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Discussed
2
Disposition:
Appeal Dismissed
JUDGMENT
Seth, J.
1. This First Appeal by plaintiff. Seth Raghunath Prasad is directed
against the decree of the Civil Judge, Agra (who was also
exercising powers of Judge, Small Cause Court. Agra) dated 2-61956, dismissing his suit.
option but to file the suit which has given rise to the present
appeal.
5. The defendant contested the suit and alleged that it never had
any dealing with plaintiff Raghunath Prasad. According to it, to
begin with the defendant received a letter from Lala Amar Nath,
brother of the plaintiff on 18-10-1944, saying that Lala Amar Nath
had been trading under two different names i.e. Makhan Lal
Radhey Lal and Makhan Lal Narain Dass and that he wanted all
his transactions to be carried on under the aforementioned two
names. Subsequently, Lala Amar Nath instructed the defendant to
put down another set of transaction in the name of Ram Narain
Agarwal. As the defendant did not have any transaction with Seth
Raghunath Prasad, he was not liable to render any account to him
and that the suit for accounting filed by him was not maintainable.
Firm Sewa Ram Tikam Dass was a joint Hindu family firm of
which Tikam Dass Sewa Ram was the 'Karta', and that the said
firm had been wrongly. impleaded through Seth Ram Chand son of
Tikam Dass Sewa Ram. The defendant, further pleaded that the
transactions between Lala Amar Nath, carrying on business in the
assumed name of Makhan Lal Radhey Lal, was settled at Bombay
and that the accounts as between the parties were also to be settled
at Bombay. It, therefore, claimed that the Agra Court had no
jurisdiction to try the suit. The defendant denied that it had at any
stage agreed to, as claimed by the plaintiff, reduce the commission
chargeable by it, and asserted that the transaction entered into by it
on 19-3-1945 was fully authorised. On correct accounting a sum of
Rs. 2,59,876-6-6 only was due from it to Makhan Lal Radhey Lal
which it remitted by means of cheque in full and final settlement of
its liability. Now as the said cheque has been cashed, it is not open
to any one to claim any account from the defendant.
6. On the pleadings of the parties, the trial court framed a number
of issues, some of which including the issue with regard to the
jurisdiction of Agra Court to try the suit, were not pressed by the
concerned parties. After going through the evidence produced in
this case, the trial Court held, that the transactions in question had
been entered into between Lala Amar Nath acting on his own
behalf and not on behalf of the plaintiff, and the defendant acting
as kuccha arhtia on terms and conditions mentioned in the plaint,
and that there was no subsequent agreement between the parties for
reduction of the commission payable to the defendant. After taking
into consideration the correspondence between the parties, the trial
court came to the conclusion that no further amount was due from
the defendant. In the result, it dismissed the suit, but in the
circumstances of the case it declined to make any order with regard
to costs.
7. At the hearing of this first appeal, learned counsel for the
respondent requested us to, before touching any other controversy
raised by the parties, deal with following two questions:-1. Whether there was any privity of contract between the plaintiff
and the defendants entitling him to claim accounts in respect of
transactions which had been entered into in the name of Makhan
Lal Radhey Lal and,
2. Whether after the plaintiff Lala Amar Nath had cashed the
cheque sent to him in full and final settlement of his claim, he can
still maintain a suit for accounts.
As according to him if the answer to either of the two questions
mentioned above goes in defendant's favour, it will not at all be
necessary to go into any other question involved in the appeal,
Learned counsel for the appellant did not object to this and
addressed us on the aforementioned two questions.
The agent is responsible to the principal for the acts of the subagent.
The sub-agent is responsible for his acts to the agent, but not to the
principal, except in case of fraud or willful wrong."
Accordingly even if, it might be possible for the third parties, with
whom the defendant had entered into the transactions, to file a suit
against the plaintiff, the plaintiff cannot seek any relief against the
defendant who is answerable to Lala Amar Nath alone.
14. A perusal of Sections 192 and 226 of the Contract Act shows
that whereas Section 192 defines the rights and obligations as
between the principal, agent, sub-agent and the third parties in
respect of a transaction entered into through a sub-agent, Section
226 deals with the case where a transaction is entered into between
two principals through an agent but without the intervention of a
sub-agent.
15. According to Sri Jagdish Swarup, the defendant was puccka
arhtia, and as such the dealings between it and the plaintiffs were
as between two principals through the agency of Amar Nath. The
instant case therefore, was covered by Section 226 of the Contract
Act and the plaintiff could sue and claim accounting from the
defendant.
16. Contention of Sri Swami Dayal, teamed counsel for the
defendant, on the other hand, is that the defendant had entered into
the transactions in question, as a cutcha arhtia appointed by Amar
Nath. His position was that of a sub-agent and the case was
squarely covered by Section 192 of the Contract Act where-under
the defendant has not at all been made responsible for his acts, to
the plaintiff.
