# ABDULLA AHMED v. ANIMENDRA KISSEN MITTER

- **Citation:** [1950] 1 S.C.R. 30
- **Court:** Supreme Court of India
- **Decided:** 1948-01-05
- **Bench:** SHRI HARILAL KANIA c . .1, Saiyid F Azl Ali, Patanjali Sastri, Mehr Chand Mahajan, S. R. Das
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/abdulla-ahmed-v-animendra-kissen-mitter-129
- **Pages:** 34

## Headnote

Oontmct-.{gencu-Estate
b1"0ker-Authorit11 to ' 11tgotiate a
sale' and '3ecure purcha.se1· '-Whether empower& broker to conclw11
contrnct-Constr"-Otion of contract~Broker finding out purchaur
ready awl willing to buy for pries fixed by principal-Principal
concl,,.ding contract with same purchaser for lower price-Broker'1
right to commission-Powers of e&late agents.
The appellant, •u estate broker,
was
employed by the
respondent by a letter .dated 5th May, 1943, to negotiate a· sale
of a certain property on the terms mentioned_ in a commission
note which ran as follows: "J ...... do hereby authorise yon to
negotiate the sale of my property 27, Amratolla Street, free from
all encumbrances at a price not less than Rs. 1,00,000. I shall
make out a good title to the property. If you succeed in securing a huyer for Rs. 1,00,000, I shall pay you Rs. 1,000 as your
remuneration. If the price exceeds Rs. 1,05,000 e.nd does not
exceed Rs. 1,10,000, I shall pay you the whole of the excess over
Rs. 1,05,000 in addition to your remunemtion of Rs. 1,000 as
~tated above.
In ce.se you can secure a buyer at a price exceed·
ing Rs. 1,10,000 I shall pay you twenty·five · pet cent. of the
excess amount over Rs. 1,10,000 in addition to Rs. 6,000 as stated
1tbove.
This authority will remain in force for one month
from !late."
In pursuance of this contract the appellant found
two persons rearly and willing to purchase the property for
Rs. 1,10,000 on the 2nd June and by letters exchanged with
them he purportecl to conclude the contract for the sale of the
property, and on the 3rd June communicated the same to the
responrlent.
The respondent, however, cancelled the authority
or the appellant on the 9th June and on the same date entered into
an
agreement
\Vith
a
nominee of the
said
persons for a
•ale of the property for Rs. 1,05,000 and eventually executerl
a conveyance in their favour for Rs. 1,05,000. The appellant institutecl a suit against the respondent for Rs. 6,000.
Held, per KANIA C.J., FAZL ALI, PATANJALI SASTRI and
DAS .J.T.-(i) that a house or estate agent is in a different position
from a hroker at the Stock Exchange owing to the peculiarities or
the p1·operty with which he has to deal, and an owner employing
an estate agent should not, in the absence of clear words to that
effect, be taken to have authorised him to conclude a contract or
sale; but the lack of such authority is not inconsistent with an
understanding that the agent is . .not to be entitled to his commis-
•ion unles• the owner and the purchase1· introduced by the agent
4
•
)
S.C.R.
SUPREME COURT REPORTS
31
carried the transaction to completion; (ii) that even j.f
the
191JO
commission note in the present case were to be construed as
making payment of commission conditional on the completion of
Abdulla Alimed
the tre.nsaotion, the appellant having "negotiated the sale" and
v.
"secured buyers" who made a firm offe1· to buy for Rs. 1,10,000,
Animendra
acquired. the right to the payment of commission on the basis of
Kis#n Mitter.
that price subject only to the condition that the buyers should
• complete the transaction of purchase and sale ; and as this
condition was fulfilled when the buyers eventually purchased
the property in question; the appellant's right to commission on
that basis became absolute, and could not be affected by the
circumstance that the respondent fo1· some reason of his own sold
the property at a lower price.
MAHAJAN J.-Under the terms of the commission note in the
present case the appellant had authority to enter into a binding
contract on behalf of the defendant, and, as he had entered
i.
into such a contract he was entitled to the commission of Rs. 6,000
according· to the terms of the co~mission note. Even conceding
that he had no such authority, under the terms of the commission
note the agent was entitled to his remuneration as soon as he in·
troduced a buyer ready and willing to purchase for the price fixed
by the o'wner, whether the owner completed th

## Text

_Characters 0–39,702 of 75,565. This is a partial read: ask again with offset=39702 for what follows._

1960
l[areh li.
30
SUPREME COURT REPORTS
ABDULLA AHMED
v.
ANIMENDRA KISSEN MITTER.
[SHRI HARILAL KANIA c . .1., SAIYID F AZL ALI,
PATANJALI SASTRI, MEHR CHAND MAHAJAN and
S. R. DAS JJ.)
Oontmct-.{gencu-Estate
b1"0ker-Authorit11 to ' 11tgotiate a
sale' and '3ecure purcha.se1· '-Whether empower& broker to conclw11
contrnct-Constr"-Otion of contract~Broker finding out purchaur
ready awl willing to buy for pries fixed by principal-Principal
concl,,.ding contract with same purchaser for lower price-Broker'1
right to commission-Powers of e&late agents.
