Sunday, 2 April 2017

What is importance of delivery of interrogatories?

 After the written statement was filed the plaintiff sought leave to deliver interrogatories for the examination of both the defendants. Answers to these interrogatories were necessary to elicit their admissions to support the plaintiff's case and destroy the case of the defendants. The learned Judge erroneously refused leave on the ground that the interrogatories were not material at that stage of the suit, meaning probably, before the oral evidence was recorded. The application for discovery of documents was also disposed of on the same ground. We are of the view that these orders are erroneous. The right of a party to deliver interrogatories to his opponent and get answers from him is a valuable one in conducting his cause and he should not lightly be deprived of it. It must be remembered that discovery of facts and documents often tends to shorten litigation and save expenses. The learned Judge had not framed all the issues arising from the pleadings of the parties. If he had framed these issues and permitted the parties to make full use of Orders 11 and 12, Civil Procedure Code, the trial would have been shortened and he would have found ample malarial to decide the case correctly. Probably, the preliminary decree could have been passed even without going into oral evidence.
IN THE HIGH COURT OF NAGPUR
First Appeal No. 127 of 1944
Decided On: 05.07.1951
Ramlalsao

Vs.
 Tansingh Lalsingh

Coram:

R. Kaushalendra Rao and Deo, JJ.

Citation:1952 NLJ 278 Nagpur

(1) This is defendants' appeal against the preliminary decree in a suit for rendition of accounts.
(2) The defendants were the guardians of the property of the plaintiff, appointed by the Additional District Judge, Bilaspur, in Guardian and Wards case No. 53 of 1932. They took possession of the property, both movable and immovable, in February 1933 (according to the defendants on the 19th March 1933) and were in possession till the 13th May 1942 when they put the plaintiff in possession of property as per inventories.
(3) During the period of their management the defendants exhibited to the Court abstracts of accounts from the 19th March 1933 to 13th May 1942. On an application made by the plaintiff to direct the defendants to render accounts of their management, the Court directed the plaintiff to institute a civil suit for rendition of accounts and did not grant a discharge to the defendants under S. 41, sub-s. (4) of the Guardians and Wards Act, hereinafter referred to as the Act.
(4) The plaintiff's case is that these accounts were not only inaccurate and discrepant with the books of account maintained by the defendants but were also "fraudulent, false and bogus" as shown in the plaint schedules. It was alleged that the defendants did not account for all the money-bonds and surrender-deeds in their possession, for village profits of 'mouza' Bamaipur and for lease money of Nawegaon fields, (b) that 14 acres of land at 'mouza' Bamaipur was fraudulently put in possession of tenants, (c) that the salary of Shamlal, the private servant of defendant No. 1 was falsely debited to the plaintiff, and (d) that the defendant No. 1 used to sell the produce of the plaintiff's fields to himself and retain the proceeds and that he has therefore to account for the fair sale proceeds and pay interest on the amounts remaining with him. Lastly, it was urged that the defendants did not manage the property diligently for the benefit of the plaintiff and were liable to make good the loss suffered by the plaintiff.
(5) The defendants admitted liability to render account from the 19th March 1933 till 13th May 1942. They however denied possession of any property of the plaintiff and pleaded that the accounts had been duly rendered to and accepted by the Court and consequently the present suit for accounts was not maintainable. The defendants also filed a schedule replying to each allegation in the plaint schedule.
(6) Under S. 34 (c) and (d) of the Act the guardian shall, if so required by the Court, exhibit his accounts in the Court at such times and in such form and pay into the Court at such times the balance due from him on those accounts, or so much thereof, as the Court from time to time directs. This is what the defendants have done in the instant case. They filed abstracts of income and expenditure every year. They were evidently to be checked by the Court reader, but it is not clear how this was done. There are notes in the order-sheets that these accounts were "checked & found correct", "perused and passed", "checked and passed". Filing of such accounts does not relieve the guardian of his responsibility for their correctness, nor does the passing of such accounts relieve the guardian of his liability to account to the ward. 'PARTAB SINGH v. KHURRAM SINGH',53 Ind Cas 75 (Oudh). It is true that the Judge must look into the accounts exhibited from time to time but the investigation is to be only a summary investigation of the management of the guardian to see that he has not incurred any expenditure prohibited by the Court and has acted generally according to its directions and to allow the settlement of accounts stand over till the time of discharge. It is obvious that the Court is not in a position to effectively, audit them. There is no obligation on the Court after the minor attains majority to review the accounts or to direct the guardian to render accounts afresh. 'MUHAMMAD KHADIM HUSAIN v. AHMAD HASAN', 39 Ind Cas 175 at p. 176 (All). The contrary view taken in 'SITA RAM v. MT. GOVINDI', 46 All 458, has been dissented from in 'SUBBARAMI REDDI v. PATTABHIRAMA REDDI', 50 Mad 80, which has been followed in 'RAMCHANDRAN v. BALASUBRAMANIA', ILR (1938) Mad 667 (F B).
