case laws in agency

8/19/2019 case Laws in Agency

1/21

Page 1

MANU/TN/0264/1955

Equivalent Citation: AIR1955Mad648

IN THE HIGH COURT OF MADRAS

Appeal Nos. 499 and 500 of 1950

Decided On 15.0!.1954

Appellan"s P. Kri!na "!atta an# Or.

$.

Responden" Mun#ila Gana%at!i "!atta ie#' an# Or.

Hon()le *u#+e,Cora-:

#. $o%inda Menon and Ra&as'a&i( )).

Counel:

*o+ Appellan"/#e"i"ione+/#lain"iff T. ,+is-na Rao( Ad%.

*o+ Responden"s/Defendan" M.,. Na&ia+ and ,. i"-al Rao( Ad%s.

Su)e/t: Civil

Su)e/t: Pro%ert0

A/t,Rule,Or#er:

ode of i%il #+oced+e( 1908 #3 ec"ion 66 on"+ac" Ac"( 18!2 ec"ion 182

Cae Re1erre#:

Ro-ee 7all %. Dindaal 7all( 21 "- R 25! Ra& Manic: Mood %. )na+aen( 6 ID O3 28;

M".


2/21

Page 2

Discssed

6

Men"ioned

4

Cae Note:

Civil 2 )ena-i trana/tion 2 Se/tion 33 o1 Co#e o1 Civil Pro/e#ure4 5678 an# Se/tion 589 o1

Contra/t A/t4 589 2 )ena-i trana/tion not inten#e# to )e o%erative 2 ;!en trana/tion

on/e -a#e out to )e )ena-i t!en )ena-i#ar a)olutel0 #ia%%ear 1or title 2 !e i -erel0

na-e len#er in trana/tion 2 !i na-e i i-%l0 an alia 1or t!at o1 %eron )ene1i/iall0

interete#.

*UDGMENT

Ra-a;a-i4 *.

© Manupatra Information Solutions Pvt. Ltd.


3/21

Page 3

1. T-ese a+e "'o connec"edappeals a+isin> f+o& "-e dec+ees and =d>&en" of "-e lea+ned

o+dina"e =d>e of o"- ,ana+a in O.. Nos. 115 of 194! and 12! of 1948.

2. T-e disp"e in "-is case +ela"es "o "-+ee i"e&s of p+ope+"ies( %i?.( "'o pa+cels of land sed fo+

+aisin> padd and a+eca n" in ,edila %illa>e and a coffee es"a"e in oo+>( "en &iles f+o&

Me+ca+a.

@ @ @

;14. Af"e+ discssin> "-e fac"s of "-e case is 7o+ds-ip p+oceeded.3

T-e poin"s '-ic- fall fo+ conside+a"ion a+e "'ofold( %i?.( '-e"-e+ in +e>a+d "o "-ese i"e&s of

p+ope+"ies $anapa"-i a+d "o '-ic- "'o

sale ce+"ifica"es -a%e een issed in fa%o+ of $anapa"-i +ea"es" difficl" "-a" a+ises in dealin> 'i"- "-e ena&i "+ansac"ions is

-o' "o dis"in>is- "-e +eal f+o& "-e ena&i. *o+ indeed i" is a &a""e+ of co&&on eCpe+ience "-a"

in "-ese ena&i "+ansac"ions( "-e p+oceedin>s '-ic- 'old a""end a +eal "+ansfe+ a+e ca+efll

>one "-+o>- in o+de+ "o "-+o' a %eil of +eali"( and all "-e so+dina"e pa+"s a+e no"o+iosl fi""ed

in "o co++espond 'i"- "-e ena&i a>+ee&en" in i"s en"i+e". T-e sa&e &o"i%e '-ic- dic"a"ed an

os"ensile o'ne+s-ip 'old na"+all dic"a"e an appa+en" co+se of dealin> in acco+dance 'i"-

sc- o'ne+s-ip Ro-ee 7all %. Dindaal 7all( 21 R 25! A3. And "-e sseBen" ac"s done

in "-e na&e of "-e no&inal o'ne+ 'old e eCplained a +efe+ence "o "-e o+i>inal "+ansac"ion.

18. T-e essen"ial c-a+ac"e+is"ic of "-e ena&i "+ansac"ion is "-a" i" is no" in"ended "o e ope+a"i%e.

-en a "+ansac"ion is once &ade n" "o e ena&i( "-e ena&ida+ asol"el disappea+s fo+ "-e

"i"le. e is &e+el a na&elende+ in "-e "+ansac"ion( In o"-e+ 'o+ds( -is na&e is si&pl an alias

fo+ "-a" of "-e pe+son eneficiall in"e+es"ed. T-e fi+s" "-in> "-e+efo+e "-a" -as >o" "o e done is "o

find o" "-e +eal in"en"ion of "-e pa+"ies.



4/21

Page 4

19. In o+de+ "o find o" '-a" is "-e +eal in"en"ion of "-e pa+"ies "o a "+ansac"ion( no -a+d and fas"

+le can e laid do'n( " eac- case( as i" a+ises( " e decided acco+din> "o i"s o'n peclia+

ci+c&s"ances and p+oaili"ies. In scannin> "-e ci+c&s"ances and 'ei>-in> "-e p+oaili"ies(

"-e consenss of le>al decisions la do'n "-a" 'e &s" -a%e +e>a+d "o "-e follo'in> fac"s( %i?.(

i3 "-e so+ce f+o& '-ic- "-e p+c-ase &one 'as de+i%ed ii3 "-e possession of "-e p+ope+"(

i.e.( a3 "-e pa+" in possession( and "-e na"+e and c-a+ac"e+ of -is possession 3 '-e"-e+

possession 'as "a:en af"e+ "-e alle>ed >if" o+ p+c-aseIf no" "a:en( '- no" iii3 "-e posi"ion of

"-e pa+"ies and "-ei+ +ela"ion "o one ano"-e+ i%3 "-e ci+c&s"ances( pecnia+ o+ o"-e+'ise( of

"-e alle>ed "+ansfe+o+ %3 -is &o"i%e in &a:in> "-e alle>ed "+ansfe+ %i3 "-e cs"od and

p+odc"ion of "-e "i"ledeed and %ii3 "-e p+e%ios and sseBen" condc" of "-e pa+"ies. -in> and app+ecia"ion of "-ei+ %ale 'old >o a >+ea" 'a "o'a+ds indica"in> '-e"-e+ "-e

o'ne+s-ip -as een +eall "+ansfe++ed( o+ '-e+e "-e +eal "i"le lies. e%idence of so&e one o+ o"-e+ of "-e fac"s indica"ed ao%e "o

+e" "-e p+es&p"ion( -e 'ill fail. "-e +den of p+oof pon p+ope+ pa""ies( 'e

&s" see '-e"-e+ "-e fac"s p+o%ed in "-is case fi" in consis"en"l 'i"- "-e "-eo+ of "-e ena&i o+ +eal co+se of dealin> 'i"- "-e p+ope+" and =d>e acco+din>l.

