Delhi District Court
Mr. Mohinder Singh vs Mr. B.R. Kapoor & Co on 5 November, 2020
IN THE COURT OF SH. JOGINDER PRAKASH NAHAR,
ADDITIONAL DISTRICT JUDGE04, CENTRAL, TIS HAZARI
COURTS, DELHI
Suit No.215171/11
Mr. Mohinder Singh
S/o late Heera Singh
R/o J238, Basement,
Saket, New Delhi 110017 ......Plaintiff
Versus
1. Mr. B.R. Kapoor & Co.
Chartered Accountant
Flat No.M, Sagar Apartment,
6, Tilak Marg, New Delhi - 110001.
2. Mr. B.R. Kapoor (since deceased)
A. Smt. Simmi Dev Kapoor (Daughter)
B. Sh. Sameer Dev Kapoor (Son)
All R/o D252, Defence Colony,
New Delhi - 110024.
3. Mr. K. Om Prakash
S/o Mr. P. Kandaswamy
Chartered Accountant
R/o 48, Barnaby Road,
Chennai - 60010.
4. Mr. Sunil P. Gupta,
Chartered Accountant
Suit No.215171/11
Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 1
Shop No. 4, B/24, Victorian,
Shastri Nagar, Opp. Lokhandwala Road, Andheri (West),
Mumbai - 400053.
5. Mr. Virender Kumar Malhotra
S/o Mr. V.P. Malhotra,
Chartered Accountant,
R/o A48, Gujrawala Town,
Delhi 110009 ......Defendants
Date of Institution : 24.11.1999
Date of Arguments : 17.08.2020
Date of judgment : 05.11.2020
Suit for Dissolution of Partnership Firm and Rendition of
Accounts
JUDGMENT
1. The brief facts of the case are that the plaintiff has filed the present suit for dissolution of partnership firm and rendition of account. The judgment to this effect was passed by my Ld. Predecessor dt.29.08.2014 which was set aside under Order XLVII read with Sec.114 and Sec.151 CPC vide order dt.31.10.2018. Thereafter opportunity to both the parties was granted to file objections on report of Ld. Court Commissioner Sh. Deepak Vashist who was examined as CW1 and questions were put by both the parties to the Ld. Court Commissioner. The plaintiff was also allowed to examine auditor's report by Jitender Chanana & Co. on Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 2 his application under Rule 14 of Order VII and Rule 17 of Order XVIII CPC for determination of account. The Auditor Sh. Jitender Chanana was examined as PW3. However plaintiff has led additional evidence which is recorded as PW3 and to avoid duplicacy the same be read as PW1 in view of the fact that the plaintiff was already examined as PW1 before the present Court on 18.01.2005 and crossexamination was deferred. The cross examination was done before Ld. Local Commissioner. The issues in the suit were framed on 21.12.2004 and additional issue no.6A was framed in the counter claim on 28.04.2005. All the issues are dealt with in preliminary decree dt.05.07.2005. The issue no.6A was decided in favour of the plaintiff and against the defendant in the preliminary decree. The preliminary decree has become final and binding between the parties which merge in the final decree. The matter is pending for final decree after ascertaining accounts of defendant no.1. It was held in case tiled Sh. Parmod Kumar Gupta vs Smt. Ram Murti Devi And Ors. on 27 July, 2017 by Hon'ble High Court Of Delhi At New Delhi RFA No. 309/2006 as under.:
6. It is trite that in every suit for dissolution of partnership and rendition of accounts every partner is both a plaintiff and a defendant meaning thereby a partner is a plaintiff to the extent that he has to get rights in the partnership firm and the partner is a defendant to the extent that he is liable Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 3 to render accounts of any of the assets etc of the partnership firm in the hands of such partner. Every partner therefore has a right and a liability and is therefore both a plaintiff and a defendant simultaneously in a suit for dissolution of partnership firm and rendition of accounts.
7. Therefore, to the extent that that the trial court holds that in a suit for dissolution of partnership and rendition of accounts such as the present every party to the suit is both the plaintiff and the defendant, that is a correct proposition of law. Also, it is also correct that there can be a compromise between limited parties to a suit subject to the fact that compromise will only bind the parties to the compromise and will not prejudicially affect rights of any other party to the suit. Therefore, so far as the appellant/plaintiff and the respondent no.3/defendant no.3 are concerned, whatever are their disputes inter se as partners in the partnership firm of M/s Krishan Oil and Flour Mills the same will stand satisfied by the compromise order dated 26.5.2000 passed in the suit. The question which then arises is what next.
8.(i) It is seen that all the four parties to the suit admitted: (a) the existence of the partnership, (b) the fact that four parties to the suit were partners, and
(c) what were the profit and loss sharing ratios of the partners as has been stated above. In such a scenario in a suit for dissolution of partnership and rendition of accounts, if already there has not taken place dissolution of the firm and complete division of assets and settlement of all issues in terms of Section 48 of the Partnership Act, then, as per Order XX Rule 15 CPC a preliminary decree has Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 4 to be passed declaring the existence of partnership, who are the partners in the firm, what is the profit and loss sharing ratios and fixing the date of dissolution of partnership. After passing of the preliminary decree further proceedings have to be taken for passing of the final decree, and for which ordinarily a local commissioner is appointed to go into the accounts of partnership firm and also to decide who is the accounting party and what is the extent/amount which one or more of the accounting parties/partners have to render to the other partners of the firm.
The facts as detailed at para no.1 to 7 in judgment dt.29.08.2014 of the present case are reproduced here under which are so pleaded by the parties in the plaint and WS : "By this judgment, I shall dispose of suit, entitled as, Mahinder Singh Vs. M/s B.R. Kapoor and Co., bearing suit no.171/11/99. The present suit has been filed for dissolution of partnership firm and rendition of accounts It has been prayed that a decree for dissolution of firm, named "B.R. Kapoor & Co., Chartered Accountants" and rendition of accounts be passed in respect of the defendant no.1 firm starting from the accounting year 199091 to 17.11.1999. It has further been prayed that a decree of grant of permanent injunction be passed restraining all the partners and persons claiming under them from dealing with all the properties of the dissolved partnership firm in any manner, including operating the Bank Accounts, selling, disposing off or transferring the assets of the firm and collecting the dues of the firm from its debtors etc. till the receiver Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 5 is appointed by this court and he assumes control of the assets of the firm. It has also been prayed that Receiver be appointed with directions to immediately take control of all the assets of the partnership firm and to wind up the affairs of the firm in accordance with law. It has further been prayed that after ascertaining the accounts, a final decree for dissolution and rendition of accounts and distribution of profits be passed, thereby ascertaining the share of the plaintiff upto the tune of 30% and directing the payment thereof to the plaintiff. It has also been prayed that costs of the suit be also awarded in favour of the plaintiff and against the defendants.
2 The brief facts of the case are that the plaintiff and the defendants no. 2 to 5 are Chartered Accountants and are the partners of the defendant no.1 firm. It is further the case of the plaintiff that this firm was started as a Proprietorship concern by the defendant no.2 and later on the same was converted into a Partnership concern at the time of plaintiff's joining this firm as a Partner on 01.04.1969. It is further the case of the plaintiff that the firm was reconstituted, on 01.04.1980, on the joining of Mr. Adesh Kumar Jain as a partner. It is further the case of the plaintiff that partnership firm continued with the same partners till 01.01.1983, when Mr. Adesh Jain retired from the Partnership and the defendant no. 3,4 and 5 joined the firm as partners. It is further the case of the plaintiff that the profit sharing ratio was determined as under :
Defendant no. 2 63%
Plaintiff 30%
Defendant no.3 1%
Suit No.215171/11
Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 6
Defendant no. 4 1%
Defendant no. 5 5%
It is further the case of the plaintiff that the copy of the partnership deed, dated 01.01.1983, is AnnexureA. It is further the case of the plaintiff that it was provided in Clause 10 of the said Partnership Deed that the proper books of accounts shall be kept by the Partnership in regard to all business transactions and the same could be inspected by each partner. It is further the case of the plaintiff that defendant no. 1 firm was working smoothly till 1989. It is further the case of the plaintiff that in the second half of the year 1989, the defendant no. 2 started sidelining and avoiding the plaintiff from conducting the day to day affairs of the partnership firm. It is further the case of the plaintiff that the defendant no. 2 had developed some malafide intentions and he wanted to remove the other partners from the firm but instead of following the legal way, he started using cheap tactics to harass and malign the plaintiff and other partners. It is further the case of the plaintiff that the plaintiff issued a cheque bearing no. 815785 dated 19.9.1989, out of the Bank Account of the Firm for Rs. 12,9701 for meeting his tax. It is further the case of the plaintiff that the said cheque was dishonoured by the bankers of the defendant no.1 firm and the reason given was that the signatory was not authorized to operate the account. It is further the case of the plaintiff that, on enquiry, he came to know that the defendant no. 2 had unilaterally withdrawn the signing authority given to the plaintiff without consulting or informing the other partners of the firm. It is further Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 7 the case of the plaintiff that he served a legal notice, dated 20.8.1999, on the defendant no.2 and other partners, calling upon the defendant no 2 to render the true accounts of the defendant no. 2 firm within seven days, the said legal notice was duly served but no reply has been received. The copy of the legal notice, with proof of service, is Annexure T. It is further the case of the plaintiff that he was left with no alternative, but to dissolve the firm and, accordingly, he issued a legal notice, dated 16.11.1999, to all the partners to dissolve the said firm under clause 17 of the Partnership Deed, dated 01.01.1983, as provided in section 43 of the Indian Partnership Act, 1934. It is further the case of the plaintiff that the said dissolution was to take effect from 18.11.1999. It is further the case of the plaintiff that the public notice of the same was also given by getting the same published in Daily Statesman and Veer Arjun. It is further the case of the plaintiff that the copy of the notice of dissolution, with proof of service on the defendants, is Annexure U and the copy of the public notice duly published in newspapers is Annexure V. It is further the case of the plaintiff that since no response had been received from the defendants till date accepting the dissolution, so the prayer to dissolve the firm has also been made in the suit, under section 44
(g) of the Indian Partnership Act, 1934. It is further the case of the plaintiff that, all the accounts are in the custody of the defendant no. 2 and the relief of rendition of accounts has been claimed against the defendant no.2, only. It is further the case of the plaintiff that the cause of action firstly, arose on 31.3.1991, when the defendant no. 2 refused to render the accounts of the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 8 defendant no.1 firm for the accounting year 199091. It is further the case of the plaintiff that it kept on arising on the closing of every accounting year and, accordingly, it lastly arose on 31.3.1999. It is further the case of the plaintiff that cause of action further arose on 17.11.1999 when the notice of dissolution was given It has been prayed that the suit be decreed with interest as well as with costs, in favour of the plaintiff and against the defendant, as prayed for by the plaintiff.
