# K.C. SKARIA v. THE GOVT. OF STATE OF KERALA AND ANR

- **Citation:** [2006] 1 S.C.R. 274
- **Court:** Supreme Court of India
- **Decided:** 2006-01-10
- **Case number:** Civil Appeal Nos. 6885-6886 of 2003
- **Bench:** Arijit Pasa Yat, R.V. Ra Veendran
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/k-c-skaria-v-the-govt-of-state-of-kerala-and-anr-21064
- **Pages:** 21

## Headnote

Code of Civil Procedure, 1908:
Order 20 Rule 16-Suit for rendition of accounts between principal and
C agent-Decree in-Contractor and State entered into a contract for construction
work--Contractor filed suit claiming Rs. 2 lacs with interest thereon alleging
that the State committed delays, defaults and breach of contract--Trial court
decreed the suit-But High Court dismissed the suit in entirety holding that
a suit by an independent contractor for rendition of accounts by the employer
D was not maintainable-Correctness of-Held: A suit for rendition of accounts
can be maintained only if a person suing has a right to receive an account
from the defendant- -Independent contractor is neither an agent of the employer
nor the claim for rendition of accounts supported by equity-Right for rendition
of accounts is also not recognized or created b_v any statute in favour of the
independent contractor-Hence suit for rendition of accounts not
E maintainable-However, merely the independent contractor also chose to seek
accounts, he cannot be non-suited--Trial court "s decree for Rs. 2 lacs with
interest of Rs. 1,000 thereon restl.8ed-Kera/a Court Fees and Suits Valuation
Act, 1959, S. 35--Contract Act, 1872, S. 213.
F
Section 149-DeficienLy of Court-fees--Power to make up-Plaintiff
filed a suit for recovery of Rs. 2 lacs with interest and valued the suit
accordingly for the purpose of c·ourt-fee -The trial court held that the actual
value of work done was Rs. 5,33,560 but decreed the suit for Rs. 2 lacs with
interest thereon as the plaintiff claimed only Rs. 2 lacs and paid court-fee
thereon-Plaintiff. in appeal, claimed Rs. 5,33,560 which was found due and
G sought permission to pay deficit court-fee- -Permissibility o.f-Held: Section
149 applied only in respect of the court-fee payable at the time of institution
of the suit-Section 149 has no application where the court-fee, due on the
plaint as per the valuation of the suit, isful~v paid, but subsequently it is found
that a larger amount is due to the plai111iff-P/ai111ijf can increase the claim
H
274
t
'"
;
K.CSKARIA v. THE GOVT. OF STATE OF KERALA
275
only by seeking amendment of plaint and paying additional court-fee on the A
amended claim-SectiOn 149 is also applicable to such amended claim-But
then such amendment would depend on limitation and may not be permitted
after the period of limitation-Hence trial court rightly decreed the suit for
Rs. 2 lacs with interest thereon.
The respondent-State invited tenders for execution of a construction B
.. ,
work. An agreement was executed between the respondent-State as the
employer and the appellant as the contractor. The contract required the
work to be completed within 18 months from the date of handing over
the site. The appellant-contractor submitted a bill for Rs. 5,36,800. It was
not paid. In spite of delay in payment an\! other breaches by the c
department, the appellant proceeded with the work and completed a
substantial portion of the work. Ultimately a payment of Rs. 4,04,628 was
made.
~
The appellant filed a suit against the respondent-employer for
recovery of Rs. 2 lacs towards the amount due for work done and paid D
the court fee on this amount. During the pendency of the suit, the
Department passed an order terminating the contract at the risk and cost
of the appellant.
The trial court decreed the suit in part and held that the Department
committed breach by causing delays on various counts, thereby preventing E
the appellant from completing the work. The trial court held that though
the amount due towards the work done was Rs. 5,33,560, as the appellant
had claimed only a sum of Rs. 2 lacs on that count and paid court fee
thereon, the appellant was entitled to a decree for Rs. 2 lacs only towards
the value .of work done.
F
The appellant filed an appeal before the High Court contending that
the suit ought to have been decreed for Rs. 5,33,560, which was found due,
instead of Rs. 2,00,000 by permitting him to pay the defici

## Text

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A
K.C. SKARIA
v.
THE GOVT. OF STATE OF KERALA AND ANR.
JANUARY 10, 2006
B
[ARIJIT PASA YAT AND R.V. RA VEENDRAN, JJ.]
