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  • Article 89 of the Second Schedule of the Indian Limitation Act, 1908,
  • Article 89 of the Second Schedule of the Limitation Act
  • Sec. 213 of the Indian Contract Act
  • rule in Article 115
  • rule in Article 120
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • Article 89 of the Second Schedule of the Indian Limitation Act, 1908,
  • Article 89 of the Second Schedule of the Limitation Act
  • Sec. 213 of the Indian Contract Act
  • rule in Article 115
  • rule in Article 120
Smart Summary

Factual and Procedural Background

This appeal concerns a preliminary decree in a suit for accounts brought by a principal against the representatives of his deceased agent. The Plaintiff-Respondent alleged that Chandra Mohon Bala acted as his agent from 1897 to 1901, succeeded by his son Gopi Nath Bala from 1902 until his death in 1908, and finally by Gopi Nath's infant son, the first Defendant, Kumeda Charan Bala, from 1909. The Plaintiff contended that although some account papers were delivered, they lacked explanation and vouchers, entitling him to full accounts for the entire agency period. The Defendants, represented by their guardian ad litem, denied any agency relationship or liability to render accounts. The Subordinate Judge issued a preliminary decree requiring the Defendants to submit accounts within fourteen days and appointed a Commissioner to take accounts. On appeal, the Defendants challenged the maintainability of the suit, their liability to render accounts, and the procedural propriety of referring the matter to a Commissioner before determining preliminary disputes. The appellate court found the Subordinate Judge's decree erroneous and unsupportable.

Legal Issues Presented

  1. Whether the infant sons of Gopi Nath Bala, as representatives of their deceased father and grandfather, are liable to render accounts of the agency.
  2. Whether the liability to render accounts under Section 213 of the Indian Contract Act extends to the legal representatives of a deceased agent.
  3. The applicability of limitation laws, specifically Articles 89, 115, and 120 of the Indian Limitation Act, 1908, to suits against agents or their representatives.
  4. The nature and scope of the principal's remedy against the representatives of a deceased agent—whether it is a suit strictly for accounts or for recovery of money lost due to negligence or misconduct.
  5. Procedural propriety of entrusting the enquiry into accounts to a Commissioner before resolving preliminary disputes.

Arguments of the Parties

Appellants' Arguments

  • The liability to render accounts under Section 213 of the Indian Contract Act is personal to the agent and does not extend to his legal representatives.
  • The infant sons of Gopi Nath Bala never acted as agents nor were competent to act as such.
  • The suit as framed is not maintainable against the representatives of the deceased agents.
  • Preliminary points regarding agency and liability should have been determined before the accounts enquiry was referred to a Commissioner.
  • Reliance on case law (Manmothonath Bose v. Basanta Kumar Bose; Rameshur Tiwari v. Kishun Kumar; Pritam Singh v. Mubarik Singh) to support the view that representatives cannot be called upon to render accounts in the same manner as the agent.

Respondent's Position (as inferred from judgment)

  • The agency existed through the successive agents and their representatives, entitling the Plaintiff to accounts.
  • The representatives of a deceased agent are liable to account for money or property that came into their hands representing the principal's estate.
  • The suit is maintainable as a claim for recovery of money misappropriated or lost due to negligence or misconduct of the agent, with the burden on the Plaintiff to prove his entitlement.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Seth Chand Mal v. Kalian Mal Distinguishing limitation applicability to suits against agents versus their representatives. Supported the view that Article 89 of the Limitation Act does not apply to suits against representatives of agents.
Lawless v. Calcutta L. & S. Co. (Mr. Justice Wilson) Upon death of agent, a fresh cause of action accrues against his representatives. Accepted that the right and remedy against representatives differ from those against the agent himself.
Harender v. Administrator-General Application of Article 115 (three-year limitation) to suits against representatives. Used to show the claim against representatives was barred if beyond limitation period.
Bindraban v. Jamuna Application of Article 120 (six-year limitation) to suits against representatives. Also used to demonstrate claim barred by limitation.
Manmothonath Bose v. Basanta Kumar Bose Guardians' personal liability to render accounts does not extend to their representatives after death. Supported appellants' argument that representatives cannot be compelled to render accounts in the same manner.
Rameshur Tiwari v. Kishun Kumar; Pritam Singh v. Mubarik Singh Similar principle as above regarding personal nature of accounting liability. Reinforced the principle that representatives are not liable to render accounts as the agent would.
Shib Chandra v. Chandra Narain Agent's duty to be ready with accounts and vouchers. Recognized agent's personal duty but distinguished from liability of representatives.
Hurrinath v. Mathoor; Khunilal v. Gobind Krishna Limitation law bars enforcement of rights, does not create them. Used to argue that limitation cannot create a right where none exists against representatives.
Nuyut Ali v. Patterson Representative liable for money misappropriated by deceased agent; action survives death. Supported the view that suit against representatives is for recovery of money or property in their hands, not strict accounts.
Concha v. Murrieta Claims based on breach of fiduciary duty survive against representatives despite 'actio personalis moritur cum persona'. Confirmed that breach of quasi-contract or fiduciary obligation can be enforced against representatives.
Phillips v. Homfiay (Bowen, L.J.) Supports recovery of loss caused by breach of fiduciary duty against representatives. Helped affirm the principal's right to recover losses from the estate of deceased fiduciaries.

