LALLIMAL BIHARILAL v. RAMBABOO VAISHYA — 1989 DIGILAW 165 (MP)

T. N. SINGH, J. ( 1 ) OF the nine plaintiffs, who describe themselves as members of Gwalior Agrico Dealers' Association, eight have appealed against the verdict rendered in their suit by the trial Court. In the array of defendants/ respondents figures several persons, but only as pro forma parties. Defendant/respondent No. 1 Rambaboo Vaishya only filed written statement and contested the suit. ( 2 ) BEFORE reference is made to the pleadings, issues, evidence and the impugned judgment, it may be appropriate even at this stage to indicate the brief outline of the controversy, because the trial Court has evidently failed to grapple satisfactorily with the legal complexion of the issues involved. Indeed, there is no reference at all in the impugned judgment to the relevant provisions of the Contract Act, the Sale of Goods Act, or even the general law of Torts on which the foundation of plaintiffs' claim actually rested. Shortly put, the plaintiffs sued the contesting defendant for wrongful detention of their goods and, it was necessary, therefore, to adjudge the merits of that claim and of the justification advanced by the contesting defendant in meeting that claim. The suit was, undoubtedly, an action of detinu, but the trial Court, misdirected itself in framing unnecessarily as many as 15 issues in deciding the controversy. ( 3 ) ON pleadings, the facts which are admitted may be stated at once. Evidence, oral and documentary, has clearly established the position that in the year 1950 there was shortage of"agrico' tools of which supplies were made by M/s. Tata Iron and Steel Company, Ltd. , Jamshedpur, and the Directorate of Civil Supplies of erstwhile Madhya Bharat Government was involved in the matter of supply and equitable distribution thereof. Admittedly, on 17-2-1950 a meeting was held in the office of Regional Controller, Civil Supplies, Gwalior, at the behest of the Director of Civil Supplies himself. In that meeting of the Gwalior Agrico Dealers' Association, Gwalior, (for short, 'association') was formed with 16 members comprising 8 plaintiff/ respondents and the pro forma defendants, and defendant No. 1 was elected convenor (Ext. D-1 ). The said Association has, however, remained all along, till today, an unincorporated body, though it had been acting through its President, defendant-respondent No. 1 (Rambaboo Vaishya), and plaintiff No. 5, Mirachand Kothari, as its Secretary. D-1 ). The said Association has, however, remained all along, till today, an unincorporated body, though it had been acting through its President, defendant-respondent No. 1 (Rambaboo Vaishya), and plaintiff No. 5, Mirachand Kothari, as its Secretary. The Association continued to function through them till Rambaboo Vaishya resigned on 28-8-1950 (Ext. P-10 ). During its tenure till then orders were placed by the Association with M/s. Tata Iron and Steel Company Ltd. , for supply of certain 'agrico' tools, but only one wagon load of tools had been supplied and a part of the orders booked remained unexecuted. There is no doubt that events took a new turn when defendant Rambaboo Vaishya resigned. He has, indeed, not contested the fact that the seven pro forma defendants dissociated themselves from the Gwalior Agrico Dealers' Association, Gwalior, and formed a new body under the name and style of 'agrico' Dealers Syndicate, Gwalior. "the main contention raised in written statement is that when one wagan load of supplies were received from M/s. Tata Iron and Steel Company, Ltd. , that was distributed equally amongst 16 members of the Association for the purpose of retail sale being made by them, and that despite the said Association having split up, the old arrangement was continued in respect of supplies remaining outstanding against orders placed and, therefore, despite his resignation, Rambaboo Vaishya continued to exercise authority with regard to the affairs of the said Association, comprising only the plaintiffs, for the purpose of completing the transaction in respect of supplies to be made by M/s. Tata Iron and Steel Company, Ltd. , by distributing the same among members of the said Association of the plaintiffs and among the pro forma defendants, who, in the meantime; formed the new body, Agrico Dealers Syndicate, Gwalior, (hereinafter called 'the Syndicate' ). Be it stated in this connection that Ext. D-3, captioned as a notice (Suchana Patra) hearing the date 27-12-1950, forms the sheetanchor of the defence in that regard. ( 4 ) ON facts, it is not disputed that under 3 invoices (Exts. P-4, P-5 and P-6), all dated 31-1-1952, made in the name of M/s. Gwalior Agrico Dealers' Association, Gwalior, goods were despatched by M/s. Tata Iron and Steel Company, Ltd. , Jamshedpur, by railway and of those goods delivery was obtained by defendant-respondent Rambaboo Vaishya giving rise to the cause of action for the suit. P-4, P-5 and P-6), all dated 31-1-1952, made in the name of M/s. Gwalior