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1994 DIGILAW 41 (HP)

THE KAILASH DISTRICT CO-OPERATIVE MARKETING AND SUPPLY FEDERATION LTD. v. NARINDER SINGH

1994-03-30

A.L.VAIDYA, V.RATNAM

body1994
JUDGMENT A. L. Vidya, J.—The plaintiff-respondent Sh. Narinder Singh originally filed a suit for recovery of Rs. 85,000 against the present appellants which suit was dismissed vide judgment dated 30th June, 1969. The plaintiff assailed the said judgment and decree in an appeal before the Division Bench and the appeal was accepted vide judgment dated 7th July, 1971 and the suit was remended back for retrial after addition of some issues, 2. After remand the plaintiff preferred an application under Order 6, Rule 17 of the Code of Civil Procedure for amendment of the plaint which was allowed vide order dated 8th December, 1971 and on the basis of the amended pleadings, submitted by the parties, some additional issues were framed. 3. The learned Single Judge thereafter decreed the suit and the said decree has been assailed in the present appeal on various grounds. 4. The case of the plaintiff, as put up in the amended plaint, had been that he was running a business after the name and style "Narinder & Co." at Khara-Pathar, Tehsil Jubbal, District Mahasu and was mainly dealing in the purchase and supply of potatoes. He alleged himself to be the sole proprietor of the said concern. In the year 1965 66, according to plaintiff, defendant No. 3, Sh. Tara Chand Chairman of the Kailash District Cooperative Federation Ltd., (defendant No. 2) came to Khara-Pathar and agreed on behalf of the aforesaid societies (defendent Nos. 1 and 2) to purchase potatoes at the rate of Rs. 90 per bag, F. O. R. Shimla, It was also pleaded that in pursuance of the said agreement and settlement the plaintiff supplied 1076 bags of Special A-I Potatoes to the aforesaid societies on the 29th, 30th November, and 1st December, 1965 which were received admittedly by defendant societies. 5. The Plaintiff further pleaded that in the alternative even if it is proved that there was no outright sale, in that event too the plaintiff was entitled to recover the amount in dispute for the reasons that the defendants dealt with the goods of the plaintiff without his permission and consent or authority in writing and otherwise too had no tight to deal with his goods as he was not the member of defendant No. 1. According to the plaintiff, in this manner goods were converted and the defendants were liable to reimburse the plaintiff at the price prevailing on the date when the goods were received by the defendants. It was also averred that defendants had been highly negligent in dealing with the goods of the plaintiff arid did not conduct the sale in the manner prescribed. 6. Plaintiffs further case has been that total price of the potatoes supplied in favour of the defendants at the rate of Rs. 90 per bag comes out to be Rs. 96,840 but the plaintiff was paid only a sum of Rs. 28,288.81 paise after deducting the freight and other charges and accordingly a sum of Rs. 68,55119 paise were due to the plaintiff It was also pleaded that the said amount was to be paid within a period of a month after the supply of the potatoes and, according to the custom of the market, the defendants were liable to pay customary market interest at the rate of Rs. 1 p. c. p. m. As the plaintiff made numerous demands for the payment of the balance amount along with interest but without any result and as such he was entitled to charge interest on the aforesaid amount from I st of January, 1966 till the actual date of payment at the aforesaid rate. The plaintiff as such calculated the interest upto the end of January, 1968 which amount came to Rs. 16,452 and as such the plaintiff was entitled to recover a total sum of Rs 85,003.12 paise but he was making a claim for recovery of Rs. 85,000 only, 7. Defendants No. 1 and 2 i. e. Himachal Pradesh State Co-operative Marketing and Development Federation Ltd and Kailash District Co-operative M. & S. Federation Ltd. in their joint written statement took certain preliminary objections with respect to the alternative plea taken by tbe plaintiff to be without limitation and that the plaintiff was not permitted to take inconsistent pleas without furnishing batter particulars. On merit, the defendants simple case has been that Chairman of Kailash District Co-operative .M. & S. Federation Ltd or any other person was never authorised on behalf of the societies to purchase potatoes at the rate of Rs. 90 per bag F. O. R. Shimla. According to them, such an agreement never came into being. On merit, the defendants simple case has been that Chairman of Kailash District Co-operative .M. & S. Federation Ltd or any other person was never authorised on behalf of the societies to purchase potatoes at the rate of Rs. 90 per bag F. O. R. Shimla. According to them, such an agreement never came into being. It was further pleaded that infact policy of sale and procurement of potatoes had been laid down, in which the potatoes were not purchased out rightly by the Joint Venture, constituted by defendant Nos. 1 and 2 but the practice had been that the potatoes were given to the replying defendants on consignment basis that is, the Joint Potato Venture used to work and goods were sold on commission basis. It was also pleaded that goods were sold on first come first served basis and whatever price was realized, used to be credited to the account of consigner and he was paid the amount after deducting the