M.P. Abdul Hameed and Co. Vs. the Tamil Nadu Civil Supplies Corporation Ltd. and anr. - Court Judgment

Excerpt:
- orderar. lakshmanan, j.1. this letters patent appeal was filed by the plaintiff/appellant against the judgment and decree dated 15.3.1991 made in a.s.no. 402 of 1981 reversing the decree and judgment dated 26.3.1980 made in o.s.no. 5467of 1978 on the file of the iii asst. judge of the city civil court, madras. the respondent is the tamil nadu civil supplies corporation limited represented by its managing director. the appellant filed the suit o.s.5467 of 1978 for rendition of accounts for said sums as found due from the first defendant/first respondent herein to the plaintiff/appellant herein and for interest as determined by the court and for permanent injunction restraining the respondents from taking any action under the revenue recovery act and from interfering with the plaintiff/appellant's right to carry on his own private business and costs.2. the plaint averments in short are: the plaintiff/appellant is running a rice mill in puduvayal, ramanathapuram district and in march, 1975, the first respondent herein entered into an agreement with the appellant herein/plaintiff for the purpose of hulling paddy procured by the defendant at different centres. the appellant as the agent of the first defendant/respondent corporation was to make a deposit of rs. 25,000 and for the paddy delivered, deliver the resultant rice tot he first respondent corporation. the stocks entrusted to the appellant should be kept under the double lock system, and the respondents should have the right to inspect the premises. the appellant accordingly deposited rs. 25,000 on 18.4.1975. the second respondent herein/2nd defendant is the regional manager of the first respondent corporation. from april 1975, the defendant/respondent corporation started supplying paddy to the appellant. the respondents did not test the quality of the paddy. the first respondent procured paddy without properly weighing and at the mill of the appellant, when weighed, differences were noticed. one of the clauses in the agreement provided for shrinkage and other causes, even though the stock would be under joint custody. under the agreement all the obligations have been cast on the plaintiff/appellant and all the rights have been reserved to the first respondent corporation. the first respondent did not act according to the principles of trade and practice. the appellant was supplied with a large quantity of paddy for hulling. the appellant took on rent godowns for stocking the paddy. it was kept under double lock system, and the appellant had to spend rs. 2,000 every month for taking godowns on rent. after the hullling the resultant rice to be transported to the godowns of the first respondent situated in ramanathapuram, kamudhi, sivagangai, karaikudi, mudukulathur, abhiraman and kovilaptti. for the loading of the lorries and unloading, appellant had to spend money which would be reimbursed by the first respondent corporation. in the godowns, the consignment is again weighed. only after the submission of bills for payment of money, the first respondent corporation raised objection. it was not stated by the first respondent corporation that the shortage was due to any default on the part of the appellant. according to the appellant, the shortage was due to the fact that the paddy was wet, that it was stored for a long time in wet condition and the quality was not decided at the time of procurement. the appellant wrote to the first respondent corporation to settle his claim and brought to the notice of the first defendant about the quality of the paddy supplied. according to the appellant, the claim of the appellant and the respondents could be settled only by taking the proper accounts. the first respondent is in possession of all the accounts and other details. the appellant and the first respondent are each liable to account to each other. the account submitted by the appellant was not accepted by the first respondent. the appellant is entitled to demand from the first respondent a true and proper account for the work done under the agreement. the appellant is therefore entitled to a preliminary issue directing the first defendant to render accounts. the circular issued by the first respondent would not bind the plaintiff/appellant. the first respondent corporation cannot arbitrarily give judgment in respect of the amounts due from the plaintiff. the plaintiff/appellant estimates that a sum of rs. 10,000 would be due to him, if accounts were taken. the second respondent is threatening to take proceedings against the appellant under the revenue recovery act. the respondents are not entitled to invoke the aid of the said act. hence the suit for accounts and injunction.3. the first respondent corporation filed a written statement stating that the suit is not maintainable and that the court below has no jurisdiction to entertain the suit. according to the first respondent, the agent is liable under law to render proper accounts. the principal entrusted the paddy to the agent for conversion into rice and therefore, the agent is liable to render accounts. the appellant executed an agreement in stamp papers and on the strength of the agreement, the appellant was appointed as the hulling agent for kuruvai '75 and samba '76 and south arcot samba 1976 and the agreement was renewed on 21.10.76. the agreement contained 19 clauses and the first respondent is the principal. the hulling and incidental charges and transport charges are mentioned in the agreement. the appellant as agent is responsible for the proper storage and safety of the paddy under double lock system. after the conversion, the rice should be packed in gunnies and stitched and delivered the same to the officer authorised. the out turn for conversion is fixed by the respondent for different varieties of paddy. the value of the short supply of rice would not be recovered from the hulling agent. the rice is liable to be rejected, if it is not of fair average quality. the rice is to be packed in the same gunnies that were supplied along with the paddy. the appellant/plaintiff was to keep accounts of the gunnies received. according to the respondent, the appellant was entrusted 19921 bags of tanjore kuruvai '75 paddy during the period from 18.10.75 to 18.12.75 and between 23.2.76 to 19.5.76, 27,534 bags of tanjore samba paddy were delivered and from 22.2.76 to 21.7.76, 465 bages of south arcot samba paddy were delivered. they were promptly weighed at the time of procurement. but out turn is fixed by the government, according to the variety of the paddy. the appellant is bound to deliver the resultant rice on that basis. the agreement has been formulated by the respondent in consultation with the government of tamil nadu. the agreement does not throw unreasonable burden on the plaintiff. nobody has compelled the plaintiff/appellant to be a hulling agent. the appellant did not act with fairness and earnestness. he has not delivered the resultant rice as per the out turn prescribed. in his letters, the appellant has admitted that 44.969 m. tonnes of resultant rice was not delivered. for tanjore kuruvai '75 paddy the shortage was 205.953 mt. for tanjore samba '76 paddy, he has to deliver 205.953. 030m. tones. for south arcot samba '75 paddy he has to deliver 1.280.168 m. tonnes of rice. according to the respondents after the release of paddy, the officers have no control over the hulling agent. the technical assistant visited the mill only to find out the moisture contents of rice. they do not have any control with regard to the quantity of paddy or rice either at the soaking, boiling, drying or hulling points. there is possibility of hulling agent doing all sorts of mal-practices. the shortage was only in respect of the resultant rice which was found out only after the entire paddy was converted into rice. large quantities of rice have not been delivered by the plaintiff/appellant. he is bound to deliver the resultant rice as per the rules. the appellant admitted in the letter dated 18.8.76 that there was shortage. in spite of it, he did not deliver the rice. the appellant did not submit bills for hulling for all the three seasons. the appellant is not entitled for rendition of accounts. the appellant has not delivered the balance of rice and therefore, the respondent cannot give a clearance certificate.4. on the above pleadings, the following issues were framed for trial:1. whether the suit as framed is maintainable as the plaintiff is partnership firm without allegations in the plaint that the partnership has been registered under the partnership act?2. whether the suit filed by the plaintiff as hulling agents against the defendants, the principal, for rendition of accounts will lie?3. whether this honourable court has jurisdiction to try the suit?4. whether the plaintiff is entitled to injunction as prayed for?5. to what relief or reliefs the parties entitled?5. before the trial court no exhibits were marked on the side of the