Filing a Government Agency Claim Before a Lawsuit

The first Court passed a preliminary decree against the defendants and on an appeal to the District Judge by the defendants, the judgment and the decree were confirmed and the appeal was dismissed. The defendants have now appealed to this Court and the principal question to be decided in this appeal is as to whether the present suit is governed by Article 89 or ll5 of the second Schedule of the Limitation Act (XV of 1877).

Article 89 of the Limitation Act governs a suit by a principal against his agent for moveable properties received by the latter and not accounted for. The period of limitation for a suit of the above description is 3 years and the limitation begins to run when the account is, during, the continuance of the agency, demanded and refused, or, where no such demand is made, when the agency terminates.

It seems that the correctness of the finding in the case of Mati Lal Bose v. Amin Chand Chattopadhay 1 C.L.J. 211 was also doubted in the case of Hafiz-ud-din Mondol v. Jadu Nath Saha 12 C.W.N. 820, 7 C.L.J. 279 : 35 C. 298 where it was held that a suit by a principal against hisagent for accounts is not “a suit for compensation for breach of a contract in writing registered” when the contract between the parties is embodied in a registered document, and Article 89 and not Article 116 should govern such a suit. In this reported case, Maclean C.J. observed (and my learned brother agreed): There seems to be some difference of judicial opinion upon the question as to which Article does apply. In the Privy Council case of Asghar Ali Khan v. Khurshed Ali Khan24 A. 27 : 3 Bom. L.R. 567 : 28 I.A. 227 the Judicial Committee held that in a case of this nature,Article 89 applied and that the expression ‘moveable property’ in that Article included money. The same view was followed by this Court in the cases of Shib Chandra Ray v. Chandra Narain Mukerjee 1 C.L.J. 232 : 32 C. 719 and Debendra Nath Ghosh v. Sheik Esha Haq Mistri 14 C.W.N. 121 : 5 Ind. Cas. 58. In this case, however, it appears that the contract under which the gomastha was appointed is a registered document. The argument is that as it is a registered document, the case falls within Article 116 of the second Schedule to the Limitation Act: and the respondent relied upon a decision of a Division Bench of this Court also Mati Lal Bose v. Amin Chand Chattopadhay 1 C.L.J. 211 which laid down that where the contract between the parties is under a registered document, the case is governed by Article 116 and not by Article 89. Had the matter rested there, my own view would have been that Article 89 applied and not Article 116. Article 89expressly applies to the case of a principal suing his agent for an account whilst Article 116applies to a suit for compensation for the breach of a contract in writing registered.’

I have no doubt as to the correctness of f the view taken in the above case. That was a suit between the principal and an agent and it was immaterial whether the contract between the parties was in a writing registered or not, as there is a special provision for suits by a principal against an agent for accounts. But the present suit, as already observed, is not between the principal and the agent. It is a suit by the plaintiffs against the heirs of the deceased agent. We have, therefore, to see when the contract was, broke, or if there have been successive breaches, when the breach in respect of which the present suit was instituted occurred, or if the breach was continuing, when it ceased, There can be no doubt that there was a contract between the principal and the agent that the latter should render his accounts every year to the plaintiffs and their co-sharers. After the agent‘s death, the law presumes that there is always an implied contract by which the heirs of the deceased agent are bound to give an account of what ever they may have received from the agent at the time of his death. That being so and also because the contract, was not in writing registered, Article 115 of the Limitation Act applies to such a case.

Another case referred to during the course of argument is the case of Jogendra Nath Roy v. Debnath Chatterjee 8 C.W.N. 113. This was a suit by a principal against his agent for an account and for money that might be found due upon such account being taken and it was held that Article 89 was applicable. As already observed before, when there is special provision underArticle 89 for limitation for a I suit by a principal against his agent, this and no other Article is applicable.

The case of Easin Sarkar v. Baroda Kishore Acharyya Chowdhury 11 C.L.J. 43 : 5 Ind. Cas. 186 was referred to. In this reported case, the question that arose was what should be the period of limitation in a suit for accounts when there had been an agreement to furnish accounts year by year, which had been neglected year by year: and the contention of the appellant of that suit was that it was immaterial whether Article 89 or Article 115 applied inasmuch as there was a succession breach of agreement. This case was decided not exactly on the application of theArticle 115 to the facts of the case but on quite a different ground. I find in the judgment of this reported case the following passage: “That being so, we are of opinion that the Munsif is perfectly right in saying that it does not matter which Article applies. Whether Article 89 applies or Article 115 applies, there having been successive breaches year by year, the limitation dates from each breach. The plaintiff brought the suit within three years of the last breach and he is, therefore, entitled to accounts for one year.” There is no doubt that in the judgment of this reported case, cases of Mati Lal Bose v. Amin Chand chattopadhay 1 C.L.J. 211 and Hori Narain Ghosh v. The administrator-General of Bengal 3 C.L.R. 446 were followed. But a discussion as to which of the two Articles applied was not necessary for the disposal of that appeal as is clear from what the Munsif said which was accepted by the Division Bench that decided that appeal.