commission and other charges. It was very specifically pleaded that defendant No. 3 was not authorised on behalf of the replying defendants to make any outright purchase or settle any rates. It was however, admitted that plaintiff supplied 1076 bags of potatoes on 29th, 30th November and 1st December, 1965 but it was denied that aforesaid potatoes were Special A-I Potatoes/ Sealed Potatoes. Potatoes received from the plaintiff were sold, as Commission agent by the defendants No. 1 and 2. It was denied that defendant No. 1 had no right to deal with the goods consigned by the plaintiff. It was pleaded that it was neither a case of conversion nor the defendants had acted in any manner, negligently. According to them, potatoes of the plaintiff were disposed of by the defendants, according to the directions of the plaintiff and in accordance with the principles adopted by the Joint Venture and prevelent in the market It was also pleaded that according to the real facts in the month of September, 1965, the plaintiff had taken empty bags from the defendants, which used to be supplied to those persons, only, who agreed to send the potatoes for sale to the Joint Venture of the defendants. It was also averred that the consignees of potatoes used to prepare challan in duplicate and send original challan with the goods. 8. It was also averred that the consignees of potatoes used to prepare challan in duplicate and send original challan with the goods. 8. The defendants No. 1 and 2 very specifically averred that the plaintiff had been paid full amount of Rs. 28,288.81 paise which was the price of potatoes, obtained after sale, and the amount was paid after deducting the freight and other charges. The plaintiffs plea for claiming interest has also not been admitted. 9. Defendant No. 3 also in a way took the same pleas as has been averred by the defendants No 1 and 2. He has in very clear terms stated that he did not agree to purchase the potatoes at the rate mentioned in the plaint nor any other rate was agreed between the parties. According to defendant No. 3, plaintiff had been paid full amount of Rs. 28,288.81 paise which was the price of his potatoes obtained after sale, after deducting the freight and other charges. 10. Before filing of the amended plaint, following issues were framed on the basis of the pleadings of the parties: (1) Is the amount in suit due to a partnership firm and not the proprietory firm (the plaintiff) and the suit is, therefore, not maintainable in the absence of the registration of the said firm ? (2) Whether the plaintiff sold 1076 bags of potatoes to the defendants at the rate of Rs. 90 per bag of the quality stated in para 3 of the plaint ? (3) What, if any, is the amount due to the plaintiff ? (4) Is the plaintiff entitled to interest and if so, at what rate ? (5) Relief. 11. As referred above against dismissal of the suit, plaintiff west in appeal before the Division Bench and the appeal was accepted on 2nd July, 1971 and case was remanded back for retrial after adding the following two issues :— (1) Whether the defendants Nos. 1 and 2 had acted as commission agents for the plaintiff for the transaction under consideration? (2) Whether defendant No. 3 was authorised to enter into a contract for outright purchase on behalf of defendants Nos, 1 and 2 ? If not, its effect? 1 and 2 had acted as commission agents for the plaintiff for the transaction under consideration? (2) Whether defendant No. 3 was authorised to enter into a contract for outright purchase on behalf of defendants Nos, 1 and 2 ? If not, its effect? After amendment of the plaint, the parties put in their pleadings and on the basis on the same following additional issues were framed on 22nd May, 1972:— (1) That in case issue No. 1 is not proved, the plaintiff is entitled to recover the amount in dispute for the reasons: (a) that the defendants dealt with the goods of the plaintiff without his permission, consent or authority in writing and otherwise too the defendants had no right to deal with the goods as the plaintiff was not the member of the defendants society ; (b) that the goods were converted as specified in (a) above and the defendants are liable to reimburse the plaintiff at the price prevailing on the date when the goods were received by the defendants ; and (c) that the defendants had been greatly negligent in dealing with the goods of the plaintiff and did not conduct the sale in the manner prescribed ? O. P. P. (2) Is the plaintiff entitled to recover interest under the provisions of Sale of Goods Act ? If so, at what rate and to what amount he is entitled? CX P. P. (3) Whether the alternative claim of the plaintiff mentioned in Para 3-A of the amended plaint is not within time, if so, its effect? O. P. D. (4) Whether the pleas now raised through amendment by the plaintiff are unconstitutional and destructive to the pleas originally raised, if so, its effect? O. P. D. (5) Whether the written statement filed by the defendant No. 3 is to be ignored as it was not filed within time allowed. ? (6) Relief. 12. The Learned Single Judge decided Issue No. 1 framed on 12th August, 1968 against the defendants Under Issue No. 2, as originally framed, it was held that defendants had gone to Khara Pathar, 2-3 days before the 29th November, 1965 and they had struck the bargain for the purchase of Special A-I quality with the plaintiff at the rate of Rs. 90 per bag, F. O. R. Shimla and thus the plaintiff has successfully proved that it was outright sale and not on consignment basis. 