Gujarat High Court
Itc Ltd vs Gadat Vibhag Vividh Karyakari Sahakari ... on 18 June, 2024
NEUTRAL CITATION
C/FA/3710/1999 ORDER DATED: 18/06/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3710 of 1999
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ITC LTD.
Versus
GADAT VIBHAG VIVIDH KARYAKARI SAHAKARI KHEDUT MANDAL LTD. &
ANR.
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Appearance:
MR MANISH BHATT, SENIOR ADVOCATE WITH MR NISARG DESAI AND
MR YASH DADHICH FOR GANDHI LAW ASSOCIATES(12275) for the
Appellant(s) No. 1
MR CHIRAG B PATEL(3679) for the Defendant(s) No. 1
SERVED BY PUBLICATION IN NEWS for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 18/06/2024
ORAL ORDER
1. This appeal is filed under Section 96 of the Code of Civil Procedure, 1908 challenging the Judgment and Decree dated 06.03.1999 passed in Special Civil Suit No.37 of 1996 by learned Civil Judge (SD), Navsari.
2. Heard learned Senior Advocate Mr. Manish Bhatt with learned advocate Mr. Nisarg Desai and learned advocate Mr. Yash Dadhich for Gandhi Law Associates for the appellant and learned advocate Mr Chirag B. Patel for the respondent No.1.
3. The brief facts of the case are as under:-
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NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined 3.1. The plaintiff-respondent No.1 being registered under the Cooperative Societies Act, is engaged in the business of Mango, Chikoo, Banana etc. Defendant No.2-present respondent No.2 represented himself as an agent of appellant-defendant No.1 and purchased Mangos from plaintiff-respondent No1. Plaintiff opened a credit account in the name of defendant No.1. Plaintiff delivered Mangos to defendant No.2 at Gadat Taluka Gandevi from 04.06.1993 to 15.06.1993 for an amount of Rs.3,31,635/-.
Bills were issued in the name of defendant No.1 by the plaintiff. Defendant No.2 gave two cheques in the name of plaintiff of Rs.2,02,460/- dated 30.06.1993 and another cheque of Rs.89,135=00 dated 04.07.1993. Both the cheques were not honoured and returned uncleared. As defendants did not make the payment of Mangos sold, a notice dated 22.04.1995 came to be issued to the defendants. Respective replies were given by both defendants. Since the notice was not complied with, wherein defendant No.2 gave assurance to pay the outstanding amount to plaintiff. plaintiff filed the suit for the recovery of Page 2 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined Rs.5,08,230.60 paise with interest @ 18% per annum. 3.2. Defendants were duly served with the summons of the suit. Defendant No.1-present appellant appeared and filed Written Statement at Exhibit-15. Defendant No.2 though served neither filed written statement nor cross-examined the plaintiff. Defendant No.2 did not lead any oral evidence. Following issues were framed at Exhibit-21:-
"1. Whether the Plff. is a corporate body - registered under Co.operative Societies Act ?
2. Whether the Plff. proves that the Deft.No.2 has approached the Plff. as an Agent of the Deft.No.1 and purchased mangoes for Deft.No.1 and took delivery of such from 4/6/93 to 15/6/93 with term to pay interest at the rate of 18% p.a. in case of non payment of due amount within 15-days?
3. Whether the Plff. proves that the Deft.No.1- purchased goods for Rs.3.31,635/- on behalf of Deft.No.2 ?
4. Whether the Plff. proves that amount of - Rs.3,31,635/- remains due towards the principal amount and amount of Rs.1,76,595/60 remains due towards the interest in all amount of- Rs.50,8230/60Ps. remains due from the Deft. ?
5. Whether the Deft. No.1 proves that it is absolutely absolved from any kind of liability?
6. Whether the Deft.No.1 proves that it has never appointed Deft.No.2 on its behalf - But Deft.No.2 was supplier to Deft.No.1 and the Deft.No.1 paid due amount immediately to the Deft. No.2 as pleaded in w/s para (2) ?
7. Whether the Deft.No.1 proves that the Deft.No.2 acted without seeking any prior permission of the Deft.No.1?
8. Whether the Plff.'s suit is of without cause of action ?
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9. Whether the Piff. is entitled to relief as prayed for?
