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Balmukand and anr. Vs. Jagan Nath - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 221 of 1957
Judge
Reported inAIR1963Raj212
ActsCode of Civil Procedure (CPC) , 1908 - Sections 100; Evidence Act, 1872 - Sections 34; Sale of Goods Act, 1930 - Sections 45(2), 46 and 54
AppellantBalmukand and anr.
RespondentJagan Nath
Appellant Advocate M.M. Vyas, Adv.
Respondent Advocate Chandmal Lodha and; Kishore Singh Lodha, Advs.
DispositionAppeal allowed
Cases ReferredHarilal v. Pehlad Rat and Co.
Excerpt:
- - they also clearly told him that he was at liberty to come and see the entire account and pay the losses that had been suffered by them on that account. it is indeed well established that the high court in second appeal has no jurisdiction to interfere with findings of fact of the court of first appeal; but it seems to me to be equally well settled that where such findings are vitiated by errors of law, such as where the judgment of the court of first appeal is founded on an entirety wrong approach of the case, or, where it is based on misreading of evidence or omission to read important evidence on the record, then a judgment of the court of first appeal must be held to involve errors of law, and such a judgment cannot be accepted as final and binding upon this court in second.....i.n. modi, j. 1. this is a plaintiffs' second appeal against the judgment and decree of the district judge, ganganagar dated the nth july, 1957, affirming the judgment and decree of thecivil judge suratgarh dated the 19th march, 1956, dismissing the plaintiffs suit for recovery of damages in circumstances presently to be mentioned. 2. the plaintiffs father and son carried on business as commission agents in the name and style of balmukund dharamchand at raisinghnagar. it is alleged that this was a joint hindu family firm. the defendant who was a patwari at raisinghnagar some time before the present suit was brought had an account with the plaintiffs in whirh he used to deposit monies from time to time. the plaintiffs' case was that between the 25th april, 1951, and the 25th june, 1951,.....
Judgment:

I.N. Modi, J.

1. This is a plaintiffs' second appeal against the judgment and decree of the District Judge, Ganganagar dated the nth July, 1957, affirming the judgment and decree of theCivil Judge Suratgarh dated the 19th March, 1956, dismissing the plaintiffs suit for recovery of damages in circumstances presently to be mentioned.

2. The plaintiffs father and son carried on business as commission agents in the name and style of Balmukund Dharamchand at Raisinghnagar. It is alleged that this was a joint Hindu family firm. The defendant who was a Patwari at Raisinghnagar some time before the present suit was brought had an account with the plaintiffs in whirh he used to deposit monies from time to time. The plaintiffs' case was that between the 25th April, 1951, and the 25th June, 1951, the defendant placed an oral order for the purchase of 200 bags of Sarson under their commission agency. These were accordingly purchased at a price of Rs. 12,343/-/6, and this sum was debited against the defendant. On the 20th August, 1951, the defendant paid Rs. 3475/- to the plaintiffs of which a sum of Rs. 2977/2/6 was paid out of his aforesaid personal account with the paintiffs, and the relevant entry in that behalf is Ex. 77 which is alleged to have been signed by him and the balance of Rs. 497/13/6 (wrongly mentioned in the plaint as Rs. 479/13/6) was paid in cash.

The plaintiffs' case further was that as the defendant had not taken delivery or paid the balance of the price of the 200 bags of Sarson purchased on behalf of him and as the price thereof was falling day by day, they sent a telegram to him on the 16th March, 1952, asking him to send a further deposit of Rs. 4000/-. (See Ex. 3 in this connection). In response to this, on the 21st May, 1952, the defendant paid a further sum of Rs. 413/- in cash and promised to clear off the account in a few days. He did nothing further however whereupon a further notice dated the 6th June, 1952 Ex. 5 was sent to the defendant', which was refused by him. Thereafter on the 18th February, 1953, the plaintiffs sent a telegraphic notice to the defendant Ex. 23 in which they asked him to deposit four thousand rupees within twenty-four hours failing which they warned him that they would sell the Sarson at the market rate and hold him responsible for the loss incurred by them. The defendant, however, adopted the policy of masterly inactivity.

