WINDOR FOODS PVT LTD Vs. LUNKAR ENTERPRISES

JUDGEMENT

(1.) THIS appeal has been directed against the decree and judgment in O. S. No. 3763 of 1996 on the file of the IV Additional Judge, City Civil Court, Chennai. The second defendant in O. S. No. 3763 of 1996 is the appellant herein.

(2.) THE averments in the plaint sans irrelevant particulars are as follows:-The plaintiff was appointed as the agent for distribution of D2's products viz. , biscuits for a part of Tamil Nadu through D1-marketing agent of the second defendant for the entire Tamil Nadu, Kerala and Andhra Pradesh. This appointment was confirmed by the second defendant vide its letter dated 3/3/1984 to Canara Bank, Audiappa Naicken Street, Chennai-1. With the connivance of D1, D2 has terminated the agency of the plaintiff, without assigning any reason vide its letter dated 19/9/1984. Plaintiff in its letter dated 24. 09. 1984 has explained to D2 that the above said termination was illegal and unjust. But D2 has confirmed the termination of agency through a telegram dated 28/4/1984. Due to the above said illegal termination the plaintiff has suffered heavy loss in the business for the period of three months. During the said period the expected minimum profit will be Rs. 98,860/02. The Stockists, who were appointed by the 1st defendant, to whom the plaintiff has supplied goods, which were purchased from the 2nd defendant for which the plaintiff has settled the entire amount with the defendants. The dealers/stockists who were appointed by the 1st defendant were directly under the control of the defendants and only to them the plaintiff could supply the products of the 2nd defendant. Now the plaintiff could not collect the dues from the dealers/stockists. The value of those goods comes to Rs. 8,89,959/57. Defendants are liable to reimburse this amount to the plaintiff. The goods taken by the plaintiff from the 2nd defendant, which could not be delivered to the dealers/stockists, are lying at the godown of the plaintiff. At the request of the 2nd defendant these unsold goods were returned to the 1st defendant on 6. 10. 1984, who took possession of the some on behalf of the 2nd defendant. The value of the said returned goods comes to Rs. 2,10,962/55. The said amount was not paid by the defendants to the plaintiff. Before the termination of agency goods valued at Rs. 91,485/27 were returned by the plaintiff to the defendants at the request of the defendants on 9. 7. 1984, 11. 08. 1984 and 13. 08. 1984. The stock worth about Rs. 30,724/65 were received back from Trichy. After giving credit to this, Rs. 30,724/65, the defendants are liable to pay the plaintiff Rs. 60,760/62. On 25. 09. 1984 the 1st defendant wrote a letter to the plaintiff promising to clear all the market outstanding and pay the same to the plaintiff by 20. 10. 1984. The 1st defendant undertook to pay the entire balance amount. The first defendant requested the plaintiff to despatch the remaining stocks with the plaintiff, promising to pay by 20. 10. 1984. The 1st defendant also assured that the entire amount due to the plaintiff would be settled before Deepavali of 1984. But, in spite of several assurances the defendants have not come forward to settle the claim till date, though the first defendant, has been collecting the dues from the dealers/stockists. The defendants are also liable to pay lorry freight, free goods supplied, Bank charges, travelling expenses which comes to Rs. 1,00,485/13, as per the details given below:- <FRM>JUDGEMENT_2238_TLMAD0_2008Html1.htm</FRM> The defendants are liable to pay Rs. 8,89,959/57, being the value of outstanding goods, Rs. 2,10,962/55 towards the value of the returned goods, Rs. 60,760/62 being the value of the returned stocks and Rs. 1,00,485/13 towards lorry freight, excess paid amount, bank charges traveling expenses, etc as mentioned above. After giving credit to the above referred RS. 8,81,46/68 the defendants are liable to pay the plaintiff Rs. 3,80,707/19. For the said sum of Rs. 3,80,707/19 the plaintiff has claimed 24% interest from 12. 10. 1984 to 22. 9. 1986 which comes to Rs. 2,18,537/20, besides a sum of Rs. 98,860/02 towards damages under the suit with 18% interest and costs.

