Pakistan Case Lawโ† Search
2017 CLC 860

N/A vs UMER FAROOQ and others

Citation2017 CLC 860
CourtSindh High Court
Case No.High Court Appeals Nos,227 and 228 of 2014,
Date2016-02-23
Judge(s)Sajjad Ali Shah, Muhammad Junaid Ghaffar
ResultAppeal allowed

1. ' SAJJAD ALI SHAH, CJ.--- Through these two appeals the Appellant Attock Petroleum Limited has impugned common Order dated 07.07.2014 passed in two different Suits bearing No,1459 and 1460 of 2013, based on common facts, whereby, the learned Single Judge on the Original Side was pleased to allow the Respondent No,l's applications bearing CMA No,12792/2013 in Suit No,1459 of 2013 and CMA No,12795/2013 in Suit No,1460/2013 under Order XXXIX Rules 1 and 2 read with Section 151, C.P.C., restraining the Appellant from cancelling/withdrawing the offer of dealership.

2. ' Briefly, the Civil Aviation on 08.11.2010 and 09.11.2010 through publication in daily "DAWN" and "The Nation" respectively invited tenders from renown oil companies for establishing petrol pumpcum- CNG stations on their plots of land located near Luxury Cinema and Main Shahrah-e-Faisal, both admeasuring 1500 square yards. It appears that the Respondent No,1 in both the appeals showed their interest and the Appellant an oil marketing company who sells its petroleum products either on its own or through dealers, offered dealership to the Respondent No,1 for establishing and operating petrol pump/ CNG stations on the stated Civil Aviation land through the following letter:-- "APL/RD/CAA/10-11 November 16, 2010 ' Dear Mr. Umer Farooq Prospective dealer, CAA Site, Karachi ' Subject: Offer of Dealership for Establishment and Operation of Petrol Pump cum CNG/Station of Attock Petroleum Limited (APL) Petrol Pump on CAA Land at Karachi.

3. ' This has reference to the subject matter, we hereby offer you the dealership of below mentioned CM Site, subject to your successful bid of the same.

4. ' CAA land on main Shahra-e-Faisal, Karachi.

5. ' This dealership is also subject to fulfillment of all the requirements and procedures necessary for obtention of all requisite NOCs including but not limited to ' DCO NOC, Explosives and OGRA licenses etc. ' Thanks and assuring you our best co-operation and services at all times.

6. ' Regards, Sd/- Karrar Hussain Incharge (Retail Development)" ' It appears to be an admitted position that the Respondent No,1 in both the appeals on 23.11.2010 after depositing a sum of Rs,10,00,000/- and 13,00,000/- respectively with the Appellant as earnest money participated in the bidding process on behalf of the Appellant and offered the highest bid and consequently the Appellant on the same day i,e, 23.11.2010 was declared highest bidder and ultimately on 23.12.2011 Civil Aviation Authority executed lease in respect of both the plots in favour of the Appellant. The record reflects that somehow the other the Respondent No,1 could not meet the entire conditions as detailed in the dealership offer, consequently, the Appellant withdrew its offer of dealership through its letter dated 03.12.2012 which reads as follows:- "APL/RD-K-68/10-11/03 December 3, 2012 ' Mr. Umer Farooq ' Southern Cooperative Housing Society, D-9, 106 Depot Line, Karachi.

7. ' Subject: WITHDRAWAL OF OFFER OF DEALERSHIP LETTER FOR INSTALLATION AND OPERATION OF ATTOCK PETROLEUM LIMITED (APL) PETROL PUMP CUM CNG STATION AT SHAHRAH-E-FAISAL, JINNAH INTERNATIONAL AIRPORT, KARACHI.

8. ' Dear Sir, ' Please refer to the letter # APL/RD/CAA/10-11 dated: November 16, 2010 regarding your proposed dealership to run the filling station at the subject site. The above said offer is subject to fulfillment of certain conditions on your part which includes obtaining requisite Government NOCs besides providing other documentations in this regard.