13. Issue No. 3 before the remand and Issue No. 1 after the remand & Issues No. 1 and 2 framed by Appellate Bench were taken up together by the Learned Judge. It was held that the plaintiff was entitled to the best rate prevalent in Shimla at the time when the goods were supplied and the plaintiff could have claimed even Rs. 96 or Rs. 102 per bag from the defendants, but since the plaintiff had agreed to charge and sell the goods at Rs. 90 per bag, he was entitled to recover the same and the amount thus recoverable by the plaintiff was Rs. 68,561 19 paise after giving a rebate to the defendant of Rs. 28,288.81 paise. The issues, as such were disposed of accordingly. 14. Issue No. 4 before the remand and issue No. 2 after the remand on 22nd May, 1972 were taken up together and it was held that the plaintiff was entitled to an amount of Rs. 16,452 on account of interest at the rate of Rs. 12% per annum. 15. Issues No. 3 and 4 framed after the remand pertaining to the alternative claim put up by the plaintiff were not pressed and as such they were dispossed of accordingly. The Learned Single Judge also observed that the remaining issues were also not pressed and as such they stood disposed of accordingly. 16. The Learned Single Judge, on the basis of the findings on the above issues, decreed the suit of the plaintiff for Rs. 85,000 inclusive of interest with costs. 17. The aforesaid judgement and decree have been assailed in the present appeal by the defendant-appellants on various grounds, the main being, that the findings on the issues given by the learned Single Judge were not only contrary to the facts established but against law also and that the learned Judge ignored sufficient evidence on record to show that transaction was consignment of potatoes for sale to the Joint Venture of defendant Nos. 1 and 2 and not that of an outright sale. It has also been pleaded by the appellants that the Honble Judge has failed to appreciate issue No. 3 (issues Nos. 1 and 2 and not that of an outright sale. It has also been pleaded by the appellants that the Honble Judge has failed to appreciate issue No. 3 (issues Nos. 1 and 2 framed by the Appellate Bench) while reminding the case for retrial regarding authority of defendant No. 3 to enter into transaction of an outright sale on behalf of the Joint Venture. 18. We have heard the learned counsel for the parties and have minutely scrutinized the entire record. The arguments advanced on behalf of the parties and the pleas taken by them during the trial of the suit, raised following points to be determined in this appeal: (1) Whether defendants No. 1 and 2 were legally barred to go in for an outright sale of potatoes and on the other hand the Joint Venture could act as Commission Agent for effecting sale of the potatoes entrusted to them as per directions of the State Government ? (2) Whether the present transaction as proved on record between the parties was a consignment of potatoes to be sold by Joint Venture as Commission Agent or an outright sale? (3) In case it was held to be an outright sale on the basis of the agreement in between defendant No. 3 and plaintiff as pleaded by the plaintiff, in that event whether defendant No. 3 had any legal authority to enter into such agreement of sale on behalf of defendants Nos. 1 and 2 ? (4) In case the plaintiff is entitled for sale price claimed by him whether all or which of the defendant/defendants were liable to make this payment ? 19. It has been contended on behalf of the appellants that there was legal bar for the Joint Venture of defendants No 1 and 2 to go in for an outright sale of the potatoes on the basis of the directions issued in this behalf by the State Government. The learned Counsel for the appellants in support of this submission has referred to Ex. D/l, which contained general instructions issued by Co-operative Department to the Government of Himachal Pradesh with respect to marketing of potatoes. The relevant instruction being relied upon in this behalf is being reproduced here-under: "Marketing by Federations will be done purely on consignment basis..............” 20. The learned Counsel for the appellants in support of this submission has referred to Ex. D/l, which contained general instructions issued by Co-operative Department to the Government of Himachal Pradesh with respect to marketing of potatoes. The relevant instruction being relied upon in this behalf is being reproduced here-under: "Marketing by Federations will be done purely on consignment basis..............” 20. At this stage a reference can safely be made to the bye-laws of the Himachal Pradesh Co-operative Marketing and Development Federation Ltd. (defendant No 1) which appears at page 499 of the paper book. At page 501 of the paper book various objects of the Federation have been recorded One of the objects referred in bye-laws is as under:— "To arrange for the grading and packing of agricultural produce of the members or purchased by the Federation." Similarly, at page535 of the paper book the bye-Jaws of the Kailash District Co-operative Marketing and Supply Federation Ltd. (defendant No. 2) have been given, and one of the objects of the society referred in bye-laws has been as under: To arrange for the sale of agricultural produce of the members or purchased by the society, to the best advantage." 21. Some oral evidence has also come on record that the Joint Venture of the defendants No. 1 and 2 have been dealing in purchase of potatoes. Relevant bye-laws referred to above also lead to the inference that two Federations were not barred to go in for sale of the potatoes. 