B MAHINDER DAS Vs. PMOHAN LAL

JUDGEMENT

(1.) This is a defendant's appeal arising out of a suit brought for the recovery of Rs. 387 or such amount as may be found duo to the plaintiffs. Plaintiff 1, Pt. Mohan Lal, is admittedly the owner of the houses in question in Mussoorie. The plaintiff 2, Bhagwan Dass & Co. Ltd., were appointed agents by plaintiff 1 to lease the houses in the year 1933. The plaintiffs case is that plaintiff 2 appointed the defendants as agents on behalf of plaintiff 1 to rent the houses and agreed to pay them commission at the rate of 21/2 per cent, on the amount of rent realized, that the defendants rented the three houses placed under their agency for a total sum of Rs. 2550,. that out of the said amount Rs. 2145-10-0 was paid to plaintiff 1 but the balance, Rs. 269-6-0, was still due, that apart from the above mentioned sum the plaintiffs claimed Rs. 17-10-0 which sum the plaintiffs were entitled to by way of remission in respect of the house tax of "Fenloe" from the City Board but the said sum was not recovered owing to the negligence of the defendants. The suit was resisted by the defendants on, various grounds. It was pleaded inter alia that there was no privity of contract between plaintiff 1 and the defendants as the latter were appointed sub-agents by( plaintiff 2 who alone was entitled to sue, that the original contract entered into between the parties was modified by another contract under which it was stipulated that-the nominal rental value of the threes houses would be deemed to be Rs. 1800.. That any sum that the defendants realized over and above that amount would be divided half and half between the plaintiffs and the defendants after deducting a sum of Rs. 250 which would be payable to a. third person through whose exertions the rents of the houses would be raised. The trial Court decreed the suit in favour of plaintiff 1 for Rs. 500-2-0, that is, for a sum larger than was originally claimed by the plaintiffs. The defendants preferred an appeal from the decree of the trial Court with the result that the lower Appellate Court reduced the amount to Rs. 323. The defendant now comes to this Court in, appeal.

(2.) Learned Counsel for the appellant has stressed two points in appeal. It has been, argued that the lower Appellate Court recorded no definite finding on the plea raised by the defendant to the effect that there was no privity of contract between plaintiff 1 and the contesting defendant. This question, it is argued, had become-vital to the decision of the case in view of the fact that the suit of plaintiff 2 had been dismissed by the trial Court and no appeal was made by him from that decree. It is argued that the only party entitled to institute a suit being plaintiff 2 and his suit having been dismissed no decree should, have been passed against the defendant in favour of plaintiff 1. It is not disputed that plaintiff 2 was not appointed an agent by plaintiff 1. It is again not disputed that the defendants were appointed agents by plaintiff 2. The question for determination is whether under these circumstances a suit by plaintiff 1 for recovery of the balance of the rent is maintainable. There is no doubt that as a general rule an agent cannot without authority from his principal devolve upon another obligations to the principal which he has himself undertaken to personally fulfil. But in special circumstances it is permissible for the agent to appoint a substitute who would be responsible to the principal in the same way as the agent himself. In De Bussche V/s. Alt (1878) 8 Ch. D 286 at p. 310, Thesiger L.J. observed as follows: But the exigencies of business do from time to time render necessary the carrying out of instructions of a principal by a person other than the; agent originally instructed for the purpose, and where that is the case, the reason of the thing : requires that the rule should be relaxed, so as, on the one hand, to enable the agent to appoint what has been termed a sub-agent or substitute and on the other hand, to constitute, in the interests and for the protection of the principal, a direct privity of contract between him and such substitute. And we are of opinion that an authority to the effect referred to may and should be implied where, from the conduct of the parties to the original contract of agency, the usage of trade or the nature of the particular business which is the subject of the agency, it may reasonably be presumed that the parties to the contract of agency originally intended that such authority should exist...

(3.) This principle has been codified in Section 194, Contract Act, which provides: Where an agent, holding an express or implied authority to name another person to act for the principal in the business agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him.