JUDGEMENT : A. H. KHAN, J. This first appeal is directed against the decree of the District Judge, Guna, passed on 17-12-1950 in Civil Original Suit No. 3 of 1949. 2. The plaintiff filed the suit against the defendant for the recovery of Rs. 15,360-4-6 on the allegations that defendant 1 (Thakurdas) and defendant 2 (Jagannath Prasad) own a firm known as Thakurdas Jagannath Prasad and that defendant 1 (Thakurdas) and defendant 3 (Damodrilal) own another firm under the name and style of Thakurdas Damodrilal. Both the firms are situated at Fachhar and do the business of Adat (Commission agency), dealing in cereals, ghee etc. Thakurdas (defendant 1) was a partner in both firms. On 23-4-1944, the plaintiff sent Rs. 2,000 through Dayaram to firm Thakurdas Jagannath Prasad for buying Sarson and this suni was entered in the Bahi Khata of firm Thakurdas Jagannath Prasad to the credit of Mahindra Kumar Dayaram. On various dates Sarson weighing 818 Mds. 30 Seers was purchased by the firm Thakurdas Damodrilal for the plaintiff and the plaintiff received two bills (Bijak) for Rs. 8,921. On 7-7-1944, Thakurdas on behalf of Thakurdas Damodrilal received Rs. 6,000 from the Plaintiff towards this account. On 24-8-1944, the plaintiff sent Rs. 5,000 to Thakurdas through a Hundi for the purchase of ghee. The defendant purchased 98 Mds. 30 Seers and 1 Chhatak of ghee for the plaintiff for a sum of Rs. 8, 479-4-0 and the plaintiff received a bill for the amount. But when the plaintiff did not receive goods, he asked for delivery. He was told that his Sarson and ghee have been pledged. On 11-3-1945, the day he asked for delivery, the market rate of Sarson was Rs. 14 per Maund and the price of 818 Mds 30 Seers of sarson if calculated at that rate, amounts to Rs. 11,439. Out of this after deducting Rs. 980-14-0 (Rs. 920-10-6 as principal and Rs. 60-2-2 as interest) the defendants have to pay Rs. 10,478-8-0 to the plaintiff. And with regard to ghee the defendants owed Rs. 5,389 to the plaintiff. Thus in all the defendants owed Rs. 15,858 but this claim is for Rs. 15,380-4-6 only. 3.
11,439. Out of this after deducting Rs. 980-14-0 (Rs. 920-10-6 as principal and Rs. 60-2-2 as interest) the defendants have to pay Rs. 10,478-8-0 to the plaintiff. And with regard to ghee the defendants owed Rs. 5,389 to the plaintiff. Thus in all the defendants owed Rs. 15,858 but this claim is for Rs. 15,380-4-6 only. 3. Thakurdas defendant 1 in his written statement has said that he and Jagannath Prasad were partners in the firm bearing that name, but that the partnership was dissolved in Samvat 1999, that in year Samvat 2000 his partnership with Damodrilal defendant 3 was also dissolved. He denies receiving Rs. 2,000 from the plaintiff initially for the purpose of buying sarson and also denies the subsequent payment of Rs. 6,000 by the plaintiff. He, however, admits taking Rs. 5,000 from the plaintiff through a Hundi for the purchase of ghee. He bought ghee for Rs. 5,479-4-1. But because the plaintiff did not pay the balance due on account of ghee, the ghee was pledged with the Imperial Bank. Since the plaintiff did not pay the balance, he is not entitled to recover from him any loss that he may have sustained. With regard to the transaction of sarson, it was alleged that it was purchased in the name of Mahindra Kumar Dayaram and that the plaintiff has to do nothing with it. 4. Defendant 2 Jagannath Prasad has denied all the allegations of the plaintiff and has stated that he was not a partner in the firm known as Thakurdas Jagannath Prasad and that Thakurdas had no right to do business in his name. 5. The other two defendants, Damodrilal (defendant 3) and Dayaram (defendant 4) in spite of service of notice did not put in appearance nor did they file any written statement and by the order of the trial Court dated 15-6-1948, the case proceeded ex parte against them. 6. The learned District Judge framed ten issues and after recording evidence of the parties and hearing their counsel, decreed the plaintiffs suit for a sum of Rs. 12,501-10-9 against defendant 1 - Thakur Das and defendant 3 - Damodrilal and dismissed the claim against Jagannath Prasad. Aggrieved by this decision, the plaintiff has filed this appeal against Thakurdas (defendant 1), Damodrilal (defendant 3) and Jagannath Prasad (defendant 2).
