1) Z cannot sue A to recover any money
2) only if there is debit on A account Z has to pay
3) Z is bound by terms of contact with A
4) no damage is caused to Z
5) regarding legal remedies it depends upon terms of contract
Summary suit query
1) "A" signed an agreement with "B" stating that "Z" is responsible to collect money from her. 2) "B" signed an agreement with "Z": Should there be any debits in "A" account then "Z" will pay to "B". 3) "A" did something that has caused a debit balance in her a/c. ------------------------------------------------------------------------------------------------------------ 4) "Z" approached "A" to collect money because "A" has signed about it in agreement with "B". But "A" refuses to pay to "Z". 5) As per agreement between "B" & "Z": "Z" is paying money to "B". #1 Query) On what premise/basis can "Z" file Summary Suit against "A"? Or how "Z" can show his eligibility in Summary Suit to recover money from "A"? #2 Query) Will "Z" be considered as the owner of this debit? #3 Query) In eye of law will action of "A" be regarded as "A" causing damage to "Z"? #4 Query) What legal remedies "Z" have to recover money from "A"? Kindly answer every point with reference to Law Name and section underneath. If possible give citation of old adjudged cases in the context of your answers. Thanks #3 Query)
Asked 5 years ago in Civil Law
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13 Answers
The debit in "A" account was caused by intentional cheating done by "A". "Z" tried to stop "A" from doing wrong but was unsuccessful. Should "A" have stopped when asked by "Z", then no harm (debit) would have happened in "A's" account. "A" knowingly that his action will result in "Z" paying to "B" (by virtue of agreement between "A" & "B") still committed his cheating. #5 Query) Does above scene alter anything - giving any help to "Z" to file for Summary Suit? #6 Query) "Z" has fix amount of money to receive from "A". "Z" is the party who is effected by the act of "A". #7 Query) Will contract act and IPC too can be used to prove a point in a Summary Suit? @ Shri Ajay Sethi Ji and others - Thanks for answering. Can you please cite the sections and reasons for your answers. And I will request other opinions as well. Thanks.
Asked 5 years ago
It does not help Z in filing suit
2) terms of contract are sacrosanct and binding between parties
3) it is necessary to peruse agreement entered into between A and B , A and Z to advice further
There is a contract between A and B
There is another contract between B and Z
There is NO contract between A and Z
Z has paid B as per their contract
There is no privity of contract between A and Z
Therefore Z cannot maintain a summary suit
However Z can file a suit for damages (commercial suit) against A since Z had to pay B due to intentional act of A
Order 37 of CPC (that is summary suit) does not apply in this case
Z can also pursue criminal action against A. No need to state any IPC section. Just state the facts in Z's complaint against A to the police and the latter will apply the applicable sections
Thanks Mr. Yusuf. "A" is in contract with "B" that when it will come to money collection task: Then "Z" is the responsible for collecting money from "A". Question) Is not "A" bound to give money to "Z" under the contract "A" signed with "B"? Question) If "A" will not give/hand-over money to "Z" isn't "A" in breach of contract? Thanks
Asked 5 years ago
1. A has entered into an agreement with B only and not with A.
The agreement entered by A was with B only, hence B only has a right to initiate legal action for recovery from A for breach of contract conditions.
A cannot sue A.
2. A is answerable to B on the basis of the agreement with B.
3. By not paying the amount to Z, A has not committed any offence because as per law A is not indebted to Z in any manner.
Hence it cannot be termed that A has done any damage to Z.
4. A is not liable to pay any amount to Z because there is no legally valid contract or agreement between both, therefore Z may not have any option to recover the amount from A.
5. What is the evidence does Z has to prove that he has given money to A?
A was indebted to B and the agreement also was between they both only.
If A breached the conditions of agreement then B can initiate recovery action on his own but Z, who is not a direct party to commitment between A and B in no way can take any legal action against A for recovery.
6. Even though Z is the affected party or victim to this episode, no legal action from his side is tenable or maintainable.
7. If no case is maintainable as per law, from where the IPC or any other provision of law can be invoked.
1. As per the contractual agreement between A and B Z is just a collection agent working on behalf of B, he cannot think and act beyond that.
2. No doubt you are right in your view that A has committed breach of contract conditions but only B can initiate any legal action against A and not Z in this connection.
There is no privity of contract between A and Z
Contract if any is between A and B
if A does not give money to Z then Z cannot sue him
In your case the perusal of the recitals in the agreement is very important for answering your query. Please do understand that according to Section 2(h) of the Indian contract act 1872, a contract is an agreement between two parties enforceable by law backed by some consideration. The essence of the law of contract lies in the promise which both parties have made towards each other for fulfilling their part of the contract. A third party beneficiary, in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been a party to the contract. This right arises where the third party is the intended beneficiary of the contract, as opposed to an incidental beneficiary. It vests when the third party relies on or assents to the relationship, and gives the third party the right to sue either the promisor or the promisee of the contract, depending on the circumstances under which the relationship was created.
