Patna High Court
State Of Bihar And Anr. vs Motilal Chamaria And Anr. on 19 April, 1963
Equivalent citations: AIR 1964 PATNA 127
JUDGMENT Tarkeshwar Nath, J.
1. The defendants are the appellants in First Appeal No. 382 of 1959, whereas plaintiffs are the appellants in the other appeal. First Appeal No. 384 of 1959, and these two appeals arise out of Money Suit No. 106 of 1952 instituted by the plaintiffs for recovery of a sum of Rs. 2,34,213/3/0 in the following circumstances: Plaintiff alleged that he was the solo proprietor of the concern "Rai Bahadur Hardutta Rai Motilal Jute Mills" (Plaintiff 2). Plaintiffs' case was that they entered into a contract with the Regional Grain Supply Officer of Purnea who was acting on behalf of the State of Bihar on 17-8-1946 for the supply of one lac maunds of local paddy at the- rate of Rs. 6/12/- per maund and one and a half lac maunds of Nepal paddy at the rate of Rs. 7/2/-per maund. Besides that, there was also a contract for the supply of rice and the plaintiffs performed their part of the contract to the entire satisfaction of the Government and there was no dispute between the parties regarding any supply of paddy and rice. Plaintiffs submitted their bill on 17-1-1947 charging an actual shortage at the rate of 11/2 seers per maund in respect of the supply of paddy and rice and the amount with regard to that shortage came to Rs. 43,314/1/9. At the time of the final adjustment of the said bill, the District Supply Officer, Purned, allowed shortage at the rate of 3 chataks only per maund (1/2% per hundred maund), the amount of which at that rate came to Rs. 3,810/6/-; in other words, he did not allow shortage to the extent, of Rs. 39,503/11/9. Plaintiffs had to purchase paddy sometimes in Nepal and on other occasions in the district of Purnea, carry it to the nearest godowns and store it for a considerable period before despatching it to different districts and mills under Government orders. There was thus a shortage under four heads: (i) on account of dryage during the period the paddy was kept in godown, (ii) while carrying paddy from villages and market to godowns (iii) ravages by rats and other insects, and (iv) while carrying paddy from godown to Rail heads for despatch. This claim for Rs. 39,503/11/9 was mentioned in item (A) of the schedule of the plaint.
Plaintiffs had to pay rent of the various godowns in Nepal and in Purnea district for storing the paddy and they paid rent to the extent of Rs. 79,272/6/6, but the claim made in respect thereof in the bill dated 13-1-1947 was disallowed without any justification. This formed the subject-matter of the claim indicated in item (B) of the plaint schedule. Plaintiffs supplied 1,04,884 maunds 23 seers of local paddy, but the District Supply Officer deducted 5602 maunds 11 seers and did not pay the price thereof, although the Government was liable to pay it. The plaintiffs were entitled to a sum of Rs. 39,215/14/-and this was mentioned in item (C) of the schedule-During the period of Barter scheme, Government had directed the plaintiffs to pay 20% of profit on the purchase of cloth to the importers and those importers used to retain 81/2% as their own profit and they had to deposit the remaining 111/2% in the government treasury according to the rules. Plaintiffs paid full amount on account of the price of the cloth and the profit at the rate of 20%, but, in spite of that, the District Supply Officer wrongly deducted a sum of Rs. 29,7747, from their bill dated 13-1-1947. If the importer did not deposit the required amount, it was their fault and the plaintiffs were not liable to pay any sum on their behalf. This claim was mentioned in item (D) of the schedule. According to the Barter scheme, the plaintiffs supplied 11,840 maunds of paddy to Katihar Rice and Oil' Mills and they were entitled to get from the Government 47,360 yards of cloth but they got only 7,104 yards of cloth. In that manner, 42,256 yards of cloth were still due and the price thereof at the rate of Re. 1/- per yard came to Rs. 40,256 indicated in item (E) of the schedule.
The plaintiffs had to supply rice to the Government at a very low rate and they were supplied cloth to be sold in Nepal so that they might compensate themselves for the loss suffered by them by the sale of the cloth in Nepal at a profit; Apart from these, the plaintiffs supplied to the Government 92,208 maunds 12 seers of paddy according to the cloth Barter scheme, but they got quota of cloth in yardage in respect of 82,054 maunds only and not in respect of 10,154 maunds of paddy. They were entitled to 4 yards of cloth per maund and at that rate they were to get 40,617 yards of cloth the price whereof came to Rs. 40,617 at the rate of Re, 1/- per yard. This sura was specified in item (F) of the schedule. There were two other transactions and the first one was that the plaintiffs supplied 1279 maunds 23 seers of hand-pound rice to Rai Bahadur Hardutta Rai Motilal jute Mills for the labourers at the rate of Rs. 12/- per maund as fixed by the Government authorities, but the Government deducted the price thereof at the rate of Rs. 16/-per maund from the bill of the plaintiffs with the result that they sustained a loss at the rate of RS. 4/- per maund. The plaintiffs were thus entitled to get from the Government a sum of Rs. 5,118/5/- mentioned in item (G) of the schedule. The other transaction was that the plaintiffs supplied 7143 maunds 23 seers of paddy to the same mill for the labourers at the contracted and fixed rate of Rs. 6/12/- per maund, tout the Government deducted the price thereof at the rate of Rs. 9/8/- per maund. The plaintiffs were accordingly entitled to the difference at the rate of Rs. 2/12/- per maund and the claim in respect thereof came to Rs. 19,645/13/6 item (H) of the schedule. In respect of the supply of paddy, the plaintiffs claim transport shortage to the extent of 120 maunds of paddy and the price thereof came to Rs. 810/- and this was mentioned in item (I) of the schedule.
