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Kota Chinna Lakshmiah Vs. Nalam Viswanatham - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1918Mad568; 42Ind.Cas.357
AppellantKota Chinna Lakshmiah
RespondentNalam Viswanatham
Cases ReferredRamji Das v. Janki Das
Excerpt:
contract act (ix of 1872), sections 215, 286 - principal and agent--agent dealing on his own account in business of agency, effect of. - 1. the defendant asked the plaintiff who is a merchant at masulipatam to buy for him 1,000 bags or paddy. this was in february 1909. he asked him to buy at the rate of rs. 4-15-0 per bag or as much less as he could get it for, and he was informed that the paddy had been bought. then it appears that the plaintiff sold 500 bags of paddy at the rate of rs. 4-8-0 to a third party, and the remaining 500 bags he bought for himself at the same rate. it appears that the plaintiff did not buy 1,000 bags from a third person, but purported to buy from himself. the defendant did not know of this fact at all, nor did he know that the plaintiff bought 500 bags of paddy for himself.2. it was apparently contended in both the lower courts on behalf of the defendant that section 236 of the indian contract.....
Judgment:

1. The defendant asked the plaintiff who is a merchant at Masulipatam to buy for him 1,000 bags or paddy. This was in February 1909. He asked him to buy at the rate of Rs. 4-15-0 per bag or as much less as he could get it for, and he was informed that the paddy had been bought. Then it appears that the plaintiff sold 500 bags of paddy at the rate of Rs. 4-8-0 to a third party, and the remaining 500 bags he bought for himself at the same rate. It appears that the plaintiff did not buy 1,000 bags from a third person, but purported to buy from himself. The defendant did not know of this fact at all, nor did he know that the plaintiff bought 500 bags of paddy for himself.

2. It was apparently contended in both the lower Courts on behalf of the defendant that Section 236 of the Indian Contract Act applied and, therefore, the plaintiff was not entitled to any relief. That section says: A person with whom a contract has been entered into in the character of agent is not entitled to require the performance of it if he was in reality acting, not as agent, but on his own account.' The language of the section would seem to indicate that it was meant to apply to cases where a person enters into a contract with another on the basis that that other person is acting as agent for somebody else. That is the opinion of the learned Judges in Joachimson and Co. v. Meghji Valji 3 Ind. Cas. 801. The District Munsif as well as the Subordinate Judge, however, seemed to think that Section 236 covered a case like the present and relied on two rulings of the Calcutta High Court, one in Sewdutt Roy Maskara v. Nahapiet 11 C. W. 609. and the other in Ramji Das v. Janki Das 17 Ind. Cas. 973. In both these eases, the plaintiff purported to act as a broker, that is to say, he offered to sell to the other party certain goods on behalf of some third person and it would appear from the judgment of Jenkins, C. J., in Ramji Das v. Janki Das 17 Ind. Cas. 973. that it was upon that ground that Section 236 was held to apply. He points out that the group comprising Sections 211 to 221 of the Contract Act deals with the agent's duty to the principal and that the group of sections which includes Sections 226 to 238 deals with the effect of agency on contracts with third persons. We think that; this is not a case governed by Section 236. But there can be no doubt that Section 215 of the Contract Act applies. Under that Section if an agent deals on his own account in the business of the agency, the principal may repudiate the transaction, if it appears that the dealings of the agent have been disadvantageous to him. Here the defendant did not know that the plaintiff purported to sell his own paddy or that he purported to buy 500 bags out of 1,000 bags sold by the plaintiff to the defendant. Both the District Munsif and the Subordinate Judge found as a matter of fact that the plaintiff wanted to dispose of his own paddy when the price was high and waited till the market hid gone down to dispose of the defendant's paddy. Mr. Rosario argues that there is no evidence in support of this finding. This objection is not taken in the grounds of appeal. On the other hand we think that there is evidence to support the finding; for instance there is Exhibit A (3) in which the defendant informed the plaintiff that Rs. 5-2-0 was the price for a bag for August delivery and asked him to get the best price available. The plaintiff, instead of selling the paddy then, did not send any reply and did not sell until the price had gone down to Rs. 4-80. If he had acted promptly on the information supplied by the defendant, no loss would have been caused.

3. On these grounds we confirm the decree of the lower Courts and dismiss the appeal with coats.


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