KAVITA TREHAN Vs. BALASARA H PRODUCT

JUDGEMENT

(1.) Two questions arise in this suit. The first one being whether the suit is liable to;be dismissed in view of Section 69 of the Indian Partnersilip Act, partnership being un-registered on the date of filing of the suit and in case the suit is to be dismissed, the second question would, be whether the parties are to be relegated to be original situationprevailing on March 27. 1989, the date the suit was and an ex-parte order granted permittiag the plaiatiffs. agents to sell the goods defendant principal. In order to appreciate these questions, it will be necessary to recount the relevant facts.

(2.) The plaintiffs instituted the present suit against defendant in the court of senior Sub Judge, Chandigarh. In this suit, the plaintiffs, defendant seek a declaration that they being clearing and forwarding agents of defendant have lien over the goods of the latter which were lying in their possession account of their outstanding outstanding commission. Apart from this, the plaintiffs claim a decree restraining the defendants from interfering in any manner in disposing of the stocks of the defendant lying in their possession. . . In the plaint, it is averred that the plaintiffs were carrying on business as partners of M/s Subhagya Agencies, and they were appointed by the defendaiaaas- 'their.Clearing and forwarding Agents for selling their products namely, tooth-paste, tooth powder, tooth-brush, mosquito-repellent, cleaning powder and toilet freshner. An agreement is said. to have.been executed bctween the parties, operative w.e.f. April 1, 1985, wherein it was stipulated that the plaintiffs will be entitled to a commission @ 1.5% upto a turn over of Rs. 2 crores and on subsequent transactions @ 15 According to the plain tiffs the terms and conditioas of the agreement were revised by the letter of the defendant dated April 4, 1986 in anticipation of increase in the turnover for the year 1986-87. It is further pleaded that the first agreement beween the parties was for the period April 1, 1985 to March 31, 1986, While the second agreement was to remain in force from April 1, 1986 to March 31, 1987. It was the case of the plaintiff that they suffered huge losses during the year 1986-87 as the defendant was not able to maintain the quality of its products. In view of this, the plaiatiffs expressed their unwillingness to continue on the then existing terms and conditions. However it is alleged that defendant after the exiry of the agreement for the year 1986-87 kept on persuading t he plaintiffs to continue working as its agents. Former kept on assuring that losses suffered by the later during the year 1986-87 would be compensated by revising the terms for the subsequent year and the comission for the year 1987-88 would be paid as per normal trade practice. It is further maintained that other companies similarly situate had been paying the commission @ 2/o during the year 1987-88 to their agents. It is also averred that the plaintiffs were Clearing and Forwarding Agents for Hawkins Ccokers Limited, Bombay and Indian Shaving Products, Delhi and tbe said companies were paying to the plaintiffs a gross commission of approximately 2/o on the sale of their products. According to the plaintiffs as per the trade practice, the C&F agents were being paid commission @ 2% during the year 1987-88. the further allegation of the plaintiffs is that for the period April 1, 1987 to December 31,1988 the defendants kept on making payment to them on the same patte as was followed in 1986-87 and were paid only a sum of Rs. 20,000.00 per month as commission. The plaintiffs further stated that they signed an agreement with the defendant for the year l987-88 only on September ]3, 1988. The agreement according to them has no validity in the eye of law as the same ws not executed during the currency of year 1987-88. It is the further case of the plaintiffs that in December 1988 the defendant company sent a draft agreement for execution which contained inter-alia a condition that commission would be payablat 3% over and above the expenses to be incurred by the former for running their C & F business besides the plaintiffs were to be paid rent for Zirakpur and Chandigarh depose @ Rs. 3700.00 and Rs. 2000.00 per month respectively. That apart the plaintiffs were also entitled to unloading and local delivery charges besides the plaintiffs were to be paid a consolidated suift of Rs. 5,500.00 per month for services rendered and other establishment expeneses iusurred by them. ft is asserted that the total turnover of the plaintiffs for the year 1988-89 including stock receipts upto March 25, 1989 which were being desparched as per letter of the defendant dated March 21,1989 comes to Rs. 4,19,45,725.70. The plaintiffs claim that they are entitled to a sum of Rs. 15,80,861.85 from the defendants as per the following details : Commission amount on @ 3% total turn over Rs. 12,58136146 Amount of security deposited Rs. 3,00,000.00 Interest on security Interest on security Rs. 22,500.00 Total amount recoverable Rs. 15,80,861.85. The plaintiffs go on to plead that the defendant vide its letter dated, February 15, 1989 informed them that the agency was being terminated with effect from March 31, 1989. The plaintiffs over that a request to settle the accounts was made by them to the defendant but were informed that the defendannt was not in a position to make payment due to its other liabilities. Despite the reminders no paymeat was made. According to the plaintiffs they filed present suit apprehending interference by the defendant in case the stocks were sold by them for recovering. their dues. The prayer clause in the plaint reads as under .

(3.) Aloagwith the suit an application under Order 39,Rules 1and 2, GIC were filed praying that during the pendency of the suit the defendant may be restrained from preventing the plaintiffs from selling in the open market the "defendant's stock lying in their possession" By order dated March 27, 1989 the Sub Judge 1st Glass Chandigath granted- an ad-interim ex-parte injunction in the following terms :0 "Court fee is reported to be correct. Suit be registered." "2. Alongwith the present suit the plaintiffs have also moved an application under Order 39, Rules 1 and 2 CPC, which is supported by affidavit. From the allegations in the plaint coupled with the affidavt of the plaintiffs and the documents on record, a prima facie case in favour of plaintiffs is made out. In that situation and in the interest of justice. the defendants are restrained from interfering in the disposal .of the stock in question otherwise than in due course of law till further orders In the meanwhile notice of the suit as well as application U/O 39,Rules 1 and 2 CPC be issued to the defendants on filing of PF for Interest on security 8-5-1989. Compliance of Order 39, Rules, 3, Civil Procedure Code be also made by plaintiff".