20. Applin> "-ese p+inciples 'e find "-a" "-e+e is no &o"i%e in "-is case fo+ "-e =oin" fa&il of

a+d "o i"e& 1 "-e

case fo+ #.. 1 is "-a" -e -i&self acco&panied defendan" 9 "o "-e o+" ac"ion sale and 'as

p+esen" o"- a" "-e "i&e '-en -is fa"-e+ >a%e &one "o defendan" 9 and also a" "-e li&e '-en

defendan" 9 p+c-ased "-e p+ope+" in o+" ac"ion. If "-a" 'e+e so( "-e+e can e no +eason fo+

"a:in> "-e sale ena&i in "-e na&e of $anapa"-i in o+"( and a""endin> "o "-e a""endan" "+ansac"ions. I" is also si>nifican" in "-is



5/21

Page 5

connec"ion "-a" so fa+ as "-e p+ope+" in "-e na&e of $anapa"-i a+d "o i"e& 2( i" in%ol%ed onl a s& of Rs. 15

conce+nin> '-ic- "-e+e cold e no disp"e "-a" i" cold -a%e co&e f+o& $anapa"-i e "o Ra&a Rao de" -as een &ade $anapa"-i

- "o +efe+ "o EC. "-a" $anapa"-i "-a" -e 'as no" a pape+ as -e is pic"+ed "o e and "-a" -e 'as no" dependen" pon -

-e is fond "o -a%e een s&&oned -i& se%e+al "i&es and no eCplana"ion is fo+"-co&in> '-

"-is Upend+a -as no" een eCa&ined. In o"-e+ 'o+ds( as +i>-"l poin"ed o" "-e lea+ned

o+dina"e )d>e( "-e e%idence +e>a+din> "-e fnds is no" clinc-in> ei"-e+ 'a. T-e+e is onl "-e

inconclsi%e e%idence of #.. 1 as a>ains" "-e e%idence of D.. 1 sppo+"ed so&e pa+"icla+s.

e need no" poin" o" "-a" '-en $anapa"-i


6/21

Page 6

ad=s"&en" e"'een -i&self and in -is cs"od "-e o+i>inal "i"le deeds +ela"in> "o

"-ese p+ope+"ies. T-e cs"od of "i"le deeds -as al'as een conside+ed "o e an i&po+"an"

ci+c&s"ance s-o'in> '-o "-e +eal o'ne+ is. I" is Bi"e "+e "-a" in o+de+ "o >e" o%e+ "-is #.. 1

-as een alle>in> "-a" $anapa"-i a"ions of "-is na"+e. In 194; i"self

"-e fa&il of "o #.. 1( -ad s"a+"ed sspec"in> "-e +eliaili" of $anapa"-i

+ee&en" EC. A.51. If "-a" 'e+e so( '- did "-e no" as: fo+ "-e -andin>

o%e+ of "-e "i"le deeds follo'in> i" p 'i"- "-e "+ansfe+ of +e>is"+ o+ "-e eCec"ion of "-eas'a"-a Ml>eai +efe++ed "o in EC. A.51G T-e lea+ned o+dina"e )d>e "-e+efo+e -as +i>-"l

placed +eliance pon "-is ci+c&s"ance as discon"in> "-e s"o+ of #.. 1 and "-e cs"od of "-e

"i"le deeds 'i"- D.9 as a s"+on> ci+c&s"ance in fa%o+ of -is %e+sion.

2;. T-o>- i" 'as asse+"ed #.. 1 "-a" "-e 'e+e in possession of "-e p+ope+"ies in disp"e( i"

is fond as a &a""e+ of fac" "-a" $anapa"-i "o "-e -ose-old d"ies and"-a" af"e+ disp"es a+ose -e did no" +e&e&e+ if -e H"oo: leases f+o& "-e "enan"s o+ no". e also

ad&i""ed "-a" -e p+odced ce+"ain leases in "-e si"s filed defendan" 9 a>ains" -is "enan"s "

"-a" -e did no" +e&e&e+ "o '-ic- ea+ "-e +ela"ed "-o>- "-e 'e+e in -is na&e and -e


7/21

Page 7

is "-e #a"el and is also seen "o e 'ell%e+sed in o+" affai+s. I" is o%ios "-a" "-e pa""a( cis"

+eceip"s and leases all s"and in "-e na&e of defendan" 9. I" is no" "-e case fo+ #.. 1 "-a" "-is

$anapa"-i ene+all conside+ed an

i&po+"an" fac"o+ fo+ de"e+&inin> '-e"-e+ a "+ansac"ion is a ena&i one o+ no" is fond "o e

defini"el 'i"- $anapa"-i &en" of "-e lo'e+ o+" in O.. No. 12! of 1948 'ill s"and si"al &odified in so fa+ as one

&oie" of "-is coffee es"a"e is conce+ned and in "-e li>-" of "-e ose+%a"ions &ade ao%e.

;6. #oin" 2. *+o& "-e ea+lies" "i&es do'n "o "-e p+esen" da ena&i p+c-ases a" ac"ion sales

-a%e een fo+idden "-e i%il #+oced+e ode see Re>la"ion II of 1!99 and "-e dde+

De'ani Adala" case ofRa& Manic: Mood %. )na+aen( 6 I D 28; in>

&e&e+ of a ind fa&il in "-e na&e of a "-i+d pe+son. -e+e "-e &ana>in> &e&e+ of a

ind fa&il &a:es a p+c-ase 'i"- =oin" fa&il fnds " "a:es "-e sa"e in "-e na&e of a "-i+d

pe+son( "-e+e is a conflic" of opinion as "o '-e"-e+ an &e&e+ of "-e fa&il can se "-e "-i+d

pe+son on "-e >+onds "-a" "-e p+c-ase 'as ena&i fo+ "-e &ana>in> &e&e+ and so e&pi+esfo+ "-e enefi" of "-e *a&il. T-is o+" -as -eld "-a" -e canide Na"a+a=a Mdalia+ %.

,a&as'a&i Mdalia+( A I R 1922 Mad 481 E3. T-e +eason is "-a" a p+c-ase a &ana>in>

&e&e+ in "-e na&e of a "-i+dpe+son canno" e conside+ed "o -a%e een &ade on e-alf of all

"-e &e&e+s of "-e fa&il and so canno" e conside+ed "o -a%e een &ade Hon e-alf of "-e

plain"iffH 'i"-in "-e &eanin> of "-e sec"ion. T-e Alla-aad i>- o+" -as -eld "o "-e con"+a+

asin> i"s decision on "-e >+ond "-a" a p+c-ase a &ana>in> &e&e+ is &ade on e-alf of all



8/21

Page

"-e &e&e+s of "-e fa&il and so is &ade on e-alf of "-e plain"iff and canno" e p+es&ed "o e ac"in>

on e-alf of "-e fa&il. In "-e p+esen" case $anapa"-i "-e applica"ion of

ec"ion 66( .#..( on "-e >+ond "-a" "-e si" in "-e p+esen" ci+c&s"ances 'old no" lie. T-e

o"-e+ side an"icipa"in> "-is o=ec"ion -as "-+o>-o" een alle>in> in "-e pleadin>s "-a"

$anapa"-i en" of en". A do&es"ic se+%an"

+ende+s "o -is &as"e+ a pe+sonal se+%ice a pe+son &a "ill ano"-e+s field o+ "end -is oc:s o+

'o+: in -is s-op o+ fac"o+ o+ &ine o+ &a e e&ploed pon -is +oads o+ 'as one &a ac" fo+

ano"-e+ in aidin> in "-e pe+fo+&ance of -is le>al o+ con"+ac"al oli>a"ions "o "-i+d pe+sons( as

'-en -e se+%es a plic ca++ie+( 'a+e-ose&an o+ inn:eepe+ in pe+fo+&ance of "-e la""e+s d"ies

"o "-e plic. In none of "-ese capaci"ies -e is an Ha>en"H 'i"-in "-e ao%e &eanin> as -e is no"

ac"in> fo+ ano"-e+ in dealin>s 'i"- "-i+d pe+sons. I" is onl '-en -e ac"s as +ep+esen"a"i%e of "-eo"-e+ in siness ne>o"ia"ions( "-a" is "o sa( in "-e c+ea"ion( &odifica"ion( o+ "e+&ina"ion of

con"+ac"al oli>a"ions e"'een "-a" o"-e+ and "-e "-i+d pe+sons( "-a" -e is an Ha>en".H

Rep+esen"a"ion of ano"-e+ in siness ne>o"ia"ions 'i"- "-i+d pe+sons so as "o ind sc- o"-e+

-is o'n ac"s as if "-e 'e+e done "-e fo+&e+( is of "-e essence of "-e +ela"ion of a>enc and

"-e dis"in>is-in> fea"+e e"'een a+" Ha>en"H and o"-e+ pe+sons '-o ac" fo+ ano"-e+.