Code of Civil Procedure, 1908:
Order 20 Rule 16-Suit for rendition of accounts between principal and
C agent-Decree in-Contractor and State entered into a contract for construction
work--Contractor filed suit claiming Rs. 2 lacs with interest thereon alleging
that the State committed delays, defaults and breach of contract--Trial court
decreed the suit-But High Court dismissed the suit in entirety holding that
a suit by an independent contractor for rendition of accounts by the employer
D was not maintainable-Correctness of-Held: A suit for rendition of accounts
can be maintained only if a person suing has a right to receive an account
from the defendant- -Independent contractor is neither an agent of the employer
nor the claim for rendition of accounts supported by equity-Right for rendition
of accounts is also not recognized or created b_v any statute in favour of the
independent contractor-Hence suit for rendition of accounts not
E maintainable-However, merely the independent contractor also chose to seek
accounts, he cannot be non-suited--Trial court "s decree for Rs. 2 lacs with
interest of Rs. 1,000 thereon restl.8ed-Kera/a Court Fees and Suits Valuation
Act, 1959, S. 35--Contract Act, 1872, S. 213.
F
Section 149-DeficienLy of Court-fees--Power to make up-Plaintiff
filed a suit for recovery of Rs. 2 lacs with interest and valued the suit
accordingly for the purpose of c·ourt-fee -The trial court held that the actual
value of work done was Rs. 5,33,560 but decreed the suit for Rs. 2 lacs with
interest thereon as the plaintiff claimed only Rs. 2 lacs and paid court-fee
thereon-Plaintiff. in appeal, claimed Rs. 5,33,560 which was found due and
G sought permission to pay deficit court-fee- -Permissibility o.f-Held: Section
149 applied only in respect of the court-fee payable at the time of institution
of the suit-Section 149 has no application where the court-fee, due on the
plaint as per the valuation of the suit, isful~v paid, but subsequently it is found
that a larger amount is due to the plai111iff-P/ai111ijf can increase the claim
H
274
t
'"
;
K.CSKARIA v. THE GOVT. OF STATE OF KERALA
275
only by seeking amendment of plaint and paying additional court-fee on the A
amended claim-SectiOn 149 is also applicable to such amended claim-But
then such amendment would depend on limitation and may not be permitted
after the period of limitation-Hence trial court rightly decreed the suit for
Rs. 2 lacs with interest thereon.
The respondent-State invited tenders for execution of a construction B
.. ,
work. An agreement was executed between the respondent-State as the
employer and the appellant as the contractor. The contract required the
work to be completed within 18 months from the date of handing over
the site. The appellant-contractor submitted a bill for Rs. 5,36,800. It was
not paid. In spite of delay in payment an\! other breaches by the c
department, the appellant proceeded with the work and completed a
substantial portion of the work. Ultimately a payment of Rs. 4,04,628 was
made.
~
The appellant filed a suit against the respondent-employer for
recovery of Rs. 2 lacs towards the amount due for work done and paid D
the court fee on this amount. During the pendency of the suit, the
Department passed an order terminating the contract at the risk and cost
of the appellant.
The trial court decreed the suit in part and held that the Department
committed breach by causing delays on various counts, thereby preventing E
the appellant from completing the work. The trial court held that though
the amount due towards the work done was Rs. 5,33,560, as the appellant
had claimed only a sum of Rs. 2 lacs on that count and paid court fee
thereon, the appellant was entitled to a decree for Rs. 2 lacs only towards
the value .of work done.
F
The appellant filed an appeal before the High Court contending that
the suit ought to have been decreed for Rs. 5,33,560, which was found due,
instead of Rs. 2,00,000 by permitting him to pay the deficit cou·rt fee in
regard to the balance amount. The High Court dismissed the suit in
entirety holding that a suit by an independent contractor for rendition of G
'"'
accounts by the employer was not maintainable. Hence the appeal.
The following questions arose before the Court:-·
(i) Whether the appellant as an independent contractor engaged by
the State Government for execution of construction work, is entitled to H
276
SUPREME COURT REPORTS
[2006] I S.C.R.
A maintain a suit for rendition of accounts by the employer?
(ii) Whether even if the prayer for accounts was not maintainable,
the suit could have been dismissed in entirety by the High Court?
(iii) Whether the respondents(employer) committed breach of its
B obligations under the contract?
