M. Akbar Ali vs. Respondent: Mrs. Rezia Sultana Begum and Ors.

IN THE SUPREME COURT OF BANGLADESH
(HIGH COURT DIVISION) (Dhaka)

Appeal from Original Decree No. 94 of 1969

Decided On: 16.06.1981

Appellants: M. Akbar Ali
Vs.
Respondent: Mrs. Rezia Sultana Begum and ors.

**Hon’ble Judges:**Ranadhir Sen and A.T.M. Afzal, JJ.

Counsels:
For Appellant/Petitioner/Plaintiff: Anil Chandra Sarker

For Respondents/Defendant: Jane Alam

Subject: Contract

Catch Words

Mentioned IN

**Acts/Rules/Orders:**Contract Act, 1872 - Section 182

Disposition:
Appeal Allowed

Citing Reference:

Discussed

 1

Mentioned

 1

JUDGMENT

A.T.M. Afzal, J.

1. This appeal by the plaintiff arises out of a suit for money and is directed against the Judgment and decree dated 30-11-68 passed by the learned Sub ordinate Judge 3rd Court, Dacca in Money suit No. 89 of 1967 dismissing the plain tiff’s suit and decreeing the defendants' counterclaim for Taka 50,000/- on contest with cost against the plaintiff. The plaintiff instituted the aforesaid suit for realisation of Taka 37, 960/- from the defendants on the averments, inter alia, that the defendant Nos. 1 and 2 are the proprietors of the business firm named M/S. Dacca Scientific Works defendant No. 3; that the plaintiff had been working as a Manager of the said firm since its inception and that he used to get a salary and commission on sale proceeds. A dispute arose between the plain tiff and the defendants with regard to the plaintiffs' dues and it was settled by and between the parties under terms and conditions embodied in a deed of agreement dated 7.9.66 executed by both the parties. The plaintiffs stated that in terms of the said agreement the plaintiffs dues were settled at Taka 41,000/ and the defendants agreed to pay the said sum in full by June 30, 1967 and that the mode of payment had also been mentioned in the said agreement. The defendant, how-ever, did not comply with terms and conditions of the said agreement but merely paid a sum of Tk. 3,040/- only in all. The plaintiff served a demand notice through his lawyer on 26.6.67 calling upon the defendants to pay the outstanding dues of Tk. 37,960/- within one week from June 30,1967 but the defendants did not pay the said amount and hence the suit.

2. The defendants contested the suit by filing a joint written statement. Besides denying the material allegations of the plaintiff they raised various pleas in bar of the suit. They denied that the plaintiff was the Manager of the firm since its inception. The defendants contended that the firm was started in October 1951 in a rented house at 22/2 Hatkhola Road, Dacca when the plain tiff was a lower division clerk in the office of the School Text Book Board at Rankin Street. The plaintiff was asked by the defendant No. 1 to look into the accounts of the business and make correspondence of the firm in the evening after his office hours and was allowed to draw an allowance of Tk. 150/per month.

3. The defendants asserted that the agreement dated 7.9.66 referred to by the plaintiff in his plaint was executed by the defendant under forced circumstances, coercion and with out their free consent. The defendant set out the circumstances under which they were compelled to sign the agreement. It was stated that the defendant’s business firm manufactures and deals in scientific instruments, laboratory glass wares, chemicals, etc. used in science laboratories of educational institutions. The plaintiff, as already stated, was a part, time employee of the firm and was allowed to occupy a room in the premises of the firm at 22/2 and later on at 27 Hatkhola Road. The plaintiff was made a full-time Manager of the firm with a salary of Tk. 250/- and commission at the rate of two percent on sale with effect from 1st December, 1962, In October, 1964 the plaintiff demanded that his salary and commission should be enhanced. The defendants having found that it was difficult to replace him decided that his salary should be raised to Tk. 500/- per month and commission to 4 percent with effect from November, 1964.