7oo:ed a" f+o& "-is poin" of %ie'( an a>enc is a con"+ac" of e&plo&en" fo+ "-e p+pose of

+in>in> ano"-e+in le>al +ela"ion 'i"- a "-i+d pa+" o+ in o"-e+ 'o+ds( "-e con"+ac" e"'een "-e

p+incipal and a>en" is p+i&a+il a con"+ac" of e&plo&en" "o +in> -i& in"o le>al +ela"ion 'i"- a

"-i+d pa+" o+ "o con"+ac" sc- siness as &a e >oin> on e"'een -i& and "-e "-i+d pa+". Ana>en" is "-s a pe+son ei"-e+ ac"all o+ la' -eld "o e a"-o+ised and e&ploed an pe+son

"o +in> -in" in"o con"+ac"al o+ o"-e+ le>al +ela"ions 'i"- a "-i+d pa+". e is a +ep+esen"a"i%e

%es"ed 'i"- a"-o+i"( +eal o+ os"ensile( "o c+ea"e %oln"a+ p+i&a+ oli>a"ions fo+ -is p+incipal

&a:in> p+o&ises o+ +ep+esen"a"ions "o "-i+d pe+sons calcla"ed indce "-e& "o c-an>e "-ei+

le>al +ela"ions. Rep+esen"a"i%e c-a+ac"e+ and de+i%a"i%e a"-o+i" &a +iefl e said "o e "-e

dis"in>is-in> fea"+es of an a>en".



9/21

Page !

I" is no" s"a"ed in "-e pleadin>s in "-e p+esen" case as "o '-en p+ecisel $anapa"-i enc. On "-e o"-e+ -and( i" is seen "-a" $anapa"-i

en" of en" -e ons"i""ed "'o la'e+s fo+ "-a" p+pose.

T-e co++espondence in "-is case clea+l sno's "-a" en". On "-e o"-e+ -and( in +e>a+d "o "-e fi+s" "'o

i"e&s $anapa"-i -" and

as +e>a+ds "-e coffee es"a"e -e and "-e =oin" fa&il of as eBal

pa+"ne+s. T-e+efo+e( "-e plea of a>enc in%en"ed "o >e" o%e+ ec"ion 66( .#..( fails. In +e>a+d "o

"-e plea of $anapa"-i - o+" in D+>adas De %. alananda DeMANU/ of "-e sec"ion( " on e-alf of

defendan" 1( i" on e-alf of an one. T-ese 'o+ds in "-e sec"ion +efe+ "o p+i%a"e a>+ee&en"s o+

nde+s"andin>s e"'een "-e ena&ida+ and "-e pe+son '-o e&plos -i&-

Dood-oo+ia %. $anes- -nde+ en( 12 7 R ;1! 13. #lain"iff does no" clai& "-e p+ope+"

on "-e >+ond "-a" i" 'as +o>-" on -is e-alf( o+ e%en on e-alf of "-e =oin" fa&il. is case is

"-a" "-e =oin" fa&il( in fac"( o>-" i" ecase i" 'as o>-" 'i"- fnds elon>in> "o "-e =oin"

fa&il defendan" 1( '-o as :a+"a 'as( in "-e 'o+ds of Mane in -is 'o+: on ind la'

ac"in> as i"s &o"-piece. T-e :a+"a is no" "-e a>en"( o+ "+s"ee of "-e =oin" fa&il( " -is posi"ion -as een desc+ied as li:e "-a" of a c-ai+&an of a co&&i""ee.

T-e p+c-ase ein> &ade o" of =oin" fa&il fnds( ipso fac"o i" eco&e i&&edia"el "-e

p+ope+" of "-e =oin" fa&il ope+a"ion of la'.- Dood-oo+ia %. $anes- -nde+

en( sp+a3 I3. No+ does "-e plain"iff clai& "-+o>- defendan" 1( in "-e sense indica"ed in "-e

sec"ion. is "i"le is no" de+i%a"i%e( li:e "-a" of an -ei+( le>a"ee( assi>nee o+ p+c-ase+( and( if i"

cold e a+>ed "-a" "-e plain"iff -o'e%e+ nfo+"na"el( did fall 'i"-in "-e 'o+ds of sec"ion

13( if +ead li"e+all and s"+ic"l( -e is p+o"ec"ed nde+ "-e p+o%isions of sec"ion 23.H

T-e lea+ned Ad%oca"e M+. ,+is-na Rao so>-" "o >e" o%e+ "-is posi"ion pleadin> "-a" "-e "e+&Hpe+sonH in ec"ion 66( .#..( canno" e &ade "o co%e+ =oin" fa&il and fo+ "-is con"en"ion 'e

see no a"-o+i" o+ +eason "o p-old. On "-e o"-e+ -and( "-e "e+& pe+sonH is 'ide eno>- "o

co%e+ "-e =oin" fa&il of


10/21

Page 1"

In o"-e+ 'o+ds( "-is 'as no" a case of "-e p+ope+" in de+o>a"ion "o "-e

=oin" fa&il " "-e =oin" fa&il i"self p+c-ased i" and is no" "-e case of "-e -ai+&an of "-e

o&&i""ee +efe++ed "o in "-e alc""a decision in> p+ope+" " "-e o&&i""ee i"self in>

"-e p+ope+". I" is "-is en"i" o+ pe+son '-ic- is -i" ec"ion 66( .#.. T-e+efo+e( "-o>- i" -as

eco&e "-eo+e"ical in %ie' of o+ p+e%ios findin>s( 'e -old "-a" ec"ion 66( .#..( on "-e

pleadin>s of "-e =oin" fa&il of


11/21

Page 11

Cae Re1erre#:

Eas" India #+ospec"in> ndica"e %s. o&&issione+ of ECcess #+ofi"s TaC

MANU/enc als+s 7a's of En>land ails-a& Edi"ion ol&e 22

als+s 7a's of En>land ails-a& Edi"ion ol&e 1

Citin+ Re1eren/e:

Discussed

3

Mentioned

1

Cae Note:

Dire/t Ta>ation 2 ae-ent o1 in/o-e 2 Se/tion ? o1 Partner!i% A/t 2 a%%ellant a

re+itere# /o-%an0 entere# into an a+ree-ent ;it! Mill /o-%an0 a%%ointin+ it a+ent 1or

t!irt0 0ear 2 a-ount re/eive# )0 a%%ellant 1ro- Mill /o-%an0 ;ere aee# un#er

in/o-e ta> 2 a%%ellant /onten#e# re-uneration re/eive# 1ro- t!e Mill /o-%an0 ;a not

ta>a)le a it ;a not %ro1it or +ain 1ro- )uine 2 1ollo;in+ quetion re1erre# to Hi+!