3) In the written statement filed on behalf of the defendants, it is the case of the defendants, that the present suit is false, frivolous, vexatious and misuse of law, therefore, the present suit is liable to be dismissed, as not maintainable. It is further the case of the defendants that the plaintiff has no cause of action to proceed against the defendants, thus, the present suit is able to be dismissed for want of cause of action. It is further stated on behalf of the defendants that the present suit is without any cause of action. It is further stated on behalf of the defendants that the present suit as framed is not maintainable in law qua the aforesaid parties in as much as there is no cause of action, whatsoever, that has arisen against the said parties and in favour of the plaintiffs. It is further stated on behalf of the defendants that the present suit, is based on concocted facts and misrepresentation and is in fact, an abuse of process of the Court with a view to extract money properties from the defendants by pressure tactics. It is further stated on behalf of the defendants that the plaintiff has not come to the court with clean hands and has suppressed the material facts from the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 9 court. It is further stated on behalf of the defendants that advalorem court fees, as required by law, has not been paid on the plaint, even though the plaintiff has claimed a sum of Rs. Ten lacs, as the value of the suit. suit be dismissed with costs.
4. Replication to the written statement of defendants had been filed It has been prayed that the present.
5. In the present matter, plaintiff, Shri Mohinder Singh, examined himself as PWI, and Shri Lyakat Ali was examined as PW2. Plaintiff, Shri Mohinder Singh tendered his evidence by way of affidavit. The same is ExPW/A which bears his signature at point A and B He relied upon the documents i.e. Ext.PW1/1 to ExtPW1/57. This witness was crossexamined on behalf of the defendants. In his crossexamination, this witness deposed that even though the firm was dissolved, his statement in para2 is correct and there was no publication of dissolution by the defendant no.
2. He further deposed that defendant no.2 was working with them and was getting retainership fee and he was also getting amenities as a regular employee. He further deposed that he had not stated anywhere in his suit/plaint or in his affidavit that the defendant no.2 was getting any amenities from the aforesaid firm. He denied that he was not the authorised signatory in the Bank Account of the Firm. He further denied that he wrongfully collected the payments from various clients and not deposited the same in the Firm's Account. He denied that he had fabricated the documents of the car no. DDQ186, make Fiat, for transferring the same in his own name. He further denied that he had Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 10 embezzled the huge amount of the Firm. He denied that he has not been authorised to transfer any assets of the company, in his name due to the subsistence of the partnership or after its dissolution. He further denied that after stopping his authorization for operating of the bank account of the firm he adopted the means of embezzlement by endorsing the cheques in his name without authorization in oral or in writing. He denied that an amount of Rs.3,84,444/ stood against him in the name of the firm. He further denied mat he had filed the present case as counter blast because of the complaint made by the defendant no.2 to the Institute of Chartered Accountants. He denied that he was not entitled to any drawings from the partnership firm as it was suffering losses more so because of the embezzlement done by him. He further denied that the firm stood dissolved with effect from 01.4.1998. He further denied that he kept on writing various letters to the defendant no.2 only with a view to fabricate the record. He further denied that there is no cause of action for filing the present suit or the same has been filed with malafide intention for covering the fraud committed by him against the firm or as a counterblast of the complaint against him in PS Tilak Marg.
6) PW2, Shri Lyakat Ali. deposed that he has brought the summoned record i. e. Finding of the Council of Institute of Chartered Accountant of India dated 10 January, 2004. He further deposed that photo copy of the same is Ext.PW1/57.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 11
7) On the pleadings of the parties, vide order dt.21.12.2004 the following issues were framed, by ld. Predecessor of this Court, for consideration:
1. Whether the partnership was at will and on dissolution all assets and good will belonged to defendant no.2? OPD 1& 2.
2. Whether the firm was dissolved by defendant no.2 on 01.04.98? OPD 1 & 2
3. Whether the firm was dissolved vide legal notice dt.16.11.99 w.e.f. 18.11.99? OPP
4. Whether the plaintiff is entitled to preliminary decree as prayed? OPP
5. Whether the plaintiff is entitled to decree of permanent injunction as prayed? OPP
6. Whether the plaintiff is entitled to final decree of dissolution as prayed? OPP
7. Relief.
Additional issue framed vide order dt.28.04.2005 To what amount, if any is the defendant entitled as counter claim from the plaintiff? OPD"
Ld. counsel for plaintiff has relied on following citations :
1. Gupta Steel Industries & Ors. Vs. Balbir Kumar & Ors., AIR 1980 Punjab & Haryana 215
2. Labanya Debi & Ors. Vs. Govinda Malik & Ors., AIR 1960 Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 12 Orissa 66
3. Gourhari Das Vs. Jaharlal Seal, AIR 1957 (Cal) 90
4. M/s. Nathmal Bhaironbux & Co. & Ors. Vs. Kashi Ram & Ors. AIR 1973 Raj 271
5. Thottamma Vs. S.C. Subramaniyyan & anr., AIR 1922 Madras 219
6. Chiranjitlal Bajoria & Ors. Vs. Sudhir Jalan dt.22.09.2017 of Hon'ble High Court of Calcutta
7. Shreedhar Govind Kamerkar Vs. Yesahwant Govind Kamerkar & anr., 2006(13) SCC 481 of Hon'ble Supreme Court of India Ld. counsel for defendants has relied on following citations :
1. Allahabad Bank Vs. Krishan Chander Ramesh Chander & Bors., 177 (2011) DLT 429
2. Rajender Singh Vs. Lt. Governor, Andaman & Nicobar Islands & Ors., AIR 2006 Supreme Court 75 at para 15 & 16
3. M/s. Green View Tea & Industries Vs. Collector, Golaghat, Assam & anr., AIR 204 Supreme Court 1738
4. Smt. Rajpati Devi Vs. Ram Sewak Singh & Ors. AIR 2005 Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 13 Allahabad 242
5. Harish Mansukhani Vs. Ashok Jain, 2009 II AD (Delhi) 30
6. Gopal Krishnaji Ketkar Vs. Mohamed Haji Latif, 1968 LawSuit (SC) 116 of Hon'ble Supreme Court of India
7. Parsion Devi & Ors. Vs. Sumitri Devi & Ors., IV (1997) CLT 91 (SC) of Hon'ble Supreme Court of India
8. M/s. Swastic Industries Vs. Maharashtra State Electricity Board, IV (1997) CLT 94 (SC) of Hon'ble Supreme Court of India
9. Lily Thomas & Ors. Vs. UOI & Ors., (2000) 6 SCC 224
10. Punam Devi & anr. Vs. Divisional Manager, New India Assurance Co. Ltd. & Ors., AIR 2004 Supreme Court 1742
2. Vide preliminary decree dt.05.07.2005 issue no.1 is decided in favour of defendants no.1 & 2 and against the plaintiff.