The plaintiffs made several representations and demands, but they were not attended to and ultimately they served tho notices under Section 80 of the Civil Procedure Code on the State of Bihar and the Collector of Purnea in respect of their claim. The cause of action, according to them, arose on 22-9-1951 when the deductions were made from their bills. The various sums mentioned in items (A) to (I) of the schedule came to Rs. 2,34,213/2/9 for the recovery of which the plaintiffs instituted this suit on 16-9-1952 against (i) the State of Bihar, (2) the Regional Grain Supply Officer, Purnea, (3) the District Supply Officer, Purnea, and (4) Mr. S. K'. Aikat, but they expunged the Regional Grain Supply Officer and Mr. S. K. Aikat from the category of defendants.
2. There were three written statements on behalf of the State of Bihar (defendant 1). In the first one, a plea of limitation was taken and in paragraph 7 it was stated that the alleged transactions were conducted according to the prescribed procedure, orders, rules and instructions of the Government and they were closed at the termination of the department of the Regional Grain Supply in the early part of 1948. It was asserted in various paragraphs that the claims of the plaintiffs were vague, ambiguous and wanting in details. With regard to the bill dated 17-1-1947 regarding shortage, the allegation was that it was never submitted to the District Supply Officer, Purnea. The claim with regard to the rent of the godowns also was denied. Another assertion was that the cause of action did not arise on 22-9-1951 and the transactions having been finally closed in the early part of 1948 the suit was belated, and barred by time. The second written statement dated 5-11-1954 filed about a year and a half after the first one is more comprehensive. The defendant emphatically denied the statement of the plaintiffs made in paragraph 2 of the plaint and asserted that there was no contract between the plaintiffs and the defendant. The various items of claim were separately referred to in this written statement and the defendant alleged that there was no contract or agreement for allowing transit shortage and other shortages. Shortage and shrinkage were, however, allowed at the rate of 1/2% according to the prescribed procedure and the plaintiffs were not entitled to anything besides a sure of Rs. 3,810/6/-.
With regard to the claim in respect of the price of 5602 maunds 11 seers of paddy, defendant 1 stated that 5482 maunds n seers of paddy were despatched by other agents, namely, (1) Katihar Rice and Oil Mills and (2) Nathmal Dugar but they did not produce acknowledgment of the consignees in respect of the receipt of the said quantity of paddy. With regard to the claim of Rs. 29,774/- in respect of cloth supplied under Barter scheme, the position was that Katihar Cloth Importing Company was the concern of the plaintiffs themselves and the proprietor of Nandram Satyanarayana was a partner of the said Importing Company. That being so, the Government had rightly deducted a sum of Rs. 29,774/- on account of the failure of the importers to deposit the requisite sum at the rate of 111/2% out of the margin of profit of 20%. The cloth Barter scheme came to an end on 15-12-1946 and the Government had already made over to the plaintiffs cloth in respect of ' the supply made while the same scheme was in force but the plaintiffs were not entitled to any cloth in respect of the supply of paddy which was after the 15th December, 1946. In fact, the plaintiffs had taken in excess 65245 yards of cloth and the defendant had a right to make a claim in respect of that excess. With regard to the other two claims in respect of Rs. 5,118/5/- and Rs. 19,645/13/6 mentioned in items (G) and (H) of the plaint, it was averred that the Government was entitled to charge the price at the local wholesale rate which had authoritatively been fixed then and the claims were not sustainable. The defendant reiterated the bar of limitation in respect of the suit. The third written statement contained a plea that plaintiff 2 was a partnership firm, but the said firm not having been registered under the Indian Partnership Act the suit at the instance of the plaintiffs was not maintainable.
3. The main issues in the suit were issues 3 and 4 and they were as follows:
"3. Were the alleged transactions finally closed in 1948 at the termination of the office of the Regional Grain Supply Officer and is the suit barred by limitation or waiver?
