ivil Appeal No 4 177 of 1989
From the Judgment and Order dated 2831989 of the Madras High Court in OSA No 48 of 1989
KK Venugopal K Chandra Mouli Ms Meenakshi Sundaram and KK Mani for the Appellant
Dr YS Chitale VG Pragasam Satya Mitra Garg V Prakash and R Venkataramani for the Respondent
The Judgment of the Court was delivered by K JAGANNATHA SHETTY J
Special Leave granted
The question raised in this appeal is whether the agent after revocation of his authority is entitled to remain in possession of the premises of the principal and interfere with the business thereof
The learned single Judge of the Madras High Court in Original Suit CS No 1317 of 1988 has granted temporary injunction restraining the respondent from interfering with the appellant s transport business
But the Division Bench by judgment delivered on March 28 1989 vacated that temporary injunction
The present appeal is directed against the judgment of the Division Bench
The facts are substantially undisputed
The appellant company under the name as Southern Roadways Ltd is engaged in the business of transport of goods and parcels to differ ent places in Southern India
It has appointed commission agents at various stations for the purpose of carrying on its business
SM Krishnan respondent was one such agent appointed at Madras city
Clause III of the agreement by which he was appointed provides that the respondent should arrange a suitable godown and engage employees
Clause XI provides for his removal from service at any time without notice
It also provides that upon removal of the agent the company could occupy the godown
The company could also utilise the services of employees engaged by the respondent
As per the agreement perhaps at the 413 suggestion of the respondent the Company took on lease a godown at No 10 Srinivasan Road T Nagar Madras
The godown was put in possession of the respondent for the purpose of carrying on his agency business of the company
In the course of the company s audit it was discovered that the respondent had mismanaged the business and misap propriated the income of the company
By letter dated Octo ber 13 1988 the company terminated his agency with effect from October 14 1988
He was informed that the company would be taking possession of the godown and carrying on the business on its own
By subsequent letter he was also intimated that the company has taken possession of the godown on October 15 1988 and another agent called R Sundarajan was appointed in his place
The respondent however prevented R Sundarajan and also the company from carrying on business at the godown premises
The company therefore had to institute a suit for declaration of its right to carry on business in the said premises
Permanent injuction restraining the respondent from interfering was also sought for
The suit was based on two separate grounds
The first related to legal right of the company to carry on its business after termination of agency of the respondent the second concerned the factum of taking actual possession of the premises on October 15 1988
Pending suit the company moved the High Court for temporary injunction
The temporary injunction restraining the respondent from interfering with the possession of the premises and the business thereof
The learned single Judge M Srinivasan J acceded to that request
The judge said As pointed out already in this case there is no denial of the lease arrangement between the owner of the premises and the plaintiff
The defendant does not claim to be the owner of the premises nor does he put forward any rival title as against the plaintiff
The only claim of the defendant is that he is in pos session and that he has been paying the rent to the owner
He does not claim that he took possession as a lessee from the owner
Though there is a specific averment in the plaint and the affidavit of the plaintiff that there is a lease arrangement between the plaintiff and the owner there is no denial of the same by the defendant
In these circumstances the defendant cannot claim that he is in posses sion pursuant to any right enured in him
 414 As to the possession of the premises he said The claim made by the plaintiff that it took possession on 15101988 is acceptable in view of the fact that the defendant was never the lessee under the owner of the premises
The defendant was only looking after the business as an agent of the plaintiff and as such he was permitted to enter the premises and he cannot claim independent possession
 Finally he concluded In the circumstances of the case there can be no doubt that the plaintiff has been in legal and actual possession of the premises on the date of suit
The fact that the business has been temporarily shifted to another place in view of the threat meted out to the plain tiff s agent will not disentitle the plaintiff to get injunction
The plaintiff is certainly entitled to carry on its business at No 10 Srinivasan Road T Nagar Madras 600017 having taken the premises on lease
It is ot open to the defendant to prevent the plaintiff from carrying on such business
 The respondent was thus restrained by means of temporary injunction from interfering with the company s transport business in goods and parcels at the suit premises
The respondent took up the matter in appeal before the Division Bench of the High Court
The Division Bench con sisting of Sathidev and Padmini Jesudurai JJ accepted the appeal and vacated the temporary injuction
The conclusion of learned Judges is largely based on the actual possession of the premises claimed by the Company
They found it hard to accept that claim and observed The plaintiff will not be entitled to the relief sought for unless it establishes that its claim that possession of the property was handed over to it on 15101984 is true
The defendant has consistently been contending that possession was not handed over to the plaintiff on 15101984 and that he continues to be in actual and physical possession of the property even now
No material has been placed before the Court to substantiate the claim of the plaintiff that possession was taken over on 15101984