plaintiff/appellant and exs. b1 to b9 were marked on the side of the respondent corporation. no-one was examined as witness on either side.6. with regard to the maintainability of the suit, the trial court was of the opinion that in view of the complicated nature of the accounts, the liability cannot be determined without the respondents/defendants rendering accounts. the said issue was answered in favour of the appellant/plaintiff also for the reason that the accounts maintained by the appellant are incomplete and inaccurate and the accounts maintained by the appellant should be examined and the amount due whether it is to the plaintiff/appellant or to the defendants/respondents would have to be ascertained. therefore, the court has answered this issue in favour of the appellant/plaintiff. in view of the finding on issue no. 2, the trial court answered issue no. 3 in the affirmative. on issue no. 4, the trial court issued an injunction against the respondents herein so long as the amount due is not determined, the respondents cannot resort to the provision of the revenue recovery act against the appellant. in the result, the trial court passed the preliminary decree as prayed for and the first respondent corporation and the appellant were directed to submit their accounts to a commissioner to be appointed by the lower court which will determine the liability of the plaintiff or the first defendant as the case may be and on the amount so determined, the party entitled to, will be granted interest at 6% p.m. from the date of suit till date of payment.7. aggrieved by the preliminary decree passed by the trial court, the respondent corporation preferred a.s.no. 402 of 1981 contending that the suit for rendition of accounts by the hulling agent against the principal will not lie as there is no such statutory right for the agent and that the agent can ask for rendition of accounts only in special and exceptional circumstances proved by the plaintiff and not otherwise. therefore, it is contended that the lower court is wrong in holding that the suit by the agent against the principal will lie and that the court has jurisdiction to entertain such a suit. other contentions were also raised before the learned single judge at the time of hearing. bellie, j., by his judgment dated 15.3.1991, came to the conclusion that the crux of the agreement between the parties is that the respondent would supply paddy procured from the producers to the plaintiff and the plaintiff would in turn after hulling the paddy deliver the resultant rice to the respondent and the appellant would be paid a commission for such hulling. the learned single judge also held that on consideration of the pleadings no special circumstance arose in the present case as held in the decision reported in naraindas morardas gajiwala v. s.p.a. papammal : air1967sc333 . the learned single judge also rejected the contention of the appellant that the agreement was unfair and the defendants taking advantage of their position of authority and the appellant's unequal bargaining power, laid down conditions in the agreement which are much disadvantageous and detrimental to the appellant. the learned single judge allowed the apple and set aside the judgment and decree of the lower court.8. the appellant/plaintiff aggrieved by the judgment and decree of the learned single judge has filed the present l.p.a.9. we have heard mr. m.v. venkataseshan, learned counsel for the appellant and mr. a. shanmugavel, learned counsel for the respondents. both the learned counsel argued the appeal at length and also drew our attention to the pleadings, documents and also the judgment of he lower court and of this court. mr. venkataseshan contended while arguing the question of maintainability of the suit that the agent is a person employed to do any act for another or to represent another in dealings with third persons. the person for whom such act is done or who is represented is called the 'principal'. so, as per definition, contract of agency can be created only if the agent has to have some dealings with third persons on behalf of the principal. in the case of hulling agent, there is no dealing with the third person. so, the term agent is only a nomenclature given to the hulling persons and it cannot be brought under the strict definition of 'principal' and 'agent' as contemplated under section 182 of the indian contract act. according to him, there is no relationship of principal and agent in the strict sense of the law and the argument that the principal is not liable to render accounts to the agent, does not at all arise. it is also contended that the accounting relating to quality cut were only with the respondents and it is only when the account is produced, the respective liability can be arrived at. since in the instant case what was produced by the appellant was only the accounts relating the hulling charges, it is urged that the accounts relating to counter claim are exclusively with the respondents and under such circumstances, only the production of accounts could resolve the claim of each other. mr. venkataseshan contended that when there is no contract of agency as contemplated under section 182 of the contract act, the respondents are duty bound to furnish true accounts so that the rights and liabilities of the parties could be decided in one and the same proceedings. it is the case of the respondents that the appellant was made aware of the resultant rice expected of each hulling operation. then, it is the duty of the respondents to establish by records as to how they claim a certain quantity from the appellant, and for proving the same, the only available course is rendition of accounts. in conclusion, it is contended that when the term 'agent' is a misnomer and when the parties are only on contractual relationship of huller and owner, there is no legal prohibition for rendition of accounts. in support of his contention, the learned counsel cited two decisions. the first is the one reported in karuppiah nadar v. commr. of civil supplies, 1972 1 mlj 99 and the 2nd is the one reported in commr. of civil supplies v. v. seethuraman, 1974 tlnj 511.10. per contra, mr. shanmugavel, appearing for the respondents argued that the suit filed by the appellant for rendering of accounts by the principal to the agent will not lie, since the agent is liable under law to render the accounts, and not the principal. while the principal has entrusted the paddy to the agent for conversion into rice, it is for the agents to render accounts for the paddy entrusted and hulled. therefore, it is contended that the suit is neither maintainable in law nor on the facts and the same is liable to be dismissed.11. we have carefully perused the judgment of the court below and also the judgment impugned in this appeal. the appellant firm is running a rice milling business in partnership under the name and style of hameedia rice mill and the appellant applied on 21.2.75 to the second respondent requesting the tamil nadu civil supplies corporation limited to appoint the firm as hulling agent for conversion of paddy into rice after remitting a sum of rs. 25,000 towards security deposit through demand draft. the appellant had voluntarily applied for as hulling agent under the tamil nadu civil supplies corporation limited, remitted the security deposit and executed the agreement and on the strength of the same, the 2nd respondent appointed the plaintiff as hulling agent in ramanathapuram region. the appellant had also again executed an agreement to continue as hulling agent on 21.10.76. the agreement was executed in favour of the managing director of the corporation as 'principal' and the said agreement contain 19 clauses with schedules showing the hulling and incidental charges and also the transport charges allowed. the stocks of paddy entrusted by the principal will be under the joint custody of the hulling agent and one of the officials of the corporation. there are other clauses also in the agreement with which we are not presently concerned. the respondent corporation had undertaken to purchase paddy and hull the same and distribute rice to the consuming public of tamil nadu and they have got the greater responsibility and obligations to the consuming public. in the interest of public and to safe guard any kind of malpractice as far as possible, the respondent corporation has formulated in consultation with the government of tamil nadu, standard forms of agreement and other forms to be entered into by the hulling agent, transport contractors and other so as to ensure purchase and transport of different varieties of paddy from the purchasing centres to the various districts and for storing of paddy and hulling the same into rice and distribution of rice through the retail sales depots of the respondent corporation and other consumer co-operative societies so as to reach the consuming public in a regular and continuous manner. hence, as rightly pointed out by mr. shanmugavel, it is incorrect to say that the agreement throw