' The present appeal arises out of judgment and decree passed on 27-9-1966 by the learned District Judge, Jacobabad whereby the appellant's Suit No, 17 of 1964 wherein the following reliefs were claimed, was disposed of by granting a mere declaration that Rs, 65,140.26 are due by the appellant to the respondent and not Rs, 1,13,195.99.
"(a) That the Hon'ble Court be pleased to appoint Commissioner for taking full, true and correct accounts from defendants 1 to 4 and be further pleased to award decree with costs to the plaintiff against the defendants 1 to 4 for the sum found due against them by the Commissioner on such settlement.
(b) That the Hon'ble Court be pleased to award any other relief to the Plaintiff that the Hon'ble Court may deem fit and proper under the circumstances."
' The averments as made in the plaint on which the suit was brought briefly stated are that on the terms and conditions contained in the agreement dated 19-6-1958, the then Government of West Pakistan appointed the appellant (hereinafter referred as the plaintiff) as their agent and entrusted him the function and duty of selling seeds and manure under the control of Agricultural Department at Mirpur Burio for the period from 19-6-1958 to 18-6-1960. According to the plaintiff he started his agency business and disposed of the stocks entrusted to him, that he used to maintain the register which was being checked by the officers of the Agricultural Department from time to time and such notes on checking were made by them in the stock registers. It was further pleaded that he used to deposit sale-proceeds and comply with the orders made by the respondent No, 4 from time to time and that he carried out agency business in accordance with letter and spirit of the terms of the said agreement. According to the plaintiff on the termination of the agreement on 27-2-1961 the stocks and gunny bags remaining in balance with him were handed over to the Agricultural Inspector, Garhi Khairo, who after verification and thorough checking took possession of the same but he did not settle plaintiffs' accounts for the rent of the godowns, commission on the sale of the stocks, the premium on purchases of paddy seeds and cost of the gunny bags purchased by him from the market during the period of agency. It was further pleaded that after close of agency the plaintiff approached the respondents from time to time through notices and application for settlement of accounts but to no avail. As no settlement of accounts took place, the respondent No, 5 issued notice to the plaintiff on 21-8-1964 calling upon him to pay an amount of Rs, 66,358 with the threat that he would otherwise be dealt with under the Land Revenue Code, the plaintiff filed First Class Suit No, 17 of 1964 in the Court of District Judge, Jacobabad wherein he claimed the reliefs reproduced above.
2. The defendants contested the suit and filed their written statement wherein amongst others, it was pleaded that the suit was not maintainable in law and that the same was undervalued and liable to be dismissed with costs.
3. On the pleadings of the parties a number of issues were framed. Since however the decision of this appeal has turned on the following issues, the same are produced hereinbelow :- Issue No, 1.-Is the suit maintainable in law ?
Issue No, 8. -Whether the plaintiff is entitled to the relief claimed ? Issue No, 12.-What should the decree be ?
4. The plaintiff examined himself (Exh. 61) and also produced one Abdul Malik (Exh. 58). The defendants examined Muhammad Ibrahim (Exh. 87).
' After recording the evidence and hearing the parties, the learned trial Court by judgment passed on 27-9-1966 granted the following relief : "In view of My finding on issue No, 7, a declaration shall issue, that an amount of Rs, 65,140.26 paisa are due by the plaintiff to the defendants and not Rs, 1,13,195.99. The defendants were claiming excessive amount and, therefore, the parties shall bear their own cost of the suit."
5. Being aggrieved by the above-mentioned judgment and decree this appeal has been preferred by the plaintiff.
6. At the time of hearing of the appeal the counsel for the appellant (plaintiff) was granted time to address the Court on the question of maintainability of the suit for accounts by an agent, against the defendants (his principals) in the light of the facts pleaded in the plaint and the evidence given by him.
