Kasat And Sons, Nagpur Another v. Smt. Kamalabai Devidatta Jejani Others

Oral Judgment:

This appeal is directed against judgment and decree passed on 17.07.1999 by Addl. District Judge, Gadchiroli in Regular Civil Appeal No.1/1992 confirming the judgment and decree passed by Civil Judge Senior Division, Gadchiroli on 30.10.1991.

Submissions:

2. In support of the appeal, learned counsel for the appellant made the following submissions.

The appellant no.1 is a firm of which appellant no.2 is partner, who is canvassing commission agent and broker dealing in grains trade. Admittedly, the goods were sold to respondent Nos.3 to 5-original defendant nos.1 to 3. The unpaid price of the goods was obviously required to be paid by defendant Nos.1 to 3 who purchased the goods from plaintiffs i.e. respondent Nos.1 and 2. It is not the case of plaintiffs that the present appellants acted as traders or purchasers of the said goods and on the contrary it is the case of the plaintiffs that the present appellants acted only as commission agents for commission and nothing more. The learned counsel then contended that there is nothing on record to show any privity of contract between the purchasers and defendant Nos.4 to 5 or with plaintiffs-respondent Nos.1 and 2 herein, in the matter of payment of price of goods in the eventuality of the same being not paid. Inviting my attention to Section 230 of the Indian Contract Act, learned counsel for the appellants argued that no decree, joint and several, could have been passed against the appellants and plaintiffs by the trial court and the decree could have been at the most passed only against the purchaser namely defendant Nos.1 to 3.

3. Per contra, learned counsel for the respondents opposed the appeal and argued that there is proved correspondence on the record from the appellants themselves in the form of Exh.- 57, 59 and 60, which ultimately shows that the appellants had undertaken the liability to make payment of the balance purchase price and, therefore, the appellants have rightly been saddled with the decree in question.

Consideration:

4. I have heard learned counsel for the rival parties. In my opinion, following substantial question of law arises in this appeal.

"Whether the appellants/original defendant Nos.4 and 5, acting as agents for commission were liable to be saddled with the price of the goods sold to defendant Nos.1 to 3, particularly in the light of Section 230 of the Indian Contract Act?"

Section 230 of the Indian Contract Act reads thus:

"230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.- In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bond by them. Presumption of contract to contrary.- Such a contract shall be presumed to exist in the following cases:-

(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident aboard;

(2) where the agent does not disclose the name of his principal;

(3) where the principal, though disclosed, cannot be sued."

5. Perusal of the above provision clearly shows that the agent cannot be saddled with personal liability. It is not the case of the plaintiffs that there was any agreement or express contract between the appellants and respondent Nos.1 and 2-plaintiffs or with the purchasers-defendant Nos.1 to 3 that the appellants would make payment of price of the goods in the event of failure of purchasers making the payment thereof and that is, in fact, nobody's case. However, attempt of Mr. Khapre, learned counsel for the respondents with reference to Exh.57, 59 and 60, to show that there was an implied contract is futile since having gone through the said documents, I find that the appellants have never made any contract for payment of price of the goods in any such eventuality but as a gesture of goodwill only communicated that they would make all attempts to make payment to the seller. The said documents do not show anything beyond that. That being so, in my opinion, the appellants cannot be held liable since their agreement was only to act as commission agent between the purchaser and the seller and not to make payment of the price. To sum up, the courts below could not have, therefore, passed any decree against the appellants and the decree could only be passed against the purchasers namely defendant nos.1 to 3-respondent Nos.3 to 5 herein who failed to pay the price of the goods purchased by them. The substantial question of law is, therefore, answered accordingly.

6. In view of above, I pass the following order.

ORDER

Second Appeal No.361/1999 filed by the appellants is allowed.

The judgment and decree dated 30.10.1991 passed by Jt. Civil Judge Senior Division, Gadchiroli in Special Civil Suit No.16/1987 and dated 17.07.1999 passed by Additional District Judge, Gadchiroli in Regular Civil Appeal No.1/1992 as against the appellants-defendant Nos.4 and 5 only, are set aside.

The decree, insofar as respondent Nos.3 to 5defendant Nos.1 to 3 is concerned, it is confirmed and the original plaintiffs are entitled to execute the decree against respondent Nos.3 to 5-defendant Nos.1 to 3.

No order as to costs."