High Court Of Calcutta
Prabir Kumar Majumdar, Bijitendra Mohan Mitra
NANDALAL N.VERMA AND CO LTD - Appellant
Versus
ALLIANCE MILLS (LEASEE) PVT.LTD. - Respondent
C. A. J. A. 116 Of 1988
Decided On : 04/22/1994
ORDER 7 RULE 11 CPC - SECTION 230 CONTRACT ACT - A plaint will not be rejected under Order 7 Rule 11 CPC unless it is manifestly vexatious and meritless in the sense of non-disclosure of a clear right to sue.
Fact of the Case:
Defendant No. 2 in a suit filed an application under Order 7 Rule 11 CPC seeking permanent stay of the suit against it or deletion of its name from the suit register on the ground that the plaint did not disclose any cause of action against it. The defendant argued that as per the plaint, it was acting as an agent of the Defendant No. 1 and hence the suit against it was barred under Section 230 of the Indian Contract Act.
Finding of the Court:
The court held that the plaint disclosed a cause of action against the Defendant No. 2 as the plaintiff had treated the Defendant No. 2 as an agent of the Defendant No. 1 and the jural character had been ascribed to the Defendant No. 2 as per the plaint case. The court further held that Section 230 of the Contract Act barred the suit against the Defendant No. 2 and hence its name was liable to be struck off from the plaint.
Issues: Whether the plaint disclosed a cause of action against the Defendant No. 2.
Ratio Decidendi: The court held that an agent cannot be personally sued on a contract entered into by him on behalf of the principal in the absence of any contract to that effect. The court further held that the plaint disclosed a cause of action against the Defendant No. 2 as the plaintiff had treated the Defendant No. 2 as an agent of the Defendant No. 1 and the jural character had been ascribed to the Defendant No. 2 as per the plaint case. The court also held that Section 230 of the Contract Act barred the suit against the Defendant No. 2 and hence its name was liable to be struck off from the plaint.
Final Decision: The appeal was allowed and the judgment of the trial court dated 15th January, 1988 passed in Suit No. 595 of 1987 was set aside. The application of the Defendant No. 2 against the plaintiff was allowed.
( 1 ) THIS appeal is directed against an order dated 18th January, 1988 ,passed by the learned Trial Judge dismissing an application under Order 7 Rule 11 of the Code of Civil Procedure. An application in nature of Order 7 Rule 11 of the Code of Civil procedure has been pressed for hearing by one Nandalal N. Verses and Co. Ltd. the defendant No. 2 in the suit praying that suit be permanently stayed against them or alternatively the name of the Defendant No. 2 as aforesaid be deleted from the suit register. The case of the petitioner being the Defendant No. 2 in the connected suit in substance is that the plaint does not disclose any cause of action against the petitioner.
( 2 ) THE Defendant No. 2 was and acted as an agent of the Defendant No. 1. According to the petitioner the plaintiff has stated in the plaint in most unambiguous terms that petitioner was acting as an agent of the Defendant No. 1 and as such the principal referred to in the plaint has been sued as Defendant No. 1. According to the petitioner the suit as against the petitioner, being the Defendant No. 2 is barred under the provisions of Section 230 of the Indian Contract Act, in so far as the defendant No. 2 is concerned.
( 3 ) ACCORDING to the plaintiff in paragraph 4 of the connected plaint, the contracts being referred to have been sought to be treated as part of the plaint. From the same as per the case of the plaintiff, it will appear that the Defendant No. 2 entered into the said contracts in its firm name as a purchaser. The Defendant No. 2 agreed to purchase from the plaintiff diverse quantities of goods at the rates mentioned in the contract. So according to the plaintiff the defendant No. 2 was in any event personally entitled to enforce the same and/or personally bound by it.
( 4 ) MR. P. K. Roy, the learned Counsel, appearing on behalf of the appellant submitted that the plaintiff has pleaded in the plaint that the Defendant No. 2 was the agent of the Defendant No. 1. Irrespective of the contracts referred to in the plaint the plaintiff has accepted the Defendant No. 2 as the agent of. the Defendant No. 1 and the jural character has been ascribed to the Defendant No. 2 as per plaint case. In view of the jurisdic character ascribed to the Defendant No. 2 as agent of the Defendant No. 1, according to Mr. Roy by virtue of Section 230 of the Contract Act, the plaint does not disclose any cause of action against the said Defendant No, 2. Section 230 of the Contract Act reads as follows : "230. Agent cannot personally enforce, not be bound by, contracts on behalf of principal. In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of the principal, nor is he personally bound by him. " section 230 of the Contract Act is intended to cover the case where the agent, though an agent cannot be made personally liable.
( 5 ) MR. Roy further submitted that veil of the juristic character of the Defendant No. 2 is lifted by the plaintiff as per plaintiff's case in the plaint. Mr. Roy further stated that for the purpose of disposal of a petition under Order 7 Rule 11 of the Code of Civil Procedure only the material averments contained in the plaint are required to be looked into and inferences we thereafter required to be drawn from the same. It is at the stage of pleading when Order 7 Rule 11 of the Code of Civil Procedure comes into play. It is salient to make a reference that the pleading is an expression defined under the provision of Order 6 Rule 1 of the Code of Civil Procedure. Accordingly, the plaint is required to be read as a whole. Alternatively, the plaintiff has also made out a case that the defendants by their conduct held out the Defendant No. 2 as the Agent of the Defendant No. 1 in the matter of purchase of H. C. Cement bags from the plaintiff at Calcutta and the plaintiff relied on the said representation of the defendants and acted thereupon. There has been no
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