Ramprasad S/O Prabhudayal Mathur
Vaishya Vs. State of Madhya Pradesh & ANR  INSC 271 (7 October 1969)
07/10/1969 HEGDE, K.S.
CITATION: 1970 AIR 1818 1970 SCR (2) 677 1970
SCC (3) 24
Contract Act (9 of 1872), ss. 148, 172 and
221-Pledge, when can be inferred-Agent's lien on goods-When arises-Practice and
Procedure-Decreeing interest from date of suit till date of decree.
A licence holder from the State for
distribution of grain, appointed the appellant as his commission agent for the
sale of the grain. The agreement provided that the appellant should be in
possession of the grain purchased and dispose:
it of in accordance with the directions given
by the licence holder. Later the State Government paid to the licence holder,
the price of the stock then in the possession of the appellant and took over
the stock. The appellant, while handing over the grain, informed the Government
that the licence holder owed him money tinder the agreement. He filed a suit to
recover the amount from the State Government and the son of the licence holder
(the father having died meanwhile). Though the plaint did not set out the basis
of the claim against the State the trial court decreed the suit, against both
defendants, but did not give any interest from the date of suit till date of
decree. In appeal by the State, and cross-objections by the appellant claiming
the interest, the High Court set aside the decree against the State, but did
not pass any order on the cross-objections.
In appeal to this Court, the appellant
claimed to be pledge of the goods and that he had a lien over the goods.
HELD : (1) The agreement does not show that
the goods had been pledged to the appellant.
The question whether an agent can enforce his
lien in a particular case is a mixed question of law and facts. As a general
rule, in order to have a lien an agent must have some possession, custody or
control or disposing power in or over the subject-matter in which lien is
claimed. The lien does not arise where the possession of the property is
acquired by the, 'agent under a contract which expressly or impliedly shows a
contrary intention or where it is delivered to him for a particular purpose
inconsistent with the existence of a lien. Further, the lien is lost by parting
with the possession, unless at the time of parting he expressly or impliedly
reserved his right of lien, or the goods were obtained from him by fraud or
unlawful means In the present case, from the mere fact that the appellant
informed the Government that his principal owed him money, while voluntarily
parting possession with the goods, it could not be said that he reserved
expressly or by implication his right of lien against the State, if any.
[680 E-H; 681 B-D] Santi Sahu v. Seogulam Sahu
A.I.R. 1958 Pat. 174 and Balmukand v.Jagannath, I.L.R. XIII Raj. 579, held not
(2) As against the second respondent, the
appellant was entitled to the principal amount decreed and the lower courts
should have also decreed interest from date of suit till date of decree. [681
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2205 of 1966.
678 Appeal from the judgment and decree dated
September 12, 1962 of the Madhya Pradesh High Court, Gwalior Bench in First
Appeal No. 9 of 1959.
J. P. Goyal and S. N. Singh, for the
I. N. Shroff, for respondent No. 1.
The Judgment of the Court was delivered by
Hegde, J. This is an appeal by certificate under Art. 133(1) (a) of the
Constitution. The appellant is the plaintiff in the suit. in the suit he
claimed a sum of Rs. 30,699/1/3 against both the defendants. The suit was
decreed by the trial court against the defendants in a sum of Rs. 22,634/4/-
together with costs and interest from the date of the decree. The State of
Madhya Pradesh, the 1st defendant in the suit appealed against the decree. The
second defendant did not appeal against that decree. The plaintiff filed
cross-objection claiming interest on the principal amount claimed from the date
of the suit till decree. The High Court allowed the appeal of the State and set
aside the decree against it; but it failed to pass any order on the
cross-objection. In this appeal the appellant seeks not only to get restored
the trial court's decree against the State of Madhya Pradesh, he also wants
that the relief claimed by him in his cross-objection before the High Court
should be granted to him.
The facts of the case lie within narrow
limits. One Hetampal Singh, father of defendant No, 2 was a licence holder for
Gird District in the then State of Gwalior for distribution of grain. He had
entered into an agreement with the appellant-plaintiff on October 14, 1942 (Ex.
1), whereunder he appointed the appellant as his commission agent. English
translation of the said agreement reads thus :
"H. P. S. Jadhav Thakur Sahab Naya Bazar
Hetampalsingh Jadhav son of Bhagwansingh
Jadhav caste Thakur, am a resident of Naya Bazar, Lashkar.
I have taken contract for supplying grain
seed in District Gird for which I need money for bringing every kind of grain
from different places. Therefore I appoint Ramprasad s/o Prabhudayal caste
Mathur Vaishya resident of Naya Bazar, Lashkar as my adhatia (Commission Agent)
and settle the following terms (1) I shall pay interest at the rate, of Re.
1/ p.c. on the amount which will be invested
by the Seth Sahab for this purpose.
679 (2) I shall pay commission at the rate of
Rs. 1/8/per cent on the goods which will be brought by the Seth Sahab or his
man from outside and I shall pay commission at the rate of Re. 1/- per cent on
the goods which will be brought by me from outside and for which the Seth Sahab
will have only to get released the railway way bill.
(3) 1 shall pay the whole expenses of
journey, railway fare, allowance etc. of the person who will go out on behalf
of the Seth Sahab for bringing the goods.
(4) The whole of the goods which will be
received from outside, shall remain in possession of the Seth Sahab. The
account thereof shall also remain with him. the, Seth Sahab will have authority
to supply only so much goods as I would permit him to supply i.e. he cannot
supply goods to anybody of his own accord. The expenses which will be incurred
in keeping account and other expenses of the shop shall be borne by the Seth
I shall pay only rent of the shop.