The appellant, •u estate broker,
was
employed by the
respondent by a letter .dated 5th May, 1943, to negotiate a· sale
of a certain property on the terms mentioned_ in a commission
note which ran as follows: "J ...... do hereby authorise yon to
negotiate the sale of my property 27, Amratolla Street, free from
all encumbrances at a price not less than Rs. 1,00,000. I shall
make out a good title to the property. If you succeed in securing a huyer for Rs. 1,00,000, I shall pay you Rs. 1,000 as your
remuneration. If the price exceeds Rs. 1,05,000 e.nd does not
exceed Rs. 1,10,000, I shall pay you the whole of the excess over
Rs. 1,05,000 in addition to your remunemtion of Rs. 1,000 as
~tated above.
In ce.se you can secure a buyer at a price exceed·
ing Rs. 1,10,000 I shall pay you twenty·five · pet cent. of the
excess amount over Rs. 1,10,000 in addition to Rs. 6,000 as stated
1tbove.
This authority will remain in force for one month
from !late."
In pursuance of this contract the appellant found
two persons rearly and willing to purchase the property for
Rs. 1,10,000 on the 2nd June and by letters exchanged with
them he purportecl to conclude the contract for the sale of the
property, and on the 3rd June communicated the same to the
responrlent.
The respondent, however, cancelled the authority
or the appellant on the 9th June and on the same date entered into
an
agreement
\Vith
a
nominee of the
said
persons for a
•ale of the property for Rs. 1,05,000 and eventually executerl
a conveyance in their favour for Rs. 1,05,000. The appellant institutecl a suit against the respondent for Rs. 6,000.
Held, per KANIA C.J., FAZL ALI, PATANJALI SASTRI and
DAS .J.T.-(i) that a house or estate agent is in a different position
from a hroker at the Stock Exchange owing to the peculiarities or
the p1·operty with which he has to deal, and an owner employing
an estate agent should not, in the absence of clear words to that
effect, be taken to have authorised him to conclude a contract or
sale; but the lack of such authority is not inconsistent with an
understanding that the agent is . .not to be entitled to his commis-
•ion unles• the owner and the purchase1· introduced by the agent
4
•
)
S.C.R.
SUPREME COURT REPORTS
31
carried the transaction to completion; (ii) that even j.f
the
191JO
commission note in the present case were to be construed as
making payment of commission conditional on the completion of
Abdulla Alimed
the tre.nsaotion, the appellant having "negotiated the sale" and
v.
"secured buyers" who made a firm offe1· to buy for Rs. 1,10,000,
Animendra
acquired. the right to the payment of commission on the basis of
Kis#n Mitter.
that price subject only to the condition that the buyers should
• complete the transaction of purchase and sale ; and as this
condition was fulfilled when the buyers eventually purchased
the property in question; the appellant's right to commission on
that basis became absolute, and could not be affected by the
circumstance that the respondent fo1· some reason of his own sold
the property at a lower price.
MAHAJAN J.-Under the terms of the commission note in the
present case the appellant had authority to enter into a binding
contract on behalf of the defendant, and, as he had entered
i.
into such a contract he was entitled to the commission of Rs. 6,000
according· to the terms of the co~mission note. Even conceding
that he had no such authority, under the terms of the commission
note the agent was entitled to his remuneration as soon as he in·
troduced a buyer ready and willing to purchase for the price fixed
by the o'wner, whether the owner completed the transaction or not.
Luxor (Eastbourne) Ltd. v. Cooper ([1941) A.O. 108) distin·
guisbed.
•
Chadburn v. 1'rloore (67 L.T. 257), Rosenbaum v. Belson ((1900)
2 Cb. 267), Durga Charan Mitra v. Rniendra Narain Sinha (36
C.L.J. 467), Wragg v. Lovett ([1948) 2 All E.R. 969) referred to.
APPEAL from the High Court of Judicature at Calcutta: Civil Appeal No. XLIV of 1949.
This was an appeal by special leave from a judgment
and decree of the High Court of Judicature at Calcutta
(Harries C.J. and Mukherjea J.) dated 5th January
1948 which varied a judgment passed by a single Judge
l
sftting_~m the Original Side of the same High Court
(Gentle J:) dated 11th June, 1945. The facts of the case
and the arguments of the Counsel appear fully in the
judgment.
M. 0. Setalvad (A. K. Sen with him), for the
appellant.
B. Sen, for the respondent.
- - <t.
1950. March 14. The judgment of Kania C. J.,
and Fazl Ali, Patanjali Sastri and Das JJ., was
delivered by Patanja.li Sastri J.: Mahajan J. delivered
a separate judgment.
6
19t:O
Al1f/ulla Ahmed
v.
A11i111e1Jdra
Jlisset? Mitter.
Patanjali
Sastri J,
32
SUPREME COURT REPORTS
[1950]
PATANJALI SASTRI J. This is an appeal by special
leave from a judgment and decree of the High Court
of Judicature at Fort William in West Bengal dated
5th January, 1948, which varied a judgment and
decree passed by a single Judge on 11th June, 1945,
on the Original Side of the same Court.