Issue no.2 is decided against the defendants and in favour of the plaintiff. Issue no.3 is decided in favour of defendants and against the plaintiff and partnership stood dissolved w.e.f. from 01.04.1998 for all purpose. Issue no.4 is decided in favour of the plaintiff that the share of profit in the dissolved firm/defendant no.1 is 30% for the period 01.04.1989 to 31.03.1998. Issue no.5 is decided in favour of defendants and against the plaintiff. Hence the only issued pending disposal between the parties is Issue no.6 for passing of final decree Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 14 after taking of accounts as it is already held that the firm had stood dissolved w.e.f. 01.04.1998 under Sec.7 of Partnership Act, 1932. The share of plaintiff are found 30% out of profit of defendant no.1 firm from 01.04.1989 till 31.03.1998 with deduction of amount already received by the plaintiff and the value of Fiat car already transferred in the name of the plaintiff. For the purpose of taking account Ld. Local Commissioner Sh. Deepak Vashist, Advocate was appointed. The additional evidence led by the plaintiff is to be read only in this limited aspect of rendition of account between the parties. Judgment in the matter was granted by my ld. Predecessor on 29.08.2014 on which review petition was filed by the defendant no.2C on 30.09.2014 which was allowed vide order dated 31.10.2018.Thereafter ld. Local Commissioner was examined and cross examined as CW1 on 10.12.2018. PW3 Sh. Jitender Chanana was examined and cross examined on 06.04.2019. The plaintiff was examined and crossexamined as PW3 on 27.04.2019 (renumbered as PW1).
3. The Ld. Local Commissioner has tendered his report Ex.CW1/1 filed on 04.10.2005. The proceedings were conduced in presence of both the parties. The Ld. Local Commissioner had checked the accounts from year 198990 to the year 199798. It is deposed by Ld. Local Commissioner that it was agreed between the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 15 parties that account book for the year 198990 to the year 199798 be inspected on random basis. Since the matter pertains to year 2005 Ld. Local Commissioner could not recall the exact proceedings. It is deposed by Ld. Local Commissioner that he has done as per directions of the Court and with the consent of the parties.
4. PW3 Sh. Jitender Chanana could not produce the 20 years old record who has identified his signatures in photocopy of his Tax Audit Report for the financial year 199798. The original record has since been destroyed. The photocopy is Ex.PW3/1. He has not received an objection in respect of the said report.
5. PW1/plaintiff in crossexamination dt.27.04.2019 has deposed that in the year 1978 the office of the firm was shifted to Sagar Apartment measuring about 1000 Sq.ft. When it is put to plaintiff that it was 1300 Sq.ft. then PW1 is not aware about it. It is admitted that this property was owned by wife of defendant no.2 Ms. Saroj Kapoor who was not partner in the firm. Plaintiff is not aware about the settled rent or that the rent was Rs.1700/ per month. It is admitted by PW1 as correct that rent was paid to Ms. Saroj Kapoor from 1978 onwards. He has no idea that what is the rate per square feet or that it was Rs.7.50 per sq.ft. He is not aware if the rent was increased to Rs.7,500/ per month from 01.04.1988. It is admitted Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 16 as correct that the rent of the premises was increased from 09.04.1994 to Rs.10,000/ per month. Plaintiff has claimed that this was unilateral decision and he was not taken into confidence for this increase in rent. However PW1 did not write any letter objecting this increase in rent. PW1 is not aware if the prevailing rent in the year 1994 in the said building was Rs.25/ per sq.ft. It is admitted as correct by PW1 that in the year 1997 the rent was increased to Rs.20,000/ per month and security for a period of rent of twelve months was paid. PW1 is not aware that if prevailing rent in the area was Rs.40/ per sq.ft in the year 1997. PW1 is not aware that rent of Rs.1000/ per month was paid by the company w.e.f.01.04.1989 to Simmi & Sameer Associates Pvt. Ltd. for using residence D252, Defence Colony as part time office. PW1 does not know if rent was increased for this part time office from 01.04.1992 for a sum of Rs.1500/ per month. PW1 does not know if this rent was further increased to Rs.2000/ per month from 01.04.1997. PW1 is not aware if stipend paid to Ms. Simmi Kapoor to attend the firm was increased to Rs.1500/ per month in the year 199293 till 199394. PW1 is not aware if this stipend was increased to Rs.2000/ per moth w.e.f. 199495. PW1 is not aware if Ms. Simmi Kapoor has qualified as Chartered Accountant in the year 1996. PW1 does not agree with the payment of salary in the year 199798 Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 17 to Ms. Simmi Kapoor @ Rs.9000/ per month though he had never objected to any of these payment when they are not known to him. It is admitted that return of the firm are filed every year in respect of which balance sheet and financial statement are also prepared and filed with the income tax return. It is deposed by PW1 that income tax return filed of any years were not shown to him. However PW1 has failed to prove having raised this issue at any time with the defendant. It is admitted as correct that balance sheet and return of the partnership firm before income tax department are to be compulsorily signed by all the partners. PW1 has claimed that he did not sign them neither has written any letter for not signing them to the defendants. It is deposed by PW1 that he did sign declaration on Form no.12 that the firm is in existence. Thereby liability existed with the plaintiff to sign the income tax return and he had sufficient opportunity to examine the financial statement before his such signing of income tax return. It is duty of the plaintiff to submit duly signed income tax return which is required under law. When the plaintiff did not object nor asked for such financial statements in the relevant period then it has to be believed that the declarations so signed before income tax authority were duly submitted which bind the plaintiff as they have attained finality over a period of time. Similarly PW1 is not aware that Sh. Sameer Kapoor son of Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 18 defendant no.2 has joined as Article Clerk for the first time in the year 199293 on stipend of Rs.750/ per month or that this stipend/salary was increased to Rs.1000/ in the year 199394 or Rs.2000/ in the year 199495 or Rs.4000/ in the year 199798. PW1 is not aware that the car hire charges were Rs.30,000/ per month debited from accounts of firms since the year 1978. It is admitted as correct that Ms. Simmi Kapoor was paid car hire charges @ Rs.2500/ per month from the year 198990. PW1 has claimed that this agreement for payment of car hire charges to Ms. Simmi Kapoor through her legal guardian Ms. Saroj Kapoor is sham though PW1 never write or objected to about this payment to the defendants.
6. After hearing both the parties on the report of Ld. Local Commissioner it is noted that the ld. Local Commissioner has to submit report as per the directions contained in the Hon'le High Court Rules & Orders Chapter 1, Practice in the Trial of Civil Suits, Part M, Special Features of Certain Classes of Cases, (h) Suits for accounts wherein it is laid down that how accounts are to be taken. The relevant rules are reproduced here as under for ready reference : "(h) Suits for accounts
1. Account may be preferably taken after disposal of other points--Order XX, Rule 16, of the Code directs Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 19 that in all suits where it is necessary in order to ascertain the amount of money due to or from any party, that an account should be taken the Court shall before passing its final decree pass a preliminary decree directing such accounts to be taken as it thinks fit. This is the general rule though where the matter appears to be simple the Court may pass a final decree straightaway.
2. Filling of accounts and evidence--At the time of passing the preliminary decree, directing the rendition of accounts, the Court should decide the rights of the parties and as to who the accounting parties are and for what period the accounts are to be taken. In case of partners, their respective shares in the profits and loss of the joint business should be stated. Under Order XX, Rule 17, the Court can also give directions, in the preliminary decree or by any subsequent order, as to the mode in which the accounts have to be taken or vouched and may in particular direct that books of accounts shall be taken as prima facie evidence of the truth of the matters therein contained; with liberty to the interested parties to object to any portion of this account. In partnership cases books of account should be treated as prima facie evidence of the truth of the matters stated therein under the general law and a special direction in this regard is not necessary.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 20
3. Commission--After the preliminary decree the Court may go into the accounts itself but in cases where the accounts are lengthy or complicated it may be helpful to issue a Commission for the purpose. Rules 11 and 12 of Order XXVI indicate that the Commission may be for examination and adjustment of accounts only or the Commissioner may also be asked to report his opinions on the points referred for his examination. When the Court decides to issue a Commission, his duties shall be stated with precision and particularity. The Commissioner is neither an arbitrator nor the Judge and the determination of any issue in the case cannot be delegated to him. The Commissioner is to place himself as an assistant to the Court so as to explain the accounts and give to the Court all the information which the accounts give in order to enable the Court to decide; unless he is also ordered to report under Order XXVI, Rule 12(1) his own opinion on the points referred to for his examination.
4. Directions to Commissioner--(1) If in any suit or matter it is necessary to take an account the order or preliminary decree of the Court shall contain the following direction as far as in the opinion of the Court issuing the commission they are adopted to the requirements of the case:
(a) The nature of the account to be taken.Suit No.215171/11
Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 21
(b) The date from which and the date to which the account is to be taken.
(c) The name of the party by whom a statement of account is to be filed.
(d) The period within which the statement of account, objection and surcharge are to be filed.
(e) The date on which the Commissioner is to submit his report.
(f) Any other matter on which the Court may think it necessary to give, or the Commissioner may desire to obtain, its instructions.
(2) The statement of account shall be in the form of a debtor and creditor account and shall be verified by the accounting party or his agent. The items on each side of the account shall be numbered consecutively and a balance shall be shown.
(3) The statement of an objection to an account, or to the report of a Commissioner, shall specify the items to which objection is taken by reference to their number in the account or report, or the date of the item and page of a particular book of account.
(4) The statement of surcharge shall specify the amount with respect of which it is sought to charge the accounting party, the date when, the person from Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 22 whom, and the particular account on which, the same was received by him.
