Skip to content


Hari Rao and anr. Vs. V.E.N.K.R.M.V.R.M. Somasundaram Chettiar - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtChennai
Decided On
Reported inAIR1936Mad980; 166Ind.Cas.360
AppellantHari Rao and anr.
RespondentV.E.N.K.R.M.V.R.M. Somasundaram Chettiar
Cases Referred and Somasundaram Chetti v. Nachal Achi
Excerpt:
- - the court accordingly took care to make it perfectly clear that the remuneration fixed in the order appointing him as receiver should be without prejudice to the excess remuneration which he could claim as a result of any agreement between himself and the v. 24 of 1923. a comparison of the written statement filed by seshagiri rao in that suit with that filed by defendants 1 to 8 will suffice to show that the main defence was put forward by seshagiri rao himself, not merely to the extent of exonerating himself from liability to the plaintiffs in that action but by pleading the defence of defendants 1 to 8 as well......for the conduct of the suit preclude the possibility of seshagiri rao also having attended to the suit as agent. if seshagiri rao's story is true that the moneys already realised by him as agent had been spent away or if for any reason he was not able to find the moneys required for the conduct of the defence in o s. no. 24 of 1923 the principal was undoubtedly justified in putting either him or his own vakil in funds for the purpose and giving any instructions that he considered necessary for the proper conduct of the suit. that will not amount to a termination or revocation of the agency.8. the argument that with the appointment of a receiver any further carrying out of the agency by seshagiri rao became illegal and therefore the agency must be deemed to have thereby terminated seems.....
Judgment:

Varadachariar, J.

1. This is an appeal against the preliminary decree in a suit for accounts instituted by a principal against the heirs of his agent. The only point for determination is a question of limitation. There has been some difference of opinion as to whether Article 89, Limitation Act is to be applied only to suits for accounts instituted against the agent himself and not to suits instituted against his heirs; but as in the present case the application of Article 89 to the suit is perhaps the most favourable from the defendants' point of view and as we have come to the conclusion that even under Article 89 the suit is not barred, it is unnecessary to deal with the divergence of authority as to the applicability of Article 89 to the case.

2. The defendants' father H. Seshagiri Row died on 14th August 1925 and this suit was instituted on 14th August 1928. It would therefore be in time unless the agency should be held to have terminated some time before the death of H.S. It has accordingly been contended, on behalf of the appellants, that by reason of certain events which happened in 1923 and 1924 in connexion with a suit, O.S. No. 24 of 1923 on the file of the Devakottah Sub-Court, the agency must be deemed to have terminated either in April or in September 1923 or at least in April 1924. Mr. Vinayaka Rao relied upon the statement of the rule in Article 137 of Bowstead on Agency, as to the ways in which an agent's authority may be terminated. The statement here is in substance the same as that contained in Section 201, Contract Act read along with the provisions of Section 56, as to the circumstances in which a contract becomes unlawful. There is no suggestion in the present case that the business of the agency had been completed before the death of H.S. The alternatives relied on by Mr. Vinayaka Rao are : (1) that the business of the agency had become illegal by reason of an order of injunction passed in April 1923 in O.S. No. 24 of 1923 or by reason of the appointment of a receiver in the said suit in September 1923; (2) that the agent must be deemed to have renounced the business of the agency when he relinquished the receivership in that suit in April 1924, or (3) that the principal must be deemed to have revoked the agency because he himself took steps to conduct the defence in O.S. No. 24 of 1923. For a proper determination of the points thus raised, it is necessary at the outset to ascertain the exact scope of the agency.

3. The plaintiff is a member of a wall known Nattukkottai family bearing the Vilasam V.E.N.K.R.M. It became divided many years ago, but, even after the division some items of assets remained in common and arrangements had to be made for their due realization. Amongst the assets thus retained in common was the amount due to the family on a mortgage decree obtained in O.S. No. 58 of 1915 against the Ammainayakanur Zamindar. The defendants' father had been a kind of law agent for the family even before its division. His duties were defined by a power of attorney executed by the various branches of the family in 1901, at a time when the present plaintiff was a minor. In 1917, after the plaintiff came of age, he executed the power of attorney filed as Ex. A in this suit, defining with greater particularity the scope of the agency and referring in fuller detail to the circumstances as they existed in 1917. We may add that another Nattukkottai family known by the Vilasam R.M.A.R. had long been claiming that they were entitled to a half share in the amount of the mortgage decree in O.S. No. 58 of 1915 and there had been disputes between the two families in that connexion. Ex. A accordingly refers not merely to what the agent was expected to do in connexion with the realization of the decree in O.S. No. 58 of 1915, but also provides that he should conduct all proceedings that might arise out of the disputes between the V.E.N.K.R.M. family and the E.M.A.R. group, in respect of the latter's claim to this decree.

