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Rameshar Lal Bisheshar Lal Vs. JainaraIn Nathu Ram and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad
Decided On
Reported inAIR1934All960; 153Ind.Cas.224
AppellantRameshar Lal Bisheshar Lal
RespondentJainaraIn Nathu Ram and ors.
Excerpt:
.....and the defendants first party was not of an assignment of the plaintiff's contract with the jhusi sugar mills, but a contract for the sale of a fixed quantity of gur by the defendant to the plaintiff and as such the plaintiff was not entitled to receive anything from the defendants first party. it went on to say that the defendants second party received the price of gur from the jhusi mills at the direction of plaintiffs who clearly treated them (defendants second party) as their own agent without making defendants first party intermediaries and this fact exonerates defendants first party from all liabilities, specially when defendants second party have by a compromise entered into between them and the jhusi mills received the price of the gur supplied to the mill. the lower..........2. his case was that in the beginning of january 1927, he entered into a contract with the krishna sugar works jhusi, allahabad, for the supply of 2,500 maunds of gur at the rate of rs. 5-4-0 per maund. the plaintiff on 26th january 1927, arranged with hari ram-parshottam das either for the supply of this quantity of gur to jhusi sugar mills at the rate of rs. 4-14-0 per maund or arranged for the purchase of this amount of gur from them at the rate of rs. 4-14-0 per maund. in the plaint it is stated that jthe plaintiff sold his contraot with the jhusi sugar works to the defendants first party. about the same time harj ram-parshottam das entered into an shar lai for the supply of the said quantity of gur at rs. 4 ll-7i per maund. here again in the plaint it is stated that the defendants.....
Judgment:

Bajpai, J.

1. This is an appeal by firm Rameshar Lal-Bisheshar Lai, defendant 2, against whom a suit of the plaintiff firm Jainarain Nathu Ram has been decreed by the Courts below. As a great deal has been said before me in the course of arguments-regarding the pleadings, I propose to set them forth in some detail. The plaintiff impleaded firm Hari Ram and Parshottam Das as defendant 1 and firm Rameshar Lal-Bisheshar Lai, as defendant 2. His case was that in the beginning of January 1927, he entered into a contract with the Krishna Sugar Works Jhusi, Allahabad, for the supply of 2,500 maunds of gur at the rate of Rs. 5-4-0 per maund. The plaintiff on 26th January 1927, arranged with Hari Ram-Parshottam Das either for the supply of this quantity of gur to Jhusi Sugar Mills at the rate of Rs. 4-14-0 per maund or arranged for the purchase of this amount of gur from them at the rate of Rs. 4-14-0 per maund. In the plaint it is stated that jthe plaintiff sold his contraot with the Jhusi Sugar Works to the defendants first party. About the same time Harj Ram-Parshottam Das entered into an shar Lai for the supply of the said quantity of gur at Rs. 4 ll-7i per maund. Here again in the plaint it is stated that the defendants first party sold their rights in respect of the aforesaid contract which they had acquired from the plaintiffs to defendants second party and made them liable as their representatives foe the supply of the gur aocording to the terms of the aforesaid contract.

2. It is then alleged that the gur was supplied to the Jhusi Sugar Works, but the defendants did not pay profits at the rate of six annas per maund to the plaintiffs and the plaintiffs therefore prayed for a decree against either of the defendants. Both the defendants filed written statements, defendant 1 claimed exemption on the ground that he had not received anything from the Jhusi Sugar Works because the plaintiff in collusion with the defendants second party instructed the Jhusi Mills to pay the price of the goods in question directly to defendants second party. He also alleged that there was no assignment of contract, but the plaintiffs purchased gur from him and as such the seller, namely, the defendant and not the purchaser, namely the plaintiff, was entitled to receive some money. Defendants second party alleged that no cause of action accrued to the plaintiff against them inasmuch as no contract was enter, ed into between these defendants and the plaintiff. This was the main plea taken in the written statement and perhaps the only plea and the meaning that can be assigned to it is that the defendants second party claimed exemption on the ground that there was no privity of contract between them and the plaintiff.

