2011(7) ALL MR 415
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
D.G. KARNIK, J.
Maharashtra Water Supply And Sewerage Road Vs. Shripati Lakhu Mane
Civil Revision Application No.1015 of 2010
29th June, 2011
Petitioner Counsel: Mr. A.R. PITALE
Respondent Counsel: Mr. S.M. KAMBLE
Civil P.C. (1908), O.7 R.11(d) - Suit for rendition of accounts - Ordinarily not maintainable by contractor against owner. Contract Act (1872) S.213.
The claim for rendition of accounts is an unusual form of relief. Accounts can be claimed when statute confers such a right. Rule, 13, 15 and 16 of Order 20 of the Code are illustrations of this right. Rule 13 of Order XX provides in a suit for administration of the property of a deceased person, the plaintiff is entitled to claim accounts of the property in the hands of the person in possession thereof. Rule 15 of Order XX provides that in a suit for dissolution of a partnership, the Court may pass a preliminary decree directing the accounts to be taken. Rule 16 of Order 20 provides for taking of accounts in a suit by a principal against his agent. Apart from the statutory instances entitling a person to claim accounts from another, courts have also recognised an equitable right to claim rendition accounts in some exceptional circumstances.
AIR 1967 SC 333 Rel. on. [Para 10]
In this case the defendant floated a tender for execution of a water supply scheme. Tender of the plaintiff was accepted and accordingly, a contract was entered into between the plaintiff and the defendant on 6 July 1981. The plaintiff completed most of the work till 1985. A large amount was due by the defendant to the plaintiff which it avoided to pay under one pretext or the other and on the other hand illegally claimed damages from the plaintiff for delay in execution of the work. According to the plaintiff, the exact amount due to him from the defendant is not known to him and therefore he was suing the defendant for taking of the accounts. Held no case has been made out in the plaint that there were special reasons or special equities which entitled him to claim a relief of accounts. The suit as framed by the present plaintiff was not maintainable as per the law declared by the Supreme Court in the case of K.C. Skaria 2006(4) ALL MR 14 (S.C.). [Para 5,12]
Cases Cited:
K.C. Skaria Vs. The Government of State of Kerala & Anr., 2006(4) ALL MR 14 (S.C.) =2006 SAR (Civil) 139 [Para 9,11]
Narandas Morardas Gajiwala & ors. Vs. S.P.A.M. Papammal & Anr., AIR 1967 SC 333 [Para 10]
JUDGMENT
JUDGMENT :- Rule returnable forthwith. Mr.Kamble waives service for respondent. By consent, taken up for hearing.
2. Revision Applicant is the defendant and the respondent is the plaintiff in the suit. For the sake of convenience, the parties are hereinafter referred to as they are arrayed in the suit.
3. By this revision petition, the defendant challenges the order dated 3 August 2010 passed by the Civil Judge, Jr. Division, Sangli rejecting it's application (Exhibit-59) for dismissal of the suit as not maintainable.
4. At the outset, it may be mentioned that the application is not happily worded and although the prayer in the application is for dismissal of the suit, from the arguments of the counsel and reading the application as a whole, it is clear that the application in fact was for rejection of the plaint under Order 7 Rule 11(d) of the Code of Civil Procedure (for short "the Code") on the ground that the suit was barred by law. The plaintiff also understood the application to be an application for rejection of the plaint and opposed the application. I would therefore proceed on the assumption that the application was for rejection of the plaint under Order 7 Rule 11(d) of the Code.
5. The plaintiff filed a suit, bearing Regular Civil Suit No.385 of 1998, against the defendant for accounts. The averments in the plaint can be summarised thus: The plaintiff is a contractor. The defendant floated a tender for execution of a water supply scheme. Tender of the plaintiff was accepted and accordingly, a contract was entered into between the plaintiff and the defendant on 6 July 1981. The plaintiff completed most of the work till 1985. A large amount was due by the defendant to the plaintiff which it avoided to pay under one pretext or the other and on the other hand illegally claimed damages from the plaintiff for delay in execution of the work. According to the plaintiff, the exact amount due to him from the defendant is not known to him and therefore he was suing the defendant for taking of the accounts. The prayers in the suit are material and they are as follows:
(i) A decree be passed for taking of accounts between the parties for the work done as per the contract dated 6 July 1981.
(ii) After accounts whatever amount is found to be due be ordered to be paid by the defendant to the plaintiff with interest.
(iii) Other just and equitable orders be passed.
