STATE OF UTTAR PRADESH Vs. MURARI LAL LIMITED

JUDGEMENT

(1.) This is an appeal by certificate from the judgment of the Allahabad High Court decreeing the suit filed by the respondent company for recovery of a sum of Rs. 21,000/on account of rent or damages in respect of storage charges for 4,000/maunds of potatoes for which space had been reserved in the cold storage by the company.

(2.) The plaintiff respondent brought a suit against the State of Uttar Pradesh and impleaded three other defendants who were, at the material time, in the service of the State. Defendant No. 3 was a Horticulturist in the Department of Agriculture. He negotiated with the plaintiff for storing Government potatoes in a cold storage which belonged to the plaintiff. It was agreed that the Government potatoes would be sent for storage and the plaintiff would be entitled to charge at a certain rate per maund. It was understood that 4,000 maunds of potatoes would be sent for storage. However, no potatoes were sent although the plaintiff had reserved the requisite space in the storage which remaind unoccupied during the season. It appears that defendant No. 3 A. P. Gupta was acting on behalf of Srivastava defendant No. 2 who was Deputy Director, Horticulture. Both these defendants were acting upon instructions from Sri Ram Krishna defendant No. 4 who was Assistant Development Commissioner, Planning, Lucknow. The suit was therefore filed against the State and the other three defendants to recover the storage charges amounting to Rs. 21,000/-.

(3.) Although all the defendants raised a common plea that there was no contract between the parties for the storage of potatoes and that the entire matter remained at the stage of negotiations the real plea taken on behalf of the State was that no contract had been entered into in accordance with Article 299 (1) of the Constitution. The trial court upheld the objection of the State and dismissed the suit against it but it held the other defendants jointly liable for the storage charges. The High Court on appeal by the defendants set aside the decree against defendants Nos. 2 and 4 but maintained it against defendant No. 3. No appeal, however, was filed by the plaintiff against the State. As the judgment of the High Court proceeded mainly on the provisions of sub-s. (3) of S. 230 of the Contract Act the whole of that section may be set out: S. 230. "In the absence of any contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.