Agrico Dealers' Association, Gwalior, goods were despatched by M/s. Tata Iron and Steel Company, Ltd. , Jamshedpur, by railway and of those goods delivery was obtained by defendant-respondent Rambaboo Vaishya giving rise to the cause of action for the suit. In his written statement, defendant Rambaboo Vaishya has admitted that after taking delivery of the goods, the same was kept for some time undistributed in a godown, but the nine plaintiffs having refused to take delivery of goods of their share, the share of 8 defendants was delivered to them and the remaining goods were still lying in godown. He took the specific plea that there was a meeting in which a resolution was adopted in respect of which the notice dated 27-12-1950 (Ext. D-3) was issued. He also pleaded that the meeting was attended by all dealers (plaintiffs and defendants) who were entitled to share the disputed supplies and a resolution was adopted and that was recorded in the proceedings of the meeting and that record was available with M/s. Phoolchand Hirachand Kothari. However, he admitted in his written statement that some of the plaintiffs did not accept the notice and that was sent by registered post. ( 5 ) IN this first appeal the evidence has to be re-appreciated, and that shall be done presently, but I would still refer briefly to some of the findings and conclusions of the trial Court. It has to be noted in this connection that plaintiff No. 9 has not appealed against the decision of the trial Court on issue No. 2 that he is not entitled to any decree. On issue No. 3 the Court below accepted Ext. D-3 as a 'resolution' dated 2712-1950 and also reached surprisingly the conclusion that plaintiff Hirachand should have produced accounts and for his default adverse inference has to be drawn against him. Both conclusions are seriously challenged. However, as regards finding on issue No. 7 it is not disputed that Rs. 2731/-, of joint contribution of parties, were in deposit with the suppliers which was adjusted against the disputed supplies. But plaintiffs claimed and proved as per Ext. P-11 that all accounts had been settled between them and the defendants. What is seriously disputed is the conclusions on issue Nos. 2731/-, of joint contribution of parties, were in deposit with the suppliers which was adjusted against the disputed supplies. But plaintiffs claimed and proved as per Ext. P-11 that all accounts had been settled between them and the defendants. What is seriously disputed is the conclusions on issue Nos. 5, 6 and 8 that the disputed supplies were not of the exclusive title of the 8 plaintiffs on the footing that as per 'agreement' (Ext. D-3) they had to share the same with the defendants. The finding recorded on issue No. 1 is that although the goods were despatched in the name of plaintiffs' Association and the R. Rs. were sent to the Bank for delivering the same to the plaintiffs on realising from them Rs. 6804 and 4 annas, defendant/ respondent Rambaboo was authorised to take delivery of those goods in his capacity as President and on the authority of 'agreement' (Ext. D-3 ). The main issues (Nos. 12 and 13) were, accordingly, decided in the negative against the plaintiffs holding that the defendant/ respondent had not illegally taken delivery of the goods. On the above findings, the trial Court passed a decree declaring the 8 plaintiffs' interest in the disputed goods shown in schedule A of the plaint to the extent of 1/16th share therein and their entitlement to get delivery thereof on payment of 1/16th expenses of Rs. 7255, 4 annas and 6 pies with interest at the rate of 6% per annum from the date of the suit till its delivery. In the alternative, the eight plaintiffs were held entitled to recover Rs. 233/- and 3 annas each from defendant Rambaboo. ( 6 ) SURPRISINGLY, the contesting defendant Rambaboo did not enter the witness-box, Only one defence witness, Motilal alias Mathulal, was examined. The plaintiffs examined one officer of M/s. Tata Iron and Steel Company Ltd. who proved relevant correspondence between the parties and supported plaintiffs' case that the disputed goods were sold to their Association and the suppliers had protested against the illegal action of the answering defendant. Plaintiff No. 5 Hirachand Kothari and plaintiff No. 8 Babulal were also examined. P. W. Hirachand Kothari was Secretary of the undivided Association as also re-constituted Association while PW Babulal was President of the re-constituted Association, and in the undivided Association he was a member. Plaintiff No. 5 Hirachand Kothari and plaintiff No. 8 Babulal were also examined. P. W. Hirachand Kothari was Secretary of the undivided Association as also re-constituted Association while PW Babulal was President of the re-constituted Association, and in the undivided Association he was a member. Although Shri N. K. Jain, learned counsel appearing for defendant/ respondent Rambaboo has placed strong reliance on some portions of the evidence of P. W. Kothari, namely, paras 