Court's Reasoning and Analysis

The Court began by acknowledging that an agent is bound under Section 213 of the Indian Contract Act to render accounts to his principal. However, the Court found that the claim against Chandra Mohan Bala's representatives was barred by limitation under Articles 115 and 120 of the Indian Limitation Act, 1908. Regarding Gopi Nath Bala, the Court noted the absence of clear findings on the scope of his agency but assumed his agency for analysis.

The Court examined whether the liability to render accounts extends to the legal representatives of a deceased agent. It accepted the appellants' argument that such liability is personal and that representatives cannot be compelled to render accounts in the same manner as the agent, as they lack personal knowledge and ability to explain or support accounts. The Court distinguished suits for strict accounts from suits for recovery of money lost due to the agent's negligence or misconduct, holding that the principal's remedy against representatives is to recover money or property misappropriated or held by them, not to compel detailed accounting.

This view was supported by various precedents, including Nuyut Ali v. Patterson and Concha v. Murrieta, which recognized that claims founded on breach of fiduciary duty or quasi-contractual obligations survive against representatives and are enforceable as money claims rather than strict accountings.

Consequently, the Court held that the preliminary decree requiring accounts was erroneous. It directed that the case be remanded for retrial with specific issues to be considered, including agency existence, scope, negligence, losses, and extent of the estate in defendants' hands. The Court emphasized that the Plaintiff bears the burden of proof and that the enquiry should initially be conducted by the Subordinate Judge, with referral to a Commissioner only if necessary and limited in scope.

The Court also ordered amendment of the plaint to convert the suit into one for recovery of a specific sum, confining the Plaintiff to specified items and accommodating the Defendants' cross-claim.

Holding and Implications

The appeal is allowed and the preliminary decree of the Subordinate Judge is discharged.

The case is remanded to the Subordinate Judge for retrial on defined issues regarding the agency, liability, and recovery of money. The Plaintiff's suit is to be treated as one for recovery of a specific sum rather than strict accounts. The Plaintiff bears the burden of proof on all claims. The enquiry into accounts will be conducted primarily by the Subordinate Judge, with possible limited referral to a Commissioner. The Defendants' cross-claim will also be tried.

This decision directly affects the parties by clarifying the nature of the principal's remedy against deceased agents' representatives and correcting procedural errors in the preliminary decree. The Court did not establish new precedent but applied and clarified existing legal principles on agency, limitation, and fiduciary obligations.

    Kumeda Charan Bala v. Asutosh Chattopadhyaya

    This appeal is directed against what purports to be the preliminary decree in a suit for accounts by a principal against the representatives of his deceased agent. The case for the Plaintiff-Respondent Was that one Chandra Mohon Bala acted as his agent for collection of rents and realisation of advances from tenants, from 1897 to 1901, that upon the death of Chandra Mohan, he was succeeded by his son Gopi Nath Bala as agent who acted in that capacity from 1902 up to the time of his death in 1908, and that finally upon the death of Gopi Nath, he was succeeded as agent by his infant son, the first Defendant, Kumeda Cbaran Bala, in 1909. The Plaintiff asserted that though some account papers were delivered to him, they were neither explained nor supported by vouchers, and, that he was consequently entitled to have the accounts taken for the entire period of agency from 1897 to 1901. The claim was resisted by two infant sons of Gopi Nath Bala represented by their mother as guardian ad litem. They denied that their father or grandfather had ever acted as agent or was liable to render accounts; they further repudiated the suggestion that the first Defendant had at any time acted or was competent to act as agent. The Subordinate Judge, in a judgment remarkable for want of lucidity and precision, has overruled all the contentions of the Defendants, and made a decree in these terms:— “That a preliminary decree be passed in this suit and that the Defendant do within fourteen days from this date submit the accounts, if there be any”. The successor of the Subordinate Judge has, however, supplemented this decree by more specific instructions to the Commissioner appointed to take the accounts. On the present appeal by the Defendants, it has been argued that the suit as framed is not maintainable, that the infant sons of Gopi Nath Bala are not liable to render accounts in respect of the agency of their father or of their grandfather, and that, in any event, preliminary points in dispute should have been determined by the Court before enquiry into the accounts was entrusted to a Commissioner. In our opinion, the decree made by the Subordinate Judge is manifestly erroneous and cannot be supported.