10. What order and decree ?"
3.3. Oral evidence was led by plaintiff by examining the witness Amul Dhirubhai Desai at Exhibit-34, Mr. Arunkumar Dayalji Naik at Exhibit-61, Harshadbhai Lalbhai Naik at Exhibit-65 and Bhikhubhai Balubhai Patel at Exhibit-70. Plaintiff produced documentary evidence at Exhibits-35, 36, 37 to 44, 45, 46, 47, 62, 63, 71 to 74. Defendant No.1 also examined Assistant Manager at Exhibit-78 and also produced documentary evidence.
4. Learned Senior advocate Mr. Manish Bhatt for the appellant-original defendant No.1 submitted that the suit was filed by respondent No.1 against the present appellant and the respondent No.2 for the recovery of Rs.5,08,230.60 paise. It is further submitted that during the year 1992-93, the appellant exported certain fruits, vegetables to various overseas buyers. The said purchases were from various suppliers and farmers.
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The respondent No.2 purchased Mangos from respondent No.1 from 04.06.1993 to 15.06.1993. Invoices were raised by respondent No.1 for the transaction as mentioned hereinabove. It is further submitted that the respondent No.1 never sent a copy of invoice to the appellant. It is also submitted that the appellant never appointed defendant No.2 as an agent to purchase Mangos from respondent No.1. It is further submitted that respondent No.2 was one of the suppliers to the appellant as the appellant is in the business of exporting fruits and vegetables to the different overseas venders and purchases were made from various suppliers and farmers as a normal routine market transaction. It is further submitted that appellant purchased fruits from respondent No.2 as an ordinary commercial transaction by issuing purchase orders and the appellant has paid entire amount to the respondent No.2 pursuant to the purchase vouchers raised by the appellant. It is further submitted that since there was no relationship of principal and agent between the appellant and respondent No.2, the learned trial Court has committed an error Page 5 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined by decreeing the suit against the present appellant. It is further submitted that even the principle of implied contract cannot be made applicable to the present set of facts as at no point of time, the appellant has ratified the action of purchasing Mangos by respondent No.2. Even the transaction of sale and purchase of Mangos were not ratified by Defendant No.1. There was no implied authority given to Defendant No.2 to enter into a transaction of purchase Mangos from plaintiff. Section 187 of the Indian Contract Act has been relied upon by the learned Senior Advocate which is reproduced as under;
187. Definitions of express and implied authority.--An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case". It is submitted that authority can be said to be expressed only when the same is given by word 'spoken or written' and the authority can be said to be an implied authority when the same is to be inferred from circumstances.
4.1. It is further submitted that in the present case, in the oral Page 6 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined evidence led by the plaintiff though the burden of proving the relationship of a principal or agent is on the plaintiff. Such burden has not been discharged by plaintiff. Plaintiff has not been able to establish such expressed or implied authority in favour of the Defendant No.2. Only on the basis of invoices, a transaction of sell and purchase of goods cannot be inferred. No delivery challans were produced by Respondent No.1. Plaintiff has not been able to prove that the Mangos were sold to Defendant No.1. As per the averment made in plaint, bills were given to defendant No.2. Even in absence of clear evidence regarding either expressed or implied authority, the learned trial Court has failed in law in arriving at a conclusion of existence of implied contract between the Defendant No.1 and the Defendant No.2. It is further submitted that outward Register of plaintiff Exhibit-71, also does not reflect the name of the Defendant No.1. The said Register was being maintained by the plaintiff and produced by the plaintiff. The Entry at Serial No.2083 of Exhibit-71 reflects the name of defendant No.2 only. Exhibit-72 Page 7 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined which is an outward Register Book maintained by plaintiff, at Serial No.5567, name of appellant is mentioned. However, at Serial No.5568, the name of respondent No.2 is mentioned which is dated 20.06.1994. It is further submitted that the conclusion arrived at by the learned trial Court about the implied contract is against the settled principles of law and also against the oral evidence led by the parties.
