Decided on September 14,1954

Seth Laxmi Narain Gaddodia Respondents


- (1.) This judgment will dispose of three appeals (Regular First Appeal Nos. 13, 14 and 15 of 1953) brought by the three defendants against a judgment and decree of the learned Senior Subordinate Judge of Delhi dated the 6th December, 1952 decreeing the plaintiff's suit which was brought by Laxmi Narain Gaddodia against the three defendants praying for declaration, injunction and account, and in the alternative decree for damages for Rs. 6,00,000 with interest pendente lite.
(2.) On the 20th March, 1937 by a letter (Exhibit P.2 at page 179 of the paper book) L.N. Gaddodia & Co., were appointed selling agents to sell yarn and cloth of the Kanpur Cotton Mills Branch of the British India Corporation. The appointment was upto the end of the year and on probation and was terminable at the option of the Mills. The important clauses of the agreement are Nos. 1 to 4, 13 and 17. I reproduce paragraphs 3, 4, 13 and 17 are as follows :- "(3) All sales will be effected at the rates specified by the Managing Directors and/or the Management of the Cawnpore Cotton Mills. (4) You will publish and distribute throughout the United Provinces, Bihar and Orissa, Delhi, the Punjab and such other Provinces as may be stipulated by the Management, a printed list of rates at which sales will be made. This list will be revised and published at the discretion of the Management of the Cawnpore Cotton Mills. (13) You will at all times use your best endeavours to dispose of the entire productions of Yarn and Cloth of the Cawnpore Cotton Mills and will in particular immediately concentrate on disposing of the stocks of Yarn and Cloth which had accumulated at the time of your appointment. The rates at which sales will be made will be indicated to you from time to time by the Cawnpore Cotton Mills. (17) It is understood that a proprietor of your firm or your representative, Mr. D. Sharma, may act for and on behalf of your Company in any matter whatsoever that may appertain to this letter of appointment or the termination thereof and that one or other of them shall attend daily or as required at the office of the Cawnpore Cotton Mills. The services of D. Sharma will not be dispensed with by your Company without the prior sanction of the Cawnpore Cotton Mills."
(3.) On the 29th March, 1937 by a document (Exhibit P.1 at page 181) Laxmi Narain Gaddodia, the plaintiff, entered into a partnership with Dev Sharma defendant No. 1. This was for the selling agency of the Cawnpore Cotton Mills only and the shares were - Gaddodia 12 annas and Dev Sharma 4 annas. The plaintiff was the financier and Dev Sharma was the working partner....This agreement was for one year in the first instance but was to continue and last as long as the agency continued. Clause 3 of this agreement was as follows :- "3. That on the termination of the selling agency business neither of the parties to this agreement shall take up the said selling agency from the Mills.";

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