But the in the agreement between B and Z , it is specifically describe that Z an agent of B then Z has some rights . According to Section 226 of the Indian Contract Act, an agent acts on behalf of the principal for creating contractual relationship between the principal and the third persons, and, therefore, for the contracts entered into through an agent, the principal becomes bound towards a third person in the same manner as if he entered into the contract himself
More over only parties to a contract are allowed to sue each other to enforce their rights and liabilities and no stranger is allowed to confer obligations upon any person who is not a party to contract even though contract the contract have been entered into for his benefit. If there is a try party agreement was executed then only Z can sue A for damages.The rule is that the only person having an interest in the contract is entitled as per law to protect his rights.
1. I never said Z cannot sue A. Its just that a summary suit is not the remedy for Z. Z has to file a normal suit for damages to recover the money he paid to B under the contract with B, from A, pursuant to the contract between A and B.
2. If Z can prove that on a holistic reading of both the contracts, A was liable to reimburse Z for the moneys he paid to B, then Z can sue A in the aforesaid suit and also make B a party to it
3. There is no direct contract between A and Z here for Z to invoke order 37 CPC remedy of filing a summary suit
4. Ideally such questions can never be answered without reading the documents as a whole. The answer is given basis the very limited information provided. The reading of both the contracts in their proper context would help a lawyer give a more plausible answer.
5. The querist should not expect a clear cut answer based on the complicated manner in which he has posed the question. The question is as vague as it can be and no background or contextual set up in which the contracts were executed, have been described or explained. The answer is therefore qualified to that extent.
Scene: "A" an NRI, has open a company in London, fully owned by him alone. "A" conspires with his friends inside India who are running that business on India's soil. Mr. "A" and his co-conspirators in India cheats "Z", who is also an Indian citizen, with cheated amount of UK's Sterling Pound 1.35 million. The company that "A" has opened in London is a "Limited Liability Company" with capital of UK Sterling Pound 100 only. Q1. Can in Indian court above cheating suit is admissible, and in what jurisdiction can "Z" file it? Q2. The land of crime is Indian territory - so does u/s IPC 2 will the court admit it? Because "A" firm is a foreign registered firm can still u/s 3 & 4 of IPC "Z" is eligible to sue "A" for cheating? Q3. Important: "A" is telling to "Z" that his company is "limited by liability" by only 500 Pounds (capital). He stresses that: all transactions were conducted under the company of "A" so, even Indian Court finds him and his conspirators guilty of cheating he is liable to pay only Pound 500, and "A" will never get back cheated amount of Pound 1.35 million back. - Is "A" speaking truth - that even if his company found guilty of cheating, then also the Indian Courts don't have any legal power to ask more than 500 Pounds because his company is limited by liability? - "A" also says, he will hide behind his company and cheating was done in company name so he cannot be touched personally. And "Z" can never recover his 1.35 million pound deceived by "A" by approaching Indian courts. - "A" makes mockery of "Z" that he is though sole owner of his firm, and his brain run to fool "Z", but Indian Court will only see the company doing everything so he is personally untouchable by Indian law. Please advise? Thanks
Asked 5 years ago
1) Z can file case of cheating in India where the offence was committed
2) although A is foreign company but offence was committed in India by his accomplices
3) you have to make company and its directors who were in charge of day to day management and its officers accused in the complaint filed by you
1. If the cause of action for the suit took place in India, then Z can file the recovery suit in India itself.
2. If the partners of foreign firm took money from Z in India and cheated then Z has cause of action in India to file a suit or even lodge a criminal complaint against the culprits.
3. Recovery is apart from criminal case against A.
If A is taken to custody by police and drills him, then he may come out with the fact or even compromise to settle the amount to Z.
What Indian courts can do is different to that of the manner that he being drilled by the Indian police.
Courts need evidence to prove the crime of the culprits.
- No suit is maintainable against A , as there is not contract of Z with A .
- But B can take legal action against A , as there is contract with them.
- . If that offence of cheating taken place in India , then a complaint can be filed in India.
- Yes, even though the company is based abroad , then also on the ground of cause of action , a case can be filed in India.
- However, only allegation is not enough for filing a case in India.
He can recover the same by filing suit if he proves that the same is siphoned by him in name of company. He can't use the company veil for personal gain. Even criminal sections will be attracted along with companies Act against him
