraud of his interests. If it is to be held that they did amount to settlements, his further plea is that owing to certain errors they are not binding upon him.

(2.) These pleas are raised in the face of a number of written admissions accepting his liability. The partnership agreement was originally an oral one But on 11th June 1920, when Jagannadham Pillai's share was reduced from l/4 to 1/5 the agreement Ex. A was executed. This contains a statement subscribed to by Jagannadham Pillai that accounts had been taken up to 31 December 1918 and that he had received the amount due to him. Again when, to provide for his ultimate liability he executed the promissory note Ex. E on 25 May 1923, he made a similar admission with regard to the profit due up to the end of 1918. Then as regards the second settlement, Ex. E itself is the most important piece of evidence of its acceptance by Jagannadham Pillai, and this document was followed by what purported to be a mortgage) by deposit of title-deeds; and the agreement to enter info this mortgage comprises another admission, and further such admissions are to be found in the stock books of the partnership. In all, as the plaintiff had to admit, he acknowledged a debt of (is. 62,000 to the defendants in five different documents. Yet ha has had the effrontery to state in evidence that be had no opportunities of looking into the accounts and that he signed these documents blindly trusting the honesty of Somasundaram Chetti. He can hardly pretend that he is a man without any business abilities or experience because for 20 years he was in charge of the hardware department of Messrs. Oakes & Co., drawing a salary of Rs. 100 a month and 10 per cent commission on sales. His evidence contains a number of prevarications regarding his acquaintance with the accounts, but the admission that he makes as regards his signing some of the rough accounts proves, what is indeed only in accordance with probabilities, that as manager he was responsible for maintaining them. How far he is prepared to go will be seen from his assertion that he understood the promissory note Ex. E to be something in the way of a security bond for losses which might subsequently he incurred in the business. There is no doubt in my mind that on each occasion the plaintiff was perfectly well aware of what he was signing and that he must have given his agreement after a verification of the accounts. An attempt has been made to cast doubt upon the truth of the second settlement by reason of some discrepancy in regard to dates. In the written statement 31 July 1920, is given as the date when accounts up to 31 December 1918, were made up, while the date of Ex. A, as we have seen, is 11 June 1920. However such a difference may be accounted for, no reason has been given for the view that it indicates the evidence regarding the settlements to be false.

(3.) Accepting then the fact of these two settlements, it remains to consider whether the plaintiff is entitled to have them reopened. It is unnecessary to discuss the principles upon which such reopening should be allowed, because he has failed not only to establish any kind of fraud but any kind of error. Before us he, has raised five objections to the correctness of the accounts and I will briefly deal with these seriatim: (1) He states that he was to draw a salary of Rs. 200 per mensem in addition to his share in the profits and that this he has not been allowed credit for. The only bases for this assertion are firstly the fact that he was drawing a sum of Rs. 100 or Rs. 150 per mensem and secondly that there are certain entries showing credit for salary of Rs. 2,400 per annum. As regards the monthly drawings they are nowhere described as salary, and it may equally well be that they represent advances from possible profits for maintenance purposes. Indeed the admitted circumstance that the plaintiff was charged interest on these drawings seems to point unmistakably to this supposition. The same account undoubtedly shows a number of such advances which were certainly not salary. In the firm's establishment ledger there is a debit for 12 months salary of Rs. 2,400. But it has been plausibly suggested that this was made for income-tax purposes, and when we turn to Jagannadham Pillai's own ledger we find not only a credit but also a debit entry, the two cancelling out. This may have been done to tally with the establishment ledger, but it certainly does not establish the claim for salary which, it may be noted, is not provided for in the agreement, Ex. A. (2) This objection relates to debits under date 21 November 1918 amounting to Rs. 14,573-10-9. In his particulars of errors and fraud filed in the suit the plaintiff admitted as correct entries to the extent of Rs. 9,600-9-3, and denied his liability as regards the balance. When however he was orally examined upon this matter he confessed that he could not say which items were right and which were wrong. This objection is therefore worthless. (3) It has been said that the plaintiff derived a profit of Rs. 13,800 in respect of the first settlement and this objection relates to a payment of this sum on 23 June 1920. The plaintiff admits that such a payment was made but denies that it was in respect of the profit. His learned advocate has endeavoured to persuade us, but without success, that if it were such profit it should not have found place where it does in the accounts. It is quite clear that it should be so shown. As regards the plaintiff's version, he has to admit the remarkable concidence that this sum is identical with what the accounts show the profits should be, and he gives the very lamest explanation why, if not as profits, he drew this large sum, some of it going in discharge of documents which are not produced and some being given away as presents. There is no foundation shown for this objection. (4) The plaintiff complains that he was charged interest upon advances drawn against profits, whereas no counter-interest was allowed upon profits left in the firm. It should be explained that Somasundaram Chetti & Sons had a money-lending business and acted as bankers to the partnership and the real objection seems to be that they did not allow interest upon moneys in deposit with them. As to this it can only be said that, whatever the merits of the objection, no materials are upon the record to show what sums, if any, wore so in deposit. This point cannot therefore be substantiated. (5) This relates to a debit of Rs. 5,137-8-0 made on 31 December 1920, in respect of Jagannadham Pillai's share of income-tax up to 1918. It is objected that this item should have found a place in the 1918 settlement. But there is nothing to show that the figure was available when those accounts were settled. Since the plaintiff does not contend that its inclusion in the second settlement caused him prejudice, it is difficult to see what this objection amounts to.