4. It is common ground that up to February 1922 various amounts had been realized by the agent from time to time in execution of the decree in O.S. No 58 of 1915 and they had been distributed amongst the sharers of the V.E.N. K.R.M. family. The lower Court has also found that in February 1922 there was a settlement of accounts between the V.E.N.K.R.M. family and the defendants' father in respect of the realizations that had so far been made by him, though a suit had already been instituted by the E.M.A.B. family for a declaration of their share in the decree amount as long as in 1920 in the Ramnad Sub-Court. This last mentioned suit was transferred to the Devakottah Sub-Court in 1923 as O.S. No. 24 and the disputes between the parties advanced one stage further by an application filed in the Devakottah Sub Court for the issue of an injunction and for the appointment of a receiver in respect of the realization of further amounts under the decree in O.S. No. 58 of 1915. The plaint alleges and the Commissioner has found that after the settlement of accounts in February 1922 and before the issue of an injunction and the appointment of a receiver in O.S. No. 24 of 1923 several amounts aggregating to about Rs. 13,000 were realized by Seshagiri Rao in further execution of the decree in O.S. No. 58 of 1915. The injunction application only asked to restrain the members of the V. E.N.K.R.M. family who had been impleaded as defendants 1 to 8 in O.S. No. 24 of 1923 and also the defendants' father who was defendant 9 in that suit from receiving the amounts in Court deposited in O.S. No. 58 of 1915. This injunction was granted in due course, but we see no reason to hold that this injunction, of itself, either put an end to the agent's functions under the power of attorney or made it illegal or impossible for him to carry on the duties entrusted to him under that power. As stated already, the power of attorney provides for various duties and the drawing of money from Court is only one of the many duties therein referred to. There is accordingly no basis for the argument that by reason of the injunction thus granted the defendants' father's agency was terminated.

5. In September 1923, the Court resolved that it would be in the interest of all parties to appoint a receiver for the realisation of the balance still due under the decree in O.S. No. 58 of 1915. For obvious reasons, it was considered desirable to appoint Seshagiri Rao himself as such receiver. Even in the pleadings in that suit, a question had been raised as to whether the agent was entitled to charge on the whole decree amount commission at 20 per cent as provided for in Ex. A. The B.M.A.B. people contended that they were not bound by the terms of Ex. A and that the agent could claim commission only in respect of the one half amount belonging to the V.E.N.K.R.M. family. This question of commission became important when it was proposed to appoint the defendants' father as receiver. The plaintiffs in that suit were not willing that he should be allowed more than 7 1/2 per cent on the collections by way of remuneration, but Seshagiri Rao was naturally anxious that to the extent to which Ex. A could be legally operative to secure the higher commission for him his rights thereunder should not be prejudiced. The Court accordingly took care to make it perfectly clear that the remuneration fixed in the order appointing him as receiver should be without prejudice to the excess remuneration which he could claim as a result of any agreement between himself and the V.E.N.K.R.M. family. This makes it obvious that so far as the mind of the parties and of the Court was concerned, there was no desire or intention that Seshagiri Rao's agency under Ex. A or under the former power of attorney should cease by reason of his appointment as receiver.