Consequently on the 2oth February, 1953, the plaintiffs sold the 200 bags of Sarson which lay stored with them on behalf of the defendant for Rs. 6607/6/- at the rate of Rs. 14/4/6 per maund and debited the latter with a further sum of Rs. 1795/-/9 for godown-rent, interest, commission and other charges. On the same date the plaintiffs sent a post-card to the defendant informing him that his Sarson had been sold by them as he had persistently refused to take delivery of the same. They also clearly told him that he was at liberty to come and see the entire account and pay the losses that had been suffered by them on that account. See Ex. 7 or 22. On the 23rd February, 1953, the plaintiffs sent the entire account to the defendant but the latter refused to receive it. See Ex. 10. Eventually, the plaintiffs instituted the present suit against the defendant for the recovery of Rs. 3645/8/- principal plus a further sum of 489/8/- as interest, the total amounting to Rs. 4135/- in the Court of the Civil Judge, Suratgarh.

3. The defendant totally denied the plaintiffs' claim. His case was that he had never purchased any Sarson under the commission agency of the plaintiffs nor he had ever deposited any amount in cash towards that account. He also pleaded in that connection that the entries made in the plaintiffs' books were all fictitious though he admitted that he had a personal account with the plaintiffs in which he used to deposit his money from time to time. Certain other pleas as to the plaintiffs' firm being a parthership one or that the suit transaction was of a wagering nature were also raised in the written statement; but these have been decided against him and have not been pressed before me.

4. Both Courts below have dismissed the plaintiffs' suit and consequently they have come up in second appeal to this Court.

5. The main findings of the learned District Judge, Ganganagar, may be summed up as follows. In the first place, he found that the books of account kept by the plaintiffs did not appear to have been regularly kept in the normal course of business, and, therefore, they did not deserve any reliance. In the second place, he found that even if these entries were admissible, they were not sufficient by themselves to charge the defendant with any liability, and the plaintiffs must have produced corroborative evidence and there was complete lack of that. In the third place, the learned Judge held that the evidence produced by the plaintiffs that they had purchased certain bags of Sarson, for the defendant from certain third parties was of no use as that evidence did not disclose that those bags had been purchased by the plaintiffs for the defendant. In the fourth place, the learned Judge observed that there was no valid reason why the plaintiffs had not obtained any order in writing from the defendant for the purchase of 200 bags of Sarson for him. In the fifth place, the learned Judge found, in concurrence with the trial Court, that the entry Ex. 17 was proved to have been signed by the defendant and that while this did go to show that the defendant must have purchased some Sarson under the commission agency of the plaintiffs,this was not sufficient to hold that he had purchased the 200 bags of the commodity under their commission agency. In this view of the whole matter, the learned Judge upheld the dismissal of the plaintiffs' suit by the trial Court. Even so, the learned Judge felt persuaded to hold that the conduct of the defendant was highly suspicious and that some of the pleas taken by him were incorrect, -- I do not propose to deal with these as no reliance has been placed on them on behalf of the defendant in this Court, -- and, therefore, he left the parties to bear their own costs throughout. It is in these circumstances that the present appeal has come to be filed by the plaintiffs.

6. At the very outset of the arguments a preliminary objection was raised on behalf of the defendant that the findings of the learned District Judge are all findings of fact, and, therefore, this appeal was not maintainable on that ground alone. It is indeed well established that the High Court in second appeal has no jurisdiction to interfere with findings of fact of the Court of first appeal; but it seems to me to be equally well settled that where such findings are vitiated by errors of law, such as where the judgment of the Court of first appeal is founded on an entirety wrong approach of the case, or, where it is based on misreading of evidence or omission to read important evidence on the record, then a judgment of the Court of first appeal must be held to involve errors of law, and such a judgment cannot be accepted as final and binding upon this Court in second appeal. I have no hesitation in saying that the judgment of the learned District Judge suffers from grave errors of law of the kind have mentioned above, and, therefore, this second appeal is maintainable. I have not though it proper to catalogue these errors here and now, as in my opinion, they will appear sufficiently from the part of this judgment that follows. I therefore, overrule this objection.

7. It may be pointed out that in order to support their case, the plaintiffs produced certain entries from their account-books together with certain other documentary evidence in the shape of the notices they gave to the defendant from time to time and also produced oral evidence which mainly consisted of the plaintiffs' Munim Surajbhan P. W. 9, of one of the plaintiffs Dharamchand P. W. IT, and of certain parties from whom they purchased Sarson for the defendant, these being P. W. 8 Shriram, proprietor of firm Taliram Badrinarain and P. W. 10 Vilayatiram proprietor of firm Vilayatiram Dwarkadass.