22. The instructions issued by the Co-operative Department of the State Government as pointed out above cannot be said to be of mandatory nature and shall have no binding force whatsoever. Such instructions are of recommendatory nature and as such cannot limit and contain activities of the Federations. There is no doubt that these instructions are of general nature and by one of such instruction Federations were directed to do marketing purely on consignment basis. There is nothing on record to suggest that these instructions have not been complied with but on the other hand these instructions did not create legal embargo upon the activities of the Federations which included the purchase of potatoes and agricultural produce also. There is nothing on record to suggest even remotely that Joint Venture taking in hand outright sale of potatoes have been held by the State Government to have acted against these instructions. There is nothing on record to suggest even remotely that Joint Venture taking in hand outright sale of potatoes have been held by the State Government to have acted against these instructions. As already pointed out, the instructions are not of statutory nature and their violation if any will not make any transaction even entered into by the Joint Venture against these instructions to be illegal, unconstitutional or unsustainable. In this view of the matter it cannot be said that the Joint Venture was to act only as Commission Agent as has been submitted on behalf of the appellants. This point—stands accordingly disposed of. 23. As per the pleadings of the parties the transaction under reference according to the defendants was a consignment for sale sent to the defendants who were acting as Commission Agent and on the other hand the plaintiff claimed the said transaction to be an outright sale in favour of the defendants. For such a transaction the basic agreement entered into between the parties is to be looked into. Admittedly, in the present case, there is no written agreement alleged to have been executed between the parties which could describe nature of the transaction. In the absence of such a document the evidence let in by the parties in the context of the pleas raised by them has to be appreciated. 24. At the cost of repetition it may be referred that according to the plaintiff this agreement for outright sale was an oral one and came into being between the defendant No. 3 Tara Chand the Chairman of defendant No. 2 acting on behalf of defendants No. t and 2 and plaintiff. On the other hand all the defendants have denied the existence of such oral agreement. On the other hand apart from common stand taken by all the defendants that consignment was to be sold by defendants No, 1 and 2, as Commission Agent, defendants No 1 and 2 very specifically pleaded that the defendant No. 3 was not authorised on behalf of the replying defendants to make outright purchase or settle any rates. 25. The parties have brought on record the oral as well as documentary evidence touching the above referred aspect of the matter. 25. The parties have brought on record the oral as well as documentary evidence touching the above referred aspect of the matter. The relevant oral evidence examined in this behalf consisted of statement of the plaintiff who appeared as PW-8, prior to the amendment of the plaint and that of S/Sh. Bisheshar Nath (PW-3), Des Raj (PW-6) and Kishan Chand (PW-7). Statement of PW-1 Sh Mina Ram, who was Director of defendant No. 2 from 1963 to 1965 would also be very much relevant to appreciate the matter under controversy. 26. The plaintiff while making statement on oath has tried to support the case pleaded by him. 27. PW-3 Sh. Bisheshar Nath was a partner in the firm Subzi Mandi Potato Merchants Union. This Union according to him deals in the business of purchase and sale of potatoes. He has stated on oath that he knew the plaintiff who had a depot at Khara-Pathar in the name of "Narinder Singh & Co." and as per this witness, knew Narinder Singh who was sole proprietor of the concern. The witness further disclosed that in-connection with the purchase of potatoes in the years he had been visiting Khara-Pathar also. According to him he visited Khara-Pathar depot of the plaintiff at the end of November, 1965 where he learnt that there was a bargain between the plaintiff and defendants No. 1 and 2 through defendant No. 3. The witness further added that he wanted the plaintiff to supply potatoes to the firm of the witness but the plaintiff informed the witness that he had just struck a bargain with defendant No. 3. 28. So far as this witness is concerned the bargain was not struck in his presence and the knowledge derived by this witness was from the plaintiff himself. According to this witness, it was the plaintiff who told him that he had struck a bargain with defendant No. 3. That means, the information about the alleged bargain supplied to this witness by the plaintiff was that it was the defendant No. 3 with whom the bargain was struck. According to this witness, it was the plaintiff who told him that he had struck a bargain with defendant No. 3. That means, the information about the alleged bargain supplied to this witness by the plaintiff was that it was the defendant No. 3 with whom the bargain was struck. Statement of this witness that he learnt about the said bargain between the plaintiff and defendants No. 1 and 2 through defendant No. 3 did not stand established, through the information, he received in this behalf from the plaintiff himself who as per this witness only informed that bargain took place between plaintiff and defendant No. 3 alone. So the statement of this witness that defendant No. 3 settled the bargain on behalf of defendants No. I and 2 cannot be accepted inasmuch as no other source has been stated by this witness through which he get the information of the involvement of defendants No. 1 and 2 also. In this view of the matter statement of this witness has to be appreciated. 