Court 2 ;!et!er un#er t!e ter- o1 t!e a+ree-ent t!e %etitioner i an e-%lo0ee o1 t!e Mill

Co-%an0 or i /arr0in+ on )uine 2 ;!et!er t!e re-uneration re/eive# 1ro- t!e Mill i

on a//ount o1 ervi/e or i t!e re-uneration 1or )uine 2 -atter #e/i#e# a+aint a%%ellant

2 a%%ellant -ove# to t!e Su%re-e Court 2 Court o)erve# t!e o)e/t o1 t!e a%%ellant in

t!i /ae inter alia ;ere to a/t a a+ent 1or Govern-ent 2 a%%ellant ;ere t!ere1ore ri+!tl0

aee# 1or e>/e %ro1it ta>.



12/21

Page 12

In#utr0: I&po+"e+s

*UDGMENT

N.H. "!a+;ati4 *.

1. T-ese a+e "'o appeals f+o& "-e =d>&en"

and decision of "-e i>- o+" of )dica"+e

a" de+aad ans'e+in> ce+"ain Bes"ions

+efe++ed a" "-e ins"ance of "-e appellan"s

"-e o&&issione+ of ECcess #+ofi"s TaC(

de+aad( and ad=d>in> "-e liaili" of "-e

appellan"s fo+ eCcess p+ofi"s "aC in +e>a+d "o

"-e a&on"s +ecei%ed "-e& as

+e&ne+a"ion f+o& "-e De'an opal Mills o&pan 7"d. as i"s

A>en"s.

2. T-e Mills o&pan 'as +e>is"e+ed on "-e

14"- *e+a+( 1920( a" de+aad in "-e

"-en "e++i"o+ies of is ECal"ed i>-ness "-e

Ni?a&. T-e appellan"s 'e+e +e>is"e+ed as a

p+i%a"e li&i"ed co&pan a" enc a>+ee&en" 'as en"e+ed in"o e"'een"-e Mills o&pan and "-e appellan"s

appoin"in> "-e appellan"s i"s A>en"s fo+ a

pe+iod of ;0 ea+s on ce+"ain "e+&s and

condi"ions "-e+ein +eco+ded. T-e appellan"s

"-+o>-o" 'o+:ed onl as "-e A>en"s of "-e

Mills o&pan and fo+ "-e *asli ea+s 1;51

and 1;52 "-e +ecei%ed "-ei+ +e&ne+a"ion

nde+ "-e "e+&s of "-e A>enc a>+ee&en". A

no"ice 'as issed nde+ sec"ion 1; of "-e

de+aad ECcess #+ofi"s TaC Re>la"ion "-e ECcess #+ofi"s TaC Office+ callin> pon

"-e appellan"s "o pa "-e a&on" of "aC

appe+"ainin> "o "-ese c-a+>eale accon"in>

pe+iods. T-e appellan"s s&i""ed "-ei+

accon"s and con"ended "-a" "-e

+e&ne+a"ion +ecei%ed "-e& f+o& "-e

Mills o&pan 'as no" "aCale on "-e

>+ond "-a" i" is 'as no" inco&e( p+ofi"s o+

>ains f+o& siness and 'as o"side "-e pale

of "-e ECcess #+ofi"s TaC Re>la"ion. T-is

con"en"ion of "-e appellan"s 'as ne>a"i%ed

and on "-e 24"- Ap+il( 1944( "-e ECcess

#+ofi"s TaC Office+ &ade an o+de+ assessin>

"-e inco&e of "-e appellan"s fo+ "-e

accon"in> pe+iods 1;51 and 1;52 *asli a"

Rs. 8(95! and Rs. 8;(!68 +espec"i%el and

assessed "-e "aC acco+din>l. An appeal 'as

"a:en "-e appellan"s "o "-e Dep"

o&&issione+ of ECcess #+ofi"s TaC '-o

disallo'ed "-e sa&e. An applica"ion &ade

"-e appellan"s nde+ sec"ion 4823 fo+

s"a"e&en" of "-e case "o "-e i>- o+" 'as

+e=ec"ed "-e o&&issione+ and "-e

appellan"s filed a pe"i"ion "o "-e i>- o+"

nde+ sec"ion 48;3 "o co&pel "-eo&&issione+ "o s"a"e "-e case "o "-e i>-

o+". An o+de+ 'as &ade "-e i>-

o+" on "-is pe"i"ion di+ec"in> "-e

o&&issione+ "o s"a"e "-e case and "-e

s"a"e&en" of "-e case 'as s&i""ed "-e

o&&issione+ on "-e 26"- *e+a+( 1946.

*o+ Bes"ions 'e+e +efe++ed "-e

o&&issione+ "o "-e i>- o+"s as nde+

13 -e"-e+ "-e #e"i"ione+ o&pan is a pa+"ne+s-ip fi+& o+ a +e>is"e+ed fi+& G

23 -e"-e+ nde+ "-e "e+&s of "-e

a>+ee&en" "-e pe"i"ione+ is an e&ploee of

"-e Mills o&pan o+ is ca++in> on

siness G



13/21

Page 13

;3 -e"-e+ "-e +e&ne+a"ion +ecei%ed f+o&

"-e Mills is on accon" of se+%ice o+ is "-e

+e&ne+a"ion fo+ siness G

43 -e"-e+ "-e p+inciple of pe+sonal

Balifica"ion +efe++ed "o in sec"ion 2( clase

43( of "-e ECcess #+ofi"s Re>la"ion is

applicale "o "-e #e"i"ione+ o&pan G

;. T-ese Bes"ions 'e+e of conside+ale

i&po+"ance and 'e+e +efe++ed fo+ decision "o

"-e *ll "-e

Bes"ions 23 and ;3 '-ic- 'e+e "-e onl

Bes"ions conside+ed de"e+&ina"i%e of "-e

+efe+ence a>ains" "-e appellan"s. T-e

appellan"s appealed "o "-e )dicial

o&&i""ee. is"e+ed co&pan as sc- cold e said

"o e possessed of an pe+sonal Balifica"ion

in "-e &a""e+ of "-e acBisi"ion of "-a"

inco&e.

5. T-e p+incipal Bes"ions '-ic- 'e+e

"-e+efo+e a+>ed efo+e "-e i>- o+" a"

de+aad and efo+e s 'e+e "-e Bes"ions

23 and ;3 '-ic- in%ol%ed "-e de"e+&ina"ion

of "-e posi"ion of "-e appellan"s '-e"-e+

"-e 'e+e se+%an"s o+ a>en"s of "-e Mills

o&pan and "-e de"e+&ina"ion of "-e

c-a+ac"e+ of "-ei+ +e&ne+a"ion '-e"-e+ i"

'as 'a>es o+ sala+ o+ inco&e( p+ofi"s o+

>ains f+o& siness.

6. T-e appellan"s 'e+e +e>is"e+ed as a

p+i%a"e li&i"ed co&pan -a%in> "-ei+

+e>is"e+ed office in ns 'e+e appoin"ed"-e a>en"s of "-e o&pan pon "-e "e+&s(

p+o%isions and condi"ions se" o" in "-e

A>+ee&en" +efe++ed "o in clase 6 of "-e

o&pans Me&o+and& of Associa"ion.