4. How far are the claims of the plaintiffs under various heads as detailed in the schedule of the plaint justified and correct; and what liability attaches to the defendants for the same?"
The Additional Subordinate Judge held that the suit was not barred by time and he came to the conclusion that the plaintiffs were entitled to a sum of Rs. 1379/- in respect of their claim in item (A) of the schedule, Rs. 19,272/6/6 in respect of the claim in item (B) of the schedule, Rs. 39,215/14/- with regard to the claim under item (C) of the schedule, and Rs. 774/- only in respect of the claim in item (D) of the schedule. He disallowed the claims in toto in respect of the other items (E), (F), (G), (H) and (I). On these findings, he decreed the suit in part against the State of Bihar (defendant 1) alone with proportionate costs and hearing fee at the minimum contested scale. He allowed future interest on the amount decreed at 6 per cent per annum. With regard to the District Supply Officer, Purnea (defendant 2), he took the view that as that defendant had acted on behalf of the State of Bihar there was no liability against him (that defendant) in respect of any of the sums claimed by the plaintiffs. Being aggrieved by this judgment and decree, the State of Bihar and the District Supply Officer, Purnea (defendants 1 and 2) have (preferred First Appeal No. 382 of 1959 valuing it at Rs. 60,641/4/6, whereas the plaintiffs have preferred First Appeal No. 384 of 1959 valuing it at Rs. 1,73,571/14/3. These two appeals have been heard together and will be governed by this judgment.
4. Certain points are common in these appeals and it will be convenient to deal with them at one place. Learned Government Pleader raised a question that there was no written contract or agreement between the plaintiffs and the State oi Bihar for the supply of paddy and rice and, according to him, the plaintiffs did not allege in their plaint that there was a written agreement either on 17-8-1946 or subsequently in respect of the supply of paddy. He contended that, in case there was no written contract, then there was non-compliance of the provisions of Section 175 (3) of the Government of India Act, 1935, and the plaintiffs were not entitled to make any claim in respect of a contract which was invalid and unenforceable.
(His Lordship after discussing the evidence proceeded:) Having regard to all these circumstances, I am of the opinion that there was a written contract between the plaintiffs and the Regional Grain Supply Officer of Purnea acting on behalf of the State of Bihar. The other question, as to whether the said contract was validly entered into by the Regional Grain Supply Officer does not arise at all, inasmuch as defendant I did not take that objection in any of the three written statements. It was necessary to take the plea that there was a non-compliance of the provisions of Section 175 (3) of the Government of India Act, 1935, and, in absence of that, learned Government Pleader could not take any objection on that score. It was held in Dominion of India v. Bhikhraj Jalpuria, (S) AIR 1957 Pat 586 that the question whether or not the provisions of Section 175 (3) had been complied with was purely a question of fact and, therefore, had to be pleaded, and unless the facts constituting the invalidity of the contract were mentioned in the written statement, it was not incumbent upon the plaintiff to establish by evidence that the contracts were valid and legal.
5. The other point raised by Mr. K. D. Chatterji is important and he urged that the suit was barred by limitation. The bills of the plaintiffs, according to the plaint, were dated 13th and 17th January, 1947, but the suit was instituted on 16-9-1952. Accordingly, it was urged that the plaintiffs could not recover the various sums on the basis of the contract alleged to have taken place in August 1946. Learned counsel further pointed out that the account between the parties was not a mutual open and current one in order to attract the provisions of Article 85 of the Indian Limitation Act and he assailed the finding of the trial Court in this respect. Article 85 is in these terms:
"Description of suit.
Period of limitation.
Time from which period begins to run.
For the balance due on a mutual open and current account, whore there have been reciprocal demands between the parties.
Three years.
The close of the year in which the last item admitted or proved is entered in the account: such-year to be computed as in the account."
This Article applies to a case where balance is due on mutual, open and current account and when there had been reciprocal demand between the parties. If the account is like that, then three years limitation is provided for from the close of the year in which the last item admitted or proved has been entered in the account. The distinctive features of a mutual account are that there should be two sets of independent transaction between the parties and in one transaction one of the parties should be debtor and the other creditor, whereas, in the other transaction the parties should occupy reverse positions. Besides that, the dealings should indicate independent obligation on both sides and not merely obligations on one side. The test of mutuality is that the dealings between the parties should be such that the balance is sometimes in favour of one party and sometimes in favour of the other. Mr. K. D. Chattorji referred to the case of Hindustan Forest Co. v. Lal Chand, AIR 1959 SC 1349. where also it was held that the requirements of reciprocal demands involved transactions on each side creating independent obligations out the other and not merely transactions which created obligations on one side, those on the other being merely complete or partial discharges of such obligations. Mr. Chatterji pointed out that, in the present case, the plaintiffs had undertaken to supply paddy and the State of Bihar had paid the price thereof from time to time and even advance were made on that score. In other words, it was a case of pure supply of 'goods for a price either paid in advance or to be paid in course of the transaction itself. According to him, there were no independent transactions creating obligation on each side and the facts of the present case were similar to those of the case before Supreme Court in AIR 1959 SC 1349.