10 to 13 at page 46 of the paperbook para 11 at page 53 and also para 21 at page 56, I have no doubt that the facts proved by documentary evidence are not destroyed by the testimony relied on of this witness and of DW Motilal. Indeed, Motilal's evidence is worthless as it contradicts Exts. P-1 and D-3. The letter of Director of Civil Supplies (Ext. P-1) dated 24-11-1950 discloses that the undivided Association had ceased functioning and that de facto position he had recognised recommending to the suppliers accordingly for supplies to be made to the two new bodies in accordance with the directions contained therein as regards respective entitlement of the Association and the Syndicate. DW Motilal's evidence contradicts Ext. D-3 as that does not speak of any "resolution" of even of any "meeting" about which he deposed. Evidently, the defendant miserably failed to establish his main plea and, indeed, on evidence it is also not established that PW Kothari used to keep "accounts" of the undivided Association or had withheld the same. His own evidence in that regard is supported by Ext. P-11by which he had asked defendant Rambaboo to "transfer" the accounts of the undivided Association which he had withheld. Apart from the fact that PW Kothari was supported by PW Babulal that there was no "meeting" or "resolution" in regard to Ext. D-3, the fact that no step was taken to call for the Minute Book from PW Kothari to prove proceedings of the alleged meeting is an important fact which discredits seriously the plea in that regard taken by defendant Rambaboo in his written statement or sought to be proved through D. W. Motilal. Indeed if there was really any such 'resolution' that would have been recorded in the minute Book produced in Court by PW Babulal, who had proved therein the proceeding of the meeting dated 8-9-1950 regarding defendant Rambaboo's resignation dated 28-8-1950. Indeed if there was really any such 'resolution' that would have been recorded in the minute Book produced in Court by PW Babulal, who had proved therein the proceeding of the meeting dated 8-9-1950 regarding defendant Rambaboo's resignation dated 28-8-1950. The further fact that the defendant did not enter the witness box to establish by evidence any plea raised in the written statement also discredits irreparably the contentions raised in the written statement except to the extent that the facts proved by documentary evidence, adduced by the parties, cannot be ignored. ( 7 ) I propose to take up immediately the two questions earlier referred to, for decision, by examining the evidence and the law applicable. Firstly, whether the disputed goods, listed in schedule A of the plaint, were, in law, of the exclusive title of the plaintiffs on the date in which defendant Rambaboo got the Ralway Receipts from the bank or after his taking delivery of the goods from the railways. In this connection I would like to refer to letter dated 11-12-1950 (Ext. P-2) addressed to the Director, Civil supplies, by M/s. Tata Iron and steel Company, Ltd. This letter was sent in reply to the Director's letter dated 24-11-1950 (Ext. P-1) in which the Director had notified the supplier of the fact of the Association splitting into two separate bodies. In his letter the Director stated that bigger 'agrico' Dealers had formed a separate body under the name and style of "agrico Dealers Syndicate, Gwalior" and that, two wagons of 'agrico' tools may be supplied to the new Association. It is important to note that in his letter the Director recognised the right of the Gwalior 'agrico Dealers' Association to receive the remaining goods of the earlier order, having noted that the said Association had received only one wagonload of goods and had yet to receive another wagon load, requesting at the same time that for the new body, the syndicate, two wagons of 'agrico' tools may be supplied separately. In their reply (Ext. P-2) the suppliers wrote. "the balance tools cannot be despatched as these will not make up a wagon load. We are, therefore, offering some more tools to Gwalior Agrico Dealers' Association, Gwalior, to be despatched as a wagon load along with the pending tools against our above work orders. In their reply (Ext. P-2) the suppliers wrote. "the balance tools cannot be despatched as these will not make up a wagon load. We are, therefore, offering some more tools to Gwalior Agrico Dealers' Association, Gwalior, to be despatched as a wagon load along with the pending tools against our above work orders. We are also offering one wagon-load of 'agrico' tools to the newly formed 'agrico Dealers' Sundicate, Gwalior, as recommended by you. Reference may be made to letter dated 20-12-1950 by M/s. Tata Iron and Steel Company, Ltd. to Gwalior Agrico Dealers Association, Gwalior (Ext. P-3) in which they mentioned about the "pending order" and offered some more tools to be despatched along with the "above pending tools," and sought advice in that regard, as also an advance of Rs. 3000/ -. It is clear that offer was accepted by the plaintiffs' Association. As by their letter dated 9-2-1951 (Ext. P-18) they sent the requisite advance, albeit against additional supply, requesting the suppliers to despatch the same along with the "goods remaining to be supplied" to them as mentioned in Ext. P-3, I have already referred to Exts. P-4, P-5 and P-6, all dated 31-1-1952 but I may also refer now to Exts. P-29 and P-30-A. These are letters dated 11-2-1952 and 1-2-1952 respectively by M/s. Tata Iron and Steel Company to the Agent, Central Bank of India, Jamshedpur. These two letters disclose that a bill of exchange ('sight draft') for Rs. 6804 and 4 annas was drawn on M/s. Agrico Dealers' Association, Gwalior, on 1-2-1952, and the relevant R. Rs. dated 28-1-1952 were sent to Bank along with the 'sight draft' for delivering those R. Rs. to the party concerned on their honouring the draft. ( 8 ) ON the unimpeachable evidence aforesaid, it is difficult to draw any other conclusion in this case except that the plaintiffs' Association were "buyers" within the meaning of the term defined in section 2 (1) of the Sale of Goods Act, 1930, and M/s. Tata Iron and Steel Company, Ltd. , were 'sellers' of disputed goods, as defined in sub-section (13) of Sec. 2 thereof. Even if there was a contract earlier between the said suppliers and M/s. Gwalior Agrico Dealers' Association, prior to its splitting up, that did that survive the event, that lapsed on the change of identity of the Association after splitting up. Even if there was a contract earlier between the said suppliers and M/s. Gwalior Agrico Dealers' Association, prior to its splitting up, that did that survive the event, that lapsed on the change of identity of the Association after splitting up. A new offer was made by the suppliers or "sellers" to the new body, the Association, with plaintiffs only as members of that body, and that was accepted by the new body. This position is made clear by the correspondence aforesaid exchange between the two parties as also the sponsor, Director of Civil Supplies. The Sellers' made their position very clear that they were dealing in respect of the remaining goods of the old order with a new entity, namely, the plaintiffs' Association, and to the other new body, the Syndicate, they were supplying separately one wagon-loads of goods. The mere fact that in the supply made in respect of the 'pending order' old advance was sued, to which the defendants had also contributed along with the plaintiffs ('buyers') did not prove that the 'sellers' were concerned in any way with the liability arising from the inter se accounting between the plaintiffs' Association and the defendants' Syndicate. That was a question to be settled between the Association and the Syndicate, and even if that question had not been settled, that fact did not impair the validity of the new contract coming into existence as a result of the fresh "offer" and fresh "acceptance" exchanged by the buyer 'and the seller. ' The legality and validity to the new contract came directly from Section 62 of the Contract Act. It became a matter of substitution of new parties and a new contract between them as contemplated under section 62. As noted in Pollock Mulla's Contract Act, 10th edn. , at p. 497, "novation is not consistent with the original debtor remaining liable in any form, it requires as an essential element that the right against the original contractor shall be relinquished, and the liability of the new contracting party accepted in his place". see also, Liladhar Nemchand v. Rawji Jugjiwan, AIR 1935 PC 93. , at p. 497, "novation is not consistent with the original debtor remaining liable in any form, it requires as an essential element that the right against the original contractor shall be relinquished, and the liability of the new contracting party accepted in his place". see also, Liladhar Nemchand v. Rawji Jugjiwan, AIR 1935 PC 93. ( 9 ) ACCORDING to section 19 of the Sale of Goods Act, 1930, the property in goods contracted for sale "is transferred to the buyer at such time as the parties to the contract intend it to be transferred," and it is also contemplated that for the purpose of ascertaining the intention of the parties regard shall be had to the "terms of the contract, the conduct of the parties and the circumstances of the case", Between the offer made on 20-12-1950 and despatch of the disputed goods on 28-1-1952 by the suppliers, the Syndicate did not conduct itself vis-a-vis the suppliers in ,such manner as would suggest Syndicate's objection to the novation. Indeed, by Ext. D-5, the Director of Civil Supplies had informed the Syndicate on 26-6-1951 that they could have no claim to the disputed goods because they had already received in the meantime one wagon for exclusive distribution by them. It is apparent that supplies were made to parties by M/s. Tata Iron and Steel Company, Ltd. , on the recommendation of the Director of Civil Supplies and, as such, the two 