An agent is obligated to account for any profit accrued from the agency relationship, and the court may enforce the agent's liability to disgorge the profit.

1. Whenever scarcity in food is felt, the State steps in with remedial measures, to ensure the availability and an equitable distribution of the food-stuffs. Special legislation some ephemeral and some almost having a'quasi permanency' is also resorted to to meet such emergent situations. Control Orders of various types to cover procurement, movement, processing, price fixation and distribution are issued on those occasions. There has been a spate of litigation in the State arising out of the implementation and the working of these Control Orders. This appeal arises from one among them.

2. Palghat District which enjoys the reputation as the granary of the State, has numerous rice mills with their sprawling yards humming with activities. The procurement of paddy and conversion of it into rice, are transacted on an extensive scale in that area. The suit out of which this appeal arises was instituted in one such area in that District Perintalmanna.

3. Clause.3 of the Rice and Paddy (Procurement by Levy) Order casts an obligation on every cultivator to sell to the Government or an agent of the Government, or other authorised person, paddy derived from the cultivated lands subject to the various conditions referred to in the Order. Under Clause.7, the payment of price is to be effected by the Government or agent or the authorised person purchasing the paddy. Under the Paddy and Rice (Declaration and Requisitioning of Stocks) Order, any stockholder can be directed by the specified authorities to convert into rice, the paddy in the possession or control of such stockholder. Every stockholder is obliged to sell to the Government, of the agent or other persons named in that behalf, at the controlled price, such quantity of paddy or rice in his possession as specified in the Order.

4. The plaintiff was appointed by the State Government, the defendant in the suit, as one such agent in Perintalmanna. He had to mill the paddy procured during the various crops. The terms and conditions regarding his appointment are contained in the agreements produced in this case as Exts. BI to B3. They follow the same pattern, though the crops to which they relate, differ. There is no controversy that the plaintiff, by virtue of his position under the agreement, hulled the paddy allotted to him by the Taluk Supply Officer transporting the same from the, godowns and other places under the control of the various officers. Rice so obtained had been supplied by him in accordance with the orders and directions of the supply officials.

5. According to the plaintiff, bulling and transporting charges were due, from the defendant. They remained unpaid, despite his demand. The suit was instituted for recovery of the dues and the return of the security amount with interest and costs.

6. According to the defendant - Government, the plaintiff had unjustly retained with him a large sum, which under the agreement and under law, really belonged to the Government. An adjustment had to be effected of the amounts due to the plaintiff from out of such retained amount and the balance was to be paid over to the Government. The contentions of the Government were amplified by an additional written statement The details of the transaction which would cogently explain the accrual of such large amounts in the hands of the plaintiff had been given therein. On a proper settlement of accounts, a sum of Rs. 21,890.27 was due to the Government after effecting a set-off of the plaintiff's dues. The defendant, therefore, prayed for a decree for recovery of that sum. Court fee was also paid in respect of the relief so sought for.

7. The plaintiff repudiated the liability for the refund of the amount as claimed in the additional written statement of the Government. The status of an'agent' attributed to the plaintiff under the additional written statement of the Government was disputed.

8. There is no longer any controversy on the actual amount that would be due to the Government in the