KASAM Vs. NARAYAN

JUDGEMENT

(1.) JACKSON , A.J.C. 1. The applicant in this case was defendant 1 in the lower Court. He purchased the shop of Karim Haji Isa at Amraoti. Defendants 2, 3 and 4, the owners of this shop, were placed by him in charge of the winding up of the business as his agents. In the course of this winding up the plaintiff made a deposit of Rs. 1,000 with the firm and he has now sued to recover it. Defendant 1 contests the plaintiff's claim on the ground that defendants 2, 3 and 4 had no authority from him to borrow money in the course of their winding up of the business.

(2.) DEFENDANT 1 had certainly given no express authority to the other defendants to borrow money and it seems to me doubtful if any such authority can be implied. On behalf of defendant 1, I have been referred to Katiar's Law of Agency in British India, where it is laid down, at p. 256, that if the transaction or business absolutely required the exercise of the power to borrow money in order to carry it on, then that power was impliedly conferred as an incident to the employment, but that it does not afford a sufficient ground for the inference of such a power, to say the act proposed was convenient or advantageous or more effectual in the transaction of the business provided for, but it must be practically indispensible to the execution of the duties really delegated in order to justify its inference from the original employment. The plaintiff, however, does not necessarily fail because the power to borrow money was not given to defendants 2, 3 and 4 at all expressly or by implication. At p. 258 of the Treatise to which I have just referred the following passage will be found extracted from the judgment of Romer, L.J., in Bannatyne v. Maciver [1906] 1 K.B. 103: Where money is borrowed on behalf of a principal by an agent, the lender believing that the agent had authority, though it turns out that his act was not authorized, or ratified, or adopted by the principal, then, although the principal cannot he sued at law, yet in enquity to the extent to which the money borrowed has in fact been applied in paying legal debts and obligations of the principal, the lender is entitled to stand in the same position as if the money had originally boon borrowed by the principal.