Contracts Cases Essay

FACTSAn Agency engagement was entered into amidst the Mills fellowship and the appellants appointing the appellants its Agents for a period of 30 geezerhood. The appellants through divulge peeed sole(prenominal) as the Agents of the Mills teleph angiotensin-converting enzymer and for the Fasli years 1351 and 1352 they received their remuneration low the ground of the Agency agreement. Notice was direct to the appellants to pay the numerate of tax appertaining to these chargeable accounting periods. The appellants submitted their accounts and contended that the remuneration received by them from the Mills Comp every(prenominal) was non taxable on the ground that it is was non income, profits or gains from argumentation and was outside the pale of the Excess win Tax Regulation. The Excess Profits Tax Officer made an order assessing the income of the appellants for the accounting periods 1351 and 1352 Fasli at Rs. 8,957 and Rs. 83,768 independently and assessed the tax ac cordingly.ISSUES1. Whether under the ground of the agreement the petitioner is an employee of the Mills Comp some(prenominal) or is carrying on contrast? 2. Whether the remuneration received from the Mills is on account of service or is the remuneration for business organisation?ANALYSIS OF THE FACTS1. The appellants were registered as a private limited comp each having their registered office in Bombay and the objects for which they were interconnected were the following To act as promoters for judicatures or politics or for any bankers, manufactures merchants, shippers, Joint Stock Companies and others and carry on altogether kinds of performance business. 2. under(a) the Articles of Association of the Mills federation the appellants and their assigns were appoint the components of the participation. The widely distri stilled management of the business of the Company vanquish to the withstand and control of the Directors, was to be in the hand of the Agents of the Company. They were to have power to appoint and employ in or for the purposes of the exertion and management of the affairs and business of the Company.The agents were authorized to sub-delegate whole or any of the powers, authorities and discretions for the cadence being vested in them. 3. The Agency agreement which was put to death provided that the appellants and their assign were to be the Agents of the Company for a period of 30 years from the date of registration of the Company and they were to continue to act as such agents until they of their own will resigned. 4. The remuneration of the appellants as such Agents was to be a commission of 2 1/2 per cent on the amount of change proceeds of all recite cloth and other begin of the Company. The appellants were to be paid in addition all expenses and charges actually incurred by them in connection with the business of the Company and charge and management in that respectof. judging1. An agent is to be distinguishe d on the one hand from a consideration, and on the other from an independent reduceor. A servant acts under the transfer control and supervision of his moderate, and is squinch to conform to all reasonable orders addicted him in the course of his work an independent contractor, on the other hand, is only if independent of any control or interference and merely undertakes to kick upstairs a specified result, employing his own means to produce that result. An agent, though bound to physical exertion his authority in accordance with all lawful instructions which may be given to him from time to time by his top dog, is not subject in its exercise to the direct control or supervision of the superstar. An agent, as such is not a servant, exactly a servant is generally for some purposes his masters implied agent, the extent of the agency depending upon the duties or position of the servant.2. The difference among the congeners of master and servant and of principal and agen t may be said to be this a principal has the remunerate to direct what work the agent has to do but a master has the further right to direct how the work is to be do. 3. In the present parapraxis, the powers did not spell a direct control and supervision of the Directors as of a master over his servant but be the appellants the agents of the Company who were to exercise their authority subject to the control and supervision of the Directors but were not subject in such exercise to the direct control or supervision of the principals. 4. The remuneration by way of commission of 2 1/2 per cent. of the amount of sale proceeds of the produce of the Company savoured more of the remuneration given by a principal to his agent in the carrying out of the general management of the business of the principals than of wages or salary which would not normally be on such a basis.5. on the whole these circumstances together with the power of sub-delegation go to establish that the appellants we re the agents of the Company and not merely the servants of the Company remunerated by wages or salary. 6. The objects of the appellants in this case inter alia were to act as agents for Governments or Authorities or for any bankers, manufacturers, merchants, shippers, Joint Stock Companies and others and carry on all kinds of agency business. This object standing by itself would comprise within its compass the activities of the appellants as the agents of the Company and constitute the work which they did by way of general management of the business of the company an agency business.Apart however from this thither is the further fact that there was a continuity of operations which established the activities of the appellants in the general management of the Company a business. 