Judgment:
(Sri K. Satyanand,Honble Member)
These two appeals arise out of the same subject matter that came to be adjudicated in C.D.No.72/2003 on the file of District Forum, Srikakulam. The facts that led to filing these two appeals are briefly as follows:
The complainant claiming to have been motivated by opposite parties 1 and 2 placed an order with opposite party No.2 for the purchase of Offset Master Mini Printing machine of 45â x 20â size centralized lubrication for an amount of Rs.2,85,000/-. The said deal was confirmed by a document signed mutually by the complainant on one hand and the representative of the manufacturer, opposite party no.2 on the other as per Ex.A9. It is pertinent to point out that opposite party no.1(appellant) is not a party to the said confirmation. The complainant claimed to have paid a total amount of Rs.1,50,000/- to opposite party no.2 for the supply of the machinery for which he placed order with opposite party no.2. A further amount was outstanding due to opposite party no.2 yet in the further interaction, opposite party no.2 remained totally silent and in substance not only failed to collect the balance consideration but also to supply the machinery as agreed. Thus the complainant alleged that opposite party no.2 directly and also his agent opposite party no.1 who according to him was instrumental in encouraging him for this deal were guilty of deficiency in service and on that footing claimed reliefs,
Opposite party No.2 remained exparte though substituted service was effected after direct service failed.
Opposite party No.1 alone entered appearance and filed a counter opposing the claim as against him by urging that he was absolutely a stranger to the contract and was merely a liaison agent at the most and the confirmation of the contract of sale of goods, the part payment of consideration was all between the complainant on one hand and the manufacturer, opposite party No.2 on the other and it was rather incomprehensible as to how he could be saddled with any liability when there was no privity of contract.
In support of his case, the complainant filed his own affidavit and relied upon documents marked as Exs.A1 to A10. Opposite party no.1 also filed his own affidavit and did not file any documents.
On a consideration of the evidence adduced, the District Forum held not only opposite party No.2 but also opposite party no.1 for the claim of the complainant and issued directions against both of them jointly and severally.
Aggrieved by this order, the opposite party no.1 filed the appeal, F.A.No.1152/2009, reiterating the defenses taken by him in the counter itself and urging that the appreciation of facts as also law by the District Forum was absolutely erroneous.
Some time after the disposal of the C.D., the complainant filed the P.P against both the opposite parties obviously seeking their conviction in terms of Section 27. The District Forum for reasons incomprehensible passed an order only against the present appellant and committed him to prison after giving conviction by which it directed the opposite party no.1/appellant to undergo imprisonment for a period of one year.
Aggrieved by the said order, opposite party No.1/appellant filed the present appeal U/s 27 (a) C.P.Act, which is numbered as F.A.No.964/2007. In the memorandum of appeal, he urged several grounds which go to the root of the matter especially contending that he was absolutely not given any opportunity and the moment he was apprehended, he was immediately convicted and the punishment was imposed. This according to him was illegal. He also urged some other peripheral grounds.
In this appeal also, both sides addressed arguments.
As the result of this last mentioned appeal U/s.27 A is apt to abide by the result of the main appeal against the order in C.D. in so far as it related this appellant, the same is first taken up for adjudication.
The points that arise for consideration in these appeals are:
1) Whether the order passed against opposite party No.1 imposing joint and several liability along with opposite party no.2 is correct in law?
2) Whether there are any good grounds to interfere with the order of the District Forum? To what relief?
3) Whether the order passed by the District Forum convicting the appellant is valid in law?
1. In order to appreciate the extent of liability of opposite party no.1, it is first necessary to examine as to who are the parties to the present contract which is obviously the sale of machinery by opposite party no.2 to the complainant and then further examine as to what was the role of opposite party No.1 and his complicity and then his privity to the contract between the appellant and the complainant. The complainant himself relied upon documents to prove the contract of sale of goods with which we are concerned in this matter. He relied upon Ex.A9 dated 17-6-2002 which bears out the confirmation of the order for Master Mini Offset printing machine placed by the complainant proprietorship firm, Harin Graphics directly with the manufacturer, M/s. Perfects Soft Systems, in which it is the complainant and the manufacturer that only signed. No where in the said document, we find the signature of the /appellant.. Likewise, the part consideration for the said purchase order in terms of Ex.A9 was paid by the complainant only to the said manufacturer, Perfects Soft Systems as per Exs.A5 and A6. Thus on the face of it, the appellant is not at all a party or privy to the contract proper for the sale of the machinery in question between the complainant and the manufacturer, opposite party no.2.
