IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD MONDAY, THE THIRTEENTH DAY OF JUNE TWO THOUSAND AND ELEVEN PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH & THE HON'BLE MR JUSTICE B.CHANDRA KUMAR CCCA.No.150 of 2000 Between: Kaytronics Electronic Engineers, Secunderabad ..... APPELLANT AND Electronic Corporation of India, Cherlapalli, Hyderabad and 5 others .....RESPONDENTS The Court made the following: THE HON'BLE SRI JUSTICE V.ESWARAIAH & THE HON'BLE SRI JUSTICE B.CHANDRA KUMAR CCCA.No.150 of 2000 JUDGMENT: (per Hon’ble Sri Justice V.Eswaraiah) The appellant is the 2nd defendant in the suit filed by the 1st respondent herein in O.S.181/1990 on the file of the III Senior Civil Judge, City Civil Court, Secunderabad. The appellant herein is the Agent of the 1st defendant. The suit was filed for recovery of money. The plaintiff company was doing business in the manufacture of sophisticated electronic items and it imports some components from outside the country for manufacturing of electronic items. The 3rd defendant is the manufacturer of the crystal controlled oscillators which was urgently needed for the manufacture of the electronic items by the plaintiff. Accordingly, the 3rd defendant issued a letter dated 02.11.1987 intimating that the 1st defendant shall represent it in India and the 1st defendant gave Ex.A2 another letter to the plaintiff informing that the 2nd defendant is the authorised exclusive agent in India. Exs.A3, A5, A8 to A11 and A16 would disclose that the 2nd defendant acted as agent of the 1st defendant. The 6th defendant is the Insurance Company from which the plaintiff has taken the cover of insurance for the loss of the goods in transit. The suit was decreed against all the defendants. It was the contention of the 2nd defendant before the Court below that the 2nd defendant is not liable to the suit claim as its principal, the 1st defendant is already made as party to the suit proceedings and therefore, under Sec.230 of the Indian Contract Act, the agent is exempted from the liability. It is further stated that Exs.A2, A3, A5, A8 to A11, A16 and A40 would indicate that the 2nd respondent participated in the transaction as agent of the 1st defendant alone, and in fact Ex.A1 shows that the 3rd defendant gave a declaration that the 1st defendant is its representative in India and the 2nd defendant is only authorised agent of the 1st defendant. Sec.230 of the Indian Contract Act 1872 is as follows: Sec.230: Agent cannot personally enforce nor be bound by, contracts on behalf of principal:- 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. Under Sec.230 of the Indian Contract Act, the agent cannot enter into any contract on behalf of the principal nor personally bound by the contract on behalf of the principal. However, agent is entitled to enter into the contract where the contract is made by an agent for the sale or purchase of the goods for merchant resident abroad, and where the agent does not disclose the name of his principal; and where principal, though disclosed, cannot be sued. In the instant case, the contract is not made by the agent on behalf of the principal, and admittedly, the principal is made as party to the suit proceedings. It is not the case of the plaintiff that name and particulars of the principal are not available. In fact, the principal i.e., 1st defendant was sued and therefore, we are of the opinion that under Sec.230 of the Indian Contract Act, the 2nd defendant, being agent of the 1st defendant, is not liable for the suit claim. Though a judgment was cited before the Court below, the Court below erroneously held that the 2nd defendant is also liable for the suit claim. It is not in dispute that there is direct contract between the 1st defendant-principal and the plaintiff and to that effect there was correspondence between them. Therefore, we are of the opinion that the 2nd defendant is not liable for the loss sustained by the plaintiff for the action on the part of the principal and other defendants. We, accordingly, allow the appeal in so far as the liability of the 2nd defendant is concerned. It is open for the plaintiff to execute the decree against other defendants. No order as to costs. ________________ V.ESWARAIAH,J _____________________ B.CHANDRA KUMAR,J Dated: 13.06.2011 Dsr