7. every(prenominal) these factors interpreted into consideration along with the fixity of tenure, the nature of remuneration and the assignability of their rights, are fitting to enable us to come to the conclusion that the activities of the appellants as the agents of the Company accomplished a business and the remuneration which the appellants received from the Company under the terms of the Agency Agreement was income, profits or gain from business. 8. The appellants were therefore right assessed for excess profits tax and these appeals must(prenominal) stand dismissed with costs. 2. P. Krishna Bhatta And Ors. vs Mundila Ganapathi Bhatta1955 queasy HCFACTSThe dispute in this case relates to three items of properties, viz., two parcels of land apply for raising paddy and are sliput in Kedila village and a coffee estate in Coorg,ISSUESwhether in regard to these items of properties Ganapathi Bhatta was benamidar and apparent owner? (IRRELEVANT ISSUE FOR US) whether air division 66, C.P.C. applies to the relationss relating to the two items or Kedila properties, in regard to which two sale certificates have been issued in favour of Ganapathi Bhatta. The other alleged in the p leadings that Ganapathi Bhatta was an agent for the joint family of Bheernayya throughout these transactions and that therefore the prohibition under voice 66, C.P.C., would not apply to this case. Ganapathi Bhatta by no stretch of imagination can be heard as the agent of Bheemayya for the purpose of buying this proportion in Court auction sale.PRINCIPLEIn legal phraseology, every someone who acts for some other is not an agent. A domestic servant renders to his master a personal service a person may cashbox some others field or tend his Hocks or work in his shop or factory or mine or may be utilize upon his roads or ways one may act for other in aiding in the performance of his legitimate or contractual obligations to ternion persons, as when he serves a overt carrier, warehouse-man or innkeeper in performance of the latters duties to the public. In none of these capacities he is an agent within the above meaning as he is not acting for another in dealings with tercet persons. It is only when he acts as representative of the other in business negotiations, that is to say, in the creation, modification, or termination of contractual obligations amidst that other and the third persons, that he is an agent.Representation of another in business negotiations with third persons so as to bind such other by his own acts as if they were done by the former, is of the essence of the relation of agency and the distinguishing feature between art agent and other persons who act for another. Looked at from this point of view, an agency is a contract of custom for the purpose of bringing another-in legal relation with a third company or in other words, the contract between the principal and agent is in general a contract of employment to bring him into legal relation with a third party Or to contract such business as may be acquittance on between him and the third party.An agent is thus a person either actually or by law held to be authoritative and employe d by any person to bring hint into contractual or other legal relations with a third party. He is a representative vested with authority, real or ostensible, to create voluntary autochthonic obligations for his principal by making promises or representations to third persons calculated get under ones skin them to change their legal relations. Representative credit and derivative authority may briefly be said to be the distinguishing features of an agent.HOLDINGIt is not declared in the pleadings in the present case as to when precisely Ganapathi Bhatta was established an agent, or on what terms he was so constituted or when the agency was got terminated or other details to spell out an agency. HE IS NOT AN AGENT. SIDE NOTE The karta is not the agent, or trustee of the joint family, but his position has been exposit as like that of a chairman of a committee 3.Loon Karan Sohan Lal vs Firm John And Co. And Ors.1967 All HCFactsThe defendant had entered into an agreement with the d efendant for the deliver of 15 bales of yarn. Since the complainant did not deliver on time, he went on to sue his principal, the govt. Of assam. Mr. Misra argued that the plaintiff was appointed by the Assam Government as their agent to perform the duties of procuring yarn and if in the performance of his duties as agent he suffered loss he is empower under percentages 222 and 223 of the Contract Act to be reimbursed by the Assam Government as principal. The agreement between the plaintiff and govt. Of Assam stated This agreement made between the Governor of Assam represented by the Additional Secretary in th Department of Supply (Textile) hereinafter called the Govt. of the one part and M/s Loonkaran Sohanla hereinafter called the agent of the other part. The agent has been appointed for the purpose of procuring yarfor the calendar month of August and September 1948 on the following terms and conditions.JUDGEMET but in my opinion the description of the plaintiff in the agreemen t Ex. C-l and in the letter Ex. 47 as the agent of the Assam government is not conclusive. The court must examine the true nature of the agreement and the subsequent dealings between the parties, and then decide whether it established a relationship of agency under the law. It is common experience that the word agent is frequently used to describe a relationship which is not an agency in law. an agent primarily means a person employed for the purpose of placing the principal