A company sought commission already paid to an individual sub-dealer. The court upheld rejection of the company's claim and held that the respondent could challenge an adverse finding without cross-objection while supporting the decree in its favour. The second appeal was dismissed without costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 25.02.2021 PRONOUNCED ON : 10.03.2021
CORAM:
THE HON'BLE MR.JUSTICE T.RAVINDRAN
S.A.No.986 of 2009
Aswathi Minerals Private Limited, Represented by its Director Mr.K.Murali, 153/1 Pankaja Mill Road, Ramanathapuram, Coimbatore 641 045. ...Appellant/Plaintiff Vs.
MPL Parts and Services Ltd., Represented by its M.D Mr.Ravindranathan, No.12, Dr.Nair Road, T.Nagar, Chennai 600 017. ...Respondent/Defendant
Prayer:
Second Appeal filed under Section 100 of C.P.C., against the judgment and decree of the learned Principal District Judge of Coimbatore dated 29.09.2006 passed in A.S.No.121 of 2005 dismissing the appeal, confirming the decree and judgment of the I Additional Subordinate Judge of Coimbatore in O.S.No.631 of 2002 dated 05.07.2005.
For Appellant : Mr.C.Seethapathi
For Respondent : No appearance Set exparte vide order dated 25.02.2021
Challenge in this second appeal is made to the judgment and decree dated 29.09.2006 passed in A.S.No.121 of 2005 on the file of the Principal District Court, Coimbatore, confirming the judgment and decree dated 05.07.2005 passed in O.S.No.631 of
2002 on the file of the I Additional Subordinate Court, Coimbatore.
5.The case of the plaintiff in brief is that the plaintiff's company is involved in promoting Chemicals and Lubricants and had dealings with the defendant on the basis of an agreement and certain terms and conditions dated 28.01.1999 and based on the abovesaid agreement, the plaintiff's company was appointed as the sub-dealer for promoting the products of the defendant's company. The abovesaid agreement was valid for a period of one year with effect from 01.02.1999 and the plaintiff's company is eligible for 4 ½% towards the payment of commission on the net invoice value raised by the defendant or by M/s.Castrol India Limited. As on 20.03.2001, the commission payable by the defendant's company to the plaintiff as per the net invoice was Rs.1,10,403/-. Inspite of repeated demands and requests, the defendant has not chosen to settle the plaintiff's due. The plaintiff came to understand that the defendant's company had paid the amount to one K.P.M.Menon and K.P.M.Menon was only a representative of the plaintiff's company and the defendant is not entitled to issue the cheque with regard to the dues payable to the plaintiff's company in the personal name of its representative. The abovesaid representative is no more in the services of the plaintiff. The payment to the representative would not amount to the payment to the plaintiff's company, particularly when the transaction is only between the plaintiff's company and the defendant's company. Hence the plaintiff issued the legal notice dated 20.03.2001, calling upon the defendant to settle the dues for a sum of Rs.1,10,403/- with interest. The defendant sent a reply containing false allegations putting forth that the amount had been paid to one K.P.M.Menon by way of a cheque and the allegations in the reply notice are totally false. Hence, according to the plaintiff, it has been necessitated to lay the suit for appropriate reliefs.
dealer for promoting the products of the defendant's company and the plaintiff was not appointed. The same could be gathered from the recitals contained in the agreement as abovestated. There is no scrap of paper on the part of the plaintiff to evidence that the plaintiff's company was appointed as the subdealer of the defendant's company or recognized as such. The legal notice issued by the plaintiff is untenable and the same had been properly replied. The defendant's company had only dealings with K.P.M.Menon, who gave his address as K.P.M.Menon, M/s. Aswathi Minerals (P) Ltd, 153/1 Pankaj Mills Road, Ramanathapuram, Coimbatore and reference has been made in the legal notice about the commission paid to K.P.M.Menon by the defendant. The payment of the commission to K.P.M.Menon by the defendant is in accordance with the agreement dated 28.01.1999. The plaintiff has no cause of action to lay the suit. The suit is bad for non-joinder of K.P.M.Menon as a party to the proceedings. The defendant is not liable to pay any amount to the plaintiff by virtue of the agreement dated 28.01.1999. Hence the suit is liable to be dismissed.
i. Does payment made to and in the name of the representative of a company incorporated under the Companies Act, 1956, amount to payment to the company itself?
ii. Does the first appellate court have jurisdiction to deal with a finding of the trial court favouring the appellant before it when the respondent has not challenged the same and the issue was also not before it?