7. The learned counsel addressed the Court on the question involved in the case and referred to the agreement dated 19-6-1960 (Exh. 68) between the parties and then relied upon the last para. Of his letter dated 13-3-1961 wherein it was stated by him : "Further I beg to state that from the beginning, Agency Account books were not supplied by the E. A.
D. A., Jacobabad hence I am unable to maintain proper record."
' Having referred to the above-mentioned letter the learned counsel made reference to the evidence of Mr. Muhammad Ibrahim Junior Auditor, office of the D. D. A. Khairpur, who was examined as D. W. 1 (Exh. 87) and had deposed as to what supplies were made by the defendants and what amount was payable as commission to the plaintiff. The learned counsel submitted that the plaintiff had claimed only Rs, 600 as commission in respect of transaction of 181 maunds of Kangni paddy seeds (without bags) whereas this witness stated that Rs, 1,803.75 were payable to the plaintiff. The learned counsel, therefore, contended that the suit for settlement of accounts filed by the plaintiff appellant in the circumstances was maintainable as the defendants were in the know of all the transactions and accounts.
8. The learned counsel then referred to the provisions of Order VII, rule 2, C. P. C. Reference was also made to para. 785 of the Halsbury's Laws of England, Volume I (4th Edition).
' Finally the learned counsel relied upon the case of Narain Das Morardas Gajiwala and others v. S. P. A. M. Papammal and another (1) and placed reliance on the observation of the Supreme Court of India appearing in
(1) AIR 1967 SC 333 para. 5 of the judgment reproduced hereinbelow in support of his plea that the plaintiff's suit for rendition of accounts was maintainable.
"In our opinion, the legal position in India is not different. Though an agent has no statutory right for an account from his principal, nevertheless there may be special circumstances rendering it equitable that the principal should account to the agent. Such a case may arise where all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim for commission against his principal. The right of the agent may also arise in exceptional case where the remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into. This view is borne out by the decision of the Madras High Court in Ram chandra Madhavadass Co. v. Moidunjutti Birnnkitti and Bros., AIR 1938 Mad. 707, of the Lahore High Court in Ram Lal Kapur and Sons v. Asian Commercial Assurance Co. Ltd. AIR 1933 Lah. 483, and of the Nagpur High Court in Basant Kumar v. Roshanlal, I L R 1954 Nag. 435 (AIR 1954 Nag. 300). In the present case the High Court has found that the transactions in respect of which the plaintiff is entitled to commission are peculiarly within the knowledge of the principal alone, viz. Of the Surat firm. There is also prima facie evidence adduced on behalf of the plaintiff in this case in support of his allegation that the Surat firm had made direct sales to customers in contravention of the contract of sole agency granted to the plaintiff. The High Court referred in this connection to the evidence of the plaintiff Exhs. A-26 and A-28 which are complaints made by the plaintiff to the Surat firm with regard to direct sales made to Mr. M. K. Lyengar. The High Court has also observed that to none of the letters or telegrams from the plaintiff the Surat firm or their accredited representative Ratilal cared to send any reply. We are, therefore, of the opinion that in the special circumstances of this case, the plaintiff is entitled to sue the Surat firm for accounts for the material period."
' Without disputing the above principles, I am however of the opinion that the plaintiff has not been able to show that his case falls within the categories of the cases referred to by the Supreme Court of India so as to justify the maintainability of the suit by the plaintiff, an agent against his principals/the defendants.