4.2. Learned Senior Advocate for the appellant has also drawn the attention of this Court by relying upon the oral evidence of respective parties and submitted that the witness of Defendant No.1 at Exhibit-78 has clearly denied the relationship of principal and agent between the Defendant No.1 and Defendant No.2. Even the said witness categorically denied the allegation that Defendant No.2 was acting as an agent of Defendant No.1. 4.3. It is further submitted by the learned Senior Advocate for the appellant that in the present case, there is nothing on record to show an "overt act" or "implied action" on the part of the Page 8 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined appellant. It is further pointed out by learned Senior Advocate by referring the plaint, wherein it is pointed out that the case of the plaintiff is that the Defendant No.2 approached plaintiff and represented himself as an agent / representative of Defendant No.1. It is also submitted that Defendant No.2 issued two cheques in favour of the plaintiff being dated 30.06.1993 for an amount of Rs.2,02,460/- and second cheque dated 04.07.1993 for an amount of Rs.89,135/- and both the cheques were dishonored. However, no actions or steps were taken by plaintiff against Defendant No.2 under the provisions of Section 138 of the Negotiable Instruments Act. It is also pointed out by the learned Senior Advocate that it is the positive assertion of the plaintiff in the plaint that there exists a relationship of principal and agent between the Defendant No.1 and Defendant No.2 respectively. However, plaintiff has failed to establish such relation.
4.4. In support of his contentions, learned Senior Advocate for Page 9 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined the appellant has placed reliance upon the decisions in the case of Vijay Traders vs. Bajaj Auto Ltd. reported in (1995) 6 Supreme Court Cases 566 and Jackie Kukubhai Shroff Vs. Ratnam Sudesh Iyer reported in [2020(5) Mh.L.J. 524. 4.5. Learned Senior Advocate for the appellant has also placed reliance upon Section 182 of the Indian Contract Act, 1872 which defines an agent and principal, which is reproduced as under:-
"182. 'Agent' and 'principal' defined.--An 'agent' is a person employed to do any act for another, or to represent another in dealings with third person. The person for whom such act is done, or who is so represented, is called the 'principal'."
It is submitted that when a person is engaged to do any act for another or to represent another in dealings with third person, such person can be said to be an "agent" within the definition of "agent".
4.6. Learned Senior Advocate for the appellant has further submitted that in the present case, defendant No.2 was never appointed to represent himself as an agent of the Defendant Page 10 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined No.1 and never ratified any action of purchasing Mangos from plaintiff. Defendant No.2 has not led any evidence. No contract of agency is produced by Defendant No.2
5. Per contra, learned advocate for respondent No.1-original plaintiff vehemently submitted that the judgment and decree passed by the learned Civil Court is in complete consonance with evidence on record and there is no reason to interfere with the findings of fact which have been arrived at by the learned trial Court. Learned advocate for plaintiff has mainly relied upon the cross-examination of witness of Defendant No.1 which is recorded at Exhibit-78 and has relied upon the disposition and submitted that it is deposed that Defendant No.1 has purchased Mangos from Defendant No.2 and the said witness has also deposed that in August 1993, payments were made to Defendant No.2. By relying upon some part of the deposition, learned advocate for respondent No.1-plaintiff has submitted that an implied contract could be inferred and there was an implied authority in favour of the Defendant No.2.
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Learned advocate for the plaintiff has also placed reliance upon Sections 186 of the Indian Contract Act, 1872 which is reproduced hereinbelow:-
"186. Agent's authority may be expressed or implied.--The authority of an agent may be expressed or implied".
5.1. It is further submitted that from the cross-examination of the said witness, the learned trial Court has come to the conclusion that there was an implied contract between the Defendant No.1 and Defendant No.2. Reliance is placed by the learned advocate for the plaintiff-respondent No.1 upon the decision in the case of Chairman, life Insurance Corpn. and Others Vs. Rajiv Kumar Bhasker reported in (2005) 6 Supreme Court Cases 188, in which, the Hon'ble Bench has observed in paragraph Nos.27,28,36,37 and 40, which are quoted as under:
"27.For creating a contract of agency, in view of Section 185 of the Indian Contract Act, even passing of the consideration is not necessary. The consideration, however, so far as the employers are concerned as evidenced by the Scheme, was to project their better image before the employees.