'buyers' and the 'sellers' were all bound by his decision and, in the instant case, the evidence is that the suppliers and the Association had explicitly, and the Syndicate, had implicitly, accepted the novation as both buyers' (Association and Syndicate) were getting one wagon each exclusively as earlier they had shared equally the goods despatched to the undivided Association. As held in Union of India v. Kishorilal, AIR 1959 SC 1362 , the original contract as respects disputed goods was discharged by the three parties (at the intervention of the Director of Civil Supplies) by the substituted agreement resulting in the original cause of action arising under the old contract being discharged and parties being governed by the substituted contract. This position was reiterated by the plaintiffs' Association in the legal notices (Exts. P-31 and P-32) dated 15-2-1952 and 6-5-1953 served on defendant Rambaboo to whom, earlier on 10-2-1952, as per Ext. P-11, a cheque for Rs. This position was reiterated by the plaintiffs' Association in the legal notices (Exts. P-31 and P-32) dated 15-2-1952 and 6-5-1953 served on defendant Rambaboo to whom, earlier on 10-2-1952, as per Ext. P-11, a cheque for Rs. 240 and 6 annas was sent by the Association to clear the old account between the Association and the Syndicate. It is clear that till then delivery of the disputed goods had not been obtained by defendant Rambaboo from the railways, and yet, he refused to hand over the R. R. s. to the Association. ( 10 ) IN the context of the instant controversy, provisions of section 25 of the Sale of Goods Act are more relevant and, accordingly, portions thereof are extracted below. "25. Reservation of right of disposal. (1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to a buyer or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the condition imposed by the seller are fulfilled. (2 ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Where the seller of goods draws on the buyer for the price and transmits to the buyer the bill of exchange together with the bill of lading or, as the case may be, the railway receipt to secure acceptance or payment of the bill of exchange, the buyer is bound to return the bill of lading or the railway receipt if he does not honour the bill of exchange and, if he wrongfully retains the bill of lading or the railway receipt the property in the goods does not pass to him. " (Emphasis added ). ( 11 ) IN the instant case, the 'sellers' M/s. Tata Iron and Steel Company Ltd. , having drawn a bill of exchange in the name of the plaintiffs' Association and having sent the railway receipts for the disputed goods to the Bank for delivery of the R. Rs. " (Emphasis added ). ( 11 ) IN the instant case, the 'sellers' M/s. Tata Iron and Steel Company Ltd. , having drawn a bill of exchange in the name of the plaintiffs' Association and having sent the railway receipts for the disputed goods to the Bank for delivery of the R. Rs. against payment made by the buyer, the title in the goods covered by the R. Rs. evidently passed as soon as payment was made and the bill of exchange honoured. The clear, intention of section 25 is to pass title in the goods to the buyer and not anybody else, and if any payment is made by any person other than the buyer that would be a payment deemed to have been made on behalf of the 'buyer, otherwise the R. R. (of bill of lading) would be deemed to have been wrongfully retained as per sub-sec. (3) thereof. The bill of exchange has to be honoured by the 'buyer' and title in goods passes to him onl his satisfying that condition. If any person acts without 'buyer's lawful authority, he would be deemed to be a 'bailee' and would be answerable to the 'bailor' (the 'buyer) for safe custody thereof. Sections 148 and 149 of the Contract Act show that a person who is in possession of goods of other or is delivered goods owned by another, holds the same as 'bailee' only as his possession is legally enjoined to before the specific purpose mentioned in sub-s. (1) of sec. 25. He has to act according to the direction of the 'bailor' (the 'buyer') on whose behalf possession of the goods is obtained and held by him. Indeed, it' is for this purpose that the words 'other bailee' are deliberately introduced in section 25 (1), prefacing the clause 'for the purpose of transmission to the buyer. ' Support for this view I read in Trustees, Port of Bombay v. Premier Automobiles Ltd. AIR 1981 SC 1982 wherein the position of a statutory bailee, similar to one contemplated under section 25 (1), was discussed in the context of a different statutory provision. ' Support for this view I read in Trustees, Port of Bombay v. Premier Automobiles Ltd. AIR 1981 SC 1982 wherein the position of a statutory bailee, similar to one contemplated under section 25 (1), was discussed in the context of a different statutory provision. Plaintiffs were entitled, accordingly, in the instant case, to maintain an action against the answering defendant for