9. I would now like to refer to the facts of the above referred case of Naraindas v. Papammal, to appreciate the principles discussed therein. Messrs Naraindas Murardas Gajiwala and Lakhshmi Chand and Company were the firms of partnership who carried on business in Bombay and had dealings with another firm who acted as their agents for selling their goods in three districts of State of Madras. The plaintiff in the referred case had brought a suit for rendition of account to ascertain the amount due and payable to him on the plea that his firm was constituted as agent for selling goods of the defendant for a period of five years agreeing to pay a commission at a flat agreed rate for all sales effected in those territories either on orders booked by him or not. The case of the plaintiff further was that the principals circumvented the terms of the contract of sole agency and privately effected sales through others or direct to customers in those territories. The plaintiff also pleaded that their firm as part of the agreement of sale agency agreed to have its indebtedness under a promissory note adjusted towards the commission that might have been earned. On the above pleas a suit for rendition of accounts was filed against the principal in order to ascertain the amount due and payable to him. A counter-suit was filed against the plaintiff for recovery of money due under the mentioned promissory note. Both the suits were tried together by consent of the parties. The subordinate judge held that the plaintiff was constituted as the sole agent on commission basis for three territories for a period of five years and that the principals were liable to render account of their sales in these territories and granted preliminary decree for rendition of accounts and the amount of decree granted on basis of promissory note in favour of the principals was ordered to be adjusted out of the commission that may be found due and payable on taking of accounts in suit filed by the agent. Both the decrees were challenged in appeals which were heard by the High Court but the same were dismissed. In the circumstances, the question which came up for consideration before the Supreme Court of India was whether the plaintiff as an agent was entitled to bring a suit for settlement of accounts against the respondent principal.
' Reference may also be made, to observations made by the learned Court in the same case which reveals that special circumstances existed in the said suit rendering it equitable that the principal be held liable to render account. The learned Court observed :- "There is also prima facie evidence adduced on behalf of the plaintiff in this case in support of his allegation that the Surat firm had made direct sales to customers in contravention of the contract of sole agency granted to the plaintiff."
' Having observed as above, it was held :- "We are, therefore, of the opinion that in the special circumstances of this case, the plaintiff is entitled to sue the Surat firm for accounts for the material period."
' Thus, it would be seen that the case for rendition of accounts by an agent against his principal before Supreme Court of India was decided on its peculiar facts.
10. This brings us to consider the law and the principles governing the right of an agent to sue his principal for accounts. The right of a principal to claim rendition of accounts from his agent is governed by the provisions of section 213 of the Contract Act which lay down that an agent is bound to render proper accounts to his principal on demand. No such obligation is imposed by law upon the principal so as to make him liable as an accounting party to his agent. Principal may however become an accounting party under special circumstances or under trade, usage or a definite contract. Reference may be made to the case of Ghulam Qutab-ud-Din Khan v. Mian Faiz Bakhsh and others (1). The facts of the said case were that a suit for adjustment of accounts was brought by plaintiffs, sons of a contractor, who it was alleged did some building work for the defendants. A preliminary decree for rendition of accounts was passed by the trial Court and the judgment was upheld on appeal by the District Judge. In the appeal filed against the above judgment a learned Single Judge of the High Court while allowing the appeal cited with approval the following observations made in the case of Jowahar Singh v. Haria Mal (2) : "The right to claim a statement of accounts is an unusual form of relief only granted in certain specific cases and is only to be claimed when
(1) AIR 1925 Lab, 100 (2) 6 P L R 1900 the relationship between the parties is such that this is the only relied which will enable the claimant to satisfactorily assert his legal rights."
' The learned Judge, has proceeded to hold : "The mere fact that the defendant did keep an account does not entitle the plaintiffs to the relief claimed. In my opinion, on the evident produced it has not been established that the defendant was under an obligation to keep an account for the plaintiff's benefit."
11. In the case of Hanuman Bakhsh v. Balrnukand Kanhaya La! (0 after discussing the case law on the subject the learned Court held : "An agent is not ordinarily entitled to institute a suit for accounts against his principal, and that his suit must be for recovery of specific amoun alleged to be due to him from the principal."
12. Reference may also be made to the case of Gulabrai Dayaram v Indian Equitable Insurance Co.
(2) where it was held as follows : "Under section 213, Contract Act, a principal has a statutory right against his agent for an account, but the converse does not apply that is to say, the agent has no statutory right of an account from hi principal. Nevertheless, where it is equitable from the particular circumstances and the relations of the parties that one should account to the other, a suit for an account will lie."