plaintiff is eligible for 4 ½ % commission on the net invoice value raised by the defendant and thus it is stated as on 20.03.2001, the commission payable by the defendant to the plaintiff amounts to Rs.1,10,403/- and despite the repeated demands, the defendant had filed to settle the abovesaid amount and the plaintiff came to understand that the defendant has paid the amount to one K.P.M.Menon, who is only a representative of the plaintiff's company and also no more in the services of the plaintiff, by way of a cheque and therefore, according to the plaintiff, when the agreement dated 28.01.1999 is only between the plaintiff and the defendant, the payment made by the defendant to an individual who is noway connected with the abovesaid agreement, would not amount to the payment to the plaintiff and as the defendant failed to pay the amount, despite the issuance of the legal notice and instead sent a reply containing false allegations, according to the plaintiff, it has been necessitated to lay the suit against the defendant for appropriate reliefs.
plaintiff has not placed any material worth acceptance to show that K.P.M.Menon was in the services of the plaintiff's company at any point of time and left subsequently, particularly he was in the services of the plaintiff's company during the relevant period and when in Ex.A1, K.P.M.Menon has not been addressed as the representative or the director of the plaintiff's company and therefore merely because the address of the plaintiff's company has been mentioned in Ex.A1 and without any material pointing to the fact that K.P.M.Menon had been in the services of the plaintiff's company and been authorized and thus acted on behalf of the plaintiff's company, as held by the first appellate court, the inevitable inclusion that could be arrived at is that it is only K.P.M.Menon who had been appointed as the sub-dealer in his individual capacity and therefore the claim of the plaintiff that it had been appointed as the sub-dealer based on the agreement Ex.A1, as such, cannot be countenanced.
contended by the plaintiff's counsel, that K.P.M.Menon was only a representative of the plaintiff's company and no more in the services of the plaintiff's company and therefore the discharge of the commission amount to K.P.M.Menon would not amount to discharge of the said amount to the plaintiff's company. When the abovesaid claim of the plaintiff has been challenged by the defendant in the written statement, the plaintiff should have placed acceptable and reliable materials that K.P.M.Menon was in the services of the plaintiff's company at any point of time, particularly at the relevant period. In this connection, P.W.1 would claim that K.P.M.Menon was appointed in their company during 1999, however, would state that no order of appointment has been issued to K.P.M.Menon and further would state that he does not remember when he was inducted into the plaintiff's company and also state that he does not know when he left the plaintiff's company and admitted that the particulars with reference to the service of K.P.M.Menon in the plaintiff's company had not been spelt out in the plaint or in the legal notice marked as Ex.A3. In the light of the abovesaid factors, the claim of the plaintiff that K.P.M.Menon was in the services of the plaintiff at one point of time and subsequently left the plaintiff, as such, cannot be countenanced. If that be so, the records pointing to the same would have produced by the plaintiff or P.W.1, the Managing Director of the plaintiff's company would have come out with the clear particulars with reference to the employment of K.P.M.Menon in the plaintiff's company as to when he had been appointed, what was the nature of the business undertaken by him in the plaintiff's company and when he left the company etc., Atleast to shed more light qua the abovesaid facts, when it has been admitted by the plaintiff in the plaint as well as by P.W.1 that the commission amount had been paid to K.P.M.Menon by way of a cheque by the defendant's company and the date of cheque has also been clearly mentioned in the plaint as wells as by P.W.1, to clarify all the abovesaid factors, as rightly contended by the defendant, the plaintiff should have implead K.P.M.Menon as a party to the proceedings and if K.P.M.Menon had been added as a party, we would have come to know as to whether he had been in the services of the plaintiff's company as claimed by the plaintiff and what was his role in the plaintiff's company etc., When nothing has been placed on record by the plaintiff that K.P.M.Menon was at any point of time in the services of the plaintiff's company and as above pointed out, when Ex.A1 agreement is found to be not entered into between the plaintiff and entered into only with K.P.M.Menon independently and when no nexus between K.P.M.Menon and the plaintiff's company at any point of time has been established by the plaintiff, the claim of the plaintiff that it had been appointed as the sub-dealer and K.P.M.Menon was only a representative of the plaintiff's company, as such, cannot be accepted in any manner.
