THARPARKAR SUGAR MILLS LTD Versus Messrs ALI INTERNATIONAL (REGD.)
ORDER
1. This order shall dispose of the application for leave to defend the suit filed by the defendant in terms of order dated 11‑3‑2002.
2. The plaintiff, through contract (Annexure‑B) supplied sugar to Z.N. Trading (Singapore) (Pvt.) Ltd., wherein the defendant acted as purchaser agent on behalf of the buyer. In terms of the contract, the plaintiff supplied sugar worth US$ 2,42,000. Against the supply, the plaintiff received US$ 58,080 leaving balance of remaining sale price. On 22‑6‑1999, MOU was signed between the plaintiff and the defendant through its partner Syed Shahid Ali (Annexure‑E) whereby the defendant, as buyer's agent at Karachi, to receive payment in Pakistan currency at the exchange rate of 51.60 amounting to Rs.6,776,112, whereby the defendant issued post‑dated cheques detailed in MOU drawn on Allied Bank as final settlement of price of export subject to realization of the above cheque. In case, for any reason, these cheques are not honoured on due date, Messrs Ali International on behalf of the principal Messrs Z.N. Trading (Singapore) will make the payment in foreign currency and the discount as agreed will stand withdrawn. It is case of the plaintiff that the balance sale amount was not realized, on presentation of the cheques, the same were bounced. Hence the present suit under summary procedure.
3. The leave to defend the suit has been sought on the grounds that (i) in absence of principal in terms of section 230 of the Contract Act the suit against the agent is not maintainable, (ii) the amount of cheque has been received by the plaintiff from the principal through Annexures‑D and F to the application.
4. Mr. Raja Sikandar Yasir, learned counsel for the defendant has taken me through para. 4 of the plaint to demonstrate that the sale amount was US $ 2,42,000 out of said amount a sum of US $ 58,080 was admitted to have been received by the plaintiff and he maintained that the cheques were issued by the defendant as security for payment by the principal which have been received through Annexures "D" and "F" and further maintained that the total amount received through Annexures "D" and "E" comes to same amount viz. US $ 81,472 and US $ 67,727 after deducting bank charges.
5. Conversely, the learned counsel for the plaintiff contended with vehemence that the cheques were bounced and no further proof is required to prove the outstanding amount. Therefore, leave to defend application is liable to be dismissed. His further contention was that the amount mentioned in Annexures E and F were obtained through third party only to save time for refund of duty as, period of claim was expiring.
6. Admittedly, the defendants are agent of the principal stationed at Singapore. The plea of the defendant is the amount has been realized whereas the plea taken by the plaintiff is that the said amount was arranged from third party. Section 230 of the Contract Act provides that agent cannot personally enforce nor be bound by, contracts on behalf of principal. In 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.
7. Presumption of contract contrary to 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.
8. So far the plea of non‑main tainability of the suit is concerned in terms of section 230 the defendant has issued cheque for repayment. The suit is based on cheque issued by the defendant for repayment of the amount due from principal. The defendant's position is thus of guarantor. A guarantor can be sued independent of debtor. Therefore, such plea is not available.
9. The second plea is that the amount has been released, whereas the plea of the plaintiff is that amount received against export by the buyer, was arranged through third party only to save the period of limitation for claim of duty drawback, though details mentioned in these annexures pertain to the contact. Therefore, this fact needs evidence whether the amount has been released or not, which cannot be decided at this stage. Therefore, leave to defend application is granted. The defendant is allowed to defend the suit unconditionally. Written statement to be filed within 4 weeks.
10. M.H./T‑50/K Application allowed.