unreasonable burden on the appellant by the respondent corporation. as already stated, the appellant himself has voluntarily entered into an agreement with the respondent corporation and has also renewed the same for a further term. nobody has compelled either the appellant or any other rice milling licensees to offer themselves to be appointed as hulling agents of the respondent corporation. on their depositing different amounts of deposits according to their capacity, as already stated the appellant has volunteered by depositing a sum of rs. 25,000 towards security deposit and entered into agreement for becoming a hulling agent of the corporation and further renewed his agreement by executing a fresh agreement on 22.10.76 also. hence, we are unable to accept the contention of mr. venkataseshan, learned counsel for the appellant that the appellant was compelled to take the paddy for the hulling. having entered into the agreement and signed the same with eyes opened, the appellant cannot now contend that the clauses of the agreement are unreasonable, arbitrary and therefore cannot be enforced on the appellant.12. it is submitted that there is no allegation of shortage in paddy as the paddy was kept under double lock system. after the release of the paddy from double lock godown, neither the double lock officer nor other officers have any control over the hulling agents with regard to moving of paddy from the godown to the hulling point or in the hulling process such as soaking, boiling, drying and conversion of paddy into boiled rice and movement of boiled rie from the mill premises of the agents to the godowns of the corporation, till the resultant rice is delivered to the godown superintendent or to the godown keeper, as the case may be on proper weighment in the presence of the representative of the hulling agents and the acknowledgments obtained for purpose of entry in the stock registers. as per the terms of agreement, the hulling agents are bound to deliver boiled rice at the rates of out turn for conversion into boiled rice, fixed for various varieties of paddy, irrespective of shortage of either paddy or rice with the hulling agents. the hulling agents are liable for the short supply of rice calculated with reference to the out turn prescribed for each variety, having regard to the market rates or rice of each variety. it is the case of the respondents that the appellant has not delivered the entire resultant rice fully and he has yet to deliver the balance quantity of rice viz., 44,969 m. tonnes for tanjore kuruvai '75 as admitted and further 205.953.030 m. tonnes and 1.180.168 m. tonnes for the entriystment of tanjore samba '76 and south arcot samba '76 respectively as per the various circular of the managing director and as per the terms and conditions of the agreement.13. our attention was drawn to clause 13(ii) of the agreement executed by the appellant. as per that clause the first respondent is entitled to call upon the plaintiff to measure any rice towards short supply of resultant rice. the government in their g.o.ms.no. 1417, revenue department dated 13.7.76 have ordered that all the hulling dues from the hulling agents or millers to the tamil nadu civil supplies corporation be recovered in the same manner, as arrears of land revenue under the provisions of tamil nadu revenue recovery act, 1864. therefore, we are of the view that the appellant is not entitled to the relief of injunction restraining the respondents from taking any action under the provisions of the revenue recovery act.14. mr. venkataseshan, learned counsel for the appellant cited the decision reported in karuppiah nadar v. commr. of civil supplies, 1972 1 mlj 99 to show that the revenue recovery act cannot be set into motion for recovery of un-quantified arrears payable by the defaulters and that it cannot summarily invoke the provisions of the revenue recovery act on the foot that there is a clause to that effect in the agreement between the parties in cases where such an agreement has been entered into. in other cases, where there is no such an agreement between the procuring agent and the state, it follows a fortiori that the provisions of the revenue recovery act cannot be invoked at all. as already seen, there is a clause in the agreement entered into between the parties in the present case. therefore, the respondents are entitled to recover the money due by the defaulter and the respondent corporation can invoke the provisions of the revenue recovery act as regards the value of shortage as arrived at. no doubt, the respondents are at liberty to recover the same by a process available under the contract and under law.15. a division bench consisting of veeraswami, cj and natarajan. j held in the decision reported in commr. of civil supplies v. v. seethuraman, 1974 tlnj 511 that when applying section 52, it is requisite by the other provisions of the act, that notice of demand will have to be made and an opportunity for payment or representation should be given. but, such opportunity does not imply a jurisdiction on the part of the authority empowered to act under section 52 to decide a dispute by himself, though it is controversial. therefore where either the liability or its quantum is fairly and reasonably in dispute and it does not appear prima facie that a dispute is raised merely as a make belief to circumvent the application of section 52, resortto that section cannot be made. the bench, in the concluding para of its judgment observed as follows:-'it is a well established proposition of construction that an authority which is entrusted with only powers of execution cannot assume for itself a jurisdiction to resolve anterior disputes by adjudication. judicial power to decide civil disputes should not be confused with execution enturstment of recovery powers of a summary character as an expedient for quick recovery on grounds of state necessity. section 52 being first an enabling summary recovery process, it cannot extend to and cover jurisdiction for finding a solution of a dispute, and then applying the summary process of recovery under section 52.merely because a contract provides for a liability for any deficiency in delivery, it does not follow that once the loss is found ipso facto the liability to compensate arises. this only means that the government will have to institute suits, if they so think fit, to establish the liability and its quantum against each of the respondents.'16. now, we consider the decisions relied on by the learned counsel for the respondents. he first cited the decision reported in ram lal v. asian assurance co., air 1933 lahore 483 wherein tapp, j, held that the right to claim a statement of accounts is an unusual form of relief, only granted in certain specific cases and is only to be claimed when the relationship between the parties is such that this is the only relief which will enable the claimant to satisfactorily assert his legal rights. in that case, the plaintiffs who were insurance agents were to be remunerated by a commission calculated on the premia paid on all policies effected or introduced through them. the court held that as the plaintiffs cannot certainly know which of these policies have lapsed, matured or been forfeited, they are entitled to call on the defendants for rendition of accounts as this is the only relief which will enable the plaintiffs to satisfactorily assert their rights. while no doubt, the plaintiffs are aware of all policies effected or introduced through them they cannot certainly know which of these policies have lapsed, matured or been forfeited, the agent can call on his principal for accounting in certain special circumstances. learned judge held that the circumstances in the said case entitled the plaintiffs to call on the defendants for rendition of accounts as that is that only relief which will enable the plaintiffs to satisfactorily assert their right.17. learned counsel for the respondents next relied on the decision reported in gulabrai v. india equitable insurance co., air 1937 sind 51 wherein it was held as follows:'agent has no statutory right of the account from his principal. nevertheless where it is equitable from the particular circumstances and the relations of the parties that one should account to the other, a suit for an account will lie. if an agent can satisfy that all accounts are rightly in possession of the principal and that he (agent) has not and could not have in his possession accounts which would enable him to determine his claim for commission against his principal, he will be entitled to sue for an account. but if it is found that the agent has no accounts because of his own failure to keep them due to his own fault, he should not be granted the relief he claims, much less if it is found that he has accounts which he with holds.'18. learned counsel for the respondents then relied on the decision reported in ramachandra m. co. v. birankutti and bros, air 1938 mad. 707 wherein it has been held thus:'a suit by agent against a principal for a specific sum of