~-. ,_

' '

JASRAJ INDER SINGH

HEM RAJ MULTAN CHAND

February 14, 1977

(V. R. KRISHNA' IYER AND A. C. GUPTA, JJ.J

Parfllership Act-Rendition of accounts-Plaintiff had two shops at different places-Defendant had dealings at both p/aces--Plaintiff claimed account of one shop wit/1out set off from the other-If set off permissible.

Jurisdiction of High Court-Remand order-Na/lire of-Lower Court, if bound by directions in remand order.

The appellant (Plaintiff) had two shops, one in his village and the other in a city.

The respondent (defendant) had dealings of various kinds with the appellant at both the places.

The plaintiff filed a suit claiming a certain sum representing the net balance due to him from the respondent (defendant) on the village account.

The defendant on the other hand claimed that, had the city account been taken into account, it was he who would be entitled to a larger sum from the plaintiff.

The plaintiff claimed that the accounts of the village and city should not be mixed up.

The trial Court held that, though the shoP§ were located at different places, they were owned by the same person and iii equity and law, set off was permissible and it accordingly granted a decree.

On the plaii{tiff's appeal, the High Court held that rendition of city accounts was illegal and remanded the case to the trial Court.

On remand, the trial Court held that while the plaintiff was right in his demand vis-a-vis the villa, ge shop, the defendant was entitled to a certain sum from the city account and awarded a decree to the plaintiff in respect of the net balance.

In appeal, the High Court held that after remand the trial Court had no E jurisdiction to look into the city accounts as a whole and on account of a misapprehension of the observations of the remand order, an illegal decree had been passed in favour of the p\aintiff.

Restoring the trial Court's order,

HELD : The true nature of the action in this case was a suit on account fo the sum due on striking a balance. That itself was the cause of action. [98 lE]

1. The trial Court's view that the entirety of account in the two shops could be viewed as a composite one, was sound.

The parties are the same.

There was only one person who owned the two shops and it is wrong to construe the situation as if there were two juristic entities. The defendant who dealt with the plaintiff in the two shops was . the same person. The dealings were either in one or the other shop. The artificial dissection of the transactions could not square up with the reality of the situation.

[981C-DJ

In the instant case there was no misapprehension on the part of the trial Court of the observations made by the High Court in its remand order.

While directing remand, the High Court ordered that issue No. 6, namely, whether on making an account of the two shops of the plaintiff the defendants were entitled to a set off and thereafter to certain sums, should be decided by the trial Court.

The trial Court naturally tQOk the view that the High Court having ordered an adjudication of th~ issue, vested it with jurisdiction to enquire into the city accounts in toto and pass a de'cree. If the village and city accounts had to be gone into, the decree passed was correct.

[980G-H]

2. Order 8, !}lie 6 CPC deals with a specific situation and does not prevent the Court, where the facts call for wider relief, from looking into the accounts in both places to do ultimate justice between the parties.

[981-HJ

3: (a~ After rema1_1d by the High Court, the subordinate Court is bound by the direction .of the High Court, the same High Court hearing the matter on a

11econd occas10n or any other Court of co-ordinate authority hearing the matter, cl!-nnot dscard the earlier holding.

Both a finding in a remand order cannot bmd a higher Court when it comes in appeal before it.

(982A-BJ

(b) The remand ordr by the High Court is a finding at an intermediate stage of the same litigation. When it came to the trial Court and escalated tit the Hi&h Court, it ren_iained the same litigation. The appeal before the Supreme Court is from the smt as a whole and, therefore, the entire subject matter is available for adjudication before the Supreme Court. [982C-D]

( c) The circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom, cannot preclude the appellant from challenging the correctness of the view taken by the High Court in that judgment. [982E]

Lonankutty v. Thomman (1976] 3 S.C.C. 528, followed.

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2208, 2209 of 1968. ·

From the Judgment and Decree dated the 10th/11th August, 1965 of the Bombay High Court {Nagpur Bench) in First Appeal Nos. 120 and 123 of 1965. .

S. T. Desai, D. N. Mishra and B. N. Mohta, for the appellant.

M. N. Phadke, A. G. Ratnaparkhi, for respondnt.

The Judgment of the Court was delivered by

KRISHNA IYER, J.-The two appeals, measured by their legal merits or factual dimensions, may not justify their longevity from une 23, 1949 to February 1977-the former being the date of birth: of the suit and the later the termination, at long last, of the cases in this Court.

The subject matter is a relatively small money claim which, perhaps, is less than the amount each side has spent on the forensic scrimmage. Before. we narrate the facts and discuss the law, we permit ourselves a pensive reflection about our processual justice. If we (law-makers and lawyers) tarry any longer to forge a speedy and radical jurisprudence of remedies-in-action, the long , quest for the fruits of rights may tempt suitor"s into the traditional quagmire of processual legalistics where from extrication may prove an expensive futility.

The story which hopefully comes to a close .. with this judgment, among many others like this, bears testimony to the crying need for serious reform-not oblique by-pass-of the court-system by an aware legi'slature, lest the considerable social cost of usuing judicial remedies stultify and disenchant seekers of legal justice.

The facts, when unfolded, will validate this obiter intended to alert the law-maker.

The High Court, thanks to the then rule of valuation under Art, 133 (1) (a) of the Constitution, granted a certificate of fitness. -The appellant plaintiff, as kartha of a joint Hindu family, was running a business in the name and style of Jasraj Inder Singh with two shops,

JASRAJ INDl!ll SINGH v. HEM llAJ (Krishna Iyer, !.) 975

tme i~ Khamgaon and the other in Bombay. (The trade name for the Bembay Shop was slightly different.) The respondent-defendant had been having dealings with the plaintiff at both places between October 1947 and May 1948. The accounts between the parties fluctuated from time to time, since deposits, advances, withdrawals and entrustment of silver, castor, cotton and the like for sale as agents and credit~ ing the prices in the accounts were a running feature of the mutual dealings.