Th<> appellant who is carrying on business as an estate broker in Calcutta was employed by the respondent on the terms mentioned in a commission letter
dated the 5th May, 194-3, to "negotiate the sale" of
premises No. 27, Amratolla Street, Calcutta, belonging
to him.
In pursuance of this contract the appellant
found two persons who were ready and willing to purchase the property for Rs. l,10,000, and by letters
ex<lhanged with them on 2nd June, 1943, he purported
to eoncl ude a con tract for the sale of the property and
communicated the same to the respondent by a letter
of even date. The respondent, however, entered into
an agreement on !lth .Tune, 1943, with a nominee of
the said persons for the sale of the property for
Rs. l,05,000 and eventually executed a conveyance in
their favour on 8th December, 1943.
Thereupon the appellant brought the suit alleging
that the contract concluded by him with the purchase1·s for Rs. I ,I0,000 on the 2nd .June, 1943, was binding on the respondent and claimed that he was
entitled to the payment of Rs. 6,000 as remuneration
in accordance with the terms <if his employment as he
had done all that he was required to do on behalf of
the respondent. In the alternative he claimed the
same sum as damages for breach of contract. In defence to the snit the respondent pleaded, intei· alia,
that the appellant had no authority to conclude a
binding contract for sale with any one, that the purchasers refused to complete the transaction alleging
that they had been induced by the fraudulent misrepresentation of the appellant to agree to a price of
Rs. 1,10,000, that the subsequent sale was effected ,.
independently of the appellant, and that the appellant was not therefore entitled to any remuneration or
damages.
....
S.C.R.
SUPREME COURT REPORTS
33
.
Gentle J. who tried the suit found that the terms of
the appellant's employment did not authorise him to
conclude a contract of sale and that the letters of 2nd
,June, 1943, did not effect a contract of sale binding on
the respondent. The learned Judge, however, rejected
the respondent's case that the purchasers refused to
purchase on the ground of any fraudulent misrepresentation by the appellant and that the negotiations
were later resumed afresh directly between the respondent and the purchasers, and came to the conclusion
that the agreement to sell of the 9th June, 1943, and
the subsequent conveyance of 8th December, 1943,
were due solely to the efforts of the appellant in bringing the parties together as potential buyers and seller.
The learned Judge refused to accept the suggestion
that the sale was in fact effected for Rs. l,l0,000 as
not being supported by any evidence but found that
the reduction of the price by Hs. 5,000 from
Rs. l,l0,000 for which the purchasers were ready and
willing to buy the property, was made only for the
purpose of depriving the appellant of his legitimate remuneration of Rs. 6,000.
He accordingly held that
the appellant, who had performed his part of the contract by finding two persons who were ready, able and
willing to buy at Rs. 1,10,000 was entitled to the commission claimed.
The Division Bench (HarriesC.J. and Mukherjea J.)
which heard the appeal of the respondent, agreed with
the trial Judge that the appellant's authority did not
extend to the concluding of a binding contract for sale
of the property, but differed from his view that all
that the appellant was required to do was to introduce
a purchaser who was ready and willing to buy for
Rs. 1,10,000 and that he was entitled to his commission whether or not the property was sold at that price
or at all.
They held, following certain observations
of Lord Russell of Killowen and Lord Romer in the
case next mentioned, that the appellant, having undertaken to "negotiate .the sale" and to "secure a buyer'',
-
could not be said to have either secured a buyer or
negotiated the sale "unless the sale actually took place
or at least a contract had been entered into". As,
1960
Al1d11lla Ahmed
v.
Anioientlfa
[{ i ssen M ittc r,
Patanjali
Sa>tri J.
1950
Abdulla Ahm<d
v.
Ani1nendra
Ki1s~n MitU,..
Ptdanjali
Sastrl /,
34
SUPREME COURT REPORTS
[1950]
however, a sale did take place between the persons introduced by the plaintiff and the defendant, and as
that sale, in the view1also of the learned Judges, was
the "direct result of the plaintiff's negotiations", they
held that the appellant was entitled to commission but
only on the price mentioned in the sale deed, namely,
Rs. 1,05,000 which, they found was the price actually
received by the respondent. As.to why the respondent accepted a reduced P,rice, Harries C.J., who
delivered the judgment of the Court, observlld: "All
that is known is that persons who undoubtedly ma.de
a firm offer of Rs. 1,10,000 for this property eventually bought it for Rs. 5,000 less. I strongly suspect
that the price was reduced at the defendant's instance
but I cannot find it as a. fact". In support of their
view that the appellant was not entitled to any aommission above that payable on a. purchase price of
Rs. 1,05,000 the learned Judges relied on the decision
of the House of Lords in Luxor (Eastbourne) Ltd. v.
Cooper('), where it was held tl!.at, in a contract to pay
commission upon the completion of the transaction
which the agent was asked to bring about, there was
no room for implying a term that the principal shall
not without just cause prevent the agent from earning
his commission, and that it was op!m to the principal
to break off negotiations and refuse to sell even after
the agent had produced a customer who was ready and
willing to purchase on the principal's terms. Applying
what they conceived to be the principle of that decision, the Appellate Bench varied the decree of the trial
Judge by reducing the a mount payable to the appellant
to a sum of Rs. 1,000.