In the case relied upon by him, the parties had entered into an agreement in writing for the supply by the sellers, the respondents, to the buyers, the appellant of 5000 maunds of maize, 500 maunds of wheat and 100 maunds of Dal at the rates and times specified. The agreement stated that on the date it had been made the buyer had paid to the sellers Rs. 3000 and had agreed to pay a further sum of Rs. 10,000/- within ten or twelve days as advance and the balance due for the price of goods delivered after the expiry of every month. Payment of Rs. 10,000/-later by the buyer to the sellers was admitted. The sellers delivered various quantities of goods to the buyer not according to the fixed programme, but the buyer accepted them. The buyer had made various payments but not month by month and some amounts were still due. The last delivery of goods was on 23-6-1947 and the suit was instituted on 10-10-1950 for the balance of the price due. Article 115 of the Jammu and Kashmir Limitation Act was in similar terms as Article 85 of the Indian Limitation Act except as to the period of limitation which, according to Jammu and Kashmir Limitation Act, was 6 years. A learned Judge of the High Court, who heard the suit, took the view that Article 115 had no application and accordingly the suit was dismissed as being barred by limitation. On appeal by the sellers, the appellate Bench of the High Court took a contrary view and it decreed the suit holding that the provisions of Article 115 were applicable. The buyer then preferred an appeal before the Supreme Court. A question arose as to whether the account between the parties was mutual. Reference was made to the decision of Rankin, C. J., In the case of Tea Financing Syndicate Ltd. v. Chandra Kamal Bez Barua, ILK 58 Cal 649 : AIR 1931 Cal 359 and their Lordships approved the observations of Rankin, C. J., with regard to the requirements of reciprocal demands and held that the law was laid down correctly by the learned Chief Justice, but, on facts, their Lordships held that there was no reciprocity of dealings and no independent obligations. The transaction, according to their Lordships was as follows: -
"What in fact had happened was that the sellers had undertaken to make delivery of goods and the buyer had agreed to pay for them and had in part made the payment in advance. There can be no question that in so far as the payments had been made after the goods had been delivered, they had been made towards the price due. Such payments were in discharge of the obligation created in the buyer by the deliveries made to it to pay the price of the goods delivered and did not create any obligation on the sellers in favour of the buyer. ......... The learned Judges (of the appellate Bench) however held that the payment of Rs. 13,000/- by the buyer in advance before delivery had started, made the sellers the debtor of the buyer and had created an obligation on the sellers in favour of the buyer. This apparently was the reason which led them to the view that there were reciprocal demands and that the transactions had created independent obligations on each of the parties. This view is unfounded. The, sum of Rs. 13,000/- had been paid as and by way of advance payment of price of goods to be delivered. It was paid in discharge of obligations to arise under the contract. It was paid under the terms of the contract which was to buy goods and pay for them. It did not itself create any obligation on the sellers in favour of the buyer; it was not intended to be and did not amount to an independent transaction detached from the rest of the contract. The sellers were under an obligation to deliver the goods but that obligation arose from the contract and not from the payment of the advance alone. If the sellers had failed to deliver goods, they would have been liable to refund the monies advanced on account of the price and might also have been liable in damages, but such liability would then have arisen from the contract and not from the fact of the advances having been made. Apart from such failure, the buyer could not recover the monies paid in advance. ....,.,,. This case therefore involved no reciprocity of demands. Article 115 of the Jammu and Kashmir Limitation Act cannot be applied to the suit".
It is thus clear that it is necessary to ascertain, as to whether there were independent transactions between the parties apart from the contract itself to supply paddy on payment of the price thereof. Mr. B. C. De, on the other hand, relied on the case of AIR 1931 Cal 359 and submitted that the facts of this case were similar to those of the reported case. That suit was brought by a Company, the Planters Agency Co., Ltd., against the defendant, who was the proprietor of a Tea Estate in Assam called the Boloma Tea Estate. During the pendency of the suit, the plaintiff company assigned its interest to the Tea Financing Syndicate Ltd., which was substituted as plaintiff. The suit was upon a deed of hypothecation dated 3-2-1920 and, according to that deed, the company had agreed to advance to the defendant sums of money as might be required to the extent of and not exceeding Rs. 80,000/- on the security of the entire crop of the said Tea Estate for the year 1920. Advances were to be made for so long and to such extent only as the Company in their discretion should think fit and it was agreed further that the company might discontinue the said advances as and when they considered it expedient with one month's notice to the defendant. The defendant hypothecated the entire tea crop for the season 1920 and agreed to transmit the manufactured tea to the Company in Calcutta for sale by them in that town by public auction and for such price as the company might consider reasonable, and it was arranged that the sale proceeds thereof should be credited by the company to the defendant in his current account, the defendant agreeing to repay to the company the amount to be advanced to him with interest at the rate of 9 per cent per annum with six-monthly rests in account.
