J K SAYANI Vs. BRIGHT BROTHERS PVT LTD

JUDGEMENT

(1.) This Letters Patent Appeal is directed against the judgment of Ismail, J. now reported in Bright Brothers Ltd. v. J. K. Sayani, AIR 1976 Mad 55. The plaintiff in O. S. No. 4905 of 1968, an the file of t he City Civil - Court, Madras, is the appellant before us. The plaintiff-appellant entered into an arrangement with the defendants respondents under which the plaintiff appellant became the sole selling agents of the respondents with regard to a specified area. It is admitted that the said arrangement did not prescribe any particular period during which the said agency should be in vogue. The plaintiff was purchasing the goods from the respondents from time to time as well as booking orders for the sale of the respondents' goods. A commission of 6.112 per cent was to be paid by the respondents to the appellant in respect of such dealings. An extra commission of 1.1/2 per cent was also provided for in certain circumstances. Under Ex. A. 44, dated 27-2-1964, though there were certain modifications regarding the percentage of commission and the circumstances under which such entitlement as to commission by the appellant could be claimed, there was no further material alterations in the arrangement. This agency of the appellant was terminated by a letter dated 28/30-09-1964 marked as Ex. B. 56. The plaintiff-appellant instituted a suit for recovery of various sums. The first one was that the plaintiff was entitled to a reasonable notice before his agency was terminated and under that head, the plaintiff estimated such commission at Rs. 4,000/- per month and was of the view that a reasonable notice of twelve months period ought to have been given, and therefore, claimed a sum of Rs. 48,000/-. The second head of claim was that he was entitled to a commission of Rs. 12,000/- on the actual orders booked and for services rendered by the plaintiff-appellant to the respondents during the tenure of the agency. The third head under which the claim was made by the plaintiff-appellant was that the respondent defendants were bound to pay compensation to the plaintiff for the loss suffered by him in payment of his salary and for the closure of their shop suddenly. The plaintiff admitted that a sum of Rs. 13,431-41 was due to the defendant but denied liability for the balance of the claim. The plaintiff in the course of the trial limited his relief to a sum of Rs. 50.000/-. Various issues were raised before the trial judge, who ultimately came to the conclusion that under Section 206 of the Indian Contract Act, the plaintiff was entitled to a reasonable notice and he was of the view that a period of four months would be the period which in the circumstances would be a reasonable period for determination of the agency and fixed the compensation on that ground at Rs. 16,000/-. Under the other heads, having regard to the admissions made by the plaintiff, that a sum of Rs. 13,431-41 was due by him to the defendants, the trial Judge gave ultimately a decree for Rs. 8817-59. As against the said judgment, the defendant went on appeal and the learned single Judge of this court, who considered the main issue was of the view that the learned trial Judge was not right in having held that a reasonable notice of four months before the determination of the agency was necessary and modified the decree of the trial Judge accordingly.

(2.) In fact, the principal contention which was raised before Ismail, J., was whether a reasonable notice for determination for the service of the agency was necessary at all, when under the arrangement between the parties, no period of agency has been agreed to either expressly or by necessary implication.

(3.) Ismail, J. was of the view that Sections 205 and 206 of the Indian Con tract Act are, so inter-linked that Section 206 can only be invoked in a case where there is an express or an implied contract that the agency should be con tinued for any period of time and if for any reason such agency is revoked by the principal or renounced by the agents without sufficient cause,- then one must compensate the other.