The commission letter runs as follows :
"I, Animendra Kissen Mitter of No. 20-B, Nilmoni
Mitter Street, Calcutta, do hereby authorise you to
negotiate the sale of my property, 27, Amratolla
Street, free from all encumbrances at a price not less
than Rs. 1,00,000. I shall make out a good title to
the property. If you succeed in-securing a buyer for
Rs. 1,00,000 I shall pay you Rs. 1,000 as your remuner- -
a.tion. If the price exceeds Rs. 1,05,000 and does not
(1) (1941] A.C, lOS.
..
•
•
•
f.
..
-, 'L
S.C.R.
SUPRE!ME COURT REPORTS
35
exceed Rs. 1,10,000 I shall pay you the whole of the
excess over Rs. 1,05,000 in addition to your remuneration of Rs. 1,000 as stated above. In case you can
secure a buyer at a price exceeding Rs. 1,10,000 I shall
pay you twenty-five per cent.. of the excess amount
over Rs. 1,10,000 in addition to Rs. 6,000 as stated
above. This authority will remain in force for one
month from date".
In the absence of clear words expressing the intention of the parties it is possible to construe these terms
in three different ways corresponding to the three
patterns into which commission contracts with real
estate brokers may broadly be said to fall. In the first
place, the letter may be read as authorising the appellant not only to find a purchaser ready and willing· to
purchase the property at the price required but also to
conclude a binding contract with him for the purchase
and sale of the property on behalf of the respondent.
Secondly, the contract may be construed as promising
to reward the appellant for merely introducing a potential buyer who is ready, able and willing to buy at or
above the price named, whether or not the deal goes
through. And lastly, the commission note may be
understood as requiring the appellant to find such a
purchaser without authorising him to conclude a binding contract of sale but making commission contingent
upon the consummation of the transaction. As stated
already, the first of these interpretations was rejected
by the learned trial Judge as well as by the Appellate
Bench, but it was pressed upon us by Mr. Setalvad on
behalf of the appel~ant. We are unable to accept that
view.
'£he contract specifies only the price required
by the respondent but does not furnish the broker with
other terms such as those relating to the payment of
the price, the investigation and approval of title, the
execution of the conveyance, the parties who are to
join in such conveyance, the costs incident&! thereto
and so on. In fact, the agreement of sale dated the 9th
June, 1943, entered into by the respondent with the
purchasers contains detailed stipulations on all these
and other matters. Mr. Setalvad laid stress on the
statement in the commission note that the sale was to
1960
Abdulla Ahmed
v.
Animendra
Ki ssen Mitter.
Patanjali
Sa•tri J•
19150
Abdulla Ah1ned
v.
Aui11iendra
Kissen Mitter,
Patanjali
Sastt'i J.
36
SUPREME COURT REPORTS
[1950]
be free from encumbrances and that a "good title"
would be made out, but this is no more than a general
indication of the nature of the bargain proposed and is
perfectly consistent with an understanding that further
details will be subject to negotiation between the respondent and the purchaser when found.
As pointed out by Kekewich J. in Chadburn v.
Moore(') a house or estate agent is in a differeu t position
from a broker at the stock exchange owing to the
peculiarities of the property with which he is to deal
which does not pass by a short instrument as stocks
and shares do but has to be transferred after investigation of title as to which various special stipulations,
which might be of particular concern to the owner,
may have to be inserted in a concluded contract relating
to such property.
The parties therefore do not
ordinarily contemplate that the agent should have the
authority to complete the transaction in such cases.
That is why it has been held, both in England and
here, that authority given to a broker to negotiate a
sale and find a pnrchaser, without furnishing him with
all the terms, means "to find a man willing to become
a purchaser and not to find him and make him a purchaser": see Rosenbaum v. Belson(') and Ditrya
Charan 11!/itra v. Rajendra Narayan Sinha(').
Mr. Setalvad next suggested, in the alternative, that
the second interpretation referred to above, which was
favoured by the trial Judge, should be adopted, and
that, inasmuch as, in that view also, the appellant had
done all that he was required to do when he introduced
to the respondent two prospective buyers who were
ready and willing to bny the premises for Rs. I,I0,000,
he was entitled to commission on that basis. Learned
counsel criticised the view of the Appellate Bench, who
adopted the third cons~ruction, as illogical and inconsistent, and argued that, if authority to secure a buyer
were to be taken to mean authority to find one who is
not only ready and willing to buy but also becomes
eventually a buyer in order to entitle the agent to his
commission, then such authority must. of necessity
(1) 67 L.T. 257.
12) [1900] 2 Ch. 267.
IS)
86 O.L.J. '67.
•
•
•
i I
S.C.R.
SUPREME COU"RT REPORTS
37
extend to the concluding of a contract of sale, as otherwise the agent could not possibly accomplish the task
assigned to him. We.do not see much force in this
criticism. As already indicated there are cogent reasons
why an owner employing an estate agent to secure a
purchaser should not, in the absence of clear words to
that effect, be taken to have authorised him to conclude
a contract of sale, and we cp.nnot see how the lack of
such authority is iiiconsistent with an understanding
that the agent is not to be entitled to his commission
· unless the owner and the purchaser introduced by the
agent carried the transaction to completion.
