PURUSHOTHAM HARIDAS Vs. AMRUTH GHEE CO LTD

JUDGEMENT

(1.) These appeals arise out of O. S. No. 45 of 1947 on the file of the Addl. Subordinate Judge, Guntur and the parties are the same. A. S. No. 118 and 173 of 1951 are by the 1st defendant and the third defendant, who is the proprietor of the 4th defendant firm, while A. S. No. 485 of 1951 is by the plaintiff. The material facts may be briefly set out.

(2.) In 1946, nine merchants trading in ghee formed themselves into a private limited company called Amrut Ghee and Co., Guntur, the present plaintiff, for trading in ghee. They obtained a permit to export 330 tons of ghee to Calcutta, Kharagpur and Midnapur, on the 14th of October, 1946. As they were not acquainted with the market conditions of Calcutta etc., they sought the assistance of the 1st defendant, one Purushottam Hari Das also a ghee merchant of Guntur, who has two brothers at Calcutta, defendants 2 and 3, the 3rd defendant being the sole proprietor of the 4th defendant firm.It was agreed between the parties that the 1st defendant should arrange for sale of the ghee to be exported to the above mentioned place on commission basis at Rs. 2.00 per tin and also secure a financier who could make advances on the security of the stock sent to them, effect sales thereof on commission basis, and appropriate the sale proceeds towards their advances and take interest, commission and incidental charges etc. In accordance with these terms, the 1st defendant arranged with his brother, the 3rd defendant, who was trading in Calcutta in the name of the 4th defendant firm for advancing money with interest at 9 % per annum on the security of the ghee tins sent to the latter.The 3rd defendant could sell the tins for which he would be paid a commission of 1 1/2 per cent and he could apply the sale-proceeds in discharge of the amounts paid by him. As the duration of the permit originally granted was to expire on the 10th of November. 1946. the plaintiff had it extended up to 35th of December 1946. Between 14/10/1946 and 15th December, 5604 tins of ghee were exported to Shalimar. Calcutta by the plaintiff and they were taken delivery of by the 4th defendant firm whereof the 3rd defendant was the sole proprietor as mentioned supra.There is dispute between the plaintiff and the 1st defendant regarding the ownership of 779 tins out of these and that forms the subject-matter of A. S. 119/1951. The first consignment of these tins arrived at Shalimar on the 28th of October. Most of the ghee tins received by the 3rd defendant in the name of the 4th defendant were sold through P. Ws. 1 to 5 who were themselves commission agents between the dates of arrival and the 31st of March, 1947. It appears they sold 3167. tins of new ghee and 1258 1/2 tins of deteriorated ghee. The 3rd defendant was sending reports of sales of the ghee periodically.On several occasions, the plaintiff protested against the low prices at which their ghee was being disposed of by the 3rd defendant and demanded that it should be sold at not less than a particular figure mentioned by them. But the 3rd defendant did not pay any heed to the remonstrances of the plaintiff and continued to sell at prices which, according to the plaintiff, were far below the market rate.There was voluminous correspondence between the parties and as they could not settle the matter amicably, the plaintiff laid this action for rendition of accounts and for payment of the amounts ascertained to be due to them, and for a direction to deliver up all the unsold tins of ghee to them, on the allegations that defendants 1 to 3 who constituted members of a joint family and for whose benefit the 1st defendant took up the agency colluded with a view to make wrongful gain and to defraud the plaintiff, and the 4th defendant sent false reports about the market rates and the price for which plaintiffs ghee was sold and also made several fictitious transactions.It was also the plaintiffs case that the 1st defendant, their authorised agent mainly responsible for accounting to the plaintiff and therefore to maintain accounts, instead of protecting their interests, conspired with his brothers and they jointly put forth sales at very low rates, while much higher price was obtained thereof, and thereby made large secret profits.

(3.) The 1st defendant contested the suit by filing a written statement. His Answer was that at the request of the plaintiff he found a financial who was to be paid interest and commission at the rates mentioned in the plaint that the plaintiffs partners themselves had to deal directly with the 4th defendant through their representatives stationed on the spot and that he should he paid a commission of Rs. 2.00 per tin extending the same to the entire quantity of 330 tins, that he should have no liability whatsoever for any profit or loss that the plaintiff might sustain.It was added that he was to keep in touch thereafter by way of general guidance and superintendence and by way of pushing up sales when it became necessary. He was merely kept informed of the various details and sales thereof by the 4th defendant and he was also in touch with the same on occasions when he had to go to Calcutta. The allegations of collusion and conspiracy or of making secret profits were denied by him. It was contended by him that he was not liable to account to the plaintiffs firm.