8. The principal point made by the learned District Judge in connection with the various entries from the plaintiffs' account-books was that these books were not at all reliable. The first reason which persuaded the learned Judge to come to this conclusion was that the plaintiffs' case, as disclosed in their plaint as well as from their books, was that they had purchased Sarson for the defendant from the 25th April, 1951, onwards, and in that connection the evidence of P. W. 8 Shriram was -- he was one of the persons from whom the plaintiffs purchased a few bags of Sarson on behalf of the defendant -- thatthe plaintiffs had purchased Sarson weighing 17 maunds and 24 seers at the rate of Rs. 25/15/3 per maund at a total cost of Rs. 465/5/3 on the 24th April, 1951 vide entries in their Bahis Exs. 1 and 2 P. W. 8. Another point made by the learned Judge was that while according to the case of the plaintiffs, Sarson had been purchased by them for the defendant in Section 2008, the books of Taliram Badrinarain of which P. W. Shriram was the proprietor, recorded that these purchases were made in the month of Chait of Section 2007, and the learned Judge observed that

'It is really suspicious how the Sarson which is alleged to have been purchased in Sambat 2008 was mentioned in the ledger of Sriram on Chait Sudi 9 Sambat 2007.'

and thus concluded the learned Judge that the entry of Rs. 465/5/3 in the ledger of P. W. Sriram was nothing but fictitious. Much of the difficulty with which the learned Judge seems to have been faced arose from the fact that the points of criticism on which he based his judgment were never made the subject-matter of any attack on behalf of the defendant when either the plaintiffs' Munim Surajbhan or the plaintiff Dharamchand or P. W. Shriram happened to be in the witness-box. It has been strenuously argued by learned counsel for the plaintiffs, therefore, that it was entirely wrong on the part of the learned Judge to have based his judgment on criticism of that character, and it was further argued that if the learned Judge had cared to go a little more deeply into the matter, he would have found that the discrepancies which he thought were unanswerable were capable of being very easily and satisfactorily answered.

9. Reverting to the first point of criticism set out above, learned counsel pointed out that the mention of the particular deal by P. W. Shriram as having been made on the 24th April, 1951, is nothing but an unfortunate slip of pen on the part of the learned Judge who recorded the statement, and it was further submitted in this connection that that would be obvious because that witness had referred to the entries from his books Exs. 1 and 2/ P.W. 8, and even a casual perusal of those entries would show that the entries were referable to the date 26th April, 1951, and consequently the learned Judge was hardly justified in making capital out of this trifling error.

It was again pointed out that so far as the plaintiffs' books were concerned, they showed that the transaction in question had been made on the 25th April, 1951, and the same was then entered in the books of Shriram on the 26th April, 1951, which was perfectly explicable on the hypothesis that the books of Shriram might have been closed earlier for the 25th April, 1951, and, therefore, the transaction was entered therein on the next day, and that if the books of the plaintiffs had not by that time been closed on that date, it could appear in their books on the 25th April, 1951, and that there was nothing at all strange in that kind of happening. There is force in this criticism, and it clearly seems to me that if this inconsistency were put to Shriram or to Surajbhan, they would have satisfactory explained that. But whether they could or could not, learned counsel for the plaintiffs is perfectly justified in my opinion, when he says that the District Judge was wrong when he was prepared to discard the books of the plaintiffs or those of Shriram on such a trifling inconsistency upon which no cross-examination had at all been directed on behalf of the defendant against any one of the plaintiffs' witnesses.

10. So far as the second point of criticism relied on in this connection by the learned Judges goes, that again depends upon when the Samwal year changed in the books of Shriram as contrasted with that in the plaintiffs' books. If the Samwat year in the case of Shriram changed after Chait Sudi 9 in any particular year and it changed in the case of the plaintiffs before that date (say, on Chait Sudi 1st), this seeming discrepancy would be obviously explained to complete satisfaction. It is obvious that the learned District Judge should not have made capital out of points of this description upon which the parties themselves had not focussed their attention at the time of the trial and the party relying on such seeming though insignificant discrepancies had not cared to cross-examine the witnesses concerned on that aspect of the case.