In the present case, however, it is not necessary to
decide whether or not the commission note imports
such an understanding, for a sale was in fact concluded
with the purchasers introduced by the appellant who
has thus, in a;ny view, earned his commission, both
the trial J·udge and the Appellate Bench having found
that the appellant's efforts were the effective cause of
that sale. The only question is whether the commission is payable on the basis of Rs. 1,10,000 for which
the appellant brought a firm offer from the purchasers,
or on the basis of Rs. 1,05,000 which is the price mentioned in the conveyance.
As already stated, the Appellate Bench based their
decision on the ruling in the Luxor case. The learned
Judges reasoned thus: "In that case the principal had
refused to sell in cirQumsta nceswhich afforded no reasonable excuse. Nevertheless, the House of Lords, revers-
. ing the Court of Appeal, held that no commission was
payable. It appears to me that the principle is applicable
to thi~case. Though the.agent introduced a purchaser
ready and willing to buy for Rs. 1,10,000 the sale
for !JOme reason took place at a lower figure. Even if
the defendant unreasonably or without just cause refused to conclude the sale at the higher figure, nevertheless the plaintiff has no right to commission based
·on that higher figure." We are unable to agree with
thia reasoning. a.nd conclusion. The ground of decision in -the Luxor case was that, where commission
was made payable on the completion of the transaction, the agent's right to. commission was " a purely
19'50
Abdulla Aluned
v.
Anifllendrn
K issen Mitter.
Patattjali
SastriJ,
1950
1lbdulla Ahnzcd
v.
Aniutendra
/( isst:n l'if itter.
F>atanjali
Sastri J.
Mahajan}.
38
SUPREME COURT REPORTS
[1950]
contingent right" and arose only when the purchase
materialised.
As Lord Simon put it " The agent is
promised a reward in return for an event and the
event has not happened". But the position is different where the principal, availing himself of the
efforts of the agent, concludes the sale with the purchaser introduced by him, as the respondent did in
the present case.
As observed by Lord Russell of
Killowen in the same case, "where a contract is concluded with the purchaser, the event has happened
upon the occurrence of which a right to the promised
commission has become vested in the agent. From
that moment no act or omission by the principal can
deprive the agent of his vested right". Applying that
principle, (even if the commission note in the present
case were to be construed as making payment of commission conditional on the completion of the transaction, as it was in the English case) the appellant,
having "negotiated the sale" and "secured buyers"
who made a firm offer to buy for Rs. 1,10,000 had
done everything he was required by the respondent to
do and acquired a right to the paymel)<t of commission on the basis of that price which he had successfully negotiated, subject only to the condition that the
buyers should complete the transaction of purchas~ and
sale. The condition was fulfilled when those buyers
eventually purchased the property in question, and
the appellant's right to commission on that basis became absolute and could not be affected by the circumstance that the respondent "for some reason" of
his own sold the property at a lower price.
We
accordingly hold that the appellant is entitled to the
full commission of Rs. 6,000.
The appeal is allowed, the decree passed on appeal
in the Court below is set aside and that of the trial
Judge restored. The appellant will have the costs of
this appeal including the costs incurred in the lower
court as well as his costs of the appeal in that court.
MAHAJAN J.-This is an appeal by special leave from
a judgment and decree of the High Court at Calcutta,
dated 5th January 1948. By that judgment the High
•
•
•
.
f
..
I I
S.C.R.
SUPREME COURT REPOR'fS
39
Court va.ried the judgment and decree of Gentle J.
dated 11th June 1945 made in exercise of his original
jurisdiction, decreeing the plaintiff's suit for recovery
of a sum of Rs. 6,000.
The appellant is a broker by profession residing at
Nq. 81/l Phear Lane, Calcutta, and carries on the
busihess of a house agent. The respondent, Animendra
Kissen Mitter, resides in No. 20B, Nilmony Mitter
Street, Calcutta.
The appellant was employed by the respondent to
negotiate the sale of the respondent's premises, No. 27,
Amratolla Street, Calcutta, on certain terms and conditions on commission and the questio~ raised by this
appeal is whether the appellant is entitled to his commission under the circumstances Jli.ereinafter mentioned.
The facts are substantially admitted. By a letter
dated 5th May, 1943, the appellant was employed by
the respondent for arranging a sale of the premises
above mentioned. This letter is in the following
terms:-
·
"I, Animendra Kissen Mitter of No. 20B, Nilmoni
Mitter Street, Calcutta, do hereby authorize you to
negotiate the sale of my above property free from all
encumbrances at a price not less than Rs. 1,00,000.
I shall make out a good title to the property. If you
succeed in securing a buyer for Rs. 1,00,000 I shall
pay you Rs. 1,000 as your remuneration. If the price
exceeds Rs. 1,05,000 and does not exceed Rs. 1,10,000
I shall pay you the whole of the excess over Rs. 1,05,000
in addition to your remuneration of Rs. l,OOOas stated
above. In case you can secure a buyer at a price
exceeding Rs. 1,10,000 I shall pay you twenty-five per
cent. of the excess amount over Rs. 1,10,000 in addition
to Rs. 6,000 as stated above. This authority will
remain in force for one month from date."