9. ' As per the aforesaid letter, the condition precedent to offer of dealership was to obtain DCO NOCs and explosive approvals. You have failed to fulfill this condition despite several verbal and subsequent written reminders through letters it APL-RD-K68/10-11 and APL-RD-K-68/10-11/02 dated June 26, 2012 and October 23, 2012 respectively but you have failed to respond the same and hence evident of your non-compliance with regard to the condition precedent of the above said offer letter. Further, non-submission of above and said NOCs along with other requisite approvals from local authorities also depicting your lack of interest to develop the retail outlet resulting delay to start construction work at the site. As you are aware that as per lease deed clause # 4 executed between APL and Civil Aviation. Authority, the construction work has to be completed by APL within a stipulated time period of two (02) years from date of signing of lease deed otherwise company will be liable to pay hefty penalty to Civil Aviation Authority (CAA) which may further lead to the termination of the lease deed. The commencement of construction work at the subject site is not possible without obtaining the requisite NOCs / approvals.

10. ' Hence in view of the above, you are hereby informed that the company has decided to withdraw it's offer regarding your proposed dealership in respect to the subject site with immediate effect without incurring any liability / claim whatsoever in this regard.

11. ' Truly yours, ' For Attock Petroleum Limited, Sd/- Shahid Butt Sr. Executive (Retail)"

12. ' The record further reflects that after withdrawal of the offer of dealership letter on 03.12.2012, no correspondence was exchanged in respect of such withdrawal and the Respondent after almost 20 months of withdrawal of offer of dealership approached this Court seeking his entitlement for the dealership in respect of Petrol Pump cum CNG station. The Respondent further sought an order directing the Appellant to issue and send dealership agreement and also an order seeking suspension of letter dated 03.12.2012 whereby the Appellant has withdrawn the offer to dealership. It appears that on the first date an interim order in favour of the Respondent No,1 was passed, which ultimately was confirmed, restraining the Appellant from creating any third party interest in the Petrol Pump/CNG Station yet to be constructed in respect whereof offer of dealership was made to the Respondent No,1, which led to the filing of the instant appeal.

13. ' Mr. Umer Lakhani, learned counsel appearing for the Appellant contends that the instant suit in the manner itself was incompetent as there was no agreement/contract between the parties settling terms and conditions of so called agency/dealership, therefore, the claim of the Respondent No,1 that he was agent of the Appellant and, had an interest in the agency is totally misconceived. It was contended that the Appellant had merely offered dealership to the Respondent No,1 by setting certain terms and conditions as pre-requisite to a dealership agreement and since the Appellant failed to fulfill the terms and conditions, therefore, the offer to dealership was revoked. It was contended that even otherwise dealer or commission agents could not be termed as agents coupled with interest. In support of his contention counsel has placed reliance on the judgments of Bolan Beverages (Pvt.) Limited v. Pepsico Inc. and others (PLD 2004 SC 860), Rehmatullah Khan v.

14. Government of Pakistan and others (2003 SCMR 50), Roomi Enterprises (Pvt.) Ltd v. Stafford Miller Ltd. (2005 CLD 1805), Media Max v. ARY Communication (Pvt.) Ltd. (PLD 2013 Sindh 555) Caltex Oil (Pakistan) Limited v. Sheikh Rehan (PLD 1958 Lahore 63). It was next contended by Mr. Umer Lakhani that there is no denial regarding the fact that the Respondent No,1 had performed certain acts spent money on behalf of the Appellant and all the monies according to arrangements were repaid but since there was no relationship of principal and agent between the parties nor the Appellant could legally claim an agency coupled with interest, therefore, at the best his remedy was for recovery. In support of his submission reliance was placed on Section 205 of the Contract Act as well as Section 21-A of the Specific Relief Act. Mr. Lakhani further contended that though the Respondent claim that the delay in completion of the process and fulfillment of the terms and conditions whereafter the Respondent was to be appointed as dealer was on account of the Appellant but he has miserably failed to place on record any letter addressed to the Appellant in support of his claim, on the contrary the Appellant had sent two letter(s) dated 26.02.2012 and 23.10.2012 warning the Respondent No,1 to expedite the process and his failure led the Appellant to withdraw the offer of appointment as dealer and thereafter all subsequent acts were totally unauthorized. It was therefore, prayed that the order impugned be set aside and the Respondents No,1's application CMA No, 12792/2013 (under Order XXXIX, Rules 1 and 2, C.P.C.) in Suit No,1459 of 2013 and CMA No,12795/2013 in Suit No,1460/2013 (under Order XXXIX Rules 1 and 2, C.P.C.) be dismissed.