3. The Court of first instance in an excellent judgment came to the conclusion that the contract between the plaintiff and the defendants first party was not of an assignment of the plaintiff's contract with the Jhusi Sugar Mills, but a contract for the sale of a fixed quantity of gur by the defendant to the plaintiff and as such the plaintiff was not entitled to receive anything from the defendants first party. It went on to say that the defendants second party received the price of gur from the Jhusi Mills at the direction of plaintiffs who clearly treated them (defendants second party) as their own agent without making defendants first party intermediaries and this fact exonerates defendants first party from all liabilities, specially when defendants second party have by a compromise entered into between them and the Jhusi Mills received the price of the gur supplied to the Mill. As regards defendants second party it came to the conclusion that the plaintiffs were entitled to the sum olaimed from the defendants second party inasmuch as the latter had received the price from the Jhusi Sugar Works upon a letter of authority given by the plaintiff to defendants second party and it did not matter that the latter had per-haps not received the full amount from the Jhusi Sugar Works. The question of privity of contract was not discussed at length by the Court of first instance. The lower appellate Court confirmed the decree of the Court of first instance exempting defendants first party although the plaintiff claimed a decree against defendants first party as well. The lower appellate Court was of the opinion that the proper issue in the case upon the question of the amount of money received by defendants second party from the Jhusi Sugar Works was did defendant 2 not get full price of the gur from the Jhusi Mills

and it came to the conclusion that the defendant had not been able to prove that he did not receive the full price of the gur from the Jhusi Sugar Works simply by showing that his suit against the Jhusi Sugar Works was compromised. The defendant second party has come up in second appeal and the plaintiff has filed cross-objections. The case of the defendants second party is that he is not liable to the plaintiff and that in any view of the case the plaintiff cannot be entitled to anything in excess of what was actually realised by the appellant. The plaintiff has filed cross-objections and reiterates the plea that he is entitled to a decree against defendants first party as well. There is also a plea that the plaintiff was entitled to interest as awarded by the trial Court against defendants second party. I propose to decide the cross-objections first. As I stated in the very beginning that although the case of the plaintiff was that the contract between him and the Jhusi Mills was assigned to the defendants first party yet the case of the defendants first party was that there was no assignment of such a contract, but the documentary evidence on the record shows that the plaintiff entered into a contract of purchase of a quantity of gur from the defendants first party.

4. The correspondence between the two as contained in two letters Ex. A-l and Ex. 3, makes it quite clear that the plaintiff arranged to purchase the gur from the defendants first party at the rate of Rs. 4-14-0. It is clear therefore that the plaintiff is not entitled to any amount from defendants first party. I am prepared to hold against the plaintiff on this short ground, but even if it be held that there was an assignment of contract then the plaintiff neither is equity nor in law is entitled to any amount from the defendants first party. The plaintiff by means of a letter dated 18th April 1927 (Ex. D-1), authorised the defendants second party to supply gur to the Jhusi Sugar Works and directed the mills to pay the price of the gur to defendants second party. Under these circumstances the plaintiff has no claim against the defendants first party. The lower appellate Court has disallowed interest against defendants second party on the ground that no demand was ever made. I am also of the opinion that under the circumstances of the present case the plaintiff should not be given any interest against defendants second party. Coming to the appeal of the defendants second party the grounds of appeal as well as the entire argument before me proceed on the basis: (1) that there was no privity of con-tract between the plaintiff and the defendants second party; (2) that in law a contract; could not be assigned, and (3) that the burden lay on the plaintiff to prove as to what amount the defendants second party had received from the Jhusi Sugar Works. Neither in the written statement now before me was it argued that the position of the defendants second party was that of a vendor of goods and as such they were entitled to receive something from either the plaintiff or defendants first party and not the plaintiff from the contesting defendants. It is not necessary therefore for me to discuss as to whether upon this ground the plaintiff's suit should be dismissed against defendants second partly. I have however to decide the question whether in law there could be an assignment of the plaintiff's contract with the Jhusi Sugar Mills to defendants second party. It was said that there is no section in the Contract Act, which deals with the assignment of rights and benefits under a contract, but even if it is so there is nothing in the Indian law which prohibits the assignment of such contracts and in any event the rule of English law would be applicable. No authority has been cited before me which would go to show that an assignment of such a contract is illegal. In the case of Jaffer Meher Ali v. Budge Jute Mills Co. 33 Cal 702, it wan held that the right to claim the benefit of a contract for the purchase of goods is a beneficial interest in moveable property within the definition of actionable claim in Section 3, T.P. Act, and as such assignable. I am therefore of the opinion that there is no force in the contention that the plaintiff's contract with the Jhusi Mills could not be assigned to the defendants second party.