As recited in the letter, the authority given to the
appellant was to remain in force for one month from 5th
May 1943. Three days before the termination of the
appellant's authority, on 2nd June 1943 the plaintiffappellant obtained an offer from two persons, namely,
6
1950
Abd,.lla Ahmed
v.
Animendra
Kissen Mitter.
Mahajan J.
1960
Abdtdla A11med
v.
Animendra
Kissen Mitter.
Mahajan j.
40
SUPREME COURT REPORTS
[1950J
Kishorilal Mahawar and Ramkumar Mahor, for the
purchase of the premises regarding which the plaintiff
had been authorized to arrange a sale. This letter is in
these terms:-
"We are willin:g to purchase the above house, land
and premises at and for the price of Rs. 1,10,000 only
free from all encumbrances.
We hereby authorize you to accept the offer for
sale of the above permises from Mr. A. K. Mitter for
Rs. 1,10,000 on our behalf and send the confirma.tion
to the vendor Mr. A. K. Mitter on our behalf."
On the same date the plaintiff gave a reply which runs
thus:-
"I am in receipt of your letter of date and under
authority from the owner Mr. A. K. Mitter, I hereby
confirm your offer for the purchase of the above permises
at and for the price of Rs. 1,10,000 free from all encumbrances."
Simultaneously with the issue of this letter he gave
intimation of this contract to the respondent in the
following terms :-
" Under the authority given to me by you I made an
offer for the sale of the above premises to Messrs.
Kishorilal Maha war and Ram KumarMahorof No.27,
Amratolla Street, Calcutta, for rupees on lakh and
ten thousand only and they have accepted the offer
and they have authorized me to send a confirmation
to you of the said offer. I accordingly confirm the offer
made by you for the sale of the above premises for
rupees one lakh and ten thousand orrly.
The draft
agreement for sale will be sent to you in the usual
course.
A copy of the letter of Messrs. Kishori Lal Maha war
and Ram Kumar l\Iahor accepting your offer is enclosed
herewith."
The lettel',Was received by Mitter on 3rd June 1943,
two days bo'fore the termination of the plaintiff's
authority. The respondent made no reply and kept
silent. He did not question the agent's authority in
effecting a binding contract of sale with the purchasers.
He did not repudiate the transaction nor did he
.. '
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S.C.R.
SUPREME COURT REPORTS
41
expressly ratify it. It was the plaintiff's case that he
had accepted the purchasers' offer after getting express
instructions from the respondent. That case, however,
was not accepted in the two courts below.
On 3rd June, 1943, the solicitor for the purchasers
wrote to the solicitor for the agent that as the offer of
his client for the purchase of 27, Amratolla Street had
already been accapted and acceptance · communicated
to him, the title deeds should be sent so thata conveyance may be prepared. At his request inspection of
the letter of authority was offered by/the plaintiff and
a copy of the letter was sent to him by post. On
receipt of this copy the purchasers' solicitor assumed
a curious attitude. He said that the copy of the letter
sent contained different terms as to commission than
those contained in the letter of authority originally
shown to his client. The plaintiff was charged with
making a secret illegal gain. In spite of these allegations it was asserted that the contract was a concluded
one and that being so, the plaintiff was bound to refund
to the purd10'sers whatever moneys he would receive
from the vendor. It appearr:; that the purchasers'
attorney did Qot like the ideaoftheplaintiffpocketing
a sum of Rs. 6,000 out of the purchase price, and this
dislike on the part of the purchasers for the broker's
commission has led to further complications resulting
inthis litigation.
On 9th June, 1943, the purchasers' solicitor wrote
to the plaintiff's solicitor that his client had cancelled
the agreement of purchase. Immediately on receipt
of this communication the plaintiff's solicitor replied
expressing surprise at this attitude and accused the
other party of a change of front with an ulterior
motive. It was said that further instructions wtmld
be given after getting instructions from Mitter to
whom these letters were forwarded. It seems that
the plaintiff was in the dark while writing the
letter of 9th June, 1943, of the negotiations that were
going on behind the scene directly between the purchasers and the vendor who had kept absolutely silent
all this time. On 9th June the date of the alleged
19li0
Abdulla Alimed
v.
Animendra
Kissen Milter.
Mahajan J.
1950
Abdulla Ahmed
v.
Animendra
K issen Mitter.
Mahajan/.
42
SUPREME COURT REPORTS
[1950]
cancellation of the bargain already made, an agreement was executed between Animendra Kissen Mitter,
the vendor, and Makkanlal, a benamidar of Kishorilal
Mahawar and Ramkumar Mahor (the purchasers) for
sale of the premises for a sum of Rs. 1,05,000. The
sale deed in pursuance of this agreement was actually
executed on 8th December, 1943, in favour of the original purchasers and not in favour of the benamidar.