28. It is well settled that for the purpose of determining the legal Page 12 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined nature of the relationship between the alleged principal and agent, the use of or omission of the word "agent" is not conclusive. If the employee had reason to believe that his employer was acting on behalf of the Corporation, a contract of agency may be inferred.
36. A somewhat similar view was taken by the House of Lords in Branwhite v. Worcester Works Finance Ltd. in the following terms:
(All ER p. 122 D-G) "In the Garnac case Lord Pearson, with the concurrence of the House, used these words:
"The relationship of principal and agent can only be established by the consent of the principal and the agent. They will be held to have consented if they have agreed to what amounts in law to such a relationship, even if they do not recognise it themselves and even if they have professed to disclaim it.... The consent must, however, d have been given by each of them, either expressly or by implication from their words and conduct.
The significant words, for the present purpose, are 'if they have agreed to what amounts in law to such a relationship. These I understand as pointing to the fact that, while agency must ultimately derive from consent, the consent need not necessarily be to the relationship of principal and agent itself (indeed the existence of it may be denied) but may be to a state of facts on which the law imposes the consequences which result from agency. It is consensual, not contractual. So interpreted, this formulation allows the establishment of an agency relationship in such cases as the present.
37. Yet again in Armagas Ltd. v. Mundogas S.A. the House of Lords Page 13 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined pointed out that even in the absence of any express contract of agency in relation to the transaction made with the third party, ostensible authority may be presumed, stating: (All ER pp. 389j-
390a) "Ostensible authority comes about where the principal, by words or conduct, has represented that the agent has the requisite actual authority, and the party dealing with the agent has entered into a contract with him g in reliance on that representation. The principal in these circumstances is estopped from denying that actual authority existed. In the commonly encountered case, the ostensible authority is general in character, arising when the principal has placed the agent in a position which in the world is generally regarded as carrying authority transaction where the agent has had in this course contractor and the principal has acquiesced in this course of honoured transactions arising out of it."
40. Agency as is well settled, is a legal concept which is employed by the Court when it becomes necessary to explain and resolve the problems created by certain fact situations. In other words, when the existence of an agency relationship would help to decide an individual problem, and the facts permits a court to conclude that such a relationship existed at a material time, then whether or not any express or implied consent to the creation of an agency may have been given by one party to another, the Court is entitled to conclude that such relationship was in existence at the time, and for the purpose in question. [See Establishing Agency by GHL Fridman - 1968 (84) Law Quarterly Review 224 at p. 231]" Page 14 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024
NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined 5.2. Further reliance is placed by the learned advocate for the plaintiff upon the decision in the case of Dilawari Exporters vs. Alitalia Cargo and Others reported in (2010) 5 Supreme Court Cases 754, in which, it has observed in paragraph Nos.17, 18, 19, 20 and 22, which are quoted as under:
"17. Section 186 of the Contract Act, 1872 (for short "the Contract Act") lays down that the authority of an agent may be expressed or implied. As per Section 187 of the Contract Act, an authority is said to be express when it is d given by words spoken or written, and an authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, which may be accounted circumstances of the case.
18. Section 188 of the Contract Act prescribes that: "188. Extent of agent's authority. An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act."
19. Section 237 of the Contract Act provides that:
"237. Liability of principal inducing belief that agent's unauthorised acts were authorised. When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations if he has by his words Page 15 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority."
20. There is no gainsaying that onus to show that the act done by an agent was within the scope of his authority or ostensible authority held or exercised by him is on the person claiming against the principal. This, of course, can be shown by practice as well as by a written instrument. Thus, the question for consideration is whether on the evidence obtaining in the instant case, can it be said that Respondent 3 had an express or implied authority to act on behalf of Respondent 1 as their agent? If Respondent 3 had such an authority, then obviously Respondent 1 was bound by the commitment Respondent 3 had made to the appellant.
22. The other relevant particulars like, the name of the consignee, the number of the house air waybill (0841), etc. tally with the house air waybill issued by Respondent 3 to the appellant clearly showing the name of the consignor as that of the appellant. From the said documents it would appear that Respondent 3 was in fact, acting in dual capacity, one as a shipper on behalf of the appellant and the other as an agent of Respondent 1. That being so, Respondent I was bound by the acts of their agent viz. Respondent 3 with all its results. We are of the opinion that while holding that there was no privity of contract between the appellant and Respondent 1 this vital aspect of the matter escaped the attention of the Commission thus, vitiating its order."