Allowing the appeal in part, the Court
HELD: 1. The relationship between the first respondent and the
appellant was that of an employer and an independent contractor engaged
to execute certain work in terms of the contract. The contract was an itemC rate contract and payment for the work done had to be made by the
employer to the contractor as per the measurements recorded in the
measurement book maintained by the Department. It is also not in dispute
that while the appellant as the contractor would approximately know the
quantum of work done by him, the exact quantities for the purpose of
D payment could be ascertained by him only by actually measuring the work
done or by having access to the measurement book maintained by the
Department. In the circumstances, the question that arises for
consideration is whether the remedy of the appellant, engaged as an
independent contractor to execute a construction work (in an item-rate
contract where payment is to be made as per the measurements recorded
E in the measurement book maintained by the employer) in the event of nonpayment for the wok done, is only to file a suit for the cost of the work
done quantifying the amount due, or whether he could file a suit for
rendition of accounts against the employer with a further prayer for a
decree for the amount due. 1286-A, DI
F
2. Order 20 Rule 16 of the Code of Civil Procedure, 1908 does not
create or confer any substantive right to seek rendition of accounts in any
particular type of cases, nor in all types of cases. It merely refers to a rule
of procedure and would apply where there is an existing right to seek
rendition of accounts having regard to the relationship between the parties.
G
1286-FI
3. 1. It is now well-settled that the right to claim rendition of accounts
is an unusual form of relief granted only in certain specific cases and to
be claimed when the relationship between the parties is such that the
rendition of accounts is the only relief which will enable the plaintiff to
H satisfactorily assert his legal right. 1286-GI
t
..
K.C.SKARIA v. THE GOVT. OF STA TE OF KERA LA
277
Jowahar Singh v. Haria Mal, (1899) 60 P.R. 1899, Gu/am Qutab-ud- A
din Khan v. Mian Faiz Bakhsh, AIR (1925) Lah 100, State of J & K v. Tota
Ram AIR (1971) J & K 71 and Tri/oki Nath Dhar v. Dharmarath Council,
AIR (1975) J & K 76, referred. 1286-H; 287-AI
3.2. The right to seek rendition of accounts is recognized in law in
such as administration suits for accounts of any property and for its B
administration, suits by a partner of a firm for dissolution of the
-\
partnership firm and accounts, suits by the beneficiary against trustee/s,
suits by a member-Of the joint family against the Karta for partition and
accounts, suits by a co-sharer against other co-sharer/s who has/have
received the profits of a common property, suits by a principal against C
an agent, and suits by a minor against a person who has received the funds
of the minor. 1287-BI
4. Even where there is no specific provision for rendition of accounts,
courts have recognized an equitable right to claim rendition of accounts.
1287-CI D
Narandas Morardas Gajiwa/a v. S.P.A.M. Papamma/, AIR (1967) SC
333, relied on. 1287-Cj
5. 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 E
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
accounts to satisfactorily assert his legal right. Such a right to seek
accounts cannot be claimed as a matter of convenience or on the ground F
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 of a suit. 1287-H; 288-A-BI
6. The right of a contractor engaged to execute a particular work to G
file a suit for accounts against the employer in regard to payment for the
work done is not created or recognized by any statute. The independent
contractor is not an agent of the employer. Nor is the employer in the
position of a trustee with reference to the independent contractor. The
claim cannot be supported in equity by stating that where the relationship
is such that rendition of accounts is the only relief which will enable the H
278
SUPREME COURT REPORTS
[2006) I S.C.R.
A contractor to satisfactorily assert his legal right. A contractor who is
engaged to execute a work, is expected to maintain his own accounts. At
all events, there is no bar for a contractor to keep an account of the work
done. Even where the contract between the employer and an independent
contractor may provide for payment on the basis of measurements to be
B recorded by the employer, nothing prevents the contractor from measuring
the work done by him and then suing for the value of the wor:< done. The
contractor may also demand joint-measurements to determine the
quantum of work done. If the employer for some reason does not cooperate, or prevents the contractor from taking physical measurements,
the contractor can seek appropriate legal remedy which will enable him
C to take measurements or to secure the information from the measurement
book in the custody of the employer. Therefore, either the fact that the
measurement book is maintained by the employer, or the fact that the
contractor does not possess the exact measurements, will not entitle the
contractor to file a suit for rendition of accounts against the employer.
D
(288-C-F]
7. In this case, the appellant could have either himself measured the
work done by him, or secured the information from the respondents. The
appellant has neither made out a right under a statute nor any fiduciary
relationship nor any right in equity by establishing that except by calling
E upon the defendants in the suit to render accounts, it is not possible for
him to get relief. The appellant has sued for Rs.2 lacs and paid court fee
thereon. Nothing prevented him from suing for Rs.5,33,000. In Para S of
the plaint, he states that the total value of work done by him was Rs.
