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Suit No. 725 of 1979, decided on 13th June, 1987.

‑‑‑ O. VII, R. 2‑‑Banker and customer‑‑Suit for rendition of accounts‑‑Accounts. kept in Bank at Ajman (U.A.E. )‑‑Suit for rendition of accounts in Karachi‑‑Contention that if documents of Bank were required to be produced in Karachi it was bound to cause public inconvenience and hence against public policy‑‑Held, by showing inconvenience and difficulty of Bank it could not be said that demanding of accounts in the manner as stated in the plaint was against public policy.

‑‑‑ O. VII, R. 2‑‑Banker and customer‑‑Suit for rendition of accounts against Bank‑‑'Legal heirs' of deceased account‑holder, not a 'third party'‑‑Bank, in such case, cannot claim that they cannot divulge secrets of their client to a third party.

‑‑‑ O. VII, R. 2‑‑Banker and customer‑‑Accounts, suit for against Bank‑‑Merely because certain vouchers to which plaintiffs objected, were after filing of suit allowed to be inspected by plaintiff cannot lead to conclusion that plaintiffs accepted the statement of accounts and had waived their objection regarding them.

--O. XX, R. 16‑‑Provisions of, not restricted to suit for accounts between principal and agent but applicable to all suits for accounts‑‑Where it is necessary, to ascertain the amount due to or from a party, Court has to pass a preliminary decree followed by a final decree‑‑No preliminary decree can be passed where liability to render account is not established or when accounts do not require scrutiny.

Province of West Pakistan and others v. Allah Ditta P L D 1972 Kar. 8; Kanhayala v. Hiralal Deoram A I R 1947 Bom. 255; Narmada Charan v. M. Maharaj Bahadur Sing A I R 1937 Cal. 359; Ram Lal Kapoor & Sons, v. Asian Commercial Insurance Co. A I R 1933 Lah. 483, Ram Chandra Madhavadoss Co. v. M.M. Birankuti & Bros. 177 IC 631 and A I R 1950 East Pb. 192; A I R 1929 Lah. 182 and A I R 1921 Sind 42 ref.

‑‑‑ Relationship between, ‑s that of debtor and creditor‑‑Death of account‑holder‑ ‑Persons inheriting properties of deceased‑ ‑Banker stands in relationship of trustee as well as agent for his customer and liable to render account to deceased account‑holder's legal heirs.

P L D 1964 Ka.r. 659 Mohammad Akram v. Habib Bank Ltd. Karachi P L D 1960 Kar. 484 and A I R 1936 Cal. 409 ref.

‑‑‑ Furnishing of statement of accounts‑‑Statement of accounts, unless checked, scrutinised, verified and accepted by customer without objection, cannot be treated as account stated or settled account‑‑Mere supply of periodical letters showing balance standing in favour of a client, cannot result in estoppel against customer.

Mohammad Akram v. Habib Bank Ltd. P L D 1960 Kar. 484 ref.

‑‑‑Accounts‑‑Suit for rendition o accounts against Bank by legal heirs of deceased customer‑‑Mere production of debit vouchers alleged to have been signed by deceased is not enough to show that vouchers were in fact signed by deceased.

Shaikh Haider for Petitioner.

Mamnoon for Respondent.

Date of hearing: 5th May, 1987

The deceased Gulzar Khan was a Pakistan National and was living at Dubai. He maintained two accounts namely Accounts Nos.268 and 230 with United Bank Limited, Ajman Branch U.A.E. He died at Dubai leaving the plaintiffs as his legal heirs. They approached the Court at Ajman UAE and obtained a certificate in their favour authorising them to collect the amounts inter alia from the defendants. The plaintiff No.1 who is the father of the deceased and the attorney of all other plaintiffs approached the Manager of the United Bank Limited, Ajman Branch, and demanded the amount and also the accounts. He was satisfied with account N6.268 but with regard to account No.230 he demanded the relevant record and verification of the correctness of the statement of account. The Manager of the Ajman Branch of the defendants did not supply statement of account of the deceased, and the plaintiff No. 1 had to obtain it in representation made to the Head Office at Karachi on 16‑5‑1977. The plaintiffs were not allowed inspection of the documents. The plaintiffs therefore filed the present suit for accounts.