12,501-10-9 against defendant 1 - Thakur Das and defendant 3 - Damodrilal and dismissed the claim against Jagannath Prasad. Aggrieved by this decision, the plaintiff has filed this appeal against Thakurdas (defendant 1), Damodrilal (defendant 3) and Jagannath Prasad (defendant 2). The points urged before us in this appeal are : (i) That Jagannath Prasad (defendant 2) was a partner in the firm of Thakurdas Jagannath Prasad and as such the suit should be decreed against him also. (ii) That the plaintiff is entitled to recover his loss from the defendants, that the trial Court erred in not decreeing the suit for the entire sum claimed by the plaintiff and that he should be held entitled to recover Rs. 2,858-8-8, the balance disallowed by the Court below, and (iii) That interest during the pendency of suit has been wrongly disallowed. 7. With regard to Point No. 1 the trial Court had framed issue No. 1, which runs thus : 8. The plaintiff has examined in all about ten witnesses on the point. Ramnlklal, P. W. 1, says that Jagannath Prasad is a partner of the firm Thakurdas Jagannath Prasad but he makes this statement at the instance of Thakurdas. In his statement he says that : I am afraid this testimony does not establish the fact that Jagannath Prasad was a partner in the firm in dispute. 9. The second witness, Jagannath Prasad (P. W. 2) is a servant in the Co-operative Department, who merely says that although in the agreement between the firm and the Co-operative department there is the name of both persons (Thakurdas and Jagannath Prasad), yet it is signed by Thakurdas only. This statement is in no way helpful. 10. Ramkishan (P. W. 2) is a Mandi clerk, who says that a license to transact business in the Mandi was issued in the name of Jagannath Prasad Thakurdas, that he never saw Jagannath Prasad and that Thakurdas alone used to sign. It is difficult to conclude from this statement that Jagannath Prasad was a partner in the firm. 11. Motilal (P. W. 4) says that he heard that Jagannath Prasad was a partner in the firm. 12. Amolakchand (P. W. 5) has admitted that he does not know any thing about partnership. He says that 13. Khemchand (P. W. 8) says that Thakurdas had told him that Jagannath Prasad was a partner. 14.
11. Motilal (P. W. 4) says that he heard that Jagannath Prasad was a partner in the firm. 12. Amolakchand (P. W. 5) has admitted that he does not know any thing about partnership. He says that 13. Khemchand (P. W. 8) says that Thakurdas had told him that Jagannath Prasad was a partner. 14. Babulal (P. W. 6) is a witness who has worked in the firm of Thakurdas Jagannath Prasad for five years and he says that Thakurdas and Jagannath Prasad were partners. But this is a queer witness who in his cross-examination denies any knowledge as to the extent of share possessed by each of the partner. Moreover he says that during his five years service no accounts as between partners were ever cast and no account of any profits was ever made out. He appears to be a tutored witness and his testimony must be rejected. 15. I shall now consider the statement of Gopaldas plaintiff himself. He is P. W. 11. He says that Jagannath Prasad had himself told him that he was a partner in the firm and that his share was 8 annas in the rupee. Jagannath Prasad asked him to give some work to the firm, thereupon he sent Rs. 2,000 to Jagannath Prasad through Dayaram and that there is an entry in his Bahi Khata to that effect. But the entry in the accounts books of the plaintiff is not in the name of firm Thakurdas Jagannath Prasad, it is in the name of other firm Thakurdas Damodrilal. It is also admitted that the plaintiff also received bills from the firm Thakurdas Damodrilal. This clearly shows that Jagannath Prasad had nothing to do with these transactions. 16. From the statement of Shamlal, P. W. 12, it appears that the plaintiff in all sent Rs. 13,000 and that all this amount stood in the name of Thakurdas Damodrilal. 17. My conclusion on a review of the entire evidence is that in the first place, the plaintiff has failed to prove that Jagannath Prasad is a partner of the firm Thakurdas Jagannath Prasad and secondly because all the money (Rs.