' Learned Judges further proceeded to hold : "If, therefore, the appellant could satisfy us that all the accounts were in the possession of the defendant firm, and rightly in the possession of the defendant firm, and that he has not and should not have his possession accounts which would enable him to determine hi claim for commission against them, we think that he will be entitle to sue for an account. This remedy is after all an equitable remedy, an if we should consider that he has for instance no accounts because his own failure to keep them, due to his own fault, we should no grant him the relief he seeks. Even less would we grant him the relic he seeks, if we should be of the opinion, as the lower Appellate Court was of the opinion, that he has accounts in his possession which h withholds."
13. Facts of the case of Mob o Mal Khaim Chand v. Tara Singh (3) we that the plaintiff claimed a certain sum of money from the defendant as he of one Lahni Bai who had deposited certain money with the defendant. The plaintiff instituted a suit for account against the defendant. The plaintiff knew or could have known what was the state of accounts between Lahn Bai and the defendant, the learned Court proceeded to hold that the plaintiff should have filed the suit on an account and not for an account and even if the plaintiff die not know how much was due to Lahni Bai it was open to him in suit on account, to value his relief according to his own estimate.
14. In the case of Firm of Jessaram Bhagwandas v. Ratanchand Fate chand (4) the learned Judge observed that an agent could not maintain a suit in equity against his principal for an account unless he made out special case. In the above-mentioned case the other side had placed reliance upon the passage in the Halsbury's Law of England to the effect that an agent has a
(I) AIR 1927 Lab. 701 (2) 167 I C 929
(3) AIR 1936 Sind 9 (4) 78 I C 846 right to sue his principal and that unless the accounts are of a complicated nature they will be taken in an ordinary action in the King's Bench Division. Repelling the above contention it was pointed out that the said passage cannot be interpreted as meaning that an agent has always a right whether such circumstances exist or not to claim an account against his principal.
' In the case of Kesho Ram v. Firm Jotisarup Goela and Sons and others (1) be learned Judge placing reliance upon the case of Hanuman Bakhsh and thers v. (Firm) Balmukand Kanhaya Lad reaffirmed the principles that "When the relationship of principal and agent is found to be subsisting between the parties it is the principal who is entitled to accounts against the agent and the agent is ordinarily not entitled to claim accounts against the principal."
15. In the commentary on the Law of Contract by Mulla the principles overning a suit by an agent against his principal are summarised in the following words :- "That though an agent has no statutory right to sue for an account against the principal nevertheless in the special circumstances it may be equitable that the principal should account to the agent. His right may also rise in exceptional cases depending upon the dealings which could not be known to him. But the relationship of principal and agent is not alone sufficient to entitle an agent for an account in equity when the matter can be dealt with in an action at law."
16. Reference may also be made to the principles discussed under sec-ion 213 in the commentary (under section 213) in Sanjiwa Row's Law of contract (8th Edition) as to the circumstances where an agent may file suit or rendition of account against his principal. The learned author has stated he the principles as laid down by various Courts as follows "As there is no provision for a suit for accounts by the agent either in the Contract Act or in the Limitation Act, no such suit will lie. Normally such suit for accounts will not lie but the existence of special circumstances will justify such a suit for accounts. It is only in exceptional cases where his remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into that a suit by an agent for accounts against his principal might be competent.
' As the right of principal to have an account from his agent is founded on the statute, such a suit would always lie. Nevertheless, there may be circumstances rendering it equitable that principal should account to the agent. Such a case may arise where all the accounts are in the possession of the principal, and the agent does not possess accounts to enable him to determine his claim for commission against his principal.
' It is only in exceptional cases where agent's remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of amount due to him unless the accounts of his principal are gone into, that a suit by an agent for accounts against his principal might be competent.
