Hulas Rai Baij Nath Vs. Firm K. B.
Bass & Co  INSC 139 (3 May 1967)
03/05/1967 BHARGAVA, VISHISHTHA BHARGAVA,
VISHISHTHA BACHAWAT, R.S.
CITATION: 1968 AIR 111 1967 SCR (3) 886
RF 1973 SC 643 (6)
Code of Civil Procedure, 1908 (Act 5 of
1908), O 23 r.1- Suit for rendition of accounts-Defendant pleads accounts
settled, money due to him, and prays for decree of amount due-Preliminary
decree not passed-Whether plaintiff can withdraw suit.
In a suit for rendition of accounts, the
defendant pleaded that accounts, had been settled and he was to get certain
money from the plaintiff; that there could be no rendition of accounts; and
that if the court concluded that rendition of account was necessary, a decree for
the amount which may be found due to the defendant with costs and interest may
be passed in favour of the defendant after necessary court fee was realised
from the defendant. While no preliminary decree for rendition of accounts had
'been passed, and, in fact, the defendant was .still contending that there
could be no rendition of accounts in the suit. the plaintiff applied for
withdrawal of the suit. The defendant opposed the withdraw claiming that in a
suit of this nature, his position became that of a plaintiff and he became
entitled to have the accounting done and to obtain a decree, and the withdrawal
after protracted duration was to defeat this right of the defendant. The trial
Court allowed the withdrawal, which was upheld by the High Court. In appeal by
the defendant, this Court
HELD : At the stage of withdrawal of the
suit, no vested right in favour of the defendant had come into existence and
there was no ground on which the Court could refuse to allow withdrawal of the
There is no provision in the Code of Civil
Procedure which requires the Court to refuse permission to withdraw the suit in
such circumstances and to compel the plaintiff to proceed with it. It is, of
course, possible that different considerations may arise where a set-off may
have been claimed under 0.8, C.P.C., or a counter-claim may have been filed,,
if permissible by the procedural law applicable to proceedings governing the
suit. In the present case, the pleadings did not amount to a claim for set-off.
Even if it be assumed that the defendant could have claimed a decree for the
amount found due to him after rendition of accounts, no such right can possibly
be held to exist before the Court passed a preliminary decree for rendition of
accounts. In the case of a suit between principal and agent, it is the
principal alone who has normally the right to claim rendition of accounts from
the agent. The agent cannot ordinarily claim a decree for rendition of accounts
from the principal and, in fact, in the suit, the defendant, who was the agent
of the respondent, did not claim any rendition of accounts from the plaintiff.
[888F-H] 889B-D] Seethai Achi v. Meyappa Chettiar and Others, A.I.R. 1934 Mad,
337. refered to
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 897 of 1964.
887 Appeal by special leave from the judgment
and order dated November 14, 1961 of the Allahabad High Court in Civil Revi-
sion No. 686 of 1953.
Bishan Narain and M. I. Khowaja, for the
Niren De. Addl. Solicitor-General, M. V.
Goswami and Yogeshawr Parshad, for the respondent.
The Judgment of the Court was delivered by
Bhargava, J. The respondent firm, K. B. Bass & Co., instituted a suit on
13th April, 1951, for rendition of accounts against the appellant firm, Messrs
Hulas Rai Baij Nath, alleging that the appellant was the commission agent of
the respondent and that the accounts between respondent as the principal and
appellant as the agent had not been settled since the dealings be-an in the
year 1941 onwards.
Tentatively, a sum of Rs. 2,100/- was claimed
in the plaint.
In the written statement filed on behalf of
the appellant, the suit was contested on various grounds; but for the purposes
of this appeal, we need mention the pleas taken in only two paragraphs 8 and I
1. In paragraph 8, it was pleased that one Lala Shiva Charan, a partner of the
respondent firm, had come with a Munim in the month of Agahan last and
account.,; were fully explained to him as worked out upto Kartik Sudi 15.
Sambat 2007. In that statement of account, a sum of Rs. 10,677-14-3 was found
due to the appellant from the respondent and the representatives of the
respondent asked for two months' time for making the payment of the amount
found due. It was thus urged that there was no occasion for rendition of
accounts and the plaintiff's suit was not fit to proceed according to law.
In paragraph I 1, the appellant pleaded that
"if, in the opinion of the court, the court has jurisdiction to try the
suit and it is necessary to tender the accounts, it is equitable that a decree
for the amount which may be found due to the contesting defendant, after
rendition of accounts, together with costs and interest be passed in favour of
the contesting defendant, after necessary court- fee being realized from the
defendant." A number of issues were framed and the case was taken up for
recording of evidence on several dates of hearing. Some of the issues were even
given up during the 'trial. Ultimately, on 5th May, 1953, after a considerable
amount of evidence had been recorded, an application was presented on behalf of
the plaintiff-respondent, for withdrawal of the suit. The -round given for
withdrawal was that the respondent firm was in the charge of one Bhagwat Charan
who had colluded with the appellant and litigation was going on between the
respondent and Bhagwat Charan for effecting partition of the business.
Consequently, it was difficult to prosecute the suit, No prayer was made for
permission to file a fresh suit. The appellant filed an application objecting
to this application for with.
L9Sup. CI/67-13 888 drawal. The main ground
taken for contesting this application for withdrawal was that, in a suit of
this nature, it is permissible to pass a decree in favour of the defendant if,
on accounting, something is found due to him against the plaintiff, and it
followed that, if the defendant paid court-fee on 'the amount which was found
due to him from the plaintiff, his position became that of ,A plaintiff himself
and he became entitled to have 'the accounting done and to obtain a decree. It
was urged that the plaintiff's game in withdrawing the suit after protracted
duration and considerable expenditure on the part of the defendant was to
defeat this right of the defendant.
