LALMAN Vs. CHINTAMANI

JUDGEMENT

(1.) THIS is a second appeal from a decree granted by the District Judge in favour of the plaintiffs, who were principals, against their agent for a sum of Rs. 3,396- 10-9, depriving the plaintiffs of any sum for interest on the amount due and depriving them of their costs of the suit. The appeal is brought against those decisions, namely, with regard to the interest; and with regard to the costs, There is a cross-appeal by which the defendant objects to the amount of the decree. With regard to the interest the decision appears to us to be right. Upon the facts found, on some date in 1912, the agency of the defendant had been determined and the accounts between the plaintiffs and the defendant had been settled, so that the defendant had nothing to claim from the plaintiffs. He received a sum of money paid to him by customers of the plaintiffs in respect of a transaction which he had entered into on behalf of the plaintiffs, although his employment had come to an end. That sum of money appears to have been received by him at the time in perfect good faith. The plaintiffs on hearing about it became suspicious and took criminal proceedings against him apparently for misappropriation, which proceedings were dismissed, The sum of money, therefore, remained in his hands as money received for the use of the plaintiffs subject to any deduction which the defendant was entitled to make therefrom. In fact, as the result of the criminal proceedings, it was eventually paid into the treasury by an order of the Criminal Court in April, 1913. The only grounds upon which interest can be claimed upon such a sum of money when the liability for the sum is established are to be found, either in Section 73 of the Contract Act, illustration (n), or in the Interest Act (No. XXXII of 1839). Illustration (n) deals with an express contract by one person to pay a sum of money to another on a day specified and provides that whatever loss the obligee can show by failure to pay he can only recover interest from the due date up to the date of payment. That illustration clearly deals with the breach of an express contract and the view taken in Pollock s "Indian Contract Act", and we agree with it, is that it does not intend to abolish the ordinary rule or to supersede the Act of 1839. THIS case clearly does not come within that illustration. Act XXXII of 1839 provides that interest shall be payable upon all debts or sums certain, payable at a certain time or otherwise, if such debts or sums be payable by virtue of some written instrument, or if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the term of payment. It is not suggested that the case comes within that provision. That Act goes on to provide that interest shall be payable in all cases in which it is now payable by law. The question, therefore, remains, whether by the general or common law interest is payable in respect of such a transaction as this. The rule of English Common Law was that interest was not payable on ordinary debts unless by agreement or by mercantile usage, nor could damages be given for non-payment of mere money debts. The ground on which the first court decided looks like an attempt to find some mercantile usage between the parties. It was said that there was an express entry of a charge of interest at the rate of ten annas in the plaintiffs account-book. If that meant that the defendant had seen the entry, and accepted it, and that the parties in the course of business had settled their accounts on that footing, the ground would have been sufficient, but there is no finding to that effect. It is unlikely, to say the least of it, that any agent would accept such a position, because, as has been pointed out to us in the course of argument, he has the right to retain in his hands money of the principal to re- imburse himself any expenses legitimately incurred and to deduct, his remuneration, and such an arrangement would have to be carried out, if at all, by taking an account almost daily to find what precise sum was due from the agent to the principal on which the interest would be payable, a clumsy arrangement which business men are not likely to enter into deliberately. We do not think that under the circumstances of this case the mere entry in the plaintiffs book, although seen by the defendant, and even that is not found as a fact, is sufficient to create a mercantile usage entitling the plaintiffs to interest.

(2.) WITH regard to costs, the respondent sought to argue that there was no right of appeal on the question of costs alone under Section 100 of the Code, because Section 35 had vested the discretion with regard to costs in the trial court, and a second appeal can only lie where the court has decided contrary to law or some usage having the force of law. We have already said all that has to be said upon this point in a recent case decided by ourselves-Radhe Shiam v. Behari Lal (1918) I.L.R., 40 All, 558 (562). One older authority of this Court was cited to us--Daulat Ram v. Durga Prasad (1893) I.L.R., 15 All., 883. Although that decision may be justified on the ground that the Bench in that case was over-ruling an appellate court for interfering with the first court on insufficient grounds, we agree with the head-note which lays down the general principle that an appeal as to costs will lie from an appellate decree (which means a second appeal) when the court has exercised its discretion as to the costs arbitrarily and not according to general principles. As a rule questions of costs are, as the law provides, in the discretion of the trial court, and it must not be supposed that anybody who is dissatisfied with some order or part of some order as to costs can come to this Court in appeal in order to set aside or modify the order of the lower appellate court. But where an important question of principle has been decided, we are bound to look into the decision and see whether it is arbitrary or based upon sound principle. To put the matter shortly, the learned Judge of the lower appellate court has confined himself entirely to matters antecedent to the suit itself. And although there are authorities, to which we need not refer in detail, which justify the depriving of successful parties of costs on some matter connected with the litigation antecedent to the suit, the matter upon which the learned Judge has acted seems to us far removed from the actual dispute which he had to decide in this case. He has in fact punished the plaintiffs for criminal proceedings which they brought against the defendant and which the learned Judge considered hasty and unjustified, but a time was reached when those proceedings came to an end and a period of some 18 months elapsed before the plaintiffs were finally driven to assert their claim to the money in dispute by suing in court. Throughout that time it was open to the defendant at any moment to admit his liability to the extent to which he considered himself liable, and immediately the suit was lodged he could have filed an admission of the amount of liability which he recognized, subject to the cross-claim which he set up. Instead of doing that, he defended the suit in its entirety; he fought it with determination, and appealed from the decision against him, claiming, among other things, that the suit ought to have been dismissed. And the Judge himself says that he has no doubt that the defendant has taken up this entirely antagonistic position mainly by reason of his anger at the criminal proceedings. He further holds the plaintiffs to have been unreasonable in presuming the defendant s dishonesty and on that ground deprives them of their costs. The plaintiffs conduct can in no sense be said to have led to or rendered necessary the litigation. Litigation in this suit was rendered necessary by the failure of the defendant to recognize his liability and by his strenuous efforts to establish his defence. This is no ground for depriving the plaintiffs of their costs. The proper order to make under the circumstances is that the decree of the lower appellate court decreeing the plaintiffs Rs. 3,396-10-9 will stand. The plaintiffs must have the costs of the suit in the proportion of Rs. 3,388 to Rs. 621. The defendant must pay the costs of the appeal to the lower appellate court and the appellants will have the costs of this appeal in the proportion of Rs. 610 to Rs. 254. There are cross-objections by the defendant respondent against the amount which has been found due; but these raise merely questions of fact. No question of principle is involved, and they must be dismissed with costs.