If on a scrutiny of the accounts a larger balance is found due by the guardian, the Court has no jurisdiction to pass an order directing its payment. Section 34(d) only requires the guardian to pay into the Court the "balance due on these accounts" if required by the Court, i.e., the balance due on; the accounts submitted by him under S. 34(c). 'HAKIM RAY v. MT. KHANDI BAI', MANU/LA/0004/1930 : AIR 1930 Lah 420 and 'HOONDOMAL v. NAZIR, J. C.'s COURT, SIND', AIR 1930 Sind 43. The Court cannot invoke its power under S. 41(3) to order such payment. 'SADHU SINGH v. MEHAR SINGH', AIR (18) 1931 Lah 68. It has to be recovered by a suit under S. 35, 36 or 37 as the case may be. 'FAKIR MUHAMMAD v. MT. BHARI', AIR 1932 Lah 306 and 'GOPALASWAMY v. RAMAYYA',ILR (1945) Mad 119.
No doubt it was held in 'SITA RAM v. MT. GOVINDI', 46 All 458, on which the learned counsel for the appellants relies, that the Court has concurrent jurisdiction to scrutinize the accounts and order payment. In 'MISRA RANGNATH v. MISRA MURALI LAL', 58 All 721, a different view was taken. It is not necessary for the purposes of this case to decide this point as the Court has directed the ward to institute a suit for accounts. The Court can give discharge to the guardian if the ward agrees on attaining majority; otherwise, the discharge must stand over till the suit of the ward for rendition of accounts is decided.
(7) The learned counsel for the defendants still contends that the suit by a ward does not lie unless it is founded on fraud after the date of receiving possession of the property from the guardian. Reliance was placed on 'MURLIDHAR v. VALLABHDAS', 33 Bom 419. That case is distinguishable as the guardian there was discharged under S. 41(4) of the Act from his liability save as regards any fraud that might subsequently be discovered.
(8) It is next contended that this suit for rendition of accounts does not lie; plaintiff's suit must be one to surcharge and falsify the accounts settled and accepted by the Court and also by the plaintiff in Ex. D-1. Reliance was placed on the phrase "understanding the accounts", in that document. There is no plea that the plaintiff examined the accounts and accepted them as correct. He was not asked about this statement in the witness-box. We therefore overrule the contention that the plaintiff accepted the accounts. The decision in 'SOKKAMMAL v. ARUNACHALAM', AIR 1946 Mad 136, on which the defendants rely is not to the point. It was there held that a suit to surcharge and falsify accounts settled is not a suit for accounts within the meaning of S. 7(iv)(f) of the Court-fees Act and must be valued for a court-fee at the total amount claimed from the defendants.
(9) No orders were passed for the period from 1-8-1941 to 13-5-1942. The suit for rendition of accounts for this period at any rate is tenable. As already pointed out, there was no acceptance by the Court of the correctness of the accounts so as to debar the plaintiff's right to sue. To accounts passed relate to the period up to the 31st July 1941. Section 34 (c) and (d) were duly complied with.
(10) After the written statement was filed the plaintiff sought leave to deliver interrogatories for the examination of both the defendants. Answers to these interrogatories were necessary to elicit their admissions to support the plaintiff's case and destroy the case of the defendants. The learned Judge erroneously refused leave on the ground that the interrogatories were not material at that stage of the suit, meaning probably, before the oral evidence was recorded. The application for discovery of documents was also disposed of on the same ground. We are of the view that these orders are erroneous. The right of a party to deliver interrogatories to his opponent and get answers from him is a valuable one in conducting his cause and he should not lightly be deprived of it. It must be remembered that discovery of facts and documents often tends to shorten litigation and save expenses. The learned Judge had not framed all the issues arising from the pleadings of the parties. If he had framed these issues and permitted the parties to make full use of Orders 11 and 12, Civil Procedure Code, the trial would have been shortened and he would have found ample malarial to decide the case correctly. Probably, the preliminary decree could have been passed even without going into oral evidence.
(11) There is a broad distinction between the position where an account is rendered and where an account is stated or settled. 'MADHUSUDAN v. RAKHAL CHANDRA', 43 Cal. 248. In the former case the accounting party must satisfy the Court that the account was correctly rendered i.e. he must support it in Court; but in the latter case the person entitled to an account is bound by the account unless it can be reopened. 'RADHIKAPRASAD v. NANDKUMAR', ILR (1944) Nag 63. As already shown, the accounts are not stated or settled in the instant case and therefore it is not necessary to plead facts which entitles the plaintiff to reopen the settled accounts. But even if that was necessary, there is ample material on record to justify reopening of the accounts on the ground of error, if not on the ground of fraud.