13,000 and that all this amount stood in the name of Thakurdas Damodrilal. 17. My conclusion on a review of the entire evidence is that in the first place, the plaintiff has failed to prove that Jagannath Prasad is a partner of the firm Thakurdas Jagannath Prasad and secondly because all the money (Rs. 13,000) sent by the plaintiff appears in the name of Thakurdas Damodrilal in his own books of account (and Jagannath Prasad is not admittedly a partner in the firm of Thakurdas Damodrilal, see para 2 of the plaint) no liability can be fastened on Jagannath Prasad for the two transactions in dispute. I agree with the finding of the trial Court on this point. 18. With regard to the second point, namely, that the plaintiff is entitled to recover his loss from the defendants and that the trial Court erred in not decreeing the suit for the entire sum claimed by the plaintiff, we must first get the necessary facts of this case into proper focus. The facts are that the defendants are commission agents, that the plaintiff advanced the sum of about Rs. 13,000 to the defendants for the purchase of Sarson and Ghee, that the defendants as a matter of fact purchased Sarson and Ghee for the plaintiff and that in making these purchases the defendants invested some money of their own, that because the plaintiff owed the defendants (their agents) some money on account of these purchases, the defendants disposed of the goods and were in consequence unable to deliver them when asked to do so. The trial Court has not viewed all these facts in their true perspective and had followed the easiest course. It has held that because the plaintiff had not sent the balance to the defendants, the defendants were justified in disposing of the goods and in these circumstances, the Court has merely passed a decree for the return of the advances made to the defendants by the plaintiff at various times. This I am afraid is not the correct approach in the matter. 19.
This I am afraid is not the correct approach in the matter. 19. The facts which should be borne in mind are that the defendant firm (Thakurdas Damodrilal) is a firm of Commission Agents, that the firm purchased Sarson and Ghee at the instance of the plaintiff with the bulk of money supplied by the plaintiff though the firm spent some money out of its own pocket as well. In these circumstances the firm was the Agent and the plaintiff was the principal. In cases such as the present one before us, where the principal owes some amount to the agent, the agent has a right as against the principal, which is known in English Common Law as the Agents lien. Lord Ellenborough in Houghton v. Mathew, 8 B and P 494 (A) has described this lien "to be the right in one man to retain that which is in his possession belonging to another until certain demands of the person who is so in possession are satisfied." This rule of English law has been put into a statutory form in S. 221, Indian Contract Act, which is as follows : "In the absence of any contract to the contrary an agent is entitled to retain goods, papers and other property, whether moveable or immovable, of the principal received by him until the amount due to himself for commission, disbursement and services in respect of the same has been paid or accounted for to him." 20. This agents lien does not give unrestricted authority to the agent to deal with the property in any manner the agent may like. The right which the lien confers upon the agent is limited in nature: it enables the agent to retain the property till his dues are paid by the principal. This right can be availed of as a defence if the principal brings an action for the recovery of the property in the possession of the agent, or, it may afford him a ground to reclaim the property, if the agent has been unlawfully dispossessed of it. But this confers no authority on the agent to sell or otherwise dispose of the property without the consent of the owner (principal) in order to satisfy his lien. See Bala Mal v. Budhumal, AIR 1926 Lah 94 (B).