The plaintiff isolated the transactions which took place in Khamgaon and brought a suit claiming a sum of Rs. 11,401-7-9 which represented the net balance due on the Khamgaon khata to him from the defendant on May 12, 1948. Interest was also demanded on an alleged agreed rate. It is noteworthy that the plaintiff's initial folly, as Shri Desai, for the appellant frankly admitted, was in excluding

from the suit claim the. amounts due one way or the other from the c Bombay branch of the business. The contracting parties were identi- ·

cal, the dealings were similar and on any fair basis either could get from the other the net amount legally due from both the shops together.

But legal sense and commonsense were abandoned by the plaintiff out of the oblique motive of claiming a larger sum than would be due in case a joint balance was strus:k. This dubious device, as will be seen presently, has backlashed on the plaintiff whose disaster in the High Court has been largely courted by this motivated cleverness. To revert to the litigative narrative, the defendant urged in defence that the demand was untenable since he had deposited six bars of silver with the Khamgaon shop of the plaintiff to be sold through his Bombay branch and if the sale proceeds thereof were taken into account in the Khamgaon khata a larger sum would be due to him. (We bypass, for the time being, the fight over this claim being a set-off under order VIII, rule 6 C.P.C., or a counter-claim in the nature of a substantive relief for the alance.). This counter-claim was met by the plaintiff in an additional pleading wherein he urged that the sale of silver bars was a matter for the Bomb.ay shop and should not be mixed up with the Khamgaon dealings which were the basis of the action. What falls for regrettable comment is that even at this stage the plaintii'I' did not invoke the obvious argument that the Khamgaon and the Bombay shops both belonged to the same owner and since the transactions were between the same parties (in different places though) when a suit for (or on) finaJ accounts were filed, all the items in the twin places should figure in the resultant decree. If this straight-forward plea were taken the facts tend to show the plaintiff would still have got a decree, may be for a lesser sum.

Oftentimes, obdurate legal obscruantism of litigants, leads to protraction of proceedings, projection of intricate pro- 'Ceclural punctilios and the phyrric processual victory forensically won being a potent source of perverting truth, draining resources and un- <loing justice.

This sombre scenario of the case we are deciding proves how on account of the correct curial approach being blinded by the cantankerousness of the plaintiff, conveniently concurred in by

the other side, revision and appeal, remand and appeal, and attendant decades of delay and disproportionate litigative spending by both and: H two friendly businessmen, thanks to this feud, turning into foes, follow- . ed-at once a disaster to both and detriment to the busines~ community.

And -some pre-trial conciliation activism by the court at an

early stage might well have sortedout the dispute, bettered their rela tions and pre-empted this cock-fight. Doing justice is a noble bche~~

hich blesses all; deciding the lis within a judicative pyramid, provo- cative of appeals and revisions, bleeds both and unwittingly incites the. bitter persistence in the struggle to win (and lose !) . We are courts bf justice guided by law and the signature tune of the indicature is Fiat Justitia. . We gently suggested, in this spirit, whether the parties would be disposed to compose their quarrel. Counsel as often happens. constructively helped, but the purchase of peace at this late stage was difficult and we gave up. Of course, adjudication on the _law and the facts cannot and shall not be influenced by this extra-curial excursion.

We pick up the story of the suit where we left it. In the dog-fight that followed, a question of court-fee was raised and decided. That was taken up to the High Court and returned. A preliminary decree for accounts of the Bombay kbata was passed and that too leapt to the High Court resulting in a remand, fresh issues and so on. Then a decree was passed and both sides challenged it in appeal and crossobjections and the last lap of the tiring race is this court where the vanquished plaintiff is the appellant. We proceed to decode the justice and the law of the cause.

We may state that the plaintiff's obstinate attitude in' treating the Bombay shop and Khamgaon shop as two different persons each being entitled to sue the defendant without reference to the amounts due to the latter from the former in inter-connected business dealings is a legal fallacy and cute perversity. However we may repeat that the defendant also proceeded on that 'shop autonomy' theory but only urged that the silver bars were wrongfully omitted from the Khamgaon kbata. Shops are not persons although suits may be filed in trade names. The trial court took a commonsense view in commingling the business account of the same parties. This was good law. A plurality of shops owned by the same person does not proliferate into many shop-persons. At an intermediate stage of the many involved interlocutory skirmishes, the plaintiff did allege :

"The alleged silver bars were sold by the defendant Suwalal through the said Bombay shop and naturally the sale proceeds of that quantity of silver are credited in the defendant's Khata in the Bombay shop. The plaintiff, therefore in reply to the defendant's claim of Rs. 17000/- has to file the extracts of accounts of the Bombay shop to put the full picture of transactions before the court. As the Bombay shop shows the balance of Rs. 4535-12-0 as due to the defendants, the said fact has been so mentioned by the plaintiff in his statement."

 In passing, we may mention that the counter-claim led to a demand for court-fee and the High Court affirmed this order but reduced the sum on .which such fee was payable. Later, issues were framed by the trial Court which reflected the integrated nature of the dealings between the two parties iii the shops at Khamgaon and Bombay. The

' ..