15. ' On the other hand Mr. Mushtaq A. Memon, learned counsel appearing for the Respondent contended that the Appeal itself is not maintainable as the Appellant has failed to annex Memo of Appeal along with the annexures with the mandatory notice as required under Order XLIII, Rule 3, C.P.C. It was contended that Notice under Order XLIII, Rule 3, C.P.C. was issued on 21.08.2014 and since no attachments were found therewith therefore, the Respondent vide its letter dated 26.08.2014 intimated the Appellant that no attachments are received which notice was not responded, therefore, the appeal itself is incompetent and liable to he dismissed. In support of his contentions Mr. Memon has placed reliance on Para 15 of the judgment of the Apex Court in the case of Mrs. Dino Manekji Chinoy v. Muhammad Mateen (PLD 1983 SC 693) as well as of this Court in the case of Karachi Building Control Authority v. Sufi Muhammad Ismail (1989 MLD 2987), .M/s. Cooperative House Building Society Limited Lahore v. Messrs Trust Leasing Corporation Limited (PLD 2000 Lahore 232), Ali Asbestos Ltd. v. Bank of Credit and Commerce (1997 MLD 2003) and Zulfiquar Ahmed Butt v. Asad Dar (2006 CLC 787). Mr. Memon further while referring to the letter dated 16.11.2010 whereby the appellant had offered dealership to the respondent for establishment of a petrolpump-cum-CNC station contended that the offer letter does not provide timeline during which the respondent was required to fulfill the prerequisite of dealership, therefore, the respondent could not have revoked the offer of dealership on the ground of delay. Mr. Memon contended that since no timeline was prescribed, therefore, in terms of Sections 5, 6 and 8 of the Contract Act a reasonable time ought to have been provided before the revocation. It was next contended that in consequent to the tender dated 23.11.2010 the respondent had on the same date deposited earnest money in the sum of Rs,1 Million and Rs,1.3 Million respectively which money till date has not been returned. Additionally the respondent made hectic efforts for obtaining the lease on which the petrol pump-cum-CNC station was to be constructed, paid stamp-paper charges and other expenses, though which were reimbursed, but the efforts put by the respondent for obtaining the lease builds the relationship between the parties as principal and agent in terms of Section 182 of the Contract Act and also that the respondent in term of Section 202 of the Contract Act, 1872 has the interest in the agency itself. Mr. Memon has further referred to the correspondences exchanged between the appellant and the lessor/Civil Aviation Authority to contend that the delay in execution of the lease was on account of lethargic conduct of the appellant for which the Respondent could not have been penalized by way of revocation of offer letter. It was contended that since the land on which petrol pump/CNG Station was to be constructed has been acquired through the efforts of the Respondents, therefore, the Respondent of course as an agent has the interest on the property, and in support of his contention reliance has been placed on the case of Syed Shafiq Hussain v.

16. Syed Abul Qasim (PLD 1979 Karachi 22), Muhammad Aref Effendi v. Egypt Air (1980 SCMR 588) and Zubair Ahmed v. Pakistan State Oil Company Limited (PLD 1987 Karachi 112). In the end Mr. Memon while placing reliance on the case of M/s. Worldwide Trading v. Sanyo Trading Company Ltd. (PLD 1986 Karachi 234) contended that an agreement is not necessary for construing an agency as it could be oral and the crux of such relationship as defined in Section 182 of the Contract Act is only in order to "doing of an act by a person employed by another to do that act" and the transaction between the parties is fully covered under Section 182 of the Contract Act.

