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Kapurji Magniram Vs. Pannaji Devichand - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Case NumberFirst Appeal No. 246 of 1925
Judge
Reported in(1928)30BOMLR1560; 113Ind.Cas.341
AppellantKapurji Magniram
RespondentPannaji Devichand
Excerpt:
.....reliable evidence that defendant no. 4 that the plaintiffs' manager asked him to enter it in the name of kapurji magniram, though the other firm was concerned, is clearly untrustworthy, and there is no other evidence of such disclosure. , sitting as a single judge, and dealing with this presumption, held that the knowledge, and not the source of it, was the main thing and that the presumption would not operate when such knowledge was obtained from other sources as well as when it was derived from the mouth of the agent. i am not satisfied that the plaintiff firm had no right to bring the suit as framed. 7. as to costs, we think that in the circumstances the proper order to pass will be that the parties should get their costs throughout, in proportion to their respective success, that..........is conceded that there was an arrangement come to between the two firms, viz., plaintiffs' firm by name kapurji magnirain and the other firm devaji narshingji, and that the joint concern was known as devaji kapurji. but it is denied by the plaintiffs that the business in suit was business of that joint concern; and in the plaintiffs' counter-statement (exhibit 37) it is stated that the connection between the two firms was merely a sort of pooling arrangement, under which the two shops were each to transact business and to render an account of that business to the other firm, so that the profits and losses resulting from such business would be divided between the two. very little evidence has been given as to the exact arrangement between the two firms. in cross-examination the.....
Judgment:

Fawcett, J.

1. The first point that I shall deal with is the legal point, because if it is decided in favour of the defendant's contentions then clearly it would be unnecessary to go into the dispute between the parties as to the accounts. It is conceded that there was an arrangement come to between the two firms, viz., plaintiffs' firm by name Kapurji Magnirain and the other firm Devaji Narshingji, and that the joint concern was known as Devaji Kapurji. But it is denied by the plaintiffs that the business in suit was business of that joint concern; and in the plaintiffs' counter-statement (Exhibit 37) it is stated that the connection between the two firms was merely a sort of pooling arrangement, under which the two shops were each to transact business and to render an account of that business to the other firm, so that the profits and losses resulting from such business would be divided between the two. Very little evidence has been given as to the exact arrangement between the two firms. In cross-examination the plaintiffs' manager was only asked a few questions about it, and it was elicited that the joint concern had no capital. There was also a dispute as to whether this joint concern kept any separate accounts or whether there was merely a Khata of the transactions, in which the two concerns were interested, kept in the plaintiffs' account books. The actual document, if it exists, under which this concern was established is not before us. Therefore, it is rather difficult to decide exactly what the arrangement is. But, so far as the probabilities go, it seems to me that the statements that the plaintiff made in Exhibit 37 as to its nature are probably true, and that it was in fact a sort of pooling arrangement very similar to the one that was entered into between the defendants and Devichand Amirchand and some other people under the document, Exhibit 79. It may be noted in this connection that when the defendants were suing some other people in Bellary, there was an objection raised of the same kind, namely that the plaintiff's in that case 1928 were not entitled to bring the suit as they had other partners, and the defendants' answer was that the four partners in the shop called Pannaji Devichand were the partners responsible for the transaction in suit and that the others were not concerned. It seems to me that this objection is one that is merely raised in order to delay or hinder the plaintiffs' rights, if any, and that it is not one raised on a substantial basis. Even supposing that the agreement between the two firms amounted to an actual partnership, there is no absolute rule of law that one partner of a firm cannot sue for a debt that is due to the firm. As long ago as 1861 it was laid down by the Privy Council in Agacio v. Forhes (1861) 14 M.P.C. 160 that a partner with whom a contract had been personally made was entitled to sue upon that contract in his own name without joining the co-partners as plaintiffs, although the benefit of the contract would result to the partnership firm: and that is really an illustration of the well recognised rule that an agent having an interest in the contract which he has entered into on behalf of his principal is entitled to sue in his own name. The cases that establish that proposition will be found in Pollock and Mulla's Indian Contract Act, 5th Ed,, p. 722; and among other cases where it has been recognised may be cited, Subrahmania Fattar v. Narayanan Nayar I.L.R(1900) Mad. 130 and Coorla Mills v. Vallabh-das : AIR1925Bom547 . In the present case, it is admitted that the defendants in fact entered these transactions in their accounts as being transactions with the plaintiffs' firm Kapurji Magniram. The excuse given is that the plaintiffs' manager asked him to do this but that is an explanation which is obviously open to suspicion. In the plaintiffs' accounts too they are entered as transactions of Kapurji Magniram. I quite agree with Mr. Thakor that there is a considerable amount of evidence which points to these transactions being transactions which came within the scope of the joint concern known as Devaji Kapurji. But that does not prevent the principle that I have already mentioned from applying. The firm Kapurji Magniram was, so to speak, the managing partners or agents in regard to these particular transactions. They were the people who directly entered into the business transactions with the defendants and both parties treated the transactions accordingly. The fact that on some occasions the manager of the other firm Devaji Narshingji was present and made entries in plaintiffs' account-books is not sufficient to show the contrary. In my opinion, therefore, the case is one which falls under the rule that an agent having an interest in the contract can sue in his own name. The case also, in my opinion, falls under the rule laid down in Section 230 of the Indian Contract Act that, where the agent does not disclose the name of his principal, there shall be presumed a contract by which he can personally enforce the contract entered into by him on behalf of the principal. There is no reliable evidence that defendant No. 4 did actually disclose the name of the firm Devaji Kapurji as being the principal in the business transactions. I think the evidence of defendant No. 4 that the plaintiffs' manager asked him to enter it in the name of Kapurji Magniram, though the other firm was concerned, is clearly untrustworthy, and there is no other evidence of such disclosure. It may be true that defendant No. 4 knew from other sources that there was this joint concern and that the transactions in suit were of a kind that would fall -within the scope of that joint concern, but that does not suffice to bring the case outside the words 'where the agent does not disclose the name of Ms principal.' It is true that in Mackinnon, Mackenzie & Co. v. Lang, Mow & Co. I.L.R (1881) Bom. 584 West J., sitting as a single Judge, and dealing with this presumption, held that the knowledge, and not the source of it, was the main thing and that the presumption would not operate when such knowledge was obtained from other sources as well as when it was derived from the mouth of the agent. But that decision was made without any reference to the terms of Section 230 of the Indian Contract Act. It is not referred to by West J., and the authority of that decision has been considerably weakened by the subsequent case of Lahshmandas v. Anna I.L.R (1904) Bom. 356, : 6 Bom. L.R. 731 where Sir Lawrence Jenkins C.J. and Mr. Justice Batchelor held in regard to the next Section 23 L that a principal could not be said to disclose himself within the meaning of that section, if the other party got knowledge about him not from the principal himself but from some other source. The language of Batchelor J, at p. 362 about the section using the words 'discloses himself' and not any such words as 'is disclosed' or 'appears upon the scene' is appropriate to the similar words in Section 230 that I am considering.