A+"icle 116 p+o%ided "-a" "-e >ene+al

&ana>e&en" of "-e siness of "-e o&pan



14/21

Page 14

s=ec" "o "-e con"+ol and spe+%ision of "-e

Di+ec"o+s( 'as "o e in "-e -ands of "-e

A>en"s of "-e o&pan( '-o 'e+e "o -a%e

"-e po'e+ and a"-o+i" on e-alf of "-e

o&pan( s=ec" "o sc- con"+ol and

spe+%ision( "o en"e+ in"o all con"+ac"s and "o

do all o"-e+ "-in>s sal( necessa+ and

desi+ale in "-e &ana>e&en" of "-e affai+s of

"-e o&pan o+ in ca++in> o" i"s o=ec"s

and 'e+e "o -a%e po'e+ "o appoin" and

e&plo in o+ fo+ "-e p+poses of "-e

"+ansac"ion and &ana>e&en" of "-e affai+s

and siness of "-e o&pan( o+ o"-e+'ise

fo+ "-e p+poses "-e+eof( and f+o& "i&e "o

"i&e "o +e&o%e o+ sspend sc- &ana>e+s(a>en"s( cle+:s and o"-e+ e&ploees as "-e

"-o>- p+ope+ 'i"- sc- po'e+s and d"ies

and pon sc- "e+&s as "o d+a"ion of

e&plo&en"( +e&ne+a"ion o+ o"-e+'ise as

"-e "-o>-" fi" and 'e+e also "o -a%e

po'e+s "o eCe+cise all +i>-"s and lie+"ies

+ese+%ed and >+an"ed "o "-e& "-e said

a>+ee&en" +efe++ed "o in clase 6 of "-e

o&pans Me&o+and& of Associa"ion

incldin> "-e +i>-"s and lie+"ies con"ainedin clase 4 of "-e a>+ee&en". A+"icle 118

a"-o+ised "-e a>en"s "o sdele>a"e all o+

an of "-e po'e+s( a"-o+i"ies and

disc+e"ions fo+ "-e "i&e ein> %es"ed in

"-e&( and in pa+"icla+ f+o& "i&e "o "i&e "o

p+o%ide "-e appoin"&en" of an a""o+ne o+

a""o+nes( fo+ "-e &ana>e&en" and

"+ansac"ion of "-e affai+s of "-e o&pan in

an specified locali"( in sc- &anne+ as

"-e "-o>-" fi".

8. T-e A>enc a>+ee&en" '-ic- 'as

eCec"ed in p+sance of "-e appoin"&en"

nde+ A+"icle 115 p+o%ided "-a" "-e

appellan"s and "-ei+ assi>n 'e+e "o e "-e

A>en"s of "-e o&pan fo+ a pe+iod of ;0

ea+s f+o& "-e da"e of +e>is"+a"ion of "-e

o&pan and "-e 'e+e "o con"ine "o ac" as

sc- a>en"s n"il "-e of "-ei+ o'n 'ill

+esi>ned. T-e +e&ne+a"ion of "-e appellan"s

as sc- A>en"s 'as "o e a co&&ission of 2

1/2 pe+ cen". on "-e a&on" of sale p+oceeds

of all a+n clo"- and o"-e+ p+odce of "-e

o&pan incldin> co""on >+o'n3 '-ic-

co&&ission 'as "o e eCclsi%e of an

+e&ne+a"ion o+ 'a>es paale "o "-e

an:e+s( solici"o+s( en>inee+s( e"c.( '-o &a

e e&ploed "-e appellan"s fo+ o+ on

e-alf of "-e o&pan o+ fo+ ca++in> on

and condc"in> "-e siness of "-e

o&pan. T-e appellan"s 'e+e "o e paid inaddi"ion all eCpenses and c-a+>es ac"all

inc++ed "-e& in connec"ion 'i"- "-e

siness of "-e o&pan and spe+%ision

and &ana>e&en" "-e+eof and "-e appellan"s

'e+e en"i"led "o appoin" an pe+son o+

pe+sons in s in

de+aad and else'-e+e in "-e "e++i"o+ies

of is ECal"ed i>-ness "-e Ni?a& and in

India and "o p+c-ase( pa fo+( sell( +esell



15/21

Page 15

and +ep+c-ase &ac-ine+( en>ines( plan"(

+a' co""on( 'as"e( ="e( 'ool and o"-e+

fi+es and p+odce( s"o+es and o"-e+

&a"e+ials and "o &anfac"+e a+n clo"- and

o"-e+ fa+ics and "o sell "-e sa&e ei"-e+ in

"-e said "e++i"o+ies as 'ell as else'-e+e in

India and ei"-e+ on c+edi" o+ fo+ cas-( o+ fo+

p+esen" o+ f"+e deli%e+( and "o eCec"e

eco&e pa+"ies "o and '-e+e necessa+ "o

case "o e +e>is"e+ed all deeds( a>+ee&en"s(

con"+ac"s( +eceip"s and o"-e+ doc&en"s and

"o ins+e "-e p+ope+" of "-e o&pan fo+

sc- p+poses and "o sc- eC"en" and in sc-

&anne+ as "-e &a "-in: p+ope+ and "o

ins"i""e( condc"( defend( co&p+o&ise( +efe+ "o a+i"+a"ion and aandon le>al and o"-e+

p+oceedin>s( clai&s and disp"es in '-ic-

"-e o&pan is conce+ned and "o appoin"

and e&plo disc-a+>e( +ee&plo o+ +eplace

en>inee+s( &ana>e+s( +e"ain co&&ission

deale+s( &ccad&s( +o:e+s( cle+:s(

&ec-anics( 'o+:&en and o"-e+ office+s and

se+%an"s 'i"- sc- po'e+s and d"ies and

pon sc- "e+&s as "o d+a"ion of office

+e&ne+a"ion o+ o"-e+'ise as "-e &a "-in: fi" and "o d+a'( accep" endo+se( ne>o"ia"e

and sell e and ndies 'i"-

o+ 'i"-o" sec+i" and "o +ecei%e and >i%e

+eceip"s fo+ all &ones paale "o o+ "o e

+ecei%ed "-e co&pan and "o d+a'

c-eBes a>ains" "-e &ones of "-e co&pan

and >ene+all "o &a:e all sc- a++an>e&en"s

and do all sc- ac"s and "-in>s on e-alf of

"-e o&pan( i"s sccesso+s and assi>ns as

&a e necessa+ o+ eCpedien" and as a+e

no" speciall +ese+%ed "o e done "-e

Di+ec"o+s.

4. T-e said 7ac-&ina+aan Ra&>opal L

on 7"d.( s-all e a" lie+" "o deal 'i"- "-e

o&pan 'a of sale of "-e o&pan of

co""on all +a' &a"e+ials and a+"icles +eBi+ed

fo+ "-e p+pose of "-e o&pan and "-e

p+c-ase f+o& "-e o&pan of a+n clo"-

and all o"-e+ a+"icles &anfac"+ed "-e

o&pan and o"-e+'ise( and "o deal 'i"-

an fi+& in '-ic- an of "-e s-a+e-olde+s of

"-e said 7ac-&ina+aan Ra&>opal L on

7"d.( &a e di+ec"l o+ indi+ec"l conce+ned

p+o%ided al'as sc- dealin>s a+e

sanc"ioned passed o+ +a"ified "-e n "-e

a>+ee&en" and "-e +i>-"s of "-e appellan"s

"-e+ende+ s=ec" "o "-e app+o%al and

sanc"ion of "-e


16/21

Page 16

'old s"ill s+%i%e '-e"-e+ "-ei+ ac"i%i"ies

a&on"ed "o "-e ca++in> on of siness in

'-ic- case onl "-e +e&ne+a"ion '-ic-

"-e +ecei%ed f+o& "-e o&pan 'old e

inco&e( p+ofi"s o+ >ains f+o& siness.