(5) I shall be responsible for any increase
or decrease in the goods.
Sd./- HETAMPALSINGH JADHAV (In English)
14-10-42." In pursuance of the said agreement, the appellant purchased
considerable stock of grain. He had in possession on January 29, 1943. 4039
maunds 35 seers 4 chhatacks of gram.
According to the appellant on that day
Hetampal Singh owed him a sum of Rs. 19,228/9/6. The possession of that stock
was taken over by the State Government on January 29 and 30, 1949. The State
Government paid the price of the said stock to Hetampal Singh. The appellant's
case is that the State Government is liable to reimburse him the money due to
him from Hetampal Singh. Before the suit came to be filed Hetampal Singh had
died and hence 'he 2nd defendant was impleaded as his legal representative.
The plaint filed by the plaintiff is a bald
one. It did not set out the right under which the plaintiff was claiming any
relief against the State. In the course of the trial, the plaintiff asserted
that he was a pledgee of the goods in question. No such case was pleaded in the
plaint nor any issue raised in that regard. The agreement entered into between
the plaintiff and Hetampal Singh does not show that the goods in question had
been pledged to the plaintiff.
The agreement provides that the appellant
shall be in possession of the goods purchased and dispose of the same in
accordance with the directions given by Hetampal Singh. The finding, 680 of the
High Court is that the grain was removed by the Government from the possession
of the appellant without any force or fraud and the appellant handed over that
grain to the Government in response to a communication from the Controller of
Food grains. At no stage he told the Government that he was a pledgee of the
goods. The decision in Santi Sahu vs. Sheogulam Sahu(1); relied on by the
learned Counsel for the appellant is of no assistance to him because the
agreement relied on in that case is materially different from the one before
us. On an interpretation of that document the court came to the conclusion that
it constituted a bailment for security and that it is a pledge within the
meaning of s. 172 read with s. 148 of the Contract Act. That is not the
position here. Therefore the High Court was fully justied in rejecting the
claim of the appellant that he was a pledgee of the goods.
The claim of the appellant was next tried to
be supported on the plea that he had a lien over the goods. No such plea was
taken in the plaint. An Agent no doubt has a specific lien upon the principal's
property in his possession for his compensation and expenses during the course
of the agency with reference to that property. Section 221 of the Contract Act
provides that in the absence of a contract to the contrary, an agent is entitled
to retain goods, papers and other property, whether movable or immovable, of
the principal received by him, until the amount due to him for commission,
disbursements and services in respect of the same has been paid or accounted
for to him. An agent who is entitled to be reimbursed from the principal's
property for the expenses incurred, advances made or losses sustained during
the course of the agency or who is entitled to be compensated for his services
has a lien upon the principal's goods or property which comes lawfully in his
possession during the course of the agency from which the right to indemnity or
compensation arises. A purchasing agent has a lien upon the principals goods in
his possession upon which he has paid money in purchasing. As a general rule in
order to have a lien, an agent must have some possession, custody or control or
disposing power in or over the subject matter in which the lien is claimed. The
lien does not arise where the possession of the property is acquired by the
agent under a contract which expressly or impliedly shows contrary intention,
or where it is delivered to him for a particular purpose inconsistent with the
existence of lien thereon.
The agent has no lien over the property where
it is en- trusted to him for a special purpose which is inconsistent with the
lien claimed. Further the lien of 'an agent being a mere right to retain
possession of the property subject thereto, is lost by parting with the
possession of the goods unless at the time of parting with them he reserved
expressly or impliedly his right of lien or they are obtained from him by fraud
or unlawful means.
(1) A.I.R. 1958 Pat 174 681 The question
whether an agent can enforce his lien in a particular case is a mixed question
of law and facts.
Therefore in the absence of any specific
plea, that question cannot be gone into. We do not know the conditions under
which Hetampal Singh was appointed as a licence holder.
From the material on record, it is not clear
whether the goods in question were taken possession of by the Government in
accordance with the conditions of the licence ranted to Hetampal Singh.
Therefore it is not possible to decide whether under the circumstances of the
present case, the plaintiff could have enforced his lien against the State.
It is true that the plaintiff informed the
Government that Hetampal Singh owed to him about Rs. 20.000/-. But from that
circumstance we cannot come to the conclusion that while voluntarily parting
with the possession of the goods, he reserved expressly or by implication his
right of lien, if he had any. We do not think that the rule laid down in
Balmukund and anr. vs. Jagannath(1) relied on by the learned Counsel for the
appellant bears on the facts of this case. Under these circumstances it is not
possible to uphold the appellant's claim against the State. Therefore the
appeal fails so far as the State is concerned. It is accordingly dismissed, as
against the 1st defendant, the State of Madhya Pradesh.
But coming to the cross-objection filed by
the appellant before the High Court, the High Court appears to have completely
lost sight of the same. It did not deal with that cross-objection while
disposing of the appeal. The trial court did not give any reason for rejecting
the plaintiff's claim for interest on the principal amount from the date of the
suit till the date of the decree. The plaintiff was entitled to interest on the
principal amount of Rs. 19,228/6/- at 41/2- per cent per annum from the date of
the suit till the date of the decree. The appeal succeeds to that extent. The
decree of the trial court as against the second defendant is modified to that
extent. In the circumstances of the case we make no order as to costs in this
V.P.S. Appeal allowed.
(1) I.L.R. XIII Raj. 579.