Gangaprasad Jagannath vs Ramprasad Pannalal

Shivdayal, J.—These two appeals can be conveniently decided by a single judgment.

Firm Ram Prasad Pannatal; purchased 519 mds. 10 seers, 4 Chh. of Moong in the Adat of Ganga Prasad Jagannath on June- 18, 1944 For the sake of brevity hereinafter, I will call these firms as ''Ramprasad and Gangaprasad'' respectively. Ramprasad instituted a suit against Gangaprasad (Suit No. 25/2002) on July 7, 1945 alleging that the Defendant was bound to export the said Moong for sale; but he did not do so, with the result that he suffered loss at the rate of Rs. 26-8-0 per beg (two and half mds.) and claimed a decree for accounts on that basis. In the written statement, Gangaprasad denied that Moong was purchased in Adat and also asserted that the Plaintiff never gave him any instructions as to where and to whom the goods were to be exported. He denied his liability to pay any damages to the Plaintiff On the contrary, he instituted a separate suit (Civil Original suit No 48 of 2002) on August 18, 1945 alleging that the Moong remained with him but Ramprasad did not give any instructions; that market rate was falling, so that he sold the goods in the local market and that entailed a loss to him. In this suit, Ganga Prasad claimed a decree for Rs. 770 against Ramprasad.

For the sake of convenience, Ram Prasad''s suit will be called "the first suit" and Ganga Prasad''s as ''the second suit''. B th these suits were instituted in the year 1945 when the Zabta Diwani (Gwalior CPC Code) was in force. These second appeals are u/s 525 of that Code. Under that section, there are no restrictions as are imposed in Section 100 of the Indian CPC Code, and these appeals are to be decided on the principles on which first appeals are decided u/s 96 of the present Code of Civil Procedure. I shall take up the first suit first i.e appeal No. 176 of 1959.

The main question for determination is whether Defendant Ganga Prasad was under an obligation to export the Plaintiff''s goods, and sell them at a place outside Morena. The case for the Plaintiff is that though moong was purchased by the Plaintiff in Defendant''s Adat, there was a definite understanding between the parties that the Defendant would endeavour to obtain a permit for its export, and the Defendant had applied for a permit to export the Moong belonging to himself as also that belonging to the Plaintiff. A permit was ultimately issued in his favour, but the Plaintiff apprehended that the Defendant would not export the Plaintiff''s goods. He therefore approached the Food, Inspector who summoned the Defendant. Before the Food Inspector, the Defendant agreed to export the Plaintiff''s goods and he wrote that admission on the back of the Plaintiff''s application to the Food Inspector. But the Defendant did not export the goods. Jagannath, son of Ganga Prasad of the Defendant Firm, (who signed and verified the written statement) was examined on Jan. 31, 1946 u/s of Jabta Diwani corresponding to order 10 Rule 1 CPC Code. His statement was:

Since he did not bring his account books his statement remained incomplete and the case was adjourned. His examination was resumed on February 8, 1946 when he stated:

From this statement it is quite clear that his denial in the written statement that Moong was purchased in his Adat was wrong. He admitted that he applied for a permit, that in the stock which he mentioned, the Plaintiff''s Moong was included; that the Plaintiff made an application to the Food Inspector; that the Defendant undertook to export Plaintiff''s Moong if the latter deposited about Rs. 1,000 with him; that be availed himself of the, permit in its entirety, i.e., to say, he exported that quantity of Moong for which the permit was granted but he did not export the Plaintiff''s Moong, and that the permit which was granted was in respect of the Plaintiff''s Moong as well.

In the Plaintiff''s application to the Food Inspector the Defendant wrote:- "

" There he did not impose any condition. However, it is common ground that the Plaintiff deposited Rs. 1 ,000, with the Defendant.

