UNITED BROKERS Vs. ALAGAPPA CORPORATION

JUDGEMENT

(1.) This appeal arises out of a suit brought by the respondents to compel the appellants to specifically perform certain agreements to deliver in all 700 shares of Steel Corporation of Bengal, Limited, or in the alter-native to recover from the appellants a sum of Rs. 13,506-4-0 being the estimated damages on account of the appellants failure to perform the contracts entered into by them. There was also a claim for a sum of Rs. 612-8-0, the dividend which had accrued on the shares; but this claim was disallowed and the plaintiffs have not chosen to appeal against the disallowance. There is also no dispute in regard to another sum of Rs. 484- 6-0 claimed by the respondents from the appellants.

(2.) In May 1945 the defendants who were carrying on business as stock and share-brokers sold and agreed to deliver to the respondents described as Alagappa Cor-poration by its sole proprietor, Dr. Sir RM. Alagappa Chettiar in all 700 shares of the Steel Corporation of Bengal, Limited, at rates varying from Rs. 31-11-0 to Rs. 33-1-6 per share. In spite of repeated demands the defendants failed to deliver the shares and after a final demand the suit was instituted on the 26th April, 1946 for specific performance or in the alternative for damges. Besides a technical plea in regard to the frame of the plaint and description of the plaintiffs, the main plea in defence was that the transactions between the plaintiffs and the defendants were not of purchases or sales, but on the contrary the plaintiffs and the defendants were acting as brokers and were intermediaries in putting through and bringing about contracts between other parties. Alternatively the appellants pleaded that the plaintiffs were acting as agents for the defendants who in turn were acting as agents for other parties. The relationship between the parties was according to the appellants one of employment and not of vendors and purchasers.

(3.) At the commencement of the trial the plaintiffs abandoned the relief of specific performance and elected to proceed with the suit only in respect of the relief of recovery of damages. The learned Judge who tried the case held that there were no merits in the main plea taken by the appellants in defence. He held that the contracts of sale were entered into by the parties as principals and not as brokers or agents. As the defendants committed default in delivering the shares the learned Judge held that the plaintiffs were entitled to damages which he assessed in the difference between the rate obtaining in the market on the date of the institution of the suit and the contract rate. In the result he passed a decree in favour of the plaintiffs for the sum of Rs. 13,990-10-0 and also granted the plaintiffs their costs of the suit. The defendants appeal.