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/ .. -:, '.fASRAJ.°iNDER SINGH" v •. HEM 11.AJ (Krishna Iyer, J.) -ii77

learned . District Judge; not. obsessed. by. the wrong-headed pleadiIJ."i:s;·- A . took the view that the shops, though located at different places,· were • owned by the same family and the claims were so inter-connected that, in equity and law, set off was permissible and the net sum due to the plaintiff-'-less than what he had sued for-should be decreed. We may mention the relevant issues framed at the first round even here since we may have to refer to them later when dealing with a supportive submission of Shri Phadke for the defendant. Issues 5 and 7 may be repro- B duced here : · ·

"5. Whether the Bombay & Khamgaon shops owned hy

plaintiff's partners are so connected with each other that a composite account of the entries in the two shops can be made by the Defendants ? * * *· *

7. Whether on making an account of the two shops of the Plaintiff of Bombay and Khamgaon, the Defendants are entitled to a set-off thereafter to a sum of :-

(a) Rs. 17,000/- as claimed by the Defendants or to

a set-of!.

D .

(b) Rs. 4,535-12-0 as stated by the Plaintiff ?"

Later, amended pleading's led to amended issues of which issues 4 to 6 are meaningful and are set out below with the findings _thereon;

K4. Whether the Bombay and Khamgaon shops owned by plaintiff's partners are so connected with each other E that a composite account of the entries in two shops can )le made by the defendants ? - Yes

5. (a) Whether a sum of Rs. 44,697 /10 is debited to the defendants in the account of the Bombay shop ?-Yes

(b) Are these entries proper and correct ? -Yes.

 (c) And in time? -Yes.

Ci. Whether on making an account of the two shops of

. the plaintiff of Bombay and Khamgaon the defendants are entitled to. a set-off and thereafter to a sum of-

(a) Rs. 17,000/- as claimed by the defendants or to G a set off -No.

(b) Rs. 4,535/12/- as stated by the plaintiff ?-Yes.

The plain fact emerges that the two parties were having de3lings with each other, that the dealings in Khamgaon and Bombay were inter-related and not totally different transactions, d; ssociated in nature and divorced in period.

The trlal judge treated the totality of tran- . sactions as a composie account and the suit as one on accounts. He granted a decree on these terms

SUPREM! COURT REPORTS [1977] 2 s.c.R.

A "The Plaintiff shall render an account of the Bombay shop to the defendant, who shall be entitled to falsify and surcharge. A preliminary decree for accounts under order 20,

rule 16 CPC shall be drawn up.

After making an account and the necessary adjustment, the ev6ntual liability 1inter se shall be determined.

Costs shall abide the result."

B The plaintiff appealed and the defendant filed cross-objections. After a 'study of 0.8, r. 6 CPC, the High Court felt that the Bombay accounts should not have been gone into and the defendant's claim by way of set off alone was available for adjudication.

Since it had been held that the silver bars were an item in the Khamgaon shop accounts, the direction for rendition of the Bombay account was illegal. The Court observed : c

"The learned lower Court was thus in error in converting the claim of set off into a claim for rendering accounts by the plaintiff to the defendants in respect of the dealings made in the Bombay shop. The lower Court was bound in terms of

Order 8 Rule 6, to treat this claim of set off as a money claim in respect of the ascertained amount and to find whether such D amount was due to the defendants from plaintiff. If such amount was found due to the defendants from the plaintiff, -then the defendants would be entitled to set off that amount as against the claim of the plaintiff.

The decree as passed by the learned lower Court will, therefore, have to be set aside. It is necessary for the trial Court to decide as to what amount was due to the defendants from the plaintiff. The issue was framed and parties have led

evidence. The lower Court shall decide the 1ssues left undecided for final decree. The learned lower Court will decide whether it is proved on the facts that the defendants have to recover Rs. 17,000/- from the plaintiff, and if so found, will adjust the eventual liability inter se, and if it is found that any of the parties has to recover any amount from the other, a decree should be accordingly pas'sed. . .

The case is, therefore, sent back to the trial Court who will decide as to what amount is due to the defendants from the plaintiff.

Thereafter whatever amount is found due to the defendants shall be adjusted towards the proved claim of the plaintiff in respect of the deposits in the Khamga?n shop.

The Court shall pass a decree in favour of the party m whose favour the balance will be found due."

It is true that the High Court's observations inhibited the Bombay accounts being generally reopened but when the case was re.m.and.ed for fresh decision, the trial Court, apparently pressed by the miustice

of amputating the composite dealins, wnt on to hold that while the plaintiff was right in his demand vrs-a-v1s the Khamgaon Khata, the defendant was cntited to a sum of Rs. 4.535/12/- from the Bombay

accouts and awarded to the plaintiff a decree for the net balance of

JASRAJ INDER SINGH v. HEM ll.AJ (Krishna Iyer, /.) 979

Rs. 7,464/4/-. This he did in purported compliance with the Hip A Court's direction. He wasi bound by it and to act contrary to a higher court's on!er is to be subversive of the discipline that the rule of law en joys in our hierarchical justice system. The trial Judge, in recording findings on all the issues, did a comprehensive investigation of the Bombay accounts since the silver bars, although entrusted to the Khamgaon 8hop, were sold in Bombay and rightly credited in the Bombay Khata.

To pick out a single true iteilJi which had been inextricably got enmeshed in the skein of entries and cross-entries was to tear up the fabric of the whole truth. In a finer sense, harmony is the beautiful totality of a whole sequence of notes and the concord of sweet sounds is .illtuned into disjointed discord if a note or two is unmusically cut and played. Truth, like song, is whole and half-truth can be noise : Justice i-: truth, is beauty and the strategy of healing injustice is discovery of the whole truth and harmonising human relations.

Law's finest hour is not in meditating on abstractions but in being the delivery agent of full fairness.

This divagation is justified by the need to remind ourselves that the grammar of justice accord'ing to law is not little litigative solution of isolated problems but resolving the conflict in its wider bearings.

Let us pick up the threads of the litigation.

