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Haji Ishtiaq Ahmad And Ors. vs Abdul Samad

High Court Of Judicature at Allahabad|20 October, 1938


JUDGMENT Mohammad Ismail, J.
1. This is a plaintiffs' appeal arising out of a suit for accounts. It appears that three brothers named Abdul Karim, Abdus Samad and Muhammad Taqi were partners in business which was dissolved some time about the end of 1926. Muhammad Taqi went out of business and the remaining two partners, Abdul Karim and Abdus Samad, continued to carry on the business as partners. The plaintiffs' case is that the new partnership terminated at the end of 1929 but, as the defendant failed to render accounts, the plaintiff prayed that the Court may direct him to do so. The suit was contested on various grounds, but a preliminary decree was passed on 1st September 1920, and the final decree followed it on 24th July 1934. The trial Court decreed the suit against the defendant for a sum of Rs. 7652-13.11. The learned District Judge modified the decree of the Court of first instance and reduced the amount to Rs. 3586.1-6. The plaintiffs now come to this Court in appeal. It may be mentioned that Abdul Karim, one of the partners, is now dead and the plaintiffs represent his share in the assets and liabilities of the business.
2. Learned Counsel for the appellants has argued that the learned District Judge had no jurisdiction to entertain the appeal as having regard to the valuation of the appeal and Section 21, Civil Courts Act, the appeal lay to this Court. The suit originally was valued at Rs. 130 and a court-fee of Rs. 10 was paid. It was stated in para. 7 of the plaint that further court-fee will be paid if any amount is found in excess as per account. The final decree was passed on 24th July 1934 for Rs. 7652-13-11. The final decree was amended and the claim was laid at the aforesaid amount under an order of the Court, dated 21st September 1934. The plaintiffs were called upon to deposit the deficit court-fee which was done. On these facts it is alleged that the real valuation of the suit should be deemed to be over Rs. 5000 and the provisional value given in the plaint should not betaken into account. In support of this argument learned Counsel for the appellants has referred to Ijjatulla Bhuyan v. Chandra Mohan Banerjee (1907) 34 Cal. 954. This was a suit for possession of land and mesne profits which was originally valued at a sum below Rs. 5000 and was instituted in the-Court of the Subordinate Judge but the amount actually found due inclusive of mesne profits payable by the defendant to the plaintiff was over Rs. 5000. The learned Judges held that the appeal lay to the High Court and not to the District Court. The following observation of Mukerji J. at p. 966 has been relied upon:
In my opinion, the illustration shows conclusively that the theory that the forum of appeal depends upon the value as adjudged by the Court does require qualification, and the qualification I have suggested seems to me completely to meet the situation. The forum of appeal depends not upon the value as adjudged, but upon the value as accepted by the plaintiff after adjudication.
3. In the present case it is argued that the provisional value of the suit in the plaint was not final, but the amount decreed by the Court was the real value which was accepted by the plaintiffs without any objection and the court-fee on that sum was paid. It is, therefore, contended that the suit being above Rs. 5000 in value the appeal from the decree lay to the High Court. The next case cited is Raman Lalji v. Desraj (1910) 32 All. 222. This was a suit for recovery of Rs. 1945 on a hypothecation bond. The plaintiff offered to redeem prior mortgages if the prior mortgagees proved their debt. The decree was passed on a compromise conditioned on redemption of prior mortgages amounting to Rs. 15,700 and payment of requisite court-fees. The learned Judges relying upon the Full Bench case cited above and certain other rulings held:
So long as there has been no order accepted by the plaintiff to make good the deficiency, the original value placed by the plaintiff must be taken as the value of the suit for the purpose of regulating the proper Appellate Court, but we think that, when there has been such an order accepted by the plaintiff, from that moment the value of the suit must be taken as being in accordance with the fee paid by the plaintiff.
4. A similar view was taken in Harihar Das v. Raj Kumar Mukerjee (1923) 10 A.I.R. Cal. 405. The following observation has been emphasized:
The Legislature did not intend that the expression "the value of the original suit" in Section 21 means the real value of the subject-matter of the original suit, regardless of what may have happened in the trial Court. Before the appellate stage is reached, the suit must already have been tried and the value of the suit fixed either by agreement of parties or on adjudication by the Court.
