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Express Publications Madurai Limited v/s Indian Express Newspapers Mumbai Limited & Another

    NOTICE OF MOTION NO. 1904 of 2010 IN SUIT NO. 1893 of 2010

    Decided On, 26 July 2012

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE B.R. GAVAI

    For the Plaintiffs: F.E. D'vitre, Sr. Counsel a/w. Rajiv For the Plaintiffs: F.E. D'vitre, Sr. Counsel a/w. Rajiv Kumar & Deepak Chitnis i/b. D.C. Chipkar & co., Advocates. For the Defendants: I.M. Chagla, Sr. Adv. a/w. D.D. Madan, Sr. Adv. Yugandhara Khanwilkar & Amol Joshi i/b. R1, R2 Poorvi Kamani, Advocates.



Judgment Text

1. The plaintiffs have filed a Suit for a preliminary decree to render true and faithful accounts in terms of the All India Advertisement Revenue Sharing Agreements/Arrangements based on circulation figures of the Indian Express and the New Indian Express, certified by ABC or as per the ABC guidelines from 1st April, 2005 till date. A consequential prayer of appointing a Commissioner for carrying out enquiry and scrutiny of the accounts of the plaintiff and defendant and for a final decree over the amount so determined to be found due and payable in favour of the party to whom it is due and against the party from whom it is due and payable alongwith interest has also been prayed for. The plaintiffs have also made a alternative prayer for decree of amount of Rs. 23,49,28,608.09.

2. It is the case of plaintiff that the original Indian Express Limited on account of dispute between the two factions in the family was bifurcated into two groups namely Indian Express Newspapers (Mumbai) Limited (hereinafter referred to as IELB and Indian Express (Madurai) Limited (hereinafter referred to as IEM). It is the plaintiff's case that both the groups had bifurcated and were controlling the newspapers which came to their respective groups. In order to target All India Market, so as to publish advertisements on All India basis, a joint advertising arrangement was entered into between the two groups. According to the plaintiffs the sharing of All India Billing was to be done on the basis of the circulation as per the figures arrived at by the Audit Bureau of Circulation (hereinafter referred to as ABC). The agreements were duly signed on 18th April, 1997 by the Chairman and Managing Directors of both the groups. As per the subsequent agreement dated 12th August, 2005 it was agreed that in respect of the editions not covered under the ABC, the audited figures based on the ABC guidelines would be taken into consideration instead of the ABC Certificate. It appears that there arose a dispute insofar as percentage of share is concerned and certain communications so also the emails were exchanged between the Directors of the two groups. The plaintiffs heavily relied on the email dated 6th June, 2009 addressed by the Managing Director of the plaintiffs to one Shri N.P. Singh, a Director of the defendants wherein he states that he is willing to accept that the review can be taken up from April 2005 and so called email dated 6th June, 2009 by the said Shri N.P. Singh to the Managing Director of the plaintiffs wherein it states that 'I would be more than happy to accept'. It is, therefore, the contention of the plaintiff that since the Director of the defendants hashimself admitted that the review can be taken from 1st April, 2005 and since the defendants have failed to do so, the reliefs claimed in the motion deserves to be passed.

3. The Suit of the plaintiffs is resisted by the defendants by filing the written-statement.

4. Alongwith the plaint, a notice of motion praying for a Chartered Accountant from the Panel of Court Receiver, High Court, Bombay being appointed as a Commissioner for carrying out scrutiny/accounting of the accounts in respect of Circulation figures of the defendants starting from 1st April, 2005 till this date as per the guidelines prescribed by the ABC and for directing the defendants to produce all the Books of Accounts, Vouchers etc. for the assessment year 1st April, 2005 onwards before the Commissioner for the purpose of carrying out scrutiny/ accounting has been taken out.

5. Heard Shri D'vitre, learned Senior Counsel appearing on behalf of plaintiff and Shri Chagla, the learned Senior Counsel appearing on behalf of defendants.

6. Shri D'vitre, the learned Senior Counsel appearing on behalf of plaintiffs submits that from the email communication dated 6th June, 2009 addressed by Shri N.P. Singh to Managing Director of the plaintiff, it is clear that the defendants have accepted to review the amounts payable to each other from 1st April, 2005 onwards. It is submitted that, however, since the certified figures of circulation of defendants are not available, it is necessary that the accounts which would depict the circulation of the defendants are produced before the Commissioner, so that the material is available before the Court at the stage of hearing of the suit. It is submitted that since the defendants' editions do not have the ABC certified figures, there is no other mode of verifying the circulation of the defendants. The learned Counsel, therefore, submits that this is a fit case as carved out in the judgment of the Apex Court in the case of K.C. Skaria v/s. Government of State of Kerala & anr. {(2006) 2 SCC 285}. Shri D'vitre further submits that for the first time in the affidavit in sur-rejoinder which is filed by the defendants, defendants have denied that said N.P. Singh had sent the email on 6th June, 2009. It is submitted that this is nothing but an after thought. The learned Counsel, therefore, submits that motion deserves to be allowed.