The defendants filed their written statement in which preliminary objection to the jurisdiction and maintainability of the suit was taken. It was pleaded that the suit for rendition of account does not lie against a Bank and if at all it is maintainable then it can be rendered only where the accounts are maintained. It was pleaded that if the plaintiffs' contention is correct that entries of withdrawal are not duly supported, they can file a suit for recovery of specific amount which according to them are not duly supported. It was pleaded that in compliance with the decree of Ajman Sharia Court, the defendants branch transferred the entire credit balance of Dirhams 40,000.00 in account No.230 and Dirhams 64,374.81 in account No. 268 into account No.391 of the plaintiff No.1. The plaintiff No.1 was fully satisfied with the credit balance in the aforementioned accounts. The transfer of balance in account No.391 was accepted which was operated upon by the plaintiff No.1. The suit is there ore, barred by principle of waiver and estoppel. It has been pleaded that statements of accounts were supplied to the plaintiffs, but the defendants were not obliged to do so. The defendants have therefore, denied the entire claim.

The following issues were framed:‑

(1) Whether this Hon'ble Court h s no jurisdiction to entertain the suit

(2) Whether the suit is barred b section 214 of the Succession Act, 1925

(3) Whether the suit is hit by the Foreign Exchance Regulation Act, 1947 and whether the /reliefs claimed in the suit would defeat the provisions contained in the Foreign Exchange Regulation Act, 1974

(4) Whether the defendant's obligation, if any, is to pay only at the branch where the account is opened and, the amount is deposited

(5) Whether the reliefs claimed in the plaint are against the public policy

(6) Whether the suit is barred by the principles of waiver and estoppel

(7) Whether the plaintiffs are the only legal heirs of the deceased Gulzar, if so, whether the suit for account is maintainable by them

(8) Whether the entries of withdrawal are not duly supported in respect of account No.230 as alleged in the plaint

(9) What should the decree be

Issues No.1 to 4 Were tried as preliminary issues and decided by the judgment dated 7‑3‑1985. The finding on issue No.1 was that the Court has jurisdiction. The finding on issues No.2 and 3 was in the negative. Issue No.4 was decided together with issue No.1 and it was held that a decree, can be passed against the defendants in the present suit. Now after the witnesses have been examined the suit has been fixed for arguments with regard to issues N0.5 to 9.

The defendants have not shown how the relevant claim in the suit is against public policy. Mr. Mamnoon has contended that the accounts were kept at Ajman and demand was made at Ajman therefore if the documents are required to be produced at Karachi, it will cause inconvenience to the defendants and frustrate their business as the ledger cannot be produced. By showing the inconvenience and difficulty to the bank it has not been established that demanding of accounts in the manner as stated in the plaint is against public policy. My finding is in the negative.

The defendant has referred to series of correspondence namely Ex‑6/6, 6/20, 6/23, 6/12 and contended that after satisfying about the account the plaintiff No.1 opened account No.391 on 16‑12‑1976 at Ajman and the credit balance in both the accounts of the deceased was transferred in the plaintiff's account No.391. The plaintiff No.1 also operated upon this account. On the basis of these facts the learned counsel contended that the plaintiffs have acquiesed and are estopped from challenging the account. On the other hand Mr. Shaikh Haider, the learned counsel for the plaintiffs has contended that from the very beginning the plaintiffs have been demanding the statement of account and the debit and credit vouchers in respect of account No.230 but the defendant denied and did not supply it at any stage. The plaintiffs had threrfore, no option, but to open an account in which the balance amount in the accounts of the deceased was transferred, but at no stage any opportunity was given to examine these accounts. from the evidence, it is clear that the defendants had refused to supply the statement of account and at no occasion allowed the plaintiffs to scrutinise, verify, and check the balance which was transferred in the plaintiffs' account No.391. It was at the intervention of the head office that the statement of account was for the first time supplied to the plaintiffs on 16‑5‑1977. The plaintiffs had obtained a decree from the relevant Court at Ajman in which all the Banks were directed to pay their liabilities to the plaintiff No.1. However, in spite of this decree the defendants did not pay any amount, but made inquiries about it. However, they did not supply the statement of account, nor the vouchers were allowed to be inspected. In this regard the defendants have taken the plea that under the decree of Ruler of Dubai, they were not allowed to provide all these particulars and documents. The decree has been filed as Ex.6/6. It recites that in order to help implementation of the economic development policies of that country the Banks were forbidden from divulging any information relating to the accounts of any its client or any financial transaction except with the written consent of the client. However, such information could be given if a decree is issued for public interest or any order is passed by the Court in Dubai. A perusal of this decree clearly indicates that it was intended to protect the development policies of that country and the Banks were asked not to divulge secrets of their clients to a third party. This was subject to an exception that it will not apply to a decree of the Court. In the present case, the plaintiffs were demanding the accounts of their predecessor and therefore, they could not be treated as a third party because Gulzar died and the plaintiffs being his legal heir were entitled to that money. Further‑more a decree had been passed by the Court in which the plaintiff No.1 was entitled and authorized to recover such amounts to whom it was to be paid. In these circumstances, the plea taken by the defendants refusing to give statement of account and show the vouchers was completely unjustified and misconceived. This decree was not applicable to the present case, and the defendants have acted in complete disregard of the decree relied upon by them, and also the rights vested in the plaintiffs. The plaintiff No. 1 has stated that no withdrawal vouchers were shown to him in spite of demand till the filing of the suit, and they were produced only after the Court had passed an order on application made by the plaintiffs. D.W.1, has, however, stated that he had given the statement of account to the plaintiff No.1 and he had also shown some of the vouchers which were produced by him before the plaintiff No. 1 for his satisfaction and he felt satisfied. He has produced the debit vouchers alleging that they were signed by the deceased. After the court's order when inspection was taken, note of inspection of document Ex.6/36 dated 19‑9‑1980 was prepared in which it has been stated that the plaintiffs have demanded photo copies of 9 vouchers which were supplied later. In this statement the plaintiff No. 1 has stated that the withdrawal vouchers do not bear the signature of his son. There does not seem to be any effective cross‑examination with regard to this aspect of the case. The learned counsel for the defendants has contended that these vouchers were produced by the defendants' witness and no question was asked about its correctness and veracity. The state of evidence as discussed above is that the plaintiff No.1 has denied the correctness of the debit vouchers and he has at no stage admitted the debit vouchers to be correct. The defendant's witness has nowhere stated that these vouchers bear the signature of the deceased, or that he had signed them before him. In these circumstances, it cannot be urged that merely by inspection of vouchers after the filing of the suit, the plaintiffs who had objected to certain vouchers can be said to have accepted the statement of account and have waived their objection. The defendants have also not shown that any representation was made by the plaintiffs and on that basis they have altered their position. In these circumstances my finding is in the negative.

