O.C.J. Appeal No. 26 of 1932 and Suit No. 2374 of 1920. Case: Kaluram Bholaram Vs Chimniram Motilal. High Court of Bombay (India)
| Case Number | O.C.J. Appeal No. 26 of 1932 and Suit No. 2374 of 1920 |
| Judges | John Beaumont, Kt., C.J. and Blackwell, J. |
| Issue | Indian Contract Act (IX of 1872) - Section 216 |
| Citation | AIR 1934 Bom 86, 1934 (36) BomLR 68, 150 IndCas 467 |
| Judgement Date | October 03, 1933 |
| Court | High Court of Bombay (India) |
Judgment:
John Beaumont, Kt., C.J.
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This suit started as long ago as 1920. It was a suit brought by the plaintiffs, who claimed a sum of about Rs. 79,000 odd, as being due to them by the defendants, for acting as commission agents to the defendants to buy and sell piece-goods.
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The defendants in their written statement alleged that no proper accounts had been delivered, that the plaintiffs had committed various breaches of duty as agents, and the defendants said that they would pay what was due, but that the amount claimed by the plaintiffs was not due.
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In 1924 the matter was referred to the Commissioner for taking Accounts to take an account of the dealings and transactions between the parties. The matter proceeded before the Commissioner, or rather before three different Commissioners, for a period of five years; and on June 22, 1929, the Commissioner made his report. On July 11, 1929, the plaintiffs took out exceptions to that report; and on September 27, 1932, the learned Judge made his order allowing some of the exceptions and rejecting others. From that judgment, the defendant appeals.
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The learned Judge stated the facts, if I may say so, with admirable lucidity; and he formulated ten propositions of law, which he thought relevant to the case. Out of those ten propositions, the only ones which are challenged are Nos. 5, 7 and 8.
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The questions which arise between the parties relate to three sets of bales of cotton delivered by the plaintiffs to the defendants. In each case, the plaintiffs were instructed to buy goods for the defendants as agents for the defendants; and in each case the plaintiffs informed the defendants that goods had been purchased at prices named. In fact, as on the evidence is plainly admitted by the plaintiffs, no goods had been purchased on behalf of the defendants, and the subsequent deliveries of goods by the plaintiffs to the defendants in alleged pursuance of the various contracts of purchase were made out of the plaintiffs' own goods, although the prices charged were those at which the plaintiffs alleged they had bought goods for the defendants. The defendants were not informed that plaintiffs were supplying their own goods.
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The plaintiffs throughout the transactions between the parties seem to have treated themselves as being pakka adatias and not mere commission agents; and before the Commissioner they asked leave to amend their plaint by alleging that they were pakka adatias. That application on their behalf was rejected, as the Commissioner held that they could not change the case at so late a date, and the decision of the Commissioner was upheld by the Judge. In this Court, Mr. Coltman on behalf of the plaintiffs has contended that on the plaint as it stands, he ought to be at liberty to allege that the true position of the plaintiffs was that of pakka adatias. But, in my opinion, that contention cannot be allowed. The plaint not only does not use the technical words " pakka adatias ", the meaning of which was perfectly well understood at the date when this plaint was filed, but it has not set up any practice between the parties or any usage from which the position of the plaintiffs as pakka adatias can be inferred. Therefore, as it seems to me, we have to deal with this case on the basis that the plaintiffs were pure commission agents, and that they were not entitled to deal as principals with their own principals; and if that is so, it was clearly wrong for the plaintiffs to have supplied their own goods to the defendants, and it was even more wrong of them to have alleged that they had purchased goods on behalf of the defendants when in fact they had not so done.
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The defendants, having on the various dates of delivery received these goods and subsequently dealt with them, are not in a position to cancel the contracts and return the goods to the plaintiffs. The learned Judge's decision as to that has not been challenged. But the defendants claim that they are entitled to be paid the amount of any profits made by the plaintiffs in dealing with their own goods under Section 216 of the Indian Contract Act. Section 215 deals with the right of rescission; and then Section 216 is in these terms:
If an agent, without the knowledge of his principal, deals in the business of the agency on his own account instead of on account of his principal, the...
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