Payment to an agent is not a valid discharge of liability to the principal unless the agent is authorized to receive payment or the principal has induced the third party to believe that the agent has such authority.

( 1 ) IN this suit tile plaintiff seeks to recover from the defendant Rs. 5,236. 62 np. being the price of goods sold and delivered. The plaintiff's case as laid in the plaint is that on December 3, 1958 he supplied fabricated earth plates to the defendant. The plaintiff made the supply in his firm name, namely. "the Electric House" in which he was carrying on business. A bill was duly submitted by the plaintiff containing particulars of the goods sold as also the price payable by the defendant. On March 16, 1953 the defendant delivered to the plaintiff a cheque for Rs. 5,236. 62 np. drawn by the defendant upon the Bank of India Ltd. payable to the Electric House. The plaintiff's case is that this cheque was not presented for payment at the request of the defendant till September t, 1959 when the cheque on being presented for payment, was dishonoured.

( 2 ) THE defence is that the contract between the parties was entered into through one S. D. Sharma who acted as agent of the plaintiff. The plaintiff by his words or conduct induced the defendant to believe that the said S. D. Sharma had the authority to act and to enter into the contract on behalf of the plaintiff with the defendant and/or to receive payment, on behalf of the plaintiff from the defendant, of moneys which would be due by the defendant to the plaintiff in respect of goods supplied. It is further alleged in the written statement that the defendant was induced by the plaintiff to believe that such act to receive payment in respect of the said contract, was within the scope of the authority of the plaintiff's agent, the said S. D. Sharma. The defendant paid in cash to the said S. D. Sharma on July 16, 1959 a sum of Rs. 5236. 62 np. as the price of the goods sold and delivered to the defendant. The defendant's case is that such payment to Sharma is sufficient discharge of the entire claim of the plaintiff from the defendant. The defendant admits that it had delivered to the plaintiff a cheque for the aforesaid sum drawn by the defendant and payable to the plaintiff's firm "electric House". It is denied by the defendant that at any time a request was made to the plaintiff not to present the cheque until September 1, 1959. It is further alleged that on or about July 16, 1959 S. D. Sharma approached the defendant and represented on behalf of the plaintiff that the cheque had been lost and thereupon the amount mentioned in the cheque was paid to Sharma at his request by the defendant in cash in full satisfaction of the plaintiff's claim.

( 3 ) THE following facts are not disputed; (a) Supply of goods by the plaintiff to the defendant, (b) Submission of Bill by the plaintiff to the defendant. (c) Price of the goods was Rs. 5236. 62 np. (d) Cheque for the amount was drawn in plaintiff's favour on March 16, 1959. (e) Cheque presented on September 1, 1959 by the plaintiff and dishonoured.

( 4 ) ON the above pleadings the following issues were raised and settled: (a) Did one S. D. Sharma act in the matter of the contract as agent of the plaintiff as alleged in paragraph 2 (a) of the written statement? (b) Did the plaintiff by his words and/or conduct induce the defendant to believe that the said S. D, Sharma had authority to receive payment on behalf of the plaintiff as alleged in paragraph 2 (b) of the written statement? (c) Has the defendant paid the said sum to S. D. Sharma as agent of the plaintiff? (d) To what relief, if any, the plaintiff is entitled?

( 5 ) ADMITTEDLY, the defendant was in financial difficulties and according to Sabyasachi Mukherji, the Managing Director of the defendant, a request was conveyed to the plaintiff that the cheque should not be presented without prior consultation (Mukherji Q. 98 ). It is clear that the defendant knew very well that goods had been supplied by the firm Electric House. The fact that the defendant had made over to the plaintiff an account payee cheque makes it clear that it was intended that the seller, na