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1991 Supreme(Del) 348

High Court Of Delhi
KAVITA TREHAN - Appellant
Versus
BALSARA HYGIENE PRODUCTS LIMITED - Respondent
Suit 39 of 1990
Decided On : 05/28/1991

Advocates Appeared:
A.K.GANGULY, I.S.MATHUR, S.C.GUPTA

The main legal point established in the judgment is the dismissal of the suit due to the unregistered partnership, as per Section 69 of the Indian Partnership Act, and the limited nature of an agent's lien over the principal's property.

Headnote:

Section 69 of the Indian Partnership Act - Dismissal of suit due to unregistered partnership - Summary of the acts and sections referenced and discussed by the court: The court discussed the provisions of Section 69 of the Indian Partnership Act, which led to the dismissal of the suit due to the partnership being unregistered at the time of filing. The court also highlighted the limited nature of an agent's lien over the principal's property and the obligations of the agent to maintain proper accounts.

Fact of the Case:

The plaintiffs filed a suit against the defendant seeking a declaration of lien over the defendant's goods and a decree restraining the defendant from interfering in the disposal of the stocks. An ex-parte order was granted allowing the plaintiffs to sell the goods. The defendant objected to the suit, claiming that the partnership was unregistered and that the plaintiffs wrongfully sold the defendant's goods.

Finding of the Court:

The court found that the suit was liable to be dismissed due to the unregistered partnership, as per Section 69 of the Indian Partnership Act. The court also directed the plaintiffs to deposit an FDR in the name of the Registrar of the court for the value of the goods sold, pending the outcome of the proceedings in another court.

Issues: The main issues were the validity of the suit in light of the unregistered partnership and the wrongful sale of the defendant's goods by the plaintiffs.

Ratio Decidendi: The court held that the suit was not maintainable due to the unregistered partnership, as per Section 69 of the Indian Partnership Act. The court also emphasized the limited nature of an agent's lien and the obligation to maintain proper accounts.

Final Decision: The suit was dismissed, and the plaintiffs were directed to deposit an FDR for the value of the goods sold pending the outcome of the proceedings in another court.

ANIL DEV SINGH, J.

( 1 ) TWO questions arise in this suit. The first one being whether the suit is liable to;be dismissed in view of Section 69 of the Indian Partnersilip Act, partnership being un-registered on the date of filing of the suit and in case the suit is to be dismissed, the second question would, be whether the parties are to be relegated to be original situationprevailing on March 27. 1989, the date the suit was and an ex-parte order granted permittiag the plaiatiffs. agents to sell the goods defendant principal. In order to appreciate these questions, it will be necessary to recount the relevant facts.

( 2 ) THE plaintiffs instituted the present suit against defendant in the court of senior Sub Judge, Chandigarh. In this suit, the plaintiffs, defendant seek a declaration that they being clearing and forwarding agents of defendant have lien over the goods of the latter which were lying in their possession account of their outstanding outstanding commission. Apart from this, the plaintiffs claim a decree restraining the defendants from interfering in any manner in disposing of the stocks of the defendant lying in their possession. . . In the plaint, it is averred that the plaintiffs were carrying on business as partners of M/s Subhagya Agencies, and they were appointed by the defendaiaaas- their. Clearing and forwarding Agents for selling their products namely, tooth-paste, tooth powder, tooth-brush, mosquito-repellent, cleaning powder and toilet freshner. An agreement is said. to have. been executed bctween the parties, operative w. e. f. April 1, 1985, wherein it was stipulated that the plaintiffs will be entitled to a commission @ 1. 5% upto a turn over of Rs. 2 crores and on subsequent transactions @ 15 According to the plain tiffs the terms and conditioas of the agreement were revised by the letter of the defendant dated April 4, 1986 in anticipation of increase in the turnover for the year 1986-87. It is further pleaded that the first agreement beween the parties was for the period April 1, 1985 to March 31, 1986, While the second agreement was to remain in force from April 1, 1986 to March 31, 1987. It was the case of the plaintiff that they suffered huge losses during the year 1986-87 as the defendant was not able to maintain the quality of its products. In view of this, the plaiatiffs expressed their unwillingness to continue on the then existing terms and conditions. However it is alleged that defendant after the exiry of the agreement for the year 1986-87 kept on persuading t he plaintiffs to continue working as its agents. Former kept on assuring that losses suffered by the later during the year 1986-87 would be compensated by revising the terms for the subsequent year and the comission for the year 1987-88 would be paid as per normal trade practice. It is further maintained that other companies similarly situate had been paying the commission @ 2/o during the year 1987-88 to their agents. It is also averred that the plaintiffs were Clearing and Forwarding Agents for Hawkins Ccokers Limited, Bombay and Indian Shaving Products, Delhi and tbe said companies were paying to the plaintiffs a gross commission of approximately 2/o on the sale of their products. According to the plaintiffs as per the trade practice, the Candf agents were being paid commission @ 2% during the year 1987-88. the further allegation of the plaintiffs is that for the period April 1, 1987 to December 31,1988 the defendants kept on making payment to them on the same patte as was followed in 1986-87 and were paid only a sum of Rs. 20,000. 00 per month as commission. The plaintiffs further stated that they signed an agreement with the defendant for the year l987-88 only on September ]3, 1988. The agreement according to them has no validity in the eye of law as the same ws not executed during the currency of year 1987-88. It is the further case of the plaintiffs that in December 1988 the defendant company sent a draft agreement for execu




























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