money alleged to be due to the plaintiff by the defendant in regard to certain dealings is not a suit for accounts within the meaning of art 31 of schedule 2. it is only in exceptional cases where is remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into that a suit by an agent for accounts against his principal might be competent. but where the exact sum of money which the agent claims from his principal is known to him, the due form in which a suit can be filed is the one for specific amount.'19. learned counsel for the respondents next cited the decision reported in basant kumar v. roshanlal, air 1954 nagpur 30 wherein the nagpur bench referred the matter to a division bench on the ground that it involved an important question of law viz., whether an agent can institute a suit against the principal for accounts. in that case the plaintiff succeeded in both the courts. the decree was that the defendants should render account to the plaintiff for the period from 15.10.1934 to 15.7.1937 and it ordered the appointment of a commissioner to take account of the same. but, the question whether the suit was not maintainable because it was instituted by an agent against his principal. there is a divergence of opinion on this point. in that case, it was not disputed that the plaintiff canvassed through out narsimhapur area. the agent's function was not to sell the books directly himself but to canvass for effecting the sales of the principal's books. the agent does not know how many orders were placed with the principal and how many books were actually sold as a result of the agent's efforts. in such circumstances, the division bench held that the agent could not have with him any account of the transactions entitling him to the commission. those accounts have admittedly been maintained by the principal. that in this type of a case the agent can maintain against his principal an action for an account.20. learned counsel for the respondents next cited the decision reported in n.m. gaziwala v. papammal : air1967sc333 . that was a case where an agent 'sued his principals for rendition of accounts for the period of the agency. the principals also filed a suit claiming enforcement of a promissory note the agent had executed in their favour. the agent pleaded an oral agreement by which the principals were not to enforce the promissory note during the period of the agency and unless the sum remainded due and payable after accounting. the trial court granted a decree on the promissory note but directed that it should be adjusted against any sum found due after accounting in the agent's suit. the principals went to the high court and failing there appealed to the supreme court. it was contended before the supreme court on behalf of the appellants that (1) an agent was not entitled in law to sue his principals for accounts and (2) the parole agreement could not be proved in view of section 92 of the indian evidence act. the supreme court held thus:-'though an agent has no statutory right for an account from his principal, nevertheless there may be special circumstances rendering it equitable that the principal should account to the agent. such a case may arise when all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim for commission against his principal. the right of the agent may also arise in an exceptional case when his remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into. in the special circumstances of the present case the agent was entitled to sue his principal for accounts for the material period.'21. following the above ruling of the supreme court, ratnam, j., (as he then was) held in the decision reported in state v. alagirisubramanian : air1988mad248 held that the institution of a suit by the agent against the principal for rendition of accounts is an equitable right available only in certain exceptional circumstances, and, if the existence of those circumstances are not established, then such a right would not be available.22. in the said case, the trial court found that though the jural relationship between the respondent and the appellant was that of the agent and principal, the respondent had to maintain the accounts in respect of the transactions and was also in possession of the accounts and therefore not entitled to maintain the suit for rendition of accounts against the principal viz., the appellant. on the said conclusion, the trial court dismissed the suit. however, the respondent preferred appeal to the sub- court, madurai which differed from the conclusion arrived at by the trial court and found that the suit at the instance of the respondent against the appellant for rendition of accounts is maintainable. accordingly the lower appellate court granted a preliminary decree for rendition of accounts in favour of the respondent and against the appellant. the correctness of this was challenged in second appeal before ratnam, j., learned government advocate contended that the plaintiff had not established any exceptional circumstances under which such a suit could be entertained. he further submitted that the lower appellate court has not considered the question whether the respondent had clearly established by evidence that the accounts which he was obliged to maintain, had been lost in the circumstances mentioned by him and without rendering a clear finding that the respondent was not possessed of the accounts, the suit ought not to have been held to be maintainable. on the other hand, learned counsel for the respondent submitted that the respondent had made out that he was not in possession of the accounts relating to the transactions entered into by the respondent in his capacity as agent of the appellant and therefore the suit was rightly held to be maintainable. ratnam, j held that the plaintiff has not made out that the accounts books and other records are not with him and that would entitled him to maintain the suit for accounts against the principal. the learned judge has held that the lower appellate court was therefore in error in having found that the respondent had established the loss of accounts rendering the suit instituted by the respondent against the appellant maintainable, as if an exceptional circumstances for countenancing such a suit, had been established.23. in the present case, the appellant as an agent is liable for the short supply of rice calculated with reference to the outturn prescribed for each variety, having regard to the market rates of rice of each variety. he has not delivered the entire resultant rice fully. according to the corporation, he has yet to deliver the balance rice. the appellant shall be responsible for the proper delivery of the rice which has to be delivered to such officials at such godown authorised by the principal or by the regional manager or any official authorised by him in this behalf. accordingly, the hulling agent of the respondent corporation is bound to deliver the resultant rice in the godowns of the tamil nadu civil supplies corporation limited to the godown superintendent, godown keeper as the case may be on proper weighment and acknowledgment for the said delivery of resultant rice with weighment particulars obtained from godown staff. therefore, as per agreement, the appellant is expected to maintain accounts for the supply made and he cannot direct the respondents to render account. it is the case of the respondent corporation that the appellant as agent has not even submitted his bills with relevant documents such as truck memos for paddy received by the appellant, acknowledgment memos for delivery of rice, quality certificate etc., and the appellant has not also rendered any account for the return of gunnies which were entrusted alongwith the paddy. the appellant has not preferred his claims and submitted his hulling bills to the respondent corporation for settlement since there was a heavy short supply of resultant rice for the paddy entrusted to the appellant for hulling. we, are therefore, of the view, that the suit filed by the appellant for rendering accounts by the principal to the agent will not lie, since the agent is liable to render accounts and not the principal. while the principal has entrusted the paddy to the agent for conversion into rice, it is for the agents to render accounts for the paddy entrusted. there are no special circumstances in this case rendering it equitable that the respondent principal should give accounts to the appellant. such a case may arise when all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim. therefore, we are of the view that the agent has no statutory right for accounts from his principal viz., the respondent corporation. therefore, this appeal fails and is liable to be dismissed.24. in the result, this l.p.a. is dismissed, the judgment and decree of the appellate court made in a.s.no. 402 of 1981 dated 15.3.1991 is hereby confirmed and that of the iii asst. city civil court, madras made in o.s.no. 5467 of 78 dated 26.3.1980 is set aside and the said suit stands dismissed. no costs in this appeal.

