IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN WEDNESDAY, THE 27TH JANUARY 2010 / 7TH MAGHA 1931 RSA.No. 1170 of 2009() ---------------------- AS.208/2004 of ADDL.DISTRICT COURT,KOTTAYAM OS.275/1997 of PRL.SUB COURT,KOTTAYAM .................... APPELLANT/APPELLANT /2ND DEFENDANT: ------------------------------------------------------------------- KERALA KHADI AND VILLAGE INDUSTRIES BOARD, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY, OFFICE OF THE KERALA KHADI & VILLAGE INDUSTRIES BOARD, VANCHIYOOR P.O., THIRUVANANTHAPURAM. BY ADV. MR.K.P.HARISH,SC,KERALA KHADI BOARD RESPONDENT(S): RESPONDENTS/PLAINTIFFS: ---------------------------------------------------------------------- 1. M.J.THOMAS, S/O.JOSE, MALAMEL HOUSE, EDAPPALLY P.O., THRIKKAKKARA NORTH VILLAGE, KANAYANNOOR -(DIED) 2. LIZZY THOMAS, W/O.LATE M.J.THOMAS, RESIDING AT MALAMEL THOUSE, EDAPPALLY.P.O. THRIKKAKKARA NORTH VILLAGE, KANAYANNOOR 3. REJALA THOMAS, D/O. LATE M.J.THOMAS, RESIDING AT MALAMEL HOUSE, EDAPPALLY P.O. THRIKKAKKARA NORTH VILLAGE, KANAYANNOOR. 4. JOSE THOMAS, S/O.LATE M.J.THOMAS, S/O.LATE M.J.THOMAS, RESIDING AT MALAMEL HOUSE EDAPPALLY P.O.,THRIKKAKKARA NORTH VILLAGE, KANAYANNOOR (THE 4TH RESPONDENT IS A MINOR, REPRESENTED BY HIS MOTHER AND GUARDIAN THE 2ND RESPONDENT) 5. THE KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD., SIDCO, SANTHI NAGAR, THIRUVANANTHAPURAM -695001. R2 TO R4 BY ADVS.MR.LITTO VARGHESE PALATHINKAL, SMT.P.K.GIGIMOLE, SMT.P.VIDHYA MOHANLAL. R5 BY ADV. MR.R.T.PRADEEP THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 27/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss ORDER ON I.A.NO.2667/2009 IN R.S.A.NO.1170/2009 DISMISSED 27/01/2010 SD/- M.N.KRISHNAN, JUDGE /TRUE COPY/ P.A.TO JUDGE Kss M.N. KRISHNAN, J. ........................................... R.S.A.No.1170 OF 2009 ............................................. Dated this the 27th day of January, 2010. J U D G M E N T This is an appeal preferred against the judgment and decree of the Additional District Judge, Kottayam in A.S.No.208/2004. A.S.No.208/2004 was preferred against the judgment and decree of the Subordinate Judge's court, Kottayam in O.S.No.275/1997. The suit is one for realisation of the amount and the trial court directed return of bank fixed deposit for Rs.50,800/= being the security deposit furnished by the plaintiff and available with the defendants with interest accrued thereon. It also granted a decree for Rs.34,320/= from the defendants and all its assets. In appeal, the learned Additional Sessions Judge did not interfere with the finding and dismissed the appeal. It is against that decision, the present second appeal is preferred. 2. The principal point argued before me is only on the question of liability of the second respondent. So, the real question of law to be formulated is whether there is any : 2 : R.S.A.No.1170 OF 2009 privity of contract between the plaintiffs and the second defendant in the suit and can the second defendant be directed to pay the amount. 3. Point: The suit is one for realisation of the amount. The brief facts of the case would reveal that the second defendant Khadi Board had decided to construct a building and for that purpose had entrusted the first defendant SIDCO for doing the same. The plaintiff is a contractor under SIDCO. An agreement has been entered into between the plaintiff and the first defendant. The second defendant is not a party to the agreement or the contract entered into between the plaintiff and the first defendant. The first defendant's duty is to construct a building for the second defendant and for the said purpose, the first defendant had invited tenders and had entrusted the plaintiff to do the work. Since the question involved is regarding the privity of contract between the plaintiff and the second defendant and as the first defendant had not challenged the decree granted by the court below in favour of the plaintiff, such : 3 : R.S.A.No.1170 OF 2009 factual questions really does not arise for determination in the appeal. Therefore I confine my finding only to the question of privity of contract. Even the appellate court had very specifically stated that the second defendant is not a visible party in Ext.B1 agreement. It is stated that the agreement has been entered into between the first defendant and the original plaintiff for the purpose of construction of a shopping complex for the appellant. Then the court jumps to the conclusion that the second defendant is the principal and the first defendant is the agent. It has to be remembered that there is no principal- agent relationship between the first defendant and the second defendant. The second defendant entrusted the first defendant to do a particular work and the first defendant independently of its right invited tenders and entrusted the plaintiff to construct a building. There cannot be any privity of contract without one being a party to the same. There cannot be any principal-agent relationship unless one recognises the other person as the agent. Nobody has got a case anywhere that the first defendant is the agent of the : 4 : R.S.A.No.1170 OF 2009 second defendant. So, when there is no privity of contract between the plaintiff and the second defendant and as there are no materials to establish that the first defendant is the agent of the second defendant, it may not be proper on the part of the court to hold that the second defendant is liable for the act of the first defendant. 4. Therefore, I hold that the second defendant is not liable for the amount claimed and any decree passed is only to be enforced against the first defendant in accordance with law. Disposed of accordingly. M.N. KRISHNAN, JUDGE cl : 5 : R.S.A.No.1170 OF 2009