Even the interrogatories served and the answers elicited made it clear that wh'ile there were two shops in two different venues, the dealings between the plaintiff and the defendant were closely connected-rather, integrated. That furnished the justification for the trial Judge to examine the Bombay accounts between the parties and he came to the factual conclusion : 'I see absolutely no reason to doubt the ccrrectness of any of the entries in these extracts of plaintiff's account book ( exht. P-23).

I answer issues 5 (a) and (b) in the affirmative.

Ex. P. 23 contains on the credit side the sale proceeds of defendant's silver which was sold in Bombay. A plea had been feebly raised by the defendants that some of the items in the Bombay account were barred by limitation and the plaintiff could not claim credit for them. 11ris plea was also examined by the trial Court and negatived with the observation : 'I hold that in view of the credit and debit entries in Ex. P. 23 all the debit entries were within time at the material period. I answer issue 5(c) in the affirmative'.

Thus there was no denial of fairness in the trial because the Bombay accounts in their entirety were put in is'sue, and focused on by both sides in the evidence followecd by appropriate findings.

The upshot of this process was, in the language of the trial Court : 'Thus all things considered plaintiff is entitled to Rs. 12,000/- minus Rs. 4,535/12/- i.e., Rs. 7,464/4/- from the defendants'. The court denied costs to both since neither came with clean hands.

Both sides were guilty of not playing cricket and, in this game of over-reaching each other, the Court's penalty is denial of costs.

This rule was adopted by the trial Court.

When the case went up in appeal, the High Court harked back to the order of the Nagpur Bench in the same case i'n a revision filed against the order of payment of court-fee for the counter-claim. It

s true the High Court had then held that only a specific sum relatmg to the sale of silver bars was the basis of the counter-claim and the entire accounts of the Bombay shop was not at large before the Court.

The High Court referred again to the decree first passed by the trial Court to render an account of the Bombay shop to the defendant on the footing that the accounts in Bombay and Khamgaon were so interconnected as to warrant a composite understanding of the entries in the two shops.

This approach of the trial Court in passing a preliminary decree for rendition of accounts was set aside by the High Court in appeal at the first round on the score that the plea of the defendant was confined to one of set off under 0.8, r. 6

CPC.

Therefore, argued the High Court,

"A mere liability to account cannot be an answer by way of set off to the claim of the plaintiff.

In fact, the defendants in their written statement, claimed by way of set off such ascertained sum of money which, according to, them, was Rs. 17,000/-. It is because such ascertained sum was claimed by way of set off that the claim was entertained_ for investigation by the lower Court.

Therefore, the only question that was before the learned lower Court was to find out what amount was due to the plaintiff from the defendants in respect of the deposits of amounts made in the Khamgaon shop and also to find out what amount was due to the defendants from tthe plaintiff in respect of the silver transactions made in the Bombay shop.

The question of rendering accounts by the plaintiff to the defendants could not arise on the facts of the case."

The remand order was undoubtedly binding on the lower , Court and had directed a limited enquiry and passing of a decree 'in favour of the party in whose favour the balance will be found due'.

The High Court held that after the remand the learned trial Judge had no jurisdiction to look into the Bombay accounts as a whole and on account of the misapprehension of the observations of the remand order an illegal decree had been passed in favour of the plaintiff.

What was the misapprehension about? While directing a remand, the High Court ordered that issue 6 should be decided by the trial Court and this issue has been set out earlier by us.

Naturally, the trial Court took the view that the High Court, having ordered an adjudication of issue no. 6, vested it with the jurisdiction to enquire into the Bombay accounts in toto and pass the decree that w0e liave

already indicated, viz., a deduction of the surplus due to the defendant from the Bombay accounts from the amount due to the plaintiff from the defendant according to the Khamgaon accounts.

The arithmetic is not in dispute and, indeed, while both the counsel have taken us through the evidence in the case we are satisfied that if both the Khamgaon and the Bombay accounts had to be gone into,

f' JASRAJ INDER SINGH v. HEM RAJ (Krishna Iyer, !.) 981

the decree passed was correct both regarding the quantum and on the , issue of limitation.

This we affirm because Shri Phadke had feebly pressed before us that in. any case his client should be given a fresh . opportunity to make out his case regarding the various entries in the Bombay Khatha. We are not satisfied that the defendant has not had a full say and we are therefore disinclined to accede to this

request.

The surviving question before us is whether it was in order for the trial Court to have investigated the accounts in t¥ two shops together as if they were transactions between the same two persons or whether the remand order of the High Court at the first round had fettered the trial Court's hands in doing justice in this comprehensive way.

The suit is for a sum due on accounts.

The parties are the same.

There are two shops belonging to the same owner.

The re~ turn of the income fro!!J. the two shops, for income-tax purposes, is a consolidated one. In sl;10rt, there was oruy one person who owned two shops and it is wrong to construe the situation as i•f there were two juristic entities or person•al. Secondly, the defendant, who dealt with the plaintiff in the two shops, was the same person. He had no dual characters t_o play.

The dealings were either in one or in the other shop.

They were business dealings between .two businessmen, during the same p_eriod, and even inter-relat_d, to such an extent that sometimes advances were made from one shop and realisations were made in h~ other shop.

In short an artificial dissectio111 of these transactions could not square up with the reality of the situation.

Shri Phadke urged that one contract was one transaction and a set of contracts need not be necessarily brough~ up in the S\lme action between the same parties. We consider that the true nature of the action here is a suit on accounts for the sum due on striking a balance.

That itself is the cause of action.

Such a suit is not unfamiliar and such a cause of action may be made up of various minor transactions.

Viewed at the micro-level each may be a si•ngle contract.

But viewed; at the macro-level as a suit on accounts, it is a single cause of action. If the present action is one on accounts and if the various entries in the two shops at Khamgaon and Bombay involve transfusion of funds and goods, there is no reason why we should not accept as sound the approach made by the trial Court that the entirety of accounts in the two shops should be viewed as a composite one.

