1965 (3) TMI 78 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Liability of the fifth defendant (Sethiya and Co.) for non-delivery of goods.
2. Agency relationship between the plaintiff and Sethiya and Co.
3. Wrongful conversion of goods by Sethiya and Co.
4. Agency relationship between the plaintiff and the Government of Assam.
5. Reimbursement claim against the Government of Assam under Sections 222 and 223 of the Contract Act.

Detailed Analysis:

1. Liability of the Fifth Defendant (Sethiya and Co.) for Non-Delivery of Goods:
The court concluded that the plaintiff-appellant has not established any liability on the part of the fifth defendant, Sethiya and Co. The contract of sale was with John and Co., not with Sethiya. The principle of law is clear that liability arises under a contract, and no privity of contract was established between the appellant and Sethiya and Co. As such, Sethiya and Co. were under no obligation to deliver the goods to the plaintiff.

2. Agency Relationship Between the Plaintiff and Sethiya and Co.:
The plaintiff argued that Sethiya and Co. acted as their agents to receive and deliver the goods. However, the court found no agreement of agency, express or implied, between the parties. The plaintiff's case did not establish that Sethiya and Co. were their agents, and no issue was framed on this point.

3. Wrongful Conversion of Goods by Sethiya and Co.:
To establish conversion, the plaintiff needed to prove ownership of the goods and that the property in the goods had passed to them. The contract was for unascertained goods, and there was no evidence of appropriation of the goods to the contract. The court found that the property in the goods did not pass to the plaintiff as there was no unconditional appropriation by Sethiya and Co. The plaintiff's claim under conversion failed.

4. Agency Relationship Between the Plaintiff and the Government of Assam:
The plaintiff claimed to be an agent of the Government of Assam for procuring yarn. The agreement described the plaintiff as an agent, but the court examined the true nature of the relationship and found that the plaintiff was not representing the Government in dealings with third parties. The plaintiff acted on their own behalf, not as an agent of the Government. The court concluded that the plaintiff was a licensee with the exclusive right to purchase and sell yarn in Assam, not an agent in the legal sense.

5. Reimbursement Claim Against the Government of Assam Under Sections 222 and 223 of the Contract Act:
The plaintiff argued for reimbursement for losses suffered in procuring yarn under Sections 222 and 223 of the Contract Act. The court found that the plaintiff was not employed to represent the Government in dealings with third parties but acted at the request of the Government. There was no contract of indemnity, and the plaintiff could not claim reimbursement for losses from the Government. The court held that the plaintiff was not an agent of the Government of Assam and was not entitled to any reimbursement for the loss suffered due to non-delivery of goods.

Conclusion:
The appeal was dismissed. The court directed the fifth defendant (Sethiya and Co.) and the eighth defendant (State of Assam) to bear their own costs, noting that the Assam Government had described the plaintiff as their agent, which misled the appellant, and that Sethiya had made untrue statements, escaping legal liability due to lack of proof.