10,00,000. He knew that he had been paid only Rs.4,04,628. He also knew
the value of material supplied by the employer. In the circumstances, the
F prayer for rendition of accounts is not maintainable. (288-G, H; 289-A(
8. The appellant next attempted to press into service Section 149 of
CPC to contend that he ought to have been given an opportunity to pay
the deficit court fee on the total amount due for the work done. Section
149 provides that where the whole or any part of court fee prescribed for
G any document has not been paid, the court may, in its discretion, at .any
stage, allow the person by whom such fee is payable, to pay the whole or
part as the case may be, of such court fee, and upon such payment, the
document in respect of which such fee is payable, shall have the same force
and effect as if such court fee had been paid in the first instance. Section
H 4 of the Court Fee Act bars the court from receiving the plaint if it does
t
--t
'
K.C.SKARIA r. THE GOVT. OF STATE OF KERALA
279
:._
)
not bear the proper court fee. Section 149 acts as an exception to the said A
bar, and enables the court to permit the plaintiff to pay the deficit court
fee at a stage subsequent to the filing of the suit and provides that such
payment if permitted by the court, shall have the same effect as if it had
been paid in the first instance. (289-B-CJ
Mannan Lal v·. Chhotka Bibi, AIR (1971) SC 1374, held inapplicable. B
(289-DJ
~'
9. A careful reading of Section 149 CPC shows that it will apply only
in respect of the court fee payable at the time of institution of the suit. If
the court fee on the plaint when instituted, is not paid wholly or partly by c
the person instituting the >uit, the court in its discretion, may allow him
to pay the court fee or deficit court fee within the period fixed by it. Section
149 CPC has no application where the court fee, due on the plaint as per
the valuation of the suit, is fully paid, but subsequently it is found that a
larger amount is due to the plaintiff. (289-F, GI
1
D
10. A plaintiff can increase the claim only by seeking amendment of
the plaint and paying additional court fee on the amended claim. In regard
to such amended claim also, Section 149 may be pressed into service. But
then amendment would depend on limitation and may not be permitted
after the period of limitation. Where there is no amendment to the plaint E
increasing the suit claim, there is no occasion for pressing Section 149 into
service in regard to court fee payable on plaints. (290-B-CJ
11. The contractor has also established by evidence that there was
an inordinate delay on the part of the department in approving the levels
in spite of requests and that until levels were approved, road formation F
work could not be carried out. The contractor has also clearly established
that there was an inordinate delay in making payment for the work done.
The first bill was submitted for Rs.5,36,800. After certain deductions, a
sum of Rs.4,04,628 towards the said bill was released only after 19 months.
This delay remains unexplained. (292-G-H; 293-A(
G
12. The trial court has examined the evidence in detail and has
:r
~
recorded clear findings of fact about the delays and the breach committed
by the Department. The finding of the High Court without consideration
of the evidence cannot be sustained. The finding of the trial court that
the respondents committed breach of their obligations and the appellant H
was justified in refusing to complete the work is restored, and also the
280
SUPREME COURT REPORTS
[2006) I S.C.R.
A consequential finding that the respondents could not, therefore, recover
the extra cost in getting the work completed from the appellant.
1293-B, Cl
13. It is not in dispute that as per the measurements recorded by
the Department, the value of the work done was Rs. l 0,05,466.42 and the
B amount due in regard to the work done after deducting the part payment
and value of the material supplied, was Rs.5,33,S60. The plaintiff had
estimated the amount due for work done as Rs.2 lacs and paid the courtfee therefor. He did not amend the suit claim nor pay any additional court
fee. The claim for accounting has been rejected as not maintainable.
C Therefore, the plaintiff is entitled only to a decree for Rs.2 lacs towards
the value of the work done, even though he has established that the amount
due in that behalf was Rs. 5,33,560. 1293-F, DI
14. As the appellant has established breach by the respondents, the
award of Rs. t,000 as damages for breach by the trial court is also upheld.
D As a consequence of the finding that the breach is on the part of the
respondents and not on the appellant, the trial court was justified in giving
a declaration that the respondents were not entitled to recover any extra
cost involved in getting the work completed from the appellant. But it
could not have granted the further relief of directing the respondents to
E refund the security deposit amount and retention deposit amount, as the
appellant had neither quantified the said security deposit/retention deposit
nor paid court fee thereon. Therefore, the decree granted by the trial court,
to the extent it directs refund of the security deposit and retention amount,
cannot be sustained. (293-F, GI
F
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6885-6886
of 2003.
From the Judgment and Order dated 12.11.2002 of the Kerala High
Court in A.S. Nos.697/91 and 481192.
G
T.L.V. Iyer, M.K.S. Menon and M.K. Michael for the Appellant.
Balraj B. and K.R. Sasiprabhu for the Respondents.