Pursuant to that agreement, the said company had advanced various sums of money from time to time and also Spent on account of the defendant various sums of money. The defendant from time to time had consigned his tea to the company for sale by public auction in Calcutta and the, proceeds were credited to the defendant as soon as the sales were effected. On 22-2-1944, the date of the institution of the suit, the defendant owed to the said company a huge sum which the defendant had failed and neglected to pay. The defence taken was that the claim was barred by limitation. The plaintiff company alleged that the advances had been made to the defendant on a mutual, open and current account and the account indicated that there were reciprocal demands by and between the parties. The plaintiff thus sought aid of the provisions of Article 85 of the Indian Limitation Act. The trial Judge, Page, J., had held that the account between the parties was not a mutual, open and current one and that accordingly Article 85 did not govern that suit. On appeal by the Tea Financing Syndicate Ltd., it was pressed that the transactions between the parties could be divided into two groups (1) lender and borrower and (2) principal and agent and that on a proper scrutiny of the accounts, it should be held that each of the said two parties had received and paid on the other's account meaning thereby, that there was a mutual, open and current account. Their Lordships scrutinised the account between the parties in order to determine the nature thereof and found that advances began in February, 1920, and by 30-6-1920 the Indian Planter's Agency Company Ltd., had advanced to the defendant a sum of Rs. 39,256/-/6 altogether. The defendant had made no payment during that period and by 8-7-1920 the defendant had drawn altogether a sum of Rs. 40,404/10/9. Their Lordships came to the conclusion that there was no want of mutuality and the account between the parties was a mutual open and current one. It was further observed that each case depended upon its own facts.
It is important to notice that, according to the deed of agreement, the plaintiff company had advanced sums of money to the defendant on the latter's agreeing to pay interest and the defendant had pledged the entire crop of the tea estate. This was a transaction by itself, but, apart from it, the defendant had agreed to transmit the manufactured tea to the company in Calcutta for sale by them and the sale proceeds had to be credited by the company in the account of the defendant. This constituted another transaction. Accordingly, there were independent transactions with respective obligation on each side. This aspect is not to be found in the contract which is the subject-matter of the present suit or the appeals before me. Accordingly this decision of the Calcutta High Court relied upon by Mr. B. C. De is of no assistance to the plaintiffs. The case of Gopal Rai v. Firm Harchand Ram Anant Ram, 3 Pat LT 492 : (AIR 1922 Pat 364) was referred to before the trial Judge on behalf of the defendants. It was held in that, case that the test of mutuality was that the dealings between the parties should be such that the balance is sometimes in favour of one party and sometimes in favour of the other and an account which consisted of entries of payment made by one party in reduction of a debt to another and of payments made by the latter on behalf of the former was not a mutual account. In that case, the account between the parties began as early as the year 1906 and the last transaction was said to have been after the adjustment which was made on 3-8-1916. The only accounts on the record were the plaintiff's account and the defendants had not produced their accounts. On examining the accounts, their Lordships held that it was not a mutual one and the plaintiff in that case was not entitled to the benefit of the limitation prescribed in Article 85.
The trial Judge referred to exhibit 8, which was a register of Regional Grain Supply Office and pointed out that that register indicated that there were shifting balances of account sometimes in favour of the defendants and sometimes in favour of the plaintiffs. Accordingly he took the view that the provisions of Article 85 were applicable and the suit was within time. Mr. B. C. De tried to support that finding and referred to exhibit 8 in support of his contention that the account between the parties was a mutual one. At page 79 of exhibit 8 is the personal ledger relating to Rai Bahadur Hardutta Rai Motilal Jute Mills, Kathiar. There are various columns in this register and column I gives the various dates. In column 2 the kind of paddy has been noted and column 5 refers to the quantity. Columns 6 and 7 are in respect of the rate and the amount, meaning thereby, the price of the paddy. Column 10 is worded like this:
"Cross reference to the item in Cash Book (with date of payment)''.
The first date in column 1 is 22-6-1946. The first entry on this page indicates that a sum of Rs. 70,000/- was advanced against a contract of supply of 20,000/- maunds of Nepal Paddy. There were other pages also relating to the personal account of Rai Bahadur Hardutta Rai Jute Mills and from the entries at page 139, which was the last page with regard to the accounts of the said Mills, it appears that the advance by the Government was to the tune of Rs. 13,29,605/12/9, whereas the total price of the supply came to Rs. 9,24,109/5/6. On subtracting the latter from the former, the amount came to Rs. 4,05,496/7/3 which was transferred to the account of D. M. (District Magistrate) on 31-7-1947. This account was in respect of the supply of paddy of different varieties and there are various difficulties in the way of the plaintiffs in treating it to be a mutual account within the meaning of Article 85 of the Indian Limitation Act.
