2002 C L D 77
[Lahore]
Before Mian Saqib Nisar, J
CONCENTRATE MANUFACTURING COMPANY OF IRELAND and 3
others---Appellants
versus
SEVEN-UP BOTTLING COMPANY (PRIVATE) LIMITED and 3 others
---Proforma-Respondents
From the above, it is clear that in effect an agent is the connecting link between the
principal and third person---a sort of conduit pipe or an intermediary. This
intermediary has the powers to create legal relationship between the principal and
third party. He has competence to make the principal responsible to the third
person. He is an imperative bridge by crossing which, the third person can reach
the principal to enforce his legal right or vice versa. The principal is liable to the
third person for all the act and deeds performed, within the authority of agency, by his
agent, as if those were personally performed by him. The agent necessarily and the
principal in certain circumstances are liable to each other for accounts. If a so-called
agent is not liable to the so-called principal for the submission of accounts, such as the
profit and loss, he cannot be termed as agent; in laying this scale, my view are
fortified by the following judgments:--
Pakistan Paper Corporation Ltd. v. National Trading Company (NTC) Limited 1983
CLC 1695; Messrs Caltex Oil (Pakistan) Limited, Karachi v. Sheikh Rehan-ud-Din
PLD 1958 (W.P.) Lah. 63; Messrs Rohtas Industries Limited v. State of Bihar AIR
1958 Patna 414 and Moti LAI Channoo LAI Vaish v. Golden Tobacco Company AIR
1957 Madh. Pra. 223.
1992 PLD 838 SUPREME-COURT
S.211---Agent is bound to conduct the business of his principal according to his direction
or in the absence of any such direction, according to the custom which prevails in doing
business of the same kind at the place where the agent conducts such business---if the
agent acts otherwise which results in loss to the principal he is obliged to make good to
his principal and if any profit accrues he is liable to account for
1983 C L C 1695
[Lahore]
Before Lehrasap Khan, J
PAKISTAN PAPER CORPORATION LTD.-Petitioner
versus
NATIONAL TRADING COMPANY (N. T.. C.) LTD.-Respondent
Civil Revisions Nos, 1111 and 1175 of 1982. decided on 11th July, 1983..
(a) Contract Act (IX of 1872)-
--- S. 182-Sale of Goods Act (III of 1930), S. 4-Contract of agency Basic ingredients.
Basic ingredients of contract of agency are :
(i) Agent has a power on behalf of the principal to deal with third persons so as to
bind the principal ;
(ii) Subject-matter of the agency has to be dealt with as the property of the
principal and not of the agent ;
(iii) The agents acts as intermediary for consideration ; and
(iv) The liability of the agent is always to account for the sale-proceeds to the
principal.
Moti Lal Channoo Lal Vaish v. Golden Tobacco Co. A I R 1957 Madh. Pra. 223 ;
Hope Prudhommne d: Co. v. Hamel & Harby Ltd. A I R 1925 P C 161 ; Garnesh
Export 8c Import Co. v. Mahadeo Lal Nathmal A I R 1956 Cal. 188 ; M/s. Caltex Oil
(Pakistan) Ltd., Karachi v. Sheikh Rehan-ud-Din P L D 1958 (W.P.) Lah. 63;
Province of East Pakistan v. M/s. M. Irfan Khan & Co. P L D 1969 Dacca 269 ;
Kalyan Ji Qunwar Ji v. Tirka Ram Sheolal and others 176 I C 675; Pakistan Industrial
Development Corporation v. Aziz Qureshi P L D 1965 Kar. 202 and M/s. Ameeji
Valeeji & Sons v. M/s. American President Lines Ltd. P L D 1973 Kar. 49 ref.
P L D 1960 (W. P.) Karachi 484
Before Wahiduddin Ahmad, J
MUHAMMAD AKRAM through his heirs and legal representatives---Plaintiffs
Versus
THE HABIB BANK LTD. KARACHI---Defendant
(c) Principal and Agent---
Test whether party stand., as agent or principal-Agent acting gratuitously---Can be
burdened for negligence---Contract Act (IX of 1872), Ss. 182 and 212.
Under section 182 of the Contract Act, 1872, an agent is a person employed to do any
act for another or to represent him in dealing with third persons. In order to determine
whether a party stands in the relation of agent or principal in reference to the other
contracting party, the nature of the agreement between them and the course of
business have to be taken into account. In law whether an agent is acting gratuitously
or otherwise, he is responsible for negligence in the discharge of his duties. An agent
who negligently omits to comply with the clear instructions of his principal must be
regarded as guilty of gross negligence and, whether he is acting as "gratuitous agent"
or not, he is responsible to his principal for any loss occasioned by that negligence.
Punjab National Bank Ltd., Layallpur v. Diwan Chand and others A I R 1931 Lah.
302 (2) ref.
P L D 1985 Supreme Court 341
Present: Muhammad Haleem, C. J., Muhammad Afzal Zullah Nasim Hasan Shah and
Shafiur Rahman, JJ
FIDA MUHAMMAD-Appellant
versus
Pir MUHAMMAD KHAN (DECEASED) THROUGH LEGAL HEIRS AND
OTHERS-Respondents
The second aspect which needs caution on question of validity of acts under a Power-of-
Attorney is that notwithstanding an authority to alienate principal's property, the
Attorney is not absolved from his two essential obligations, amongst others firstly in
cases of difficulty (and it will be a case of difficulty if the Power-of-Attorney is
susceptible to doubt about its interpretation) to use all reasonable diligence in
communicating with the principal and seeking to obtain his instructions, and secondly,
if the agent deals on his own account with the property under agency, e.g., if he
purchases it himself or for his own benefit, he in his own interest should obtain the
consent of the principal in that behalf after acquainting him with all material
circumstances on the subject, failing which the principal is at liberty to repudiate the
transaction.