The Judgment of the Court was delivered by
H
R.V. RAVEENDRAN, J. These are plaintiffs appeals against the
common judgment and decree dated 12.11.2002 of the High Court of Kera la
t
)
K.C.SKARIA r. THE GOVT. OF STATE OF KERALA [RAVEENDRAN, J.]
281
in Appeal Suit No.481/1992 filed by the defendants, and Appeal Suit No.697/ A
1991 filed by the plaintiff both against the judgment and decree dated
16.2.1991 in O.S. No.2411990 on the file of the Subordinate Court,
· Muvattupuzha.
2. The plaint averments, in brief, were as follows:
B
(2. I.) The second respondent (The Superintending Engineer, PWD,
Central Circle, Alwaye, Kerala) invited tenders for execution of a
construction work (Improvements to Thalakkad to Mularinad Road).
The appellant's offer was accepted and an agreement dated 7 .6.1982
was executed between the State of Kerala as the employer (represented
by second respondent), and the appellant as the contractor. The C
. estimated cost of the work was Rs. 11,28,595 and the security deposit
payable by the appellant ·was Rs.22,600. The contract required the
work to be completed within 18 months from the date of handing
over of the site. As the site was fonnally handed over on 17.8.982,
the work had to be completed on or before 16.2.1984. According to D
the appellant, on account of delays, defaults and breaches committed
by the Department, he could n.ot complete the work.
(2.2.) The appellant submittecl_ an on account bill for Rs. 5,36,800 on
25.8.1984. It was not paid. In spite of the delay in payment and other
breaches by the department, the Appellant proceeded with the work E
and completed substantial portion of the work. He also sent various
letters seeking payment. The Executive Engineer by letters dated
4.7.1985 and 18.10. 1985 infonned the Chief Engineer (B&R) that the
appellant had executed work worth about Rs. I 0 lacs and the delay in
payment was affecting the progress of the work. In spite of it, the
payment was delayed and ultirnately Rs.4,04,628 was belatedly F
released on 26.3.1986 after making cert&in deductions (that is 10%
towards errors in measurement, Rs.40,463 as retention amount etc.).
No further payments were made by the Department.
(2.3.) The appellant alleged the following breaches by the respondents:-
(i)
Delay in issuing cement and steel required for the work which
was the Department's responsibility (delay of 16 months in issuing
cement and delay of 26 months in issuing steel);
(ii) Default in releasing further cement and MS rods thereby
G
preventing him from completing the work (two bridges);
H
282
SUPREME COURT REPORTS
[2006 I I S.C.R.
A
(iii) Failure to finalise the formation level of the road., thereby
preventing him from metalling the road (delay in approving initial
levels tentatively being 9 months);
(iv) Delay in making on account payments for the work done as
required by the contract terms (delay of 19 months in releasing
B
the payment towards first part of bill);
(v) Requiring him to do more than 25% in excess of the agreed
quantities in regard to certain items of work;
The appellant contended that in view of the expiry of the contract
period as also the extended period and the breaches committed by the
C Department preventing him from completing the work within the extended
period, he was not liable to execute the balance work and that the Department
cannot foist any liability on him in regard to any extra cost in getting the
balance work completed through another agency.
The appellant filed O.S. No.691/1987 on the file of the Sub-ordinate
D Judge, Ernakulam (later transferred and renumbered as O.S. No.24/1990 on
the file of Sub-Judge, Moovattupuzha) against the respondents, for the
following reliefs:
(i)
For recovery of Rs. 2 lacs towards the amount due for work
done, with interest at 18% per annum. (The appellant also claimed
E
proper accounting and prayed that if the amount due for the
work done was in excess of Rs.2 lacs estimated by him, he may
be permitted to pay additional court fee in regard to the actual
amount found due);
(ii) For recovery of Rs.1,000 as damages and breach of contract with
F
interest at 18% per annum thereon;
(iii) For a declaration that he was not liable to execute the remaining
part of the work and that the completion of the remaining work
shall not be at his risk and cost, and for a consequential direction
to refund the entire security deposit and retention money with
G
interest at 18% per annum;
(iv) For costs and such other reliefs as the court may deem fit to
grant in the circumstances of the case.
i3. The appellant valued the suit, for the purposes of court fee, as follows,
ur.der the Kerala Court Fees and Suits Valuation Act, 1959 ('CF Act' for
H short) and paid court fee accordingly :-
-1
I
)
\
I
,,
K.CSKARIA '"THE GOVT, OF STATE OF KERALA [RAVEENDRAN, J,]
283
S. No.
Relief
Valuation
CF paid
A
(a)
Relief (i) under Section 35 of
CF Act
Rs. 2,00,000
Rs. 19,980
(b)
Relief (ii) under Section 22 of
C.F. Act
Rs.
