Case: Khila Dhish & Others Vs. Mool Chand & Others

V. Ramaswami, J.1. This appeal is brought by special leave from the judgment of the Allahabad High Court dated 10th July, 1964 in First Appeal No. 183 of 1952 whereby the judgment dated 2nd February, 1952 of the Civil judge of Mainpuri was set aside and the case was sent back to that court for deciding on merits after taking additional evidence on behalf of the parties.2. The relationship of the parties will appear from the following pedigree :Sunder LalDharam Das Narain Dass Mool Chand(Childless) (4 sons) (3 sons)There was a joint Hindu family consisting of Mool Chand and his sons on the one hand and two brothers Dharam Das and Narain Dass with his sons on the other. Dharam Das did not have any issue but Narain Dass had sons who were also members of the joint Hindu family. One of the brothers Narain Dass brought suit No. 2 of 1937 in the Court of Civil judge, Mainpuri, against Mool Chand for partition of the joint family properties. In that suit the sons of Narain Dass and Mool Chand were also impleaded as parties. During the pendency of the suit the parties agreed on 27th January, 1937, that Dharam Das should be appointed as a referee to partition the family properties. By a separate agreement of the same date, Dharam Das was appointed as the manager of the entire joint family property till the decision of the dispute. Accordingly, Dharam Das entered upon the management of the joint family property and on 1st February, 1938 he gave a report allotting various items of property to the members of the three branches in three lots. On 31st May, 1940 a final decree was passed by the Civil Judge, Mainpuri in terms of the report. Mool Chand who was the defendant in the suit, was dissatisfied with the final decree and filed First Appeal No. 213 of 1941 in the Allahabad High Court. The appeal was ultimately dismissed on 28th July, 1944 on the ground that no appeal lay against the decree. On 28th July, 1947 Dharam Das and Mool Chand filed two separate applications for execution of the decree in suit No. 2 of 1937. On the same date, Mool Chand made an application saying that Dharam Das as manager should be" required to render accounts in respect of the realisations made by him from the joint family properties on their behalf. This application was dismissed by the Execution Court on the ground that the accounting could not be demanded from the manager in execution proceedings and that Mool Chand was at liberty to file suit for that purpose. On 27th July, 1950 Mool Chand and his sons filed suit No. 11 of 1950 in the Court of Civil judge, Mainpuri against Dharam Das for rendition of accounts for the period from 28th January, 1937 up to June, 1941. The suit was contested by Dharam Das who pleaded that the suit was barred by Article 89 of the Indian Limitation Act. By his judgment dated 2nd February, 1952 the Civil judge of Mainpuri dismissed the suit holding that it was time barred. Against the judgment of the Civil judge dated 2nd February, 1952 the respondents preferred First Appeal No. 183 of 1952 in the Allahabad High Court. By his judgment dated 10th July, 1964 Gyanendra Kumar, J., allowed the appeal and remanded the matter to the Civil judge for decision according to law. It was held by Gyanendra Kumar, J., that the suit was within time.3. Article 89 of the Limitation Act, 1908 (Act No. 9 of 1908), was to the following effect :Description of suit Period of Time from limitation which period begins to run89. By a principal against Three When the account his agent for movable years is, during the property received by continuance of the the latter and not agency, demanded accounted for and refused or, where on such demand is made, when the agency terminates.Sections 201, 213 and 218 of the Indian Contract Act (Act No. 9 of 1872), are reproduced below :"201. Termination of agency. - An agency terminated by the principal revoking his authority; or by the agent renouncing the business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated as insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors.213. Agents accounts. - An agent is bound to render accounts to his principal on demand.218. Agents duty to pay sums received for principal. - Subject to such deductions, the agent is bound to pay to his principal all sums received on his account."4. It was argued on behalf of the appellants that the suit was barred by limitation under Article 89 of the Limitation Act. It was said that Dharam Das was to manage the properties till the end of June 1941 when his agency was terminated. It was argued that the suit should have been filed within three years of that date. i. e., by 30th June, 1944. It was urged that the agency of Dharam Das had terminated when suit No. 2 of 1937 was decided by the Trial Court on 31st May, 1940 or