2. Therefore, in my opinion, there was no absolute obligation upon the plaintiffs to join the other firm Devaji Narshingji as a party in this suit. It was of course open to the Court under Order I, Rule 10, Civil Procedure Code, to say that though it is not an absolutely necessary party, it is desirable that they should be joined, having regard to the circumstances of the case. But, in the present case, I do not think that there are any adequate grounds for this Court taking up that attitude. There is nothing to indicate that there is any dispute between the two Fawcett firms, or that the plaintiffs are suing the defendants without their knowledge and consent, so far as this other firm has an interest in the result of these transactions. As I have already said this is merely a plea set up in order to try to delay and hinder the plaintiffs' right, just as similar contentions appear to have been raised against the defendants in the Bellary litigation. In my opinion, therefore, the lower Court was wrong when it held that the plaintiffs alone could not be allowed to sue for the balance due, and I hold that the plaintiffs have a right to sue-[The remainder of the judgment is not material to the report.]

Murphy, J.

3. [His Lordship, after dealing with the facts of the case, continued :] The only remaining question agitated in the appeal is the plaintiff' firm's right to sue in the form it has adopted. The defendant firm's contention was that the transactions in question were not with the firm Magniram Kapurchand, but with that of Devaji Kapurji; the firm composed of Magniram Kapurchand and Devaji Narsingji, and that the firm of Devaji Kapurji alone could sue, or was at least a necessary party. This contention has been accepted by the learned Subordinate Judge, who states that plaintiff alone, being one of the partners of the joint firm, cannot be allowed to sue alone. No separate accounts of the joint firm are available though they are alleged to exist. The explanation is that it was mere arrangement to pool the profits and losses of the two firms composing it, and that it had no capital and no separate transactions of its own: and that this was the reason that it was represented by a 'khata' in Magniram Kapurchand's accounts. The defendant firm, and the firm Exhibit 79, seem to have had a very similar arrangement and that joint firm traded in the name of the defendant firm. I am not satisfied that the plaintiff firm had no right to bring the suit as framed. Though defendant Dhuraji has stated that he knew he was trading with the composite firm, his own books show the transactions as having been with Magniram Kapurchand-vide Exhibit 90, item No. 1 of Rs. 8,775-2-0. On the same page is an entry in the name of the other member of the composite firm, Devaji Narsingji of Rs. 19,242 6-0 and both entries are in respect of differences.

4. I think that on the facts the transactions were essentially with the firm of Magniram Kapurji and not with the joint firm Devaji Kapurji, and from these facts, and also the reasons given and on the strength of the authorities quoted by my learned brother Fawcett J., in his judgment, that the plaintiff firm can sue for these amounts. As a result, my findings are that it has not been proved that the payment of the sum of Rs. 18,000 was made to Amichand on behalf of the defendant firm and that plaintiff is not entitled to have this sum taken into account; but that the defendant firm have not shown that nothing is due from them for the payment of Rs. 28,000 on the grounds pleaded, and that the plaintiff firm is consequently entitled to have this amount taken into account.

5. I, therefore, think that the original Court's order should be varied and I concur in the one proposed to be made.

6. Per Ceriam. It is agreed by the pleaders for the parties that on the above basis the amount actually due by the defendants to the plaintiffs at the date of the suit comes to Rs. 2,488-0-6, We accordingly pass a decree for the payment of that sum by the defendants, with interest thereon at six per cent, from date of suit till payment.

7. As to costs, we think that in the circumstances the proper order to pass will be that the parties should get their costs throughout, in proportion to their respective success, that is to say, the plaintiffs will get the proportion of their costs that is represented by the fraction, Rs. 2.488 plus interest from date of suit till to-day over the sum of Rs. 23,621, and the defendants will have their costs throughout in the proportion of the difference of the above numerator from I over the sum of Rs. 23,621.


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