11. T-e dis"inc"ion e"'een a se+%an" and an

a>en" is "-s indica"ed in #o'ells 7a' of

A>enc( a" pa>e 16

a3 $ene+all a &as"e+ can "ell -is se+%an"

'-a" "o do and -o' "o do i".

3 $ene+all a p+incipal canno" "ell -is

a>en" -o' "o ca++ o" -is ins"+c"ions.

c3 A se+%an" is nde+ &o+e co&ple"e con"+ol

"-an an a>en"(

and also a" pa>e 20

a3 $ene+all( a se+%an" is a pe+son '-o no"

onl +ecei%es ins"+c"ions f+o& -is &as"e+

" is s=ec" "o -is &as"e+s +i>-" "o con"+ol

"-e &anne+ in '-ic- -e ca++ies o" "-ose

ins"+c"ions. An a>en" +ecei%es -is

p+incipals ins"+c"ions " is >ene+all f+ee

"o ca++ o" "-ose ins"+c"ions acco+din> "o

-is o'n disc+e"ion(

3 $ene+all( a se+%an"( Ba se+%an"( -as no

a"-o+i" "o &a:e con"+ac"s on e-alf of -is

&as"e+. $ene+all( "-e p+pose of e&ploin>

an a>en" is "o a"-o+ise -i& "o &a:e

con"+ac"s on e-alf of -is p+incipal.

c3 $ene+all( an a>en" is paid

co&&ission pon effec"in> "-e +esl" '-ic-

-e -as een ins"+c"ed -is p+incipal "o

ac-ie%e. $ene+all( a se+%an" is paid

'a>es o+ sala+.

12. T-e s"a"e&en" of "-e la' con"ained in

als+s 7a's of En>land ails-a&

Edi"ion ol&e 22( pa>e 11;( pa+a>+ap-

192 &a e +efe++ed "o in "-is connec"ion

HT-e diffe+ence e"'een "-e +ela"ions of

&as"e+ and se+%an" and of p+incipal and

a>en" &a e said "o e "-is a p+incipal -as

"-e +i>-" "o di+ec" '-a" 'o+: "-e a>en" a>en"

-as "o do " a &as"e+ -as "-e f+"-e+ +i>-"

"o di+ec" -o' "-e 'o+: is "o e done.H

1;. T-e posi"ion is f+"-e+ cla+ified in

als+s 7a's of En>land ails-a&

Edi"ion ol&e 1( a" pa>e 19;( a+"icle ;45

'-e+e "-e posi"ions of an a>en"( a se+%an"

and independen" con"+ac"o+ a+e "-s

dis"in>is-ed

HAn a>en" is "o e dis"in>is-ed on "-e one

-and f+o& a se+%an"( and on "-e o"-e+ f+o&

an independen" con"+ac"o+. A se+%an" ac"s

nde+ "-e di+ec" con"+ol and spe+%ision of

-is &as"e+( and is ond "o confo+& "o all

+easonale o+de+s >i%en -i& in "-e co+se of -is 'o+: an independen" con"+ac"o+( on "-e

o"-e+ -and( is en"i+el independen" of an

con"+ol o+ in"e+fe+ence and &e+el

nde+"a:es "o p+odce a specified +esl"(

e&ploin> -is o'n &eans "o p+odce "-a"

+esl". An a>en"( "-o>- ond "o eCe+cise

-is a"-o+i" in acco+dance 'i"- all la'fl

ins"+c"ions '-ic- &a e >i%en "o -i&

f+o& "i&e "o "i&e -is p+incipal( is no"

s=ec" in i"s eCe+cise "o "-e di+ec" con"+ol o+ spe+%ision of "-e p+incipal. An a>en"( as

sc- is no" a se+%an"( " a se+%an" is

>ene+all fo+ so&e p+poses -is &as"e+s

i&plied a>en"( "-e eC"en" of "-e a>enc

dependin> pon "-e d"ies o+ posi"ion of "-e

se+%an".H



17/21

Page 17

14. onside+in> "-e posi"ion of "-e

appellan"s in "-e li>-" of "-e ao%e

p+inciples i" is no do" "+e "-a" "-e

appellan"s 'e+e "o ac" as "-e a>en"s of "-e

o&pan and ca++ on "-e >ene+al

&ana>e&en" of "-e siness of "-e o&pan

s=ec" "o "-e con"+ol and spe+%ision of "-e

Di+ec"o+s. T-a" does no" -o'e%e+ &ean "-a"

"-e ac"ed nde+ "-e di+ec" con"+ol and

spe+%ision of "-e Di+ec"o+s in +e>a+d "o "-e

&anne+ o+ &e"-od of "-ei+ 'o+:. T-e

Di+ec"o+s 'e+e en"i"led "o la do'n "-e

>ene+al polic and also "o >i%e sc-

di+ec"ions in +e>a+d "o "-e &ana>e&en" as

&a e conside+ed necessa+. enc A>+ee&en" ao%e se" o" 'as 'i"-in

"-e disc+e"ion of "-e appellan"s and apa+"

f+o& di+ec"in> '-a" 'o+: "-e appellan"s -ad

"o do as "-e a>en"s of "-e o&pan "-e

Di+ec"o+s -ad no" confe++ed pon "-e& "-e

f+"-e+ +i>-" "o di+ec" -o' "-a" 'o+: of "-e

>ene+al &ana>e&en" 'as "o e done. T-econ"+ol and spe+%ision of "-e di+ec"o+s 'as

a >ene+al con"+ol and spe+%ision and 'i"-in

"-e li&i"s of "-ei+ a"-o+i" "-e appellan"s as

"-e a>en"s of "-e o&pan -ad pe+fec"

disc+e"ion as "o -o' "-a" 'o+: of >ene+al

&ana>e&en" 'as "o e done o"- in +e>a+d

"o "-e &e"-od and "-e &anne+ of sc- 'o+:.