1,000
Rs.
100
(c)
Relief (iii) under Section
B
25(d)(ii) of the Act
Rs.
300
Rs.
30
Total
Rs. 2,01,300
Rs. 20,110
4. The suit was resisted by the State, inter alia, on the ground that there C
was no breach on its part. It was alleged that the work consisted of (a) cross
drainage works, (b) Earth-work for fonning the roadway, (c) protective works
and (d) supply of materials like stone, metal etc. The respondents stated that
cement was issued on 9.11.1983 when the appellant made arrangements for
cross drainage works. It was also alleged that a part of steel rods were issued
on 26.10.1984 and balance as and when the work progressed. It was contended D
that major items of work (like earthwork for road formation, supply of stone/
metal for soling and metalling work) did not involve cement and steel and
nothing prevented the appellant from proceeding with those works pending
issue of cement and steel. It was also alleged that any delay in supply of
materials by the Department would entitle the appellant only to extension of E
time and not to any extra payment. It was alleged that time was extended
from 16.8.1984 to 31.3.1985 and again up to 31.12.1985 with fine ofRs.100
and the appellant did not complete the work in spite of such extensions and
in spite of final notice dated I I .11.1986. The respondents contended that
they would get the unfinished work completed at the risk and cost of the
appellant and recover any extra cost in completing the work as also the cost F
of unreturned material from the security and retention amounts and ot~er
amounts due to the appellant.
5. During the pendency of the suit, the Department passed an order
dated 31.5.1989 terminating the contract at the risk and cost of the appellant
arid ordering forfeiture of the security deposit amount of Rs.22,600.
G
6. The trial court framed the following issues :
I.
Whether the --defendants committed breach of contractual
obligation and if so, what is the amount due to the plaintiff as
H
284
SUPREME COURT REPORTS
(2006) I S. C.R.
A
damages for breach of contractual obligations?
B
c
2.
Whether the plaintiff is entitled to get the value of the work done
and, if so, what is the amount due to him ?
3.
Whether the plaintiff is entitled for a declaration that the balance
work shall not be arranged at the risk and costs of the plaintiff
and consequently directing the defendants to release security
deposit and retention amount?
4.
Whether the plaintiff is entitled to get 18% interest per annum on
the amount due to him from the date of the suit 16-7-1987 till
the date of realization.
5.
Cost and other reliefs."
7. After appreciating the oral and documentary evidence led by the
parties, the trial court by a judgment and decree dated 16.2.1991 decreed the
suit, in part. It held that as per the measurements contained in the Measurement
D Book (Ex. B-2) maintained by the Department, the total value of the work
done by the appellant was Rs. I 0,05,466.42 and as Rs.4,36, 963.29 had already
been paid, the balance due for the work done was Rs.5,68,487.13, and after
deducting the cost of the material supplied by the Department, the amount
due to the appellant was Rs. 5,33,560. The trial court also found that the
Department committed breach by causing delays on various counts, thereby
E preventing the appellant from completing the work. The trial court held that
though the amount due towards the work done was Rs.5,33,560, as the
appellant had claimed only a sum of Rs.2 lacs on that count and paid court
fee thereon, the appellant was entitled to a decree for Rs.2 lacs only towards
value of work done. As a consequence of its findings, the trial court decreed
p the suit against the respondents as follows :-
(i)
A decree for Rs. 2 lacs towards the cost of the work done with
12% interest per annum from the date of suit till the date of
decree and, thereafter, at 6% per annum till the date of realization;
G
(ii) A decree for Rs. I ,000 as damages for breach of contract with
interest as above;
(iii) A declaration that the appellant was not liable to execute the
remaining part of the work and the execution of the balance
work shall not be at the risk and cost of the appellant; and
H
(iv) A direction to the respondents to refund the security deposit
"1-
,..
\ I
K.C.SKARIA ''·THE GOVT. OF STATE OF KERA LA [RA VEENDRAN, J.]
285
amount and retention money within six months to the appellant. A
8. The appellant filed an appeal in A.S. No.697/1991 contending that
the suit ought to have been decreed for Rs.5,33,560 which was found due,
instead of Rs.2,00,000 (towards the value of the work done) by permitting
him to pay the deficit court fee in regard to the balance amount.
B
9. ~he respondents also filed an appeal in A.S. No.481/1992, being
aggrieved by the reliefs granted by the trial court. The respondents contended
that the appellant, who was an independent contractor, was not entitled to
maintain a suit for rendition of accounts and, therefore, the trial court ought
to have dismissed the suit in entirety, as not maintainable. It was also contended
that the trial court ought to have held that the appellant was in breach and C
that there was no breach on the part of the respondents.