4. Some time in May 1966 it transpired that the plaintiff was arranging a secret business deal with some Japanese firm and this cast a serious doubt about the plaintiffs ‘motives in the mind of the defendant. At about the same time it was revealed that although a full-time employee of the defendant the plain tiff was regular student of the Dacca University attending classes without the knowledge and consent of the defendant and he obtained an M.A. degree in History in 1964, The defendants further learned that the plaintiff had been carrying on independent business from some time back and opened two firms of his own PIMCO Instrument and Victor Scientific Co. When the plaintiff realised that he could no longer conceal his activities, he gave a proposal to the defendants that be wished to open a firm of his own of scientific instruments while remaining their Manager. It was turned down by the defendants and the plaintiff be came furious and turned hostile. The defendant’s further asserted that in order to settle accounts with the plaintiff the defendants No. 1 asked him to hand over all the papers, documents, etc but the plaintiff refused to comply with the said request, On the contrary, realising helplessness of the defendants the plaintiff made a fantastic demand that he should be paid a salary of Tk. 500/-per month and four percent commission on sale with retrospective effect. The plaintiff insisted that unless his demands were met he would neither vacate the premises nor hand over the books of accounts, the documents relating to property, etc, to the defendants. The defendants further contended that thus deadlock was created and consequently arbitration was held in which some basis of calculation of the plaintiff’s salary and commission was arrived at.

5. It also alleged that the plaintiff continued to work for the benefits of his own firm at the cost and to the detriment of the interest of the defendants and as a result the defendant’s business sustained heavy loss. The defendants then served a pleader’s notice to vacate the premises but the plaintiff did not pay any heed to it and continued with his nefarious activities. The defendants therefore felt that recovery of extremely valuable documents of property, hooks of accounts, files, etc. from the custody of the plaintiff and his eviction from the firm premises became most urgent but he would not leave nor hand over the documents. It is the positive case of the defendants that they had to sign the agreement in question under such extreme pressure and coercion put by the plaintiff upon the defendant. The plaintiff, it is said, handed over the documents and vacated the premises only after the execution of the said agreement.

6. The defendants further alleged that upon scrutiny of the books of accounts it was found that the plaintiff was accountable for a sum of Tk. 1,72,000/- under various heads as set out below :-

The dependents claimed on the basis of the aforesaid account that the plaintiff was liable to pay the defendants Taka. 50,000/A, prayed for a decree accordingly and also prayed for a set-off of the said amount against the dues of plaintiff, if any, as claimed in the suit. The plaintiff put in an objection petition against the defendants claim denying the allegations of the defendants particularly as to with holding of books of account, etc and stating further that he had attended classes in the University during 1962-64 with full knowledge and consent of the defendant No, 1 and her husband. It was contended that the defendant’s claim under the various heads was false and baseless.

7. On the aforesaid pleading the following issues were framed at the trial for adjudication:

1. Is the alleged deed of agreement vitiated by fraud, undue influence and coercion and is it enforceable in law against the defendant?

2. Is the plaintiff entitled to get any amount as claimed by him?

3. Is the plaintiff guilty of negligence to perform the duties as agreed between the plaintiff and defendants?

4. Are the defendants entitled to get a decree as claimed in the written statements as counter claim?

5. Are the claim of the plaintiff and counter claim of the defendants barred by limitation?

6. To what relief, if any, are the plaintiff and the defendant entitled?

[Discussion of witnesses’ evidence omitted]

8. The learned Advocate for the appellant has rightly challenged the finding of the learned subordinate judge in this behalf. Upon a reference to the impugned judgment it is found that the learned subordinate Judge was labouring under a serious misconception of the defendants case and the evidence adduced by them. The defendants nowhere alleged fraud but the learned Subordinate Judge took up for consideration as to whether the agreement Ext. 2 was, inter alia, vitiated by fraud. Similarly, he read many things in the evidence of D.W. 1. which as we have indicated above, are not there. The subordinate Judge having realised that there was no evidence as to the demand of documents from the plaintiff went on to make surmise that it was natural for a pruden man like Mr. Fazlul Rahman D.W. 1 to have demanded the documents, etc. from the plaintiff when the trouble began. The learned subordinate Judge then relied on the alleged admission of the plaintiff that demands were made before charge was made over as per Ext. 3. It is, however, found from the evidence that the plaintiff as P.W 1 stated that it was not a fact that the defendants demanded that documents prior to granting to Ext. 2 and that it was not a fact that he refused to hand over papers before settlement of his dues. The subordinate Judge quite contrary to the evidence on record further found that there was no cogent evidence that any practical accounting was made in the salish before Ext. 2 was executed and that it was another circumstance to indicate and establish undue influence and coercion. The evidence of D.W. 1, as referred to above, completely belied the aforesaid finding of the subordinate Judge. We must say that we are disappointed with the poor appreciation of the fact and evidence made by the learned sub ordinate Judge with regard to the compromise agreement Ext. 2 and for reasons to be refer ed hereafter we do not also approve of the other part of his judgment. In view of our discussion above we have no hesitation in set ting aside his finding as to the compromise agreement and in holding further that the agreement in question was not vitiated by undue influence and coercion and as such it is perfectly enforceable in law.

