Sunday, 6 December 2015

Powers of a Civil Judge in Ex-Parte Suits

PLJ 1992 SC 94
Present: DR.NASIM HASAN SHAH, RUSTAM S. SIDHWA AND MUHAMMAD AFZAL
LONE, J.
M/s. FRIEND ENGINEERING CORPORATION-Appellant
versus
GOVERNMENT OF PUNJAB and 4 others-Respondents
 Civil Appeal No.93 of 1987, accepted on 31.7.1991.
[On Appeal from judgment dated 28.2.1987, of Lahore High Court, passed in
RSA No. 148 of 1977.]
(i) Jurisdiction--
—Rendition of accounts—Suit for—Whether preliminary decree passed by trial court, was without jurisdiction—Question of—By jurisdiction is meant a power to hear and decide legal controversy between parties, to pronounce judgment and execute same-Held: It cannot be said that Civil Judge seized of suit, who passed preliminary decree, was not possessed of such power-Held further: Respondents' absence from trial court and their consequential failure to defend suit, would have effect of waiving objection about jurisdiction. [P.97JB
(ii) Preliminary Decree—
—Preliminary decree—No appeal filed against—Whether preliminary decree could be set aside in appeal against final decree—Question of—Preliminary ex-parte decree was within knowledge of respondents but they did not prefer anyappeal against it-Failure of Civil Judge to take suo moto notice of form of suit and passing of preliminary decree without calling upon appellants to establish that respondents were an accounting party, would at most, be an illegalityagainst which respondents could seek remedy through an appeal provided by Section 97 of CPC-It appears that Section 97 was not even present to mind of learned single Judge while setting aside preliminary decree—Held:Respondents could not have been permitted to circumvent period of limitation and by-pass provisions of Section 97 in challenging preliminary decree through an appeal against final decree-Appeal accepted.         [Pp.97,98&99]C,D,E&F '
(iii) Rendition of Accounts—
—Rendition of accounts—Suit for—Whether respondents were under obligation to render accounts to appellant—Question of—Liability to render accounts is foundation for maintainability of a suit for rendition of accounts-Such aliability exists when there is fiduciary relationship between parties-In this case, relationship between parties is undoubtedly contractual-Held: Respondents are not under any obligation to render accounts to appellant.                [P.97]A
Syed Najamul Hassan Kazmi,  Advocate, Supreme Court, instructed by
Ch.Akhtar All, A.O.R. for Appellant.
Mr.Muliammad Nawaz Abbasi, A.A.G. and Rao Muhammad Yousaf Khan,
A.O.R. (absent) for Respondents.
Dale of hearing: 7.11.1990.
JUDGMENT
Muhammad Afzal Lone, J.--This appeal under Article 185(2) of the Constitution filed by the plaintiff in a suit for rendition of accounts is directed against the High Court's judgment dated 28.2.1987, whereby the respondents' firstappeal was accepted; the preliminary as well as final decree passed by the trial Court in favour of the appellant were set aside, and the suit was remanded to the trial Court with the direction to decide it afresh after filing of the amended plaint by the appellant for recovery of specific amount.