T-e appellan"s fo+ ins"ance -ad pe+fec"

la"i"de "o en"e+ in"o a>+ee&en"s and

con"+ac"s fo+ sc- p+pose and "o sc-

eC"en" and in sc- &anne+ as "-e "-o>-"

p+ope+. T-e -ad "-e po'e+ "o appoin"(

e&plo( disc-a+>e( +ee&plo o+ +eplace "-e

office+s and se+%an"s of "-e o&pan 'i"-

sc- po'e+s and d"ies and pon sc- "e+&s

as "o d+a"ion of office +e&ne+a"ion o+

o"-e+'ise as "-e "-o>-" fi". T-e -ad also

"-e po'e+ >ene+all "o &a:e all sc-

a++an>e&en"s and "o do all sc- "-in>s and

ac"s on e-alf of "-e o&pan( as &i>-" e

necessa+ o+ eCpedien" and as 'e+e no"

specificall +ese+%ed "o e done "-e

Di+ec"o+s. T-ese po'e+s did no" spell a

di+ec" con"+ol and spe+%ision of "-e

Di+ec"o+s as of a &as"e+ o%e+ -is se+%an" "

cons"i""ed "-e appellan"s "-e a>en"s of "-e

o&pan '-o 'e+e "o eCe+cise "-ei+

a"-o+i" s=ec" "o "-e con"+ol and

spe+%ision of "-e Di+ec"o+s " 'e+e no"

s=ec" in sc- eCe+cise "o "-e di+ec" con"+ol

o+ spe+%ision of "-e p+incipals. T-e lie+">i%en "o "-e appellan"s nde+ clase 4 of "-e

A>enc A>+ee&en" "o deal 'i"- "-e

o&pan 'a of sale and p+c-ase of

co&&odi"ies "-e+ein &en"ioned also did no"

spell a +ela"ion as e"'een &as"e+ and

se+%an" " e&po'e+ed "-e appellan"s "o

deal 'i"- "-e o&pan as #+incipals in spi"e

of "-e fac" "-a" nde+ clase 8 of "-e

A>+ee&en" "'o of "-ei+ &e&e+s fo+ "-e

"i&e ein> 'e+e "o e "-e eCofficioDi+ec"o+s of "-e o&pan. T-e po'e+ "o

assi>n "-e a>+ee&en" and "-e +i>-"s of "-e

appellan"s "-e+ende+ +ese+%ed "o "-e&

nde+ clase 9 of "-e A>enc A>+ee&en"

"-o>- s=ec" "o "-e app+o%al and sanc"ion

of "-e -" "o con"ine in e&plo&en"

as "-e a>en"s of "-e o&pan fo+ a pe+iod of

;0 ea+s f+o& "-e da"e of "-e +e>is"+a"ion

"-e+eof and "-e+eaf"e+ n"il "-e appellan"s of

"-ei+ o'n 'ill +esi>ned( '-ic- also 'old e

-a+dl consis"en" 'i"- "-e e&plo&en" of

"-e appellan"s as &e+e se+%an"s of "-e

o&pan. T-e +e&ne+a"ion 'a of

co&&ission of 2 1/2 pe+ cen". of "-e a&on"



18/21

Page 1

of sale p+oceeds of "-e p+odce of "-e

o&pan sa%o+ed &o+e of "-e

+e&ne+a"ion >i%en a p+incipal "o -is

a>en" in "-e ca++in> o" of "-e >ene+al

&ana>e&en" of "-e siness of "-e

p+incipals "-an of 'a>es o+ sala+ '-ic-

'old no" no+&all e on sc- a asis. All

"-ese ci+c&s"ances "o>e"-e+ 'i"- "-e po'e+

of sdele>a"ion +ese+%ed nde+ A+"icle 118

in o+ opinion >o "o es"alis- "-a" "-e

appellan"s 'e+e "-e a>en"s of "-e o&pan

and no" &e+el "-e se+%an"s of "-e o&pan

+e&ne+a"ed 'a>es o+ sala+.

15. E%en "-o>- "-e posi"ion of "-eappellan"s Ba "-e o&pan 'as "-a" of

a>en"s and no" se+%an"s as s"a"ed ao%e i"

+e&ains "o e de"e+&ined '-e"-e+ "-e 'o+:

'-ic- "-e did nde+ "-e A>enc A>+ee&en"

a&on"ed "o ca++in> on siness so as "o

cons"i""e "-e +e&ne+a"ion '-ic- "-e

+ecei%ed "-e+ende+ inco&e( p+ofi"s o+ >ains

f+o& siness. T-e con"en"ion '-ic- 'as

+>ed efo+e s "-a" "-e appellan"s onl

'o+:ed as "-e a>en"s of "-e Mills o&panand no o"-e+s and "-e+efo+e '-a" "-e did

did no" cons"i""e a siness does no" a%ail

"-e appellan"s. T-e ac"i%i"ies in o+de+ "o

cons"i""e a siness need no" necessa+il e

conce+ned 'i"- se%e+al indi%idals o+

conce+ns. T-e 'old cons"i""e siness in

spi"e of "-ei+ ein> +es"+ic"ed "o onl one

indi%idal o+ conce+n. -a" is +ele%an" "o

conside+ is '-a" is "-e na"+e and scope of

"-ese ac"i%i"ies "-o>- ei"-e+ c-ance o+

desi>n "-ese &i>-" e +es"+ic"ed "o onl one

indi%idal o+ conce+n. I" is "-e na"+e and

scope of "-ese ac"i%i"ies and no" "-e eC"en" of

"-e ope+a"ions '-ic- a+e +ele%an" fo+ "-is

p+pose.

16. T-e ac"i%i"ies of "-e appellan"s ce+"ainl

did no" co&e 'i"-in "-e inclsi%e defini"ion

of siness '-ic- is >i%en in sec"ion 2

clase 4 of "-e ECcess #+ofi"s TaC

Re>la"ion( de+aad. of con"+ac"s. T-e 'o+: '-ic- "-e

appellan"s did nde+ "-e "e+&s of "-e A>enc

A>+ee&en" cons"i""ed nei"-e+ "+ade(

co&&e+ce o+ &anfac"+e o+ an ad%en"+e

in "-e na"+e of "+ade( co&&e+ce o+

&anfac"+e no+ 'as i" a p+ofession o+

%oca"ion.

1!. T-e ac"i%i"ies '-ic- cons"i""e ca++in>

on siness need no" necessa+il consis" of

ac"i%i"ies 'a of "+ade( co&&e+ce o+

&anfac"+e o+ ac"i%i"ies in "-e eCe+cise of a

p+ofession o+ %oca"ion. T-e &a e%en

consis" of +ende+in> se+%ices "o o"-e+ '-ic-

se+%ices &a e of a %a+ie>a"ed c-a+ac"e+.

T-e conside+a"ion '-ic- appl in "-e case of

indi%idals in "-e &a""e+ of de"e+&inin>

'-e"-e+ "-e ac"i%i"ies cons"i""e a siness

'i"-in "-e &eanin> of "-e inclsi%e

defini"ion "-e+eof se" o" ao%e &a no"

appl in "-e case of inco+po+a"ed co&panies.

E%en "-o>- "-e ac"i%i"ies if ca++ied on

indi%idals &i>-" cons"i""e siness in "-a"

sense "-e &i>-" no" cons"i""e sc-



19/21

Page 1!

siness '-en ca++ied on inco+po+a"ed

co&panies and +eso+" &s" e -ad "o "-e

>ene+al posi"ion in la' in o+de+ "o de"e+&ine

'-e"-e+ "-e inco+po+a"ed co&pan 'as

ca++in> on siness so as "o cons"i""e "-e

inco&e ea+ned i" inco&e( p+ofi"s o+ >ains

f+o& siness. Refe+ence &a e &ade in

"-is con"eC" "o illia& Esplen( on and

'ains"on( 7i&i"ed %. o&&issione+s of

Inland Re%ene J1919K 2 ,. en>inee+s

and "-e 'o+: done "-e co&pan 'as

iden"ical in c-a+ac"e+ 'i"- "-a" fo+&e+l

done "-e pa+"ne+s-ip '-ic- is scceeded.