As pointed out by the learned Chief Justice who delivered the judgment of the appellate Bench, possibly
some arrangement was made whereby both the defendant and the purchasers benefited by the insertion of
a lower price in .the contract of sale and the transfer
deed. It seems obvious enough that the defendant
having received a firm offer of Rs. 1,10,000 for this
property could not have parted with it for Rs. 5,000
Jess except on the basis of some arrangement between
himself and th.e purchasers under which both of them
shared the commission instead of paying it to the
broker. It was to the advantage of both of them.
On 14th August, 1943, the appellant filed the suit
out of which this appeal arises for recovery of
Rs. 6,000, brokerage payable under the commission
note. He also claimed relief by way of damages in the
alternative.
The defendant resisted the suit and
denied the appellant's claim. Gentle J. who heard
the suit, gave judgment for the plaintiff and passed a
decree for a sum of Rs. 6,000, with interest and costs
in his favour.
He held that on a true construction of
the commission note'the appellant's authority was to
find a purchaser, namely, a man ready, able and willing to buy at a price acceptable to the respondent and
that the appellant had accomplished this when he introduced to the re~;·ondent the purchasers and thathe
had done all that "':1s required of him. It was held
that the appellant I.ad no authorit.y to conclude a contract of sale and no binding contract of sale was made
on 2nd and 3rd June, 1943, that the transaction
effected nominally in the name of Makkanlal and completed on 8th December, 1943, in favour of Kishorilal
Mahawar and Rarnkumar Mahor, was effected solely
through the intervention of the appellant who brought
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•
•
S.C.R.
SUPREME COURT REPORTS
43
the parties together in the capacity at least of a
potential buyer and seller, that the reduction of the
price by Rs. 5,000 from Rs. 1,10,000 wal.' more than
peculiar and that this reduction was made for one
purpose and that was to deprive the plaintiff of his
remuneration.
The respondent preferred an appeal against this
decree. This was partially allowed by the learned
Chief Justice and Mukherjea J. on the following findings: that the appellant procured two persons, vi~.,
Kishorilal Mahawar and Ramkumar Mahor, on 2nd
June, 1943, who were willing to buy the property for
Rs. 1,10,000, that on a true construction of the contract of agency no commission was payable until at
least a binding contract had been entered into between the appellant and the respondent, that the agent
could only be said to have negotiated the sale if he
introduced a person willing to buy who eventually
bought, that the -sale took place between the persons
introduced by the appellant and the respondent and
it was the direct result of the appellant's agency, that
the commission note gave no authority to the appellant to conclude a contract of sale, that Makkanlal
with whom the sale a.greement dated 9th June was
entered into was a benamidar of Kishorilal Mahawar
and Ramkumar Mahor; that the appellant had no
right to commission on a higher price than for which
the sale was actually made and as the sale was actually made for Rs. 1,05,000, his remuneration could
not exceed a sum larger than Rs. 1,000. On the basis
of these findings the appeal was allowed and the
decree granted by Gentle J. was modified and the
plaintiff's suit was decreed in the sum of Rs. 1,000.
No order for costs was made in the appeal.
In this appeal Mr. Setalvad for the plaintiff raised
three contentions: (1) That the finding of the court
below that on a true construction of the commission
note the plaintiff had no authority to make a binding
contract regarding the sale of this property with the
purchasers was erroneous; (2) That even if that finding was correct, the plaintiff was entitled to a decree
19ll0
Abdulla Ahmed
v.
Animendra
K issen Mitter-.
Mahajan J,
19ll0
Abdulla Ahmett
T,
Animendra
K is sen M itler.
Mahaj"" J.
44
SUPREME COURT REPORTS
[1950]
· for the sum of Rs. 6,000, because he had done all that
he had promised to do for the respondent, viz., he had
secured a purchaser for Rs. 1,10,000, who was ready,
able and willing to buy the property and that if by_
reason of his own caprice or in collusion with the purchasers, the respondent did not sell the property for
Rs. 1,10,000 but chose to receive instead Rs. 1,05,000,
the plaintiff could not be made to suffer.
(3) That on
the evidence it should have been held that the sale
was made for a price of Rs. 1,10,000 and that the
amount entered in the sale deed was fictitious.
The first thing to see is what the parties have expressed in the commission note and what is the true
effect of the language employed in it, read in the light
of the material facts.
As pointed out by Viscount
Simon, Lord Chancellor, in Luxor (Eastbourne), Ltd.
v. Cooper('), contracts with commission agents do not
follow a single pattern and the primary necessity in
each instance is to ascertain with precision what are
the express terms of the particular contraut ·under
discussion.
I have very carefully considered the
terms of this contract in the light of the material
circumstances and with great respect to the Judges
who decided this case in the High Court, I am of the
opinion that the authority given by the principal to
the agent authorized him to enter into a binding contract of sale on his behalf. It was not a mere authority
authorizing him to find a purchaser willing, able and
ready to buy the premises for a price mentioned in the
document. The note, to begin with, confers authority
on the plaintiff to negotiate a sale free from all encumbrances at a price not less than Rs. 1,00,000. Then it
proceeds to say that the principal undertakes to make
out a good title to the property. It further provides
that if the agent succeeds in securing a bnyer for
Rs. 1,00,000, he will be paid a sum of Rs. 1,000 as
remuneration. In the concluding part of the note a
scale of commission proportionate to the price bas been
promised in case a price higher than Rs. 1,00,000 was
secured. In express words it is said that if the price
exceeds Rs. 1,05,000 and does not exceed Rs. 1,10,000,
(1) [19U] A.O. 108,
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S.C.R.