In spite of so much of clarity in the matter, the complainant could successfully make an attempt before the District Forum to rope in the appellant to saddle the appellant as well with joint and several liability. In that process, he first tried to project the appellant as the agent of the manufacturer and that it was also the appellant that motivated the complainant to purchase the machinery. But he conveniently forgot that he was merely a liaison agent. In fact, it is not clear as to whose agent he was as the two principal documents namely, Ex.A7 and A8, that the complainant relied upon particularly to make out the case against the appellant, did not show that the appellant was the agent of opposite party No.2 and on the other hand, appellants descriptive particulars in those documents showed that he was merely a liaison agent without clearly telling us that he was such an agent of the manufacturer. Moreover, the machinery ultimately purchased by the complainant and the related manufacturer namely opposite party no.2, do not find a place in those two documents upon which not only the complainant but also the District Forum placed undue reliance to extend the liability to opposite party No.1/appellant. With this there remains only one more document ostensibly having an inkling inspiring the line of contention that appellant was the agent of the manufacturer. This is the brochure filed by the complainant as Ex.A4. At the fag end of the said brochure, we find a postscript saying âFor Andhra Pradesh contact, M.Seshadrivasaâ¦â¦â¦â¦â¦. â. It is absolutely ridiculous to say that opposite party No.1 is the agent of opposite party No.2 on this basis. Thus all the documents namely, Ex.A4, A7 and A8 mustered for support to link up opposite party no.1 and opposite party no.2 as the agent and the principal turn out to be devoid of any probative value in that behalf. On the other hand, Exs.A9, A5 and A6 clearly show that this is a bipartite contract between the complainant and opposite party no.2. Just as the complainant and the District Forum fell into an error in the appreciation of the fact, they also misapprehended the position of law.
It is a matter of common knowledge especially in legal circles that when a contract is entered into by an agent on behalf of the principal, it binds the principal and very rarely binds the agent. In this regard, what Section 230 of Indian Contract Act, 1872 postulates is worth noting:
230.Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.-In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.
Presumption of contract to contrary. Such a contract shall be presumed to exist in the following cases:
(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;
(2) where the agent does not disclose the name of his principal
(3) where the principal, though disclosed, cannot be sued.
As a matter of fact, this is not at all a case of the agent having entered into the contract on behalf of the principal. If it were such a case, then definitely as per Section226 of the Contract Act, the principal would have been bound by it. The facts here are the other way round. In other words, it is unfortunate that reliance is placed on a converse proposition which has no legal sanctity. It is thus abundantly clear that the order of the District Forum in so far as it relates to the appellant is erroneous as it rested upon totally wrong appreciation of facts as also law. This circumstance is a good ground to set aside the order of the District Forum as against opposite party no.1/appellant. Accordingly, the appeal, F.A.No.1152/2009 is allowed and the order of the District Forum in so far as it imposed liability against appellant/opposite party No.1 is set aside. The respondent/complainant is directed to pay costs of Rs.3,000/- to the appellant within six weeks from the date of receipt of this order.
Obviously the appellant came to be convicted to enforce an order which is found to be untenable against him. It is therefore, imperative that the P.P. proceedings against the appellant must be set aside in toto on this ground alone. Even otherwise, the way the P.P. proceedings are conducted by the District Forum it betrays a total imperviousness to the procedure laid down by Section 27 of the Consumer Protection Act, 1986, the provisions of which read as follows:
27. Penalties: (1).Where a trader or a person against whom a complaint is made 2[or the complainant] fails or omits to comply with any order made by the District Forum, the State Commission or the National Commission, as the case may be, such trader or person 2[or complainant] shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to three years, or with fine which shall not be less than two thousand rupees but which may extend to ten thousand rupees, or with both:
(2) Not withstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), the District Forum or the State Commission or the National Commission, as the case may be, shall have the power of a Judicial Magistrate of the first class for the trial of offences under this Act, and on such conferment of power, the District Forum or the State Commission or the National Commission, as the case may be, on whom the powers are so conferred, shall be deemed to be a Judicial Magistrate of the first class for the purpose of the Code of Criminal Procedure, 1973.
(3) All offences under this Act may be tried summarily by the District Forum or the State Commission or the National Commission as the case may be.
In the instant case, we do not find any material in the record to show that the District Forum had followed Criminal Procedure Code to the extent it is applicable to summary trails as mandated by Sub Sections 2 and 3 of Section 27 of the Consumer Protection Act, 1986 read with Section 262 Cr,P,C, read with other relevant provisions in Cr.P.C. as Chapter XX Cr.P.C. On the face of it, the order did not mention about taking the process through all the steps contemplated by the Cr.P.C. commencing from recording the sworn statement of the complainant/penalty petitioner, examination of the accused/ respondent, evidence of the petitioner then examination of the respondent U/s.313 Cr.P.C. and then taking the respondents defense evidence, if any, etc., The appellant also rightly pointed out that without giving him any opportunity, he came to be convicted the moment he was produced before the District Forum on N.B.W. This critism is probablised as the docket notes on the P.P. did not disclose any mandatory steps contemplated by Cr.P.C., having been resorted to.
Thus we are firmly of the opinion that this appeal also deserves to be allowed and accordingly allowed setting aside the conviction passed against the opposite party No.1. The respondent/complainant is directed to return the amount that he received from the opposite party/appellant herein under interim orders. It is however open to him to pursue his remedies as against the opposite party No.2 the order against which remained untouched in these proceedings. There shall be no order as to costs in regard to this appeal as one set of costs is already imposed in the main appeal.