    It cannot be, nor indeed has it been disputed, that if there was an agency either on the part of Gopi Nath Bala or of Chandra Mohan Bala, each was liable to render an account. Sec. 213 of the Indian Contract Act provides that an agent is bound to render proper accounts to his principal on demand; this duty will be enforced by following in the hands of the agent propetties representing the money for which he ought to have accounted, and the liability to account is irrespective of any express contract to that effect. In so far, however, as the alleged agency of Chandra Mohan Bala is concerned, the claim, even if it be assumed to have been enforceable against his representatives, is plainly barred by limitation. If Article 89 of the Second Schedule of the Indian Limitation Act, 1908, which provides that a suit of this description must be brought against the agent within three years from the termination of the agency or from the date of refusal to render accounts, had been applicable, the claim would have been obviously barred, as the agency of Chandra Mohan Bala, if any, terminated in May 1901, and the present action was not commenced till the 4th January, 1910. Article 89, however, is not applicable, as the suit is brought, not against the agent but against his representatives, Seth Chand Mal v. Kalian Mal (1); but, if we assume with Mr. Justice Wilson, Lawless v. Calcutta L. & S. Co., that a fresh cause of action accrued to the Plaintiff upon the death of the agent against the representatives of the latter, and then apply the three years' rule in Article 115 [Harender v. Administrator-General] or the six years' rule in Article 120 [Bindraban v. Jamuna], the claim is equally barred. In respect of the period covered by the agency of Chandra Mohan Bala, the claim is thus obviously barred. In so far as Gopi Nath Bala is concerned, there is no distinct finding in the judgment as to the scope and limit of his agency, if any; but we shall assume for the moment that he was an agent for the Plaintiff. As he died on the 4th February, 1908, the suit is in time, if the claim is enforceable as against his sons. The question thus arises whether the liability to render an account as defined by Sec. 213 of the Indian Contract Act is enforceable against the legal representatives of the agent.