(5) The statement of objection or surcharge shall also state (a) the grounds of each objection and surcharge, and (b) the balance, if any, admitted or claimed to be due; and it shall be verified by the affidavit of the party concerned or his agent.
(6) If any party fails to file his statement of account or objection and surcharge, within the period allowed, the Commissioner shall report the fact to the Court, and on application of defaulting party, the Court, may extend the period or direct the Commissioner to proceed ex parte as regards such party or direct any other party to file a statement of account, or the Court may proceed to decide the suit forthwith on the evidence before it.
Evidence shall not be admitted with respect to an objection or surcharge not included in a statement of objection or surcharge.
(7) If the Commissioner is unable to submit his report within the time fixed by the Court he shall apply to the Court for an extension of the time giving reasons thereof and the Court may extend the time or cancel the Commission and appoint a new Commissioner.
(8) When the case before him is ready for hearing, Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 23 the Commissioner shall after reading the statement filed before him and after examining the parties, if necessary, ascertain the points on which the parties are at issue and require them to produce their documentary or oral evidence on such points.
(9) After the evidence has been duly taken and the parties have been heard, the Commissioner shall submit his report together with a statement in the form of a diary of the proceedings heard before him each day. If he is empowered under Order XXVI, Rule 12(1) to state his opinion on the matter referred to him he shall append to his report schedules setting out
(a) the contested items allowed or disallowed,
(b) the reasons for allowing or disallowing them,
(c) the amount found due,
(d) the name of the party to whom it is due, and
(e) the name of the party by whom it is due."
7. The report of Ld. Local Commissioner on record is Exhibit CW1/1. From page no.31 to 64 showing balance sheet billing from 31.03.1989 till 31.03.1998. The balance sheets are identified by the accounting party through CA Sh. Chanana on behalf of the proprietor of the firm. The agent can also verify the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 24 account. However the items on each side of the accounts though not numbered consecutively has shown the balance. The accounts are examined in detail for the period 19891990 and 19971998. At para no.6 of the report it is mentioned that the parties have mutually agreed that on random basis the account of any two years may be taken into consideration and therefore accounts are taken only for the abovesaid period. The balance sheets are filed for the entire period. Therefore the documents were so made available by the defendants for such examination at the time of taking of account. The report of ld. Local Commissioner is signed at page no.30 by the plaintiff on 26.09.2005. The report is in handwriting. Therefore plaintiff has read the report before signing it. The plaintiff has also signed at page no.22 of the handwritten proceeding sheet prepared by the ld. Local Commissioner. The supporting bills/vouchers were shown. The accounts were produced by the defendants as per proceeding sheet dt.08.08.2005. At page no.29 the report mentions that the account for the above period 198990 and 199798 had been gone through. On conclusion of this report at page no.30 no objections for such examination of the restricted period are recorded by the plaintiff. In fact as per above directions of Hon'ble High Court of Delhi under High Court Rules & Orders at para no.4(6) referred above the statement of objections had to be filed before ld. Local Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 25 Commissioner. The evidence shall not be admitted with respect to an objection not included in such statement of objection before ld. Local Commissioner. Ld. Local Commissioner on filing of such objection had to give opinion in this respect and the opinion may not be evidence with the report. It is settled law that the parties can agree to the procedure in which account could have been taken between them. The signature of plaintiff on report of Ld. Local Commissioner without any protest or objection shows that the plaintiff had agreed to such taking of accounts on random basis only for the period 198990 and 199798. It is settled law that parties can adopt procedure by way of consent in reference to which accounts can be taken and in view thereof the relevant citation titled Kanshi Ram Vs. Tarlok Singh ILR Punjab & Haryana 640 (1970) 2 at para no.11 is reproduced here as under : "(11) The main contention of the learned counsel for the appellant is that the Local Commissioner had no power under the law to examine evidence and give his findings fixing liability on the parties. The contention is that jurisdiction of the Local Commissioner is confined to his going through the books and preparing a statement of accounts and not that he can examine oral and documentary evidence to find out if the entries made in the books of accounts give the correct position or not. It is submitted that once a challenge is made to the genuineness of the books of accounts, the Local Commissioner must stay his hands and it is the Civil Court alone which can Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 26 decide as to the genuineness or otherwise of such books. Our attention, in this connection, has been invited by the learned counsel to cases reported as Assarmal and another v. Hundomal and another (1); Tulsi Ram v. Dina Nath and others (2); Ram Krishna Muraji v. Ratan Chand and another (3); Bharat Chandra Chakrabarty v. Kiran Chandra Rai (4). None of these cases can help the appellant. Before dealing with the legal proposition advanced by the learned counsel, it may be pointed out that the defendant appellant is estopped from challenging the procedure adopted by the Local Commissioner when it was done so at his instance and that of the plaintiff respondent. Both of them agreed to lead evidence before the Local Commissioner taking their chance for a favourable decision. No objection as to the jurisdiction of the Local Commissioner to record evidence for examining the truth of the entries in the books of account was raised before him and not even before the trial Court. It is for the first time in the present appeal that an objection as to the validity of the procedure adopted by the Local Commissioner is being taken. It must be held that when parties to a suit themselves agree to a procedure to be adopted before a Local Commissioner and do not raise any objection thereto before him, it is not open to them to challenge the validity of that procedure afterwards either in the Court of first instance or in a Court of appeal."
8. The plaintiff has filed objections on 29.11.2005 that he had not consented to such random taking of accounts for the above period. The objections as to manner of taking of accounts had to be raised by the plaintiff before Ld. Local Commissioner. Further Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 27 plaintiff has objected to transactions in the account as not correct to which plaintiff seeks to plead that they are to defraud the partnership firm. Therefore the fraud has to be proved by the plaintiff which is defined under Indian Contract Act, 1872 as under.:
"Section 17 in The Indian Contract Act, 1872
17. 'Fraud' defined.--'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it; (4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
Explanation.--Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak2, or unless his silence, is, in itself, equivalent to speech."
Further misrepresentation is defined under Indian Contract Act as under.:
18. "Misrepresentation" defined.--"Misrepresentation" means and includes--
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 28 (1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him; by misleading another to his prejudice, or to the prejudice of any one claiming under him; (3) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
9. The plaintiff was required to file objection mentioning grounds for each objections and shall specify the items to which objection is taken with reference to their number in the account and report, the date of item and the page of particular book of account which is requirement of Rule 4 (3) to (5) of Hon'ble High Court Rules & Orders referred above. The objections of the plaintiff are held not filed specifically with respect to entries in the balance sheets and the report of ld. Local Commissioner. It is settled law that the report of ld. Local Commissioner and duly certified account book when produced before the Court then prima facie presumption arises in favour of such correct record of account book and the burden of proof is on the plaintiff to rebut the same in absence of which it has to be held that the account books are true as to their contents. It is settled law in case titled Anil Rishi Vs. Gurbaksh Singh from Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 29 Hon'ble Supreme Court of India in Appeal (Civil) No.2413/2006 that the burden of proof has always remained on the plaintiff relevant portion of which is reproduced here as under : "xxxxxxxxxxxxxxx In the impugned judgment, the High Court proceeded on the basis that although generally it is for the plaintiff to prove such fraud, undue influence or misrepresentation, but when a person is in a fiduciary relationship with another and the latter is in a position of active confidence, the burden of proving the absence of fraud, misrepresentation or undue influence is upon the person in the dominating position.
The initial burden of proof would be on the plaintiff in view of Section 101 of the Evidence Act, which reads as under: "Sec. 101. Burden of proof. Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist.
When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person."
In terms of the said provision, the burden of proving the fact rests on the party who substantially asserts the affirmative issues and not the party who denies it. The said rule may not be universal in its application and there may be exception thereto. The learned trial Court and the High Court proceeded on the basis that the defendant was in a dominating position and there had been a fiduciary relationship between the parties. The appellant in his written statement denied Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 30 and disputed the said averments made in the plaint. Pleading is not evidence, far less proof. Issues are raised on the basis of the pleadings. The defendantappellant having not admitted or acknowledged the fiduciary relationship between the parties, indisputably, the relationship between the parties itself would be an issue. The suit will fail if both the parties do not adduce any evidence, in view of Section 102 of the Evidence Act. Thus, ordinarily, the burden of proof would be on the party who asserts the affirmative of the issue and it rests, after evidence is gone into, upon the party against whom, at the time the question arises, judgment would be given, if no further evidence were to be adduced by either side.
The fact that the defendant was in a dominant position must, thus, be proved by the plaintiff at the first instance.