17. ' In response Mr. Umer Lakhani, learned counsel appearing for the Appellant while denying that Notice under Order XLIII, C.P.C. did not contain Memorandum of Appeal as an enclosure, however, he alternatively argued that as long as the Respondents gets the hearing, the requirement of Order XLII, C.P.C. are fulfilled. Reliance was placed on the judgment of this Court in the case of SITE v. M/s. Noorani Enterprises (1996 CLC 570), Salahuddin v. Syed Mansoor Ali Shah (1999 SCMR 414), Sikandar Trading Company (Pvt.) Ltd v. Habib Bank Limited (2008 CLD 326). In response to the contention of Mr. Memon that the Respondent has an interest in the subject matter of the agency, Mr. Umer Lakhani while placing reliance on the judgment of Caltex Oil (Pvt.) Ltd. Karachi v. Shaikh Rehanuddin (PLD 1958 West Pakistan Lahore 63), Bolan Beverages (Pvt.) Ltd. v. PEPSI Co. Inc. (PLD 2004 SC 860) and Media Mex (Pvt.) Ltd v. ARY Communication (Pvt.) Ltd. (PLD 2013 Sindh 555) contended that neither there is an agreement nor the relationship between the parties is such that the Respondent could be termed as an agent having interest in the agency. Additionally, per counsel commission agents and dealers even otherwise cannot be termed as agents having interest in the subject matter of the agency.

18. ' We have heard the learned counsel for the respective parties and perused the record as well as the case-law cited at the bar.

19. ' Beside maintainability of the instant appeal on account of non-supply of memo of appeal along with notice under Order XLIII, C.P.C. the only question which requires consideration appears to be as to whether the respondent could be held as Agent holding interest in Agency. As to the maintainability, Mr. Memon has heavily relied on Paras 15 to 18 of the case of Mrs. Dino Manekji Chinoy (supra) wherein the Apex Court has held that <i> "the party preferring an appeal against any order made during the pendency of the suit must give notice of such appeal to the respondent or his Advocate before presenting the appeal by delivering a copy of the memorandum and grounds of appeal along with a copy of the order appealed against. In order to satisfy the appellate Court that this has been done he should obtain an acknowledgment receipt to the effect that a copy of the grounds of appeal along with the other documents has, indeed, been received by the respondent or his Advocate" and after dilating upon the purpose of the provision concluded as "Hence we think that issuance of a notice to the respondent before presentation of an appeal preferred against an order passed during the pendency of a suit is obligatory and no appeal can be entertained without issuance of the requisite notice". </i>Likewise in the case of<u> Karachi Building Control Authority </u>(supra) a learned Single Judge of this Court by following the dicta laid down by the Apex Court in the case of Mrs. Dino Manekji Chinoy held that the issuance of notice and its service on the respondent was obligatory. Likewise in the case of M/s. Cooperative House Building Society Limited Lahore (supra) relied upon by Mr. Memon, a Division Bench of Lahore High Court held that the appeal was incompetent for want of service of notice as required under Order XLIII,Rule 3, C.P.C. and the same rule was followed in the cases of Ali Asbestos Ltd. and Zulfiquar Ahmed Butt (supra) relied upon by Mr. Memon.

20. ' However, it appears that the Supreme Court after its pronouncement in the case of Dino Manak Ji (supra) has changed its view in the year 1997 while pronouncing the order in the case of Salahuddin (supra) relied by Mr. Lakhani by holding that in case the Respondents are represented before the admission of appeal then the object of serving notice on the Respondent under Order XLIII, Rule 3, C.P.C. before filing of appeal is met with and the appellant could not be non-suited in appeal for want of notice under Order XLIII, Rule 3, C.P.C. The Apex Court held:-- ' We are otherwise, satisfied that as the respondents were duly represented before the learned Judges of the Division Bench before admission of the appeal, the object of serving a notice on the respondents under Order XLIII, Rule 3, C.P.C. before filing of the appeal was fully met in the case and, therefore, the appellant could not be non-suited in the appeal on this ground."