(12) Where a person entitled to an account alleges and proves facts which show that, at any rate in respect of one item, sums other than those received would have been received by the person liable to account but for his wilful neglect or default, the latter will be liable to account not only for what he has in fact received but for what he ought to have received. An intentional default may be held to be wilful if he was careless or forgetful. 'RADHIKAPRASAD v. NANDKUMAR', (supra.) In the case of reopening of accounts, Jessel, M. R. says that
"if the Court is of opinion that errors of sufficient number and sufficient magnitude are shown, it is not necessary that the errors shown should amount to fraud. If they are sufficient in number and importance, whether they are errors caused by mistake or errors caused by fraud, the Court has a right to open the accounts..........When the account is between persons in a fiduciary relation and the person who occupies the position of the accounting party - that is, trustee or agent - is the defendant, it is easier to open the account than it is in cases where persons do not occupy that position - that is to say, that a less amount off error will justify the Court in opening the account.
"..........where you show a single fraudulent entry in the case of persons occupying the position of principal and agent, or trustee and 'cestui que trust', the Court has actually opened an account extending over a greater number of years and closed for a much longer period than the account I have before me.
(Note: It was for twenty years).
"We therefore have this as a sort of guide without laying down any general rule, because every case must depend on its own circumstances, that where the accounts have been shown to be erroneous to a considerable extent both in amount and in the number of items, or where fiduciary relations exist and a less considerable number of errors are shown, or where the fiduciary relation exists and one or more fraudulent omissions or insertions in the account are shown, there the Court opens the account and does not merely surcharge and falsify. 'WILLIAMSON v. BARBOUR',(1877) 9 Ch D 529; 'BHAGWAN BAKSHI SINGH v. DAMODARJI JOSHI',42 All 230. By S. 20 of the Act the defendants stand in a fiduciary relation to the plaintiff ward.
(13) The lower Court has found that Shamlal was the servant of defendant No. 1 and his salary was wholly debited to the plaintiff. It is true that Shamlal was doing some work in connection with the guardian and ward case, filing accounts, appearing in Court etc. It was alleged that the defendant No. 1 paid separately for the work done by Shamlal for him, but he has not produced his account books in support of this contention, probably because those account books would not support the defendant No. 1 and would have exposed the alleged fraudulent dealings with the produce of the plaintiff's fields received by defendant No. 1 for sale. Any way, the evidence of defendant No. 1, uncorroborated by the available documentary evidence, has not been accepted by the Court below and we see no reason to differ from it.
(14) Admittedly, the plaintiff is a co-sharer of 'mouza' Bamaipur and he was entitled to his share of village profits. No village profits are entered in the accounts exhibited by the defendants. Their case is that after setting off the rental assessment payable by the plaintiff not much was left for payment and therefore no credits appear in the accounts. Consequently this is a case where the defendants must account afresh and satisfy the Court that their contention is justified.
(15) As regards the 14 acres of land at 'mouza' Bamaipur, the defendant No. 1 has admitted in the report dated 20-10-34 that the defendants received possession of 60 acres; but the plaintiff was put in possession of 45 acres. It is now alleged that the mention of 60 acres in the report was a mistake. It therefore follows that the defendants must account for the land of which they actually obtained possession in the several litigaions and how they dealt with that land.
(16) The plaintiff has shown various discrepancies in the accepted account of every year with the account books maintained by the defendants. The defendants alleged that several discrepancies were due to the difference in measures adopted by them at different times and that the resulting difference is not considerable. This cannot be assumed unless the defendants render proper accounts. It is admitted in the explanatory statement annexed to the written statement that the various figures given in the abstracts submitted to the Court do not agree with the original books and need explanations for reconciliation.