    On behalf of the Appellants, it has been argued that the liability is personal and the legal representatives of the deceased agent cannot be required to render accounts in the same sense in which the agent himself might have been called upon to do. A similar question appears to have been raised in the case of Manmothonath Bose v. Basanta Kumar Bose, where it was ruled that though a guardian of a ward was liable to render accounts of his guardianship, yet after his death his representatives could not be called upon to render an account in the same manner. The same view was adopted in the cases of Rameshur Tiwari v. Kishun Kumar(6) and Pritam Singh v. Mubarik Singh(7). This position may plainly be defended on principle. No doubt, as stated in Shib Chandra v. Chandra Narain(8), the first duty of an agent is to be constantly ready with his accounts, and to be always prepared to explain them and support them by vouchers. But it does not follow that his representatives may be required to discharge this duty to explain matters of which they have no personal knowledge, and to assist the Plaintiff in the investigation of the management of his estate of which they are wholly ignorant; any other decision would place the representatives of the deceased agent at an unfair disadvantage; they cannot be called on to do that which does not lie within their power, and should not be required to attempt the impossible. We are not urmindful that Sir Earnest Trevelyan in his work on Minors [1906, p. 214] broadly formulates the rule that the Court may require the representative of a guardian, if he is dead, to deliver property in his possession or control belonging to the ward or any accounts in his possession or control relating to any past or present property of the ward. But even if we assume that this general statement, in support of which no authority is cited, does not require to be qualified, it does not bear out the contention that the representative may be called upon to render an account in the same sense as the agent himself. Nor is the form in Seton on Decrees (Vol. I, p. 114) of any real assistance to the Plaintiff, as it refers to the continuation of a suit for account against an agent, after the preliminary decree has been made. Article 89 of the Second Schedule of the Limitation Act also does not, even by implication, indicate that such a suit can be maintained against the representative of the agent; besides, as their Lordships of the Judicial Committee observed in Hurrinath v. Mathoor(9) and Khunilal v. Gobind Krishna(10), “the intention of the law of limitation is not to give a right where there is not one, but to interpose a bar, after a certain period, to a suit to enforce an existing right”. On the other hand, the view taken by Mr. Justice Wilson in Lawless v. Calcutta L. & S. Co., that upon the death of the agent, a fresh right accrues to the principal against the representative of the agent, supports the position that the right and remedy against the representative are not identical with those against the agent. What, then, is the nature of the remedy of the principal against the representative of his deceased agent? It does not follow that the estate of the agent who has not rendered an account escapes all liability in the hands of the representative. The remedy of the principal in a case of this description is to sue the representative for any loss he may have suffered by reason of the negligence or misconduct, the misfeasance or malfeasance of his agent; in other words, the suit is not one for accounts strictly so called but a suit for money payable to the principal by the representatives of the agent out of the assets in their hands. This view is supported by the decision in Nuyut Ali v. Patterson(11) which was a suit brought against the representative of an agent for recovery of money, and for delivery of papers and documents belonging to his principal. The contention that the liability was personal and had expired on the death of the agent, was overruled. It was held that if the agent had misappropriated the money, the representative was bound to indemnify the principal to the extent of the estate that had coma into his hands; as by the alleged wrong of the agent, property was acquired which benefited the deceased, the right of action did not ??? on the death of the wrongdoer; the claim for papers and documents also survived; the Plaintiffs did not seek to obtain damages for their detention; they sued for delivery of the documents and this claim could not expire with the deceased. This view accords with the decision in Concha v. Murrieta, where a claim was sought to be enforced on behalf of a ward against the representatives of his deceased guardian. It was contended that the claim could not be enforced in view of the maxim of English law ‘Actio personalis moritur cum persona’. Lord Justice Cotton observed in answer to this argument that although no action for a tort could be revived or commenced against the representatives of the person who committed it, yet the case was different where the act was not a mere tort but was a breach of a quasi-contract, where the claim was founded on breach of a fiduciary relation or on failure to perform a duty. In support of this view, reference was made to the decision of Bowen, L.J, in Phillips v. Homfiay and the conclusion was reached that the Plaintiff was entitled to recover the loss he had suffered on account of the breach of obligation of his guardian by following up his estate. In the case before us, therefore, although we hold that the suit has not been properly framed, yet the claim is maintainable for recovery of money misappropriated by the deceased, if he is proved to have been the agent of the Plaintiff and also for recovery of damages for the loss suffered by the Plaintiff by reason of his negligence or misconduct. The only difference in substance will be that the burden will be upon the Plaintiff to establish his case. In fact the Plaintiff has attached to his plaint a detailed statement of the sums he was entitled to receive from his agent and sums he did actually receive. The suit may, therefore, be deemed as one for recovery of the balance and the onus will be upon the Plaintiff to establish, with regard to each specific sum, that he is entitled to recover it.

    Under these circumstances we hold that the decree of the Subordinate Judge must be discharged and the case remitted to him for retrial. The questions for consideration will be as follows: first, was Gopinath Bala the agent of the Plaintiff? If so, what was the precise scope and limit of that agency: and what was the period during which be served as agent? Secondly, was any rent, if so how much, barred by the negligence of the agent? Thirdly, what was the stock of paddy that came into the hands of the agent from the time when the paddy business was started and what was the amount of paddy lost by the negligence of the agent? Fourthly, did the Plaintiff allow any remission of paddy as alleged by the Defendant? If so, to what extent? Fifthly, what were the bonds on account of paddy that came into the hands of the agent; was the claim upon any of these bonds barred by his negligence? Sixthly, what is the extent of the estate of the deceased agent that has come into the hands of the Defendants? The burden of proof, as we have stated, will be upon the Plaintiff. The enquiry will be held in the first instance by the Subordinate Judge himself and the matter will be referred to a Commissioner only if the Subordinate Judge finds that the enquiry is likely to be so protracted that it cannot be conveniently conducted in Court. If reference is made to a Commissioner, the items to which the enquiry is limited must be specified in the order. We further direct that the plaint be amended in the manner following: In the first prayer clause, the following words will be struck out: “That the decree may be passed against the Defendants for getting accounts from the Defendants as mentioned in para, 7 of this plaint;” and the prayer clause (Ga) will be expunged. The suit will then stand as one for recovery of a specific sum of money, i.e, Rs. 6,372, and the Plaintiff will be strictly confined to the items specified in the schedule to the plaint. As the Defendants have preferred a cross-claim, the question whether the Plaintiff has been overpaid and is bound to refund the excess, will also be tried out.

    The Appellants will have their costs of this appeal; we assess the hearing-fee at five (5) gold mohurs.

    Appeal allowed: Case remanded.

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    Kumeda Charan Bala v. Asutosh Chattopadhyaya
    (Aug 1, 1912)