T-e 'o+: done "-e co&pan 'as

iden"ical in all +espec"s 'i"- "-e 'o+: of a p+ofessional na%al a+c-i"ec" and consl"in>

en>inee+( and 'as pe+fo+&ed "-e said

"-+ee s-a+e-olde+s and di+ec"o+s of "-e

co&pan pe+sonall. A Bes"ion a+ose

'-e"-e+ "-e co&pan 'as ca++in> on a

p+ofession 'i"-in "-e &eanin> of sec"ion ;9

pa+a>+ap-s of "-e *inance No. 23 Ac"(

1915. I" 'as con"ended "-a" i" ca++ied on a

p+ofession of na%al a+c-i"ec"s and consl"in>

en>inee+s ecase "-e &e&e+s co&posin>

i" 'e+e "-+ee na%al a+c-i"ec"s. T-a"

con"en"ion 'as -o'e%e+ ne>a"i%ed and i"

'as -eld "-a" e%en "-o>- '-a" 'as "o e

loo:ed a" 'as "-e c-a+ac"e+ of "-e 'o+: done

"-e co&pan( i" 'as no" ca++in> on "-e

p+ofession of "-e na%al a+c-i"ec"s 'i"-in "-e

&eanin> of "-e sec"ion( ecase fo+ "-a"

p+pose i" 'as of "-e essence of a p+ofession

"-a" "-e p+ofi"s s-old e dependen" &ainl

pon "-e pe+sonal Balifica"ions of "-e

pe+son '-o& i" 'as ca++ied on and "-a"

cold onl e an indi%idal. A co&pan

sc- as "-a" cold onl do a na%al a+c-i"ec"s

'o+: sendin> a na%al a+c-i"ec" "o i"s

cs"o&e+s "o do '-a" "-e 'an"ed "o e

done and i" 'as -eld "-a" "-e co&pan 'as

no" ca++in> on a p+ofession " 'as

ca++in> on a "+ade o+ siness in "-e

o+dina+ sense of "-e "e+&.

18. -en a pa+"ne+s-ip fi+& co&es in"oeCis"ence i" can e p+edica"ed of i" "-a" i"

ca++ies on a siness( ecase pa+"ne+s-ip

acco+din> "o sec"ion 4 of "-e Indian

#a+"ne+s-ip Ac" is "-e +ela"ion e"'een

pe+sons '-o -a%e a>+ee "o s-a+e "-e p+ofi"s

of a siness ca++ied onl all o+ an of

"-e& ac"in> fo+ all. ee Inde+c-and a+i

Ra& %. o&&issione+ of Inco&e"aC U.#. L

.#. J1952K I.T.R. 1083


20/21

Page 2"

"e+ndale. M.R.( in o&&issione+s of Inland

Re%ene %. T-e ,o+ean ndica"e 7i&i"ed

19213 12 TaC as. 181

If o once >e" "-e indi%idal and "-e

co&pan spendin> eCac"l on "-e sa&e

asis( "-en "-e+e 'old e no diffe+ence

e"'een "-e& a" all. e""in> possession of concessions and

"+nin> "-e& "o accon"( "-en "-a" is a &a""e+

"o e conside+ed '-en o co&e "o decide

'-e"-e+ doin> "-a" is ca++in> on a siness

o+ no".H

19. )s"ice Ro'la"" follo'ed "-e ao%e %ie'

of 7o+d "e+ndale( M.R.( in o&&issione+

of Inland Re%ene %. -a& T-ea"+eRoal Es"a"e o.( 7i&i"ed 192;3 12 TaC

as. 580 ( and -eld "-a"

H'-en o a+e conside+in> '-e"-e+ a ce+"ain

fo+& of en"e+p+ise is ca++in> on siness o+

no"( i" is &a"e+ial "o loo: and see '-e"-e+ i"

is a co&pan "-a" is doin> i".H

T-e o=ec"s of an inco+po+a"ed co&pan as

laid do'n in "-e Me&o+and& of Associa"ion a+e ce+"ainl no" conclsi%e of

"-e Bes"ion '-e"-e+ "-e ac"i%i"ies of "-e

co&pan a&on" "o ca++in> on of siness

ee Indian 7a' Repo+"s 55 alc""a 1059

andMANU/ene+al &ana>e&en" of "-e siness

of "-e co&pan an a>enc siness. T-e'o+ds Hca++ on all :inds of a>enc

sinessH occ++in> a" "-e end of "-e o=ec"

as "-e+ein se" o" 'e+e capale of incldin>

'i"-in "-ei+ >ene+al desc+ip"ion "-e 'o+:

'-ic- "-e appellan"s 'old do as a>en"s fo+

$o%e+n&en"s o+ A"-o+i"ies o+ fo+ an

an:e+s( &anfac"+e+s( &e+c-an"s( s-ippe+s

and o"-e+s '-en "-e ac"ed as a>en"s of "-e

o&pan '-ic- 'e+e &anfac"+e+s in"e+

alia of co""on piece >oods "-e 'old eca++in> on a>enc siness 'i"-in "-e

&eanin> of "-is o=ec". Apa+" -o'e%e+ f+o&

"-is "-e+e is "-e f+"-e+ fac" "-a" "-e+e 'as a

con"ini" of ope+a"ions '-ic- cons"i""ed

"-e ac"i%i"ies of "-e appellan"s in "-e >ene+al

&ana>e&en" of "-e o&pan a siness.

T-e '-ole 'o+: of &ana>e&en" '-ic- "-e

appellan"s did fo+ "-e o&pan 'i"-in "-e

po'e+s confe++ed pon "-e& nde+ A+"icle

116 of "-e A+"icles of Associa"ion and clase

; of "-e A>enc A>+ee&en" consis"ed of

n&e+os and con"inos ope+a"ions and

co&p+ised of %a+ios se+%ices '-ic- 'e+e

+ende+ed "-e appellan"s as "-e a>en"s of

"-e o&pan. T-e appellan"s 'e+e also

en"i"led "-o>- 'i"- "-e sanc"ion o+



21/21

Page 21

+a"ifica"ion "-e s "o en"e+ in"o

dealin>s 'i"- "-e o&pan 'a of sales

and p+c-ases of %a+ios co&&odi"ies.

T-e+e 'as no"-in> in "-e A>enc A>+ee&en"

"o p+e%en" "-e appellan"s f+o& ac"in> as "-e

a>en"s of o"-e+ &anfac"+e+s( )oin" "oc:

o&panies e"c.( and "-e appellan"s cold

-a%e as 'ell ac"ed as "-e a>en"s of o"-e+

conce+ns esides "-e o&pan. All "-ese

fac"o+s "a:en in"o conside+a"ion alon> 'i"-

"-e fiCi" of "en+e( "-e na"+e of

+e&ne+a"ion and "-e assi>naili" of "-ei+

+i>-"s( a+e sfficien" "o enale s "o co&e "o

"-e conclsion "-a" "-e ac"i%i"ies of "-eappellan"s as "-e a>en"s of "-e o&pan

cons"i""ed a siness and "-e +e&ne+a"ion

'-ic- "-e appellan"s +ecei%ed f+o& "-e

o&pan nde+ "-e "e+&s of "-e A>enc

A>+ee&en" 'as inco&e( p+ofi"s o+ >ain f+o&

siness.

21. T-e appellan"s 'e+e "-e+efo+e +i>-"l

assessed fo+ eCcess p+ofi"s "aC and "-ese

appeals &s" s"and dis&issed 'i"- cos"s.

22. Appeal dis&issed.

Manpa"+a Info+&a"ion ol"ions #%".

7"d.


case laws in agency

Documents