The trial Court held that the right of the
plaintiff in this suit to withdraw under 0. 23, r. 1 of the Code of Civil
Procedure was inherent and such a right could be exercised at any time before
judgment. All 'that the defendant could claim was an order for costs in his
favour. The Court, therefore, dismissed the suit, awarding costs of the suit to
the appellant. The appellant filed a revision in 'the High Court of Allahabad
against this order, with a prayer that the High Court may set aside the order
of the trial Court and remand the suit for trial according to law. The High
Court dismissed the application for revision; and the appellant has now come
tip to this Court in 'this appeal by special leave.
The short question that, in these
circumstances, falls for decision is whether the respondent was entitled to
withdraw from the suit and have it dismissed by the application dated 5th May,
1953 at the stage when issues had been framed and some evidence had been
recorded, but no preliminary decree for rendition of accounts had yet been
passed. The language of 0.23, r. 1. sub-r. (I ), C.P.C., gives an unqualified
right to a plaintiff to withdraw from a suit and, if no permission to file a
fresh suit is ,-ought under sub-r. (2) of that Rule, the plaintiff becomes
liable for such costs as the Court may award and becomes precluded from
instituting any fresh suit in respect of that subject-matter under sub- r. (3)
of that Rule. There is no provision in the Code of Civil Procedure which
requires the Court to refuse permission .to withdraw the suit in such
circumstances and to compel tile plaintiff to proceed with it. It is, of
course, possible that different considerations may arise where a set-off may
have been claimed under 0. 8 C.P.C., or a counterclaim may have been filed, if
permissible by the procedural law applicable to the proceedings governing the
suit. In the present case. the pleadings in paragraphs 8 and II of the written
statement. mentioned above, clearly did not amount to a claim for set-off.
Further, there could be no counterclaim, because no provision is shown under which
a counter-claim could have been filed in the trial Court in such a. suit. There
is also the circumstance that the application for withdrawal was moved at a
stage when no preliminary decree had been passed for rendition of account and,
in fact, the appellant 889 was still contending that there could be no
rendition of accounts in the suit, because accounts had already been settled.
Even in para 11, the only claim put forward was that, in case the Court found
it necessary to direct rendition of accounts and any amount is found due to the
appellant, a decree may be passed in favour of the appellant for that amount.
In this paragraph also, the right claimed by the appellant was a contingent
right which did not exist at the time when the written statement was filed.
Even if it be assumed that the appellant could have claimed a decree for the
amount found due to him after rendition of accounts, no Such right can possibly
be held to exist before the Court passed preliminary decree for rendition of
accounts. It is to be noted that in the case of a suit between principal and
agent, it is the principal alone who has normally the right to claim rendition
of accounts from the agent. The agent cannot ordinarily claim a decree for
rendition of accounts from the principal and, in fact, in the suit, the
appellant, who was the agent of the respondent, did not claim any rendition of
accounts from the respondent. In 'these circumstances; at the stage of
withdrawal of the suit, no vested right in favour of the appellant had come
into existence and there was no ground on which the Court could refuse to allow
withdrawal of the suit. It is unnecessary for us to express ,my opinion as to
whether a Court is bound to allow withdrawal of a suit to a plaintiff after
some vested right may have accrued in the suit in favour of the defendant. On
the facts of this case. it is clear that the right of the plaintiff to withdraw
the suit not at all affected by any vested right existing in favour of the
appellant and, consequently, the order passed by the trial Court was perfectly
On behalf of the appellant, reliance was
placed on the views expressed by a Division Bench of the Madras High Court in
Seethai Achi v. Meyappa Chettiar and Others (1), where the Court held:
"Ordinarily, when the Court finds no
impediment to the dismissal of a suit after the announcement of the withdrawal
of theclaim by the plaintiff, it will simply say that the suit is dismissed as
the plaintiff has withdrawn from it.
An order as to costs will also be passed. But
several exceptions have been recognised to this general rule. ]n suits, for
partition, if a preliminary. decree is passed declaring and defining the shares
of the several parties, the suit will not be dismissed by reason of any
subsequent withdrawal by the plaintiff, for the obvious reason that the rights
declared in favour of the defendants under the preliminary decree would be
rendered nugatory if the suit should simply be dismissed. So also in
partnership suits and suits for 890 accounts, where the defendants too may be
entitled to some reliefs in their favour as a result of the settlement of
accounts, the withdrawal of the suit by the plaintiff cannot end in the mere
dismissal of the suit." We do not think, as urged by learned counsel, that
the learned Judges of the Madras High Court were laying down the principle
that, in a suit for accounts, a defendant is always entitled to relief in his
favour and that the withdrawal of such a suit by the plaintiff cannot be
permitted to terminate the suit. In the context in which that Court expressed
its opinion about suits for accounts, it clearly intended to lay down that the
dismissal of the suit on plaintiff's withdrawal is not to be necessarily
permitted, if the defendant has become entitled to a relief in his favour. But
such it right, if at all, can in no circumstances be held to accrue before a
preliminary decree for rendition of accounts is passed. In fact, in mentioning
suits for partition and suits for accounts, the Court was keeping in view the
circumstance mentioned in the earlier sentence which envisaged that a
preliminary decree had already been passed defining rights of parties. In any
case, we do not think that any defendant in a suit for rendition of accounts
can insist that the plaintiff must be compelled to proceed with the suit at
such a stage as the one at which the respondent in the present case applied for
withdrawal of the suit.
The appeal, therefore, fails and is dismissed