It reduces litigation; it promotes the final financial settlement as between the parties! it has the stamp of reality.

Otherwise it would be an odd distortion to grant a decree for the plaintiff for, say Rs, 10,000/- on the strength of the Khamgaon accounts while he owesJ_he defendants Rs. 50,000/- according to the Bombay accounts.

Order 8, rule 6, CPC deals with a specific situation and does not prevent the Court, where the facts call for wider relief, from looking into the accounts in both places to do ultimate justice between the parties.

Procedure is the handmaid and not the mistress of justice and, in this spirit, the trial Court's adjudication cannot be faulted.

Be that as t may, in an appeal against the High Court's finding, the Supreme Court is not bound by what the High Court might have

SUPREME °COURT J!.EPORTS

[1977] 2 S.C.J!..

held in its remand order. n is true that a subordhiate court is bound. by the direction of the High Court.

It is equally true that tlie same High Court, hearing the matter on a second occasion or any other court of co-ordinate authority hearing the matter cannot discard the earlier holding, but a finding in a remand order cannot bind a higher Court when it comes up in appeal before it.

This is the correct view of the law, although Shri Phadke controverted it, without reliance on any authority.

Nor did Shri S T Desai, who asserted this proposition, which we regard as correct, cite any precedent of this Court in support.

However, it transpires that in Lonankutty v. Thomman(') this proposition has been affirmed.

Viewed simplistically, the remand order by the High Court is a finding in an intermediate stage of the same litigation. When it came to the trial court and escalated to the High Court, it remained the same litigation.

The appeal before the Supreme Court is from the suit as a whole and, therefore, the entire subject matter is available for adjudication before us.

If, on any other principle of finality statutorily conferred or on account of res judicata attracted by a decision in an allied litigation the matter is concluded, we too are bound in the Supreme Court.

Otherwise, the whole /is for the first time comes to this Court and the High Court's finding at an intermediate stage does not prevent examination of the position of law by this Court.

Intennediate stages of the litigation and orders passed at those stages have a provisional finality.

After discussing various aspects of the matter, Chandrachud J., speaking for the Court in Lonankutty (supra) observed: "The circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom, cannot preclude the appellant from challenging the correctness of the view taken by the High Court in that judgment." The contention barred before the High Court is still available to be canvassed before this Court when it seeks to pronounce finally on the entirely of the suit.

Shri Desai cited before us the decision of the Bombay High Court, in Ratanlal( 2 ), as part of his argument.

Therein it is laid d9wn that a remand order will not operate as res judicata and preclude the remanding court from reopening it at the subsequent stage of the same continuing proceeding when the law underlying the remand order is differently interpreted by a larger Bench or by the Supreme Court.

Such an order or finding recorded at the stage of remand happens to be interlocutory and -cannot terminate the cause finally so that when the litigation comes up before the remanding court, the previous remand order would ordinarily be conclusive and binding like any other interlocutory order.

But exceptions there are where a re--consideration of such an order is necessitated either by discovery of fresh matter or pf unforeseen development subsequent to the order or change of law having retrospective effect.

We do not make any comments on this argument of Shri Desai and leave it at that.

(1) [1976] 3 s.c.c. 528.

(2) (1975) Mah. L.J. 65.

JASRAJ INDER SINGH v. HEM RAJ (Krishna Iyer, !.) 983.

, The trial Court's judgment has therefore to be restored. It accords A. with justice and with law.

There will thus be a decree in favour of the plaintiff in a sum of Rs. 7,464/4/-. Even truthful cases urged through unveracious forensic processes must be visited with the punitive curi'al displeasure of denial of costs and discretionary interest.

Here the plaintiff sued for a sum of Rs. 121000/~ and gets a decree for less than Rs. 8,000/-. We deny hi~ costs for the amount decreed in his favour but allow costs for the defendant to the extent he B: has succeeded (viz., for Rs. 4,535/12/-). The equities of the situation are such, especially having regard to the long lapse of time and the dubious attitude of the plaintiff and li•tigative prolixity, that we do not award interest on the amount decreed at all.

P.B.R.

Appeal allowed-

JASRAJ INDER SINGH

HEM RAJ MULTAN CHAND

February 14, 1977

V. R. KRISHNA' IYER

A. C. GUPTA, JJ

CPC

Supreme Court

S. T. Desai

D. N. Mishra

B. N. Mohta

M. N. Phadke

A. G. Ratnaparkhi

KRISHNA IYER

Jasraj Inder Singh

Bombay

Khamgaon

May 12, 1948

Desai

C.P.C

Suwalal

Phadke

Bombay

order 20,

rule 16

CPC

CPC

Order 8 Rule 6

Khamgaon Khata

Nagpur

CPC

Order 8, rule 6

CPC

S T Desai

Chandrachud

Lonankutty

Bombay High Court

Ratanlal


RADHA KISHAN SAO

GOP AL MODI & ORS.

February 14, 1977

[P. K. GOSWAMI AND P. N. SHINGHAL, JJ.]

Bihar Buildings (Lease, Rem and Eviction) Control Act, 1947, ss. 11 and llA -Scope of-Rellt of premises fixed by Rent Controller-Subsequent contract for letting out furniture-Failure to pay rent of furniture-If a ground for eviclion.

Section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 provides that a tenant shall not be liable to eviction except in execution of a decree passed by the Court on one or more of the grounds specified therein.

Under s. I IA, if in a suit for recovery of possession of any building the tenant contests the suit, the Court may make an order for deposit of rent and arrears, if any, and on failure to deposit the arrears within fifteen days of the date of the order, the Court shall orcfer the defence against ejectment to be struck out.

