S S SOMAYAJULU Vs. HOPE PRUDHOMME AND CO LTD
LAWS(APH)-1963-2-2
HIGH COURT OF ANDHRA PRADESH
Decided on February 04,1963

S.S.SOMAYAJULU Appellant
VERSUS
HOPE PRUDHOMME AND CO.LTD., MADRAS Respondents

JUDGEMENT

Venkatesam, J. - (1.) This is an appeal by the plaintiff against the Judgment and Decree of the learned Subordinate Judge, Guntur, in O.S. No. 33 of 1955 on his file by which he granted a decree only against the second defendant-company, and dismissed the suit as against defendants 1 and 3. The relevant facts may be briefly stated as follows : Hope Prudhomme Tobacco Company, which is the second defendant, is a Public Limited Company, and its Managing Agents are Hope Prudhomme & Co., the first defendant in the suit, which is a Private Limited Company. The first defendant-company was appointed as Managing Agents by an agreement dated 29th January, 1951, for a period of 20 years. The third defendant, M. F. Ehny is the Managing Director of both the first and second defendant-companies. The plaintiff's case is that the third defendant, while staying in the Connemara Hotel at Madras, on 7th December, 1950, as the Managing Director of the first defendant-company and as promoter of the second defendant-company, requested and induced the plaintiff to agree to be employed as Manager of the Branch of the second defendant-company to be opened at Guntur, on a remuneration to be paid from the date of the registration of that company. The second defendant-company was registered under the Indian Companies Act on 17th January, 1951 and obtained the certificate for commencement of business in or about July, 1951. Later, by mutual consent, the plaintiff's salary was fixed at Rs. 150 per mensem from July, 1951 to December, 1951, at Rs. 2,400 for the year 1952, and at Rs. 300 per mensem from January, 1953. The plaintiff acted as the Branch Manager of the second defendant-company at Guntur from January, 1951 till 7th July, 1953, when his services were terminated.
(2.) Though the salary due for the year 1951-52 was credited in the account-books of defendants 1 and 2, only a sum of Rs. 1,275 was paid, but not the balance. The plaintiff is entitled to three months' notice according to the agreement of service, and as such entitled to the salary for three months, i.e., Rs. 900 in lieu of notice. So, the amount due to him from the defendants towards salary is Rs. 4,805. The defendants requested the plaintiff to advance monies for the business on condition that he would be reimbursed later, and, pursuant to this, he advanced sums of money, part of which was reimbursed, and the balance of Rs. 6,402-15-6 was still due. Third defendant promised and gave a guarantee to the plaintiff in November, 1952, that he would pay all the amounts due to the plaintiff after his return from Europe whereto he was then proceeding. It was also alleged that the second defendant-company, by an extraordinary resolution of the shareholders, accepted the relinquishment of the Managing Agency of the first defendant-company, and made itself a department of the first defendant-company. The third defendant, being the Managing Director of the first and second-defendant companies, and also the person who by his promises and guarantees induced the plaintiff to accept the employment, and who had agreed to pay the amounts due to the plaintiff towards his salary and advances made by him, and made himself personally liable, should have satisfied the plaintiff's claim but failed to do so, and as such he is liable. The first defendant, it is alleged, is liable to pay the amount as it employed the plaintiff in their capacity as the Managing Agents of the second defendant-company, and agreed to pay the salary and advances, and, also on the ground that the second defendant-company became its department after 24th September, 1952. Thus, all the three defendants were said to be liable. The suit is, therefore, laid for recovery of Rs. 12,345-9-0 on the ground that Rs. 10,227-15-6 was due as per settlement of the account, Rs. 80 towards arrears of salary from 1st July, 1953 to 8th July, 1953, Rs. 900 towards three months' salary in lieu of notice, and Rs. 1,137-9-6 by way of interest at 6 per cent, per annum from 6th August, 1953 to the date of the plaint.
(3.) The second defendant-company, while denying the allegations, admitted that the plaintiff was employed by it as its Branch Manager at Guntur, and that the second defendant-company alone was responsible to the plaintiff, but not defendants 1 and 3. It was alleged that the resolution referred to was passed in order to run the second defendant-company more economically through the staff and establishment of the first defendant-company, without having to pay any remuneration therefor, but that did not make the first defendant-company liable. It admitted that a sum of Rs. 10,227-15-6 stood to the credit of the plaintiff in the books of the second defendant-company against which some adjustment were to be made and accounts had to be taken.;


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