7. Shri Chagla, learned Senior Counsel appearing on behalf of defendants on the contrary submits that so called email dated 6th June, 2009 is a fabricated document. He submits that date which is shown on the said email is Monday, the 6th June, 2009, whereas infact 6th June, 2009 was a Saturday and not a Monday. He submits that the reply to the email is on a computer and it is impossible that an incorrect date would appear in the email. He, therefore, submits that it is apparent that the so called email by N.P. Singh is a fabricated document. The learned Counsel further submits that the tenor of the entire correspondence between the parties would reveal that the defendants had never agreed for re-assessment of the claims inter se. He further submits that as a matter of fact the accounts between the parties have already been reconciled as is evident from reconciliation of accounts signed on 30th July, 2008 which are duly signed by the representatives of the parties. The learned Counsel further submits that present Suit is not a Suit for accounts but in fact for reopening of the accounts which are already finalized between the parties. The learned Counsel further submits that the present application is nothing else but in the nature of collecting the evidence to support the case of the plaintiff. It is, therefore, submitted that the same cannot be allowed in view of the settled legal position.

8. Though both the learned Counsels have taken me through various documents in support of the rival claims, I find that any comment thereon would prejudicially effect the rights of either of the parties at the stage of hearing of the Suit. The Court at this stage is considering the matter from a limited preliminary aspect. Any observations about the claims of either of the parties in my considered view would prejudice the rights of the parties at the stage of hearing of the Suit and, therefore, though I have been taken through voluminous documents, I do not wish to go into the merits and demerits of the same.

9. The limited question that arises is as to whether the relief claimed in the present notice of motion can be granted or not? The Apex Court in the case of Padam Sen & anr. v/s. The State of U.P. {AIR 1961 SC 218} had an occasion to consider the question as to whether the order passed by the Additional Munsif for appointment of Commissioner for the purpose of assessing the accounts books of the plaintiff was sustainable or not? The Apex Court in paras 9, 10 and 11 has observed thus:-

'9. The question for determination is whether the impugned order of the Additional Munsif appointing Sri Raghubir Pershad Commissioner for seizing the plaintiff' books of account can be said to be an order which is passed by the Court in the exercise of its inherent powers. The inherent powers saved by s. 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it. These powers are not powers over the substantive rights which any litigant possesses. Specific powers have to be conferred on the Courts for passing such orders which would affect such rights of a party. Such powers cannot come within the scope of inherent powers of the Court in the matters of procedure, which powers have their source in the Court possessing all the essential powers to regulate its practice and procedure. A party has full rights over its books of account. The Court has no inherent power forcibly to seize its property. If it does so, it invades the private rights of the party. Specific procedure is laid down in the Code for getting the relevant documents or books in Court for the purpose of using them as evidence. A party is free to produce such documents or books in support of its case as be relevant. A party can ask the help of the Court to have produced in Court by the other party such documents as it would like to be used in evidence and are admitted by that party to be in its possession. If a party does not produce the documents it is lawfully called upon to produce, the Court has the power to penalize it, in accordance with the provisions of the Code. The Court has the further power to draw any presumption against such a party who does not produce the relevant document in its possession, especially after it has been summoned from it. Even in such cases where the Court summons a document from a party, the Court has not been given any power to get hold of the document forcibly from the possession of the defaulting party.

10. The defendants had no rights to these account books. They could not lay any claim to them. They applied for the seizure of these books because they apprehended that the plaintiff might make such entries in those account books which could go against the case they were setting up in Court. The defendants' request really amounted to the Court's collecting documentary evidence which the defendants considered to be in their favour at that point of time. It is no business of the Court to collect evidence for a party or even to protect the rival party from the evil consequences of making forged entries in those account books. If the plaintiff does forge entries and uses forged entries as evidence in the case, the defendants would have ample opportunity to dispute those entries and to prove them forgeries.

