MEWAR TEXTILES MILLS LTD Vs. SITARAM BASANTILAL JAIN

JUDGEMENT

(1.) THIS is an appeal from the judgment and decree dated 5th October, 1966, of the District Judge, Bhilwara, decreeing the plaintiffs suit for a sum of Rs. 18200/- against the appellant Company.

(2.) THE appellant is Textile Mills and limited company (hereinafter called the company ). It was allotted wagons of coal for its use by the Deputy Coal Controller, Government of India. THE Company used to send permits of coal to the plaintiff with a letter of authority in their favour. THE plaintiff then used to obtain priority sanction in the name of the Company, then it approached the Collieries, paid the money for the coal and got the coal loaded in railway wagons. THE railway receipts were got prepared by the Collieries as consignors in the name of the Company as consignee. Plaintiff's case is that between 15th October and 6th December, 1959, 25 wagons of coal were despatched to the Company and the sum of Rs. 11936/70 P. for its bills is due to the plaintiff from the Company. Although the coal wagons had reached the destination station, the company did not take delivery of the goods on taking the railway receipts from the bank after making payment of the Hundis which were drawn by the plaintiff on it and which were sent along with the railway receipts. On account of the Company not taking delivery of the coal wagons the amount of wharfage and demurrage swelled to the extent of Rs. 46800/- which being not paid, the Railway appropriated the coal to itself. Plaintiff's case is that it had paid the price of the coal to the Collieries on behalf of the Company and so it was entitled to recover it from the Company. THE amount of Rs. 11936/70 P. also includes the amount of plaintiff's commission.

(3.) NOW coming to the second contention it will be noticed that throughout the defendant's case has been that there was an agreement between the parties that the railway receipts shall be directly sent to it and it was in contravention of this agreement and the past dealings between the parties that the plaintiff sent the Railway Receipts of the 25 wagons in question through its banker. This is also the evidence of the defendant's witness Bhanwarlal D. W. 1. He has stated that the payment to the plaintiff used to be made after delivery of the consignment was taken. If such was the agreement between the parties, then it is clear that it could not have been intended by the plaintiff that the title to the goods would not pass unless its price was paid. Having taken this plea in the written statement, it did not lie with the defendant to say that the plaintiff was not entitled to claim the price of the goods because the title in the goods had not passed to the defendant Company. The entire argument is now based on the plaintiff's statement that payment to Collieres used to be made by the plaintiff and the bills were also issued in its name. The Collieries only maintained the account of the plaintiff and not of the defendant. But the question as to when property in the goods passes depends upon the intention of the parties having regard to the terms of the contract, their conduct and the circumstances of the case. Secs. 20 to 24 of the Sale of Goods Act lay down the rules for ascertaining the intention of the parties as to the time when the property in the goods is to pass to the buyer. Learned counsel says that even though the plaintiff might be the agent of the defendant for the purchase of coal, having purchased the coal in its own name and the bills having been issued by the Collieries in its name, the title to the goods vested in it and did not pass to the Company until it paid for the goods. Bowstead on Agency (Thirteenth Edition) in Art. 82 at page 239 states: "where an agent by contracting personally, renders himself personally liable for the price of goods bought on behalf of his principal, the property in the goods as between the principal and the agent, vests in the agent and does not pass to the principal until he pays for the goods, or the agent intends that it shall pass, and the agent has the same rights with regard to the disposal of the goods, and with regard to stopping them in transitu, as he would have had if the relation between him and his principal had been that of seller and buyer. " The Bombay High Court in Harilal vs. Pehladrai & Co. (Supra) after quoting the above passage observed that "this precise statement is not found in the Indian Contract Act, but the Indian Contract Act is not exhaustive, and, speaking for myself, this provision appears to me to be good sense," It was a case where the agents were acting for an undisclosed principal and their commission agents were held entitled to resell or to stop the goods in transit. The right of an agent who has himself paid or has indirectly paid for the price of the goods, to a lien on goods or of stoppage in transit or to resell has been given statutory recognition under the Sale of Goods Act, 1930, and it was this principle of English law which was recognised by the Indian High Courts in several decisions before the Sale of Goods Act was enacted. However simply for the fact that the agent has paid the price of goods on behalf of its principal, it cannot be held that the property in the goods vests in it untill the price is paid by the principal. The question whether an agent who has made a contract on behalf of his principal is to be deemed to have contracted personally and if so the extent of his liability in the contract depends upon the intention of the parties to be deduced from the nature and terms of the particular contract and surrounding circumstances including any binding custom. See Bowsted on Agency Art. 118, pages 374 and 375. The decisions relied upon on behalf of the appellant lay down the same principle as is contained in secs. 19 to 25 of the Sale of Goods Act regarding the passing of title in the goods, and, as already observed, it is the intention of the parties which is a determining factor for it.