K.P.M.Menon represented the plaintiff's company, that K.P.M.Menon had no authority to receive the cheque in his name on behalf of the plaintiff. Therefore, the plaintiff's counsel cannot take advantage of the contents available in the reply notice, to suit his client's case. On a reading of the reply notice wholly, it is evident that the defendant has clearly averred that it is only K.P.M.Menon who had been appointed as the sub-dealer under Ex.A1 agreement and accordingly the cheque had been issued only in the name of K.P.M.Menon. Even according to the plaintiff, K.P.M.Menon is the representative and infact had entered into the agreement with the defendant, as per Ex.A1, when the cheque had been issued in favour of K.P.M.Menon in accordance with the agreement, as rightly putforth by the defendant, in the reply notice, if the plaintiff has any claim or misunderstanding with K.P.M.Menon with reference to the issues involved, it is for the plaintiff to take appropriate proceedings against him and therefore the plaintiff without resorting to necessary action as per law against K.P.M.Menon, is found to have laid the case without any basis against the defendant. As above pointed out, when the plaintiff has miserably failed to establish that pursuant to the sub-dealership agreement under Ex.A2, it had been dealing the products of the defendant's company and when no material with reference to the same had been projected by the plaintiff, in all, it is seen that as rightly held by the first appellate court, the plaintiff has not been appointed as the sub-dealer and only K.P.M.Menon has been appointed as the sub-dealer under Ex.A2 agreement. In such view of the matter, the payment of the commission amount by the defendant's company in favour of K.P.M.Menon is correct and in accordance with Ex.A1 agreement and not liable to be questioned by the plaintiff.
any order which ought to have been passed or made in the proceedings before it. The abovesaid position of law has been outlined by the Apex Court in the decision reported in 2020 (15) Supreme Court Cases 681 [State of Andhra Pradesh and others Vs. B.Ranga Reddy (dead) by Legal Representatives and others] as follows:
A. Civil Procedure Code, 1908 – Order 41 Rule 22 and 33- Applicability of Order 41 Rule 22 – Principles explained.
It is the decree against which an appeal lies in terms of Section 96 CPC. Decree in terms of Section 2(2) CPC means formal expression of an adjudication conclusively determining the rights of the parties. The defendant State could not file an appeal against a decree which was of a dismissal of a suit simpliciter. The findings on issue 1 against the State could be challenged by way of crossobjections in terms of amended provisions of Order 41 Rule 22 CPC but such filing of cross-objection is not necessary to dispute the findings recorded in Issue 1 as the defendants have a right to support the ultimate decree passed by the trial court of dismissal of suit on grounds other than which weighed with the trial court. Even in terms of Order 41 Rule 33 CPC, the appellate court has the jurisdiction to pass any order which ought to have passed or made in proceeding before it.
without cross objection. The abovesaid position of law has been outlined in the abovesaid decision as follows:
A. Civil Procedure Code, 1908 – Order 41 Rule 22(1) Expln & (4) and Rule 33 – Right of respondent to file cross-objection- Nature and scope of – Position of law as prevailed prior to amendment of 1976 and changes effected by the amendment explained – Where in a suit for specific performance of contract of sale, relief of compensation or refund of money/deposit in case of refusal of specific performance also sought by plaintiff and court while refusing the larger relief of specific performance, granted the smaller relief of compensation or refund, the plaintiff would be a person aggrieved by the decree and when appeal is filed by defendant against the grant of relief of compensation or refund, held the plaintiff as respondent can seek the relief of specific performance of contract or modification of decree only by taking cross-objection or by filing appeal of his own- In absence of cross-objection or cross-appeal, modification of the decree and grant of relief of specific performance by the appellate court would be without jurisdiction – Appellate court cannot do so even in exercise of power under Order 41 Rule 33 – Appellant cannot be reduced to a position worse that if he had not appealed.
C.Civil Proceedure Code, 1908 - Sections 96 & 100 – Appeal – who can file – Appeal lies against decree and not against judgment or any finding(s) – only person aggrieved by the decree is entitled to file appeal.
Order 41 Rule 22 -Text as amended by Act 104 of 1976 w.e.f. 0102-1977 :
Upon hearing, respondent may object to decree as if he had preferred a separate appeal.-(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree [but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take any cross-objection] to the decree which he could have taken by way of appeal, provided he has filed such' objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.
[Explanation.-A respondent aggrieved by a finding of the Court in the judgment on which the decree appealed against is based may, under this rule, file crossobjection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.]
(2)– (3) * * *
(4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the court thinks fit.”
Text Pre-amendment:
R.22. Upon hearing, respondent may object to decree as if he had preferred a separate appeal.-(1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree on any of the grounds decided against him in the Court below, but take any cross-objection to the decree which he could have taken by way of appeal, provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.