5. On the strength of these authorities it is contended that as the Court found that the plaintiffs were entitled to a decree for a sum of over Rs. 5000, the learned District Judge had no jurisdiction to hear the appeal from the decree of the learned Civil Judge. Before we examine the authorities cited by learned Counsel for the respondent, we proceed to refer to statutory provisions on the subject under consideration. Section 7(iv)(f), Court-fees Act, provides that in a suit for accounts the amount of fee payable should be assessed according to the amount at which the relief sought is valued in the plaint or memorandum of appeal. In all money suits the plaintiff is directed to state the precise amount claimed by him. But where the plaintiff sues for mesris profits or for an amount which will be found due to him on taking unsettled accounts between him and the defendant, the plaint shall state approximately the amount sued for (Order 7, Rule 2). From the above-mentioned provisions it is manifest that the plaintiff was fully justified in valuing his suit at Rs. 130. It is not disputed that the present suit was for an unascertained amount which could be found only on an examination of the accounts of the business. Section 11, Court-fees Act, provides that in such suits when a decree for a larger amount has been passed the Court will not execute that decree unless and until the deficiency has been made good. In all suits for accounts it is assumed that the plaintiff is able to give only a tentative or provisional amount in the plaint. It may well happen that ultimately on accounting a sum lower than that mentioned in the plaint may be found due to the plaintiff. Similarly a sum larger than what is stated in the plaint may be found due to him. In the latter case a provision has been made for the recovery of the requisite court-fee payable under the Court-fees Act. Section 8, Suits Valuation Act, lays down:
Wherein suits other than those referred to in the Court-fees Act, 1870, Section 7, Paras, (v), (vi) and (ix), and Para, (x), Clause (d), court-fees are payable ad valorem under the Court-fees Act, 1870, the value as determinable for the computation of court-fees and the value for purposes of jurisdiction shall be the same.
5. In the present case the plaintiff was authorized under the law to give his own valuation for the purposes of the court-fee. Under Section 8 the valuation for the purposes of court-fee and jurisdiction has to be identical. It seems to us difficult to hold that in view of the Sections mentioned above, the appeal lay to the High Court and not to the District Judge. The rulings cited by learned Counsel for the appellants are not in account suits for which a specific provision has been made. This question was considered in a later ruling by a Bench of this Court in Muhammad Abdul Majid v. Ala Bux (1925) 12 A.I.R. All. 376. This was also a suit for accounts. In the plaint the plaintiff of that suit had stated that the valuation of the subject-matter of the suit for the purposes of jurisdiction and payment of court-fee was Rs. 2500. The Subordinate Judge gave the plaintiff a decree for Rs. 5796-9-3. The question for determination before the learned Judges was whether the appeal lay to the High Court or to the District Judge. It was held:
In order to determine the proper Appellate Court, what has to be looked at is the value of the original suit, that is to say, the amount or value of the subject-matter of the suit, and that must be taken to be the value assigned by the plaintiff in his plaint, and not the value as found by the Court, unless it appears that, either through carelessness or gross negligence, the true value has been altogether misrepresented by the plaintiff. It is the plaintiff's valuation in his plaint which controls the jurisdiction not only of the first Court but of the Appellate Court.
6. In this case the authorities cited above and several other cases were noticed and discussed. It is not suggested by learned Counsel for the plaintiff that his client inadvertently or deliberately gave a wrong valuation. With respect we entirely agree with the observations made in the above-mentioned ruling. It is true that under the order of the Court, dated 21st September 1934, the final decree passed in favour of the plaintiffs by the trial Court was amended. But such is the case in every suit for accounts where a sum larger than that mentioned in the plaint has been decreed in favour of the plaintiff. The plaintiffs no doubt had offered to pay the requisite court-fee on the sum that was found due to them. But this offer by itself will not affect the jurisdiction of the Court, because under the provisions of Section 11, Court-fees Act, the plaintiffs were bound to make good the Court-fee. The view taken in the above-mentioned case finds support from the observations in Ishwarappa Malleshappa v. Dhanji Bhanji (1932) 19 A.I.R. Bom. 111 and Shailendrakumar v. Haricharan Sadhukhan (1931) 18 A.I.R. Cal. 159. We have no hesitation in holding that the learned District Judge did have jurisdiction to entertain the appeal.