29. This witness stated that he was at Khara Pathar at the end of November, 1965 where he had seen defendant No. 3 also. In so far as statement of this witness with respect to the presence of defendant No. 3 at that time in November, 1965 at Khara Pathar was concerned, the same has not been assailed during cross-examination either by defendants No. 1 and 2 or by defendant No 3 at all. Defendant No. 3 has not cross-examined the witness on any account whatsoever. 30. PW-6 is Sh. Des Raj, who deposed on oath that in the year 1965-66 the plaintiff was engaged in the business of purchase and sale of potatoes and was working in the name and style of ^Narinder & Company* and according to this witness, the plaintiff was the sole proprietor of the aforesaid concern. This witness has deposed that he too was also doing the same business in those days He had his depot at Khara Pathar during the year 1965-66. The witness further disclosed that in November, 1965, Tara Chand defendant No. 3 had visited Khara Pathar and purchased potatoes from the plaintiff at the rate of Rs. 90 per bag F. O. R. Shimla, He also disclosed that defendant No. 3 had purchased these potatoes for and on behalf of defendants No. 1 and 2. The witness further disclosed that in November, 1965, Tara Chand defendant No. 3 had visited Khara Pathar and purchased potatoes from the plaintiff at the rate of Rs. 90 per bag F. O. R. Shimla, He also disclosed that defendant No. 3 had purchased these potatoes for and on behalf of defendants No. 1 and 2. According to him market rate at that time was Rs. 100 per bag. He has been very specific in deposing that bargain between the plaintiff and defendant No. 3 was struck in his presence and at that time three bags of potatoes were opened by the defendant No. 3 for the purpose of verifying the quality and grade before the bargain was struck. The witness further added that plaintiff despatched the consignment of potatoes to Shimla. This witness during cross-examination added that Bisheshar Nath and Kishan Chand were the other depot holders besides him who were present at that time. He also disclosed that all three of them were present throughout. The witness further disclosed that Bisheshar Nath wanted to purchased potates from the plaintiff at the rate of Rs. 85 per bag but the plaintiff told him that he was selling the same to defendant No. 3 who had offered Rs. 90 per bag. On cross-examination on behalf of defendants No. 1 and 2, the witness stated that he was C-class member of the Kailash Federation, therefore, he never made any outright sale of potatoes to defendants No. 1 and 2 but his sale has been throughout on consignment basis. 31. PW-7 Sh. Kishan Chand, was a resident of Tehsil Rohru, has stated on oath thai in the year 1965-66 the plaintiff was engaged in the business of purchase and sale of potatoes at Khara Pathar in the name of Narinder and Co.. According to this witness, the plaintiff was the sole proprietor of the concern. The witness stated that he was doing the same business at Khara Pathar. He knew defendant No. 3 According to this witness in November, 1965, defendant No. 3 had visited Khara Pathar and he had come there to buy potatoes. According to this witness, the plaintiff was the sole proprietor of the concern. The witness stated that he was doing the same business at Khara Pathar. He knew defendant No. 3 According to this witness in November, 1965, defendant No. 3 had visited Khara Pathar and he had come there to buy potatoes. The witness also stated that the defendant No. 3 was the Chairman of defendant No. 2 and in his presence there was a bargain between the plaintiff and defendant No. 3 and that bargain was for sale of potatoes by the plaintiff to defendants No. I and 2 through defendant No. 3 at the rate of Rs. 90 per bag F, O R. Shimla. This witness added that bargain related to about 900 to 1000 bags of potatoes but he was not sure. He stated that he had sold at that time potatoes at the rate of Rs. 85 per bag delivery at Khara Pathar. During cross-examination he deposed that Bisheshar Nath, Tara Chand, Narioder Singh plaintiff and Des Raj were the persons present at the time of bargain. He stated that bargain struck in his presence and Bisheshar Nath was present throughout. He also disclosed that when potatoes were sold by way of outright sale a voucher showing the rate and quantity was prepared but when the potatoes were sold on consignment basis then no such voucher was prepared and only challan was prepared. 32. The plaintiff in his statement tried to support his case as pleaded by him and in this behalf also stated that defendant No. 3 had represented that he was the Chairman of defendant No. 2 and that a huge demand had been received by the said defendant and therefore he had come to purchase potatoes on its behalf. The plaintiff also stated that at the time of sale of potatoes in favour of defendants No 1 and 2 he had 1076 bags of potatoes in stock and he sold the entire quantity by way of outright sale to the said defendants through defendant No. 3 at the rate of Rs. 90 per bag F. O. R. Shimla. The plaintiff also disclosed that defendant No. 3 had asked him to write down the rates on the challan form and goods might be kept separate. 