2. The relevant facts are that the respondents awarded a contract to the appellant for repairing gliara along Shahdara protection bund and for providing pushla alongwilh R.D.13/14 Shahdara protection bund. According to theappellant, he executed the work and supplied some material to the respondents in pursuance of several work orders placed on him; in August 1974 he was issued a Cheque for Rs.3,92,178/-, as a running payment, for a portion of the work completed by him, but the payment of the cheque was stopped and it was retrieved back from him by the respondents. That despite his request the cheque was never re-issued to him. He then filed a suit against the respondents for rendition of accounts on the pica that they failed to furnish details of the running payment and render accounts maintained by them, disclosing the full information about the work completed and supplies made lo them by the appellant. In the written statcmenl ihe respondents objected to the form of the suit and also raised some other objections which were put into preliminary issues. At a later stage, they did not appear in the Courl; consequently were proceeded against ex-parte, and on 12.5.1976 the trial Court passed a preliminary decree against them; appointed one Syed Ali Shah an Accountant of the office of the Deputy Controller PTNT Department as Local Commissioner, with the direction that after hearing the parties and examination of their accounts he would submit his report on 29.7.1976. However, the report was filed by him on 26.2.1977, wherein he opined that a sum of Rs.3,57,517/- was due to the appellant from the respondents. The latter filed objections against the report, which mainly were, that the Local Commissioner was appointed without their knowledge and consent; the work orders were not issued by the competent authority; in this respect a departmental inquiry was being conducted and that the report was also inconsistent with the factual position of the suit. The learned trial Court by a detailed and well-reasoned order dated 30.4.1977 turned down all the objections, passed a final decree for Rs.3,57,517/- in terms of the Local Commissioner's report in favour of the appellant, who was allowed a period of two months to make good the deficiency in the court-fee.
3.          The respondents assailed this decree before the High Court through an appeal under Section 96 CPC. During the course of its hearing, on their behalf, it was contended that they were not under any legal obligation to keep and render the accounts for the work done by the appellant. This argument weighed with the learned Single Judge, who maintained that the appellant was well aware of the work performed by him and,could sue for a specific amount of remuneration therefor. In this view of the matter, the High Court accepted the respondents' appeal and alongwith the final decree also set aside the preliminary decree and remanded the suit to the trial Court, as observed in the opening para of this judgment.
4.          From the appellant's side it is argued that the preliminary decree is appealable under Section 97 CPC., but the respondents never filed any such appeal within the period of limitation and were thus debarred from challenging the same in appeal from the final decree. It is submitted that the High Court acted illegally in setting aside the preliminary decree, while hearing the appeal under Section 96 CPC against the final decree. On the other hand the argument of the respondents' is that relationship between the parties being contractual, they were not liable to render accounts to the appellant, who should have filed a suit for recovery of specific amount. Their, submission is that  an objection to the competency of the suit, in the form of rendition of accounts, having been raised in the written statement, an important issue fell for consideration before the trial Court, and even if they were absent, the trial Court could not have passed an ex- pane preliminary decree against them without satisfying itself by recording evidence or examining other material, that the respondents were really an accounting  party.  In   the absence   of  any  such  material,   according  to  the respondents'   learned   Counsel,   the   preliminary   decree   suffered   from   a jurisdiclional defect and being wholly void could be ignored and set aside by the
High Court in hearing the appeal against the final decree.

5.          It is to be remembered that liability to render accounts is the foundation for maintainability of a suit for rendition of accounts. Such a liability exists when there is fiduciary relationship between the parties as in the case of partners of a firm, guardian and ward, principal, and agent trustee and beneficiary of the trust. These instances are only enumerative and under Order XX rule 16 CPC., the Court is empowered to pass a preliminary decree where it feels necessary that to ascertain the amount due to one party from the other side, the accounts should be taken. But, in the instant case, the relationship between the parties is undoubtedly contractual. In such a case, the respondents are not under any obligation to render accounts to the appellant. The work done, the material supplied to the department and the payments received from them by the appellant were well within his knowledge. It was, therefore, for him to have ascertained the amount due to him and filed a money suit for recovery thereof.
6.          A question arises, when the suit for rendition of accounts was not maintainable,   whether   the   ex-pane   preliminary   decree   was   void,   withoutjurisdiction and thus, could be ignored by the High Court in appeal from the final decree. Our answer is in the negative. By jurisdiction is meant a power to hear and decide legal controversy between the parties, to pronounce judgment and execute iJae same. It cannot be said that the learned Civil Judge who was seized of the sirit and passed a preliminary decree was not possessed of such power. If the order made by him is contrary to law that would not render it as one without jurisdiction. It is correct that in the written statement there was an objection to the form of the suit. It is to be noticed that such an objection does not involve any consideration of public policy. It is well settled that where public policy is not involved any party may waive of the benefit of the law made for his advantage. The respondents' absence from the trial Court and their consequential failure to defend the suit would have the effect of waiving of the objection. What would have been the position of the decree, had there been no objection to the form of the suit by the respondents? Could such a decree be treated as void and a nullity? Where a party can waive of a plea, any decision of the Court in disregard of such a
plea, cannot involve a jurisdictional issue, for, jurisdiction, is not dependent on the 
will of the parties to the suit.