9. The agreement Ext. 2 was between the pltff. and defdt. Nos. 1 and 2. If the defdts, wanted to get out of the contract on the ground of undue influence and coercion it was absolutely essential for them to take oath before the court and depose, it they so liked; but D.W. 1 flatly stated in cross-examination that he would not examine either defdt. No. 1 or 2. Whatever might have been the consideration with D.W. 1 to agree to the settlement, there is nothing on record to show that any undue influence or coercion was practiced upon the defdts to obtain the execution of the document Ext. 2. Even D.W. 1 did not say in his evidence that the defdts put their signatures in the agreement with any reservation. Since admittedly D.W. 1 was not a party to the negotiation on behalf of the defdts, his evidence alone, in our opinion, cannot be considered legally sufficient for the purpose of avoiding the agreement on the basis of alleged undue influence and coercion.

10. With regard to claim of defdts for Taka 50,000/- the subordinate Judge found, in his judgment that all the documents about the counter-claim were of dates beyond more than 3 years. Question arose whether limitation would: be govern by article 62 or Article 89 of the Limitation Act. The defdts', contention was that since the plaintiff was their agent Article 89 was attracted and as such the counter claim was not barred by limitation even though it was made beyond 3 years. The learned subordinate judge up held the contention of the defdts.

11. The learned advocate for the appellant has contended that the learned subordinate judge was wrong in holding that the plaintiff was an agent of the defendants. He has argued that there is a distinction between a servant and an agent and further that the defendants not having introduced expressly the concept of agency either in the written statement or in the deposition the plaintiff could not but be held to be servant of the defendants.

12. An agent has been defined by section 182 of the Contract Act to be a person employed to do any act for another or to represent another in dealing with third person notwithstanding this wide definition an agent is to be distinguished, on the one hand, from a servant and, on the other, from an independent contractor. A servant acts under the direct control and supervision of his master, and is bound to conform to all reasonable orders given him in the course of his work; an independent contractor, on the other hand, is entirely independent of any control or interference, and merely undertakes to pro duce a specified result, employing his own means to produce that result. An agent though bound to exercise his authority in accordance with all lawful instructions which may be given to him from time to time by his principal, is not subject in its exercise to the direct control or supervision of the principal. An agent as such, is not a servant, but a servant is generally for some purposes, his master’s agent, the extent of the agency depending upon duties or position of the servant, and in some cases an independent contractor may also be an agent. (Halsbury’s) Laws of England. (Third edition) Volume 1 page 145, 146

The Indian Supreme Court in the case of Lakshminarayan Ram Gopal and Son Ltd. Vs. The Government of Hyderabad reported in 1955 S.C. Reports vol. 1 page 393 corresponding to A.I.R. 1934 SC. 364 noticed the aforesaid distinction between the different categories of employment while dealing with the subject of agency. In the case of Shalagram Jhajharia Vs. National Co. Ltd. & others, reported in 69 CWN 369 Bose, C.J. upon noticing the definition of agent as under the Contract Act observed that the relationship is to be determined not by name but by conduct of the parties and the purport of their dealings. It is, therefore; clear that it requires to be decided in the facts of each, case whether a particular employment could be said to be one in course of agency irrespective of by whatever name the employment is designated In the instant case, however, we find it difficult to agree with the submission of the learned Advocate for the appellant that the plaintiff was merely a servant of the defendants and not an agent for the simple reason that besides salary the plaintiff admittedly was used to be paid com mission on the sale proceeds of the firm. This incentive by way of giving commission to the plaintiff shows that he was afforded a latitude in the matter of augmenting the sale of the firm and thus he could earn as much as he could work in his volition. In other words, he had a discretion in the matter of shall. There is nothing in the evidence to show that defendants could any manner interfere with the plaintiff’s job of selling on behalf of the firm.