5. The next question which calls for consideration is whether there was any privity of contract between the plaintiff and the defendants second party. It was argued that the appellant is a stranger to the contract and even though he may have undertaken the liability to pay something to the plaintiff in a contract entered into between him and defendants first party no consequent right accrues to the plaintiff to realize that benefit from defendants second party in a suit brought by the] plaintiffs. It is true that in certain cases it has been held that where all the parties are before a Court there is nothing in law which would prevent the Court from adjusting the equities of the parties, but the correct rule seems to be that where on a contract between two persons one of them agrees to pay a sum of money to a stranger and no more circumstances appear the person who was to receive that sum of money from the contracting party cannot sue the person who has taken the liability to pay the money though all the parties to the contract are parties to the suit. This is the general rule though some exceptions to the rule arise under certain circumstances for example: (a) where the person who has taken the liability agrees to pay the beneficiary direct or becomes estopped from denying his liability to pay him personally; (b) where the original contract creates a trust in favour of the stranger; (o) where the contract charges the money to be paid out of the same immoveable property or (d) where this is due to the stranger under a marriage settlement, partition or other family arrangement.

6. This was the view taken by a Pull Bench of the Madras High Court in the case of Subbu Chetti v. Arunachalam Chettiar 1930 Mad 382, and I am in complete agreement with this view. I have got therefore to see whether in addition to the fact that all the parties are before the Court there are ciroumstances in the present case which would entitle me in giving a decree to the plaintiff against defendants second party or whether the defendants second party have estopped themselves from alleging that there is no-liability of them. I have already said that the plaintiff wrote a letter to the Jhusi Mills to receive the gur from defendants second party and to pay the price to them. It was upon the basis of this authority that the Jhusi Mills accepted the gur from defendants second party. It was again upon the basis of this authority that the defendants second party sued the Jhusi Mills on the basis of a contract entered into between the plaintiff and the Jhusi Sugar Works. I have got upon the record of this case a copy of the plaint filed by the defendants second party against the Jhusi Sugar Works in which the claim was laid not at the rate of Rs. 4-11-7J, but at the rate of Rs. 5-4-0 per maund. These circumstances point indubitably to the fact that defendants second party clothed themselves with the rights of the plaintiff against the Jhusi Sugar Works and they are now estopped from alleging that there was no privity of contract between the plaintiff and themselves.

7. I have now got to decide whether the plaintiff is entitled to a decree against defendants second party claiming profits at the rate of six annas per maund. It is contended that the defendants second party did not get money from the Jhusi Sugar Works at the rate of Rs. 5-4-0 per maund and as the plaintiff has come into Court claiming that' amount the burden is upon him to establish as to what was received by the defendants second party from the Jhusi Sugar Works which burden the plaintiff has failed to discharge. I am not prepared to accede to this contention. This matter was entirely within the knowledge of defendants second party and it was almost an impossibility on the part of the plaintiff to prove as to what amount was received by defendants second party. It is admitted that defendants second party claimed from the Jhusi Sugar Works the money due not only upon this particular contract, but upon several other contracts which they had entered into either directly with the Jhusi Sugar Works or through the intervention of certain other persons. Their claim was a consolidated claim upon the basis of several contracts and all that has been pointed out to me is a passage in the evidence of one of the plaintiff's witnesses to the effect that the entire claim of defendants second party was not decreed against the Jhusi Sugar Works and from this it is argued that it may be inferred that even upon this contract defendants second party got something less than at the rate of Rs. 5-4-0 per maund. As I said it was impossible for the plaintiff to prove as to what was actually received by defendants second party upon this contract and the lower appellate Court struck the proper issue in the case when it said: 'Did the defendant 2 not get the full price of gur from Jhusi Mills.' It might also be argued on behalf of the plaintiff that the defendants second party, if they had not received the entire amount from the Jhusi Sugar Works, were themselves to blame inasmuch as either they did not fight the battle properly or supplied inferior gur to the Jhusi Sugar Works on account of which they got a lesser amount than the contractual price and that for this the plaintiff can in no way suffer. Finally, it was argued that in any event the defendants second party were entitled to the money which they spent in the conduct of the earlier suit against the Jhusi Sugar Works. On this point there is a complete absence of evidence and in the absence of proper materials I am not prepared to have effect to this contention. Incidentally, it was argued that the position of defendants second party was that of a sub-agent and the plaintiff as the principal has no right to sue a sub-agent. Beliance was placed upon the case of Lockwood v. Abdy (1845) 14 Sim 437. I have already discussed this point in an earlier portion of my judgment when considering the question of privity of contract and I am of the opinion that the position of the defendants second party was not that of a sub-agent. For the reasons given above I dismiss this appeal with costs awarding separate sets of costs to the plaintiff and defendants first party. The cross-objections are also dismissed with costs. Leave to file an appeal by way of Letters Patent is allowed.


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