21. ' Likewise, a Division Bench of this Court in the case of Sikander Trading Company Private Limited (supra) after taking into consideration all relevant judgments on the point specially, the case of Mrs. Dino Manekji Chinoy (ibid) held that:- "On examining large number of cases as cited at bar and some of the cases noted above, we are of the humble opinion that the intent and purpose of Rule 3 of Order XLIII, C. P. C. as reproduced above has been grafted in Section 22(2) of the Ordinance, 2001 in order to ensure that the respondent is not condemned unheard. The purpose is to give an ample reasonable opportunity to contest any [sic] the appeal on merit and any order may not be passed behind the back of the respondent. On examining the authorities cited at bar principle deducible appears to be that such purpose could be served even by issuing the pre-admission notice. In the instant case, admittedly the notice was served but without memo. of appeal and impugned order".

22. ' The instant case is on better footing for the reason that the receipt of Notice under Order XLIII, Rule 3, C.P.C. is acknowledged by the Respondent and on the first date of hearing counsel for the Appellant was called absent, whereas, the Counsel for the Respondent was in attendance and thereafter on all dates of hearing respondent No,1 was duly represented and had full opportunity to represent their case before us and no prejudice whatsoever could be demonstrated even if the memorandum of appeal was not received by them. The objection does not find favour with us and therefore, is overruled.

23. ' Coming to the main controversy involved in the instant appeal viz. As to whether the Respondent No,1 could be held as an agent of the appellant having interest in the agency. The record reflects that letter dated 16.11.2010 (reproduced above) whereby an offer of dealership was conveyed to the respondent No,1, is the only document which create relationship between the parties. Perusal of the said letter would reflect that the Appellant had offered dealership to the Respondent subject to his successful bidding for the Civil Aviation land located near Luxury Cinema/Main Shahrah-e-Faisal and obtaining of NOCs for installation of petrol pump CNG station from DCO (Explosive) and licence from OGRA etc. Admittedly, the offer was revoked by the Appellant vide their letter dated 03.12.2012 (reproduced above) well before the Respondent No,1 could comply with the pre-requisite of the offer of dealership on the ground that the respondent No,1 despite reminders dated 26.06.2012 and 23.10.2012 did not fulfill the prerequisite and his conduct depicted lack of interest. On the other hand, Mr. Mushtaq A. Memon, learned counsel appearing for the respondent denying lack of interest on the part of the respondent No,1, asserted that the appellants are to be blamed for the delay, if any. Counsel further pleaded that since there was no timeline fixed in the offer letter for fulfilling the prerequisite, therefore, on principle such offer could only be revoked after lapse of reasonable time. Reference was also made to section 6 of the Contract Act. To our mind, this argument has no application at all for the simple reason that even if it is presumed that the offer was withdrawn without any fault on the part of the respondent No,1 still the question would be as to whether there is any Agency at all and if there is one then as to whether the respondent No,1 has such interest in the subject matter of the Agency entitling him to obtain an order restraining the appellant from revoking such Agency.

24. ' In our opinion the case of the respondent No,1 at the best could be that since on account of his hard work lease for the plot reserved for Petrol/CNG Station and other permissions were procured in the name of appellant, therefore, he has acquired interest to run the Petrol/CNG Station which is yet to be constructed on the subject land. There is no dispute that the lease money etc. for such plot was paid by the appellant.

25. ' Mr. Memon while asserting that the respondent No,1 has an interest in the subject matter of the agency has placed reliance on the case of Syed Shafiq Hussain (supra). The facts of this case are totally different and cannot be applied to the case in hand. In the referred case a general power of attorney coupled with an agreement acknowledging payment and possession of land was given to the defendant against payment and the verdict of the trial Court was endorsed by the learned Single Judge of this Court by holding:- "I, therefore, agree with the trial Court that the applicant having got into possession of the land for value paid and acknowledged in the agreement and he having right to usufruct till the land was finally transferred in his name, he had beneficial interest in the land which formed the subject- matter of the power of attorney which could not be, therefore, revoked by the respondent in view of section 202 of the Contract Act."