wrongful detention by him as a 'bailee,' of the disputed goods of which he had obtained delivery unauthorisedly under railway receipts, inasmuch as title to those goods had passed to the plaintiffs' Association by payment made to the Bank, notwithstanding the fact that he had made the payment. ( 12 ) REFERENCE in this connection may be appropriately made to the leading case on the subject, decided by the apex Court. See Dhian Singh v. Union of India, AIR 1958 SC 274 . It has been held therein that in the event of non-delivery of the goods by the 'bailee' on a demand made on him in that behalf, the 'bailer' is entitled, at his election, to sue the 'bailee' either for wrongful conversion of the goods or wrongful detention thereof, and if the 'bailer' pursues his remedy against the 'bailee' for wrongful detention of the goods it would be no answer for the 'bailee' to say that he was guilty of wrongful conversion of the goods at an earlier date and was not liable to the plaintiff for wrongful detention thereof. It has been further held that wrongful detention being a tort which continued all the time until re-delivery of the goods by the defendant to the plaintiff, the only verdict or judgment which the Court can give in such cases is that the defendant delivers to the plaintiff the goods or pays, in the alternative, the value thereof as can be ascertained on the date of the decree. The settled law that "unlawful keeping back of what belongs to another person is of itself a ground for real damages and not for nominal damages at all," as held by the House of Lords in the case of Owners of the Steamship "mediana" 1900 AC 113 at p. 118 was reiterated and it was held that the plaintiff was entitled to damages also for wrongful detention in addition to re-delivery of the goods or payment of its value in the alternative. ( 13 ) IT is necessary now to consider the defence plea, or, in other words, the Justification advanced by the answering defendant for the tort committed by him. Before the crucial document (Ext. D-3) is looked at and contents thereof analysed, I propose to refer to sections 167, 170 and 171 of the Contract Act. The plea in the written statement and the evidence of DW Motilal is that disputed goods were. subject to charge in respect of Rs. 5606 and odd, as that amount was Syndicate's money (or, for that matter, of pro forma defendants) which the answering defendant had used in retiring the R. Rs. from the Bank and paying freight, etc. In that connection it may be noted that the question did not arise as plaintiffs' Association were always willing to pay to the answering defendant all expenses incurred by him in taking delivery of the disputed goods and, they had, thus, satisfied the requirements of section 170. It is provided under section 167 that if any person other than the 'bailer, has any claim to the goods bailed "he may apply to the Court for delivery of the goods to the bailor and to decide the title to the goods. " In the instant case, admittedly, the pro forma defendants did not take recourse to the remedy contemplated under section 167, and did not even care to contest the suit of the plaintiffs on the basis of their right, if any, envisaged under Section 167. On the other hand, the only defence which the answering defendant could take in terms of section 170, was not available to him, as he defaulted in compliance of the request made by the plaintiffs' Association, the suppliers and the Director, Civil supplies, for the disputed goods being delivered by him to the plaintiffs' Association on payment being made to him expenses incurred by him in taking delivery of the disputed goods. Reference, however, may be made to section 171 which speaks of the class of 'bailees' which may have a general lien to retain possession of any goods as security for the balance due payable to him on account between the parties. Only Bankers, factors, wharfingers, attorneys of a High Court and policy brokers have the right to "general lien" contemplated thereunder, and the answering defendant, admittedly, does belong to that category. Only Bankers, factors, wharfingers, attorneys of a High Court and policy brokers have the right to "general lien" contemplated thereunder, and the answering defendant, admittedly, does belong to that category. In any case, he has not established his right to claim on behalf of the pro forma defendants payment of any money due to them by the plaintiffs' Association. Indeed, as per Ext. P-11, as earlier alluded, all accounts had been settled between them and nothing contrary to that had come on record either in the evidence of DW Motilal or any document exhibited by the defence. ( 14 ) THE document (Ext. D-3), as earlier alluded, is captioned as a 'notice' (Suchna Patra) and reading even the recitals thereof, it is not possible to accept the finding and conclusion of the trial Court with respect thereto. By no stretch of imagination, the document can be said to constitute an "agreement" of any nature between