Having these admissions in view, I see no force in Shri Patanker''s argument that the Defendant was under no obligation to export the Plaintiff''s Moong. It is argued by the learned Counsel that there is a distinction between ''Contract and ''Understanding'' and further, the undertaking before the food Inspector was not a contract. I am unable to accept these arguments Although in the plaint the word definite under standing" is used, it really meant an agreement. Perhaps the word "understanding" was use 1 as the grant of a permit was not in the hands of the partie: it was discretionary with the authorities. However, it is quite clear from the Plaintiff''s application to the Food Inspector that on his apprehension(sic) the moved the Fool Inspector to grant a separate permit in the Plaintiff''s name for exporting his own Moong. The Defendant having appeared before the Food Inspector and having written on the application that he was prepared to export the Plaintiff''s Moong, he is estopped from saying that there was no contract of his, there was every likelihood that the Plaintiff would have been granted a separate permit and the Defendant''s permit would have been revoked or modified. The Defendant, when applied for a permit, admittedly included the Plaintiff''s Moong and it is also an admitted fact that the permit which was granted to him was also in respect of the Plaintiff''s goods. It is therefore, impossible to agree with Shri Patanker that it was in the discretion of the Defendant to export or not to export and there was no binding contract in that behalf. According to the Defendant he locally sold the Plaintiff''s goods to Maheshwar Mills and examined Ram Kishore to prove that fact. Ram Kishore could not Specify whether the goods sold to him belonged to the Plaintiff or the Defendant. The Plaintiff endeavoured to show that the goods were soldi for export to Phoolchand Dwarika. For this purpose he summoned Phool Chand with his account books. But Phoolchand stated that his account books had been stolen. In. the Defendant''s books there was an entry of Rs. 600 made on January 4, 1945 as ''Amanat'' in respect of profit relating to 200 bags of Moong Jagannath Prasad Defendant was examined on this> point, but he stated, that there was no entry as to the rate at which the said Moong was purchased nor the rate it was sold. To my mind this aspect of the matter as to whom the Defendant really sold the Plaintiff''s goods is not material Even if it is accepted that the Defendant did not really export the goods, his liability will depend upon whether he was under an obligation to export or not.

Shri Patanker strenuously urges that even if the Defendant had undertaken to export the Plaintiff''s goods, he could not be made liable for any damages because the Plaintiff did not prove that be had given instructions to the Defendant to whom the goods were to be sent. This question presents no difficulty whatever. At the first place, the Defendant had clearly agreed to export the goods along with his own. He knew fully well where he was to send them. When the Plaintiff moved an application to the Food Inspector and became satisfied on the Defendant''s undertaking in writing, it followed by necessary implication that bis goods also to be exported along with the Defendants. No further instructions were necessary. Moreover, if the Defendant felt any difficulty about it he could seek instructions about it from the Plaintiff.. This duty was cast upon him u/s 214 of the Contract Act. It is not his case that he sought instructions from the Plaintiff and trie Plaintiff refrained from advising him. Section 188 conferred on the Defendant authority to do all lawful things which were usually done in the course of the business. If he had exported the Plaintiff''s goods along with his own, no body could question his act in the absence of any instructions to the contrary from the principal. It is proved by not only the statements of the Plaintiff''s witnesses but also Ram Kishore, Defendant''s witness that there was a difference of Rs. 5 per Maund in the rate of local sale find that of sale on export. It is the duty of the agent to conduct the business of the principal with as such skill as is generally performed by persons in similar business. Diligence and ordinary skill required the Defendant to export the Plaintiff''s goods when he had a permit rather than sell it locally. It seems clear to me that the Plaintiff took undue advantage of the permit and fully availed himself of it by exporting not only his own goods which he had at the time of applying for permit, but also another stock either by substituting the Plaintiff''s Moong by purchasing fresh Moong for himself or by exporting the Plaintiff''s Moong, denying however that it was his. In either case his liable. (Section 216 of the Contract Act).

For reasons stated above I see no error in the judgment of the Courts below when they have held the Defendant is liable to compensate the Plaintiff for the loss incurred by him by the Defendant''s non-performance of his promise or by his negligence.

Shri Patanker objects to the allowance of interest on damages. In fact interest has not been allowed for the period prior to the suit, and there can be no doubt that the Court had jurisdiction and discretion to allow interest pendente lite in future.

For these reasons appeal No. 176 arising out of the first suit is dismissed with posts. And it follows as a necessary consequence that Ganga Prasad is not entitled to any damages from Ram Prasad on account of locally selling the Moong as alleged by him. His appeal No. 175 of 1950 is also accordingly dismissed with costs.