BRIGHT BROS. (PVT.) LTD Vs. J. K. SAYANI

JUDGEMENT

(1.) THE defendants in O.S.No. 4905 of 1968 on the file of the City Civil Court, Madras, are the appellants herein. Since the appeal was argued before me within a very narrow compass, it is unnecessary to refer to the facts of this case in great detail. The respondent is a wholesale dealer in plastic goods doing business at Madras, while the appellants herein are manufacturers of plastic goods, having their office and business premises at Bombay. In or about 1952, there was an arrangement between the appellants and the respondent under which the respondent became the sole selling agent of the appellants with regard to specified area. The terms of that arrangement admittedly had not been reduced to writing. The respondent had been purchasing the goods of the appellants as well as booking orders for the sale of the appellants' goods and forwarding those orders to the appellants for being executed. A commission of 6 1/4 per cent, was being paid by the appellants to the respondent in respect of the orders so executed as well as on the goods supplied by the appellants to the respondent directly. An extra commission of 1 1/2 per cent, and concession regarding Central Sales Tax were also given to the respondent by the appellants. This arrangement which was in force from 1952 onwards was modified by a letter dated 27 -2 -1964 written by the appellants to the respondent herein, marked as Ex. A -44. Under this arrangement, the nature of the relationship between the parties was not altered, but only the remuneration received by the respondent by way of commission was changed. Under the revised terms, the respondent was to get only 6 1/4 per cent, towards commission on all orders either booked in the name of the respondent or booked in the name of third parties and no additional commission or rebate regarding Central Sales Tax was payable to the respondent. However, a commission called, "Target Commission" of 1 1/4 per cent, was to be paid by the appellants to the respondent, if the annual turnover exceeded a particular limit. This agency of the respondent was terminated by a letter dated 28/30 -9 -1964, marked as Ex. B -56. It is, therefore, the respondent instituted the present suit for recovery of a sum of Rs. 50,000/ - from the appellants herein. The said sum of Rs. 50,000/ - included the amount claimed by the respondent under three heads. One was that the respondent was entitled to a reasonable notice before his agency was terminated, that that reasonable notice would be a notice of 12 months, that the respondent was earning a commission of Rs. 4,000/ - per month and that therefore the amount to which he would be entitled for the said notice period would be Rs. 48,000/ -. The second was that he was entitled to a commission of Rs. 12,000/ -, on the actual orders booked by him before the termination of his agency, which were subsequently executed, some of them directly and some of them after having been re -booked in the name of the new agent appointed in the place of the respondent. The third was that the respondent was entitled to compensation for the loss suffered by him in payment of salary etc., to the staff employed by him in connection with the agency business. Thus, the total of these three sums came to Rupees 75,000/ -. The respondent admitted that as on the date of termination of the agency, he owed a sum of Rs. 13,432.41 to the appellants. Deducting the said sum of Rs. 13,432.41 from the sum of Rs. 75,000/ -, the balance came to Rs. 61,567.59. However, the respondent restricted his claim in the suit to a round figure of Rs. 50,000/ -.

(2.) THE appellants contested the claim of the respondent in this behalf. They contended that the respondent was not their agent and that he was only a stockists for their goods. They also denied that there was any need to give any notice before terminating the relationship that existed between the parties. There were certain other defences also put forward by the appellants as reflected in the following issues framed by the trial court -

(3.) THE argument on behalf of the appellants in this behalf is two -fold. One is that the respondent was merely a selling agent for the appellants herein and that such a selling agency can be terminated summarily without any notice. In support of this contention, reliance was placed on the following statement found in paragraph 878 of Halsbury's Laws of England, IV Edn. Volume 1, pages 527 -528 :