' Where the accounts between the parties were mutual the final balance cannot possibly be struck unless and until the accounts are rendered
(1) 140 I C 15 by both the parties. It is true that normally speaking an agent cannot bring a suit for rendition of accounts against his principal. In exceptional cases, however, the Courts have held that such a suit does lie."
17. In the light of the above, we may now examine the case of the plaintiff. Under the agreement executed between the parties, which is the foundation of his case, the defendants had appointed the plaintiff as their commission agent, who was entrusted with the functions of selling seeds and manure etc. For the period from 19-6-1958 to 18-6-1960 on the terms and conditions which inter alia provided :-
(a) Under clause (1) stocks of cereals, manure, seeds for sale to the public were to be delivered to the defendants.
(b) By clause (4) the appellant was required to maintain accurate and up-to-date accounts of all transactions connected with the sale of the seed and manure in the various registers and ledgers prescribed for the purpose and that he was required to make these accounts available for inspection and scrutiny at all times by the Seed Depot Officer or any other officer of the department duly authorised in that behalf.
(c)Clause (6) of the agreement provided that on the conclusion of the sowing season the commission agent shall, by a date to be specified by the Seed Depot Officer render, in the prescribed form, a full account of the transactions conducted by them.
(d) Under clause (7) for the performance of the functions under the agreement the plaintiff as the commission agent was to be paid by the Government commission at the agreed rate as provided in the agreement.
(e)According to clause (10) the seed and manure supplied to the plaintiff by the Government was deemed to remain the property of the Government in possession of the plaintiff as commission agent by way of trust, and their ownership during such possession shall vest in the Government.
(f) Under clause (14) on the' expiry of the period of agreement or, if sooner determined, on the termination thereof, the commission agent (plaintiff) was required to deliver to the Seed Depot Officer or any officer authorised by him in this behalf the quantity of seed or manure, as the case may be, lying still unsold ; and (g)Clause (15) provided that the plaintiff Commission Agent shall be responsible for the safe custody of the seed or manure entrusted to him and to account for the same and to make good the loss to Government in case of damage or loss unless it was caused by viz. Major and except in so far as it may be allowed by the Director of Agriculture, the commission agent (plaintiff) remained liable to make good the loss to the Government.
18. At the time of the trial of the suit the plaintiff examined himself as Exh. 61, wherein he deposed to the effect that on termination of the agreement he made repeated applications for settlement of accounts, which was not done and instead in retaliation a demand was made upon him by Mukhtiarkar, Garhi Khairo, on 21-8-1964 to pay Rs, 66,355.91. He then proceeded to state :- "I deposit the sale-proceeds in the National Bank. I produce Bank Challans (Exhs. 67/1 to 11). I supplied 181 maunds of paddy seeds to Abdul Rashid Khosa at the direction of the E. A. D. A. I produce letter of the E. A. D. A. (Exh. 68). I sent 2,500 maunds of paddy seed to Ghotki and Panno Akil at the direction of E. A. D. A. I produce 4 Railway receipts (Exhs. 69/1 to 4). I had disposed of 2,319 maunds of paddy as per direction of E. A. D. A. And credited sale-proceeds. I had repaid the amount of Rs, 52,500. I produce a photostat copy of the receipt (Exh. 70)."
' Having stated as above, in his cross-examination the plaintiff expressly made a statement as to the amount, which according to him became payable to him by the defendants. The relevant portion of his deposition is reproduced hereinbelow : - "I claim Rs, 6,000 as rent for godown for two years at the rate of Rs, 250 p. m. I claim Rs, 1,600 as commission and Rs, 4,500 as premium and Rs, 4,500 as cartage. I claim Rs, 1,861 and annas four as cost of gunny bags and miscellaneous expenses. I produce the list (Exh. 82)."
