AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTARPRADESH

SUBMITTED BY SUBMITTED TO
KRITICA OJHA(01) MR.SURENDRANATH
SALONI JAIN(06)
JAYABHARATHREDDY M(22)
AMITABH KUMAR(24)
AMAN GANDHI(33)
AGENCY
• The contract which creates relationship of principal and agent is
called agency. An agent is involving party to the contract of agency. He
is merely connecting link. His authority can be revoked by the principal.
AGENT
• He is a person employed to do any act for another in dealing with
third parties.
APPOINTMENT OF AGENT
• According to sec. 183
"Any person who is of the age of majority according to the law to which
is subject, and who is of sound mind, may employ an agent.
WHO MAY BE AGENT
• According to Sec. 184 Contract Act
"As between the principal and third person, any person may become an
agent, but no person who is not of the age of majority and of sound mind
can become an agent, so as to reasonable to his principal according to
provisions in that behalf herein contained
RIGHTS OF AGENT

(I) RIGHT OF REMMUNERATION:

It is basic right of an agent.

(II) RIGHT OF COMMISSION:

He has also right of commission.

(III) RIGHT OF LINE:

An agent has right of line over goods until the payment in due is received
by him.

(IV) RIGHT TO RETAIN:

An agent has right to retain goods, papers and other property until the
amount due is paid.

(V) RIGHT OF COMPENSATION:

In case of injury caused to agent by the negligence of principal may be
compensated by him.

(VI) RIGHT TO BE INDEMNEFIED:

An agent has a right to be indemnified against liabilities falls on him.

(VII) RIGHT TO BE INDEMNIFIED AGIANST CONSEQUENCES

OF ACTS DONE IN GOOD FAITH:
He has right to indemnified against the consequences of act done in good
faith even though it causes an injury to the rights of third person.

(VIII) RIGHT OF STOPAGE OF GOODS IN TRANSIT:

He has right of stoppage of goods in transit.
DUTIES OF AN AGENT

(I) OBEY THE INSTRUCTIONS:

He should obey the instructions of the principal.

(II) CONDUCTING BUSINESS:

It is the duty of agent to conduct the business of principal.

(III) SHOWING OF ACCOUTNS:

He should maintain the accounts and show to principal on his demand.

(IV) RETURN OF UNDUE PROFIT:

If an agent has earned undue profit from the business he should return it
to principal.

(V) USE OF SKILL AND KNOWLEDGE:

Agent should perform his duties as much skill and knowledge as is
generally shown by ordinary prudence in similar business.

(VI) PAYMENT OF ALL SUMS:

He should pay all sums to his principal received on his account.

(VII) SEPARATE ACCOUNTS:

He should not mix his account with the principal and maintain separate
accounts.

(VIII) DUTY IN CASE PRINCIPAL DIE OR BECOME INSANE:

He should protect the interest of legal heirs.
(IX) NOT TO DELEGATE AUTHORITY:
He should not delegate his authority to any other.

(X) DUTY TO COMMUNICATE WITH PRINCIPAL:

He should give all information to principal about the
matters of business.

(XI) SHOULD NOT MAKE ANY SECRET PROFIT:

He should not make any secret profit.

(XII) PERFORMANCE WITH HONESTY:

He should deal the business honestly. If he conducts the business
dishonestly then he is not entitled to receive the reward of his services.

CONCLUSION
To conclude we can say that. An agent is authorized to create a contract
between his principal and third party. An agent can be sued on his
personal liabilities and the authority of an agent can be revoked.
 CASES:-

Arunachalam Chettiar vs Kasi Nevenda

Pillai, Agent Of ... on 13 April, 1914

Equivalent citations: 24
Ind Cas1007

Arunachalam Chettiar vs Kasi Nevenda Pillai, Agent Of Messes. Ralli

Brothers And Anr. on 13/4/1914

JUDGMEN
Sadasiva
Aiyar ,
1. The Subordinate Judge mistaken in saying that Exhibits V Series VI
Series, VII Series and VIII Series mention Ralli Brothers as the other
contracting party they mention Messrs. Agence Ralli Freres" winch 1 take
to mean " The Agents of Ralli Brothers."

2. Probably they mean the Agents at Pondicherry of whom the 1st

defendant alleges that he is only a sub-agent (para-graph 6).

3. The lower Court's finding on the 4th issue cannot be accepted as it is

vitiated by its misreading of these documents he is requested to give a
revised finding after considering the question whether he is merely a
sub-agent of the Pondicherry Agency and whether, if the contract was
with the Pondicherry Agency, the 1st defendant will evidence (if any) on
the record as to the 1st defendant's undertaking to be personally liable
before coming to his conclusions. 4. He will also give a finding on the 3rd
issue.

4. The time for the submission of the finding will be one month from the
date of the receipt of the records Seven days will be allowed for filing
objections in compliance with the order contained in the above
judgment, the Suboridante Judge of Tanjore submitted the following

FINDINGS.--The above suit has been remanded for a revised finding on

the evidence on record on the 4th point and for a finding on the 3rd point.