But this confers no authority on the agent to sell or otherwise dispose of the property without the consent of the owner (principal) in order to satisfy his lien. See Bala Mal v. Budhumal, AIR 1926 Lah 94 (B). In Mulchand Shib Dhan v. Sheomal Sheo Prasad, AIR 1929 Lah 666 (C), Shadilal, C.J., has observed that "Where plaintiffs purchase certain goods on behalf of the defendants from whom certain money was due to them, they are entitled to retain possession as agents of the goods until the money is 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 are not entitled to sell the goods. If they sell them, however, they are liable for the loss substained by the defendants on account of such unauthorized sale." 21. To this position of the agents lien, may be added another stride which the law took and which appears to have extended the limits of the agents lien. It is said that although "an agent pure and simple may not be justified in selling the principals goods without his authority, yet where the agent has spent money from his own pocket in purchasing the goods on behalf of the principal, the agent is in the position of a tacit pledgee and can recover as much of his outlay as possible by selling the goods which are in his custody". See Bar Dukan v. Gopal Singh, AIR 1928 Lah 747 (D). 22. Although the case does not say that the agent in such circumstances should first serve a notice on the principal before selling the goods, but sines the agents position has been akin to that of a pawnee (he is regarded as a tacit pledgee), I think the logical conclusion of the assumption of that position is that like a pledgee (pawnee) where there is a default in payment of the sum due, the agent can sell the goods only after giving reasonable notice of the sale to the principal. 23.
23. This being the position of the agents lien in law, in the instant case, it does not appear that the agent either sold Sarson and Ghee with the consent of the principal or that the agent in order to recover the money due to him, disposed of the commodity after giving a reasonable notice to the principal (the plaintiff). In the circumstances, the plaintiff must be held entitled to the loss suffered by him by the unauthorised sale by the agent. 24. The plaintiff claimed a sum of Rs. 15,368-4-6 from the defendants on the ground that on 11-3-1945, the plaintiff asked the defendants to deliver his goods (Sarson and Ghee) to him but they failed to do so and on 13-3-1945 the defendants told him that they had pawned the goods. Thus it is obvious that without authority from the plaintiff and without giving him any notice, the agent dealt with the property of the principal. In doing so the defendants as agent of the plaintiff exceeded the limit of their lien, and their act being in excess of the authority, they are liable to the plaintiff for the loss which the plaintiff has sustained. 25. In assessing his loss, the plaintiff has urged that on the day he made a demand for delivery i.e., on 11-3-1945, the price of Sarson was Rs. 14 a Maund and Ghee was Rs. 91 per Maund and that calculated at this rate, the price of his goods amounts to about Rs. 16,058 for which he prefers his claim. 26. But from the statement of the Mandi Clerk, Ram Kishen plaintiffs own witness it appears that on 11-3-1945, the rate of Sarson and Ghee was Rs. 11-8-0 and Rs. 90 per Maund respectively. On a calculation at this rate the plaintiff would have got in all Rs. 13,704-10-0 for his goods. Out of this in the plaint he had admitted having received Rs. 498 so the net amount he is entitled to is Rs. 13,205-10-0 and in the circumstances we would add a further sum of Rs. 704 to the amount already decreed. 27. Regarding interest during the pendency of the suit we see no reason why the lower Court has deprived the plaintiff of it. We think it should be awarded to him. 28. For reasons stated above, the appeal of the plaintiff is partly allowed.
704 to the amount already decreed. 27. Regarding interest during the pendency of the suit we see no reason why the lower Court has deprived the plaintiff of it. We think it should be awarded to him. 28. For reasons stated above, the appeal of the plaintiff is partly allowed. The suit of the plaintiff is decreed for a sum of Rs. 13,305-10-0 and he is also held entitled to interest pendente lite at the rate of 6 per cent per annum. The plaintiff shall also get his costs to the extent he has succeeded. The appeal is dismissed against Jagannath Prasad with costs. The decree of the trial Court shall be amended to the extent indicated above. 29. DIXIT, J. :- I agree that this appeal as against Jagannath Prasad should be dismissed with coss and hat as against Damedrilal end Thakurdas, the decree of the lower Court should be modified as proposed by learned brother and that as against them this appeal should be allowed with costs.