(2)-(3) * * *
(4) Where, in any case in which any respondent has under this rule filed a memorandum of objection, the original appeal is withdrawn or is dismissed for default, the objection so filed may nevertheless be heard and determined after such notice to the other parties as the court thinks fit.”
and Anr., [1971] 1 SCR 146 that the right given to a respondent in an appeal to file cross objection is a right given to the same extent as is a right of appeal to lay challenge to the impugned decree if he can be said to be aggrieved thereby. Taking any cross objection is the exercise of right of appeal and takes the place of cross-appeal though the form differs. Thus it is clear that just as an appeal is preferred by a person aggrieved by the decree so also a cross objection is preferred by one who can be said to be aggrieved by the decree. A party who has fully succeeded in the suit can and needs to neither prefer an appeal nor take any cross objection though certain finding may be against him. Appeal and cross-objection - both are filed against decree and not against judgment and certainly not against any finding recorded in a judgment. This was well-settled position of law under the unamended CPC.
(iii) The decree is entirely in favour of the respondent and all the issues have also been answered in favour of the respondent but there is a finding in the judgment which goes against the respondent.
B. Civil Procedure Code, 1908 – Order 41 Rule 22(1) – Respondent's right to file cross objection in appeal -Nature and scope of – Filing of cross-objection against adverse finding recorded in judgment of decree – Is permissible after amendment of Order 41 Rule 22 vide Act 104 of 1976 – Withdrawal of appeal or dismissal thereof for default – Would not affect adjudication of said cross-objection on merits.
Held:
After the 1976 amendment of Order 41 Rule 22, the insertion made in sub-rule (1) thereof makes it permissible to file a cross-objection against a finding. The difference is basically that a respondent may defend himself without taking recourse to file a crossobjection to the extent the decree stands in his favour, but if he intends to assail any part of the decree, it is obligatory on his part to file the cross- objection. Post-amendment, read in the light of the Explanation to Order 41 Rule 22(1) though it is still not necessary for the respondent to take any cross- objection laying challenge to any finding adverse to him as the decree is entirely in his favour, yet he may support the decree without cross- objection. It gives him the right to take cross-objection to a finding recorded against him either while answering an issue or while dealing with an issue. After the aforesaid amendment in CPC, if the appeal stands withdrawn or dismissed for default, the crossobjection taken to a finding by the respondent would still be adjudicated upon on merits which remedy was not available to the respondent under the unamended CPC. Banarsi v. Ram Phal, (2003) 9 SCC 606 relied on
Applying the abovesaid principles of law to the case at hand, it is found that the defendant is entitled to challenge the adverse finding rendered against it by the trial court also while supporting the decree in its favour without preferring any cross objection. What is provided in the explanation in Order 41 Rule 22 CPC (after the amendment) is that the defendant is also given the right to take cross objection to a finding recorded against him while answering an issue or while dealing with the issue or even without filing the cross objection is still entitled to support the decree, even on the issue that was held against him by the trial court without filing the cross objection. The position of law being above, the contention of the plaintiff's counsel that the first appellate court had acted without jurisdiction in dealing with the finding of the trial court favouring the plaintiff without the defendant challenging the same, as such, cannot be sustained in the eyes of law.
Consequently, connected miscellaneous petition, if any, is closed.
Sd/Assistant Registrar True Copy//
Sub Assistant Registrar
mfa To 1. The Principal District Judge, Principal District Court, Coimbatore. 2. The I Additional Subordinate Judge, I Additional Subordinate Court, Coimbatore. Copy to The Section Officer, VR Section, High Court, Chennai. CA[co] NSK 10/11/2021
S.A.No. 986 of 2009
2 issues framed by the court
Was the plaintiff company entitled to recover commission already paid to the individual appointed as sub-dealer?
Could the respondent support a decree wholly in its favour by challenging an adverse finding without filing a cross-objection?
Colour shows how this judgement treated each authority
State of Andhra Pradesh and others Vs. B.Ranga Reddy (dead) by Legal Representatives and othersApplied¶46
2020 (15) Supreme Court Cases 681 [State of Andhra Pradesh and others Vs. B.Ranga Reddy (dead) by Legal Representatives and others]
Banarsi and Others Vs. Ram PhalApplied¶49
2003(9) SCC 606 [ Banarsi and Others Vs. Ram Phal] · Who else cites this
Hardevinder Singh Vs. Paramjit Singh and OthersApplied¶76
2013 (9) SCC 261 [ Hardevinder Singh Vs. Paramjit Singh and Others ] · Who else cites this
3 provisions across 1 enactments
Aswathi Minerals Private Limited
MPL Parts and Services Ltd.
T.RAVINDRAN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