The present suit was for recovery of Rs. 2,34,213/2/9 and it does not appear that this was the balance due on reference to exhibit 8. In fact, there was no balance due from defendants according to the entries in exhibit 8. There was no reciprocity of dealings and no independent obligations according to exhibit 8. Plaintiffs had to further establish as to which was the last item, either admitted or proved and entered in the account on which they wanted to rely for bringing their claim within the period of limitation. The last entry in the register (exhibit 8) was on 31-7-1947 and that was undoubtedly beyond a period of three years from the date of the present suit. I am, therefore, of the opinion that exhibit 8 was not a mutual, open and current account between the parties. It may be further pointed out that the plaintiffs did not indicate in the plaint that the account between the parties was a mutual, open and current one. The mere statement that the cause of action arose on 22-9-1951 when the deductions were made from the bill of the plaintiffs is not at all helpful for bringing the claims within the period of limitation provided by Article 85 and the plaintiffs ought to have disclosed in their plaint the nature of the account which they had with the State of Bihar. This view is supported by the very same decision in the case of AIR 1959 SC 1349, where their Lordships observed as follows:
"We think it fit also to observe that it is somewhat curious that any question as to the application of Article 115 was allowed to be raised. The applicability of that article depends on special facts. No such facts appear in the plaint. There is no hint there that the account was mutual. We feel sure that if the attention of the learned Judges of the High Court had been drawn to this aspect of the matter, they would not have permitted any question as to Article 113 being raised and the parties would have saved considerable costs thereby."
6. Mr. B, C. De further made another attempt to bring the facts of this case at par with those of the case of AIR 1931 Cal 359 by urging that the plaintiffs were the purchasing agents of the State of Bihar and the agreement with regard to that was a separate and distinct one from the other agreement relating to the contract of supply of paddy and rice. He contended that in those days, the State of Bihar had appointed various purchasing agents including the plaintiffs and advances were made to the plaintiffs as well for purchasing paddy. In other words, his argument was that whatever was advanced to the plaintiffs was for making purchases and then ultimately after the supply of the paddy, the price thereof was to be finally adjusted after a proper accounting. This case of purchasing agency also was not made out in the plaint; no issue was framed on that point and the defendants had no chance to meet that case. Paragraph 2 of the plaint indicated that there was a contract for the supply of paddy and rice. It will thus be not proper to consider the case on the footing that the plaintiffs were the purchasing agents. It is a salutary rule that evidence should not be looked into in respect of a case not put forward and pleaded (vide Firm Srinivas Ram Kumar v. Mahabir Prasad, AIR 1951 SC 177). When P. W. 1 wanted to state at the trial Court (about) the purchasing agency, objection was taken on behalf of the defendants to that statement. Exhibit 2 (c) is a letter dated 23-9-1946 from the Regional Grain Supply Officer to Kamlal Golcha asking him to supply on behalf of Rai Bahadur Hardutta Rai Motilal Jute Mills 11,500 maunds of paddy. By exhibit 2 (b) dated 4-11-1946 as well, the Regional Grain Supply Officer asked P. W. 1 to deliver 10,000 maunds of paddy to the Sub-divisional Officer, Supaul, pointing out that the supply should be made within November. The correspondence also indicates that the contract was for the supply of paddy and it does not indicate that the plaintiffs were the purchasing agents. The advances to the plaintiffs were made on account of the price of the paddy which they had to supply; in other words, plaintiffs had to supply paddy and the State of Bihar had to pay the price thereof. If a person acts as a representative of the other in business and in contracts, then only he can be deemed to be an agent. Before an agency can be inferred, it has to be established that the State of Bihar had confided in the plaintiffs for the management of some business and it was to be transacted in the name of the State of Bihar and on their account but such a case has not been made out, either in the plaint or at the trial. The plaintiffs have submitted their bills (exhibits 3 series) not as agents hut as suppliers of paddy. Besides that, in case of agency, the principal has to bear all the losses. All these facts arc not present and accordingly the case of agency has to be ruled out.
7. Mr. B. C. De submitted that even after 1947, there were further transactions and there must be other entries in the account books maintained by the defendants. His comment was that the defendants had failed to produce their account books in spite of the fact that the plaintiffs had applied from time to time calling upon the defendants to produce the relevant registers. He contended that the registers, if produced would have revealed the true state of affairs and made it clear that the account was a mutual one.