Judgment:
ORDER

AR. Lakshmanan, J.

1. This letters patent appeal was filed by the plaintiff/appellant against the judgment and decree dated 15.3.1991 made in A.S.No. 402 of 1981 reversing the decree and judgment dated 26.3.1980 made in O.S.No. 5467of 1978 on the file of the III Asst. Judge of the City Civil Court, Madras. The respondent is the Tamil Nadu Civil Supplies Corporation Limited represented by its Managing Director. The appellant filed the suit O.S.5467 of 1978 for rendition of accounts for said sums as found due from the first defendant/first respondent herein to the plaintiff/appellant herein and for interest as determined by the court and for permanent injunction restraining the respondents from taking any action under the Revenue Recovery Act and from interfering with the plaintiff/appellant's right to carry on his own private business and costs.

2. The plaint averments in short are: The plaintiff/appellant is running a rice mill in Puduvayal, Ramanathapuram District and in March, 1975, the first respondent herein entered into an agreement with the appellant herein/plaintiff for the purpose of hulling paddy procured by the defendant at different centres. The appellant as the agent of the first defendant/respondent Corporation was to make a deposit of Rs. 25,000 and for the paddy delivered, deliver the resultant rice tot he first respondent Corporation. The stocks entrusted to the appellant should be kept under the double lock system, and the respondents should have the right to inspect the premises. The appellant accordingly deposited Rs. 25,000 on 18.4.1975. The second respondent herein/2nd defendant is the Regional Manager of the first respondent Corporation. From April 1975, the defendant/respondent Corporation started supplying paddy to the appellant. The respondents did not test the quality of the paddy. The first respondent procured paddy without properly weighing and at the mill of the appellant, when weighed, differences were noticed. One of the clauses in the agreement provided for shrinkage and other causes, even though the stock would be under joint custody. Under the agreement all the obligations have been cast on the plaintiff/appellant and all the rights have been reserved to the first respondent Corporation. The first respondent did not act according to the principles of trade and practice. The appellant was supplied with a large quantity of paddy for hulling. The appellant took on rent godowns for stocking the paddy. It was kept under double lock system, and the appellant had to spend Rs. 2,000 every month for taking godowns on rent. After the hullling the resultant rice to be transported to the godowns of the first respondent situated in Ramanathapuram, Kamudhi, Sivagangai, Karaikudi, Mudukulathur, Abhiraman and Kovilaptti. For the loading of the lorries and unloading, appellant had to spend money which would be reimbursed by the first respondent Corporation. In the godowns, the consignment is again weighed. Only after the submission of bills for payment of money, the first respondent Corporation raised objection. It was not stated by the first respondent Corporation that the shortage was due to any default on the part of the appellant. According to the appellant, the shortage was due to the fact that the paddy was wet, that it was stored for a long time in wet condition and the quality was not decided at the time of procurement. The appellant wrote to the first respondent Corporation to settle his claim and brought to the notice of the first defendant about the quality of the paddy supplied. According to the appellant, the claim of the appellant and the respondents could be settled only by taking the proper accounts. The first respondent is in possession of all the accounts and other details. The appellant and the first respondent are each liable to account to each other. The account submitted by the appellant was not accepted by the first respondent. The appellant is entitled to demand from the first respondent a true and proper account for the work done under the agreement. The appellant is therefore entitled to a preliminary issue directing the first defendant to render accounts. The circular issued by the first respondent would not bind the plaintiff/appellant. The first respondent Corporation cannot arbitrarily give judgment in respect of the amounts due from the plaintiff. The plaintiff/appellant estimates that a sum of Rs. 10,000 would be due to him, if accounts were taken. The second respondent is threatening to take proceedings against the appellant under the Revenue Recovery Act. The respondents are not entitled to invoke the aid of the said Act. Hence the suit for accounts and injunction.

3. The first respondent Corporation filed a written statement stating that the suit is not maintainable and that the court below has no jurisdiction to entertain the suit. According to the first respondent, the agent is liable under law to render proper accounts. The principal entrusted the paddy to the agent for conversion into rice and therefore, the agent is liable to render accounts. The appellant executed an agreement in stamp papers and on the strength of the agreement, the appellant was appointed as the hulling agent for Kuruvai '75 and Samba '76 and South Arcot Samba 1976 and the agreement was renewed on 21.10.76. The agreement contained 19 clauses and the first respondent is the principal. The hulling and incidental charges and transport charges are mentioned in the agreement. The appellant as agent is responsible for the proper storage and safety of the paddy under double lock system. After the conversion, the rice should be packed in gunnies and stitched and delivered the same to the officer authorised. The out turn for conversion is fixed by the respondent for different varieties of paddy. The value of the short supply of rice would not be recovered from the hulling agent. The rice is liable to be rejected, if it is not of fair average quality. The rice is to be packed in the same gunnies that were supplied along with the paddy. The appellant/plaintiff was to keep accounts of the gunnies received. According to the respondent, the appellant was entrusted 19921 bags of Tanjore Kuruvai '75 paddy during the period from 18.10.75 to 18.12.75 and between 23.2.76 to 19.5.76, 27,534 bags of Tanjore Samba paddy were delivered and from 22.2.76 to 21.7.76, 465 bages of South Arcot Samba paddy were delivered. They were promptly weighed at the time of procurement. But out turn is fixed by the Government, according to the variety of the paddy. The appellant is bound to deliver the resultant rice on that basis. The agreement has been formulated by the respondent in consultation with the Government of Tamil Nadu. The agreement does not throw unreasonable burden on the plaintiff. Nobody has compelled the plaintiff/appellant to be a hulling agent. The appellant did not act with fairness and earnestness. He has not delivered the resultant rice as per the out turn prescribed. In his letters, the appellant has admitted that 44.969 M. Tonnes of Resultant rice was not delivered. For Tanjore Kuruvai '75 paddy the shortage was 205.953 MT. For Tanjore Samba '76 paddy, he has to deliver 205.953. 030M. Tones. For South Arcot Samba '75 paddy he has to deliver 1.280.168 M. Tonnes of rice. According to the respondents after the release of paddy, the officers have no control over the hulling agent. The technical assistant visited the mill only to find out the moisture contents of rice. They do not have any control with regard to the quantity of paddy or rice either at the soaking, boiling, drying or hulling points. There is possibility of hulling agent doing all sorts of mal-practices. The shortage was only in respect of the resultant rice which was found out only after the entire paddy was converted into rice. Large quantities of rice have not been delivered by the plaintiff/appellant. He is bound to deliver the resultant rice as per the rules. The appellant admitted in the letter dated 18.8.76 that there was shortage. In spite of it, he did not deliver the rice. The appellant did not submit bills for hulling for all the three seasons. The appellant is not entitled for rendition of accounts. The appellant has not delivered the balance of rice and therefore, the respondent cannot give a clearance certificate.

4. On the above pleadings, the following issues were framed for trial:

1. Whether the suit as framed is maintainable as the plaintiff is partnership firm without allegations in the plaint that the partnership has been registered under the Partnership Act?

2. Whether the suit filed by the plaintiff as hulling agents against the defendants, the principal, for rendition of accounts will lie?

3. Whether this Honourable Court has jurisdiction to try the suit?

4. Whether the plaintiff is entitled to injunction as prayed for?

5. To what relief or reliefs the parties entitled?

5. Before the trial court no exhibits were marked on the side of the plaintiff/appellant and Exs. B1 to B9 were marked on the side of the respondent Corporation. No-one was examined as witness on either side.