6. The defendant contested the suit by filing a written statement. It denied that the plaintiff had completed most of the work and that only a small portion of work had remained to be completed. According to it, the plaintiff had not carried out the work as per the contract and despite several letters, had not completed the work. The defendant was therefore entitled to levy penalty on the plaintiff as per the contract. The defendant specifically contended that the suit being for accounts, was not maintainable.
7. The defendant also filed a separate application at Exhibit 59 contending that since the plaintiff was only the contractor, a suit by him for accounts was not maintainable. It, accordingly prayed for dismissal of the suit as not maintainable. By an order dated 3 August 2010, the trial court rejected the application. That order is impugned in this revision petition.
8. The order of the trial court rejecting the application is very laconic and is reproduced below:
"In the present suit issues (including issue of original defendant no.1) have been framed. The amount is also disputed. Hence there is no force in this application. As a result application stands rejected."
9. To say the least, the order does not take into consideration any of the contentions raised by the defendant and in particular the decision of the Supreme Court in K.C. Skaria Vs. The Government of State of Kerala & Anr, 2006 SAR (Civil) 139 : [2006(4) ALL MR 14 (S.C.)].
10. It is well settled that the claim for rendition of accounts is an unusual form of relief. Accounts can be claimed when statute confers such a right. Rule, 13, 15 and 16 of Order 20 of the Code are illustrations of this right. Rule 13 of Order XX provides in a suit for administration of the property of a deceased person, the plaintiff is entitled to claim accounts of the property in the hands of the person in possession thereof. Rule 15 of Order XX provides that in a suit for dissolution of a partnership, the Court may pass a preliminary decree directing the accounts to be taken. Rule 16 of Order 20 provides for taking of accounts in a suit by a principal against his agent. Apart from the statutory instances entitling a person to claim accounts from another, courts have also recognised an equitable right to claim rendition accounts in some exceptional circumstances. For example, in Narandas Morardas Gajiwala & ors. Vs. S.P.A.M. Papammal & Anr, AIR 1967 SC 333 negativing the contention that only a principal can sue the agent for rendering of proper accounts and not vice versa as section 213 of the Contract Act casts only an obligation on the agent to render accounts to the principal, the Court held: though the agent does not have a statutory right for an account from the principle, nevertheless there may be special circumstances rendering it equitable that the principal should account to the agent.
11. In the case K.C. Skaria [2006(4) ALL MR 14 (S.C.)] (supra), the plaintiff contractor had filed a suit against the Government of Kerala claiming that he had executed certain works for the defendant and had not received the full dues. In the suit, he prayed for recovery of sum of Rs.Two lakhs towards the amount due for the work done with interest at 18% p.a. He further claimed proper accounting and prayed that if the amount due for the work done was in excess of Rs.Two lakhs estimated by him, he be permitted to pay additional court fee stamp and recover the actual amount due. The suit was decreed by the trial court but on appeal the High Court dismissed the suit holding that suit for rendition of accounts by a contractor was not maintainable and dismissed the suit in entirety. The Supreme Court partly upheld the decision of the High Court to the extent it held that suit for rendition of accounts by the contractor was not maintainable but passed a decree for Rs.2,00,000/- which was specifically claimed in the suit. The legal position regarding maintainability of suit for accounts was summarised by the court in following words:
"To summarise, a suit for rendition of accounts can be maintained only if a person suing has a right to receive an account from the defendant. Such a right can either be (a) created or recognised under a statute' or (b) based on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee, or (c) claimed in equity when the relationship is such that rendition of accounts is the only relief which will enable the person seeking account to satisfactorily assert his legal right. Such a right to seek accounts cannot be claimed as a matter of convenience or on the ground of hardship or on the ground that the person suing did not know the exact money due to him, as that will open the floodgates for converting several types of money claims into suits for accounts to avoid payment of court fee as the time of institution. (Para 16 of the decision)
12.The decision of the Supreme Court leaves no doubt that a suit for rendition of accounts would ordinarily not be maintainable by a contractor against the owner. No case has been made out in the plaint that there were special reasons or special equities which entitled him to claim a relief of accounts. The suit as framed by the present plaintiff was not maintainable as per the law declared by the Supreme Court in the case of K.C. Skaria. The present suit for rendition of accounts was contrary to the law declared by the Supreme Court and was not maintainable. As such, the plaint was liable to be rejected under clause (d) of Rule 11 of Order 7 of the Code. The trial court therefore erred in dismissing the application of the petitioner.
13. For these reasons, revision application is allowed, the impugned order is set aside and the plaint of the respondent in Regular Civil Suit No.385 of 1988 is rejected under Order 7 Rule 11(d) of the Code.