 415 They continued In the face of these documents and in the absence of any material to show that posses sion of the suit property was taken by the plaintiff on 15101988 it would be impossi ble for this Court to grant the plaintiff the relief of injuction As to the company s right to treat the respondent as trespasser the Division Bench observed Before the defendant could be characterised as a trespasser the validity of the termina tion of the agency and the rights of the parties following that have also to be determined and this could be done only during trial At the outset we may state that we are not so much concerned with the rival claims relating to actual posses sion of the suit premises
Indeed that is quite irrelevant for the purpose of determining the rights of the company to carry on its business
Mr Venugopal learned counsel for the appellant also discreetly did not advert to that contro versy
He however rested his case on certain facts which are proved or agreed
They may be stated as follows The company was and is the tenant of the suit premises and has been paying rent to the owner
The lease in respect of the premises has been renewed up to November 22 1983
It was the company which has executed the lease and not the respondent
The respondent as agent was allowed to remain in possession of the premises
It was only for the purpose of carrying on company s business
His agency has been termi nated and his authority to act for the company has been put an end to
These facts are indeed not disputed
On these facts the contention of counsel is that when the agency has been terminated the respondent has no legal right to remain in the premises or to interfere with the business activities of the company
The force of this argument cannot be gainsaid
Counsel in our opinion appears to be on terra firma
The principal has right to carry on business as usual after the removal of his agent
The Courts are rarely willing to imply a term lettering such freedom of the principal unless there is some agreement to the contrary
The agreement between the parties in this case does not confer right on the respondent to continue in possession of the suit premises even after termination of agency
Nor does it preserve right for him to interfere with the com 416 pany s business
On the contrary it provides that the respondent could be removed at any time without notice and after removal the company could carry on its business as usual
The company under the terms of the agreement is therefore entitled to assert and exercise its right which cannot be disputed or denied by the respondent
Even otherwise under law revocation of agency by the principal immediately terminates the agent s actual authori ty to act for the principal unless the agent s authority is coupled with an interest as envisaged under section 202 of the 
When agency is revoked the agent could claim compensation if his case falls under section 205 or could exercise a lien on the principal s property under section 22 1
The agent s lien on principal s property recognised under section 22 1 could be exercised only when there is no agreement inconsistent with the lien
In the present case the terms of the agreement by which the re spondent was appointed as agent expressly authorises the company to occupy the godown upon revocation of agency
Secondly the lien in any event in our opinion cannot be utilised or taken advantage of to interfere with principal s business activities
There is yet another significant factor to be borne in mind when we deaf with the rights of an agent
An agent who receives property or money from or for his principal obtains to interest for himself in the property
When he receives any such property he is bound to keep it separate from his own and that of others
Long ago Lord Cottenham LC Foley vs Hill  1843 60 All ER Reprint 16 at 198 said 
So it is with regard to an agent dealing with property he obtains no interest himself in the subject matter beyond his remuneration he is dealing throughout for another and though he is not a trustee according to the strict technical meaning of the word he is quasi a trustee for that particular transac tion for which he is engaged
 Out of this practice there has emerged a rule which is a normal incident of agency that an agent cannot deny principal s title to property nor he can convert it into other kind or use
Fridman s Law of Agency 5th Edition page 150 also supports this view Respect of Principal s title The agent cannot deny the title of the prin cipal to goods 417 money or land possessed by the agent on behalf of the principal
The possession of the agent is the possession of the principal for all purposes including the acquisition of title under statutes of limitation even where in fact the agent though in ignorance of his claim is entitled to the land unless the agent possesses not as agent but on his own behalf in which event his possession will be personal and not for his principal As to the nature of agent s possession in respect of principal s property this Court in a recent judgment ren dered in Smt
Chandrakantaben and Anr
vs Vadilal Bapalal Modi and Ors 1989 2 SCC 630 said at 643 It is well settled that the possession of the agent is the possession of the principal and in view of the fiduciary relationship defend ant 1 cannot be permitted to claim his own possession
This aspect was well emphasised in David Lyell vs John Lawson Kennedy 1889 14 HL E 437 where the agent who was collecting the rent from the tenants on behalf of the owner and depositing it in a separate ear marked account continued to do so even after the death of the owner
After more than 12 years of the owner s death his heir s assignee brought the action against the agent for possession and the agent defendant pleaded adverse possession and limitation
The plain tiff succeeded in the first court
But the action was dismissed by the Court of Appeal
The House of Lords reversed the decision of the Court of Appeal and remarked For whom and on whose behalf were those rents received after Ann Duncan s death Not by the respond ent for himself or on his own behalf any more than during her lifetime Emphasising the fiduciary character of the agent his possession was likened to that of trustee a solicitor or an agent receiving the rent under a power of attorney