17. Crucial question therefore, that arises for consideration is
whether in this case the defendant entered into the transactions
with Lala Amar Nath as a puccka arhtia or in his capacity of a
cutcha arhtia. The incidence of a cutcha arhtia vis-a-vis an upcountry constituent has been described by their Lordships of Privy
Council in the case of Sobhagmal Gianmal v. Mukundchand Balia
AIR 1926 P C 119 thus :-"There is no dispute that as regards cutcha arhtia transaction the
course of business and the relative positions of the parties are as
follows: when a cutcha arhtia enters into transactions under
instructions from and on behalf of his up-country constituent with
a third party in Bombay he makes a privity of contract between the
third party and the constituent, so that each becomes liable to the
other; but also he renders himself responsible on the contract to the
third party. He does not ordinarily communicate the name of his
constituent to the third party, but he informs the constituent of the
name of the third party. The position, therefore, as between himself
and the third party, is that he is agent for an unnamed principal
with personal liability on himself. His remuneration consists solely
of commission, and he is in no way interested in the profits or
losses made by his constituent on the contract's entered into by him
on his constituent's behalf."
The difference between a cutcha arhtia and puccka arhtia was very
clearly brought out by Agarwala, J. in the case of Sheo Narain v.
Bhallar, MANU/UP/0132/1950 : AIR1950All352 thus:--
commission and that it had nothing to do with the profits and loss
accruing as a result of those transactions. The terms and conditions
on which the defendant had been appointed as a commission agent
as disclosed in the plaint, clearly indicate that the position of the
defendant could not be that of a puccka arhtia. In our opinion the
terms and conditions enumerated in the plaint are indicative of the
fact that the defendant was to act as a kutcha arhtia and not as a
puccka arhtia.
20. Sri Jagdish Swarup, learned counsel for the appellant, relying
upon certain observations made by the Privy Council in the case of
Sobhagmal Gianmal v. Mukundchand Balia (supra) urged that if
the defendant had been acting as a cutcha arhtia he would have
disclosed the names of the persons with whom he had entered into
the transactions on behalf of the plaintiff to the plaintiff. He invited
our attention to certain bijaks and contended that the name of the
person with whom those transactions had been entered into had not
been disclosed therein, and as such the defendant cannot be
considered to be a cutcha arhtia. The Privy Council in the case of
Sobhagmal Gianmal v. Mukundchand Balia (supra) while, taking
notice of the fact that in Bombay a cutcha arhtia does not
ordinarily communicate the names of his constituent to the third
party but it observed that he informs the constituent about the
name of the third party with whom he enters into such transaction.
The question whether in the instant case, the defendant had been
informing Lala Amar Nath about the names of the third parties
with whom he had been transacting, is essentially a question of fact
which had to be pleaded and proved by the plaintiff. The plaint
neither contains an averment that the defendant was a puccka
arhtia nor does it contain any allegation indicating that in its
dealing with third parties the defendant was not informing their
names either to the plaintiff or to Amar Nath.
Sri Jagdish Swarup, invited our attention to certain bijaks sent by
the defendant which do not disclose the names of the third parties
and urged that this shows that the defendants were not expected to
disclose the names of such third parties to the plaintiff and that it
could not be considered to be of a cutcha arhtia. There are a
number of documents on the record, namely, Ext. 108 dated 31-101944, Ext. 111 dated 26-6-1945. Ext. 112 dated 3-7-1945, Ext. 478
dated 20-7-1945, Ext. 103 dated 17-8-1945, which shows that the
defendant had been mentioning the names of the parties with
which it had been dealing on its constituent's behalf. If the
defendant had been acting as a puccka arhtia, there was no point in
its indicating the names of the third parties to its constituent. In
view of the terms and conditions on which the defendant had been
employed as a commission agent, as disclosed in the plaint, as also
the fact that the defendant had been indicating the names of the
third parties with which it had entered into the transactions on
behalf of its constituent, its position vis-a-vis Amar Nath could not
be anything else but that of a cutcha arhtia. Consequently, if Lala
Amar Nath had employed the services of the defendant as a cutcha
arhtia for carrying on the business on behalf of the plaintiff, the
position of the defendant was that of a sub-agent and the case
would be covered by Section 192 and not Section 226 of the
Contract Act. As a sub-agent, the defendant is not answerable to
the plaintiff.
21. Accordingly, in any view of the matter, the plaintiff is not
entitled to seek any relief from the defendant.
22. In this view of the matter, it is not necessary for us to express
any opinion either on the 2nd question on which learned counsel
for the parties made their submissions before me or on any other
controversy that had been raised in the suit.
23. Before parting with the case, we may, observe that Sri Swami
Dayal did not advance any arguments in support of the crossobjection filed by him.
24. In the result, both the appeal and the cross-objection fail and
are dismissed with costs.