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1950 Supreme(Raj) 151

High Court Of Rajasthan
Judgename : Sharma
MADHOLAL - Appellant
Versus
BRIDHICHAND - Respondent
Second Appeal 42 Of St. 2005
Decided On : 10/05/1950

Advocates Appeared:
P.C.Bhandari, S.N.Saxena

A sub-agent is not responsible to the principal except in case of fraud or wilful wrong.

Headnote:

CONTRACT - PRINCIPAL AND AGENT - SUB-AGENT - LIABILITY OF SUB-AGENT TO PRINCIPAL - SECTIONS 192 AND 193, CONTRACT ACT - A sub-agent is not responsible to the principal except in case of fraud or wilful wrong. Where an agent without authority appoints a sub-agent, the agent is responsible for the acts of the sub-agent to the principal and to third persons, but the principal is not represented by or responsible for the acts of the sub-agent, nor is the sub-agent responsible to the principal.

Fact of the Case:

The plaintiff paid Rs. 300 to the defendant to purchase 4 Mds. of Ganja from Sanawar in erstwhile Indore State. The defendant purchased 2 Mds. of Ganja valued at Rs. 150-11 and made it over to the plaintiff. The defendant spent Rs. 19-7 on railway fare, leaving a balance of Rs. 127-14. The plaintiff sued the defendant for the balance amount with interest.

Finding of the Court:

The trial court dismissed the suit, holding that there was no privity of contract between the plaintiff and the defendant. The appellate court reversed the trial court's decision and remanded the case for determination of the correct amount due to the plaintiff.

Issues: 1. Whether there was privity of contract between the plaintiff and the defendant. 2. Whether the defendant was liable to the plaintiff for the balance amount.

Ratio Decidendi: 1. The defendant was a sub-agent of Laxami Narain, who was the agent of the plaintiff. 2. Under Section 192 of the Contract Act, a sub-agent is not responsible to the principal except in case of fraud or wilful wrong. 3. The appellate court failed to consider the provisions of Sections 192 and 193 of the Contract Act and acted illegally in the exercise of its jurisdiction.

Final Decision: The revision petition was allowed, the appellate court's order was set aside, and the case was remanded back to the appellate court for deciding the appeal in light of the observations made by the High Court.

Judgment


SHARMA, J.

( 1 ) THIS is an application by Madholal defendant to revise the order of the learned Judge, Karauli, remanding the case to the Court of the Munsif, Karauli, for decision according to the observations made in the appellate judgment. Originally, the defendant filed a second appeal but on the objection of the counsel for the opposite party that; no appeal lay against the order of the appellate Court, the defendant made an application that the appeal might be treated as a revision, as no appeal lay against the order of the lower Court. The facts giving rise to the revision are as follows; The plaintiff opposite party filed a suit against the defendant-applicant on the ground that he had been paid Rs. 300 by the plaintiff on 8-10-1943 for the purpose of purchasing 4 Mds. of Ganja from Sanawar in erstwhile Indore State, 2 Mds. of Genja valued at Rs. 150-11 was purchased by the defendant and made over to the plaintiff, Rs. 19-7 were spent on railway fare. Thus only Rs. 172-2 were spent out of the sum of Rs. 300, and the balance of Rs. 127-14 remained due from him which had not been paid. The plaintiff claimed this amount of Rs. 127-14 with interest at the rate of re 1% per mensem. The total amount claimed was Rs. 193-7-6.

( 2 ) THE main defence was that there was no privity of contract between the plaintiff and the defendant. The learned Munsif Karauli held this point in favour of the defendant and dismissed the suit. On appeal, the learned Civil Judge held that the plaintiff was entitled to recover the balance out of the sum of Rs. 300 from the defendant and has remanded the suit for the determination of the correct amount. Against this order second appeal was first filed, but no appeal lay as the order of remand could not under the circumstances of the ease, be under Order 41, Rule 23, Civil P. C. The only order of remand, which is appealable, is that under Order 41, Rule 23. The present order of remand, though described by the learned Civil Judge as under Order 41, Rule 23 and section 151, Civil P. C. , is in fact an order under Section 151, Civil P. C. and is consequently not appealable. An application was, therefore, made by the defendants counsel to treat the appeal as revision and it has been so treated.

( 3 ) THE main argument made by the learned counsel for the defendant- applicant, is that there was no privity of contrast between the parties. The applicant was only a sub agent of Laxami Narain who was in the position of an agent of the plaintiff. Under Section 192, Contract Act, where a sub-agent is properly appointed, he is responsible for his acts to the agent, but not to the principal, except in case of fraud or wilful wrong. under Section 193 where an agent with. out having authority to do so, has appointed a, person to act as a sub-agent, the agent stands towards such person in the relation of a principal and an agent, and is responsible for his acts both to the principal and to third persons; the principal is not represented by or responsible for the acts of the person so employed, nor is that person responsible to the principal. It was urged that the defendant, whether he was properly appointed as sub-agent or so appointed without any authority by the agent, be is not responsible to the plaintiff who is the principal. The Civil Judge was, therefore, wrong in holding the defendant as liable to the plaintiff.

( 4 ) ON behalf of the opposite party it has been argued that the defendant was an agent of the plaintiff and not a sub-agent, and therefore he was responsible to the plaintiff. It was further argued, whether the lower appellate Court had rightly or wrongly hold the defendant to be ass agent of the plaintiff, it is only a mistake of law and therefore no revision lay.

( 5 ) I have considered the arguments of the learned counsel for both the parties. There can he no doubt that; a revision lies either when a jurisdiction not vested in a subordinate Court has been usurped or a jurisdiction so




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