11. The third discrepancy on which the learned Judge below seems to have placed great stress was that an item of Rs. 110/6/- dated Baisakh Sudi 5 in the defendants' Khata appeared above the entry of Rs. 401/10/3 dated Baisakh Sudi 3, and the learned Judge observed that ordinarily the entry of Baisakh Sudi 3 should have come first and thereafter the entry of Baisakh Sudi 5. And the learned Judge further went on to observe as follows: -

'But here in the account books of the plaintiffs the order of maintaining the dates in the account of the defendant is reversed due to the reasons best known to the plaintiffs themselves.'

The criticism again, with all respect to the learned Judge, is entirely misplaced, for no cross-examination was directed in that regard against the plaintiffs' Munim Surajbhan or the plaintiff Dharamchand himself when they examined themselves as witnesses. The explanation offered by learned counsel for the plaintiffs for this apparent inconsistency was that according to the usual method in which the entries were made in the Khata of the plaintiffs, entries from the Rokar were made first whenever the khata came to be posted and thereafter the entries from the 'Nakal' book. And he further explains that it is well-known that whereas entries in the cash-book are written from day to day, the entries in the khata are not so recorded but are posted at irregular intervals, whenever it is convenient to do so. This latter observation is undoubtedly correct, and it also appears from the general trend of entries in the plaintiffs khata that entries from the Rokar were posted in their chronological order, in a string, as it were and then an entry or entries from the Nakal.

Thus looking at Ex. 1, we would find that the first four entries are from the Rokar and they are from Baisakh Vadi 4 to Baisakh Vadi II in their chronological order. Then comes an entry of Rs. 584/12/6 which is dated Baisakh Vadi 4.But this is an entry from the Nakal and it did not appear soon after the entry from Rokar of Baisakh Vadi 4 but after all the entries from the Rokar had been posted upto Baisakh Vadi II, that being presumably the date on which the Khata entries were being made. The second batch of the entries in this khata seems to start from Baisakh Sudi 3 onwards, and there are two entries -- one for Baisakh Sudi 3 and another for Baisakh Sudi 5, and both are from the Rokar. But the next following entry for Rs. 401/10/3 is from Nakal, and this appears after the next preceding entry of Rs. 110/6/- which is dated Baisakh Sudi 5 but which was from Rokar. Thus we find that there is nothing at all serious in the criticism made by the learned District Judge so far as this set of entries is concerned.

12. No other discrepancies are at all referred to or relied on by the learned Judge. As I have shown above, whatever discrepancies have been referred to are capable of a satisfactory explanation, and if they were not explained, the fault at the worst cannot be said to be of the plaintiffs any more than that of the defendant. It was for the latter, if he wanted to demolish any particular entries on the ground of their irregularity or falsity to have cross-examined the plaintiff's witnesses on that aspect of the case. If I may point out in passing, this illustrates the danger on the part of our courts relying on points which have not been made the subject-matter of any controversy during the course of trial. I cannot help pointing out at this place that when the plaintiff's Munim Surajbhan came into the witness-box, he clearly stated that he was responsible for maintaining the books and that the same had been kept regularly in the course of their normal business. Surprisingly enough, not a single question was put to him in his cross-examination so far as the aforesaid statement of his was concerned. No question was also put to Dharamchand when he came into the witness-box to show that his books were not reliable, and yet the learned Judge came to the conclusion that the plaintiff's books were unreliable. The original books have been produced before me and I have seen them. They appeal to have been maintained from day to day and balances have been struck at the end of each day. It cannot, therefore, be said that they have not been regularly kept in the usual course of business. The phrase 'regularly' means that the accounts must be kept according to a system, though that system need not be elaborate. Again, it is a mistake to think that the expression 'regularly kept' is synonymous with 'correctly kept'; though if they are not correctly kept, that would affect the weight to be attached 'to the entries made therein but not their admissibility. I have no hesitation therefore in saying that the conclusion of the learned Judge on this aspect of the case was based on an unfortunate misreading of the plaintiff's account-books and cannot be upheld for a single moment.