IO. A Division Bench cifthe Kerala High Court by a common judgment
dated 12.11.2002 dismissed the appellant's appeal and allowed the respondents'
appeal thereby dismissing the suit in entirety. It held that a suit by an D
independent contractor for rendition of accounts by the employer, was not
maintainable and, therefore, there cou Id not be a decree for Rs.2 lacs towards
cost of work done, or for any other relief. It also held that there was no
breach on the part of the Department and, consequently, the trial court could
not have granted a declaration that the Department was not entitled to get the
balance work executed at the risk and cost of the appellant.
E
11. Feeling aggrieved, the appellant has filed these appeals by special
leave. On the contentions raised, the following points arise for our
consideration :
(i)
Whether the appellant as an independent contractor engaged by F
the State Government for execution of construction work, is
entitled to maintain a suit for rendition of accounts by the
employer?
(ii) Even if the prayer for accounts was not maintainable, whether
the suit could have been dismissed in entirety by the High Court? G
(iii) Whether the respondents (employer) committed breach of its
obligations under the contract ?
(iv) To what amounts, if any, the appellant is entitled to?
Re : Point (i) :
H
286
SUPREME COURT REPORTS
[2006] I S.C.R.
A
12. The relationship between the first respondent and the appellant was
that of an employer and an independent contractor engaged to execute certain
work in terms of the contract. The contract was an item-rate contract and
payment for the work done had to be made by the employer to the contractor
as per the measurements recorded in the Measurement Book maintained by
B the Department. It is also not in dispute that while the appellant as the
contractor would approximately know the quantum of work done by him, the
exact quantities for purpose of payment could be ascertained by him only by
actually measuring the work done or by having access to the measurement
book maintained by the Department. In the circumstances, the question that
arises for consideration is whether the remedy of the appellant, engaged as
C an independent contractor to execute a construction work (in a item-rate
contract where payment is to be made as per the measurements recorded in
the measurement book maintained by the employer) in the event of nonpayment for the work done, is only to file a suit for the cost of the work done
quantifying the amount due, or whether he could file a suit for rendition of
D
accounts against the employer with a further prayer for a decree for the
amount due.
13. Order 21 Rule 13 CPC provides that in administration suits, a
preliminary decree directing accounts can be made. Order 21 Rule 15 provides
that in a suit for dissolution of partnership or taking of partnership accounts,
E the court before passing a final decree may pass a preliminary decree declaring
the proportionate shares and directing accounts to be taken. Order 21 Rule 16
provides that "in a suit for an account of pecuniary transactions between a
principal and an agent, and in any other suit not hereinbefore provided for,
where it is necessary, in order to ascertain the amount of money due to or
from any party, that an account should be taken, the court shall, before
F passing its final decree, pass a preliminary decree directing such accounts to
be taken as it thinks fit." We may clarify that Order 20 Rule 16 does not
create or confer any substantive right to seek rendition of accounts in any
particular type of cases, nor in all types of cases. It merely refers to a rule
of procedure and would apply where there is an existing right to seek rendition
G of accounts having regard to the relationship between the parties.
14. It is now well-settled that the right to claim rendition of accounts
is an unusual form of relief granted only in certain specific cases and to be
claimed when the relationship between the parties is such that the rendition
of accounts is the only relief which will enable the plaintiff to satisfactorily
H assert his legal right [vide Jowahar Singh v. Haria Mal ( 1899) 60 P.R. 1899,
t
K.C.SKARIA v. THE GOVT. OF STATE OF KERA LA [RA VEENDRAN. J.]
287
followed in Gulam Qutab-ud-din Khan v. Mian Faiz Bakhsh AIR (1925) A
Lahore 100, State of Jammu & Kashmir v. L. Tota Ram AIR (1971) J&K 71,
Triloki Nath Dhar v. Dharmarath Council, AIR (1975) JK 76]. The right to
seek rendition of accounts is recognized in law in administration suits for
accounts of any property and for its administration, suits by a partner of a
firm for dissolution of the partnership firm and accounts, suits by beneficiary
against trustee/s, suits by a member of the joint-family against the Karta for B
\
partition and accounts, suits by a co-sharer against other co-sharer/s who has/
have received the profits of a common property, suits by principal against an
agent, and suits by a minor against a person who has received the funds of
the minor.
15. 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, AIR (1967) SC 333,
this Court considered the maintainability of a suit by an agent against the
principal for accounts. Negativing the contention that only a principal can
c
sue the agent for rendering proper accounts and not vice versa, (as Section D
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 E
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 F
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 G
accounts of his principal are gone into."
