agency -law of contracts-case laws by harshit

law of contracts agency case laws

1. Indian Oil Corporation Ltd. v. M/s. Gwalior Gas Company Ltd. (2001)

2. FACTS Indian Oil Corporation (IOC) appointed M/s. Gwalior Gas Company (GGC) as its agent to distribute LPG gas cylinders in Gwalior. GGC was given a power of attorney to negotiate and conclude sales on IOC's behalf. GGC started selling LPG cylinders at a higher price than the maximum retail price (MRP) fixed by the government.

3. Issues: 1.Was GGC authorized to sell LPG cylinders at a higher price than the MRP? 2.Is IOC liable for the overpricing by GGC ?

4. Sections: Section 188 of the ICA: An agent cannot bind his principal by acts done in excess of his authority. Section 215 of the ICA: Rights of Principal when Agent deals on their own account in business of the agency .

5. Judgment: The Supreme Court held that GGC was not authorized to sell LPG cylinders at a higher price than the MRP. The power of attorney did not grant GGC the authority to deviate from the government-fixed price. Therefore, IOC was not liable for the overpricing by GGC. The court emphasized that an agent must act within the scope of his authority and comply with all relevant laws and regulations.

6. National Insurance Company Ltd. v. M/s. M.K. Traders (2005)

7. Facts: National Insurance Company (NIC) appointed M/s. M.K. Traders (MKT) as its agent to collect premiums from policyholders. MKT was given a power of attorney to collect premiums on NIC's behalf. MKT collected premiums from policyholders but did not remit them to NIC.

8. Issues: Was MKT authorized to collect premiums from policyholders? Is NIC liable for the non-remittance of premiums by MKT ?

9. Sections : Section 211 of the ICA : This section syas that the agent is bound to conduct the business of the principal according to the directions given by the principal or in a manner customary in the business . Section 238 of the ICA: Effect, on agreement, of misrepresentation of fraud by agent

10. Judgment: The Supreme Court held that MKT was authorized to collect premiums from policyholders . The power of attorney granted MKT the authority to act as NIC's agent for the purpose of collecting premiums. However, the court also held that MKT was liable for the non-remittance of premiums to NIC. The court emphasized that an agent has a fiduciary duty to act in the best interests of his principal and is accountable for any funds received on the principal's behalf.