Das Gupta, J. - (1.) The question that arises for decision in these two Rules is whether the plaintiff who, while acting as broker for the sale of certain goods for their principal, the defendant firm, is entitled to brokerage commission, where it is found that they made the sale to themselves. The plaintiff having claimed brokerage commission at the rate mentioned in the bought and sold notes, the defendant raised the defence that as the broker was himself the buyer, no brokerage commission was paid. Another defence raised was that the contracts were not performed. We are no longer concerned with that defence as the finding that the contracts were performed has not been disputed before us, apparently as it cannot be disputed. In the courts below, reliance was placed on behalf of the defendant on section 236 of the Indian Contract Act for the contention that where the broker was the buyer, no brokerage was payable. Both the courts below held that section 236 had no application to the question of payment of brokerage commission. That view, in our judgment, is entirely correct.
(2.) It is contended before us, however, that in any case under section 220 of the Indian Contract Act, the plaintiff having been guilty of misconduct in making the sale to himself instead of finding a third party purchaser, is not entitled to any remuneration for this sale. Section 220 of the Indian Contract Act provides: "An agent who is guilty of misconduct in the business of agency is not entitled to any remuneration in respect of that part of the business which he has misconducted,
(3.) On behalf of the petitioner, Mr. Mitra, relied strongly on the decision of this Court in Ram Swaroop Mam Chand v. Chaju Ram and Sons (1) [I.L.R. (1937) 1 Cal. 757] . It was held in that case that an agent, employed to sell goods upon a remuneration, forfeits his remuneration if he buys the goods for himself and this notwithstanding that his principal knew at the time of performance that the agent was buying for himself. Panckridge J. observed: "I think it cannot be gainsaid that it is misconduct on an agent's part to deal on his own account in the business of the agency without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his knowledge on the subject. and after pointing out that "the defendants were never in a position to repudiate the contracts although they knew before performance that the plaintiffs were in fact the buyers" concluded that "prima facie under section 220 of the Indian Contract Act, the plaintiffs are not entitled to any remuneration in respect of the contracts in which they were the undisclosed principals although purporting to act as agents". It has to be mentioned that in an additional statement filed by the plaintiff, it was stated that the defendant firm at the time of performance knew that the plaintiff firm were in fact the principals and it was submitted that as the defendant elected to perform the said contracts with such knowledge they could not refuse to pay the plaintiff firm the brokerage stipulated.;