13. The learned fudge further seems to have been of the opinion that even if the books of accounts in question were accepted as havingbeen regularly kept in the ordinary course of business of the plaintiffs, they had not been corroborated by any other evidence, and, therefore, were insufficient to charge the defendant with any liability. In saying so, again, the learned Judge seems to me to have fallen into a very serious error. The plaintiff's Munim Surajbhan appeared in the witness-box and made a detailed statement fully supporting the plaintiffs' case as disclosed in the plaint. I have been taken through his entire statement and I find that he has stated at elaborate length how the contract between the parties for the purchase of 200 bags of Sarson came to be made for a total price of Rs. 12,335/4/6 and how these bags and been purchased in the presence of the defendant himself from various persons and how the witness had explained the entire account to the defendant on the 20th August, 1951, corresponding to Bhadwa Vadi 4, Section 2008, and the latter had signed the entry for Rs. 2977/2/6 as having been paid on account of the purchase of the said commodity and how thereafter demands had been made from time to time orally and in writing of the defendant to pay the sum outstanding against him and the latter had paid nothing against his outstandings save a sum of Rs. 413/-which he had paid on the 21st May, 1952. There is no cross-examination worth the name of this witness. The plaintiff Dharamchand also came into the witness-box as P. W. 11, and he clearly stated that all the entries in his books had been made by the preceding witness Surajbhan and that the two hundred bags of Sarson had been purchased by his firm under instructions from the defendant and that the latter had signed the entry of Rs. 2977/2/6 Ex. P-17 in his presence and so on and so forth.

The learned Judge seems to me to have fallen into a grave error of law when he thoughtthat this was not corroboration of the entriesappearing in the plaintiff's account books againstthe defendant. It may be pointed out at thisplace that Section 34 of the Evidence Act does notrequire any particular form of corroborativeevidence, and that where in a suit the plaintiffproduces books of accounts and a witness oahis behalf gives evidence in support of the entries and there is no cross-examination ofthe witness with respect to his personal knowledge of the facts stated, that is sufficient corroboration. See Narain Das v. Firm GhasiRam Gojar Mal, AIR 1938 All 353 in this connection. Again, there is ample authority forthe view that the plaintiff's own statement, on oath in support of the entries made in hisaccount-books would be sufficient to fix thedefendant with liability. Further corroborationof the plaintiffs' case is furnished by the evidence of P. Ws. Ratansingh, Nandram andGovindram. The courts below do not appearto have applied their minds to the evidence ofthese witnesses.

14-17. (After discussion of evidence His Lordship proceeded) For the reasons mentioned above, I have categorically come to the conclusion that the plaintiffs have satisfactorily proved that they had purchased 200 bags ofSarson for the defendant as his commission agents and that a sum of Rs. 3645/8/- was payable to them by the defendant on this account. This includes the incidental charges incurred by the plaintiffs on the defendant's account in the shape of rent for godown, interest, commission and other miscellaneous charges which have never been specifically controverted by the defendant, apart of course from his general disclaimer that he had never entered into the transaction in question with the plaintiffs.

18. Two further points have been raised by learned counsel for the defendant, and these are first that even if this Court was pleased to hold that the defendant had purchased 200 bags of Sarson under the commission agency of the plaintiffs as alleged the latter had no right to sell the goods without the consent of the defendant and that the only right that they had in this connection was that of retaining the goods until their dues were paid to them, and reliance was placed in this connection on Section 221 of the Contract Act. In support of this submission, learned counsel invited my attention to Balla Mal v. Budhu Mal, AIR 1926 Lah 94 and Mul Chand v. Sheo Mal, AIR 1929 Lah 666. The second point is that in any case, the plaintiffs had failed to prove that the prevailing rate of Sarson on the 2oth February, 1953, was Rs. 14 /2/6 per maund as alleged by them.

19. Taking up the first point, Section 221 of the Contract Act reads as follows :

'221. Agent's lien on principal's property. In the absence of any contract to the contrary, an agent is entitled to retain goods, papers and other property, whether movable or immovable, of the principal received by him, until the amount due to himself for commission disbursements and services in respect of the same has been paid or accounted for to him.'

Then it has been held in AIR 1926 Lah 94 (supra) that under Section 221, the rights conferred upon an agent who has a lien on the principal's property are of a very limited nature and seem to be confined to the mere right to retainer which may be used as a defence to any action for the recovery of the property brought against him or as a matter of title to re-claim the property by action if he has been unlawfully dispossessed of it; but there is no right in an agent to sell or dispose of the property without the consent of the owner in order to satisfy his lien. This was the decision of a learned single Judge of the Lahore High Court. The same view seems to have been taken in a bench decision of that very Court in AIR 1929 Lah 666 (supra), and it was laid down that where the plaintiffs purchased certain goods on behalf of the defendants from whom certain money was due to them, they were entitled to retain possession as agents of the goods until the money was paid, but, without being directed by the defendants to sell them, and in the absence of a mercantile custom authorising them to do so, they were not entitled to sell the goods, and that if they sold them, they would be liable for the loss sustained by the defendants on account of such unauthorised sale.