7. Coming to the merits, learned Counsel for the appellants has complained that the learned District Judge was not justified in debiting the accounts of the fresh partnership with the liabilities payable by the former partnership which had been admittedly dissolved some time in 1926. It is argued that the finding of the learned Judge it) not only opposed to the pleadings of the parties but also to the preliminary decree which was affirmed by the Appellate Court and was final between the parties. The observation in the judgment of the District Judge, dated 28th April 1930, affirming the preliminary decree has been relied upon which runs as follows:
The original partnership came to an end in 1927 when accounts were finally settled... and that a new partnership was then entered into by the parties.
8. This however does not mean that the mew partnership started with new capital and had no concern with old assets or liabilities. The learned District Judge upon a consideration of evidence recorded a definite finding in the following words;
What actually happened was that Abdul Karim find Abdus Samad bought out Muhammad Taqi by undertaking to pay him Rs. 2434-13-6 in cash from the funds of the new partnership and took over the assets and liabilities of the former partnership.
9. Learned Counsel contends that this is not supported by the pleadings or the evidence on the record. We have been taken through the plaint and the written statement of the parties and we entirely agree with the observations of the learned District Judge on this point. In para. 3 of the plaint the plaintiff stated:
The account for 1926 has been adjusted between the parties and other partners and payments have been made. From 1927 when the parties came to have shares by half and half, there was no rendition of account of profits and loss regarding the entire business together with the money dealings in respect of the previous business which was given effect to subsequently, although the plaintiff continued to receive items as per account at different times and they are noted in the account.
10. The preceding paragraphs are also more or less in the same strain. It appears that the business originally started with three partners who owned equal shares of one-third each. One of the partners decided to go out of the business. 3?or that purpose it was absolutely necessary to go into the accounts in order to ascertain the share of the outgoing partner. This share was ascertained and the outgoing partner was bought out. It is nowhere suggested in the plaint that the entire stock was sold up and divided between the parties, nor has it been suggested that the liabilities of third persons were liquidated and paid off. It is manifest from the plaint that it was a going concern from 1926 onward. It would be highly impracticable for the partners to wind up the old business, convert all its assets into cash and make a new start with fresh capital. Unless this was specifically pleaded, proved and found, we would have much hesitation in accepting this case. But it is not necessary to examine the evidence on this point in view of the clear statement made in para. 3 of the plaint and the finding of the learned District Judge which is supported by the statement in the plaint. In this view of the case it is not necessary for us to examine the objections by learned Counsel for the appellants in detail with regard to various items.
11. The main objection referred to the transference of the old liabilities and, as stated above, we think that the learned District Judge rightly held the plaintiffs responsible for the old debts to the extent of one-half. There is one item which in our opinion needs correction. At page 21 the learned District Judge has referred to two items of Rs. 1107-8-6 and Rs. 968-7-6 which were originally debited to the plaintiffs but were struck off under the orders of the Subordinate Judge. The learned District Judge was of opinion that the learned Subordinate Judge was not right in striking off these items with the result that these two items were debited to the plaintiffs. By a reference to p. 17 of our paper-book we find that the latter item refers to commission khata. The entire amount was Rs. 968-7-6 out of which a sum of Rs. 667-7-3 had already been debited. The learned Subordinate Judge in his judgment relying upon the Commissioner's account found each party liable to a sum of Rs. 3260.4-10. This included a sum of 301-0-3 on account of commission khata which was part of the total sum of Rs. 968-7-6 under that khata. We therefore agree with learned Counsel for the appellants that this sum ought to be decreed to the plaintiffs-appellants. In other words, the sum of Rs. 301-0-3 should be added to the decree passed in favour of the plaintiffs by the learned District Judge which in the aggregate will come to Rs. 3887-1-9. Pendente lite and future interest on this sum should be added as directed in the decree for the Court below. In the result we modify the decree of the Court below to the extent mentioned above. In other respects we dismiss the appeal. Costs of this appeal to be borne in proportion to success and failure.
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Haji Ishtiaq Ahmad And Ors. vs Abdul Samad


High Court Of Judicature at Allahabad

20 October, 1938