6. With regard to the maintainability of the suit, the trial court was of the opinion that in view of the complicated nature of the accounts, the liability cannot be determined without the respondents/defendants rendering accounts. The said issue was answered in favour of the appellant/plaintiff also for the reason that the accounts maintained by the appellant are incomplete and inaccurate and the accounts maintained by the appellant should be examined and the amount due whether it is to the plaintiff/appellant or to the defendants/respondents would have to be ascertained. Therefore, the court has answered this issue in favour of the appellant/plaintiff. In view of the finding on issue No. 2, the trial court answered issue No. 3 in the affirmative. On issue No. 4, the trial Court issued an injunction against the respondents herein so long as the amount due is not determined, the respondents cannot resort to the provision of the Revenue Recovery Act against the appellant. In the result, the trial court passed the preliminary decree as prayed for and the first respondent Corporation and the appellant were directed to submit their accounts to a commissioner to be appointed by the lower court which will determine the liability of the plaintiff or the first defendant as the case may be and on the amount so determined, the party entitled to, will be granted interest at 6% p.m. from the date of suit till date of payment.

7. Aggrieved by the preliminary decree passed by the trial court, the respondent Corporation preferred A.S.No. 402 of 1981 contending that the suit for rendition of accounts by the hulling agent against the principal will not lie as there is no such statutory right for the agent and that the agent can ask for rendition of accounts only in special and exceptional circumstances proved by the plaintiff and not otherwise. Therefore, it is contended that the lower court is wrong in holding that the suit by the agent against the principal will lie and that the court has jurisdiction to entertain such a suit. Other contentions were also raised before the learned single Judge at the time of hearing. Bellie, J., by his judgment dated 15.3.1991, came to the conclusion that the crux of the agreement between the parties is that the respondent would supply paddy procured from the producers to the plaintiff and the plaintiff would in turn after hulling the paddy deliver the resultant rice to the respondent and the appellant would be paid a commission for such hulling. The learned single judge also held that on consideration of the pleadings no special circumstance arose in the present case as held in the decision reported in Naraindas Morardas Gajiwala v. S.P.A. Papammal : AIR1967SC333 . The learned single judge also rejected the contention of the appellant that the agreement was unfair and the defendants taking advantage of their position of authority and the appellant's unequal bargaining power, laid down conditions in the agreement which are much disadvantageous and detrimental to the appellant. The learned single judge allowed the apple and set aside the judgment and decree of the lower court.

8. The appellant/plaintiff aggrieved by the judgment and decree of the learned single judge has filed the present L.P.A.

9. We have heard Mr. M.V. Venkataseshan, learned counsel for the appellant and Mr. A. Shanmugavel, learned counsel for the respondents. Both the learned counsel argued the appeal at length and also drew our attention to the pleadings, documents and also the judgment of he lower court and of this court. Mr. Venkataseshan contended while arguing the question of maintainability of the suit that the agent is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done or who is represented is called the 'principal'. So, as per definition, contract of agency can be created only if the agent has to have some dealings with third persons on behalf of the principal. In the case of hulling agent, there is no dealing with the third person. So, the term agent is only a nomenclature given to the hulling persons and it cannot be brought under the strict definition of 'principal' and 'agent' as contemplated Under Section 182 of the Indian Contract Act. According to him, there is no relationship of principal and agent in the strict sense of the law and the argument that the principal is not liable to render accounts to the Agent, does not at all arise. It is also contended that the accounting relating to quality cut were only with the respondents and it is only when the account is produced, the respective liability can be arrived at. Since in the instant case what was produced by the appellant was only the accounts relating the hulling charges, it is urged that the accounts relating to counter claim are exclusively with the respondents and under such circumstances, only the production of accounts could resolve the claim of each other. Mr. Venkataseshan contended that when there is no contract of agency as contemplated Under Section 182 of the Contract Act, the respondents are duty bound to furnish true accounts so that the rights and liabilities of the parties could be decided in one and the same proceedings. It is the case of the respondents that the appellant was made aware of the resultant rice expected of each hulling operation. Then, it is the duty of the respondents to establish by records as to how they claim a certain quantity from the appellant, and for proving the same, the only available course is rendition of accounts. In conclusion, it is contended that when the term 'agent' is a misnomer and when the parties are only on contractual relationship of huller and owner, there is no legal prohibition for rendition of accounts. In support of his contention, the learned counsel cited two decisions. The first is the one reported in Karuppiah Nadar v. Commr. of Civil Supplies, 1972 1 MLJ 99 and the 2nd is the one reported in Commr. of Civil Supplies v. V. Seethuraman, 1974 TLNJ 511.

10. Per contra, Mr. Shanmugavel, appearing for the respondents argued that the suit filed by the appellant for rendering of accounts by the principal to the agent will not lie, since the agent is liable under law to render the accounts, and not the principal. While the principal has entrusted the paddy to the agent for conversion into rice, it is for the agents to render accounts for the paddy entrusted and hulled. Therefore, it is contended that the suit is neither maintainable in law nor on the facts and the same is liable to be dismissed.

11. We have carefully perused the judgment of the court below and also the judgment impugned in this appeal. The appellant firm is running a rice milling business in partnership under the name and style of Hameedia Rice Mill and the appellant applied on 21.2.75 to the second respondent requesting the Tamil Nadu Civil Supplies Corporation Limited to appoint the firm as Hulling Agent for conversion of paddy into rice after remitting a sum of Rs. 25,000 towards security deposit through demand draft. The appellant had voluntarily applied for as hulling agent under the Tamil Nadu Civil Supplies Corporation Limited, remitted the security deposit and executed the agreement and on the strength of the same, the 2nd respondent appointed the plaintiff as hulling agent in Ramanathapuram region. The appellant had also again executed an agreement to continue as hulling agent on 21.10.76. The agreement was executed in favour of the Managing Director of the Corporation as 'Principal' and the said agreement contain 19 clauses with schedules showing the hulling and incidental charges and also the transport charges allowed. The stocks of paddy entrusted by the principal will be under the joint custody of the hulling agent and one of the officials of the Corporation. There are other clauses also in the agreement with which we are not presently concerned. The respondent Corporation had undertaken to purchase paddy and hull the same and distribute rice to the consuming public of Tamil Nadu and they have got the greater responsibility and obligations to the consuming public. In the interest of public and to safe guard any kind of malpractice as far as possible, the respondent Corporation has formulated in consultation with the Government of Tamil Nadu, standard forms of agreement and other forms to be entered into by the hulling agent, transport contractors and other so as to ensure purchase and transport of different varieties of paddy from the purchasing centres to the various districts and for storing of paddy and hulling the same into rice and distribution of rice through the retail sales depots of the respondent Corporation and other consumer co-operative societies so as to reach the consuming public in a regular and continuous manner. Hence, as rightly pointed out by Mr. Shanmugavel, it is incorrect to say that the agreement throw unreasonable burden on the appellant by the respondent Corporation. As already stated, the appellant himself has voluntarily entered into an agreement with the respondent Corporation and has also renewed the same for a further term. Nobody has compelled either the appellant or any other rice milling licensees to offer themselves to be appointed as hulling agents of the respondent Corporation. On their depositing different amounts of deposits according to their capacity, as already stated the appellant has volunteered by depositing a sum of Rs. 25,000 towards security deposit and entered into agreement for becoming a hulling agent of the Corporation and further renewed his agreement by executing a fresh agreement on 22.10.76 also. Hence, we are unable to accept the contention of Mr. Venkataseshan, learned counsel for the appellant that the appellant was compelled to take the paddy for the hulling. Having entered into the agreement and signed the same with eyes opened, the appellant cannot now contend that the clauses of the agreement are unreasonable, arbitrary and therefore cannot be enforced on the appellant.

