P L D 1956 Sind 66 (PLP)

MUHAMMAD BACHAL, J.

‑This is a suit for recovery of Re. 54,000 brokerage commission or as damages. The plaint states that in December 1948, the plaintiff was engaged by the defendant to secure in his favour the sale of E. T. Tramway Co. which has its Head office in London. Mr. Kensett was their attorney in Karachi. The defendant promised that he would give him much better terms than 2% commission offered by others to him and would appoint him Managing Director and give him a reasonable share of profit. The plaintiff succeeded in bringing about a contract of sale between the defendant and the company through its attorney, Mr. Kensett, and a draft agreement for the sale of the Company for about 20 lacs rupees was prepared by Messrs Tolasing & Co. Advocates agreed to by the parties. This was sent to London for confirmation. Mr. Batley, a local businessman of Karachi, raised the offer to 27 lacs and Mr. Kensett sent this agreement to London for confirmation. The plaintiff was therefore asked by the defendant to immediately proceed to London to have the sale agreement finally adopted in his favour. The plaintiff proceeded to London to negotiate the matter with the officers of the Company. He returned to Karachi and was sent for by Mr. Kensett on 28th April 1949, and ultimately the concern was sold to the defendant for Rs. 27 lacs. The plaintiff was put to the proof of facts stated in his plaint, it being denied that the defendant engaged the plaintiff as a broker on the terms stated in the plaint or that a draft agreement of sale was brought about after a contract of sale was brought about by the plaintiff between the defendant and Mr. Kensett. According to the defendant, he directly negotiated with Mr. Kensett and the said draft agreement was drawn up, but as Mr. Kensett received Rs. 10 lacs from Mr. Batley who offered Rs. 27 lacs, a written agreement in his favour was sent by Mr. Kensett to London for approval. The plaintiff requested him to send him to London for direct negotiations with the Head Office. The defendant agreed to pay to the plaintiff the return fare and Rs. 3,000 for securing the sale in favour of the defendant and also securing other business for the defendant.. The plaintiff misconducted him self there and in spite of his offering Rs. 29 lacs, the company on 30th March 1949, agreed to the sale of the Company in favour of Mr. Batley for Rs. 27 lacs. But subsequently Mr. Batley did not agree to make payment of the balance of the price and Mr. Kensett contacted the defendant and completed the transaction with him for Re. 27 lacs. The defendant denied the plaintiff having seen Mr. Kensett on his return from England. The following issues were raised (1) (a) Did the defendant engage the plaintiff to secure the sale of East India Tramway Company, Karachi‑in defen dant's favour ? and (b) Did the defendant promise to appoint the plaintiff as the Managing Director of the said company and also give to the plaintiff a reasonable share of profit in case he gets the sale completed in defendant's favour ? (2) Did the plaintiff bring about an agreement of sale between the defendant and the said company as alleged in para. 2 of the plaint and did the alleged negotiations by plaintiff not terminate on the acceptance of Mr. Batley's offer by the attorney of the company prior to plaintiff's visit to London mentioned in para. 3 of the plaint ? (3) (a) Did the plaintiff on his visit to London mentioned in para. 3 of the plaint get the offer of Mr. Batley rejected and the agreement of sale in defendant's favour finally accepted by the company ? (b) Did the plaintiff spoil the deal by his misconduct on his visit to London mentioned in para 3 of the plaint and could not secure the sale in defendant's favour in spite of the offer of Re. 29 lacs on behalf of the defendant ? (4) Did the plaintiff actually bring about the sale of the East India Tramway Company in favour of the defendant ? (5) (a) Is the plaintiff entitled to brokerage at the rate o` Rs. 2 per cent. as per usage and custom of the market ? (b) If not (i) is plaintiff entitled to Rs. 54,000 as damages caused to him by the alleged failure of the defendant to fulfill his alleged obligation or (ii) is the plaintiff entitled to this amount on account of services alleged to have been rendered by him. (6) Is the defendant entitled to costs under section 35‑A Civil P. C.