It is apparent that these abstracts could not be verified with the original books without lot of accounting. There is no 'prima facie' evidence that this was done by any Court official. It appears that the abstracts which appear to be in accordance with the orders of the Court were accepted without scrutiny of the account books which scrutiny was not possible without close study of the books and of the profit-yielding capacity of the different items of property. It is also admitted by the defendants that certain outstandings from the debtors were not recovered, that the certain items of expenditure are not shown in the account books but are shown in the abstracts filed in the Court and that certain advances of grain shown in the books are not shown in the abstracts. It is said only the income resulting therefrom is shown.
(17) There is admittedly a difference in the quantity taken out for sale and the quantity whose sale price is shown in the account books. This shortage is said to be due to cleaning of grain and damage by rats and insects. This is not mentioned in the books, nor any cleaning charges noted; nor was this brought to the notice of the Guardians and Wards Court. The defendants' explanation has not been accepted by the Court below. It is also admitted by the defendants that there is shortage of 'dhan' and the explanation is that is due to driage. The driage is not ascertained every year and shown in the books. It must also be noted that the grain increases in quantity during rainy season and there is always what is called 'Wadhawa' which is to be accounted for. The defendants have shown this in some cases. Whether they had properly shown it or or not is a matter for settlement of accounts on examination and on considering the explanations of the defendants.
(18) All this is a matter for going into the accounts item by item and the defendants' supporting the accounts by proper vouchers or other evidence. If on a settlement of account it is found that the defendants have not accounted for all the receipts, it may be necessary to ascertain the prevailing rates of grain in each year to ascertain the amounts payable by the defendants or the rate at the time of the deficit is determined.
(19) We have said enough to support the finding of the lower Court that the accounts were not properly maintained and the defendants had not furnished true accounts to the Guardians and Wards Court. The learned Judge has relied on the oral evidence of the parties and the comparison of the abstracts with the account books. Under the circumstances, we affirm the finding of the lower Court.
(20) We do not find any support for the plaintiff's contention that the defendants took possession of his property in February 1933. They were appointed on the 25th February 1933 and they submitted their report of having taken possession on the 25th March 1933. Under the circumstances we hold that the defendants are liable to account from the 19th March 1933.
(21) In view of the pleadings and admissions in this case, the controversy in the appeal was a very narrow one, but the learned Counsel has covered a very wide field. We need not examine all his arguments in view of the findings that the accounts were not closed, that the defendants were liable to render accounts to the plaintiff and that the defendants' own admission in the written statement clearly establish the case for reopening of the accounts.
(22) The appeal thus fails and is dismissed with costs. The preliminary decree drawn up by the lower Court is incomplete and in one respect erroneous. We therefore direct that
(a) The defendants do render accounts of the assets received by them on their appointment as guardians, of the subsequent acquisitions, receipts, income and profits during the period of their management from the 19th March 1933 to the 12th May 1942;
(b) The original books of account kept by the defendants may be taken as an inclusive piece of evidence in support of the account the defendants may render;
(c) The lower Court will appoint a Commissioner to take accounts. He will
(i) call upon the defendants to render accounts of their period of management. The accounts may be rendered and made approximately for a period of one year separately;
(ii) call upon the defendants to append lists of documents in which they reply in support of the accounts
(a) which are in their possession or power and
(b)which are not in their possession or power;
(iii) then call upon the plaintiff to admit or deny these accounts and to state the items which they dispute. The plaintiff will file a full written statement stating his case, and will file lists as in (ii);
(iv) parties should be allowed to make full use of the provisions of Orders 11 and 12 of the Civil Procedure Code;
(v) the commissioner will call on the parties to file documents and frame issues on all the points in dispute;
(vi) he will then receive all such oral evidence as the parties may adduce;
(vii) the commissioner will prepare his report and the accounts of the amounts that may be found due to the plaintiff, and submit them to the Court;
(viii) the lower Court will give such other directions to the commissioner from time to time as may be necessary;
(d) The lower Court will allow sufficient time to the parties to submit their objections, and will decide them after taking such oral and documentary evidence as it may consider necessary;
(e) the question of costs of the lower Court will be decided at the time of the final order;
(f) a final decree will follow thereon.


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