any parties. In the very first sentence it is mentioned that under "orders" of the President, the members of Gwalior Agrico Dealers' Association were being informed' thereunder of the decision rendered by the Director, Civil Supplies, vide his letter dated 24th November, 1950 (Ext. P-1) of formation of two separate bodies, namely, Agrico Dealers Syndicate and Gwalior Agrico Dealers' Association. The names of members of those bodies were mentioned. The further recital in the document is that the two bodies will elect their respective office bearers and book orders separately with the suppliers in their respective names. The crucial recital on which implicit reliance is placed is a but the goods which remained undelivered by suppliers under pending order and in regard thereto it is stated that the 'old' President and 'old' secretary shall continue to exercise authority in regard to distribution thereof among members who had paid advance for those goods. In the last sentence of the document, it is stated that all members are accordingly, "informed" and nothing else, beyond that. Thereafter follows the names of 17 members. Only some of the members had simply put their signatures and one of the members had even made an endorsement that he had objection in respect of the portion underlined in red. Significantly, as earlier pointed out, the document did not speak of any "meeting'' or of any "resolution" and contained no recital that the notice was issued pursuant to any decision in any meeting. Significantly, as earlier pointed out, the document did not speak of any "meeting'' or of any "resolution" and contained no recital that the notice was issued pursuant to any decision in any meeting. ( 15 ) ADMITTEDLY, both bodies, new and old the Association and the Syndicate were each an unincorporated association of persons. Both bodies did not, therefore have any legal personality. Admittedly, neither body had framed any rules for conduct of business on its behalf by the office bearers elected. The office bearers, the President and Secretary and, for that matter even any member of the two bodies claiming to act on its behalf, had to establish his legal authority in that regard, for that claim could only be founded on the principles of 'agency' under the Contract Act, To bind all the members of any such body, the members thereof are required to express their consent either individually or through their agent, in Paton's Jurisprudence, 3rd edn. , at p. 385, the learned author has observed, in dealing with cases of such 'associations' as follows -"it is trite law that an association cannot be sued in its own name, for it has no legal personality. Hence an action lies in contract only against members who have bound themselves personally or who can be treated as principals under the ordinary rules of agency. And the law assumes that, in the case of the ordinary club, there is no implied authority in the committee to pledge the credit of members. "undoubtedly, dehors Ext. D-3 the answering defendant could not claim any implied authority, and significantly, Ext. D-3 was an incomplete as also an innocuous document conferring no express authority on him with regard to the disputed goods. ( 16 ) EVEN if it is assumed that the 'order' of the answering defendant was in effect an 'offer' by him in regard to the arrangement proposed by him for distribution of goods of 'pending order, he would evidently have no legal authority even to act as agent for the plaintiffs' Association in his capacity as President of the old or undivided Association after he had tendered resignation from that office on 8-8-1950. It is obvious, on the other hand, from the recitals above-referred that the answering defendant had not been elected President of the new body, 'syndicate,' till 27-12-1950 when the 'notice' (Ext. It is obvious, on the other hand, from the recitals above-referred that the answering defendant had not been elected President of the new body, 'syndicate,' till 27-12-1950 when the 'notice' (Ext. D-3) was issued and, as such, it is difficult to accept him as an agent for the Syndicate either. In the instant case, no specific authority had been obtained by the answering defendant to enable him to sustain his claim otherwise, possessing legal authority to make the offer contained in Ext. D-3 Paton, at p. 383, has noted that in case of such an Association, on resignation of member, all rights possessed by him in the association in virtue of membership thereof disappear at once and, indeed, such a member cannot even demand dissolution of the association. ( 17 ) THAT apart, the main defect that seriously afflicts Ext. D-3 is the fact that there was no acceptance in any manner expressed by parties to whom the 'offer' was made, namely, the 17 members of the undivided Association. On evidence the answering defendant's plea in his written statement of a meeting being held of those members or of any resolution passed, as claimed by DW Motilal, has not been established. On