26. ' Likewise, in the case of Muhammad Aref Effendi (supra), relied upon by Mr. Memon, the appellant was holding a general sales agency of Egypt Air and on his failure to submit his monthly account the agency was revoked, the appellant pleaded that he was legally entitled to hold the account and the Supreme Court without going into the merits made interim arrangement between the parties till it is determined whether the termination of contract of agency was lawful or not. Again the fact of this case are totally different than the one in hand and the dicta laid therein cannot be applied to the instant case. In the case of Zubair Ahmed (supra), the termination of dealership in respect of a petrol pump was suspended by following the dicta laid down by the Apex Court in the case of Egypt Air ,till the parties lead their respective evidence and the controversy is finally decided. However, it would be worthwhile to mention that ultimately this suit was dismissed by this Court vide its judgment dated 12.10.1995 by holding that the licence in favour of the Plaintiff was not coupled with interest in para-18 of the judgment it was held: <i> "To sum up the discussions 1 am of the view that the licence agreement in respect of service station by its nature is revocable at the option of the Defendant No,1 as the Plaintiff did not acquire any right to property or an interest of permanent nature to render the licence as irrevocable. Under the licence he had the right to sell the petroleum products of Defendant No,1 Company rates so fixed during the subsistence of the licence and not beyond it. Since the Plaintiff did not have a legal character or right and interest to the property he cannot seek a declaration of the nature prayed by him."</i> ' Similar view was taken in the case of Caltex Oil (Pakistan) Ltd. (supra) relied by Mr. Lakhani that dealer of petrol appointed by a petrol company is not necessarily an agent as he no power to deal with the third person so as to bind the principal an indispensible ingredient of agency which is always missing. The Court further held:-- "In view of the facts stated above, I have not the slightest doubt that by being appointed by the defendant as its dealer, the plaintiff did not become, at any rate as far as the sale of petrol was concerned, a mere agent of the defendant. He was to have become what is known in the business parlance a favoured purchaser of the defendant's petrol. He was to push up the sale of the 'defendant's petrol and to sell only their petroleum products and in return was to be allowed to purchase goods from the defendant at reduced or favourable rates and also the use of the defendant's petrol pump and equipment, According to section 182 of the Contract Act "an agent is a person employed to do any act for another or to represent another in dealings with third persons". In selling the petrol the plaintiff would have done an act principally for and on behalf of himself because he would have been selling his own goods which he had purchased from the defendant and not merely acting as an agent or intermediary between the customers of petrol and the company. He was not given, or at any rate has not been shown to have been given, any power to deal with third persons so as to bind the defendant a power which is an indispensable ingredient of agency."

27. ' Likewise in the case of Bolan Beverages (Pvt.) Limited (supra) relied upon by Mr. Lakhani, the Supreme Court while examining the provision of Section 202 of the Contract Act came to conclusion that "The close examination of section 202 of the Contract Act would show that it can be split up into two parts. The first part contemplates that the interest of the agent himself should exist in the property that forms the subject-matter of agency. The second part of the section is that when such an interest is created, it cannot be terminated to the prejudice of agent unless it is expressly provided in the contract. The first portion of the section is clearly indicative of the fact that either the agent must have an interest pre-existing in the property or creation of such interest should be the direct result of the agreement itself. Any interest, either not pre-existing or not forming subject-matter of the agreement but created subsequent to the agreement in any related matter, would not be called as the creation of interest of the agent."

28. ' Examining the relationship between Appellant and Respondent No,1 in the light of the case-law referred to above, it appears that the ultimate offer of the Appellant to the Respondent upon successful completion of all the pre-condition was a dealership in respect of the Petrol Pump/CNG Station, which was to be constructed at the expenses of the Appellant and then the Respondent No,1 would purchase oil/CNG from the Appellant and would sale the same. The admitted position at present is that there is an open plot owned by the Appellant the sub lease on record reflects that Civil Aviation had executed lease deed in favour of M/s. Attock Petroleum Limited against the lease money paid by the Appellant. It may be that the Respondent No,1 might have made hectic efforts in procuring this piece of land for the Appellant but the fact remains that the entire price of the plot was paid by the Appellant and the Respondent has no interest therein. We further must record our displeasure that the Respondent No,1/Plaintiff in both appeals knowing very well that they had no interest in the subject matter of the agreement i,e, land obtained the interim order through misrepresentation by posing themselves to be the owner of the subject plot. Perusal of Prayer Clause (1) of the plaint would reflect that the Respondent No,1/Plaintiff sought a declaration to the following effect:--- "Declare that the Plaintiff is legally, lawfully and bonafidely on merits is entitled for the dealership of Defendant No,1 in respect of Petrol Pump- cum-CNG Station at HIS AFORESAID LAND measuring 1500 square yards situated at Shahrah-e-Faisal, Jinnah International Airport, Karachi".