in contractual or other relations with a third party and it is essential to an agency of this character that a third party should be in existence or contemplated. The agreement Ex. C-l does not suggest, level(p) by implication, that the plaintiff was to represent the Assam Government in any transaction or dealings with any other party or parties. No such parties were mentioned in the agreement or in contemplation of the signatories to the agreement.The conduct of the plaintiff after the agreement shows that he never functioned as the agent of the Assam Government. He entered into the agreement of sale of yarn with John and Co. in his own scream and on his own behalf he paid the price from his own sac and did not debit it to the Assam Government he regarded himself as the owner of the goods and filed this equip in his own name. He might have been advised, when things went wrong, that the Assam Government had described him as their agent and were therefore liable to reimburse him for theloss suffered by him in the discharge of his obligations under the agreement. He is authorize to our sympathy, but he cannot in the circumstances ask this Court to make the Government liable for his losses. Mr. Misra contended that even if the plaintiff was not employed under the agreement to represent the Assam Government in dealings with third persons, he was appointed for the purpose of procuring yarn for the Assam Government and thus employed to do any act for another and this made him an agent under Section 182.I am unable(p) to agree. There are several answers to this argument. First. it is based on a misapprehension of the words a person employed to do an act for another in Section 182 of the Contract Act. There is a distinction between a person employed In do an act for another and a person who does an act at the bidding if another. In the for the first time place the act done is not that of the person employed but of him who employs him in the second, the act is that of the person himself Again, in the first case, the person employed is an agent of the employer, in the second, he merely acts at the request of another. therefore again in the first case, under Section 222 the person is entitled to be indemnified against the consequences of all lawful acts done by him in the exercise of his authority as an agent, in the latter, he is entitled to be indemnified only if there is a contract of indemnity to this effect.If the plaintiff had been employed to buy and sell cotto n yarn on behalf of the Government of Assam, or asked by them to distribute yarn, belonging to the Government, he would have been their agent under Section 182 of the Contract Act and entitled to be indemnified for the consequences of all lawful acts done by him But the plaintiff, under the agreement, was to purchase yarn from others and sell it to consumers in Assam The utmost he can claim is that he entered into a transaction of sale with John & Co at the bidding of the Government of Assam.But there was no undertaking by that Government, either under the agreement exhibit C-1 or any other to indemnify the plaintiff against loss. 10. later a careful analysis of the agreement Exhibit C, I am of the opinion that it is really a license conferring upon the plaintiff the exclusive right to purchase yarn and sell it to consumers within the province of Assam. Though the plaintiff is called an agent, he was no more an agent in law than a licensee under a permit to sell intoxicating liquor subject to terms and conditions specified in the permit. Here a representative character would be required for him to be an agent which is absent.4. Unit Trust Of India vs Ravinder Kumar ShuklaThe plaintiff in error is a statutory corporation established under Section 3 of the UTI Act, 1963. As part of its activities the appellants float various schemes. Under the various schemes from time to time, the Appellant issue cheques towards maturity amount of the units purchased and/or towards repurchase value. It appears that the Appellant normally draw Account Payee, Non-transferable and Not Negotiable cheques and send them to the payee by registered invest.The Appellant started receiving a large number of complaints from unit pallbearers alleging non-receipt of the cheques. In all 1600 unit holders had not received cheques of the value of app. Rs. 3 Crores 35 lakhs.All these cheques were intercepted, new accounts opened in Banks/Post Offices in the names of payees of the cheques and thereafter the moneis were withdrawn leaving a minimum balance in the accounts. In respect of this colossal fraud, F.I.Rs. have been lodged, investigations and prosecution are in progress. The forefront before this Court is whether the loss is to be borne by the unit holder payee and/or by the Appellant. The answer to this question would depend on whether the post office was acting as an agent of the unit holder and/or the Appellant. Thus the law is that in the absence of any contract or request from the payee, mere posting would not amount to payment.In cases where there is no contract or request, either express or implied, the post office would continue to act as the agent of the drawer. In that case the loss is of the drawer. (drawer here is the appellant) any proof of any contract that the amounts could be sent by post or any proof that any request had been made by any of the payees that the amount be sent by post. Mr. Bhat was also asked whether there was any proof of any wo rkout from which it can be implied that the payee had requested/consented to have the cheques sent by post, since the prrof of such a contract could not be established. Appellant/ drawer held liable.