11. We are therefore of opinion that the Additional Munsif had no inherent power to pass the order appointing a Commissioner to seize the plaintiff's account books. The order appointing Sri Raghubir Pershad as Commissioner for this purpose was therefore an order passed without jurisdiction and was therefore a null and void order.'

10. It could thus be clearly seen that the Apex Court in unequivocal terms has held that a party is free to produce such documents or books in respect of its case as is relevant. It can also seek the help of the Court to have produced in Court by the other party such documents as it would like to be used in evidence and are admitted by that party to be in its possession. The Apex Court has further held that if a party to whom such a direction is issued does not produce the documents which has been lawfully called upon to produce, the Court has the power to penalize it. The Court has further power to draw any presumption against such a party who does not produce the relevant document in its possession especially after it has been summoned for it. The Court has in unequivocal terms held that the Court does not have a power to get hold of the document forcibly from the possession of the defaulting party.

11. The Apex Court in unequivocal terms has held that it is not the business of the Court to collect the evidence for a party or even to protect the rival party from the evil consequence of making forged entries in the account books. It has been held that if the party does the forged entries and uses the forged entries as evidence in the case, the other party would have ample opportunity to dispute those entries and to prove them forgeries.

12. Subsequently, in the case of K.C. Skaria v/s. Government of State of Kerala & anr.,cited supra the Apex Court was considering the decree passed in a Suit for rendition of accounts. The Apex Court in paras 16 and 17 has observed thus:-

'16. Even where there is no specific provision for rendition of accounts, courts have recognised an equitable right to claim rendition of accounts. In Narandas Morardas Gajiwala v. S.P.A.M. Papammal, this Court considered the maintainability of a suit by an agent against the principal for accounts. Negativing the contention that only a principal can sue the agent for rendering proper accounts and not vice versa, (as Section 213 of the Contract Act provided that an agent is bound to render proper accounts to his principal on demand without a corresponding provision in the Contract Act enabling the agent to sue the principal for accounts), this Court held:

'In our opinion, the statute is not exhaustive and the right of the agent to sue the principal for accounts is an equitable right arising under special circumstances and is not a statutory right....

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 where 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 where 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.

17. To summaries, a suit for rendition of accounts can be maintained only if a person suing has a right to receive an account from the defendant. Such a right can either be (a) created or recognized under a statute; or (b) based on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee, or (c) claimed in equity when the relationship is such that rendition of accounts is the only relief which will enable the person seeking account to satisfactorily assert his legal right. Such a right to seek accounts cannot be claimed as a matter of convenience or on the ground of hardship or on the ground that the person suing did not know the exact amount due to him, as that will open the floodgates for converting several types of money claims into suits for accounts, to avoid payment of court fee at the time of institution.'

13. The Apex Court has held that a suit for rendition of accounts can be maintained only if a person suing has a right to receive an account from the defendant. Such a right can either be (a) created or recognized under a statute; or (b) based on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee; or (c) claimed in equity when the relationship is such that rendition of accounts is the only relief which will enable the person seeking account to satisfactory assert his legal right.

14. At this stage the Court is only considering as to whether the prayer as made in the notice of motion should be granted or not? The perusal of the prayers in the notice of motion as also in the Suit would reveal that prayers are almost identical. If the motion at this stage i

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s allowed, it would amount to decreeing the suit. 15. Insofar as the contention of Shri D'vitre that a present case would fall under the exception as carved out in para 16 of the judgment of the Apex Court in the case of Skaria cited supra is concerned, it is only after the parties lead the evidence in the matter, it could be decided as to whether the claim as made by the plaintiff in the suit could be granted or not? Such an inference cannot be drawn at this stage only on the basis of certain documents produced before the Court which are disputed by the rival parties. 16. In that view of the matter, I am of the considered view that present notice of motion is nothing else but an attempt on behalf of plaintiff to collect the evidence in support of their case. It is a settled principle of law that the party has to stand or fall on its own merits. In any case, as already observed by the Apex Court that if a party is directed to produce some documents and if the same are not produced, the Court is always at liberty to draw such inference as is permissible in law. When the Suit is ripe for trial and if the plaintiffs make an appropriate application for direction to the defendants to produce the documents and if the Court finds it necessary to do so and directs the defendants to do so, the defendants can either produce the said documents. In the event, the defendants fail to produce such documents inspite of orders of the Court, the Court would always take into consideration that aspect of the matter and draw such inference as is necessary in the facts of the matter at the stage of hearing of the Suit. 17. In that view of the matter, notice of motion is without substance and is dismissed.
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