The plaintiff ( re3pondent) let out two rooms of his premises to the defendant {appellant) at a rent fixed by the Rent Controller under s. 5 of the Act.

Sometime later, the plaintiff let out some furniture t6 the defendant at a mutually agreed rent.

The plaintiff's suit for eviction of the defendant on the ground of non-payment of rent for three months was dismissed by the trial Court holding that failure to pay the rent of furniture along with the rent of the premises did not amount to a default under s. ll(l){d) of the Act.

On appeal, the Subordinate Judge held that non-payment of rent of furniture along with the rent of the premises was a default within the meaning of s. 11(1 ){d).

The High Court upheld the decision of the Subordinate Judge. On the question of deposit of rent under s. llA, the Subordinate Judge held that the defendant bad filed documents to show subsequent deposit in a regular way. Dn the other hand, the High Court came to the conclusion that the defendant failed to produce any material to show as to what deterred him from "depositing the money himself on the passing of the challan and what caused the handing over of the money to the Nazir." On this ground, it allowed the plaintiff's suit.

Allowing the appeal,

HELD : The High Court and the Subordinate Judge committed an error of law in a, ccepting the ground of default under s. ll(l)(d) on a wrong appreciation of the legal position on the facts found bv the first appellate Court. There was, therefore, no basis for granting a decree for eviction under s. 11 (1 )( d) of the Act. [990Cl

1. (a) It is the default in the payment of rent fixed by the Rent ContrQller which will furnish a ground for eviction under s. 11 (l )(d). Section 4 of the Act provides that notwithstanding anything contained in any agreement er law to the contrary, it shall not be lawful for any landlord to increase, or claim any increase in, the rent which is payable for the time being, in, respect of .any building except in accordance with the provisions of the Act.

[989E-F]

In the instant case, the Rent Controller having fixed the rent of the premises, the plaintiff could .not alter that rent without an order of the Ri;_nt Controller.

Default of the pavment of furniture rent agreed to by the defendant subsequent to the lease of thepremises could not be brought within the miscltief of s. 11 (I)

(d) to entitle the landlord to a decree for eviction. The furniture rent remains divorced from the rent of the building under the original demise.

[989D &P]

(b) Any alteration of the fair rent fixed by the Rent Controller will have to receive the imprimatur of the Rent Controller under s. 7.

There is no legal impediment if the parties approach the Controller and by consent obtain an order from the Controller fixing the revised rent admissible under the Act. No

RADHA KISHAN SAO v. GOPAL MODI,(Goswami, J.) 985,

enhancement of fair rent is legally permissible except in accordance with the A provisions of the Act. Default of payment of any rent in excess of the fair rent fixed, if without recourse to the procedure under the Act, will not entail a ground

for eviction under s. 11 ( 1 )( d) of the Act.

[990A-B]

The penalty of striking out the defence for noh-compliance .of an order under s. llA is district from the grounds of eviction permitted under s. 11. [988H]

2. The contention of the defendant that an order under s. 1 IA could be passed only by the trial Court is without forca because an appeal is a continuation of the suit.

The advantage given to the landlord under s. llA for the purpose of realisation of the arrears of rent pendente lite can be secured by him at any stage of the litigation, whether in the trial Court or in appeal. [9880]

~. . f 3.h Wdhefre dthe firsht apHp.elhlatCe court came to a posidtive _findingd.offf fact in favour o t e e en ant, t e tg ' ourt was wrong in a optmg a 1 erent course to reach a contrary conclusion for the first time on a vital fact. The matter would have been different if the High Court had called for additional evidence under 0.41, r. 28, C.P.C.

But the course adopted by the High Court has resulted in great prejudice to the defendant.

[987E-F]

In the instant case ihe High Court itself had accepted that the amount of rent was handed over to the. Nazir but the objection was that the defendant, instead of handing over the amount to the Nazir, should have himself deposited

it. In the absence of a proper enquiry into the matter of delay of deposit by the Nazir the High Court was not right in second appeal to penalise the defendant D by striking out his defence agairist ejectment.

[988B]

1" -------,

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 721 of 1976.

(Appeal by Special Leave from the Judgment and Order dated the 27th April 1976 of the Patna High Court in Appeal froni Appellate Decree No. 6 of 1974).

Harbans Singh Marwah, for the appellant.

K. K. Sinha, S. K. Sinha and Devi Prasad, for respondents.

The Judgment of the Court was delivered by

GOSWAMI, J.-This appeal by special leave is directed against the judgment of the Patna High Court in a second appeal arising out of •a suit for eviction of the tenant.

Two rooms being shop Nos. 17 and 18 of Modi Building in Commissioner's Compound, Ranchi, were let out by the plaintiff (respondents herein) on a monthly rental to the defendant (appellant herein).

We will describe them as ithe plaintiff and the defendant.

It is common ground that fair rent of Rs. 50/- per month (including water tax) was determined for the two shops by an order of the Rent Controller under section 5 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 (briefly the Act) on May 30, 1953 .

Later on, certain furniture, such as five almirahs and .six racks, were also let out by the. plaintiff to the defendant on a monthly rental of Rs. 28F A suit was instituted by the plaintiff on April 18, 1966, praying for eviction of the defendant on the ground of non-p•ayment of rent of the said two shops and furniture for three months from July to September 1965.

A The Munsiff, Ranchi, dismissed the suit holding that failure to remit rent for furniture along with rent for the two shops did not amount to default under section 11 (1 )( d) of the Act.

The M11nsiff also held that there was no valid service of notice under section 106 of the Transfer of Property Act.

On appeal the Second Additional Subordinate Judge, R•anchi, reversed the judgment of the trial court and decreed the suit for eviction upholding the ground of default.

