(Prayer : Appeal Suit filed under Section 96 of Civil Procedure Code, to allow this appeal by setting aside the judgment and decree dated 30.11.2017 made in O.S.No.20 of 2011 on the file of the VI Additional District Court, Madurai by allowing this appeal and decree the suit as prayed for.)

G.R. Swaminathan, J.

1. The unsuccessful plaintiff in O.S No.20 of 2011 on the file of the VI Additional District Court, Madurai is the appellant before us. The suit was for recovering a sum of Rs.2,47,04,020/- together with interest from the defendants.

2. The case of the plaintiff is as follows:-

The plaintiff and the deceased P.A.Bansidhar were brothers. Their father passed away on 01.02.1998. The mother passed away on 10.11.2001. The plaintiff has a younger sister, namely, Vasudha Arvindhlal. The plaintiff, P.A.Bansidhar and their father constituted a joint hindu family. There was a partition among them on 01.04.1970. “D” schedule properties set out therein were allotted to the plaintiff. Another partition took place on 27.04.1970 in respect of the agricultural lands. The plaintiff went to USA in the year 1986 and is employed there. He executed power of attorney in favour of his father on 05.08.1986. After the father's demise, the plaintiff executed a registered power of attorney dated 12.03.1998 in favour of his brother/P.A.Bansidhar to manage the properties that belonged to him. Without the plaintiff's knowledge, Bansidhar sold away three items of properties vide registered sale deeds dated 27.02.2002. When the plaintiff became aware of the same, Bansidhar admitted his guilt and undertook to set right the accounts. The plaintiff believed his brother and did not press the matter further. But Bansidhar sold few more items in the year 2004. Since he was suffering from cancer, the plaintiff adopted an indulgent approach. Bansidhar again sold away a few more properties vide sale deeds 07.03.2006 and 08.03.2006. The sale proceeds never reached the hands of the plaintiff. Certain amounts were deposited and they were also withdrawn by self-cheques. Bansidhar died on 13.06.2008 leaving behind the defendants as his legal heirs. The defendants are in possession not only of the estate of the deceased Bansidhar but also the proceeds obtained from the aforesaid sales.The breach of trust committed by Bansidhar came to light only after his demise when the plaintiff made enquiry with his auditors. The plaintiff has worked out the amount payable by the defendants at Rs.1,47,18,233/-. Since the said sum has to be paid with interest, he made a demand for payment of Rs.2,47,04,020/- by the defendants. As the defendants did not respond to his legal notice dated 02.11.2010, he instituted O.S.No.20 of 2011.

3. The defendants are the widow and son of the deceased Bansidhar. They filed written statement controverting the plaint averments. Their case is that the suit is barred by limitation and that they are not in possession of the sale proceeds as alleged by the plaintiff.

4. Based on the rival pleadings, the Court below framed the necessary issues. The plaintiff examined himself as P.W.1 and seven other witnesses. Exs.A1 to A31 were marked. The first defendant examined herself as D.W.1 and one other witness. Exs.B1 and B2 were marked. Through Court witnesses, Exs.C1 to C6 were marked. After hearing both sides and considering the evidence on record, vide judgment and decree dated 30.11.2017, the learned Trial Judge dismissed the suit. Questioning the same, this appeal has been filed.

5. The learned Senior Counsel for the appellant reiterated all the contentions set out in the grounds of appeal. He took us through the evidence on record and contended that the power agent was duty bound to account for the sale proceeds and that this duty was not at all discharged. He also contended that the suit was filed within time. According to him, limitation has to be reckoned from the date of demise of Bansidhar since till then, the power of attorney was in force. Since the defendants had inherited the estate of Bansidhar, the suit can very well be maintained against them. He also argued that the onus to show that the sale proceeds were duly accounted for lay only on the defendants. He pressed for setting aside the impugned judgment and decree and wanted this Court to grant relief as prayed for. He placed reliance on the decision of the Hon'ble Supreme Court in Canbank Financial Services Ltd vs Custodian (2004) 8 SCC 355 wherein it was held that Section 88 of the Trust Act would get attracted when there is a breach of the obligations by the agent acting in fiduciary capacity.