the face of the document, some members had simply signed the notice and one of the members had even recorded his objection. Section 7 of the Contract Act contemplates that a proposal or offer to be converted into a binding promise or contract (should be) by an acceptance, and "the acceptance must be absolute and unqualified and expressed in some usual and reasonable manner. " Reference in this connection may be made to what has been observed in Bhagwandas v. Girdharilal AIR 1966 SC 543 , wherein the esserntials of a valid and binding contract have been pointed out. It has been held that there can be no unilateral action to constitute a contract and no contract would result, unless there is 'meeting of minds,' in other words, consensus ad idem. It has been pointed out that an agreement does not result from a mere state of mind and that 'there must be intent to accept and some external manifestation of that intent by speech, writing or other act. It has been pointed out that an agreement does not result from a mere state of mind and that 'there must be intent to accept and some external manifestation of that intent by speech, writing or other act. " Indeed, in the case of a contract which consists of mutual promise, the offerer must receive intimation that the "offeree has accepted his offer and has signified his willingness to perform his promise. " ( 18 ) IN the instant case, all the 17 members to whom the 'notice' (Ext. D-3) was issued by the answering defendant, were evidently required to fulfil a promise of their agreeing to abide by the arrangement proposed therein by the answering defendant, namely, for distribution of goods of the 'pending order' by him and the Secretary nowithstanding the fact that both had ceased to hold their respective offices of the undivided Association and the new office bearers had not taken over. Accordingly by affixing merely their signatures those members cannot be deemed to have conveyed their acceptance of the offer contained in Ext. D-3, apart from the fact that all the l7 members had not signed the notice and one of them had expressed his reservation. In this context it is necessary to refer also to the fact that on 25-5-1951 there was a meeting of plaintiffs' Association, as reconstituted, and in that meeting the offer (Ext. D-3) was discussed and expressly rejected. That position was subsequently reiterated in Ext. P-11, and there can be no doubt about the rejection being communicated to the answering defendant not only thereunder but also under other, documents, such as Exts. P-31 and P-32. ( 19 ) FOR the several reasons aforesaid, it is difficult to uphold the finding and conclusion of the trial court that Ext. D-3 was a 'resolution' of an 'agreement' by which the plaintiffs were bound and that provided justification for the action of the answering defendant in regard to which the suit was instituted. ( 20 ) THE appeal must, therefore, succeed and the impugned decree must undergo necessary modification to uphold appellants' claim. I hold that the answering defendant is bound to make delivery to the appellants of the entire stock of goods listed in Schedule A of the plaint on payment by them of Rs. 7300/- which he had spent in taking delivery of the goods. I hold that the answering defendant is bound to make delivery to the appellants of the entire stock of goods listed in Schedule A of the plaint on payment by them of Rs. 7300/- which he had spent in taking delivery of the goods. However, in his written statement the answering defendant having took stand that the entire stock is not available now, it is necessary to make a direction in the alternative. If the appellants claim in execution proceedings either partial delivery or for value of foods for the entire consignment being paid to them in the alternative, the court shall be bound to ascertain value of those goods on the date of the judgment passed by the trial court, namely, 22-1-1973. The eight appellants shall be entitled to be paid in equal shares the value of goods so determined by the executing Court and also partial delivery of available goods in addition, if they so choose, in the same proportion. They shall also be entitled to damages in the sum of Rs. 1000/-as claimed by them, to be shared equally. There is no doubt that they could have claimed more damages for suffering loss of business for 21 years, when judgment was delivered by the trial court, again 14 years ago, but more than what they have claimed need not be allowed. They shall also be entitled to interest at the rate of 6% per annum on the sum determined to be payable to them, for value of goods as also for compensation, from the date of judgment of the trial court. ( 21 ) IN the result, the appeal is allowed and the judgment and decree passed by the trial court are set aside, holding the eight plaintiffs appellants to be entitled to the reliefs hereinabove mentioned. The appellants are also entitled to their costs in this court according to schedule. Appeal allowed. .