G.S. Panicker v. K. Prabhakaran

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE A.HARIPRASAD MONDAY, THE 18TH DAY OF JANUARY 2016/28TH POUSHA, 1937 ## A.S.No.9 of 1997 AGAINST THE JUDGMENT IN OS 300/1985 of I ADDL.SUB COURT, TRIVANDRUM DATED 05-06-1995 ## APPELLANT/PLAINTIFF: G.S.PANICKER, PRODUCER AND PROPRIETOR NEO FILMS, T.C.2/1920, T.P.ROAD, TRIVANDRUM BY ADVS.SRI.L.MOHANAN SRI.D.RAJEEV ## RESPONDENT/DEFENDANT: K.PRABHAKARAN, S/O KUNJU BENNI HOUSE, CHITTATTINKARA DESOM AVANAVANCHERRY VILLAGE THIRUVANANTHAPURAM. R, BY ADV. SRI.R.S.KALKURA R, BY ADV. SRI.M.RAMASWAMY THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 18-01-2016 ALONG WITH A.S.498/97, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: # **V.CHITAMBARESH & SATHISH NINAN, JJ.** **==================== A.S. Nos.9 & 498 of 1997** **==================== Dated this the 27[th] day of January, 2017** ## **J U D G M E N T** ## **SATHISH NINAN, J.** Decree in a suit for settlement of accounts is under challenge by the plaintiff as well as the defendant therein. 2. Plaintiff in O.S. No.300 of 1985 is the producer of M/s.Neo Films. For the production of the film “Sahyante Makan”, amounts were advanced by the defendant. An agreement dated 25.03.1982, Ext.B31, was executed with regard to the transaction. The original estimate for production of the film was Rs.1 lakh. Expenses were to be shared in equal proportion by the plaintiff and defendant. Since the plaintiff was not in possession of funds, amounts were to be raised by the defendant on behalf of the plaintiff on the agreement ## **A.S. Nos.9 & 498 of 1997** -: 2 :- that it would be paid off by the plaintiff. Subsequently, Ext.B15 agreement dated 03.07.1984 was executed between the parties wherein they acknowledged that for the production of the film though the estimate was Rs.1 lakh, the same has went up to more than Rs.3 lakhs. A Power of Attorney was executed by the plaintiff in favour of the defendant to enable him to receive money from the Director of Public Instruction for the supply of 20 prints of the film. The amounts were to be expended by the defendant on convincing the plaintiff regarding the accounts. Plaintiff claims that the defendant has not accounted for the money, that on settling the accounts the plaintiff would be entitled to not less than Rs.2 lakhs. Accordingly the suit was filed for settlement of accounts and recovery of money. 3. The court below after considering the oral and documentary evidence, held that the plaintiff is entitled to recover Rs.27,500/- with 12% interest and proportionate costs from the defendant. Plaintiff challenges the decree on the ground that the quantum **A.S. Nos.9 & 498 of 1997** -: 3 :- awarded is low and that the settlment of accounts is not proper. Defendant challenges the decree granted against him. 4. Exhibits B31 and B15 are the documents which govern the relationship between the parties. Though the genuineness of Ext.B31 agreement dated 25.03.1982 is disputed by the plaintiff, Ext.B15 agreement dated 03.07.1984 acknowledges Ext.B31 agreement. Therefore, the contention of the plaintiff against genuineness of Ext.B31 is without any substance and is unsustainable. 5. Though the defendant has raised a contention in the written statement regarding the maintainability of the suit and an issue was raised in the said regard, the court below, observing that the relationship between the parties especially in view of the Power of Attorney executed by the plaintiff in favour of the defendant is that of Principal and Agent, held that the suit for settlement of accounts was maintainable. 6. Smt.R.Bindu, learned counsel for the appellant in A.S. No.498 of 1997/defendant in the suit relying **A.S. Nos.9 & 498 of 1997** -: 4 :- upon the decisions in **Brothers Chitty Fund v. Jacob Mathew** (2004 KHC 9) and **K.C. Skaria v. State of Kerala and Another** (2006 KHC 92) would contend that finding of the court below that the relationship between the parties is that of Principal and Agent is without any basis, that a fiduciary relationship does not exist between the parties and that the suit for settlement of accounts is not maintainable. According to her, the plaintiff could have at best maintained a suit for realisation of a specified amount of money. On the other hand, Shri Anil S.Raj, learned counsel for the appellant in A.S. No.9 of 1997/plaintiff in the suit would contend that under the arrangement between the parties, the defendant was permitted to expend amounts on behalf of the plaintiff also with a specific provision that he is liable to account to the plaintiff. According to him, the proper remedy is a suit for settlement of accounts. 7. As noted above, the relationship between the parties is governed by Exts.B31 and B15 documents. A reading of the said documents seem to indicate that they ## **A.S. Nos.9 & 498 of 1997** -: 5 :- joined together on a particular venture, viz., production of a film (Sahyante Makan). The agreements further indicate that one is acting on behalf of the other and that there is an agreement between them to share the profits of the business. The necessary ingredients relating to a partnership seem to be present though there is no written deed of partnership as such between the parties. A partnership could even be inferred from circumstances (see **Ponnamma v. Kamaleswaran** (1986 KLT 745). The question as to whether a suit for settlement of accounts is maintainable, essentially depends upon the nature of the relationship between the parties. It is seen that the same has not been properly considered by the court below. 8. On the merits of the case, learned counsel for the plaintiff would contend that the court below has omitted to consider Exts.B1 and B2 confirmation letters, in the correct perspective. Amounts as mentioned in Ext.B2, according to the learned counsel, takes in the amounts as mentioned in Ext.B1 also. Exhibit B2 is ## **A.S. Nos.9 & 498 of 1997** ## -: 6 :- written by the plaintiff acknowledging that an amount of Rs.60,700/- has been received from the defendant till 10.05.1982 towards expenses for production of the film “Sahyante Makan”. He stresses on the word “Õæø” in Ext.B2 to contend that it necessarily includes the amounts paid till then which takes in the amount mentioned in Ext.B1 also. So also, he contends that being a suit for settlement of accounts, when the court settles the accounts between the parties, amounts that are spent by the plaintiff also are to be taken into account. Same has not been done by the court below. 9. As indicated supra, the very maintainability of the suit would depend on the finding regarding the nature of the relationship between the parties. The same has not been properly gone into. In the circumstances, we feel that the judgment and decree are liable to be set aside. The court below has to consider the matter afresh by granting adequate opportunity to both sides to amend the pleadings and adduce fresh evidence. The court below shall raise an issue regarding the nature of the **A.S. Nos.9 & 498 of 1997** ## -: 7 :- relationship between the parties and enter a finding thereon and also on the issue of maintainability of the suit. The court below shall consider the entire issues afresh. In the result, both the Appeals Suits are allowed. The judgment and decree are set aside. The matter is remitted to the court below for disposal _de novo_ in terms of the observations made above. The parties shall appear before the Ist Additional Sub Court, Thiruvananthapuram on 06.02.2017. The court fee paid on the memorandum of appeals shall be refunded to the respective parties. Sd/- ## **V.CHITAMBARESH, JUDGE.** Sd/- **SATHISH NINAN, JUDGE.** Vsv ## /true copy/ ## P.S. To Judge