7. To what relief, if any, is the plaintiff entitled ? My findings are as follows Issues Nos. 1 and 2.‑Yes. Issue No. 3.‑No. Issue No. 4.‑No. Issue.‑No. 5.‑‑(a) yes (b) does not arise. Issue No. 6.‑No. Issue No. 7.‑Suit decreed with costs as below. Reasons Issues Nos. 1 and 2:‑The plaintiff in his evidence deposed to the facts as stated in the plaint. His witness Abde Ali deposed to his introducing1the plaintiff to Tayyabali Mandviwalla who was interested in purchasing this concern and witness Tayyabali deposed to the defendant asking the plaintiff to work for him and he would pay him more than 2 per cent. commission and make him Managing Director and give him a share. The defendant has not been examined. His son stated in his evidence that the plaintiff did nothing here. But the defendant's witness Mr. Kensett, who is the General Manager of the defendant's concern, admitted in his evidence that before he went to England in February 1949 in connection with Mr. Batley's offer of Rs. 27lacs, he had not dealt with the defendant directly. He conceded that he dealt with the plaintiff here regarding the sale of this concern and in his letters to the Head Office he mentioned the plaintiff and not the defendant as the prospective buyer. Mr. Hakumatrai, the defendant's lawyer, who wrote out the draft agreement of sale (Exh. 13) for about 20 lacs stated in his evidence that the plaintiff came to him with the defendant once and in all the plaintiff came to him for 5 or 6 times in connection with the draft agreement (Exh. 13) which was prepared after verifying the statement of affairs (Exh. 16/6) of the Company. The draft agreement made no mention of Mr. Kensett being the Managing Director after the sale of the concern. But the agreement (Exh. 17) signed here by Mr. Kensett after receipt of Rs. 10 lacs earnest money and Exh. 25 signed by him in London on 30th March 1949, and the second agreement (Exh. 28) dated 30th May 1949, in favour of the defendant specifically provided that Mr. Kensett would remain in control of the management of the Company. On behalf of the plaintiff reliance is placed on Mr. Batley's letter (Exh. 19) dated 22nd February 1949 to Mr. Kensett sending him a draft of agreement drawn up on similar lines to that which he had sent to London to show that Exh. 13 and Exh. 17 were sent to London. Mr. Kensett does not remember this. But this is immaterial having regard to the fact admitted by Mr. Kensett that he had written to the Head Office that the plaintiff was the prospective purchaser. In this state of the evidence of the defendant's witnesses my findings on the first and second issues are in the affirmative. Issue No. 3 ‑It is conceded that after Mr. Batley's offer of Rs. 27 lacs here, the defendant sent the plaintiff to London for direct negotiations with the Head Office as also appears from the notice (Exh. 5/2) dated 24th December 1949, sent to the plaintiff by the defendant's lawyer. In his letter (Exh. 6/1) dated 14th March 1949, to the defendant, the plaintiff informed the defendant that their agreement was wrongly misunderstood there and he had given them a final offer for Rs. 29 lacs with effect from 1st April 1949. . The defendant in his letter (Exh. 6/4) dated 16th March 1949, advised the plaintiff not to raise the offer. This was before the receipt of the letter (Exh. 6/4) and the defendant in his reply to this letter (Exh. 6/5) dated 26th March 1949, raised no objection to the offer of Rs. 29 lacs. But it appears that as the company had already accepted Rs. 10 lacs earnest money under the agreement (Exh. 17) from Mr. Batley who had promised that Mr. Kensett would be the manager unlike the draft agreement (Exh. 13) in favour of the defendant, the plaintiff's offer was not accepted. My finding on this issue is in the negative. Issue No. 4.‑Mr. Kensett on return to Karachi from London gave a letter (Exh. 26) dated 12th April 1949, to Mr. Batley who was working in the Tramway office to com plete the transaction by 30th June 1949, instead of 31st December 1949, as agreed to under Exh.