7.          A preliminary decree is appealable, but the respondents did not prefer any appeal against the ex-pane decree dated 12-5-1976. It is in the report of the Local Commissioner that from 16th December, 1976, to 26th December, 1977 the officials of the department appeared before him on several occasions, produced the account books and participated in the proceedings. The trial Court's order also reflects that the Counsel for the respondents entered appearance in the Court alongwith the Local Commissioner on 29-11-1976,10-1-1977 and 26-2-1977. It can thus, safely be presumed that they stood posted with the knowledge of the preliminary decree in pursuance whereof the Local Commissioner had embarked upon taking the accounts. Section 97 CPC., expressly ordains:
"Where any party aggrieved by a preliminary decree ......................... does not
appeal from such decree, he shall be precluded from disputing its correctness in an appeal, which may be preferred against the final decree."
It was thus, not open to the respondents to throw a challenge to the validity of the preliminary decree against an appeal from the final decree. The order of the High Court in striking down the preliminary decree, is evidently violative of mandatory provisions of Section 97 CPC, and thus, cannot be sustained. The failure of the learned Civil Judge to suo moto take notice of the form of the suit and passing of preliminary decree by him without calling upon the appellant to establish that the respondents were an accounting party would at the most be an illegality against which they could seek remedy through an appeal provided by Section 97 CPC. As regards a void order, it will not be out of place to refer here to the following observations appearing in M/s. Conferee Ltd., Vs. Syed All Shah etc. (PLD. 1977 SC. 599):
"....We would observe that a void order or an order without jurisdiction is only a type of an illegal order passed by a Court and the fact that it has been passed and that it may, therefore, create rights cannot be altered by describing it as void or without jurisdiction. And, further, the expressions void orders and orders without jurisdiction are overworked expressions."
It is significant to note that there is nothing in the impugned judgment to reflect that the High Court proceeded on the assumption that the preliminary decree was void and a nullity. It appears that section 97 was not even present tothe mind of the learned Single Judge. The respondents could not have been permitted to circumvent the period of limitation and bypass the provisions of Section 97 CPC.
8. With a view to see that complete justice is done in this case, we have also gone through the report of the Local Comissioner, prepared by him on examination of the accounts of both the sides, which demonstrates that the cheque for Rs. 3, 92, 178/-issued to the appellant, but withdrawn subsequently, related to the work done by him under 15 work orders. It is noteworthy, that out of this amount, the respondents paid to him a sum of Rs. 1, 71, 210/-during pendency of the suit and showed rest of the amount as adjusted against Government dues, security and income tax deductions etc. This would militate against their claim that the work orders were issued to the appellant without sanction of the competent authority. We find that it was on the basis of a detailed inquiry and scrutiny of the accounts that the Local commissioner came to the conclusion that a sum of Rs. 3, 57, 517/-was payable to the appellant by the department. The acceptance of this report, and passing of a final decree on the basis thereof by the trial Court, is not open to any valid criticism. We have noticed that the suit was filed in the year 1975. The appellant has already paid the requisite court-fee on the amount awarded to him. As already observed, the Local Commissioner made his report after a searching look into the respective claims of the parties, in the light of their accounts. We feel, that even if the suit is re-heard on merits, the result would not be different one.
For all these reasons this appeal is accepted and the impugned judgment set aside. Consequently, the judgment and decree of the trial Court stand restored. The parties are left to bear their own costs.
(MBC)                             (Approved for reporting)               Appeal accepted.

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