PEYARE LAL Vs. MTMISRI

JUDGEMENT

(1.) This is a defendant's appeal and arises out of a suit brought by the plaintiffs- respondents for declaration that the house described in the plaint belonged to them. There was a firm Kure Mal Kallu Mal. Bhagwan Das and Durga Prasad were its partners. The property in dispute, as has been found by both the lower Courts, belonged to this firm. On 17 August 1933 Bhagwan Das sold the property in dispute to the plaintiffs. On the next day, that is 18 August 1933 the same property was sold by Durga Prasad to the defendant. Both the sale deeds were registered on the same day, 18 August 1933. The firm was subsequently dissolved by an award, dated 24 July 1935. The defendant contended that the plaintiff's sale deed was invalid inasmuch as Bhagwan Das had no right to sell the partnership property. The trial Court found that, though Bhagwan Das had no right to sell the property to the plaintiffs yet the sale was ratified in the arbitration proceedings by Durga Prasad and therefore the plaintiffs sale deed was valid. On appeal the decision of the trial Court was upheld.

(2.) The defendant has appealed. It has been urged on his behalf that the plaintiffs sale deed was invalid, because there could be no ratification by Durga Prasad in the arbitration proceedings. The argument is based on the fact that Bhagwan Das executed the sale deed in his own right and not on behalf of the firm and therefore there could be no ratification by his partner Durga Prasad. This contention of the learned Counsel for the appellant seems to be correct. Section 196, Contract Act, lays down: Where acts are done by one person on behalf of another, but without his knowledge or authority he may elect to ratify or to disown such acts. If he ratify them, the same effects will follow as if they had been performed by his authority.

(3.) Section 200 further lays down: An act done by one person on behalf of another without such other person's authority, which, if done with authority, would have the effect of subjecting a third person to damages, or of terminating any right or interest of a third person, cannot, by ratification, be made to have such effect.