6. Per contra, the learned Senior Counsel for the respondents submitted that the appellant who is well placed in life wants to harass the widow of his deceased brother who is not in a position to give the explanation demanded by the plaintiff. He laid stress on the fact that the transactions were entirely between the plaintiff/P.A.Jaswant Babu and his brother/P.A.Bansidhar. The plaintiff cannot be expected to answer if Bansidhar had accounted for the sale proceeds or not. He pointed out that if the plaintiff suspected that Bansidhar was mismanaging the properties, he would have cancelled the power of attorney. The plaintiff had not sought for rendition of accounts during the lifetime of Bansidhar. This showed that the sale proceeds were accounted for and that the sale transactions happened with the consent and knowledge of the plaintiff. In support of his contentions, he placed reliance on the decisions reported in (2006) 2 SCC 285), AIR 1934 Cal 238, AIR 1945 Bom 21 and AIR 1931 Mad 185. He also submitted that the suit was barred by limitation. He called upon this Court to sustain the impugned judgment and decree and dismiss the appeal.

7. We carefully considered the rival contentions and went through the evidence on record. The points that arise for determination are as follows:-

                     a) Whether the legal heirs of the deceased agent are liable for the sums said to be due to the principal ?

                     b) On whom the onus to prove such liability lies ?

                     c) Whether the legal heirs of the agent are liable to render accounts ?

                     d) Whether a suit for recovery of money simpliciter will lie without a prayer for general account ?

                     e) Whether the instant suit is hit by limitation ?

8. There is no difficulty in answering the questions of law. Section 213 of the Contract Act states that an agent is bound to render proper accounts to his principal on demand. If the agent failed to do so and had retained the properties belonging to the principal and dies without handing them over, the legal heirs of the agent are obliged to meet the said liabilities from out of the estate of the deceased. All rights enforceable against the agent will survive even after his death. The legal heirs of the agent are bound to make good the loss caused by the agent to the principal. But this is not a personal liability. It is limited to the estate inherited from the agent.

9. However, there is a qualitative difference in the burden cast on the agent and the burden cast on his legal heirs. If the agent himself is the defendant, the whole burden will be on him to not only render accounts but also explain them. But if the agent is no more and his legal heirs are to answer, their role is limited to delivering the books, vouchers etc. to the plaintiff, if available with them. They are not obliged to explain the accounts and the entries in the records. In other words, law does not expect them to “render” accounts. There is a legal maxim “lex non cogit ad impossibilia” (The law does not compel the impossible). The legal heirs, not being parties to those transactions involving the agent, the principal and third parties, cannot be expected to have any personal knowledge of those affairs and hence, they cannot be called upon to explain them. That is why, law is content with directing them to hand over the records available with them.

10. Not just that. The burden is on the principal to establish that he is entitled to the specific sum of money claimed by him from the legal heirs of the deceased agent. It is for him to place all the relevant evidentiary materials for the consideration of the Court. Of course, the legal heirs also would do well to make available what is with them. Failure to do so may invite drawal of adverse inference against them. But the burden of proof is thrown only on the principal (vide 1943 SCC OnLine Bom 147 (Purshottam Vasudeo Vs. Ramkrishna Govind), 1967 SCC OnLine Del 142 (Ram Pershad Vs. Chhano Devi) and 1956 SCC OnLine Mad 140 (P.Murugayya Pillai and Others Vs. S.Somasundaram Pillai and others)). The liability to render accounts is a personal one attached to the agent and cannot be enforced against the heirs (Rameshwar Singh Vs. Narendra Nath AIR 1923 Pat 259). The second and third issues are answered accordingly.

11. That the principal can sue the legal heirs of his agent for an ascertained sum of money due by the agent is not in doubt. It is only the frame of the suit that has given rise to conflicting judicial opinions. The Calcutta High Court in a line of decisions has taken the view that a money suit is very much maintainable against the legal heirs of the agent to recover the sums due by him. But the Madras High Court has taken a more nuanced view. According to some decisions which we shall presently notice, an accounting exercise is a sine qua non. A learned Judge of this Court (Venkatadri J.,) in N.N.Rm.Narayan Chettiar Vs. Arunachalam Pillai (1965) 78 LW 418) held that an agent is liable to render the account but the principal cannot off-chance pick up some items and then file a suit for the recovery of the amounts covered by those accounts as if those amounts are debts due and payable by the defendant to the suit.

12. The Hon'ble Full Bench of this Court in the decision reported in 1954 SCC OnLine Mad 167 (T.K.P.Rajagopala Chettiar Vs. A.P.S.Palani Chettiar and another), in the context of Indian Partnership Act, held that a suit for recovery of a sum which would be an item in the partnership account could not be instituted without a suit for general accounts.

