GUNUPATI ALLURAIAH Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) These five second appeals arise out of suits filed by dealers in food grains of Nellore District, hereinafter called the dealers, against the State of Andhra represented by the District Collector, Nellore, for recovery of certain amounts due to them. These five suits and two others were disposed of by a common judgment by the District/Munsif of Kanigiri, who decreed all the suits. The appeals against his decision preferred by the State of Andhra were also disposed of by a single judgment of the Subordinate Judge of Kavali, who reversed the decision of the that Court, and dismissed the suits. These second appeals are preferred by the dealers against that judgment.

(2.) The facts briefly are as follows: The appellants-plaintiffs were appointed as wholesalers for Kanigiri Taluq under the scheme of State Trading in Food Grains, adopted by the State of Madras in exercise of the powers conferred on it under the Essential Supplies (Temporary Powers) Act (XXIV of 1946), hereinafter called "the Act", in order to make up the shortage of food grains experienced at that time and to ensure proper distribution of the available stocks. In September, 1952, the District Collector, Nellore, allotted to the plaintiffs and some others each 218 bags of Visakhapatnam rice to be delivered at Singarayakonda Railway Station after collection of the price including administrative surcharge and subsidiary surcharge and the Railway freight. The Tahsildar of Kandukur took delivery of the food grains at Singarayakonda Railway Station and handed over the same to the plaintiffs as per their quota. Having discovered that what was delivered by the Tahsildar was boiled rice, for which there was no demand in the locality, the plaintiffs made representation to the Collector, Nellore, who directed the pontiffs to return the stocks remaining with them to the Tehsildar, Kandukur at Singarayakonda Railway Station for export to Madras, which was accordingly done by the plaintiffs. The plaintiffs case is that in receiving the quota of food grains allotted to them and in returning the stocks they acted throughout as agents of the Government, and, on account of the relationship of principal and agent between them, they are entitled to claim the expenses which they incurred in receiving the food grains and if, also returning the same, including reasonable interest on their out-lay in that connection. The plaintiffs have sued for the balance of the sums spent by them with interest and the loss incurred on account of shortage, after deducting the payments made to them by the Government.

(3.) The suits were resisted by the Government, contending that the transactions in question were in the nature of an outright sales that there was no relationship of principal and agent between them and dealers, and that as the ownership in the goods passed to the plaintiffs together with attendant risk, the plaintiffs have to bear the losses or shortage, and that they are not entitled to recover the sums claimed. The Government made ex gratia payments to the dealers towards handling charges, and they are not liable to pay the suit amounts by way of damages or otherwise.