12. It is submitted that there is no allegation of shortage in paddy as the paddy was kept under double lock system. After the release of the paddy from double lock godown, neither the double lock officer nor other officers have any control over the hulling agents with regard to moving of paddy from the godown to the hulling point or in the hulling process such as soaking, boiling, drying and conversion of paddy into boiled rice and movement of boiled rie from the mill premises of the agents to the godowns of the Corporation, till the resultant rice is delivered to the godown superintendent or to the godown keeper, as the case may be on proper weighment in the presence of the representative of the hulling agents and the acknowledgments obtained for purpose of entry in the stock registers. As per the terms of agreement, the hulling agents are bound to deliver boiled rice at the rates of out turn for conversion into boiled rice, fixed for various varieties of paddy, irrespective of shortage of either paddy or rice with the hulling agents. The hulling agents are liable for the short supply of rice calculated with reference to the out turn prescribed for each variety, having regard to the market rates or rice of each variety. It is the case of the respondents that the appellant has not delivered the entire resultant rice fully and he has yet to deliver the balance quantity of rice viz., 44,969 M. Tonnes for Tanjore Kuruvai '75 as admitted and further 205.953.030 M. Tonnes and 1.180.168 M. Tonnes for the Entriystment of Tanjore Samba '76 and South Arcot Samba '76 respectively as per the various circular of the Managing Director and as per the terms and conditions of the agreement.

13. Our attention was drawn to Clause 13(ii) of the agreement executed by the appellant. As per that clause the first respondent is entitled to call upon the plaintiff to measure any rice towards short supply of resultant rice. The Government in their G.O.Ms.No. 1417, Revenue Department dated 13.7.76 have ordered that all the hulling dues from the hulling agents or millers to the Tamil Nadu Civil Supplies Corporation be recovered in the same manner, as arrears of land revenue under the provisions of Tamil Nadu Revenue Recovery Act, 1864. Therefore, we are of the view that the appellant is not entitled to the relief of injunction restraining the respondents from taking any action under the provisions of the Revenue Recovery Act.

14. Mr. Venkataseshan, learned counsel for the appellant cited the decision reported in Karuppiah Nadar v. Commr. of Civil Supplies, 1972 1 MLJ 99 to show that the Revenue Recovery Act cannot be set into motion for recovery of un-quantified arrears payable by the defaulters and that it cannot summarily invoke the provisions of the Revenue Recovery Act on the foot that there is a clause to that effect in the agreement between the parties in cases where such an agreement has been entered into. In other cases, where there is no such an agreement between the procuring agent and the State, it follows a fortiori that the provisions of the Revenue Recovery Act cannot be invoked at all. As already seen, there is a clause in the agreement entered into between the parties in the present case. Therefore, the respondents are entitled to recover the money due by the defaulter and the respondent Corporation can invoke the provisions of the Revenue Recovery Act as regards the value of shortage as arrived at. No doubt, the respondents are at liberty to recover the same by a process available under the contract and under law.

15. A division bench consisting of Veeraswami, CJ and Natarajan. J held in the decision reported in Commr. of Civil Supplies v. V. Seethuraman, 1974 TLNJ 511 that when applying Section 52, it is requisite by the other provisions of the Act, that notice of demand will have to be made and an opportunity for payment or representation should be given. But, such opportunity does not imply a jurisdiction on the part of the authority empowered to act Under Section 52 to decide a dispute by himself, though it is controversial. Therefore where either the liability or its quantum is fairly and reasonably in dispute and it does not appear prima facie that a dispute is raised merely as a make belief to circumvent the application of Section 52, resorTto that section cannot be made. The Bench, in the concluding para of its judgment observed as follows:-

'It is a well established proposition of construction that an authority which is entrusted with only powers of execution cannot assume for itself a jurisdiction to resolve anterior disputes by adjudication. Judicial Power to decide civil disputes should not be confused with execution enturstment of recovery powers of a summary character as an expedient for quick recovery on grounds of state necessity. Section 52 being first an enabling summary recovery process, it cannot extend to and cover jurisdiction for finding a solution of a dispute, and then applying the summary process of recovery Under Section 52.

Merely because a contract provides for a liability for any deficiency in delivery, it does not follow that once the loss is found ipso facto the liability to compensate arises. This only means that the Government will have to institute suits, if they so think fit, to establish the liability and its quantum against each of the respondents.'

16. Now, we consider the decisions relied on by the learned counsel for the respondents. He first cited the decision reported in Ram Lal v. Asian Assurance Co., AIR 1933 Lahore 483 wherein Tapp, J, held that the right to claim a statement of accounts is an unusual form of relief, only granted in certain specific cases and is only to be claimed when the relationship between the parties is such that this is the only relief which will enable the claimant to satisfactorily assert his legal rights. In that case, the plaintiffs who were insurance agents were to be remunerated by a commission calculated on the premia paid on all policies effected or introduced through them. The court held that as the plaintiffs cannot certainly know which of these policies have lapsed, matured or been forfeited, they are entitled to call on the defendants for rendition of accounts as this is the only relief which will enable the plaintiffs to satisfactorily assert their rights. While no doubt, the plaintiffs are aware of all policies effected or introduced through them they cannot certainly know which of these policies have lapsed, matured or been forfeited, the agent can call on his principal for accounting in certain special circumstances. Learned Judge held that the circumstances in the said case entitled the plaintiffs to call on the defendants for rendition of accounts as that is that only relief which will enable the plaintiffs to satisfactorily assert their right.

17. Learned counsel for the respondents next relied on the decision reported in Gulabrai v. India Equitable Insurance Co., AIR 1937 Sind 51 wherein it was held as follows:

'Agent has no statutory right of the account from his principal. Nevertheless where it is equitable from the particular circumstances and the relations of the parties that one should account to the other, a suit for an account will lie. If an agent can satisfy that all accounts are rightly in possession of the principal and that he (agent) has not and could not have in his possession accounts which would enable him to determine his claim for commission against his principal, he will be entitled to sue for an account. But if it is found that the agent has no accounts because of his own failure to keep them due to his own fault, he should not be granted the relief he claims, much less if it is found that he has accounts which he with holds.'