(His Lordship after examining the materials on record and after discussing the evidence proceeded :) Having regard to these circumstances, there is no merit in the contention raised on behalf of the plaintiffs that the defendants had withheld the papers and an adverse inference should be drawn against them. It appears from the evidence of P. W. 1 that the plaintiffs also maintained accounts in respect of the paddy purchased, price paid, godown rents and shortage thereof. It was upto them to produce their accounts and establish that there was a mutual, open and current account between the parties. They have not done this and, in absence of proper materials, it would not be proper to make a surmise that the accounts were mutual. Having given my anxious consideration, I am of the view that the plaintiffs cannot get any benefit from the provisions of Article 85 of the Indian Limitation Act on the facts and circumstances of the present case.
8. Mr. A. K. Mitter, who also appeared for the plaintiffs, submitted while replying to the arguments of the defendants that, in case the provisions of Article 85 of the Limitation Act were not applicable, then the provisions of Article 120 of the said Act would govern the facts of this case and the suit having been instituted within 6 years of the accrual of the cause of action it was not barred by time. Learned counsel referred to the case of C. Mohammad Yunus v. Syed Unnisa, AIR 1961 SC 808, but the facts of that case was entirely different and that appeal arose out of a suit for a declaration of right and an injunction restraining the defendants from interfering with the exercise of that right. But, apart from it, the question arises, as to whether the provisions of Article 120 can be attracted on the facts and circumstances of the present case. Article 120 prescribes a period of 6 years from the time when the right to sue accrues for institution of a suit in respect of which no period of limitation has been provided elsewhere in schedule 1 of the Limitation Act. This is a general Article and it applies to suits to which no other Article is applicable. The words "right to sue" means a right to seek relief and there can be no right to sue until there is an accrual of the right asserted in the suit and its infringement by the defendant. The question as to when a right to sue arises depends mostly on the facts and circumstances of each case.
Plaintiffs had asserted in the plaint that on 22-9-1951 deductions were made from their bills and the Government had disallowed the claims without any justification. The plaintiffs had submitted their bills in January, 1947, and they remained pending till 22-9-1951 when the accounts were finally made, Mr. B. C. De referred once again to the interrogatories filed on behalf of the plaintiffs and pointed out that the plaintiffs had asked the defendants to state, as to whether the Government or the appropriate authority had passed bills as per specifications and details given in a separate sheet flag "A". He urged that after the finalisation of the account a sum of Rs. 77079/14/- was paid in view of the order dated 22-9-1951 passed by the District Magistrate and the District Supply Officer. Learned counsel relied upon the answer given by defendant 1 to the interrogatories where it was admitted that a sum of Rs. 77079/14/- as shown at flag "A", was passed and paid to the plaintiffs. Without going through the interrogatories and their answers, it appears from the evidence adduced in this case that the bills of the plaintiffs remained pending for a long time and payment was made to them in September 1951. P. W. 1 deposed that after the final accounts were made in August, 1951, the plaintiffs verified the accounts and learnt that the Government had made various deductions without any justification. He further asserted that the final accounts were made without any notice to the plaintiffs. He has proved the various bills (exhibits 3 series). The evidence of D. W. 1 is that, after considering the objections raised in the audit report, final accounts were made by him sometime in September, 1951. His positive statement is that the accounts were finally adjusted by him in 1951 from the registers and the liability and dues of the parties respectively were determined by him on reference to the various registers and the audit reports. He further added that after the accounting a sum of Rs. 77079/14/- was paid to the plaintiffs and then nothing was left due. This payment was made after the adjustment of the plaintiffs' account with the Government. It further appears from his evidence that various deductions were made at the time of the final accounting. The position thus in the present case was that the bills of the plaintiffs remained pending till 22-9-1951 when the final account was made and then a sum of Rs. 77079/14/- was paid to the plaintiffs after making various deductions. Until those deductions were made and the plaintiffs came to know of them they were not in a position to institute a suit. Before those deductions, the plaintiffs were not in a position to decide for themselves, as to whether their claims and the bills would be paid in full or in part and after the deductions they had to make up their mind as to whether the basis for the deductions was' justified or not. In those circumstances, their right to sue or obtain a relief arose after the finalisation of the accounts and not until then. In this view of the matter, the provisions of Article 120 are applicable to the facts of the present case and the suit in toto cannot be held to be barred by time.