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6. In spite of service of notice to the respondent No.2, none appears for respondent No.2-original defendant No.2.
7. I have considered the submissions made by respective advocates and also considered the record and proceedings which is placed on record. It is the case of plaintiff in the plaint that the respondent No.2 represented himself as an agent / representative and purchased Mangos from plaintiff and took the delivery of Mangos from 04.06.1993 to 15.06.1993. The bills of sale and purchase of Mangos were given to defendant No.2, however, the bill was issued in the name of defendant No.1. The said bills are produced at Exhibit 37 to 44. On perusal of such bills, though the bills are prepared in the name of defendant No.1, no counter- signature of defendant No.1 is found regarding receipt of bills. Moreover it is the case of plaintiff that bills were given to Defendant No.2. In absence of a delivery challan with regard to the sale and purchase of Mangos, invoices raised in the name of defendant No.1, can never be said that goods were sold to Defendant No.1 The entire chain of selling and purchasing of Page 17 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined goods can be proved by producing and proving purchase orders, if any, invoices and the delivery challan. The delivery challan is a conclusive proof of the transaction which is missing in the present case. It is noticed by this Court that except bare statement in plaint, no material is found that there existed a relationship of principal and agent between Defendant No.1 and Defendant No.2. It is only upon the oral statement of Defendant No.2 to be represented as an agent of Defendant No.1, plaintiff sold Mangos to Defendant No.2. From the cross-examination of Defendant No.1, nothing could be extracted by plaintiff which can satisfy this Court to arrive at a conclusion of implied authority or implied contract between Defendant No.1 and Defendant No.2. the transaction which is referred by Defendant No.1 in his cross-examination is not the conclusive proof that such was a suit transaction. No further questions were put to be written to extract any omissions which could be linked up with suit transaction. Further, it is also deposed by the witness of Defendant No.1 and also in the written statement that for the Page 18 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined transaction of purchase of Mangos from Defendant No.2, payment has already been made to Defendant No.2. When Defendant No.2 issued cheques in favour of plaintiff clearly establishes the fact that the transaction was between plaintiff and defendant No.2 independently. Even after dishonouring of two cheques, plaintiff did not initiate any action against Defendant No.2 under Section 138 of the Negotiable Instruments Act.
8. It would be apt to refer Section 34 of the Indian Evidence Act to discuss about the Exhibit-45, which is the statement of account. Section 34 of the Indian Evidence Act is reproduced as under:
"34. [Entries in books of accounts including those maintained in an electronic form] when relevant-[Entries in books of accounts, including those maintained in an electronic form], regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability."
9. In the present case, plaintiff has produced a copy of statement of account. In absence of any books of accounts regularly kept in the course of business, no liability can be Page 19 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined fastened on other side. Merely by producing a statement of account, it cannot be said that the plaintiff has proved the entries in the books of accounts.
In the case of Ishwar Dass Jain (Dead) Through Lrs. Vs. Sohan Lalo (Dead) by L.rs. reported in AIR 2000 SC 426, in which, it has been observed in para Nos.23 and 24 which are reproduced hereinunder:
"23. Now under Section 34 of the Evidence Act, entries in "account books" regularly kept in the course of business are admissible though they by themselves cannot create any liability. Section 34 reads as follows:
"Section 34 : Entries in books of account when relevant - Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability".
It will be noticed that sanctity is attached in the law of evidence to books of account if the books are indeed "account books i.e. in original and if they show, on their face, that they are kept in the "regular course of business". Such sanctity, in our opinion, cannot attach to private extracts of alleged account books where the original accounts are not filed into Court. This is because, from the extracts, it cannot be discovered whether accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page numbering. Hence, if the original books have not been produced, it is not Page 20 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined possible to know whether the entries relating to payment of rent are entries made in the regular course of business.
24. It only in the case of Bankers' Books Evidence Act, 1891 that certified copies are allowed or the case must come under Section 65(f) or (g) of the Evidence Act. Private extracts of accounts in other cases can only be secondary evidence and unless a proper foundation is laid for adducing such secondary evidence under Section 66 or other provisions of the Evidence Act, the privately handwritten copies of alleged account books cannot by themselves be treated as secondary evidence."
10. However, after a long period of more than one and a half year, notice of demand dated 22.04.1995 came to be issued. The said notice was replied to by defendant No.1.
11. As per the provisions of the Indian Contract Act, more particularly Sections 182, 186 and 187, an agent is a person employed to do any act for another or to represent another in dealing with third parties. Thus, at the first instance, the plaintiff has to establish that there exists relationship of principal and agent between the defendants inter se. As observed in the case of Dilawari Exporters (supra), the onus to show that the act done by an agent was within the authority or ostensible authority held or exercised is on the party who claims against principal. In Page 21 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined the present case, in absence of any written contract or even in absence of any express or implied authority to act on behalf of defendant No.1 as an agent, Defendant No.1 cannot be held liable for the suit transaction. When an authority is given in words or in writing, it amounts to an expressed authority. When there is no written authority or expressed words giving authority to the agent, it amounts to an implied authority. In the plaint, it has been specifically averred by the plaintiff that defendant No.2 approached the plaintiff and represented himself as an agent of defendant No.1 and by relying upon such representation, plaintiff sold and delivered Mangos to defendant No.2. The suit transaction as per the oral version of the witness of the plaintiff took place in the year of June 1993. The said witness has deposed that defendant No.2 represented himself as an agent of defendant No.1. Whereas another witness of plaintiff at Exhibit- 65 deposed that defendant no.2 introduced himself as an representative of defendant No.1. The said witness has also deposed that letters were written to the defendant No.2 Page 22 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined demanding their outstanding dues. It reveals from the record that except notice dated 22.04.1995, no correspondence was initiated by the plaintiff against the defendant No.1. The outward Register at Exhibit-71 and 72 also do not inspire any confidence to presume an implied contract existed between the defendants inter se.
12. The learned trial Court has given a complete go-by to the oral deposition of the defendant No.1. There is no cross- examination by plaintiff on the deposition of witness that defendant No.2 on the fact that Defendant No.2 acted as an agent of defendant No.1. The witness is not contradicted on the statement that Defendant No.1 has never appointed Defendant No.2 as an agent. In absence of specific questions being put to the defendants' witness, implied contract cannot be presumed. Even there is no circumstance found on record to show any conduct of defendant No.1 which proves implied authority in favour of the defendant No.2.
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13. It is worthwhile to observe that the defendant No.2 who claims to be an agent of defendant No.1 has neither cross- examined the plaintiff and nor Defendant No.1 has filed any written statement. Defendant No.2 has not offered himself for cross-examination. There is nothing contrary on record to dislodge the stand taken by the defendant No.1 that the defendant No.1 purchased Mangos from defendant No.2 as an ordinary commercial transaction by issuing purchasing orders independent of suit transaction. The plaintiff has not been either able to point out from the evidence or from the deposition that there existed nexus between the suit transaction and the transaction which has been averred in the written statement of defendant No.1. Even an outward Register also speaks about the communication dated 28.06.1994 which cannot be taken into consideration for expressed or implied contract. Thus, learned trial Court has committed an error by holding the existence of implied contract between the defendants inter se. The learned trial Court has committed an error by decreeing the suit against Page 24 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024 NEUTRAL CITATION C/FA/3710/1999 ORDER DATED: 18/06/2024 undefined the present appellant-original defendant No.1. Resultantly, the present First Appeal is allowed. The judgment and decree dated 08.03.1999 passed by the learned Civil Judge (SD), Navsari in Special Civil Suit No.37 of 1996 against appellant-defendant No.1 is hereby quashed and set aside. Judgment and decree against respondent No.2-defendant No.2 is hereby affirmed. Suit against Defendant No.1 is dismissed. No order as to costs.
14. Record and proceedings be sent back to the learned trial Court below forthwith.
(D. M. DESAI,J) RINKU MALI Page 25 of 25 Downloaded on : Fri Jun 28 21:49:55 IST 2024