Strong reliance has been placed by the High Court in the decision of this Court in Krishna Mohan Kul @ Nani Charan Kul & Anr. v. Pratima Maity & Ors., [AIR 2003 SC 4351]. In that case, the question of burden of proof was gone into after the parties had adduced evidence. It was brought on record that the witnesses whose names appeared in the impugned deed and which was said to have been created to grab the property of the plaintiffs were not in existence. The question as regards oblique motive in execution of the deed of settlement was gone into by the Court. The executant was more than 100 years of age at the time of alleged registration of the deed in question. He was paralytic and furthermore his mental and physical condition was not in order. He was also completely bedridden and though his left Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 31 thumb impression was taken, there was no witness who could substantiate that he had put his thumb impression. It was on the aforementioned facts, this Court opined: "12 The onus to prove the validity of the deed of settlement was on the defendant No. 1. When fraud, misrepresentation or undue influence is alleged by a party in a suit, normally, the burden is on him to prove such fraud, undue influence or misrepresentation. But, when a person is in a fiduciary relationship with another and the latter is in a position of active confidence the burden of proving the absence of fraud, misrepresentation or undue influence is upon the person, in the dominating position, he has to prove that there was fair play in the transaction and that the apparent is the real, in other words, that the transaction is genuine and bona fide. In such a case the burden of proving the good faith of the transaction is thrown upon the dominant party, that is to say, the party who is in a position of active confidence. A person standing in a fiduciary relation to another has a duty to protect the interest given to his care and the Court watches with jealously all transactions between such persons so that the protector may not use his influence or the confidence to his advantage. When the party complaining shows such relation, the law presumes everything against the transaction and the onus is cast upon the person holding the position of confidence or trust to show that the transaction is perfectly fair and reasonable, that no advantage has been taken of his position"
This Court in arriving at the aforementioned findings referred to Section 111 of the Indian Evidence Act Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 32 which is in the following terms: "Sec. 111. Proof of good faith in transactions where one party is in relation of active confidence. Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence."
But before such a finding is arrived at, the averments as regard alleged fiduciary relationship must be established before a presumption of undue influence against a person in position of active confidence is drawn. The factum of active confidence should also be established.
Section 111 of the Evidence Act will apply when the bonafides of a transaction is in question but not when the real nature thereof is in question. The words `active confidence' indicate that the relationship between the parties must be such that one is bound to protect the interests of the other. Thus, point for determination of binding interests or which are the cases which come within the rule of active confidence would vary from case to case. If the plaintiff fails to prove the existence of the fiduciary relationship or the position of active confidence held by the defendant appellant, the burden would lie on him as he had alleged fraud. The trial Court and the High Court, therefore, in our opinion, cannot be said to be correct in holding that without anything further, the burden of proof would be on the defendant.
The learned trial Judge has misdirected himself in Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 33 proceeding on the premise "it is always difficult to prove the same in negative a person/party in the suit."
Difficulties which may be faced by a party to the lis can never be determinative of the question as to upon whom the burden of proof would lie. The learned Trial Judge, therefore, posed unto himself a wrong question and arrived at a wrong answer. The High Court also, in our considered view, committed a serious error of law in misreading and misinterpreting Section 101 of the Indian Evidence Act. With a view to prove forgery or fabrication in a document, possession of the original sale deed by the defendant, would not change the legal position. A party in possession of a document can always be directed to produce the same. The plaintiff could file an application calling for the said document from the defendant and the defendant could have been directed by the learned Trial Judge to produce the same.
There is another aspect of the matter which should be borne in mind. A distinction exists between a burden of proof and onus of proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of onus of proof has greater force, where the question is which party is to begin. Burden of proof is used in three ways : (i) to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later; (ii) to make that of establishing a proposition as against all counter evidence; and (iii) an indiscriminate use in which it may mean either or both of the others. The elementary rule is Section 101 is inflexible. In terms of Section 102 the initial onus is always on Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 34 the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same.
In R.V.E. Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P. Temple and Anr. [JT 2004 (6) SC 442], the law is stated in the following terms :
"29. In a suit for recovery of possession based on title it is for the plaintiff to prove his title and satisfy the court that he, in law, is entitled to dispossess the defendant from his possession over the suit property and for the possession to be restored to him. However, as held in A. Raghavamma v. A. Chenchamma there is an essential distinction between burden of proof and onus of proof: burden of proof lies upon a person who has to prove the fact and which never shifts. Onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. In our opinion, in a suit for possession based on title once the plaintiff has been able to create a high degree of probability so as to shift the onus on the defendant it is for the defendant to discharge his onus and in the absence thereof the burden of proof lying on the plaintiff shall be held to have been discharged so as to amount to proof of the plaintiff's title."
10. Hence the burden of proof remains on the plaintiff only and not on the defendant. There exist fiduciary relationship between the parties as both plaintiff and defendant are partners in Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 35 partnership firm. However to shift the burden of proof on the defendant the plaintiff must plead and prove by evidence that the accounts produced by the defendants are not correct. The burden of proof may also be shifted on the defendant if plaintiff proves that in such fiduciary relationship the defendant was in a dominant position qua plaintiff so that plaintiff due to his inability and such position he could not have secured his interest and that he was dependent on the defendant and that defendant was in a position of active confidence. This is neither the pleading of the plaintiff nor plaintiff has led evidence in this respect. Hence the plaintiff has to discharge burden of proof.
11. Plaintiff had moved an application under Order XI Rule 12, 14 & 15 read with Sec. 151 CPC on 17.07.2008. The defendants did not appear to argue on this application and despite grant of many opportunities the defendants were proceeded exparte. The application was not pressed further by the plaintiff when defendants rejoined the proceedings and the matter was listed for final arguments. The balance sheet filed on record with the report of ld. Local Commissioner. The balance sheets are in the form of liabilities and assets and signed by defendant no.1 who was one of the partner. The objections are taken by the plaintiff . Plaintiff has Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 36 appeared as AW1 as witness after taking of accounts which was recorded on 05.07.2010. Since the defendants had remained ex parte the affidavit of the plaintiff in this regard has remained not crossexamined. Vide preliminary decree dt.05.07.2005 ld. Local Commissioner was appointed to take account and to submit report. However objections had to be recorded by ld. Local Commissioner. The objections are recorded in the report of ld. Local Commissioner Ex.CW1/1. The objections of plaintiff are recorded at page no.4 to page no.8 of the report. The plaintiff held to have agreed in taking of account in such manner of two years of the year 1989 - 1990 and 19971998. Plaintiff has also signed the proceedings before ld. Local Commissioner on 26.09.2005 without any demur at page 30 of the report. Objections were also filed by the plaintiffs on 29.11.2005.
12. It is to be noted that while taking accounts before ld. Local Commissioner the plaintiff had to collect copy of all such documents on which he wanted to rely to raise objections. This does not mean that plaintiff had to believe in correctness of such documents but to challenge their veracity such documents had to be specifically brought on the record by the plaintiff only since the burden of proof is on the plaintiff. Hence the documents had to be collected by the plaintiff before ld. Local Commissioner which was Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 37 an opportunity available to him. Thereafter the plaintiff had to file objections as without knowing about the accounts he could not have filed objections. Since the documents are voluminious in nature and that all the documents may not be relevant for the purpose of trial therefore there is separate procedure of taking of accounts after preliminary decree. In this process the plaintiff had to collect the relevant documents from the defendants before ld. Local Commissioner and to validly challenge their veracity and not thereafter by separately filing an application under Order XI CPC. The same opportunity cannot be granted twice to the plaintiff under different provisions of law unless plaintiff shows that in the previous process he did not have complete opportunity. Further the documents has to be supplied only when plaintiff specifically names each and every document without which it cannot be known that which documents are to be supplied. Hence on such collection of documents by the plaintiff the pleadings are to be filed by the plaintiff in the form of objections and has to lead evidence based upon such objections. Only for identification of such documents another ld. Local Commissioner cannot be appointed as this opportunity has already been granted to the plaintiff. Hence the application moved by the plaintiff under Order XI at belated stage does not lie.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 38
13. The plaintiff is second party in the partnership deed. As per para no. 5 of the partnership deed the share of profit of the plaintiff is 30% and also the share of losses in the same proportion. As per para no. 10 of the partnership deed the account books shall be open for inspection by each of the partner who shall be entitled to take such extracts therefrom as they think fit. As per para 11 of the deed general account shall be taken by the end of each accounting period of assets and liabilities and profits and loss of the partnership which shall be signed and only after which the partners could have taken profits or loss of their share. As per para 12 the partners are permitted draw such sum of money on mutual consent in anticipation of profits. As per para 14 parties are responsible for payment of income tax of their individual share.
14. Hence in the above scheme of partnership the plaintiff could have drawn profits. The plaintiff has objected that the salary paid to son and daughter of defendant Sameer Dev Kapoor and Simmi Dev Kapoor at the rate of Rs.6000/ and Rs.4000/ per month is much more as one of the partner was paid only Rs.3000/ per month. It is noted that the payment of money as salary to the employees of the firm is a separate contractual legal obligation unrelated to profits and loss in the partnership business. The salary Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 39 had to be paid even when there is loss in the partnership firm. No profit and non payment to partners does not mean that salary of the employees had not to be paid. The same is held not a valid objection in view of the fact that the partner are paid in terms of their share of profits or the renumeration already determined and when a person is employed whether that person is son or daughter then the payment has to be as per contract between the parties and industry standards. Hence the payment to the employee has to be made as per work done by that employee in reference to his or her contract. Hence this objection does not lie and stands rejected.