(Paras 9 to 15 have been omitted as they contain, no points of law worth reporting. (Ed.) )
16. The other objection (First Appeal No. 382 of 1959) in this appeal is with regard to the claim in item (B) of the schedule in respect of deductions for the godown rents and the claim was to the tune of Rs. 19272/6/6, The entire claim has been allowed by the trial Judge, but the defendants have preferred an appeal in this respect. Plaintiffs asserted in the plaint that they had to take on rent various godowns in Nepal, and in the district of Purnea for stocking paddy. The answer of defendant was that there was no liability for the rents of the godowns and there was no agreement to pay those sums. P. W. 1 stated that the grains used to be stocked in the godowns after being brought there on boats or bullock carts and later on they used to be despatched by rail according to the directions. His evidence further was that godown rents were allowed to the other purchasing agents of the Government, but the plaintiffs' claim in that respect was refused by the authorities without any justification. D. W. 1 deposed that there was no stipulation or contract by the Government to pay godown rent. Mr. B. C. De referred to a letter, exhibit 2 (e) dated 10-10-1950 sent by the Secretary to Government, Supply and Price Control Department, to the District Magistrate, Purnea, in respect of the claims of Mr. B. Bhattacharjee, a purchasing agent. It indicates that the Government had decided to allow godown rent to the said purchasing agent at the rate of 2 annas per maund for storage less than 6 months and 4 annas per maund for storage for 6 months and above. On this basis Mr. De urged that the plaintiffs as well were entitled to godown rent at the rate of 2 annas per maund. This contention found favour with the tria! Judge and he allowed the plaintiffs' claim to the full extent in this respect. It appears from the bills (some of the exhibits 3 series) that the plaintiffs had charged godown rent at the rate of 2 annas per maund. Mr. K. D. Chatterji, submitted that the plaintiffs had failed to adduce evidence as to what rents they had paid in respect of one godown or the other and to whom and for which period. It is true that definite evidence in that respect is lacking, but this much is cleat that before despatching the paddy to different persons, it had to be stored somewhere and the quantity was very large. The duplicate copy of the Bill exhibit 3 (a) dated 13-1-1947, contains a statement showing paddy supplied from Barsoi to outside as per Regional Grain Supply Officer's programme, and it appears from this statement that paddy was sent to the Sub-divisional Officer of Hajipur and Madhepura as well. Exhibit 3 (b) indicates that paddy was supplied to the mills in Purnea region. The plaintiffs had to purchase grains at several places and then they had to wait for directions from the authorities concerned for sending them either to one place or' the other and until the directions were received, they had to keep the huge quantities of paddy in their charge. In these circumstances, they had to pay the rents of the various godowns at different places. Section 44 of the Indian Sale of Goods Act, 1930, provides inter alia that when the seller is ready and willing to deliver the goods and requests the buyer to take delivery, and the buyer does not within a reasonable time after such request take delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or refusal to take delivery and also for a reasonable charge for the care and custody of the goods.
In the case of Kamruddin Kedibhai and Co. v. Municipal Committee, Anjangaon, AIR 1951 Nag 148 the plaintiff respondent (Municipal Committee) had entered into an agreement with the defendant-appellant, a firm of hardware merchants and the firm had to supply to the committee sets of weights and measures to be used within the municipal limits. The firm prepared weights and measures, delivered some and was willing to deliver more but the committee refused to take delivery of the goods. The firm had previously instituted a suit claiming the price of the goods supplied and ready to be delivered. The firm obtained a decree against the municipal committee for the price of the goods and the decretal amount was paid by the said committee, but the goods had remained with the firm. The Municipal Committee, then sent notices asking the firm to deliver the goods. The firm refused to deliver the goods except on payment of rent for the keeping of the goods for a certain period. The committee then instituted the suit out of which that appeal arose for delivery of the stock or, in the alternative, for damages in respect of the price of the goods. Defendant expressed willingness to deliver the goods but only on payment of rent for the care and custody of the goods at a certain rate. In other words, charges were claimed for care and custody of the goods. A question of limitation also arose in that appeal and it was held that Articles no and 115 were not applicable. As the liability of a buyer for reasonable charges for care and custody of the goods arose under Section 44 of the Sale of Goods Act, apart from any contract between the parties it was further held that the residuary Article 120 was applicable.
Section 44 will not apply in terms to the facts of the present case, but the principles can be relied upon. As already observed, plaintiffs had to keep the paddy in their charge and custody till directions were received for despatching it to one place or the other and they are entitled to claim the rents of the godowns. The letter exhi bit 2 (e) indicates that a flat rate of 2 annas per maund was allowed to Mr. Bhattacharjee for storage less than 6 months. Plaintiffs had claim-
ed godown rent at the rate of 2 annas only per maund and this seems to be the minimum rate for storage for a period less than 6 months. In view of these circumstances, I am in agreement with, the finding of the trial Judge that the plaintiffs were entitled to a sum of Rs. 19272/6/6 on this score.
(Paras 17 and 18 have been omitted as they contain no points of law.)
19. In the result First Appeal No. 382 of 1959 is dismissed but without costs. First Appeal No. 384 of 1959 is allowed in part, the, judgment and the decree of the trial Court are modified to this extent that the plaintiffs' suit is decreed against defendant 1 for Rs. 29,000/- as, well with proportionate costs of both the Courts. Defendant 1 is directed to pay this amount to the plaintiffs within three months from today.
Mahapatra, J.
20. I agree.