18. Learned counsel for the respondents then relied on the decision reported in Ramachandra M. Co. v. Birankutti and Bros, AIR 1938 Mad. 707 wherein it has been held thus:

'A suit by agent against a principal for a specific sum of money alleged to be due to the plaintiff by the defendant in regard to certain dealings is not a suit for accounts within the meaning of Art 31 of Schedule 2. It is only in exceptional cases where is remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into that a suit by an agent for accounts against his principal might be competent. But where the exact sum of money which the agent claims from his principal is known to him, the due form in which a suit can be filed is the one for specific amount.'

19. Learned counsel for the respondents next cited the decision reported in Basant Kumar v. Roshanlal, AIR 1954 Nagpur 30 wherein the Nagpur Bench referred the matter to a Division Bench on the ground that it involved an important question of law viz., whether an agent can institute a suit against the principal for accounts. In that case the plaintiff succeeded in both the courts. The decree was that the defendants should render account to the plaintiff for the period from 15.10.1934 to 15.7.1937 and it ordered the appointment of a commissioner to take account of the same. But, the question whether the suit was not maintainable because it was instituted by an agent against his principal. There is a divergence of opinion on this point. In that case, it was not disputed that the plaintiff canvassed through out Narsimhapur area. The agent's function was not to sell the books directly himself but to canvass for effecting the sales of the principal's books. The agent does not know how many orders were placed with the principal and how many books were actually sold as a result of the agent's efforts. In such circumstances, the Division Bench held that the agent could not have with him any account of the transactions entitling him to the commission. Those accounts have admittedly been maintained by the principal. That in this type of a case the agent can maintain against his principal an action for an account.

20. Learned counsel for the respondents next cited the decision reported in N.M. Gaziwala v. Papammal : AIR1967SC333 . That was a case where an agent 'sued his principals for rendition of accounts for the period of the agency. The principals also filed a suit claiming enforcement of a promissory note the agent had executed in their favour. The agent pleaded an oral agreement by which the principals were not to enforce the promissory note during the period of the agency and unless the sum remainded due and payable after accounting. The trial court granted a decree on the promissory note but directed that it should be adjusted against any sum found due after accounting in the agent's suit. The principals went to the High Court and failing there appealed to the Supreme Court. It was contended before the Supreme Court on behalf of the appellants that (1) an agent was not entitled in law to sue his principals for accounts and (2) the parole agreement could not be proved in view of Section 92 of the Indian Evidence Act. The Supreme Court held thus:-

'Though an agent has no statutory right for an account from his principal, nevertheless there may be special circumstances rendering it equitable that the principal should account to the agent. Such a case may arise when all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim for commission against his principal. The right of the agent may also arise in an exceptional case when his remuneration depends on the extent of dealings which are not known to him or where he cannot be aware of the extent of the amount due to him unless the accounts of his principal are gone into. In the special circumstances of the present case the agent was entitled to sue his principal for accounts for the material period.'

21. Following the above ruling of the Supreme Court, Ratnam, J., (as he then was) held in the decision reported in State v. Alagirisubramanian : AIR1988Mad248 held that the institution of a suit by the agent against the principal for rendition of accounts is an equitable right available only in certain exceptional circumstances, and, if the existence of those circumstances are not established, then such a right would not be available.

22. In the said case, the trial court found that though the jural relationship between the respondent and the appellant was that of the agent and principal, the respondent had to maintain the accounts in respect of the transactions and was also in possession of the accounts and therefore not entitled to maintain the suit for rendition of accounts against the principal viz., the appellant. On the said conclusion, the trial court dismissed the suit. However, the respondent preferred appeal to the sub- court, Madurai which differed from the conclusion arrived at by the trial court and found that the suit at the instance of the respondent against the appellant for rendition of accounts is maintainable. Accordingly the lower appellate court granted a preliminary decree for rendition of accounts in favour of the respondent and against the appellant. The correctness of this was challenged in second appeal before Ratnam, J., Learned Government Advocate contended that the plaintiff had not established any exceptional circumstances under which such a suit could be entertained. He further submitted that the lower appellate court has not considered the question whether the respondent had clearly established by evidence that the accounts which he was obliged to maintain, had been lost in the circumstances mentioned by him and without rendering a clear finding that the respondent was not possessed of the accounts, the suit ought not to have been held to be maintainable. On the other hand, learned counsel for the respondent submitted that the respondent had made out that he was not in possession of the accounts relating to the transactions entered into by the respondent in his capacity as agent of the appellant and therefore the suit was rightly held to be maintainable. Ratnam, J held that the plaintiff has not made out that the accounts books and other records are not with him and that would entitled him to maintain the suit for accounts against the principal. The learned judge has held that the lower appellate court was therefore in error in having found that the respondent had established the loss of accounts rendering the suit instituted by the respondent against the appellant maintainable, as if an exceptional circumstances for countenancing such a suit, had been established.

23. In the present case, the appellant as an agent is liable for the short supply of rice calculated with reference to the outturn prescribed for each variety, having regard to the market rates of rice of each variety. He has not delivered the entire resultant rice fully. According to the Corporation, he has yet to deliver the balance rice. The appellant shall be responsible for the proper delivery of the rice which has to be delivered to such officials at such godown authorised by the principal or by the Regional Manager or any official authorised by him in this behalf. Accordingly, the hulling agent of the respondent Corporation is bound to deliver the resultant rice in the godowns of the Tamil Nadu Civil Supplies Corporation Limited to the godown Superintendent, Godown keeper as the case may be on proper weighment and acknowledgment for the said delivery of resultant rice with weighment particulars obtained from godown staff. Therefore, as per agreement, the appellant is expected to maintain accounts for the supply made and he cannot direct the respondents to render account. It is the case of the respondent Corporation that the appellant as agent has not even submitted his bills with relevant documents such as truck memos for paddy received by the appellant, acknowledgment memos for delivery of rice, quality certificate etc., and the appellant has not also rendered any account for the return of gunnies which were entrusted alongwith the paddy. The appellant has not preferred his claims and submitted his hulling bills to the respondent Corporation for settlement since there was a heavy short supply of resultant rice for the paddy entrusted to the appellant for hulling. We, are therefore, of the view, that the suit filed by the appellant for rendering accounts by the principal to the agent will not lie, since the agent is liable to render accounts and not the principal. While the principal has entrusted the paddy to the agent for conversion into rice, it is for the agents to render accounts for the paddy entrusted. There are no special circumstances in this case rendering it equitable that the respondent principal should give accounts to the appellant. Such a case may arise when all the accounts are in the possession of the principal and the agent does not possess accounts to enable him to determine his claim. Therefore, we are of the view that the agent has no statutory right for accounts from his principal viz., the respondent Corporation. Therefore, this appeal fails and is liable to be dismissed.

24. In the result, this L.P.A. is dismissed, the judgment and decree of the appellate court made in A.S.No. 402 of 1981 dated 15.3.1991 is hereby confirmed and that of the III Asst. City Civil Court, Madras made in O.S.No. 5467 of 78 dated 26.3.1980 is set aside and the said suit stands dismissed. No costs in this appeal.