The defendants have not disputed that the plaintiffs are the legal heirs of the deceased, but it has been urged that the suit for account is not maintainable by them. The main contention of the learned counsel for the defendants is that the defendants are not the accounting party and further that the suit should have been filed for an ascertained amount. The learned counsel has referred to Province of West Pakistan and others v. Allah Ditta PLD 1972 Kar. 8 in which it was observed as follows:‑

"Thus the consistent view of the Courts has been that a plaintiff cannot sue for accounts when his relationship with the defendant is on a purely contractual basis. Secondly, when an agent sues his principal for accounts, his rights are even more restricted, and he can succeed only if he shows that, due to special circumstances or difficulties, he is not able to ascertain the amount due to him from his principal."

This observation was made after considering Kanahayal v. Hiralal Deoram AIR 1947 Bombay 255, Narmada Charan v. M. Maharaj Bahadur Sing AIR 1937 Cal. 359, Rain Lal Kapoor & Sons v. Asian Commercial Insurance Co. AIR 1933 Lah. 483, Ram Chandra Madhavadoss Co. v. M.M. Birankuti & Bros. 177 IC 631. It was also observed that "a suit for accounts is an equitable remedy which is available to a plaintiff if he is entitled to account, and has not been given accounts. It follows therefore, that such relief does not arise out of mere contractual relationship or that the accounts may have to be examined in the course of a suit". In Nazir Ahmad v. Mohammad Ashraf P L D 1975 Kar. 598 the above observations were followed and affirmed. It therefore, seems clear that the equitable relief of account can be granted to the plaintiff if he establishes that he has such relationship with the defendant which requires rendition of account and it has not been properly and truly rendered by the defendant. In this regard Order XX rule 16 C.P.C. may be usefully referred which provides for passing of a preliminary decree for accounts and also a final decree. Order XX rule 16 is not restricted to suit for account between Principal and Agent, but it is applicable to all suits for accounts. Reference can be made to AIR 1950 East Punjab 192, AIR 1929 Lah. 182, AIR 1921 Sind 42. Under this provision where it is necessary to ascertain the amount of money due to or from any party, the Court should pass a preliminary decree followed by a final decree. No preliminary decree can be passed where the liability to account is not established or that where the accounts do not require any scrutiny.