15. The plaintiff has submitted that the ld. Local Commissioner has failed to obtain details of cars of the firm which was provided to Mr. B.R. Kapoor. It is submitted that Sh. B.R. Kapoor was also provided with car from Sita World Travel alongwith driver where he was working as financial advisor. The expense of car and driver was met by Sita World Travel Pvt. Ltd. The above objection of the plaintiff does not form part of pleading of the plaintiff which is separate than the account examined by ld. Local Commissioner. The alleged use of car by defendant no.2 of Sita World Travel Pvt. Ltd. is separate knowledge of the plaintiff other than from the conduct of the business of the partnership firm. When this does not form part of pleading of the plaintiff then plaintiff cannot Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 40 be permitted to raise new objections beyond his pleadings after taking of accounts. Further, plaintiff has not examined any witness from Sita World Travel Pvt. Ltd. According to the plaintiff Sita World Travel Pvt. Ltd firm has since been merged with another company and its accounts are not traceable and which are lost. However this fact must have been proved by the plaintiff on the record by direct evidence. No such evidence is produced on record. It is settled law that mere statement of facts or mere pleadings are not evidence. The loss of such accounts must have been proved on record and thereafter secondary evidence had to be led in this respect. Hence the above objection of the plaintiff cannot be sustained. The objection that the car repair and maintenance expenses are only of those used by family member of defendant no.2 has to be proved by relevant evidence. It has to be shown that the car was used by family members of the defendants not as employee of the firm but for their personal use. Merely a statement or assertion without supporting evidence is not proof of such statement. The plaintiff has not proved any such evidence on record. It is matter of record that son and daughter of defendant no.2 were working for the firm. When the firm has provided for such facility to its employee then the plaintiff was required to object it with the firm at the time of providing of such facility.The Clause no.10 of Partnership Deed dt.01.01.1983 Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 41 Ex.PW1/1 provided that the account book shall be open for inspection for each of the partner who shall be entitled to take such extracts therefrom as they think fit. The plaintiff has deposed as PW1 who has written letter for the year ending 31.03.1991, 31.03.1992 and letter Annexure - H to Annexure - O, Annexure - R, S to the defendants for supply of account despite which the defendants have not provided the plaintiff with the accounts. The plaintiff thereafter did not proceed further to see account in taking remedy through Courts of Law and therefore the plaintiff has acquiescenced/waived to the such alleged not providing of the accounts by the defendants. The plaintiff has not proved on record such service on the defendants of letter Ex.PW1/4 to Ex.PW1/37. Even otherwise the opportunity to examine the accounts are availed by the plaintiff in presence of ld. Local Commissioner. As per Clause - 18 of Ex.PW1/1 the account had to be maintained every year. The Ld. Local Commissioner was assistant to the Court and not to collect evidence of the parties. The plaintiff was at liberty to take extract of the documents which he doubted and to bring the same on record with proper exhibits. This opportunity was available with the plaintiff before ld. Local Commissioner. If the family members were employees of the firm then it is separate aspect and if the family members are not employee of the firm then it is another.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 42 When the employees have used the vehicle in the name of firm then even when they are family members it cannot be said that there is fraud on the plaintiff as it is not disputed that such vehicle purchased in the name of firm. No evidence is brought on record that the journey in the vehicle were performed not in the business of the firm but for personal use of the employee who were family members of the defendants. If no evidence was available then objection must have been raised in the report of ld. Local Commissioner that such evidence was asked from the defendants during examination of accounts which defendants had failed to produce and which is of such date, such nature, for such year if reflected or not reflected in the statement of account. Further there must be rule of business that vouchers/documents of what nature are to be preserved for upto what period for record and examination.
16. In the report of ld. Local Commissioner Ex.CW1/1 at item no.2 the defendant had sought some time to produce relevant vouchers of car repair and maintenance to which plaintiff had objected (page no.25). At page no.27 the vouchers were brought and shown to which plaintiff had objected that they were not arranged in chronological order. Defendant had submitted before ld. Local Commissioner that those accounts are audited accounts.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 43
17. It is objected by the plaintiff that the consent of the partners including that of the plaintiff was not taken to take cars on hire for son and daughter of defendant no.2. The plaintiff is required to show that such consent was required from him from partnership deed Ex.PW1/1 for such running day to day affairs of the firm when defendants were managing the business of the firm on implied authority of the plaintiff. Whether such consent was required as per rules of business of the partnership firm for such matter? As per Clause 9 of Partnership Deed Ex.PW1/1 the bank accounts of the partnership shall be operated by the first party or by the partners authorized by the first party. Hence the operation of account of the firm by defendant no.2 being first party does not shift onus of proof against them as it is rightfully within their rights to exercise the same.
18. The plaintiff has objected that a new car was purchased for a sum of Rs.5,70,732/ which was used by son and daughter of defendant to reduce profit. This aspect is already discussed above that the car was so used by them as the employees of the partnership firm. It is submitted that on the one hand defendant no.2 is paying car hire charges and on the other hand he is buying a new car which was not used by any of the partners. No specific evidence is brought on record that which car hire charges are paid Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 44 for such employees to whom car is also provided by the partnership firm. In absence of such evidence it cannot be said that whether such car hire charges were improperly occurred. The plaintiff has not brought any evidence to prove that such purchase of car was not for the business of the firm. The burden of proof is on the plaintiff to show that car could not be purchased by the firm for the work of the firm. The partnership deed Ex.PW1/1 nowhere provides that cars has to be purchased and provided first for the partner and later on to the employee. Objections should have been raised by the plaintiff immediately on such purchase and use of the car for which plaintiff remained silent for long period. Opportunity was available with the plaintiff to take his accounts on yearly basis as annual returns of the firm are to be filed with Income Tax department. Each partner had to file separate income tax return. It is duty of the plaintiff to sign Form no.12 of the income Tax Act for such submission of return of the firm with the income tax department failing which the firm may incur loss as the account filed would otherwise would be taken as account of association of person then of the registered firm. The relevant para no.25 and 27 to 30 in citation titled M/s. Fraser & Ross, Chartered Accountants, etc. Vs. P.S. Swaminathan, 1998 - 1 - L.W.783 30.11.1994/O.S.A. No.49 of 1993 and O.A. No.230 of 1993 are reproduced here as Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 45 under : "25. Lindley on the Law of Partnership 14th Edition (at pages 581 and 582) has stated thus:
"These authorities show that where partnership is not determinable at will, those partners who are desirous of carrying on the business in the proper way will be protected by the Court from the unwarranted acts of a copartner, whose only object may be to force the others to submit to him or to agree to a dissolution".
Certain subsequent events also compel us to hold that the conduct of the plaintiff is not bona fide.
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27. It is clear from the above orders that the plaintiff has received his share of the capital asset and also the share of profits. Regarding the share of profits, the plaintiff has his own expectations and he is claiming more. It is without prejudice to his claim in the share of profits, the learned Judge has passed the orders dated 4.8.1994 and 10.8.1994. As on date, the plaintiff has received his share in the firm and nothing more remains to be paid as per the interim Application. The question whether he is entitled to get anything more is a matter to be decided in the suit, after deciding whether the provisions of the Arbitration Act apply to the facts of this case. In view of the facts set out above, we are of the view that the injunction sought for, if granted, will seriously prejudice the right of the defendants in the conduct of their business. The balance of convenience is also in favour of the defendants.
28. We may also say that the plaintiff has not approached the Court with clean hands. One of the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 46 main reasons for seeking the grant of injunction is that the defendants are not maintaining proper accounts. According to him, the second defendant is syphoning off the funds, and that he (plaintiff) is not allowed to peruse the accounts. We may say that the Application is lacking in good faith and he has come to Court with false allegations.
29. For the purpose of proving that the defendants are not properly, maintaining accounts, he has relied on a deposit of Rs.25,00,000/ on 5.7.1989 in S.B. Account No.8765 of Indian Bank, North Usman Road, Madras. A reading of the cheque reveals that it is Savings Bank Account in the name of the second defendant and ten others on behalf of Messrs. Fraser & Ross. It is alleged by the plaintiff that it is secret account which is not disclosed to him and other partners and that he is also excluded from that account. This is the only piece of evidence that is disclosed before this Court as regards the allegation relating to falsification of accounts. We may say that the said allegation by the plaintiff is without basis. The learned counsel for the defendants has brought to our notice the full details of S.B. Account No.8765. The said account was opened by the second defendant along with all the other partners on 28.7.1984. At the time, there were only 11 partners including the plaintiff. A copy of the letter dated 30.7.1984, written to the said Bank is also produced before us. It contains the list of partners of the firm, who hold the funds on behalf of the firm, and the names of the partners who are authorised to operate the above Savings Bank Account. We find that the plaintiff is also Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 47 shown as one of the partners of the firm and one of the account holders in the said letter. He is the fifth party to the account. So, the plaintiff's allegation that he was not aware of the Account falls to the ground. Then we are concerned only with the amount deposited on 5.7.1989. In the balancesheet as on 31.5.86 and 87, the Savings Bank Account with Indian Bank, North Usman Road Branch is also made mention of. That balancesheet is also signed by the plaintiff. Then, the other question is, whether the sum of Rs.25,00,000/ deposited in the Savings Bank Account is properly accounted and whether it is a secret Account.