33. PW-1 Sh. 90 per bag F. O. R. Shimla. The plaintiff also disclosed that defendant No. 3 had asked him to write down the rates on the challan form and goods might be kept separate. 33. PW-1 Sh. Mina Ram, Director of defendant No. 2 Society from 1963 to 1965, was examined on behalf of the plaintiff. He stated that he knew the plaintiff Narinder Singh who had a depot for sale and purchase of potatoes at Khara Pathar during the potatoe season of 1965. According to him, the plaintiff was the sole proprietor of the concern Narinder & Co He also disclosed that on behalf of defendants No. 1 and 2 he was in-charge of loading and unloading operation of the depots at Shimla and Dhalli. Potatoes belonging to the plaintiff were received at a place called Bhatta which was the unloading stand for Dhalli depot of defendants No. 1 and 2. The witness further added that defendant No 3 was the Chairman of defendants No. 1 and 2 he had instructions from the Chairman that whatever consignments of potatoes were received in the potato season of 1965-66 from the plaintiff those should be kept separate. He further added that instructions received from the defendant No. 3 were not in writing. The witness disclosed that defendants No. 1 and 2 used to sell the consignments of potatoes received from the plaintiff on commission basis. He stated that it was correct that defendants No. 1 and 2 did not make any outright purchase of potatoes from the growers or suppliers. He also disclosed that in December, 1965 or in January, 1966 he had gone to Jallandhar in-connection with the disposal of the potatoes on behalf of the Federation and he had seen the plaintiff in Jallandhar during those very days. The witness further added that plaintiffs potatoes were sold through the Jallandhar Federation and also through other Commission Agents at Jallandhar. He further disclosed that he was sent only to watch the sale of the potatoes on behalf of the Federation but he could not include the sale of the plaintiffs potatoes as well. The witness did not agree that when he was instructed by defendant No 3 to keep the plaintiffs consignment of potatoes separate the intention was to treat those consignments as lying in trust with the Federation. 34. The witness did not agree that when he was instructed by defendant No 3 to keep the plaintiffs consignment of potatoes separate the intention was to treat those consignments as lying in trust with the Federation. 34. The documentary evidence in this particular behalf which can render some help are the challans Ex. PW-4/1 to Ex. PW-4/23, which the plaintiff had sent to the defendants alongwith consignment of potatoes. In all these challans the following entries have been made: "Adjust sale in my account at the rate of Rs. 90 per bag as done by Tara Chand." This endorsement is in all the challans except Ex. PW-4/16. The plaintiff has been sending the consignment of potatoes by trucks from Khara Pathar and a challan to that effect in duplicate was prepared. It has come in evidence that original challan was given to the transporter and the carbon copy was retained by the plaintiff. The freight was paid by the defendants but it was liable to be adjusted against the amount due to the plaintiff. Regarding payment of freight, there has been endorsement in the challans. Those challans remained in the custody of the defendants. According to the procedure followed by the defendants in respect to the goods received from their A-class members, there was a arrival register maintained at Head Office, Shimla. 35. In these challans referred to above sent by the plaintiff whatever be the consignment, there has been a specific noting incorporated in the challan. That note was as under : "MAL ALAG LAGAYEN (consignment be kept separate)." 36. It has been contended on behalf of the defendant-appellants that the aforesaid notes, especially the note pertaining to the sale price of Rs. 90 made by the defendant No, 3 has been interpolated .afterwards by the plaintiff inconnivance with the Mukadam or other servant of the defendants. We think such a plea is not at all available to the defendants especially when the challans had been in their custody and the alleged plea having not been taken in the written statement but only appeared to have been reflected during the evidence stage when some of the witnesses have been cross-examined in this behalf. We think such a plea is not at all available to the defendants especially when the challans had been in their custody and the alleged plea having not been taken in the written statement but only appeared to have been reflected during the evidence stage when some of the witnesses have been cross-examined in this behalf. There is no doubt that some evidence has come that the defendants have tried to take explanation of their servants pertaining to the alleged fact but that will not make the plea of the alleged interpolation of these documents at the hands of the plaintiff to have been legally proved. Mukadam, Incharge at that particular time, has not been examined who could throw some light upon the alleged interpolation if any However, on the other hand there are two documents Ex. PW-4/28 and Ex, PW-4/29 which can safely be taken note of at this stage. 