It is to be ascertained whether the relationship between the plaintiffs and the defendants exists in which the defendants are liable to render account and no account has been rendered or that the statement of account does not require any further scrutiny. The account was in the name of the deceased and not the plaintiffs. The plaintiffs after the death of the deceased inherited his properties and the defendants were holding the money which was in the nature of trust for delivering to the rightful claimant. Therefore, the relationship of the plaintiffs and defendants was not merely of a debtor and creditor. The defendants, stand at some other relationship to the plaintiffs. The defendants are bankers of which the deceased was a customer. In PLD 1964 Kar. 659 it was held that relationship between a banker and customer is that of a debtor and creditor. In Mohammad Akram v. Habib Bank Ltd. Karachi, P L D 1960 Kar. 484 reference was made to AIR 1936 Cal. 409 and reliance was placed on the following observation:‑

"The relationship of banker and customer is generally that of agent and principle, of debtor and creditor or of pledgor and pledgee; there are however cases where the banker stands in the relation of trustees as well as agent for his customer: .

In the present case, the deceased had deposited moneys with the defendants and had a credit balance and there existed relationship of debtor and creditor. From the evidence it is not clear whether the defendants were regularly supplying statement of account to the deceased or had issued any pass book giving the balance from time to time. The defendants have stated that they had the entire record with them of the deposits and withdrawals but unless it is established that the statement of account was duly accepted by the deceased, it can have no binding effect. In Mohammad Akram's case it was observed.:‑

"It appears to me unless and until evidence is produced that the customer examined the pass book with all the relevant documents little reliance can be placed on the pass book and the customer in law is not estopped from disputing entries appealing in the book although he raised no objection on it."

There is nothing to show that the deceased had accepted the balance at any time or that the plaintiffs accepted the same. In fact the plaintiffs have been demanding the accounts in account No.230 as they did not possess any debit and credit voucher slips. This was denied by the defendants on a misconceived plea that the decree of the Ruler prohibited them from allowing inspection of the documents. In these circumstances as the plaintiffs were completely in the dark about the state of affairs and accounts, the defendants in the existing relationship as discussed above were duty bound to render true and correct account to the plaintiffs. The plaintiffs were not satisfied with the credit balance shown to them or transferred to their account. They have been agitating from the very beginning demanding examination of the debit and credit vouchers. Till the filing of the suit, defendants resisted and refused to show the vouchers. D.W.1 has stated that he had shown some of the vouchers and the plaintiff No.1 was satisfied but this has not been accepted by the plaintiff No.1. Even if for the sake of argument it is accepted then such examination related to some of the vouchers and not all the vouchers. If the plaintiffs were satisfied from the vouchers produced, or the account shown in the statement of account the defendants ought to have obtained such statement in writing from them. There is nothing on record to establish such satisfaction.

The learned counsel for the defendants has contended that the statement of account is an account stated, therefore, a decree in specific amount should be passed. The argument is based on the reasoning that as the statement of account was prepared and delivered to the plaintiff No.1, it should be accepted to be correct. In my view the contention and reasoning as advanced by the learned counsel for the defendants are misconceived and devoid of any force. A statement of account unless checked, scrutinised, verified and accepted by the customer without any objection cannot be treated to be an account stated or a settled account in Mohammad Akram v. Habib Bank Ltd., 1960 Kar. 484 the Bank had contended that as it had been sending periodical statement of accounts and confirmatory letter about the account maintained by the deceased, the plaintiffs were estopped from challenging the correctness of the account. This contention was repelled with the observation that "there is nothing on the record to show that the deceased's attention was specifically drawn to any such statement of account. The mere fact that the bank send periodical letters showing the balance standing in favour of their client cannot result in any estopple of the customer. The bank generally recognise this position which is evident from the fact that they always ask their customers to confirm it in writing: . On the facts of the present case, the defendants owed a duty to render accounts to the plaintiffs. The statement of account in loose leaves produced by the plaintiffs cannot be treated as correct and final. Ex.6/13 is a statement of account in which during the month of July, there have been heavy drawings. It has not been verified or certified to be correct as required by the law in Pakistan. The defendants are liable to render account.

The learned counsel for the defendants has contended that it will be most inconvenient to render account at Karachi as the Ledger books are at Ajman. The defendants had offered to give inspection at Karachi and they should produce all such documents which are necessary for rendering due and correct account. My finding is in the affirmative.

The defendants have produced vouchers out of which 9 were disputed by the plaintiffs stating that they have not been signed by the deceased. The defendants maintained that these vouchers were signed by the deceased but no evidence has been produced to substantiate it. Mere production of vouchers is not a proof of its having been signed by the deceased. The defendants have not produced any other evidence to support their contention. My finding is accordingly.

A preliminary decree is passed against the defendants for accounts which shall be rendered by the defendants before the Official Assignee who is appointed Commissioner for taking accounts. If it is necessary to produce the Ledger and the defendants are unable to bring it to Karachi, then the Official Assignee should make a reference to the Court for necessary orders in that regard.

A preliminary decree is passed against the defendants with cost.

K.B. A. /A‑123/K Preliminary decree passed.

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