MADHAV TRADING COMPANY Vs. UNION OF INDIA

JUDGEMENT

(1.) This suit was instituted on 14-12-1973 by Madhav Trading Company, a partnership firm carrying on business at Calcutta, against the Union of India, (defendant No. 1), Salzgitter Stahl GMBH, a West German Company (defendant No. 2) and Madhav Trading Company, a partnership firm carrying on business of Rs. 1,06,999.86. It was alleged by the plaintiff that it was a partnership firm duly registered under the provisions of the Partnership Act. On 20-1-1971, the 1st defendant, Union of India, invited tenders, for the supply of approximately 4,197 tonnes of steel sheets; It was stated in the invitation to tender, inter alia, that all tenderers should give the names and addresses of the agents authorised to bid, negotiate and conclude the contract and that agency commission would be payable in India in Indian rupees. Defendant No. 2 informed the Union of India by its letter dated 16-2-1971 that the plaintiff was its agent in India and was authorised to negotiate in respect of the said tender enquiry on its behalf. Salzgitter Stahl GMBH (hereinafter referred to as 'the German Firm') sent its quotation on 17-2-1971 and mentioned therein specifically that the plaintiff was its agent and the price quoted included a commission of 2 per cent payable to e plaintiff. The plaintiff negotiated the said tender as agent of defendant No. 2. attended the opening of tenders by defendant No. 1 and concluded the contract. Acceptance of the tender was communicated by the Union of India through a telegram dated 20-3-1971 to defendant No. 2 directly and on 19-4-1971 a formal contract was entered into by the Union of India and the German Firm. It was provided by the said contract, in addition to other things, that f.o.b. prices were inclusive of agency commission of 2 per cent which would be paid to the Indian agent of the seller in Indian currency and Messrs. Madhav Trading Company was its agent. As agent of defendant No. 2, the plaintif caused the tender to be made to defendant No. 1 by defendant No. 2. followed up and negotiated the same, got its final acceptance by defendant No. 1 and expedited the import licence. It repeatedly reminded defendant No. 1 about the establishing of a letter of credit in favour of defendant No. 2 and ultimately succeeded in getting it done on or about 4-8-1971. The said contract had been duly completed and the commission at the rate of 2 per cent of the f.o.b. value amounting to Rs. 1,06,999.86 had become payable to it. Defendant No. 1 admitted in writing dated 3-8-1971 that the agency commission would be paid by it direct to the plaintiff in India. Later on the defendants began contending that the nomination of the plaintiff as the agent in the said contract had been changed and defendant No. 3 substituted in its place. According to the plaintiff the alleged change had been made, if at all, after the conclusion of the contract and even after the opening or the letter of credit. It was not open to the defendants to make that change unilaterally and defendant No. 3 was not entitled to any commission. It was urged in the alternative that the plaintiff having done all that was required to be done by it as agent, it had performed its part of the contract and the defendants were liable to pay the commission in dispute to it.

(2.) Defendant No. 1 conceded in its written-statement that while submitting its tender defendant No. 2 had intimated to the Union of India that the plaintiff was its authorised agent in connection with the tender enquiry in question, still it offered resistance to the suit contending, infer alia, that while returning the signed copies of the contract, in its letter dated 29-4-1971 defendant No. 2 had intimated nomination of defendant No. 3 as its agent in place of the plaintiff and there was a reference in this letter to an earlier communication dated 3-3-1971. As the plaintiff had ceased to be the agent of defendant No. 2 it was not entitled to the commission sued for. It was urged by the Union of India further that there was no privity of contract between it and the plaintiff and it was bound to follow the instructions of defendant No. 2 in respect of the payment of the commission. It was denied by this defendant that the plaintiff was a registered partnership firm or that the plaint has been signed 'and verified by a person competent to do so. Defendant No. 3 also controverted the plaintiff's claim to the payment of the commission in dispute and pleaded that defendant No. 2 had nominated this defendant as its agent and the payment of the commission at the stipulated rate was due to it Defendant No. 2 did not put in appearance and was proceeded against ex-parte. The conflicting pleadings of the parties gave rise to the following issues :-

(3.) The plaintiff and defendant No. 1 have adduced oral as well as documentary evidence. No evidence has been produced by defendant No. 3.