16. To summarise, a suit for rendition of accounts can be maintained
only if a person suing has a right to rece'ive an account from the defendant.
Such a right can either be (a) created or recognized under a statute; or (b) H
288
·SUPREME COURT REPORTS
[2006] I S.C.R.
A 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
B 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.
17. Let us now examine whether a contractor engaged to execute a
C particular work, can file a suit for accounts against the employer in regard to
payment for the work done. Such a right is not created or recognized by any
statute. The independent contractor is not an agent of the employer. Nor is
the employer in the position of a trustee with reference to the independent
contractor. Can the claim be supported in equity by stating that where the
relationship is such that rendition of accounts is the only relief which will
D enable the contractor to satisfactorily assert his legal right? A contractor who
is engaged to execute a work, is expected to maintain his own accounts. At
all events, there is no bar for a contractor to keep an account of the work
done. Even where the contract between the employer and independent
contractor may provide for payment on the basis of measurements to be
E recorded by the employer, nothing prevents the contractor from measuring
the work done by him and then suing for the value of the work done. The
contractor may also demand joint-measurements to determine the quantum of
work done. If the employer for some reason does not co-operate or prevents
the contractor from taking a physical measurements, the contractor can seek
appropriate legal remedy which will enable him to take measurements or to
F secure the information from the measurement book in the custo~y of the
employer. Therefore, either the fact that the measurement book is maintained
by the employer, or the fact that the contractor does not possess the exact
measurements, will not entitle the contractor to file a suit for rendition of
accounts against the employer.
G
18. In this case, the appellant could have either himself measured the
work done by him or secured the information from the respondents. The
appellant has neither made out a right under a statute nor any fiduciary
relationship nor any right in equity by establishing that except by calling
upon the defendants in the suit to render accounts, it is not possible for him
G to get relief. The appellant has sued for Rs.2 lakhs and paid court fee thereon.
l
K.C.SKARIA 1·. THE GOVT. OF ST A TE OF KERALA [RA VEENDRAN, J]
289
Nothing prevented him from suing for Rs.5,33,000. In para 5 of the plaint, A
he states that th~ total value of work done by him was Rs. I 0,00,000. He
knew that he had been paid only Rs.4,04,628. He also knew the value of
material supplied by the employer. In the circumstances, the prayer for
rendition of accounts is not maintainable.
19. The appellant next attempted to press into service Section 149 of B
CPC to contend that he ought to have been given an opportunity to pay the
deficit court fee on the total amount due for the work done. Section 149 ·
provides that where the whole or any part of court fee prescribed for any
document has not been paid, the court may, in its discretion, at any stage,
allow the person by wliom such fee is payable, to pay the whole or part as C
the case may be, of such court fee, and upon such payment, the document in
respect of which such fee is payable, shall have the same force and effect as
if such court fee had been paid in the first instance. Section 4 of the Court
Fee Act bars the court from receiving the plaint if it does not bear the proper .
court fee. Section 149 acts as an exception to the said bar, and enables the
court to permit the plaintiff to pay ·the deficit court fee at a stage subsequent D
to the filing of the suit and provides that such payment if permitted by the
court, shall have the same effect as if it had been paid in the first instance.
Interpreting Section 149, this Court in Mannan Lal v. Chhotka Bibi, (AIR
1971 SC 1374) held that Section 149 CPC mitigates the rigour of Section 4
of the C.F. Act, and the courts should harmonise the provisions of the C.F. E
Act and the CPC by reading Section 149 as a proviso to Section 4 of the C.F.
Act, and allowing the deficit to be made good within the period to be fixed
by it. This Court further held that if the deficit is made good, no objection
could be raised on the ground of bar of limitation, as Section 149 specifically
provides that the document is to have validity with retrospective effect.
F
20. A careful reading of Section 149 shows that it would apply only iti
respect of the court fee payable at the time of institution of the suit. If the
court fee due on the plaint when instituted, is not paid wholly or partly by
the person instituting the suit, the court in its discretion, may allow him to
pay the court fee or deficit court fee within the period fixed byit. Section 149
has no application where the court fee, due on the plaint as per the valuation G
of the suit, is fully paid, but subsequently it is found that a larger amount is
due to the plaintiff. For example, if th~ plaintiff values the suit at Rs.2 lacs
and the court fee payable is Rs.20,000 and the plaintiff pays a court fee of
Rs. I 0,000, on his request time for payment of balance of Rs. I 0,000 can be
extended by the court at its discretion under Section 149 CPC.