1968 Supreme(Cal) 144

HIGH COURT OF CALCUTTA
A. N. RAY, S. K. MUKHERJEE
MODI VANASPATI MANUFACTURING COMPANY - Appellant
Versus
KATIHAR JUTE MILLS (PRIVATE) LIMITED - Respondent
A. F. O. D.  110  Of  1965
Decided On : JUNE 28, 1968

A company cannot be sued in a name other than its own which it assumes for the purpose of carrying on business. It can only be sued in its corporate name.

Headnote:

The plaintiff filed a suit against the Modis and the Bhaduris and claimed a decree for Rs. 80,960 as mentioned in paragraph 17 of the plaint and if necessary an enquiry into damages and decree for such sum as might be found due. The plaintiff's case was that by exchange of letters and telegrams between the month of July 1952 and the month of November 1952 it was inter alia agreed that the Bhaduris would sell two sets of generating plants to the plaintiff with parts and equipments more fully mentioned in the correspondence to the plaintiff and the price of each plaint would be Rs. 70,000. The correspondence was set out in schedule A to the plaint. The plaintiff alleged that the Bhaduris were at all material times in the matter of the sale of the generating plants the agents of the Modis. In the month of October 1952 the plaintiff paid a sum of Rs. 35,000 for the price of the said generating plants, whereof Rs. 15,000 was to be appropriated towards the price of the first generating plant and the balance of Rs. 20,000 for the second set. The plaintiff alleged that the plaintiff obtained delivery of the first set. In paragraph 5 of the plaint the plaintiff alleged that the plaintiff paid the price of the second set as mentioned in that paragraph. The particulars of the payment of Rs. 70,000 are that in addition to the said Rs. 20,000 there was a draft in favour of the Bhaduris for Rs. 15,000 and there were four drafts in favour of the Modis aggregating Rs. 35,000. Further allegations in the plaint are that the defendant Modis by their acts and conduct held out the Bhaduris as their agents or allowed the Bhaduris to hold themselves out as agents. In paragraph 9 of the plaint it was alleged that the Modis at all material times knew that the plaintiff was acting in the matter of the sale of the sets on the basis that the Bhaduris were the agents of the Modis and by accepting the money and by acts and conducts the Modis intentionally caused or permitted the plaintiff to believe that if payments were made to the Bhaduris the second set would be delivered to the plaintiff. The plaintiff also alleged that the Modis were estopped from denying that the Bhaduris were their agents and were precluded from refusing delivery of the second set. The other pleading was that if the Bhaduris were not the agents of the Modis the plaintiff was entitled to relief against the defendants on the basis of the agreement or breach of warranty of authority. The plaintiff in the alternative claimed loss and damages assessed at Rs. 70,000. The plaintiff alleged that by refusing to allow the plaintiff to take possession or delivery of the second set to which the plaintiff became entitled the defendants deprived the plaintiff of the same and caused loss and damage amounting to Rs. 70,000. The plaintiff also alleged that the defendants or any of them were not entitled to retain and were liable to refund Rs. 70,000.

Fact of the Case:

The plaintiff filed a suit against the Modis and the Bhaduris and claimed a decree for Rs. 80,960 as mentioned in paragraph 17 of the plaint and if necessary an enquiry into damages and decree for such sum as might be found due. The plaintiff's case was that by exchange of letters and telegrams between the month of July 1952 and the month of November 1952 it was inter alia agreed that the Bhaduris would sell two sets of generating plants to the plaintiff with parts and equipments more fully mentioned in the correspondence to the plaintiff and the price of each plaint would be Rs. 70,000. The correspondence was set out in schedule A to the plaint. The plaintiff alleged that the Bhaduris were at all material times in the matter of the sale of the generating plants the agents of the Modis. In the month of October 1952 the plaintiff paid a sum of Rs. 35,000 for the price of the said generating plants, whereof Rs. 15,000 was to be appropriated towards the price of the first generating plant and the balance of Rs. 20,000 for the second set. The plaintiff alleged that the plaintiff obtained delivery of the first set. In paragraph 5 of the plaint the plaintiff alleged that the plaintiff paid the price of the second set as mentioned in that paragraph. The particulars of the payment of Rs. 70,000 are that in addition to the said Rs. 20,000 there was a draft in favour of the Bhaduris for Rs. 15,000 and there were four drafts in favour of the Modis aggregating Rs. 35,000. Further allegations in the plaint are that the defendant Modis by their acts and conduct held out the Bhaduris as their agents or allowed the Bhaduris to hold themselves out as agents. In paragraph 9 of the plaint it was alleged that the Modis at all material times knew that the plaintiff was acting in the matter of the sale of the sets on the basis that the Bhaduris were the agents of the Modis and by accepting the money and by acts and conducts the Modis intentionally caused or permitted the plaintiff to believe that if payments were made to the Bhaduris the second set would be delivered to the plaintiff. The plaintiff also alleged that the Modis were estopped from denying that the Bhaduris were their agents and were precluded from refusing delivery of the second set. The other pleading was that if the Bhaduris were not the agents of the Modis the plaintiff was entitled to relief against the defendants on the basis of the agreement or breach of warranty of authority. The plaintiff in the alternative claimed loss and damages assessed at Rs. 70,000. The plaintiff alleged that by refusing to allow the plaintiff to take possession or delivery of the second set to which the plaintiff became entitled the defendants deprived the plaintiff of the same and caused loss and damage amounting to Rs. 70,000. The plaintiff also alleged that the defendants or any of them were not entitled to retain and were liable to refund Rs. 70,000.

Finding of the Court:

The learned judge reached the conclusion that the contract between the parties to the suit was that there was to the knowledge of all parties concerned three parties to the transaction, namely, the plaintiff; the defendant Modis and the defendant Bhaduris and held that there was one contract for sale in which the plaintiff was the buyer and the defendant Modis were the seller and the defendant Bhaduris acted as agent to bring the buyer and the seller together to complete the sale. The second conclusion of the learned judge was that Bhaduris received in the beginning a part of the price as the plaintiff's agent and subsequently the plaintiff was asked to make payment to the seller Modis direct and the plaintiff made payments to the Modis direct and not through the Bhaduris and held that the Bhaduris acted more as the agent of the plaintiff than as the agent of the Modis. Another conclusion of the learned Judge was that though the Bhaduris acted as agent nevertheless as agent they agreed to remain responsible for the delivery of the set to the plaintiff.

Issues: 1. Whether there was a contract between the plaintiff on the one hand and the Modis on the other hand through the Bhaduris. 2. Whether there was any breach of contract committed by the Modis. 3. Whether the suit was competent against the Modis. 4. Whether the plaint disclosed any cause of action.

Ratio Decidendi: The court held that the suit against the Modi Vanaspati Manufacturing Firm is not maintainable and is incompetent. Modi Vanaspati Manufacturing Firm is not a person within the meaning of Order 30 of the Code. The word 'person' in Order 30 refers to individuals and not to corporations because corporations are dealt with in Order 29 of the Code. Further Order 30 does not recognise a trading name but it recognises only the individual persons who are legal entities carrying on trade in a name.

Final Decision: The decree against Bhaduri Sen and Company for Rs. 25,000 is affirmed with interest at the rate of 6 per cent, on that amount and also interim interest at the rate of 6% as the learned judge was pleased to order. The order for costs is also affirmed. In view of the fact that there cannot be a decree against the Modi Vanas-pati Manufacturing Co. Ltd. I am of opinion that each party would bear its own costs in this appeal. The appeal against the Modi Vanaspati Manufacturing Co. is allowed and the decree is set aside.