20. It seems, however, that a bench decision of the same High Court in Firm Roop Ram Bhagwan Das v. Firm Nanak Ram Chhaju Ram, AIR 1927 Lah 493 was not brought to the notice of the learned Judges who decided the case of AIR 1929 Lah 666 (Supra). The facts in this case were that the plaintiffs as commission agents, bought on behalf of the defendants certain goods to be delivered on a certain date. Just before the date of delivery, the plaintiffs telegraphed to the defendants to remit the purchase price within twenty-four hours, otherwise they would be compelled to sell at the market rate at the risk of the defendants. The latter took no action, and, therefore, on the due date the plaintiffs settled with the person from whom they purchased at the market rate and sued the defendants for the loss. It was held that as the defendants had failed to remit the purchase money, the plaintiffs as their agents had an implied authority to sell the goods at the market rate and sue the defendants for the loss sustained by them.

21. In a like case in Harilal v. Pehlad Rat and Co., AIR 1929 Bom 260, relying on certain English authorities, the learned Judges of the Bombay High Court held that

'Where a commission agent, by contracting personally renders himself personally liable for the price of goods bought on behalf of his principal, the property in the goods, as between the principal and agent, vests in the agent, and does not pass to the principal until he pays for the goods, or the agent intends that it shall pass, and the agent has the same rights with regard to the disposal of the goods and with regard to stopping them in transit as he would have had if the relation between them and his principal had been that of seller and buyer.'

It would thus appear that there was a conflict of judicial opinion as to the precise rights of a commission agent in cases where he has purchased with his own money certain goods on behalf of his principal, and the latter has failed to take delivery of them or pay for the price thereof; some cases holding that the commission agent in such a case has no right to sell the goods except under the authority of his principal or perhaps under a mercantile custom to that effect, and, broadly speaking, all that he has is the right of retainer so long as he is not paid his dues; while other cases have held that, apart from his lien, he has a further right to sell the goods and reimburse himself thereby and he can thereafter sue his principal for the balance of the money which may be due to him on account of the loss which he may have so sustained.

22. It seems to me that there need not be any doubt or difficulty about the correct legal position in cases of this type after the Sale of Goods Act, 1930, came into force. For Sub-section (2) of Section 45 of that Act clearly lays down that the term 'seller' in Chapter V of the Act which Chapter deals with the 'rights of unpaid sellers against the goods' also includes a consignor or an agent who has himself paid or is directly responsible for the price. In other words, the position of a commission agent (like the plaintiffs here) who is proved to have personallypaid the price of the goods purchased by him for his principal has been placed on par with that of an unpaid seller for the purposes of Chapter V of the aforesaid Act.

Then Section 46 lays down that an unpaid seller, notwithstanding that the property in the goods may have passed to the buyer, has by implication of law, the following rights: -

(a) a lien on the goods, for the price while he is in possession of them.

(b) in case of the insolvency of the buyer right of stopping the goods in transit after he has parted with the possession of them;

(c) a right of resale as limited by this Act. In Sub-section (2) of this section, it has been further provided that where the property in goods has not passed to the buyer, the unpaid seller has, in addition to the rights mentioned above, the further right of withholding delivery similar to and co-extensive with his rights of lien and stoppage in transit where the property has passed to the buyer. It is clear, therefore, that an unpaid seller has a right of re-sale as limited by the Act.

23. Then Section 54 which provides the conditions for re-sale lays down that the unpaid seller where the goods are of a perishable nature or where the unpaid seller having exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to sell, and the buyer does not within a reasonable time pay or tender the price, may re-sell the goods within a reasonable time and recover from the original buyer damages for any loss occasioned by his breach of contract. But if such notice is not given, the unpaid seller will not be entitled to recover any damages.

24. The correct position in law, therefore, seems to be that a commission agent where he has purchased goods with his own money on behalf of his principal and the latter fails to pay for the goods at the proper time then, apart from certain other rights, such as of lien which he has, he has a further right to sell those goods in the market and recover the balance of the money due to him as damages for such loss as may have been occasioned to him by the breach of the contract provided that except in cases where the goods may be of a perishable nature in which case no notice is necessary, he gives a reasonable notice to his principal of his intention to re-sell and the latter fails to pay the price within a reasonable time. Two types of cases may arise in this connection, (1) where the property in the goods has passed to the purchaser and (2) where it has not. In the first branch of cases the commission agent will have a right of re-sale as provided by and under the Sale of Goods Act (Section 54), while in the other branch of cases, he would have it a fortiori because the commission agent still retains his right of property in the goods, and, therefore, the view taken in some of the cases referred to above that the commission agent has no right of sale whatever and that he has only his lien on the goods until his dues are paid in full to him must be held to be otiose and unsound.