37. When plaintiff insisted on payment of the sale price, the explanation of the employees of the defendants were taken and one Kundan Lal Kalyani in Ex. PW-4/28 admitted that 1006 potatoes bags belonging to the Plaintiffs at Khara Pathar have not been entered in the arrival sheet as ordered by Sh. Mina Ram, Incharge Director Bhatta, and further Mina Ram instructed that no goods be entered in the arrival sheet till consignment was from C-Class member of the Federation. This Kundan Lal Kalyani in Ex. PW-4/29 mentioned that in all those challans it was only noted down that the freight be paid and the consignment be kept separate, but after seeing the challans he deposed that he could not tell where was the other note made probably pertaining to sale at the rate of Rs 90 per bag made by defendant No. 3. He also mentioned in this document that challans remained with him and with the Chaudhary at Dhalli. That Chaudhary as referred to above has not been produced. 38. The aforesaid evidence did not at all prove legally that the endorsement pertaining to the sale price of Rs. 90 per bag made by defendant No. 3 was interpolated afterwards, more so, when these challans remained under the custody of the defendants and their employees. 39. At this stage reference to the statement of Sh. Sarad Chand who was examined as D-l W/4 can safely be referred. 90 per bag made by defendant No. 3 was interpolated afterwards, more so, when these challans remained under the custody of the defendants and their employees. 39. At this stage reference to the statement of Sh. Sarad Chand who was examined as D-l W/4 can safely be referred. At the relevant time he was the Manager of the Joint Venture that is of defendants No. 1 and 2. He deposed on oath that defendants No. 1 and 2 had a Joint Venture for marketing potatoes from 1957 onwards and he was working as a sort of Manager of the said Joint Venture. He has been very specific in deposing that the challans in respect of the goods, unloaded at Dhalli, used to be sent to them two to four days after the receipt and after the instructions given in the challan have been complied with. He further added that Challan Ex. PW-4/16 was received at Shimla Railway Station and the remaining challans were received at Dhalli and then were received in Shimla office on 15ih March, 1966. He further added that the remarks enclosed in red circle on Ex. PW-4/1 to Ex. PW-4/15 and Ex. PW-4/17 to Ex. PW-4/23 were in existence at that time when the challans were received in the office. 40. On the basis of the statement of Sh. Sarad Chand, Manager of the Joint Venture of defendants No. 1 and 2 it is crystal clear that endorsement in all the challans encircled with red pencil were already there when those were received in the office. These endorsements pertained to the fact wherein it was mentioned to adjust the sale in the account of plaintiff at the rate of Rs. 90 per bag done by Tara Chand. 41. The alleged interpolation on the basis of the aforesaid evidence was not legally established but on the other hand it stood proved that the aforesaid endorsement was already there when the consignment was sent along with the challans which made a reference to the sale of potatoes of the plaintiffs at the rate of Rs. 90 per bag as made by defendant No. 3. 42. It is an admitted fact that 1076 bags of potatoes were received in the depot of defendants No. 1 and 2. 90 per bag as made by defendant No. 3. 42. It is an admitted fact that 1076 bags of potatoes were received in the depot of defendants No. 1 and 2. In case they had been received, in which capacity delivery of those bags were taken and under what circumstances potatoes of those bags were sold ? The oral evidence examined and as discussed above proved that defendant No. 3 was there at Khara Pathar at the end of November, 1965 and he entered into an oral agreement pertaining to the purchase of potatoes from the plaintiff at the rate of Rs 90 per bag. The oral evidence examined in this behalf has been assailed on behalf of the defendants to be full of contradictions and variations but we think such an inference on the basis of oral evidence detailed above was not at all available to the defendants especially when factum of oral evidence is fully supported in the documents which have come on record in the form of challans wherein the sale at the behest of defendant No. 3 at the rate of Rs. 90 per bag has been clearly described. This documentary evidence coupled with oral evidence examined during the trial and as discussed above lead to sole legal inference that it was defendant No. 3 who entered into the transaction with the plaintiff. This transaction of tie sale was with the plaintiff on the basis of which the plaintiff supplied 1076 bags of potatoes agreed to be sold at the rate of Rs. 90 per bag. 43. The plaintiff on the basis of his application Ex. D/4 was paid Rs. 2,000 advance against his potatoes. This document can be interpreted in support of an outright sale and also in favour of the transaction being consignment as pleaded by the defendants. But the fact remains that the other evidence examined as discussed above definitely made the transaction to be an outright sale, 44. Now it is to be looked into whether defendant No. 3 had any authority on behalf of defendants No. 1 and 2 to go into for the said sale and bird with his actions defendants No. 1 and 2 also. 45. Now it is to be looked into whether defendant No. 3 had any authority on behalf of defendants No. 1 and 2 to go into for the said sale and