Order 20 Rule 16 CPC | Not Mandatory To Pass Preliminary Decree In Every Suit For Accounts: J&K High Court

Elucidating the application of Order 20 Rule 16 of the Civil Procedure Code (CPC), the Jammu and Kashmir and Ladakh High Court has ruled that the Court is not mandated to pass a preliminary decree before a final decree in every suit for accounts. Instead, the decision depends on the unique facts and circumstances of each case, it clarified.Order 20 Rule 16 of the Code relates to suits for accounts between a principal and an agent or in other suits where it is necessary to ascertain the amount of money due to or from any party by taking an account.A bench of Justice Javed Iqbal Wani was hearing a Civil First Appeal preferred by the Appellant against the judgment and decree passed by the Court of Additional District Judge, Srinagar in a suit directing payment of Rs. 10,32,080/- in favor of the Respondent No. 1 along with simple interest and costs.The Appellant challenged the judgment on the ground that the suit filed by the Respondent/Plaintiff was for declaration and accounts and that in money suits, the law mandates the issuance of a preliminary decree before the final decree for payment of money and the lower court, contrary to this legal requirement, directly passed a decree for the payment of money, they argued.Justice Wani after careful consideration of Order 20 Rule 16 of the CPC addressed the primary contention and observed that the Court isn't obligated to pass a preliminary decree before a final decree in every suit for accounts. Spotlighting the expressions “where it is necessary…that an account should be taken” and “such account to be taken as it thinks fit” used in Order 20 Rule 16 the bench recorded,“The expressions “where it is necessary…that an account should be taken” and “such account to be taken as it thinks fit” amply indicate that the Court is not required to pass a preliminary decree before passing a final decree in each and every suit for accounts but only in suits where the Court thinks it fit and necessary to ascertain the amount of money due to or from any party in the facts and circumstances of the case”.Referencing Purushotham Haridas & ors. v. M/s Amruth Ghee Ltd.1961 & Ors. and Balkishan Dass v. Parmeshri Dass 1963 the bench explained that the usual practice in a case involving an account is to pass a preliminary decree and proceed with taking accounts, even if the defendant denies accountability. However, this does not imply an obligation for the court to do so in every case as Rule 16 clarifies that a preliminary decree may be passed only when necessary to determine the amount of money owed by or to any party and to facilitate the process of taking accounts, the court underscored.“.. where the facts of the case are so simple, either by admission or proof as to afford a ready decision, the court can pass a final decree without passing a preliminary decree,” Court added.Case Title: Executive Engineer, Dal Lake Division-I Vs Mousvy Industries BudgamCitation: 2023 LiveLaw (JKL) 287Click Here To Read/Download Judgment

Order 20 Rule 16 CPC | Not Mandatory To Pass Preliminary Decree In Every Suit For Accounts: J&K High Court

Basit Amin Makhdoomi

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