The transaction with an agent does not bind the principal without proper authority.

1. The appellant herein instituted Special Civil Suit No. 86 of 1982 in the Court of 2nd Joint Civil Judge, Senior Division, Thane for seeking specific performance against respondents in regard to 3 shops and a flat (hereinafter referred to as the ’suit property’) situate within the limits of Kalyan Municipal Council to be constructed on land bearing survey Nos. more particularly set out in the plaint.

2. The learned 2nd Joint Civil Judge, Senior Division, Thane (hereinafter referred to as the ’learned trial Judge’) decided the suit by judgment and decree dated 24th October, 1981 and rejected the prayer for specific performance. The learned trial Judge however granted money decree against respondent Nos. 1, 2 and 3 to the extent of Rs. 5,501/-along with the interest more particularly set out in the operative part of the judgment and decree dated 24th October, 1989. This judgment and decree dated 24th October, 1989 is challenged in this first appeal. Few facts necessary for the disposal of the first appeal are as under.

3. The appellant original plaintiff claims that he entered into an oral agreement with one Mr. Kanjibhai being partner of the firm M/s. Thakkar i.e. respondent No. 3 for purchase of 3 shops and one flat more particularly set out in the plaint. According to the appellant, the said transaction was being carried out by defendant No. 3 in its capacity as sole selling agent of defendant Nos. 1 and 2 who were the owners in respect of the suit property which was to be sold in favour of the appellant. According to the appellant the shop Nos. 1, 2 and 3 were agreed to be sold and that they were subsequently renumbered as shop Nos. 9, 8 and 7 respectively. According to the appellant, the appellant paid to said Kanjibhai in all a sum of Rs. 5,501/- and also a sum of Rs. 1, 38,375/- towards the transaction in question. The appellant claims that as the oral agreement was not specifically performed by respondent Nos. 1, 2 and 3, the appellant had to institute the suit. Respondent No.4 happens to be a subsequent purchaser in regard to shop Nos. 7 and 8.

4. At trial, the appellant stepped into the witness box as a principal witness and also examined some other witnesses in respect of his stand as regards the transaction in question and payment of monies to said Kanjibhai. The learned trial Judge framed issues on the basis of the pleadings and recorded finding that respondent No. 3 was the estate agent of respondent Nos. 1 and 2. However, he did not record a finding in favour of the appellant as regards grant of specific performance. The learned trial Judge granted money decree in favour of appellant to the tune of Rs. 5,501/- and interest as the said amount was paid to the respondent No. 3. The learned trial Judge declined the claim of the appellant as regards Rs. 1, 38,375/-as the said payment turned out to be the one made in violation of provisions of Section 23 of the Indian Contract Act.

5. On the basis of the record as aforesaid, following points do arise for my determination.

(i) Whether the acts of defendant No. 3 do bind defendant Nos. 1 and 2 as regards the sale of suit property?

Ans. In the negative.

(ii) What orders?

Ans. As per the operative order.

6. I have heard learned advocate Mr. Arjunwadkar appearing on behalf of the appellant original plaintiff and learned advocate Mr. Kumbhakoni appearing on behalf of respondent Nos. 1 and 2 i.e. the persons who were the owners in respect of the suit property. Nobody appeared on behalf of respondent No. 3, the partnership firm.

7. On consideration of the record, it is made out that original respondent No. 3 was the estate agent of respondent Nos. 1 and 2 and said Kanjibhai was acting as the partner of respondent No. 3 and said respondent No. 3 was acting as the estate agent in regard to the suit property, which was being developed by respondent Nos. 1 and 2. The fact that said Kanjibhai was partner of respondent No. 3 could not be disputed by respondent Nos. 1 and 2