13. Reference to partnerships in the context of principal-agent relationship is not inapposite. A partner is the agent of the firm for the purpose of the business of the firm(Section 18 of the Indian Partnership Act, 1932). If a partner who owes money to the firm or the other partners dies, his representatives can be sued and their liability will be similar to the liability of the legal heirs of the agent to his principal. Therefore, the precedents rendered under the Partnership Law do have a resonance with the law of agency also.

14. Order 20 of CPC which deals with judgments and decrees contains a specific rule with regard to suit for account between principal and agent. It reads as follows:-

                     “(R 16) Decree in suit for account between principal and agent –

                     In a suit for an account of pecuniary transaction between a principal and an agent, and in any other suit not hereinbefore provided for, where it is necessary, it order to ascertain the amount of money due to or from any party, that an account should be taken, the Court shall, before passing its final decree, pass a preliminary decree directing such accounts to be taken as it thinks fit.”

The above rule underlines the importance of accounting exercise covering the entire gamut of transactions and dealings between the principal and the agent.

15. Coming to the case on hand, it is admitted by the plaintiff / PW1 himself that the purchasers paid the sale consideration in the form of demand drafts drawn in the name of the plaintiff himself. It was also admitted by him that those instruments were deposited in his bank account. However, he would claim that those moneys were unauthorisedly withdrawn by the agent. According to the plaintiff, it was only after the death of the agent on 13.06.2008, the plaintiff came to know from M/s.Suri & Co., that returns as well as taxes have not been paid and that a scrutiny of the accounts disclosed that a sum of Rs. 32,86,526/- was in the hands of agent as cash balance from the sale proceeds of the plaintiff's property and this balance has been shown as withdrawal as per the book of accounts. After receiving the files from M/s.Suri & Co., the plaintiff appointed a new auditor M/s.K.K.B.Associates and after getting the details, he called upon the first defendant (wife of the agent) to render accounts and return the amounts available in her hands. It is seen that the plaintiff on his own worked out a statement of accounts from the returns submitted to the Income Tax Department and concluded that the defendants are in possession of a sum of Rs.1, 47, 18,233/-. A copy of the said statement was enclosed in the plaint. This amount was treated by him as the principal sum. Adding interest @ 12% p.a., the suit claim was quantified at Rs.2, 47,04,020/-. The defendant in her written statement categorically denied the aforesaid projection made by the plaintiff. The sale consideration set out in all the sale deeds had been consolidated and the amounts withdrawn by the agent from time to time were added to arrive at the suit claim. According to the defendant, she did not have any knowledge about the dealings that took place between the plaintiff and her husband. She deposed that all the sale proceeds were duly deposited in the plaintiff's bank account. This is also admitted by the plaintiff. The burden is entirely on the plaintiff to establish that there were no other dealings between him and his agent and that the withdrawals were not made at his instance or with his consent. This burden has not been discharged by the plaintiff.

16. A suit for recovering a certain sum of money from the defendant must have a definite basis. When it comes to transactions between the principal and the agent, the reference point has to be the settlement of accounts. If the accounts had already been settled, the principal can sue the agent for the balance. “Settlement of accounts” is a contract between two parties by means of which they ascertain the state of the accounts between them and strike a balance.(P.Ramanatha Aiyar's Advanced Law Lexicon). A unilateral self-serving working out of accounts cannot be termed as settlement of accounts. It is a bilateral exercise. If such an exercise was not undertaken, then the principal has to institute a suit for accounts. Section 35 of the Tamil Nadu Court Fees Act deals with such suits. In such a suit, the plaintiff can very well make an estimated claim. There could be occasions when the liability of the agent is so clear and definite that it dispenses with the need to take accounts. The plaintiff can straightaway sue the agent for an ascertained sum of money. But where it becomes necessary, the Court will have to order taking of accounts. The Court will pose a question if justice can be done without taking an account. When taking accounts becomes necessary, it necessarily implies general accounting and not partial accounting. Partial accounting would be permitted only in exceptional cases when the Court is satisfied that no injustice will be caused to the defendants. Otherwise the general rule is that without undertaking an accounting exercise, the question of directing the legal heirs of the agent to pay an ascertained sum of money to the principal would not arise at all.