6. Mr. Vinayaka Rao however argued that as a matter of law, apart from any intention of the parties, this must be the result. He referred to a passage in Reid v. Explosives Co. (1887) 19 Q B D 264, as supporting the proposition that when once the Court takes charge of the property in a suit by the appointment of a receiver or otherwise, rights of management or service which other persons may possess by virtue of any contract with the original owners will cease. But it is made clear by the judgment of Fry, L.J. in that ease that this is not an absolute rule of law but will depend upon the circumstances of each case. The further [conduct of the parties during the progress of O.S. No 24 of 1923 makes it clear that Seshagiri Rao continued to act as the agent of the V.E.N.K.R.M. family notwithstanding his appointment as receiver. In a deposition (Ex. D.) which he gave in January 1924 he makes it clear that he still continued to regard himself as the agent of that family. As we have already stated, the power of attorney provided that he should conduct all proceedings arising out of disputes between the R.M.A.R. people and V.E.N.K.R.M. family in respect of the former's claim to a share of the decree in O.S. No. 58 of 1915. This was the very subject matter of the dispute in O.S. No. 24 of 1923. A comparison of the written statement filed by Seshagiri Rao in that suit with that filed by defendants 1 to 8 will suffice to show that the main defence was put forward by Seshagiri Rao himself, not merely to the extent of exonerating himself from liability to the plaintiffs in that action but by pleading the defence of defendants 1 to 8 as well.

7. The other defendants practically adopted his written statement. Even in Ex. D, Seshagiri Rao admitted that he was conducting the defence of V.E.N.K.R.M. people in that case. Mr. Vinayaka Rao relied on one sentence in Ex. D, as supporting his contention that so far as defendant 1(i. e. the present plaintiff) was concerned he was looking after his own defence himself and Seshagiri Rao did not conduct it. This seems to us a misapprehension of that sentence for whatever reason Seshagiri Rao merely attempted to say that he was conducting the defence on behalf of defendants 1 to 8 not under the power of attorney but under some other arrangement; we see no basis for any such differentiation. In their defence on the merits in this suit the defendants are claiming credit for considerable amounts spent by Seshagiri Rao for the conduct of O.S. No. 24 of 1923 and also for the expenses incurred by him in filing an appeal against the preliminary decree in that suit. It is difficult to understand how in the face of that claim, taken along with other facts above adverted to, it could seriously be maintained that Seshagiri Rao did not conduct O.S. No. 24 of 1923 on behalf, of the V.E.N.K.R.M. family including the present plaintiff. If he did it, it is certainly a continuation of his functions as agent under Ex. A. Even assuming for the sake of argument that he did not do it, it does not mean that the agency ipso facto ceased. Nor does the fact that a separate vakil was engaged for defendant 1 in that suit or that defendant 1 spent moneys or gave instructions to his vakil for the conduct of the suit preclude the possibility of Seshagiri Rao also having attended to the suit as agent. If Seshagiri Rao's story is true that the moneys already realised by him as agent had been spent away or if for any reason he was not able to find the moneys required for the conduct of the defence in O S. No. 24 of 1923 the principal was undoubtedly justified in putting either him or his own vakil in funds for the purpose and giving any instructions that he considered necessary for the proper conduct of the suit. That will not amount to a termination or revocation of the agency.

8. The argument that with the appointment of a receiver any further carrying out of the agency by Seshagiri Rao became illegal and therefore the agency must be deemed to have thereby terminated seems to us untenable. Assuming that after the appointment of Seshagiri Rao as receiver, any further execution by him of the decree in O.S. No. 58 of 1915 must be attributed to his character as receiver and not to his character as agent, it does not follow that his discharge of the other duties entrusted to him under Ex. A, including, as already stated, the conduct of the defence in O.S. No. 24 of 1923, became illegal. Even in respect of the execution of the decree in O.S. No. 58 of 1915, if for any reason the receivership should have ceased as for instance by a dismissal of the suit, we see nothing that would have prevented Seshagiri Rao from carrying on the further conduct of the execution, on the authority conferred on him by Ex. A. This being in our opinion the true view as to the effect of his appointment as receiver, it will also follow that his relinquishment of the receivership in April 1924, will not amount to a relinquishment of his 'agency' as contended for, on behalf of the appellants.

9. The decisions in Venktachalam v. Narayanan 1916 28 MLJ 140, Palaniappa v. Alagappa 1916 30 IC 691 and Somasundaram Chetti v. Nachal Achi 1935 42 MLW 342. relied on by Mr. Vinayaka Rao do not help him in the circumstances of this case. There can be no doubt that even before the completion of the term of business of the agency or the full discharge of his obligations by an agent, events may happen whereby the agency may be terminated in law; and the cases referred to are illustrations of such termination either by renunciation by the agent or by revocation by the principal. But as we have already held, there is no basis in the facts here for a case of revocation or renunciation. The appeal accordingly fails and is dismissed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //