Madras High Court
Aruna Fertilizer Agencies, ... vs B. Balanagamanickam And Co., ... on 16 March, 1998
Equivalent citations: (1998)3MLJ25
Author: M. Karpagavinayagam
Bench: M. Karpagavinayagam
JUDGMENT M. Karpagavinayagam, J.
1. The plaintiff is the appellant. He filed the suit against the defendants for recovery of a sum of Rs. 11,210 with interest at 12% per annum. The lower court dismissed the suit. Therefore, the plaintiff filed an appeal, which was also dismissed. Hence, the plaintiff, the appellant herein, challenging the concurrent judgments by which he has lost in both the courts below, filed this second appeal.
2. The case of the plaintiff is this:
The appellant/plaintiff is the firm dealing in fertilizer. On 19.10.1979 the first respondent/first defendant, who is the dealer in fertilizer, purchased complex Fertilizer from the appellant. The first defendant despite the receipt of consignment, did not pay the amount due to the plaintiff. So, the plaintiff sent a telegram to the first defendant, who in turn, sent a reply that he paid the amount to the second defendant. The second defendant was not authorised to receive payment from the first defendant. So, the plaintiff sent the suit notice and received reply from the first defendant stating that there was no privity of contract between him and the plaintiff and that the amount had been paid to the second defendant, who sent the consignment through the plaintiff's firm. Hence, the suit.
3. The second defendant remained absent and was set ex parte.
4. The case of the first defendant is this: The first defendant did not directly purchase fertilizer from the plaintiff. The second defendant canvassed orders on behalf of the plaintiff. So, the first defendant placed on order for the purchase of complex fertilizer believing that he was the agent of the plaintiff. After receipt of consignment, he paid the amount to the second defendant and obtained the receipt. Therefore, the first defendant is not liable to pay any amount to the plaintiff.
5. The trial court, on consideration of the evidence of P.W.1 and D.W.1, Exs.A-1 to A-7 marked on the side of the plaintiff and Exs.B-1 to B4 marked on the side of the defendant, dismissed the Suit, accepting the case of the first defendant.
6. In the first appeal filed by the appellant/plaintiff, it was contended by him that he has proved privity of contract between him and the first defendant and so, the burden shifts on the first defendant to prove that the liability has been discharged and that the failure on the part of the first defendant to discharge the said liability would warrant interference in the judgment of the trial court.
7. During the pendency of the first appeal, the appellant/plaintiff filed a petition praying for permission to adduce evidence by way of filing additional documents. But, the same has been dismissed by the lower appellate court holding that those documents would not have any bearing on the issues raised in this case.
8. The lower appellate court, on consideration of the submissions made by both the parties, confirmed the judgment of the trial court by accepting the finding of fact given by the trial court. Hence, the second appeal.
9. Ms. Aruna Ganesh, learned Counsel appearing for the appellant, would strenuously contend that both the courts below have failed to consider that once the first defendant-firm had admitted that the consignment sent by the plaintiff was received by it, it is sufficient to raise a presumption that the order had been placed for the supply of goods with the plaintiff by the first defendant and the initial onus which is on the plaintiff to prove the privity of contract stood discharged and that the burden of proof that there is no privity of contract shifted to the first defendant.
10. The learned Counsel would further contend that the proposition of law relating to the presumption of privity of contract as laid down in K.M. Patel v. Firm, Mohammed Hussain Rahimbux , by the Supreme Court in a similar situation, has not been given due consideration by both the courts below. She would also contend by referring various portions of the judgment rendered by the courts below that the evidence adduced by the first-defendant would not show the burden which shifts on the first defendant either regarding the absence of privity of contract or, in the alternative, with regard to the payment of the dues to the plaintiff from the agent.
11. The counsel for the appellant has placed much reliance on the observation made by the Apex Court in K.M. Patel v. Firm, Mohammed Hussain Rahimbux , which is as follows:
The fact that the goods had been sent to the defendant firm by the plaintiff and had been received by the former was admitted on all hands and was sufficient to raise a presumption, till the contrary was proved, that an order had been placed for the supply of the goods with the plaintiff by the defendant firm; and it was immaterial whether the person actually placing the order was a partner of the defendant firm or a person authorised by it. The plaintiff could thus bank on the said fact for the purpose of discharging the initial onus which lay on him to prove privity of contract between the parties and it was for the defendant firm to rebut the presumption which the fact raised as stated above.
12. Arguing contra, Ms. Bhuvaneswari, representing Mr. T.R. Rajaraman, counsel appearing for the first respondent, would inter alia contend that these aspects have been elaborately considered by both the courts below and the above referred decision was also, taken into consideration by the lower appellate court to arrive at a conclusion that the first defendant discharged his onus to disprove the fact that there is a privity of contract between the plaintiff and the first defendant and that the factual aspects which were considered elaborately by the courts below could not be disturbed by invoking Section 100, C.P.C., particularly when there is no substantial question of law.
13. The counsel for the first respondent would further contend that the first defendant produced materials before the trial court that the first defendant placed orders only with the second defendant who held out that he was acting as the agent of the plaintiff and that after receipt of consignment, the amount had been disbursed to the second defendant for which receipt was obtained.
14. In brief, the contention of the counsel is that the orders were booked with the second defendant and at the instance of the second defendant, the first defendant received the consignment and immediately thereafter, the payment was given to the second defendant and that therefore, the first defendant is not liable to pay any amount to the plaintiff.
15. I have heard both and gone through the judgments, evidence and other records.
16. Before both the courts below, the question whether there is any privity of contract between the plaintiff and the first defendant was raised. On meticulous analysis, the courts below have given finding that there is no privity of contract between these parties and as such, the plaintiff is not entitled to claim the suit amount from the first defendant.
17. The Apex Court in K.M. Patel v. Firm, Mohammed Hussain Rahimbux is quite categoric in observing that once the goods sent by the plaintiff to the defendant had been received by the defendant and the same was admitted by the defendant, it is sufficient to raise a presumption, till the contrary is proved, that the defendant placed an order for the supply of goods with the plaintiff and that that will be enough for the plaintiff to show that the initial onus which lay upon the plaintiff to prove the privity of contract stood discharged and once it is discharged, it was for the defendant to rebut the presumption which the fact raised as stated above.
18. In the light of the above principle, the issue raised in this case has to be considered on the basis of the materials and evidence available on record in this case.
19. In this case, there is no dispute that the first defendant purchased fertilizer from the plaintiff. But the case of the first defendant is that he paid the sum to the second defendant under Ex.B-1, a stamped receipt dated 13.11.1979, Ex.B-1 is the receipt issued by the second defendant. According to the first defendant in his evidence and in the written statement, there was no direct contract between him and the plaintiff and he had only contracted with the second defendant, who claimed to be an agent of the plaintiff.
20. As submitted by P.W.1 in his evidence, the first defendant did not place any order with the plaintiff directly. He would also admit that there was no direct contract between the plaintiff and the first defendant. But the case put forward by the first defendant is that he placed orders with the second defendant who was acting as an agent of the plaintiff and that the first defendant paid the sale price of the consignment to the second defendant.
21. In view of the evidence of P.W.1 and Exhibits marked on behalf of the plaintiff, there is no difficulty in coming to the conclusion that there was no direct dealing between the first defendant and the plaintiff. But, the first defendant admits that the goods was received by him sent by the plaintiff. Therefore, as held by the Apex Court, it cannot be contended that the privity of contract has not been established by the plaintiff.
22. It is the case of the first defendant that as soon as he received telegram form the plaintiff demanding for the payment, he sent Ex.A-5 reply telegram immediately stating that he made payment to the second defendant and obtained stamped, receipt. The first defendant also produced his ledger maintained in his Firm in the routine course of business. The entry Ex.B-2 dated 13.11.1979 has been made in page 188 as against the account of the plaintiff. This would also strengthen the case of the plaintiff to a certain extent with reference to the aspect of the privity of contract. Therefore, it has to be considered whether the liability to the plaintiff by the first defendant has been discharged.
23. The consistent plea of the first defendant is that the second defendant was acting as the agent of the plaintiff. Since, he was made to believe that the second defendant is the agent of the plaintiff, it is stated by the first defendant that he paid the amount to the second defendant as early as 30.11.1979 under Ex.B-1, stamped receipt. In order to decide about the aspect whether the second defendant was acting as the agent of the plaintiff, which led the first defendant to make the payment, Ex.A-3 would be very, useful and assumes importance.
24. According to the plaintiff, after despatch of consignment, the plaintiff sent a letter Ex.A-3 on 20.10.1979 to the first defendant asking him to send the payment directly to the plaintiff. On the strength of this document Ex.A-3, it is contended by the plaintiff that the first defendant has been specifically instructed to send the payment to the plaintiff only and that in such a situation, the first defendant cannot be permitted to contend that under the bona fide belief that the second defendant was acting as the agent of the plaintiff he made the payment to him. This submission, in my view, is quite sound. However, it has to be seen whether this document dated 20.10.1979 has been proved before the trial court.
25. Ex.A-2, dated 19.10.1979 is the credit bill sent by the plaintiff to the first defendant. P.W.1 admits that Ex.A-3 letter dated 20.10.1979 sent to the first defendant was not sent along with Ex.A-2. Moreover, admittedly this is not a registered communication to the first defendant. Obviously, the despatch of this letter has not been substantiated by any other evidence. It is relevant to note that the first defendant denied having received any such letter dated 20.10.1979. Besides this, there is no reference about Ex.A-3 in Ex.A-4, the telegram sent by the plaintiff to the first defendant. In Ex.A-5 issued by the first defendant, it is specifically stated that the first defendant made payment to the second defendant on 30.11.1979. Even then, the plaintiff did not refer about the letter Ex.A-3, dated 20.10.1979, when he issued Ex.A-6 suit notice. Therefore, the contention urged by the counsel for the first defendant that Ex.A-3 was not in existence on the date of Ex.A-6 suit notice cannot be rejected.
26. In the light of what is stated above, both the courts below have rightly rejected Ex.A-3. It is true that there is no express authorisation to the second defendant to receive the amount for the plaintiff. But, the factual finding given by both the courts below is that the plaintiff by his express conduct made the first defendant believe that the second defendant is the agent of the plaintiff.
27. In view of the above discussion, though there are some materials to hold that there is a privity of contract between the plaintiff and the first, defendant, the materials available on record would make it obvious that the first defendant was made to believe that the second defendant was the agent of the plaintiff and that therefore, the first defendant made the payment to the second defendant.
28. In this context, a useful reference can be made on some observation made in K.S. Dugar v. Corporate Engineers Ltd . It is held in this decision that the payment by buyer to the broker of the price of goods sold is a payment to the seller, when the seller has so acted as to make the buyer believe that the seller has authorized the broker to receive payment.
29. So, in the light of this decision, I am of the view that the burden which actually shifted on the first defendant stood discharged and the conclusion arrived at by both the. courts below to hold that the plaintiff is not entitled to the relief sought for is correct, in view of the other reasonings added in this judgment.
30. Moreover, as held in Ram Das alias Ram Suraj v. Smt. Gandiabai and Ors. (1997) 2 L.W. 556 (S.C.), it is well settled that on a question of fact, the decision rendered by the lower appellate court is final, and this Court in exercise of its jurisdiction under Section 100, C.P.C., cannot interfere with the findings of fact.
31. Therefore, in my view, the finding of fact based on relevant evidence as arrived at by both the trial court and the lower appellate court is final and the same cannot be disturbed.
32. In the result, the second appeal is dismissed.