17. The Hon'ble Supreme Court in the decision reported in AIR 1977 SC 336 (Loonkaren Sethia Vs. Ivan E.John) held that if a suit is filed for a certain sum of money on the basis of a settled account but if it is found that there was no settlement of the account, the proper course is either to dismiss the suit or pass a preliminary decree directing accounts. Thus, the Court has two options. Dismissing the suit straightaway is very much an option open to the Court in such cases. The Court also has the discretion to direct general account to be taken. In fact, when the great Alladi Krishnasamy Aiyar was faced with a definite prospect of dismissal, he prayed for remand so that the plaint could be amended for including the prayer for accounts (1924 SCC OnLine Mad 518, Ramaswami Pillai Vs. Muthukaruppan Chetty). The Hon'ble Division Bench of this Court accepted the request but imposed costs. The appellant before us did not exhibit a similar sagacity. An application for amending the plaint has been made but it is for creating a charge on the defendant's property. No CMP was taken out for carrying out an accounting exercise. Therefore, the suit has to be dismissed by respectfully applying the ratio laid down in N.N.Rm.Narayan Chettiar Vs. Arunachalam Pillai ((1965) 78 LW 418) and Loonkaren Sethia Vs. Ivan E.John (AIR 1977 SC 336).

18. The principles of law laid down above can be summarised as hereunder:

                     a) When the agent's liability towards the principal is established, the legal heirs of the deceased power of attorney/agent would be liable to the extent of the estate inherited by them from the agent.

                     b) Burden of proof: When the principal files a suit for rendition of accounts and recovery of money against the agent, the burden is on the agent to not only produce the accounts but also explain them and prove that the specified sum is not payable. But when the principal files a suit against the legal heirs of the deceased agent, the onus in on the principal to establish through evidence that a specified sum is payable. The role of the legal heirs is confined to producing relevant papers/vouchers/documents available for ascertaining the liability.

                     c) Accounting is normally a sine qua non for maintaining a suit for recovery of money from the agent. A money decree against the agent has to be preceded by a final settlement of accounts.

                     d) When there is no settlement of accounts between the principal and the agent, and the liability is disputed by the agent or his legal heirs, a suit ought to be filed seeking rendition of accounts. The court is empowered to either a) dismiss the suit as not maintainable or b) direct that the general accounts be taken.

19. The case of the plaintiff is that the properties belonging to him were sold away by Bansidhar, his power agent, without his knowledge and that the sale proceeds were not handed over to him. Ex.A2 is the power of attorney executed in favour of Bansidhar. The terms of the power of attorney explicitly authorised Bansidhar to effect sales and receive the consideration without prior permission. Bansidhar was also given the power to operate the bank accounts. Ex.A.2 is comprehensive and broad in its terms.

20. Exs.A3 to A5 are the sale deeds dated 27.02.2002 executed by Bansidhar in favour of three different purchasers conveying three different properties belonging to the plaintiff. Three more sale deeds were executed on 31.03.2004 under Exs.A6 to A8. One another sale deed was executed on 02.08.2004 under Ex.A9. Even though the plaintiff claims that all these sales had taken place without his knowledge, he concedes that he became aware of the same in the year 2004 itself. He also admitted that he questioned the power agent about the same and claims that the power agent promised to buy a new property in his name with the sale proceeds at the earliest.

21. As rightly observed by the Court below, Bansidhar passed away only on 13.06.2008. During these four years, that is from the date when the plaintiff claimed to have discovered the fraud committed by his power-agent till his demise, the plaintiff did not make any claim. He did not demand rendition of accounts in the e-mail sent by him to Bansidhar (Ex.A.13). Even according to the plaintiff / appellant, the agent was questioned with regard to the sale transactions that had taken place on 27.02.2002, 31.03.2004 and 02.08.2004. When as per the appellant's version, the agent had indulged in misconduct, suit for recovery of the sums payable on that score ought to have been instituted within three years when the misconduct became known to the plaintiff (Article 4 of the Limitation Act, 1963). The suit was instituted on 25.02.2011. The plaintiff has aggregated the sale consideration paid under the three sale deeds dated 27.02.2002, the sale deed dated 31.03.2004 and the sale deed dated 02.08.2004 and two sale deeds dated 07.03.2006 and 08.03.2006. The plaintiff concedes in paragraph Nos.8 and 9 of the plaint that he made regular visits to Madurai and it was then that he came to know about the alienations about 2002 and 2004. The alienations made in 2002 cameto the knowledge of the plaintiff in December 2003. This was admitted by him in his testimony. Therefore, limitation in respect of those transactions have to be reckoned from December 2003. When the plaintiff admits that he had come to know about the alienations made in 2004, it was for him to mention the date of knowledge. Order 7 Rule 6 of CPC states that where the suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint shall show the ground upon which exemption from such law is claimed. The plaint as well as the oral testimony of the plaintiff are blissfully silent on this aspect.