30. It is not disputed that the first defendant firm are the Auditors for Messrs. Perkins Engines Group Limited, Peterborough, England. There was some dispute regarding their incometax assessment and the same was being routed through the first defendant As per the final orders of the Incometax Appellate Tribunal, an amount of Rs.29,90,644/ was directed to be refunded to the Company. Out of the said amount, an amount of Rs.4,90,644/ was retained by the 1st defendantFirm for its fee and services and the balance of Rs.25 lakhs was sent to the client. The amount of Rs. 25 lakhs represents that amount. It is not an amount belonging to the firm, but to its client. The learned counsel for the defendants has also brought to our notice the Indian Bank pass book of that Number. We have verified the Original of the same. We find that the allegation of the plaintiff that the said sum of Rs.25 lakhs deposited is unaccounted is false. Again, the trial balance for the months of March 1989, March 1990, March 1991 and March 1992 were also produced Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 48 before us. The corresponding entries in the passbook were also perused by us. We find that the entire amount as seen in the pass book is entered in the accounts of the Firm, and the trial balance is also signed by the plaintiff. When this was brought to the notice of the plaintiff, he stated that he is not aware as to the persons in whose names the Account has been opened and who are all operating it. The said statement of the plaintiff also cannot be correct. For, he has admitted that he has signed the balancesheet of 1986 87 also. The balancesheet includes the Savings Bank Account of the Indian Bank, North Usman Road Branch. When such a reckless allegation is made against a reputed Firm for the personal gain of the plaintiff, it shows his bad faith, and it demonstrates only his intention to harm the reputation of the firm and also to see somehow or other that the business of the Firm is affected. As stated earlier, the contention of the defendants is that the plaintiff wants to hold the defendants to ransom for achieving his purpose. We find that such a contention of the defendants is correct. Knowing that the Savings Bank Account stands in his name also, and also after having signed the balance sheet for consecutive years, the plaintiff should not have made such an allegation that there is falsification of accounts, and that the sum of Rs.25,00,000/ is not represented in the Accounts. The said conduct also shows that the plaintiff is not entitled to equitable relief which he has sought for."
19. The burden of proof is on the plaintiff to show that the car was so purchased to defraud the defendant no.1. First, pleading by Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 49 way of objections have to be raised then evidence has to be led. When the son and daughter of defendant no.2 are employees of defendant no.1 then prima facie presumption goes in the favour that the car was utilized for the purpose of the firm unless otherwise the plaintiff proves the same on the record. Plaintiff has failed to prove any evidence on the contrary. Mere suspicion that relatives were employed by the defendants is not evidence of fraud though it may raise suspicion. Though the son and daughter of defendant no.2 are employee of defendant no.1 and car of the firm was utilized by them then this may raise a suspicion with the plaintiff that it was not utilized for the business of the firm. However suspicion alone does not absolve the plaintiff to discharge burden of proof levied upon him in this regard for the allegation raised by him. Suspicion alone does not take form of proof to shift onus on the defendants. Plaintiff has to stand on his own legs. Hence in absence of evidence in this regard the above allegation of the plaintiff could not be sustained and hence rejected.
20. The plaintiff has prayed to the Court in his objection filed on 29.11.2005 to inspect the accounts again. In fact plaintiff has filed objection in the present matter, also in his evidence by his affidavit dt.05.07.2010 and another affidavit dt.22.04.2019. The objections are filed without reference to entries brought on record in Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 50 the report of Local Commission Ex.CW1/1. However the plaintiff is required to specify item in respect of which objection is taken in reference to the specific entries. The plaintiff was required to put exhibit on such evidence on record. The item in page number of particular book of account should also have been mentioned which are prima facie evidence of truth of matters contained in them. The report of ld. Local Commissioner has specifically mentioned that the account of the year 19891990 and 19971998 were examined at random. The plaintiff has not disputed proper examination of the above two years. However now plaintiff claims that the remaining year had to be examined and average had to be taken. It is noted that taking of accounts in a particular manner is one aspect and taking of average of profit is totally another. In the present case the opportunity was available with the plaintiff to examine all the accounts of which two years he has examined. The balance sheet of remaining year are already available on record with the report of ld. Local Commissioner as Exhibit CW1/1 as prima facie evidence and presumption of genuineness arises in their favour. Even when parties agree that share of profit of the plaintiff can be determined by taking average of any two years is not a good method of fastening liability under law of contract in as suit for accounts unless there is specific agreement in this respect between the parties with respect Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 51 to specific amount. Before the Court of Law parties have to adduce evidence and prove their case for their rightful claim. There is no recording of this fact in the report of ld. Local Commissioner at any time that average of accounts of any two years had to be taken for determining liability between the parties. Ld. Local Commissioner had taken the balance sheet of all the years and had prepared record of proceeding. In record of proceeding dt.26.09.2005 defendant no.1 was asked to produce supporting vouchers/bills. They were so produced. Plaintiff has objected to payment of salary in the year 19891990 by way of such bearer cheque and not by crossed cheque. However plaintiff has failed to show that how self bearer cheque cannot be paid in lieu of or that what prejudice was caused to him. The payment itself is not disputed. The plaintiff was required to put objection specific to each entry in the balance sheet failing which it cannot be known that for which particular financial year plaintiff is raising objection and for what amount When the plaintiff has put signature in the report prepared by ld. Local Commissioner on 26.09.2005 then in the same report it is shown that account were allowed to be examined at the time of putting signature on 26.09.2005. No objection was raised. The plaintiff himself is a Chartered Accountant by profession and could have examined the accounts himself when opportunity was given to him.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 52 The plaintiff could have asked copy of documents from the local commissioner at the time of examination of account before ld. Local Commissioner and could have disputed specifically each and every entry with respect to their bills and vouchers. Plaintiff did not ask documents before ld. Local Commissioner at the time of examination of accounts. However plaintiff filed an application before the Court for supply of documents under Order XI CPC. The application was filed on 17.07.2008. Plaintiff has asked for record at para no.4 of this application from 01.04.1989 to 31.03.1998. Vouchers are claimed false for the period 1991 to 1996 on the one hand and on the other it is claimed by the plaintiff that he was not allowed to examined those vouchers for such period. However the accounts are bulky and voluminous in nature and therefore in this respect opportunity was already provided to the plaintiff before ld. Local Commissioner to examine these accounts and seek copy of document if any from ld. Local Commissioner only. Making this application in the present form is vague as plaintiff himself does not know that which particular document is to be filed by the defendants. All the documents as such could not be filed by the defendants which were voluminous in nature and for that purpose ld. Local Commissioner was already appointed and opportunity was granted to the plaintiff. Other than this the plaintiff Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 53 has claimed at para no.5 of his application under Order XI CPC filed on 17.07.2008 that defendant no.2 had created false vouchers/bills pertaining to the period 199192 to 199596 to show loss to the firm. Had the plaintiff not seen those vouchers before Local Commissioner then plaintiff could not have said that those bills/vouchers were false. This means that bills & vouchers of the relevant period were available for examination of the plaintiff before ld. Local Commissioner. The plaintiff had opportunity to take copy of such bills/vouchers before ld. Local Commissioner and atleast date and amount with nature of voucher should be noted so that it could be verified that about which bill & voucher plaintiff is raising an issue. Allowing this application at belated stage would have been meant reappointment of ld. Local Commissioner which is not permissible under law for the same purpose without discarding previous report of ld. Local commissioner. The accounts are already examined between the parties if at all plaintiff needed some bills and vouchers which he sought to challenge copy of which must have been obtained by the plaintiff from ld. Local Commissioner only. Plaintiff has not done so moresowhen burden of proof to challenge account after such taking of account before ld. Local Commissioner remains on plaintiff in view of citation titled Anil Rishi Vs. Gurbaksh Singh from Hon'ble Supreme Court of India in Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 54 Appeal (Civil) No.2413/2006 (supra).
21. The report of ld. Local Commissioner was taken on record on 04.10.2005 and objections were thus asked to be filed and matter was listed for final arguments for 10.10.2005. In the report Ex.CW1/1 plaintiff has signed at page no.22 and page no.30 in rough proceeding sheet without any protest. Hence opportunity was granted to the plaintiff to inspect all the documents including vouchers at such time of inspection before ld. Local Commissioner. Therefore fresh opportunity to plaintiff at final stage of the proceeding for reexamination of account cannot be granted. Since the record was voluminous and each & every record may not be relevant for the purpose of present suit. The burden of proof has remained on the plaintiff even when the defendant does not bring any evidence in defence. The plaintiff has to stand on his own legs. As per Clause 14 the partners were responsible to pay income tax of their individual share of profits. As per Clause 11 the general account had to be taken of assets and liabilities of the partnership firm which should have been signed by all the partners and therefore profit could have been drawn. As per Clause - 15 of the partnership deed Ex.PW1/1 the goodwill shall be profit of first party Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 55 and in case of dissolution all the assets will remain with the first party and the retiring party will only be entitled to the amount outstanding to his credit and the share of profit. Hence the plaintiff has availed opportunity of examination of account before ld. Local Commissioner and prayer for fresh examination of accounts is declined. In view of the above the report of ld. Local Commissioner Ex.CW1/1 is accepted which stands proved on record by evidence of ld. Local Commissioner as CW1.