13. We propose to examine the question of limitation on the footing that the plaintiff was an agent of the defendant. Article 89 of the Limitation Act provides for a suit by a principal against his agent for moveable property received by the latter and not accounted for. It prescribes a limitation of 3 years from the time when the account is, during the continuance of the agency, demanded and refused, or where no such demand is made, when the agency terminates. There are two aspects to be considered in this particular case, firstly whether the counter claim of the defendants was at all made bonafide and secondly, whether such a claim could be made without a proper suit for accounts. In the instant case, there is absolutely nothing either in the pleading or in the evidence that account was even demanded of the plaintiff during the tenure of his service with the defendants. The plain tiff’s service was admittedly terminated on and from September 9, 1966. The defendants can claim the limitation to run from that day pro vided it can be shown that something remained unaccounted for on that date. There is nothing in the evidence of D.W. 1 that anything remained due from the plaintiff on the date of agreement Ext. 2. Admittedly the dispute between the parties arose since May, 1966 and D.W. 1 had access to all the books of accounts of the firm. He admitted in his evidence that he looked after the business of the firm though the management was with the plaintiff. The plaintiff stated in his evidence that he used to hand over the sale-proceeds of the firm to Mr. Fazlur Rahman daily. This statement of the plaintiff has not been challenged in cross-examination. P.W. 3 Abdul Huq, an old pensioner of the neighbourhood of the firm, deposed that he saw Mr. Fazlur Rahman to come daily to 27, Hatkhola Road in the evening and to examine all books of accounts. There is nothing on record to show that D.W. 1 laid any claim against the plaintiff at any point of time even during the arbitration when the claim of the plaintiff was being settled. That there was no claim of the defendants which was not accounted for by the plaintiff on the date of the termination of his service on 7.9.66 will be further evident from the defendant’s own letter addressed to the plaintiff as late as on April 27, 1967 Ext. 5(e). Even in that letter the defendants made no claim whatsoever against the plaintiff although Mr. Fazlur Rahman stated in his evidence that with 4/5 months from September, 1966 he came to know of the fishy deals of the plaintiff after checking the books of account. D.W. 1, how ever, alleged in his evidence that he had made several demands from the plaintiff through third persons on the basis that huge amount was due from him but Mr. Fazlur Rahman could not name any of those persons nor he could give even the approximate time of ma king such demands. The predicament of this scholar witness is easily understandable. That the claim of the defendants is absolutely baseless can best be appreciated by the significant fact that the defendants never made any claim against the plaintiff until the filing of the written statement. From the circumstances of the case we felt absolutely certain that the counter-claim of the defendants was nothing but an afterthought and was advanced more on the theory that offence is the best form of de fence. Since there is no material to hold that anything remained unaccounted for by the plaintiff or that there was a claim even in that behalf on the date of termination of his service-it is apparent that article 89 had no manner of application and thus the claim of the defendants could not escape the bar of limitation. The learned Advocate has rightly argued that the question of limitation as referred to above has been wrongly decided by the learned Sub-ordinate Judge.

14. The learned Advocate for the appellant has further argued that in the facts and circumstances of the case the Subordinate Judge ought not to have allowed a decree in favour, of the defendants on the basis of their own accounting without specific prayer for rendering of accounts by the plaintiff. The submission of the learned Advocate seems to have considerable substance. The summary way in which the Subordinate Judge allowed the claim of the defendants betrays his lack of appreciation of the facts of the case and, particularly, because the claim could not be allowed in that manner as admittedly the plaintiff had his own claim against the defendants notwithstanding the finding of the Subordinate Judge that the agreement Ext. 2 was obtained by undue influence and coercion, Even otherwise, the learned Subordinate Judge while considering the defendants' claim overlooked the material statements of the plaintiff that Mr. Fazlur Rahman used to receive the sale-proceeds of the firm daily and this statement of the plaintiff has remained unchallenged. The learned Subordinate Judge also ignored that Mr. Fazlur Rahman himself admitted in his cross-examination that he did not produce the payment register of the employees, the commission register, sale registers of 1962-66, deposit and withdrawal register from different Banks, cash receipt of 1963-66 and the sale bills of 1963-66. It is in the evidence of Mr. Fazlur Rahman himself that he used to receive cash on many occasions of which he neither granted any receipt nor deposited the same in the Bank. We wonder how in the face of such evidence the Subordinate Judge could allow the claim of the defendants, particularly having regard to the manner in which it was claimed. Having gone through the evidence in the case we cannot help observe that the conduct of the plaintiff was above board in so far as the present transaction, namely the agreement Ext. 2 was concerned. But we cannot say the same insofar as the defendant and their case are concerned. In such view of the matter we are of the opinion that the defendants not having brought a suit for accounts they were not entitled to the relief in the manner claimed. In the circumstances of the case and in view of our findings above we do not consider it necessary to examine the defendants' counter claim on merit. We are clearly of the opinion that the learned Subordinate Judge Illegally allowed the counter-claim of the defendants which is, accordingly, liable to be set aside.

In the result the appeal is allowed, the impugned judgment and decree are set aside and the suit is decreed with costs throughout in favour of the plaintiff. We direct that the defendants shall pay the plaintiff Taka 37,960/- and the decretal costs within two (2) months from the date of signing of the decree.

Ranadhir Sen, J.

I agree.