25. Let us now see how the principles formulated above apply to the present case:

The plaintiffs here, as commission agents, purchased 200 bags of Sarson for the defendant with their own money and their dues were not paid to them in full by the latter. Their position, therefore, was analogous to that of an unpaid seller. Assuming then for the purposes of this case that the goods purchased were not of a perishable nature, they would have, apart from other rights such as of lien, a right of re-sale as provided by Section 54 of the Sale of Goods Act subject of course to the limitations provided thereunder. As to these conditions it also seems to me that the property in the goods had passed to the defendant principal. The manner in which the plaintiffs had acted clearly shows that they had dealt with the bags as if the property therein had passed to him. They had paid the price on their own and debited it against the defendant. They had also put the bags in their godown on his behalf and had throughout been dealing with the goods as if they belonged to him. Further, they had called upon the defendant to pay the price for the goods purchased on his behalf a number of times, and apart from oral demands which they say they made of him, they made requests in writing, both telegraphically and otherwise, that he should pay the price and take away the goods. See Exs. 3 and 5 in this connection. But the defendant paid no heed to these requests. Eventually, they sent a telegram (Ex. 23) to him on the 18th February, 1953, in which they called upon him to pay the price within twenty-four hours in default of which they would be compelled to re-sell the bags (which were lying with them on behalf of the defendant) in the market, and they clearly told him that they would hold him responsible for the loss which they would sustain on that account. The defendant still sat quiet. Consequently, the goods were sold on the 20th February, 1953. Therefore, I am definitely disposed to hold that the plaintiffs did give a notice of re-sale which was perfectly reasonable under the circumstances and still the defendant did nothing and so they were entitled to sell the goods, as they 'did, by virtue of the provisions contained in Sections 45, 46 and 54 of the Sale of Goods Act put together. Even if it were to be held that the property in the goods had not passed to the defendant and it remained with the plaintiffs, then too the plaintiffs would have the right of re-sale. There is no force, therefore, in the objection raised on behalf of the defendant on this score and I hereby repeal it.

26. The only other question that was raised before me was that the plaintiffs had sold the bags in question at an inadequate price and I proceed to dispose of it briefly. This objection also seems to me to have very little substance. No specific issue was raised on behalf of the defendant on this aspect of the case. When the plaintiffs' witness Govind Narain, the purchaser, came into the witness-box, he clearly stated that he had purchased the 200 bags from the plaintiffs at Rs. 14/2/6 per maund and that that was the prevailing price of Sarson in the market on that date. There was no serious cross-examination of this witness on behalf of the defendant. The only question which seems to have been put to this witness on behalf of the defendant in this regardwas as to the price of Sarson on the 26th of February, 1953, and the reply of the witness was a straightforward one that it was Rs. 14/14/-. For one thing, this does not falsify the case on behalf of the plaintiffs that the rate on the 2oth February, 1953, was Rs. 14/2/6. For another, this witness clearly explained that the rate of Rs. 14/14/- per maund was for new Sarson and Sarson which belonged to the defendant and which he had purchased was a year old. The latter did not lead any evidence on this aspect of the case. It is also remarkable that as soon as the plaintiffs had sold the defendant's bags in the market at the rate at which they did, they lost no time in informing the defendant of that. In fact, they informed him of the sale on the same date and two or three days thereafter they sent him a detailed account. The defendants raised no objection whatsoever that the rate at which the plaintiffs had sold his Sarson was less than the prevailing rate on that date. I, therefore, see no force in this objection either.

27. In the result, I allow this appeal, set aside the judgments and decrees of the two Courts below and decree the plaintiffs' suit for a sum of Rs. 3645/8/- plus a sum of Rs. 489/8/- as interest, the total amounting to Rs. 4135/-. The plaintiffs will also be entitled to interest on the sum of Rs. 3645/8/- from the date of suit upto the date of realisation at the rate of three percent per annum simple. The plaintiffs will be entitled to their costs in all the Courts.


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