The authority of a partner to file a suit on behalf of a registered partnership firm and the validity of the partnership under the Partnership Act.

1. Appellants have filed the present appeal against the Judgment and decree dated 20.5.2003 passed by learned Single Judge whereby suit for recovery of `5,89,434/- filed by the respondent was decreed for a sum of `2,92,977.46 paisa only.

2. The respondent filed the suit for recovery of `5,89,434/- towards agent commission against the appellants claiming himself to be an agency of defendant No.3 (in the suit) an Italian Company, in India. Appellants floated a global tender for purchase of two hydraulic Crankshaft Grinding Machines on 24.09.1986. Respondent gave an offer dated 22.09.1986 for two machines. Earlier the respondent had supplied four similar machines to the appellants vide their order dated 05.02.1985. Later on the appellants sought some clarifications and amendment in terms if four machines were purchased instead of two.

3. The respondent had offered in the original offer that Agency commission would be 15% of FOB value of order. By letter dated 07.03.1987, respondent offered discount of 5% on commission if entire order was placed on him and 100% commission was paid on receipt of shipping documents.

4. Appellants wrote letter dated 10.08.1987 to the respondent that the requirement was raised to four Grinder Machines and the respondent should submit reduced price bid accordingly.

5. Respondent vide letter dated 14.08/1987 did the needful and informed the appellants that the price of machine would be the same and be multiplied by four in place of two and discount of 5% on agency commission of 15% would be valid if (i) entire order is placed on the respondent and (ii) 100% agency commission released on presentation of shipping documents. Vide letter dated 09.11.1987, defendant No.3 in the suit, informed the appellants that respondent would not accept any amount less than already offered by them as their work involved lot of expenditure.

6. Further case of the respondent before the learned Single Judge was that the appellants thereupon placed order dated 25.04.1988 addressed to defendant No.3 on the respondent at Delhi who in turn forwarded it to defendant No.3 in Italy only for two machines. An amendment dated 06.0.1985 was issued by appellants to this letter. In the order placed, appellants unilaterally reduced the commission payable to the respondent from 15% to 10% of FOB value, even though discount of 5% was offered only as to quantity discount on four machines and was not applicable to two machines only. Respondent protested against this unilateral action of the appellants as the appellants never consented to 5% discount for only two machines. By letter dated 17.05.1988 the respondent accepted the order at Delhi with the exception of the discount clause.

7. The appellants did not issue any amendment but acted on the respondent?s letter allowing 5% discount and established Letter of Credit in favour of defendant No.3 in the suit. Two machines were shipped on 09.01.1989 by the foreign seller. The complete machinery was received by the appellants at site on or before 30.089.1989. The respondent repeatedly wrote to the appellants asking for readiness of site to enable him to commission the machine. Since there was no response, he served legal notice dated 08.04.1989 on the appellants demanding 15% commission.

8. The appellants contested the suit and pleaded that the respondent vide letter dated 22.09.1986 had offered to allow discount of 5% on the FOB price on placement of order for two machines. The appellants had specifically stated in the order dated 25.04.1988 the terms of the discount. There was no such condition that the said discount would be payable only if four machines were purchased. It was specifically mentioned to the respondent that agency commission would be payable after commissioning was completed by the respondent. Since the respondent had failed to commission the machines in time there was no occasion for the appellants to release 100% agency commission to him. In fact t