29. ' Likewise, in his Application CMA No,12792/2013 (under Order XXXIX, Rules 1 and 2, C P.C.)

30. Plaintiff/Respondent No,1 claims to be the owner of the subject land by asserting "Consequently not to create third party interest in respect of dealership of Plaintiff for establishment of Petrol Pump- cum-CNG Station at PLAINTIFF'S LAND measuring 1500 square yards situated at Shahrah-e-Faisal, Jinnah International Airport, Karachi".

31. ' The fact that the Respondent No,1 was fully aware that he had no interest in the subject matter of agency could further be demonstrated from the fact that the Respondent No,1, after close of arguments made an attempt in that pursuit by filing a statement undertaking to pay the non- utilization charges for eight months, however, such payment was voluntarily without the consent of the Appellant and or in consequent to any agreement or direction of the Court and such payment by no stretch of imagination could create relationship of principal and agent between the parties or interest in the subject matter of agency. We further fail to understand that once the learned Judge on the Original Side had himself recorded the submission of the Plaintiffs counsel at page 2 second para that Rs,3.875.000/- spent by the Respondent No,1 were reimbursed as per prevailing practice by the Appellant then how could it be held at page 13 of impugned order that "by the time the actual lease was executed on 13.10.2011 the Plaintiff had already borne expenditure of Rs,3,875,000/-. In this matter it can easily be said that the Plaintiff acquired interest in the subject matter of the suit which is the said land in terms of Section 202 of the Contract Act, 1872". Mr. Umer has further placed on record certified copy of order sheet to show that though the order is dated 7th July, 2014 but it was reserved for orders on 11th July, 2014, however, in our opinion this appears to be some kind of mistake and does not require deliberations.

32. Besides, examination of Section 202 of the Contract Act in the light of dicta laid down by the Apex Court leaves no doubt in our mind that where the agent has an interest in the property which forms the subject matter of the agency then unless the contract between the parties-so provide it cannot be terminated to the prejudice of such interest. However in the instant case the Respondent No,1 has no interest in the property as such, though he may have made efforts in procuring the lease but such efforts to our opinion can very well be compensated and therefore, the Respondent No,1 could not be held as an Agent or having interest in the property which forms the subject matter of the agency. Though in the instant case the Appellants have yet to construct Petrol Pump/CNG Station for his dealer who would purchase the petroleum product/CNG from the Appellant and would sell the same. In our opinion even this would not have created the relationship of a principal and agent between the parties as a dealer who purchases petrol and sells the same on a margin of profit neither can represent his principal in dealing with third person nor can create legal relationship between his principal and third party. The Apex Court in the case of Bolan Beverages (Pvt.) Ltd. (ibid) has enumerated the relationship between the principal and agent in the following words:- <i> "That an agent is a hyphen that joins and a buckle that binds the relation between the principal and the third parry. Where an agent is not a link between the principal and a third party, the institution of agency is not created. Where a person is not liable to the principal for the submission of accounts such person cannot be dubbed as agent".</i> ' In the light of what has been discussed above, we are of the firm opinion that the Respondent No,1 had no interest whatsoever in the property which forms the subject matter of the agency and therefore, was not entitled to the interim relief through impugned order. The Appeals therefore, are allowed. The impugned order is set aside and the Applications for interim relief are dismissed.

Cited by 1 case

For educational and research use only โ€” not legal advice. Verify against the official report before relying on it. See our Disclaimer.
DisclaimerยทPrivacyยทTermsยทSearch