Another English case of Williams vs Pott LR 12 Eq Cas 149 arising out of the circumstances similar to the
present case was more interesting
The agent in that case was the real owner of the estate but he collected the rents for a considerably long period as the agent of his principal who was his mother
After the agent s death his heir claimed the estate
The mother the principal had also by then died after pur porting by her will to devise the disputed lands to the defendants upon certain 418 trusts
The claim of the plaintiff was dis missed on the plea of adverse possession
Lord Romilly MR in his judgment observed that since the possession of the agent was the possession of the principal the agent could not have made an entry as long as he was in the position of the agent for his mother and that he could not get into possession without first resigning his position as her agent which he could have done by saying The property is mine I claim the rents and I shall apply the rents for my own purposes
 The agent had thus lost his title by reason of his own possession as agent of the principal
 We wish to add that it is not every agent who is in a fiduciary position vis a vis his principal
For example is A appoints B to be his agent merely to sign a memorandum and places no particular trust in B the doctrine of fiduciary relations would not apply
Like wise where the principal authorises an agent to do particular or specified acts the doctrine of fiduciary relation may not arise
What we want to emphasise is in all cases of general agency the rela tion may be generally fiduciary but in other kinds of agencies the relation may vary with the confidence which the principal chooses to repose in the agent
It may also depend upon the power which the agent exercises over the subject matter under the terms of the contract of agency or by virtue of the incident of law and usage of the business which the relationship implies
Thus the fiduciary element in agency though the key to much of the law governing this relation is not the essential element in the relation
See Modern Law Review Vol
17 pp 31 32
The crux of the matter is that an agent holds the prin cipal s property only on behalf of the principal
He ac quires no interest for himself in such property
He cannot deny principal s title to property
Nor he can convert it into any other kind or use
His possession is the possession of the principal for all purposes
As the Kerala High Court in Narayani Amma vs Bhaskaran Pillai AIR 1969 Kerala 214 observed at 217 The agent has no possession of his own
What is called a caretaker s possession is the possession of the agent
 So much is we think established law as regards agent s right to property belonging to the principal
Dr Chitale learned counsel for the respondent however cited in this context two decisions i Abdul Nabi Sahib vs Bajab Sahib and Anr AIR 1944 Mad 221 and ii 419 Jemma vs Raghu AIR 1977 Orissa 12
In the former case of the Madras High Court the suit was for a permanent injunc tion restraining the defendant from interfering with the plaintiff s peaceful possession and enjoyment of the suit properties and performance of the religious services
The defendant admitted that he was agent of the plaintiff but set up title to the property in himself as donee
He has also set up title by adverse possession
On these claims Kunhi Raman J observed Since the plaintiff had not got possession of the property it would not be sufficient to show that he was in constructive possession and the theory of constructive possession as between the principal and agent cannot be relief upon by the principal for the purpose of meeting the contention of the description raised on behalf of the defendant who is the agent If the defendant in the above case has admitted that he was the agent of the plaintiff and yet set up title to the property of his principal the above observation may not be consistent with the settled principle of law
We have al ready stated that the agent acquires no interest in the property of the principal and he cannot therefore non suit the principal on the possessory title as agent
The second case in Jemma vs Raghu referred to us is the decision of the Orissa High Court
That case dealt with the general principle that the plaintiff who is not in posses sion of the suit premises is not entitled to relief of injunction
The plaintiff must ask for recovery of posses sion
But this principle has no application with regard to dispute between the principal and agent in respect of prin cipal s property
In this case the respondent s possession of the suit premises was on behalf of the company and not on his own right
It is therefore unnecessary for the company to file a suit for recovery of possession
The respondent has no right to remain in possession of the suit premises after termination of his agency
He has also no right to interfere with the company s business
The case therefore deserves the grant of temporary injunction
The learned single Judge of the High Court in our judgment was justified in issuing the injunction
The Division Bench of the High Court was clearly in error in vacating it
In the result we allow the appeal with costs
In rever sal of the order of the Division Bench we restore the temporary injunction granted by learned single Judge of the High Court
Y Lal Appeal allowed


Summary:
In dealing with circumstantial evidence there is always the danger that conjecture or suspicion may take the place of legal proof
It is therefore right to remember that in cases where the evidence is of a circumstantial nature the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused
Again the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved
In other words there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused
vs Hodge 1838 referred to
An admission made by a person whether amounting to a confession or not cannot be split up and part of it used against him
It must be used either as a whole or not at all