2. 4th point--First defendant in paragraph 6 of his written statement says

that he is merely the sub-agent of Messrs. Ralli Brothers at Patukota. In
his deposition as his witness, he swears that he was appointed sub-agent at
Patukota by the chief agent of Messrs. Ralli Brothers at Pondicherry.
Exhibit I is a letter written by one of plaintiff's Kariasthans apparently to
the 1st defendant, in which he is described as the sub-agent of messrs.
Ralli Brothersat Patukota. Exhibits Viii and oracle are day book and ledger
maintained by the 1st Patukota by the chief agent of Messrs. Ralli
brothers at Patukota. Exhibits VIII and VIIa are day-book and ledger
maintained by the 1st described as the sub-agent of Messrs. Ralli
Brothersat Patukota. Exhibits VIII and VTTT are day-book and ledger
maintained by the 1st defendant. They are described as the accounts of
Messrs. Ralli Brothers' sub agency at Pattukota. These documents
corroborate 1st defendant's statement that he is only a sub-agent. I hold,
therefore that 1st defendant was only a sub-agent appointed by the chief
agent of Messrs. Ralli Brothers at Pondicherry.
3. Exhibits V, Va and Vb are the sale memos relating to the contracts in
question. They were executed by the
2nd defendant (alleged agent of the plaintiff) to the agent of messrs. Ralli
Brothers at Pondicherry Exhibits VII VIIa and VIIb are memos' of
accounts relating to the said contracts" and it is stated in them that they
are accounts of 2nd defendant with the agent of Messrs. Ralli Brothers at.
Pondicherry. It is, therefore, clear that the agent of Messrs. Ralli Brothers
at Pondicherry was in writing made the contracting party and that the
contracts in question were made" directly in his name.

4. The plaintiffs Pleader here has not pointed out to mo any authority to
show that in the circumstances of the ease, 1st defendant is personally
liable for the plaint claim. He merely relies on the statement of the
plaintiff made in his deposition as his 1st witness that he looked to 1st
defendant for payment of the money due in respect of these contracts.
These contracts were entered into, not by the plaintiff personally, but by
the 2nd defendant. In the plaintiff's accounts, Exhibits A" Series, no
mention is made of 1st defendant's name in any place, but it is shown in
them, that the dealings are with Messrs. Ralli Brothers, Patukota. The
plaintiff's statement in the light of documents in the ease appears
improbable and .1 do not believe it. I hold that the contracts in question
were with the agent of Messrs. Ralli Brothers at Pondicherry and that the
1st defendant did not undertake to he personally liable to the plaintiff for
the money alleged to be due in respect of the said contracts.

5. Section 192 of the Indian Contract Act lays down that the sub-agent is
responsible for his acts to the agent but not to the principal, except in
ease of fraud or wilfulness. Section 230 does not in terms apply to
sub-agents. ]f the agent of Messrs. Ralli Brothers at Pondicherry is to be
treated as the principal and the sub-agent (1st defendant) as his agent at
Patukota, the principle of the decision reported in Tutika Basavaraju v.
Parry & Co. 27 M. 315. applies. I find the 4th point against the plaintiff and
in favour of the 1st defendant.

6. The second defendant does not put in his appearance either in person or
by a Pleader. The plaintiff's Pleader and the 1st defendant's Pleader hero
put in mamos asking me not to give any finding on the 3rd point and I,
therefore, record no finding.

5. This petition coming on for final hearing yesterday and this day after
the return by the lower Court of the findings on the issues referred by this
Court of trial, the Court delivered the following

6. When this case came on before me on the 31st October 1912, the
interested respondent (1st defendant) did not appear and I called for a
revised finding, believing in the light of the argument of the petitioner's
Vakil that a French expression used in Exhibits V Series et cetera meant
: The Agents of Ralli Brothers." The respondent's learned Vakil now tells
mo that that expression has the meaning, "The Agency business carried on
by the Firm of Ralli Brothers." I am not quite sure that a respondent, who
did not appear when an appeal or a revision petition was called on or
argued on the first day of the hearing, can afterwards appear as of right
and claim to be heard at later stages of the case without the permission of
the Court. However, I shall allow him to appear, assuming that such
permission is required.

7. It is unnecessary to consider the meaning of that French expression

further, for, whether the defendant is a sub-agent under the agent of Ralli
Brothers or is an agent directly of the Firm of Ralli Brothers, the contract
with plaintiff, was in writing, and, according to the ruling in Tutika
Basavaraju, v. Parry & Co. 27 M. 315. the presumption raised under
Section230 of the Indian Contract Act is rebutted by the fact that the
contract is made in the name of the 1st defendant's principal (whoever he
may be) and not of the 1st defendant.
8. As regards the Subordinate Judge's refusal to add Ralli Brothers as
defendants, it is too late to add them now, having regard to Section 22 of
the Indian Limitation Act.

9. The petition is dismissed with only half of the 1st defendant's costs, as
the lst defendant's failure to appear on the first occasion has unnecessarily
delayed the disposal of this case.