The Subordinate Judge held that the plaintiff was entitled to realise rent at the rate of Rs. 78/- per month which included the rent for furniture and hence remittance by the defendant of Rs. 50/- per month wa$ not a valid discharge of his rental liability and he was a defaulter within the meaning of section 11 ( 1 H d) of the Act.

The Subordinate Judge also held that there was. no proper service of the notice of eviction.

We are not concerned in this appeal with the question of service of notice.

Since the Subordinate Judge was the final court of facts, it will be appropriate to note the following findings material for our purpose :

( l) "I, therefore, decide that the plaintiff was entitled to realise Rs. 50/- as monthly rent.

(2) In view of the evidence of the parties and Ext. 2 I hold that plaintiff had supplied the furniture detailed in Schedule B of the plaint and rent fixed for the same had been Rs. 28/- per month.

(3) The subsequent supply of furniture and that of

sufficient value must be construed as a quite independent contract unconnected with the original tenancy .... ".

The defendant's second appeal to the High Court failed.

The High Court agreed with the first appellate court that the rent for furniture was also lawfully tyayable under section 11 (1) (d) and hence the ground of default of payment of Rs. 78/- per month from July to September 1965 was available to the plaintiff.

The High Court also gave an additional reason for sustaining th• eviction decree.

There was an order by the Subordinate Judge, in the course of the appeal, under section l lA of the Act directing the defendant to deposit the rent of the premises at the rate of Rs. 50/- per month in terms of that Section. It appears there 'Yas some controversy before the Subordinate Judge as to whether this order under section 11 A was complied with or not by the defendant.

The Subordinate Judge, however, repelled the contention of the plaintiff to strike out the defence of the defendant on the ground of non-compliance with the court's order under section 1 lA in the following terms :

"It was argued on behalf of the appellant (plaintiff) that the defendant had not deposited subsequent rent in spite of direction by, the court arfd so this court had to

strike out the defence against ejectment.

The defendant A had filed the documents to show subsequent deposit in regular way.

So this plea of plaintiff fails".

A second attempt, -and this time successfully, was made in the High Court by the plaintiff to press the ground under section llA of the Act to strike out the defendant's defence against ejectment.

It is clear from the judgment of the High Court that there was no material, without further enquiry, to reach a conclusion contrary to that of the first appellate court with regard to non-compliance with

ection l lA of the Act.

The High Court, therefore, allowed parties to produce some documentary evidence and relying upon the same ____ held as follows:-

"Learned Advocate appearing for the appellant (defendant) contended that inasmuch as the delay in depositing the money in the Bank occasioned on account of the default of the officers of the court, no penalty should be imposed on the appellant (defendant).

Learned Advocate, however, failed to produce any material to show as to what detracted the appellant (defendant) to deposit the money himself on 15-3-1974 on the passing of the challan and what caused the handing over the money to the Nazir".

< Jn a matter where the first appellate court came to a positive finding in favour of the defendant with regard to the non-compliance with its order under section 1 lA, we do not consider that the High Court was right in adopting the course it did in a rather unsatisfactory manner to reach a contrary conclusion, for the first time, on a vital and clinching fact about handing over the amount of rent to the Nazir in absence of the latter's oral testimony.

There is no denial even in the written information furnished by the Nazif'that the rent was handed over to him on March 14, 1974. The matter would have been different if the High Court, in the interest of justice, had called for additional evidence under order 41, rule 28, Civil Procedure Code, so that the parties would have proper and adequate opportunity to establish their respective versions including the procedure of the particular court regarding acceptance of deposit in a given situation.

It is true that the, High Court could itself permit documentary evidence to be produced before it under order 41, rule 27, but, as we have seen, this course has resulted in gret prejudice to the defendant.

Even the counsel were unable to inform us about the procedure of depositing the money in compJioance with the order under section 11A in the court of the Subordinate Judge even after entertaining of additional evidence before the High Court.

In view of the fact that the first appellate court held the deposit of the amount sufficient under the law being within the statutory period laid down under section 11 A, we are most reluctant to prefer the contrary conclusion of the High Court on the materials - produced

before it.

This is particufarly so since the High Court itself appears H to have accepted the position that the amount was handed over to the Nazir on March 14, 1974, in the extract from the judgment quoted

15-206SCT /77

above.

The only objection of the High Court was that the defendant instead of handing over the amount to the Nazir should have "himself' deposited the amount on March 15,

1974. Since the money was deposied by the Nazir on May 28, 1974, in absence of a prope~ enqwry mto the matter of delay of deposit at the hands of the Nazir and the reasons for it, the High Court was not right, in second appeal, to penalise the defendant by striking out his defence against ejectment. The second ground relied upon by the High Court for decreeing the plaintiff's eyiction. suit, therefore, fails.

Further section 11 describes the circumstances under which evic-- tion of tenants can take place. Under that section a tenant shall not be liable to eviction except in execution of a decree passed by the court on one or more of the grounds specified therein.

Section 1 lA which was inserted by amendment by Bihar Act 16 of 1955 reads as. follows:-

"Deposit of rent by tenants in suits for ejectment.-If in a suit for recovery of possession of any building the tenant contests the suit, as regards claim for ejectment, the landlord may make an application at any stage of the suit for order on the tell'ant to deposit month by month rent at a rate at which it was last paid and also the arrears of rent, if any; and the Court, after giving an opportunity to the parties to be heard, may make an order for deposit of rent at such rate as may be determined month by month and the arrears of rent, if any and on failure of the tenant to deposit the arrears of rent within fifteen days of the date of the order or the_ rent at such rate for any month by the fifteenth day of the next following month, the Court shall order the defence against ejectment_ to be struck out and the tenant tobe placed in the ame position as if he had not defended the claim to ejectment.