bird with his actions defendants No. 1 and 2 also. 45. Admittedly, there is no written authorisation which was otherwise expected from the statutory institution like defendants No. 1 and 2 to have issued in case Joint Venture had decided to go in for outright sale especially in favour of the plaintiff or in favour of other persons. The witnesses examined on behalf of the plaintiff who have tried to support the oral agreement of sale cannot be of any help to prove this fact that defendant No. 3 being Chairman of one of defendants acted on behalf of the Joint Venture of defendants No. 1 and 2 when bargaining the sale with the plaintiff, 46. It has come in evidence and as referred to above that on the instructions of defendant No. 3 consignment received from the plaintiff was kept separate and to that effect a note was given in the challans. There is absolutely no explanation as to why such procedure was adopted with respect to the plaintiffs goods The likelihood of defendant No. 3 taking the benefit of the management of defendants No. 1 and 2 in order to effect sale of the plaintiffs goods on the basis of the oral agreement entered into by him with the plaintiff could not be ruled out. 47. There was no dispute to the fact that the policy or scheme of the Joint Venture was to act as commission agent for their member society and also for C class society. There is nothing on record to prove that plaintiff came within the ambit of the scheme. This fact is not disputed by the learned Counsel for the parties- Thus in a case of present nature, if there was a departure from the scheme or policy, some authorisation of the Joint Venture in favour of defendant No 3 could be there and otherwise also it was incumbant upon defendant No. 3 to have brought to the notice of Joint Venture for its approval that the transaction under reference was either consignment for sale as commission agent or an outright sale in favour of Joint Venture. Defendant No. 3 did not at all bring the transaction to the notice of defendants No. 1 and 2. Such a conduct of defendant No. 3, reflected his own personal involvement in the transaction to the exclusion of the Joint Venture. 48. It may be pointed out at this stage that as per resolution No. 2 dated 6th October, 1965 (Ex, D-1/W/4-Z/2) passed by the Board of Director of Kailash District Co-operative M & S Federation Ltd , it was resolved that S/Sh. Tar a Chand Chairman, Diwan Chand and Prabh Dayai Jishtu, Directors be and were hereby authorised to represent Federation in the Joint Potato Committee of the two Federations which may be composed of besides the representatives of two Federations, any other member or members as may be nominated by the Registrar, Co-operative Societies, H. P. or co-opted by the Joint Potato Committee. Thus, the defendant No. 3 alone was not authorised on behalf of Joint Venture to go in for any transaction. The authority if any was in favour of defendant No. 3 and two other persons named in resolution that too on behalf of defendant No. 2 as defendant No. 3 was the Chairman of defendant No. 2 at the relevant time. No authority of the Joint Venture in this behalf had been issued in favour of defendant No. 3 to enter into any agreement of an outright sale with any person he desired so. 49. Another important factor has to be taken note of. Admittedly, there was no authorisation in favour of defendant No. 3 to go in for any sort of transaction on behalf of defendants No. I and 2. I076 bags were received by the defendants. It may be argued that in so for as member society or ‘C’ class society was concerned, there was no requirement of any individual agreement for the consignment to be sold as commission agent. Plaintiff did not come within the purview of the Scheme and as such was a stranger. Under ordinary circumstances the Joint Venture was required to go in for a specific agreement with a stranger. That agreement by or on behalf of defendants No. 1 and 2 cannot be inferred on the basis of the proved facts on record, and as discussed above. Under ordinary circumstances the Joint Venture was required to go in for a specific agreement with a stranger. That agreement by or on behalf of defendants No. 1 and 2 cannot be inferred on the basis of the proved facts on record, and as discussed above. There is no doubt that defendants No. 1 and 2 considered the receipt of 1076 bags from plaintiff as pleaded by them to be a consignment to be sold as a commission agent only and as per the specific pleadings, denied, to have authorised in any manner defendant No.3 to go in for any agreement for outright sale with any person, more so with the plaintiff. . 50. Thus, on the basis of the aforesaid discussion and -inferences drawn from the relevant documentary as well as oral evidence examined during the trial the transaction under reference is held to be an outright sale effected by defendant No. 3 with the plaintiff for which defendants No. 1 and 2 in the absence of any authority or agreement cannot be made liable. 51. No other points have been stressed on behalf of the parties except referred to above. 52. In view of the foregoing reasons, the judgment and decree passed against the defendants No. 1 and 2 is set aside while the same against defendant No. 3 alone is maintained. The appeal preferred by defendants No. 1 and 2 as such stands accepted while that of defendant No. 3 is disallowed. Decree in favour of the plaintiff and against defendant No. 3 accordingly for recovery of Rs. 85,000 is passed with costs. Order accordingly.