-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3847 OF 2006 NOTICE OF MOTION NO.3847 OF 2006 NOTICE OF MOTION NO.3847 OF 2006 IN IN IN SUIT NO.4148 OF 1995 SUIT NO.4148 OF 1995 SUIT NO.4148 OF 1995 National Agricultural Cooperative Marketing Federation of India Ltd .. Plaintiffs. Vs M/s Ansagida Urunleri Pazsan Ve Tic Ltd and ors. .. Defendants. Mr Shashipal Shankar, for the plaintiffs. Mr Vishal Sheth with Ruben Fernandes for defendant no.3. CORAM : D.B.BHOSALE,J. CORAM : D.B.BHOSALE,J. CORAM : D.B.BHOSALE,J. DATE : 18th June, 2008 DATE : 18th June, 2008 DATE : 18th June, 2008 ORAL ORDER: ORAL ORDER: ORAL ORDER: 1. Heard learned counsel for the parties. 2. This Motion is taken out by defendant no.3 seeking rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 ("CPC", for short) on the ground that the suit does not disclose any cause of action against them. They have also prayed for rejection of the plaint on the ground that the suit is not maintainable in view of section 230 of the Indian Contract Act, 1872 ("the Contract Act", for short). 3. Defendant no.3 appears to have been impleaded -2- because they were agents for and on behalf of defendant no.4. Nowhere in the plaint the plaintiffs have averred as to how defendant no.3 were involved in the transactions referred to in the plaint, apart from being agent of defendant no.4. There is no averment to the effect as to how defendant no.3 are either concerned with or responsible for the alleged shortage of the suit consignment and the consequent loss, which forms the basis of the plaintiffs claim in the suit. From the averments in the plaint it does not appear that the suit consignment was ever entrusted to defendant no.3 nor was transported by them. The role attributed and allegedly played by defendant no.3 was only as an agent of defendant no.4. 4. It is against the backdrop of these pleadings I have heard learned counsel for the parties. Counsel for defendant no.3 submitted that the agent cannot personally enforce nor be bound by contracts on behalf of principal. He submitted, ordinarily an agent contracting in the name of his principal cannot be sued on such contracts. The agent in such circumstances is not entitled to sue in his name as contemplated under section 230 of the Contract Act. He further submitted that the plaintiffs claim is founded on short delivery of the consignment, for which there is no whisper in -3- the plaint stating that defendant no.3 were responsible for the short delivery. He further submitted that the instant case is squarely covered by the judgment of this Court in Midland Overseas Vs m.v. CMBT Tana and Midland Overseas Vs m.v. CMBT Tana and Midland Overseas Vs m.v. CMBT Tana and ors, AIR 1999 Bombay 401. ors, AIR 1999 Bombay 401. ors, AIR 1999 Bombay 401. 5. On the other hand, learned counsel for the plaintiffs, after taking me through the averments in the plaint and more particularly paragraphs 8,14 and 15, submitted that in view of the admitted facts that defendant no.3 was an agent of defendant no.4, were involved in the transaction and are equally liable to pay for the damage/loss caused to the plaintiffs. He submitted that both, the agent and his principal, are equally responsible and liable to indemnify the loss caused to them. He then submitted that sections 222 and 223 of the Contract Act were not taken into consideration by the learned Single Judge in the Midland Overseas case Midland Overseas case Midland Overseas case (supra) and, therefore, the judgment would have no application to the facts of the present case. He submitted that correspondence placed on record show the involvement of defendant no.3 and that they played equally active role in this transaction and the plaintiffs, therefore, are entitled to claim damages from them. He submitted that the correspondence between the plaintiffs and defendant -4- no.3 show that they (defendants) acted independently and have not anywhere mentioned that they are only agents and the plaintiffs should lodge the claim with the principal, i.e. defendant no.4. In support, my attention was specifically invited to Exhibits O and R to the plaint. 6. I have perused the plaint so also the other material to which my attention was specifically drawn by the learned counsel for the parties. It is clear from the plaint that defendant no.3 have been impleaded only as an agent for and on behalf of defendant no.4. The suit consignment was never at any stage either entrusted to defendant no.3 or transported by them. As a matter of fact in paragraphs 5 and 9 of the plaint, the plaintiffs have averred that defendant no.1 entrusted the consignment to defendant no.4 and the same was loaded at Mersin Port at Turkey. 7. This Court, while dealing with similar facts in the Midland Overseas case Midland Overseas case Midland Overseas case (supra) in paragraphs 6 and 7 held thus:- "6. On these admitted facts which have been pleaded by the plaintiffs themselves in the -5- plaint the question that arises for determination is whether any cause of action has accrued against the third defendants who had only acted as agents for and on behalf of 2nd defendants. The agent cannot personally enforce nor be bound by, contracts on behalf of principal. Ordinarily an agent contracting in the name of his principal cannot be sued on such contracts. The agent in such circumstances is also not entitled to sue in his name. This position emerges from section 230 of Contract Act which reads thus: "230. In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them." Presumption of contract to contrary - such a contract shall be presumed to exist in the following cases - (1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad; (2) where the agent does not disclose the name of his principal; (3) where the principal, though disclosed, cannot be sued." It is apparent that the principal is disclosed and has been impleaded as 2nd defendant. It is further admitted case in the plaint that the 3rd defendant acted as an agent of the 2nd defendant and the container was accepted by the 3rd defendant on behalf of the 2nd defendant. In the circumstances, where the principal is disclosed and has been impleaded as defendant no.2, no action would lie against the defendant no.3 who are only agent of defendant no.2. There is not even a whisper in the entire plaint that the 3rd defendants acted independent of 2nd defendant or that the container was accepted by the 3rd defendants in the capacity of their own or the 3rd defendants while contracting undertook any personal liability under the said contract. 7. The plaintiffs claim is founded on -6- non-delivery of the container containing plaintiffs cargo to the consignees at Durban allegedly attributable to negligence and breach of contract of carriage. Under Section 230 of the Act before the Agent can be sued it must be pleaded and shown that the principal is undisclosed and the contract, the breach of which is sued on was entered into by the agent as having contracted personally. Where the contract is entered into by agent contracting on behalf of a foreign principal who is named and disclosed the agent cannot be sued personally nor made personally liable. From the pleaded facts in the plaint it is amply clear, therefore, that no cause of action has arisen against the 3rd defendants and plaint is liable to be rejected under Order 7 Rule 11 CPC as against 3rd defendants." From perusal of the facts of the present case and the observations made in the Midland overseas case Midland overseas case Midland overseas case (supra), I do not find any difference between the two cases and, in my opinion, the present case is squarely covered by the said judgment in Midland Overseas case. The case relied upon by the learned counsel for the defendants of the Madras High Court in Show Wallace and Co Ltd and Show Wallace and Co Ltd and Show Wallace and Co Ltd and India Steamship Co Ltd Vs. The Union of India India Steamship Co Ltd Vs. The Union of India India Steamship Co Ltd Vs. The Union of India, 2005 (1) CTLJ 420 (Mad) has no application to the facts of the present case. Sections 222 and 223 of the Contract Act, in my opinion, have no bearing on the facts of the present case. The instant suit is filed not only against defendant no.3 but also against his principal, namely, defendant no.4. In the circumstances, this Motion is made absolute in terms of prayer clauses (a) -7- and (b), with no order as to costs. (D.B.Bhosale, J.) (D.B.Bhosale, J.) (D.B.Bhosale, J.)