The landlord may also apply for per-. mission tg withdraw the deposited rent without prejudice to his riht to claim decree for ejectment and the court may permit him to do so.

T, he Court may further order recovery of cost of suit and such other compensation as may be determined by it from the tenant''.

It is submitted by the defendant that an order under section 1 lA can be passed only by the trial court.

We are, however, unable to accept this position, since appeal is a continuation of the suit.

The advantage which is given to the landlord under section 1 lA for the purpose of realisation of the arrears of rent pendente lite which is in the nature of lawful enforcement of the conditions of tenancy, can be secured by the landlord at any stage of the litigation, wheth<:-r in the trial court or in appeals. The pealty of striking out defen?e _for non-compliance of an order under section 1 lA has to be kept d1stmct from the grounds of eviction permitted under section 11 of the Act.

The only ground that remains for consideration is whether the defendant defaulted 'in the payment of rent from July to September,

1965. If it were merely a finding of fact by the first apl'ellate col}rt,_

ithere would be nothing wrbng for the High Court to dismiss the A second appeal. The question, however, assumes a legal comptexion even. on the findings of facts of the first appellate court.

The first appellate court found that rent for the premi•cs was Rs. 50/- per month and there was no default of that rent at any time. The first appellate court found that the rent of Rs. 28jper month for the furniture was a subject matter of "subsequent supply" B and "a quite independent contract unconnected with the original tenancy".

It, however, found that since the same was not paid by the defendant during the months in question along with the rental of Rs. 50jper month for the premises, the defendant was a defaulter --- -'- within the meaning of section 11 (1) (d) of the Act.

The High Court has accepted this legal conclusion of the Subordinate Judge.

We are, however, unable to accept the above legal position of the defendant's default in this case on the findings of facts set out above .. Rent has been always Rs. 50/- per month for the premises after the same was fixed by the Rent Controller under section 5 of the Act as far back as 1953.

The parties having been already before the Rent Controller for fixation of fa'ir rent of the premises, the plaintiff could not alter that fixed rent without order of the Rent Controller.

Section 4 of the Act provides that "notwithstanding anything contained in any agreement or law to the contrary, it shall not be lawfuL for any landlord to increase, or claim •any increase in, the rent which is payable for tpe time being, 'in respect of any building except in accordance with the provisions of this Act".

The two shops, which are building for the purpose of section 2(aa) of the Act, were rented out as an unfurnished building.

This amount of rent of Rs. 50/- was determined by the Rent Controller as fair rent under section 5 of the Act. It is the default in the p•ayment of this rent fixed by the Rent Controller which will furnish a ground for eviction under section ll(l)(d) of the Act.

Default of the furniture rent agreed by the defendant subsequent to the lease cannot be brought within the mischief of section 11 ( 1) ( d) to entitle the landlord to a decree for eviction.

On the findings of the first appellate court the furniture rent remains divorced from the. rent of the building under the original demise.

Even if the furniture be returned, the lease for the building in this case will not be affected.

The plaintiff submits that since the definition of building includes furniture the rent becomes consolidated 11nd the defendant was liable •to pay the total amount of Rs. 78/- and any default for two months to pay the consolidated rent will attract sections I I (1) ( d) of the Act.

The plaintiff further submits that since the furniture rent is the rent agreed between the parties there was no occasion nor legal requirement to approach the Rent Controller for redetermination of the rent under section 7 of the Act.

We are unable to accept the above submission.

Any alteration of the fair rent fixed by the Rent Controller either by improvement of the building or by addition of furniture to the building will have fo receive the_ imprimatur of the Rent Controller. Section 7, inter alia,

provides that if, at any time after the fair rent of a building has been determined, it appears to the Rent Controller that subsequent to such determination some addition or improvement has been made to the building at the landlord's expense, the Controller may redetermine the fair rent of the building.

There is no legal impediment if the parties, landlord and tenant, approach the Controller and by consent obtain an order fni)m the Controller fixing the revised rent Wf1ich is admissible under the Act.

Any other course is bound to lead to mal-practices and unholy devices deterimental to the interests of the tenants.

No enhancement of fair rent fixed by the Rent Controlj.er is legally permissible except in accordance with the provisions of the Act.

Default of. payment of any rent, in excess of the fair rent fixed, if without recourse to the procedure under the Act, will not entail oa ground for eviction under section 11 (1 ) ( d) of the A cit.

The High Court, and earlier the Additional Subordinate Judge, therefore, committed an error of Jaw in accepting the ground of default under section 11(1) (d) on a wrong appreciation of the legal position on the facts f9und by the first appellate court. There was, therefore, no basis. for granting a decree for eviction under section 11 ( 1 ) ( d) of the Act.

In the result the judgment of the High Court i1, set aside and the judgment and the decree of the Munsiff dismissing the suit stand restored.

The appeal is allowed with costs.

P.B.R.

Appeal allowed.

SAO

GOP AL MODI & ORS

February 14, 1977

P. K. GOSWAMI

Control Act, 1947

ss. 11

Section 11

Control Act, 1947

s. 5

s. 11(1 )

s. 11

s. 11

Section 4

s. 11

s. 7

s. 11

s. 11

s. 1

C.P.C

Nazir

Harbans Singh Marwah

K. K. Sinha

S. K. Sinha

Devi Prasad

GOSWAMI

Patna High Court

section 5

Control Act, 1947

May 30, 1953

April 18, 1966

Ranchi

section 11

section 106

Transfer of Property Act

section 11

section 11

section 11

section 1

section 1

March 14, 1974

order 41, rule 28

Civil Procedure Code

order 41, rule 27

section 11A

section 11

section 11

Section 1

section 1

section 1

section 1

section 11

section 11

section 5

Section 4

section 2(aa)

section 5

section 11

section 7

Section 7

section 11

section 11(1)

section 11