(3.) THE first defendant remained exparte. The second defendant in its written statement would contend that D2 is not aware of Sri. Mohanchand, the alleged partner of the plaintiff-partnership firm, representing the plaintiff. The second defendant is the company incorporated having its registered office at Baroda. D1 is the marketing agent of D2. D1, who is the marketing agent of D2 is not empowered to assist the plaintiff as the agent for D2 to distribute the products of D2 viz. , biscuits for part of Tamil Nadu State through D1. The plaintiff is not the agent of D2, but was a dealer of D2 selling D2/s products as a dealer. Under the dealership transaction, all the transactions with the plaintiff by D1 as Proprietrix of M/s. Seshadri Associates were direct sales to the dealer by the 2nd defendant and the 2nd defendant/s liability seized as soon as the sale transactions were completed. The 2nd defendant's liability did not exist in any way subsequent to the sale to the dealer. The plaintiff was not obliged to maintain account on behalf of the 2nd defendant. The plaintiff was not performing any transactions with the 3rd parties on behalf of the 2nd defendant and was not answerable to the 2nd defendant company for it sale to the parties. The 2nd defendant terminated only the dealership of the plaintiff and not the agency. Due to the termination of the dealership the plaintiff has not incurred any loss. The plaintiff never acted as an agent of the 2nd defendant. Even though the plaintiff was a dealer of the 2nd defendant there was no agreement of dealership entered into between the plaintiff and 2nd defendant. The plaintiff had no privity of contract or any part of agency with the defendant. The plaintiff was never answerable to the 2nd defendant for his sale to the third parties and accordingly was not accountable also. The plaintiff is not entitled to claim any damages much less Rs. 98,860/02 towards the minimum loss of profit for three months from the 2nd defendant. The plaintiff cannot recover the money which is due from the dealers / stockists from the 2nd defendant. The plaintiff as the dealer had paid to the 2nd defendant on the sale of goods. The stockists / dealers were not under the direct control of the 2nd defendant to whom the plaintiff was supplying the products of the 2nd defendant. The 2nd defendant is not liable to reimburse Rs. 8,89,956/57 being the amount due from stockits / dealers. The 2nd defendant's liability seized as soon as the sale was completed. The 2nd defendant's company is in no way responsible or liable for the credit extended by the plaintiff to the 3rd parties. The 2nd defendant is in no way liable for the wrong committed by the sub-agents to the plaintiff in default of payment and for the stocks which have not been delivered to the dealer/stockist, and which are lying at the godown. The plaintiff had purchased the goods from the 2nd defendant and as soon as the sale was completed the 2nd defendant is in no way liable for the goods of the plaintiff wherever it lies and for whatever manner they are being dealt with. The unsold goods were not returned to the 1st defendant as alleged in the plaint on 6. 10. 1984. The 2nd defendant is not aware whether the 1st defendant had received unsold goods worth Rs. 2,30,962/55. The 2nd defendant is not liable for the sum of Rs. 2,10,962/55. Before the termination of agency goods worth Rs. 91,488/27 were not returned by the plaintiff to the defendants at the request of the defendants on 9. 7. 1984, 11. 8. 1984 and 13. 8. 1984. The goods worth Rs. 30,724/65 were also not received back from Trichy. The 2nd defendant is not liable to pay Rs. 60,760/62 to the plaintiff. The transaction between the plaintiff and the 1st defendant is a separate transaction, for which there is no privity of any contract with the 2nd defendant. The plaintiff was never authorized by the 2nd defendant to represent the 2nd defendant with the third parties. The allegation in the plaint that on 25. 09. 1984 the 1st defendant wrote a letter to the plaintiff promising to clear all the market outstanding and pay the same to the plaintiff by 20. 10. 1984 are not admitted. Any arrangement made between the 1st defendant and the 2nd defendant in respect of the sale of goods ie. , biscuits purchased from the plaintiff will not bind the 2nd defendant. The 2nd defendant is not aware whether the 1st defendant has assured the plaintiff to settle the dues before Dipavali of 1984. The 2nd defendant is not liable to pay any amount much less Rs. 1,00,485. 13 towards lorry freight, excess supply, bank charges and travelling expenses etc. The 2nd defendant is not liable to pay the plaintiff the amount mentioned at para 11 of the plaint. The amount of discharge pleaded by the plaintiff at para 12 of the plaint is also denied by the 2nd defendant. The 2nd defendant is not liable to pay Rs. 3,80,707. 19 with interest as claimed in the plaint much less the damages asked for in the plaint. Hence, the suit is liable to be dismissed with costs of the 2nd defendant.