1957 (8) TMI 30 - HC - Indian Laws

Appellant's Appeal Dismissed, Plaintiff Awarded Commission for Securing Buyer

Raja Ram Jaiswal Versus Ganesh Prasad And Ors.

The court upheld the decree against the appellant, dismissing the appeal with costs. The plaintiff was entitled to the commission as he had fulfilled his ... - Issues Involved:1. Interpretation of the letter dated 22-12-1941.2. Joint liability of the three directors.3. Basis of the plaintiff's claim.4. Applicability of Sections 230 and 235 of the Indian Contract Act.Issue-wise Detailed Analysis:1. Interpretation of the letter dated 22-12-1941:The primary issue was whether the plaintiff could claim commission only if the property was actually sold. The appellant argued that terms like 'bechenge' (will sell) and 'dilayenge' (will get paid) indicated that the commission was contingent upon the actual sale. The court, however, interpreted the letter to mean that the plaintiff's commission was not dependent on the completion of the sale. The court noted that the plaintiff was only required to introduce a ready and willing purchaser. The court emphasized that the letter did not specify that the commission was contingent on the acceptance of the offer by the company's Board of Directors or the completion of the sale. The court also considered the conduct of the parties, including the acceptance of the earnest money cheque and subsequent correspondence, which indicated that the commission was due upon securing a buyer willing to pay the stipulated price.2. Joint liability of the three directors:The appellant contended that since the contract was made by all three directors, the suit could not be decreed against him alone. The court referred to Section 43 of the Indian Contract Act, which allows for the enforcement of a contract against any one of the joint promisors. The court held that the appellant could be made liable even if the suit failed against the other directors. The acceptance of the earnest money cheque by the other two directors did not affect the appellant's liability, as all three directors were joint promisors.3. Basis of the plaintiff's claim:The appellant argued that it was unclear whether the plaintiff's claim was based on the express terms of the contract, compensation for breach of contract, or remuneration on a quantum meruit basis. The court found that the plaintiff's claim was based on the express terms of the contract. The court noted that the plaintiff had complied with the terms of the contract by introducing a willing purchaser and was entitled to the agreed commission. The court cited Halsbury's Laws of England, which states that where parties have made an express contract for remuneration, the conditions under which it becomes payable must be ascertained by reference to the terms of that contract.4. Applicability of Sections 230 and 235 of the Indian Contract Act:The appellant argued that he acted as an agent of a disclosed principal (the company) and that the suit was barred by Sections 230 and 235 of the Indian Contract Act. The court found that neither party had pleaded that the appellant acted as an agent. The court held that a director of a company is not necessarily an agent of the company or its shareholders. The court noted that the appellant did not raise the plea of acting as an agent in his written statement. The court concluded that the appellant was personally liable for the commission based on the language of the letter and the findings of the lower courts.Conclusion:The court upheld the decree against the appellant, dismissing the appeal with costs. The court concluded that the plaintiff was entitled to the commission as he had fulfilled his part of the contract by securing a willing purchaser. The liability was personal and not contingent on the actual sale or the actions of the other directors.