22. The plaintiff has mentioned in the above application that he came to know that defendant no.2 has received huge fees after the firm as dissolved and has usurped the whole amount himself. Plaintiff has neither disclosed basis of this knowledge nor disclosed the amount specifically in this regard if received from M/s. Sita World Travel India Ltd. Hence the averment of the plaintiff is vague in nature and stands rejected. Plaintiff did not file any objection with the defendant before dissolution of the firm that why rent was paid to Ms. Saroj Kapoor or if high rent was paid. Similarly the plaintiff has not challenged the car hire charges specifically upto the year 1999 before dissolution of the firm. However plaintiff has asked for bifurcation of accounts of charges paid for maintenance of the cars.
23. In the objections dated 29.11.2005 it is pleaded by the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 56 plaintiff that professional fee from Sita World Travel (I) Pvt Ltd. was not collected regularly which was collected by defendant no.2 after dissolution of the firm i.e., after 31.03.1998 and misappropriated it. However except pleading plaintiff has not produced any evidence in this regard from Union Bank of India or from Sita World Travel (I) Pvt. Ltd. It has to be proved on record that what money was due from Sita World Travel (I) Pvt. Ltd and for what period.
24. The report of ld. Local Commissioner is evidence in the present suit but not the conclusion drawn by him on disputed questions of fact. The citation titled Nathmal Bhaironbux & Co. & Ors. Vs. Kashi Ram & Ors. AIR 1973 Raj 271 dated 12.02.1973 para no.16, 17, 18 are reproduced hereas under : "16. Then as regards the defendant filing any application for summoning of witnesses before the Commissioner it is sufficient to say that the Commissioner does not take over the functions of the Court in the matter of summoning witnesses and recording evidence as such. He has to go into the accounts and deal with such questions as incidentally arise in the course of the scrutiny or examination of the accounts. If at all, the defendant wanted that any witnesses should be examined by the Commissioner then it was his duty to make an application before the Court itself. Learned counsel invited my attention to an application made by the defendant on 23361 to the Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 57 District Judge. In this application a prayer was made to summon the witnesses With their 'Bahis' and other papers, but no order seems to have been passed on this application except that it be filed. I am not satisfied that this application was pressed by the party. Naturally, therefore, I enquired of the learned counsel if on the receipt of the Commissioner's report any objection had been taken regarding the nonissuing of processes for the examination of witnesses as desired by the defendant and the learned counsel was not in a position to submit that any such objection was raised. That being so, I do not find any sufficient reason for holding that the defendant had been denied the opportunity of producing his witnesses or accounts or documents through them.
17. Now, as regards the burden of issues placed on the defendants it is enough to say that looking to the pleadings of the parties the burden cannot be said to have been wrongly allocated on the defendant in respect of the issues of which the defendant appellant is making grievance. Learned counsel referred me to Issues Nos. 1, 5, 12, 13, 14, 17, 18, 19, 20, 23 and 24. Issue No. 1 has already been decided in favour of the defendant. Learned counsel, however, contends that a Commissioner's report is evidence in the case according to Subrule (2) of Rule 12 of Order 26, Civil Procedure Code and, therefore, to the extent the conclusions of the Commissioner were in favour of the defendants the burden for the issues pertaining to them should have been placed not on the defendant, but on the plaintiff. I may read Rule 12 of Order 26, Civil Procedure Code.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 58 "Rule 12 (1) The Court shall furnish the Commissioner with such part of the proceedings and such instructions as appear necessary, and the instructions shall distinctly specify whether the Commissioner is merely to transmit the proceedings which he may hold on the inquiry, or also to report his own opinion on the point referred for his examination.
(2) The proceedings and report (if any) of the Commissioner shall be evidence in the suit, but where the Court has reason to be dissatisfied with them it may direct such further inquiry as it shall think fit."
18. The nature and scope of the enquiry which the Commissioner can make is limited. He is not expected to decide any matter like a Court, but has to go into the accounts and on consideration of the same submit his report to the Court. He is only to assist the Court so that the Court may be able to appreciate the accounts and come to its own decision. The report of the Commissioner is no doubt evidence in the case, but bearing in mind the functions of the Commissioner whatever observations that the Commissioner makes on the basis of his examination of the accounts is really what is the evidence. In other words, after going nto the accounts whatever he states to be ;he effect of such accounts will be truly evidence, but not the conclusions that he may ike to draw on disputed questions, as if he were a Court. Though the rule makes the report submitted by the Commissioner to be evidence in the case, the same value cannot be attached to that part of the report in which the Commissioner draws his conclusions like Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 59 a Court as would be given to the observations made by the Commissioner regarding the accounts as a result of his scrutiny or examination of such accounts. The framing of the issues will be based on the pleadings and the statements of the parties as also an tne material documents that the parties may have produced. Therefore, the Court in the framing of issues after the Commissioner's report in a proceeding following a preliminary decree may take the Commissioner's report into account, but then one cannot lay down as a general rule that in respect of the conclusions drawn by the Commissioner in favour of a party the burden of the issues pertaining to them should not be placed on such party. How the burden of an issue is to be allocated depends upon all the facts and circumstances relevant for consideration at that stage. Therefore, I am unable to accept the contention that the burden of the above mentioned issues was wrongly placed on the defendants. If the defendants did not choose to adduce any evidence by way of protest then I am afraid a fresh opportunity at this stage cannot be afforded to them to lead evidence and the matter has to be decided on whatever material is available on record."
25. In view of discussion above it is held that the plaintiff has failed to prove his case by preponderance of probabilities about dues in his favour from the defendant in the present suit for accounts and hence the present suit of the plaintiff is dismissed.
Suit No.215171/11Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 60 COUNTER CLAIM:
26. In respect of counter claim filed by defendant issue no.6A was framed vide order dt.28.04.2005 and in preliminary decree dt.05.07.2005 the same was decided in favour of the plaintiff and against the defendant in that defendant no.1 & 2 did not pay court fees on the counter claim which they were directed to deposit within a month from the date of preliminary decree which would be additional ground for dismissal of the counter claim. Further no evidence was produced by defendant no.1 & 2 in respect of the counter claim despite of grant of opportunity in respect of their claim for a sum of Rs.3,84,444/. The burden of proof in respect of this claim was on defendants only. Defendants cannot merely rely on report of ld. Local Commissioner Ex.CW1/1 in support of this claim. Defendants are required to produce best evidence before the Court which are accounts with supporting documents. Defendants miserably failed in proving their case. Further Court Fees is also not deposited by the defendants and on this account also the counter claim of the defendants is dismissed. It is settled law that the defendants have to stand on their own legs in spite of presumption raised in the report of Ld. Local Commissioner Ex.CW1/1. The presumption could have been sustained only when defendants had Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 61 produced their independent evidence for a legally enforceable debt or liability. The relevant citation in this respect is reproduced as under :
"Shiv Kumar Alias Jawahar Saraf vs Ramavtar Agarwal on 19 February, 2020 Supreme Court Of India in Criminal Appellate Jurisdiction in Criminal Appeal No.1688 Of 2017"
Learned counsel for the appellant has also referred to the judgment of the High Court and specifically paragraphs 23 and 32. The High Court in paragraphs 23 and 32, which has been relied and referred by counsel for the appellant, observed:
"23. The presumption available under Section 139 of NI Act has to be rebutted and that rebuttal can only be done after adducing evidence. This, by itself clearly reflects that the rebuttal presumption cannot be looked into at the stage of the Court taking cognizance of the offence and registering the case all that Court would have to see is whether there is a prima facie case made out meeting the conditions precedent as envisaged under Section 138 of NI Act, which in the instant case, in the opinion of this Court, the Respondent has in fact been able to establish and fulfill all such ingredients.
32. As has been stated in the preceding paragraphs since there is a presumption to be drawn of there being a debt or liability in part or in whole of the drawer to the holder of the instrument, the Court Suit No.215171/11 Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 62 below cannot be said to have faulted upon in taking cognizance and in registering the offence. Since it is a rebuttal presumption and all the contentions and averments made by the counsel for the Petitioner being his defence, it would be open for him to raise all these grounds at the stage of leading evidence including the defence of existence of legally enforceable debt or liability. However, there can be no doubt that at the time of filing of complaint there was always initial presumption which would be in favour of the complainant.
We are in full agreement with the opinion of the High Court expressed in the above noted paragraphs which has been referred by learned counsel for the appellant. It is well settled that the rebuttal can be made with reference to the evidence of the prosecution as well as of defence.
27. Hence the counter claim of the defendants stands dismissed.
28. Hence, both the suit and the counterclaim are dismissed. Decree sheet be prepared accordingly. File be consigned to record room.
Digitally signed by JOGINDER JOGINDER PRAKASH NAHAR
PRAKASH NAHAR Date: 2020.11.12 14:19:21
Announced in the open Court +0530
on 05.11.2020 (JOGINDER PRAKASH NAHAR)
ADDL. DISTRICT JUDGE04/ CENTRAL
TIS HAZARI COURT/DELHI
Suit No.215171/11
Mr. Mohinder Singh Vs. Mr. B.R. Kapoor & Co. & Ors. 63