SUPREME COURT REPORTS45
"I shall pay you the whole of the excess' over
Rs. 1,05,000 in addition to your remuneration of
Rs. 1,000", that if a buyer is secured at a price exceeding Rs. 1, 10,000, he will be paid 25 per cent. of the
excess amount over Rs. 1,10,000 in addition to
Rs. 6,000. The authority of the agent was to remain
in force for one month. In my opinion, the terms of
the rrote as regards the property being free from
encumbrances and in respect of the guarantee about
title :indicate that the agent was given authority to
make a binding contract. In a bare authority conferring power on a broker for introducing a customer,
these stipulations would ordinarily find no place: The
words "to negotiate a sale" standing by themselves
may not authorize an agent to make a contract of sale.
But here they do not stand by 17hemselves. They are
followed by two illl.llortant conditions adverted to
above. The agreement further lays down that if the
broker succeeds in securing a buyer, he will get a
certain remuneratiOn. Gentle J. observed that the
word "securing" here had the meaning of "obtaining
a. buyer". I have consulted the same dictionary :as
the learned Judge did and I find that the true meaning
of the expression "securing a buyer" is "to. obtain a
buyer firmly". • It is not possible in business sense to
secure a buyer firmly unless he is bound by an offer
and an acceptance. Otherwise, he is entitled to withdraw the offer at any time before acceptance and it
cannot in this situation be said that a buyer has been
secured firmly. The word "secure" has not the same
meaning as the word "find" or "procure". It gives an
id-ea. of safety and certainty. If a buyer fa ensured he,
is said to be secured and no buyer can be said to be
ensured till he is bound by his offer and that cannot
happen unless it stands accepted. The agent could
only secure a buyer in the strict sense of the term if he
had authority to enter into a binding contract. The
word "buyer" when used in a strict sense also means
"a person who l: 11os actually made the purchase". The
authority given\ to an agent to secure a buyer therefore gives him authority to enter into a ~inding conh·act of sale with him. Without such an authority it
1960
Abdulla Ahmed
v.
Anime•dra
Kissen Mitter.
Mahajan/.
19150
AIN"'11aAhmed
••
A.#U..mdra
Hiuen Mitter.
Maloaja" J,
46
SUPREME COURT REPORTS
(l950J
was not possible to secure a buyer. I am further
supported in this view by the language employed in
the document in respect of the paym•mt of the commission. When the price .secured was Rs. 1,10,000, the
broker was entitled to 25 per cent. of the excess. It is
difficult to think of an excess in relation to price in a
stipulatiOn for commission unless the agent has been
given an authority to make a contract of sale.' If the
scope of the authority is only to introduce a customer
ready, able and willing to buy the property with an
option to the principal to accept or to refuse the offer,
then it would have been drawn up in a different
language.
The subsequent conduct of both the parties to the
agreement very str~ngly supports this view The evidence of such conduct is relevant in this case because,
as pointed out by Viscount Simon, L. C., in the case
already referred to, the phrase "finding a purchaser"
is itself not without ambiguity. Here the phrase is
"securh~g a purchaser". This phrase similarly is not
without ambiguity. The evidence of conduct of the
parties in this situ .. tion as to how they understood the
words to mean can be considered in determining the
true effect of the contract made betw~en the parties.
Extrinsic evidence to determine the effect of an instrument is permissibie where there remains a' doubt as to
its true meaning. Evidence of the acts done under it
is a guide to the intention of the parties in such a case
and particularly when acts are done shortly after the
date of the instrument. (Vide p.ara 343 of Haiis·ham
Edn. of Halsbury, Vol. 10, p. 274).
So far as the conduct of the agent is concerned, he
accepted the offer and under his own signature Rent.
the letter of acceptance to the purchasers. In the letter
written by him to his principal he specifically refers to
his authority. The correspondence above mentioned
clearly shows that both the purchasers and the
agent thought that a concluded contract had been
made. Information of this was given to the vendor and
though he did not speak, his silence in the circumstances of the case seems as eloquent as speech would have
,.,
I ,;
S.C.R
SUPREME COURT REPORTS
47
been. He never repudiated the contract made by the
agent but behind his back entered in.to a fresh contract
with the same persons who had been secured by the
agent in a surreptitious manner.
In the witness box
he assumed a dishonest and untruthful attitude. The
learned trial Judge pronounced him a liar and rightly
too.
He asserted complete igngrance about the subsequent contract of sale and fixed all blame on to his son .
. When asked about the sale price on the contract of 9th
June, 1943, his answer was that be knew nothing about
this and said that because his son asked him to sign
the deed he did sign it and that W&,S all that he knew.
When faced with the sale deed, he said that he did not
know what his son had told him astowhatwaswritten
in the deed. He added that be did not know what
consideration was paid to him for the sale. He further
professed not to know whether the sale price went into
his banking account or was even entered in the account
books.