at the latest on 29th July, 1944 when the High Court dismissed First Appeal No. 2 of 1941 arising from the decree of the lower Court. According to the appellants, the present suit should have been brought on or before 28th July, 1947 within a period of three years from the date of the termination of his agency. Section 301 of the Indian Contract Act provides that an agency is terminated by the principal revoking his authority or by the agent renouncing the business of the agency; or by the business of the agency being completed. Section 218 of the Indian Contract Act further provides that the agent is bound to pay his principal all sums received on his account. The contention of the appellants was that Dharam Das was no longer in physical management of the property on behalf of the respondents and so the agency of Dharam Das should be deemed to have terminated. We are unable to accept this argument as correct. The question as to when the agency terminates is a question of fact to be determined on the matters proved or admitted in a particular case. In the present case, Dharam Das made a statement before the Civil judge on 28th August, 1951 that he was willing to account for all the money received by him in respect of his report dated 1-2-1938 submitted by him in suit No. 2 of 1937. On the basis of the statement the Civil Judge recorded the following order"Dharam Das deft. stated that he is willing to account for all the money received by him in respect of his report dated 1-2-1938 filed today Paragraph 14. The counsel for the plffs. stated that he is agreeable to account being rendered by deft. No. 1 on the basis of the report mentioned above. The counsel for the plff. agrees that all moneys received by his client in respect of property handed over to Dharam Das on 27-1-1937 will be brought into account and if there is any excess over his own share it shall be paid back."Later on Dharam Das tried to go back on his undertaking by moving an application 32-C. The Trial Court rejected the application holding that Dharam Das did not make any reservations at the time he made his previous statement. The order of the Civil Judge dated 22nd August, 1951 states :"The applicant did not make any reservations at the time he made his statement. He agreed to render such accounts as he had for the entire period following his receiving the property and his report dated 1-2-1938 has reference to it.He confirmed his willingness to render all accounts when his counsel Shri R. C. Mowar appeared and Mr. Mowar then signed on the Court order sheet.This application is, therefore, an afterthought."5. Upon the particular facts established in the present case, we are of opinion that the agency of Dharam Das had not terminated in June 1941 or in July, 1944, but the agency continued till 21st August, 1951 when Dharam Das admitted that he was willing to account all the money received by him. It follows that the suit of the respondents instituted on 27th July, 1950 is not barred under Article 89 of the Limitation Act.6. Mr. S. P. Sinha also raised two other questions in the course of his argument. In the first place, it was contended that after the death of Dharam Das his legal representatives were not liable to account to the respondents because the liability for accounting was something personal to Dharam Das and the liability terminated with his death. Another contention was that there was no question of any accounting by Dharam Das who as the Karta of the joint Hindu family was not liable to furnish accounts. We do not wish to express any opinion at this stage on these contentions. If the appellants choose, they may press the contentions before the Trial Court which will no doubt decide them in accordance with law.

Decision reasoning: 0[ds]We are unable to accept this argument as correct. The question as to when the agency terminates is a question of fact to be determined on the matters proved or admitted in a particular case. In the present case, Dharam Das made a statement before the Civil judge on 28th August, 1951 that he was willing to account for all the money received by him in respect of his report dated 1-2-1938 submitted by him in suit No. 2 of 1937. On the basis of the statement the Civil Judge recorded the followingDas deft. stated that he is willing to account for all the money received by him in respect of his report dated 1-2-1938 filed today Paragraph 14.Upon the particular facts established in the present case, we are of opinion that the agency of Dharam Das had not terminated in June 1941 or in July, 1944, but the agency continued till 21st August, 1951 when Dharam Das admitted that he was willing to account all the money received by him. It follows that the suit of the respondents instituted on 27th July, 1950 is not barred under Article 89 of the Limitation Act.