Kalakonda Balrajiah vs Partnership Firm of Madhuri Rajiah

Manohar Pershad, J.—This is a petition in revision on behalf of the Defendant against the judgment and decree of the Sub-Judge, Secunderabad, in the Small Cause suit No. 138 of 1953, dated 15-6-1954, decreeing the suit against Defendant 1 with interest at 6 per cent, per annum.

In this revision three arguments are advanced on behalf of the Petitioner. The first contention is that the court below ought to have dismissed the suit on the ground that the firm of the Plaintiff had mo cause of action against the Defendant-Petitioner as the alleged purchase was made from the shop of Madhuri Rajeshwar Rao and not from the Plaintiff''s ''firm which is admitted by the Plaintiff''s witness himself. The second argument advanced is that Defendant 1 was a mere salesman as such he could not make any purchase on behalf of the Petitioner to bind the Petitioner. The third argument is that when the court below has held that Defendant 2 was not in the service of Defendant 1 on 1-9-1950 it erred in holding the Petitioner liable for the reason that the publication in the newspaper was of 9-9-1950.

He contends that though the publication is of a later date, the Plaintiff could not get a decree against the Petitioner for the purchase made by Defendant 2 unless he established that Defendant 2 had the requisite authority to purchase or that the Petitioner ever held him out to be a person clothed with such authority. Reliance was placed on the case, reported in Parsram Bulchand v. Jodhpur Railway AIR 1931 Sind 144 (A) and on the passage in Halsbury''s Laws of England Vol. 22 paras 394 and 395.

On behalf of the Respondent-Plaintiff it is contended that the Defendant in his written statement did not raise the plea that the Plaintiff had no cause of action against him (Defendant) and he cannot be now allowed to raise this point in revision. With regard to the question whether Defendant 2 was a salesman and was not authorised to make purchases it is urged that the Defendant has not taken even this plea in his written statement and if he had raised this plea, the Plaintiff could have met the plea by producing evidence to establish that he had such authority to make the purchase. In reply to the third contention it is urged that though, Defendant 1 never came to make purchases and usually used to send for the goods from the Plaintiff''s him through his servants but when those other servants made purchases on his behalf and Defendant 1 did not choose to challenge, he would be estopped from denying that Defendant 2 was entitled to make the purchase. It is, however, contended that the purchase made by Defendant 2 was in the usual course of business and as such Defendant 1 was liable.

So far as the first and the second arguments are concerned, it is conceded by the learned advocate of the Defendant-Petitioner that these pleas were not raised in the written statement. If that be so, I cannot allow him to raise these new points in revision as both the pleas are connected with facts. The learned advocate for the Petitioner did not lay much stress on these points and in view of this I do not wish to discuss them in detail. In the result these two contentions must fail.

In the third contention, however, I do find sufficient force. The case of the Plaintiff is that Defendant 2 who was in service of Defendant 1, on 5-9-1950 purchased a sari in the name of Defendant 1 and as he was the authorised agent Defendant 1 is bound to pay the amount. The case of Defendant 1 is that Defendant 2 was no doubt in his service but he was removed from service on 1-9-1950 and a public notice to that effect was also issued on 9-9-1950. In other words the contention is that he was not entitled to make the said purchase on his behalf on 5-9-1950. The question that arises for consideration is whether the Defendant-Petitioner is liable to pay the amount for the purchase made by the Defendant 2.

The relation of master and servant does not in itself confer on the servant an inched authority to bind his master. As a general rule the master is not liable for the contracts entered into by his servant without express authority. An authority to bind the master may, however be implied from the circumstances of the particular case. Admittedly in the present case there is no question of any express authority. The Plaintiff does not say that the Defendant ever came and told him that he should give goods to Defendant 2. Now I have to see whether the authority to bind the Petitioner can be implied from the circumstances.

On behalf of the Plaintiff the only circumstance that is shown is that there are other servants who make purchases and the Defendant-Petitioner has acquiesced in their dealings and never challenged their acts. This, in my opinion, would not be sufficient. It is nowhere stated that before the alleged purchase, Defendant 2 had on any previous occasion come to the firm of the Plaintiff or taken goods or that the Defendant accepted them. and made payments. It the Plaintiff has established this sort of conduct of the Defendant, it could be said that he was liable. The mere fact that other servants used to make the purchases would not be sufficient to fasten the Defendant with liability for the act of Defendant 2. It may be that the other servants hail such authority or such authority could be inferred from the Defendant''s conduct in regard to their actions. But such conduct even if established will not warrant a generalisation that Defendant 1 had given a general authority to all his servants to make purchases for him. The doctrine of holding out has its own limitations.

Great stress is laid on the fact that the purchase was made in the usual course of the business but there is no satisfactory evidence to show that the duties of Defendant 2 were such as to lead to that conclusion. Lastly it is contended that the Plaintiff believed that Defendant 2 was the authorised servant of Defendant 1. The fact that the Plaintiff believed that Defendant 2 was the authorized servant of Defendant 1 would not bind the Petitioner- Defendant 1 unless it is shown that Defendant 1 had, by his conduct or action, held him out to be an authorised person. On the other hand he had done what all he could do to remove the impression in others that he was continuing in his service by publishing the notice.

The petition in revision is, therefore, allowed, and the judgment and decree of the court below are set aside and the Plaintiff''s suit is dismissed with costs.