22. We wondered which article will apply: Article 3 or Article 4? Article 3 would apply if it was a suit for recovery of money from the agent. But if the cause of action is the neglect or misconduct of the agent, Article 4 will apply. Misconduct is a forbidden act, a dereliction from duty, unlawful behaviour, willful in character, improper or wrong behaviour (Black's Law Dictionary). From the characterisation of the P.A.Bansidhar by the plaintiff, one can safely conclude that the plaintiff is accusing his deceased agent of misconduct. Therefore, Article 4 will apply. The plaintiff is not forthcoming as to when he became aware of the two alienations made in March 2006. While the plaintiff has conceded that he had enquired his late brother and agent with regard to the sale transactions that took place in 2002 and 2004, he is silent as to whether he enquired his agent / brother in respect of the 2006 sale transactions. Since the sale consideration was deposited in the plaintiff's bank account, knowledge has to be imputed to him. Therefore, the suit instituted in February 2011 is clearly hit by limitation. We endorse the finding of the Court below that the suit is time barred.

23. Going by his own conduct, the plaintiff had condoned the act of his brother. Having done so, the plaintiff cannot now expect the first defendant to account for the receipt of the sale proceeds executed by her husband. Acquiescence can some times bar an accounting action. The legendary Judge Chagla J., in Seth Maneklal Mansukhbhai v. Jwaladutt Rameshwar Pillani, 1946 SCC OnLine Bom 14, held that the right to claim accounts from the agent under Section 213 of the Contract Act is subject to one qualification, that is, the accounts between the principal and the agent are settled or stated. If accounts are submitted and if they are accepted as they are correct, then they are stated or settled accounts. It is not necessary that the settlement of accounts need be in writing nor is it necessary that parties should sit down, compare accounts and call for vouchers, etc. All that the Court has got to ascertain is whether in fact the party to whom accounts were rendered has accepted those accounts as correct. Such an acceptance need not be express; it can be inferred from conduct. It is not necessary that the party to whom the accounts have been rendered has actually seen all the accounts and the particulars and has satisfied himself as to its correctness. Though there can be no acceptance without knowledge, the knowledge which the law contemplates is not the knowledge of the actual correctness of the accounts but the knowledge of the right to claim particulars and vouchers with regard to the accounts submitted. Thus, accounts can be said to be settled if the principal, being aware of his right to claim detailed accounts, chooses to be satisfied with the accounts rendered to him. In the case on hand, the plaintiff with full knowledge of the transactions that took place in 2002 and 2004 chose to keep quiet. He cannot like Rip van winkle, suddenly remember his right to seek accounts and institute a suit in the year 2011 after the expiry of the limitation period. The Bombay ruling applies on all fours to the facts of this case.

24. It is not as if the plaintiff never visited India during the period between the date of execution of the power of attorney and the demise of Bansidhar. It is true that the plaintiff had raised certain queries with his brother through e-mail as evidenced by Exs.A13 to A16. We went through the said correspondence. None of the messages took the shape of a concrete claim as now made in the plaint. As a proposition of law, the legal heirs of power agent can be proceeded against if it can be shown that they had received the property from the power agent which actually belonged to the principal. But the onus to prove that the legal heirs were in receipt of such properties following the demise of the power agent must be discharged only by the principal. In the case of hand, this onus has not at all been discharged.

25. Article 3 of the Limitation Act prescribes three years as the period of limitation to institute a suit by a principle against his agent for movable properties received by the latter and not accounted for. This three years period will be reckoned when the agency terminates or from the date of refusal by the agent. In the case on hand, Bansidhar had passed away on 13.06.2008. The suit was instituted on 25.02.2011. Though the suit had been filed within three years from the date of termination of agency, it is not a suit by the principal against the agent. On the other hand, it is a suit against the agent's legal heirs. The plaintiff's burden of song is that the sale proceeds received by his power agent was not handed over to him. But in his cross examination, the plaintiff (P.W.1) admitted that the sale consideration received by the power agent by way of demand drafts in his name were deposited in his bank account. The allegation of the plaintiff is that the amount so deposited by the power agent were illegally withdrawn by him. This is a different case altogether. The plaintiff is not consistent. His entire case was that the sale proceeds were not given to him. To recover the said amount from the hands of the legal heirs, the suit had been instituted. The defendants have convincingly proved that the power agent did not receive the sale consideration in cash. Nor he retained the same with him. They were received by way of demand drafts and they were deposited in the plaintiff's bank account. Thus, the very foundation of the plaintiff's case stands completely undermined.

26. The plaintiff had filed the suit on the basis of Ex.A17. The break up has been given as under:-