19. In the light of the principles discussed above I find that the plaintiff has not been able to make out any special or equitable case either on evidence or otherwise justifying the maintainability of a suit for accounts by hi as an agent against his own principals, the defendants. According to plaintiff's own case in the plaint he was appointed commission agent, entrusted with the goods and was obliged to maintain the accounts an to render accounts to the respondent on termination of his agency. Under the agreement vide clauses (6) and (15) the liability to keep and render proper accounts was expressly placed upon the plaintiff and according to his own statement in evidence he knew the exact amount due to him. Thus, the suit for rendition of accounts brought by the plaintiff/an agent against his principals, the defendants, was totally misconceived.
21. Apart from the fact that no case for maintainability of the suit for accounts by the plaintiff against the defendants could be made out, a perusal of his evidence shows that the plaintiff was fully aware of the details of transactions made by him and the total amount which according to him was payable by the defendants, so as to enable him to have brought a suit for specific sum of money. The discussion as above shows that plaintiff failed to prove that the defendants are accounting party or that any special circumstances existe to justify maintainability of suit for rendition of accounts brought by the plaintiff (an agent) against his principals (the defendants).
The suit, therefore, as framed for rendition of accounts by an agent against his principals is be to be not maintainable.
22. This brings us to the text question, which arises in this case as to whether the learned trial Court was justified to have granted the relief to the effect that a declaration shall issue that an amount of Rs, 65,140.26 was due by the plaintiff to the defendants and not Rs, 1,13,195.99 which amount the defendants were claiming from the plaintiff. The law relating to the grant of declaration is laid down in section 42 of the Specific Relief Act. It has been held by the Honourable Supreme Court in the case of State of Pakistan v. Mehrajuddin (1). . . . . By the terms of the Specifie Relief Act, 1877 any person entitled to a legal right or character may institute a suit against any person denying such right or character and the Court may in its discretion make a declaration that he is so entitled, provided that no declaration
(1) PLD 1959 SC (Pak.) 147 may be given where a further or consequential relief deriving from the declaration which could have been claimed by way of relief in the same Court and in the same suit has not been claimed.
The purpose of this jurisdiction vested in the civil Courts is plainly to prevent future litigation, and to remove existing sources of controversy."
' Reference may also be made to the case of M. A. Naser v. Chairman, Pakistan Railways (1) where while interpreting the provisions of section 42 of the Specific Relief Act the Honourable Supreme Court held :- "Under the provisions of section 42 of the Specific Relief Act, 1877 a person entitled "to any legal character" or to "any right to property" can institute a suit for a declaratory relief in respect of his title to such legal character or right to property. Section 42 does not contemplate a suit for a declaration that a catering contract between a contractor and a Railway Administration to supply refreshments in Refreshment Rooms of the Railway and to run their buffet cars, was still subsisting."
' Reference may also be usefully made to the case of Malik and Haq v. Muhammad Shamsul Islam
(2) wherein principles as to grant of declaratoy decree where a plaintiff is entitled to claim further relief came up for consideration. On the facts of the said case the Honourable Supreme Court observed :- " If a plaintiff is entitled to money from the defendant he cannot claim declaration as to his being so entitled, he must sue for money."
' In the light of the principles thus laid down authoritatively, I find that the appellant was not entitled to and that the learned trial Court was not justified to hold that :- "A declaration shall issue that an amount of Rs, 65,140.26 is due by the plaintiff to the defendants and not Rs, 1,13,195.99."
' The relief as above granted by the learned trial Court is neither warranted by provisions of section 42 of the Specific Relief Act nor could be justified in view of the law laid down by the Honourable Supreme Court of Pakistan.
23. The upshot of the above discussion is that the plaintiff has failed to make out the case that he, as an agent, has any special circumstance or equity in his favour contractual or otherwise which could prove that the defendants are accounting party or justify maintainability of a suit for rendition of accounts against his principals. I also find that the relief granted by the learned trial Court directing that declaration be issued that certain amount is due by the plaintiff to the defendants is also erroneous and liable to be set aside.
24. For the reasons stated above, this appeal fails and is dismissed with no order as to costs.
(1) PLD 1965 SC 83 (2) PLD 1961 SC 531