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Report No. 89

31.11. Termination of agen.-Comments of Sir Richard Garth and Mr. Hobhouse.- The third point that arises under Article 3 is: what should be taken as the point of time 'when the agency terminates', within the meaning of the third column of the schedule?

This was also a doubt lingering in the mind of Sir Richard Garth,1 when he commented on the draft Bill that led to the Act of 1877.

"I now proceed to clause 90, by which the period of limitation fixed for a principal to bring his action against his agent for moveable property received, and not accounted for, is three years from the time when the account is demanded and refused.

This clause would virtually give the principal an almost indefinite time for bringing his action. He may wait for ten, twenty or thirty years after the agent has left his service, when the latter may have lost every means of explaining or refuting any demands made upon him, and then at the end of that time the principal may demand money or any other property he thinks proper, and place the agent in the unfair position of having to discharge himself at that distance of tune from the claim.

Upon this, Hon'ble Arthur Hobhouse, Q.C., commente.-

"Surely if the relation of principal and agent comes to an end, there must be a time at which it is reasonable to presume that all accounts have been settled, and it is those reasonable presumptions which we are translating into definite rules in framing a statute of limitations. I think the time should run from the demand, or the close of the relation, whichever first happens. But then section 20 ought to extend to acknowledgements given in answer to such demands, whereas it appears to be confined to debts and legacies."

1. Hon'ble Sir Richard Garth, D.O. letter to the Hon'ble Arthur Hobhouse, Q.C., dated 8th March, 18.-National Archives File, pertaining to papers of 1877.

31.12. Views of various High Courts.- The Madras High Court1 held that the agency terminated with the selling of goods, and did not continue till the accounts were settled and money remitted. A contrary view was expressed by the Calcutta High Court in an early case,2 its decision being to the effect that the agents continue to be liable to the plaintiff till they accounted to him.

1. Nagayya v. Thommandra Yerrikalappa, AIR 1934 Mad 691 (1).

2. Fink v. Buldeo Dass, 1899 ILR 26 Cal 715.

31.13. The Sind1 and Allahabad2 view is that the question of termination depends on the circumstances of each case.

1. Gordhandas v. Firm of Gokal Khataoo, AIR 1926 Sind 264.

2. Bah Ram v. Ram Dayal, 1890 ILR 12 All 541.

31.14. No change.- It appears that the phraseology used in the article will have to be applied and interpreted in the facts of each case. A change in the phraseology would be no improvement in practice. In the result, Article 3 needs no change.

31.15. Article 4.- Article 4 reads as unde.-

"Other suits by principles against agents for neglect or miscounduct.

Three years.

When the neglect or misconduct becomes known to the plaintiff.

It is identical with Article 90 of the Acts of 1908 and 1877. Under Article 91 of the Act of 1871, the starting point w.-"When the neglect or misconduct occurs."

The present provision is sound in principle, and has created no difficulties. No change is therefore recommended.

31.16. It would be seen from the genesis of the present article that a very serious defect in Article 91 of the 1871 Act, namely, the omission of a reference to the time when the neglect or misconduct becomes known to the plaintiff, has been cured by adding the words "becomes known to the plaintiff" after the word "misconduct". In fact, the draft of the 1877 Act which was circulated for comments contained the clause "when the neglect or misconduct occurs or becomes known to the plaintiff", but the words "occurs or" were omitted in the final draft.

On this reasoning, the High Courts of Allahabad1, Calcutta2 and Madras3 have also brought, under the purview of Article 4, cases involving movable property entrusted to the agent, whenever there was an allegation of neglect or misconduct against the agent though Article 3 deals with recovery of movable property.

We do not deem it necessary to express any final view on this matter, except saying that the applicability of the article would depend upon the facts and circumstances of each case.

No change is, therefore, needed in this article.

1. Jaganji v. Bandan, AIR 1930 All 397.

2. Saktiprasanna Bhattacharya v. Naliniranjan Bhattacharya, AIR 1931 Cal 738.

3. Sankaranarayana Ayyar v. Trichondur Dharmanarinalam Sakthithara Bhajana Scrbluz through A. Sivaranzakrishna Iyer, AIR 1939 Mad 114.

31.17. Article 5.- Article 5 reads as unde.-

"For an account and share of the profits of a dissolved partnership.

Three years.

The date of the dissolution."

It is identical with Article 106 of the Acts of 1908 and 1877, and with Article 106 of the Act of 1871.

The article needs no change.

The Limitation Act, 1963 Back

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