25. But Mr. Batley refused. The plaintiff, returned to Karachi on 22nd April 1949. On 28th April 1949, Mr. Kensett wrote a letter (Exh. 8) to the plaintiff which reads as under "Dear Mr. Kadery. I heard you were back but you have not been to see me. Can you see me today ? If so please telephone for an appoint ment." According to the plaintiff he sent for him regarding this transaction which was finalised. But according to Mr. Kensett he sent for him to Jose the accounts of Decora Ltd. of which the plaintiff was the manager by 28th Feburary 1949 in April 1949. But Mr. Kensett admitted that the February 1949 bills (Exh. 16/3 and 16/4) of Decora Ltd. had been paid to the company for which receipt (Exh. 16/2) was issued on 9th April 1949. The fact that the plaintiff wanted to be the Managing Director of the company militates against Mr. Kensett's agreeing to the plaintiff's finalizing the transaction on 28th April 1949. It appears that Mr. Kensett directly contacted the defendant who agreed to continue him as Manager. The second agreement (Exh. 28) entered into by the defendant with Mr. Kensett directly on 30th May 1949, provided such a clause as above. My finding on this issue is in the negative. Issue 5.‑In the leading case of Burchell v. Gowrie Blockhouse Colieriss Ltd. (1910 A C 614.), the following observation occurs in the judgment of the judicial committee :" In the words of Erle C. J. in Green v. Bartlett (135 Rev. Reports 868) if the relation of buyer and seller is really brought about by the act of the agent, he is entitled to commission although the actual sale has not been effected by him. In Bows Emporium Ltd. v. A. R. Brett (1927 44 T L R 194), it was held that where an agent first introduced the purchaser to the vendor, is entitled to a commission. Where a sale is nego tiated by an agent his commission is usually paid by the vendor. It may well be that where the agent is employed to approach the owner of a particular business in order to negotiate its sale by the vendor who is to be thus set in motion, the parties may bargain, or be taken to have bargained, that the commis sion is to be paid by the purchaser on whose behalf the agent has succeeded in setting the vendor in motion. It may be mentioned that the mere fact of introduction may not be conclusive. But where the introduction is the foundation or where the negotiation proceeded and the negotiation eventually ripened into sale, the introductor is entitled to Claim the fruit of his labour. The real test is whether the vendor and the purchaser were brought together by the agent acting in the matter either for one or the other or for both. If the ultimate sale could not have taken place but for the introduction made by the agent, the latter is entitled to get his brokerage. Remu neration can be claimed only in transactions which are the direct consequence of the agency. It is not necessary that the agent should actually complete the transaction, but he must show that it was brought about as the direct result of his intervention (Halsbury's Laws of England, Hailsham Ed. Vol. I para 434). If an agent is prevented from earning his remunera tion by some wrongful act or default on the part of the principal, he is entitled to recover from the latter as damages the actual loss sustained by him (Halsbury's Laws of England, Hailsham Ed. Vol . I, para. 435). The principle in Green v. Bartlett was followed in I L R 20 Bom. 124 The Municipal Cor poration of Bombay v. Cuverji Hirji and others at page 127 his Lordship says "In that case Green v. Bartlett the purchaser had been introduced to the vendor by the agent. In the present case, there is no question of introduction. That is often the main office of a broker in case where an article of commerce is sold. The bringing together of a willing vendor and a willing purchaser is virtually bringing about the bargain, and the same is often the consequence though in a less degree of bringing a vendor and buyer of land into communication. But, in a case like the present, the owner is usually well known to the intending purchaser; the latter has no difficulty in ascertaining the person with whom he has to deal. The initial phase of the transaction is not the making of the parties known to each other, but the inducing irk the owner the contracting mind‑the willingness to open negotiations upon a reasonable basis." Mr. Sadiq for the defendant argued that unless the sale was procured by the plaintiff's intervention, he would not be entitled to any commission. The principles enunciated above are subject to any contract or any special term in the contract of employment to the contrary. In this case the contract was not written but oral. In Mehta v. Cassumbhai (24 B L R 847.) it was held that the broker had introduced the purchaser to the vendor, and as such introduction was the foundation on which the negotiations proceeded, the broker was entitled to his commission if he was up a certain time the agent or the middleman between, the parties, though the transaction was completed without his instrumentality or interference. The circumstances of this case clearly go to show that the defendant in reality, made it impossible for the plaintiff to earn his commission, by directly entering into the sale. Under section 219 of the Contract Act the plaintiff is entitled to 2 per cent. commission having regard to the evidence of Mr. Hakumatrai defendant's witness that 2 per cent. is the customary brokerage and that the draft agreement of sale (Exh. 13) was brought about by the plaintiff, whom the defendant, according to the defendant's lawyer's notice (Exh. 5) sent to England as his agent with authority to negotiate the deal regarding the sale of the E. I. Tramway Co., arid that the plaintiff carried on such negotiations there, but the defendant ultimately in Karachi directly entered into the sale. My finding on the first part of this issue is in the affirmative finding on the second part of this issue does not arise. Issue No. 6.‑My finding on this issue is in the negative. Issue No. 7.‑‑The result is that the suit is decreed with costs with interest at 6 per cent p.a. on Rs. 54,000 from the date of suit till payment. A. H. Suit decreed.