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Issues:
Breach of agreement for employment as managing agents - Privity between company and firm - Recognition of firm as distinct entity - Claim for damages for breach of agreement - Refusal to amend plaint for implied agreement - Application of Section 87B(c), Companies Act. Analysis: 1. Breach of agreement for employment as managing agents: The appellant claimed damages for breach of an agreement made in 1907 to employ the firm as managing agents of the company. The agreement stipulated that the firm would act as secretaries, treasurers, and agents of the company as long as both entities existed and conducted business. However, the company contended that the agreement had terminated due to changes in the composition of the firm. The trial court and the High Court dismissed the suit on the grounds that the appellant was not a party to the original agreement and, therefore, could not enforce its rights or obligations. 2. Privity between company and firm: The courts in India upheld the dismissal of the suit, emphasizing that the original agreement was made between the company and specific individuals who were no longer part of the firm when the claim was brought. This lack of privity between the company and the reconstituted firm, which included the appellant, was a crucial factor in denying the appellant's claim for damages. 3. Recognition of firm as distinct entity: The appellant argued that under the Indian Partnership Act, a firm is recognized as a separate entity from its members. However, the courts clarified that while a firm may have a distinct personality, changes in its composition can impact the continuity of that entity. The law does not confer perpetual succession on a firm, and in this case, the original agreement was with specific individuals who were no longer part of the firm. 4. Refusal to amend plaint for implied agreement: The appellant sought to amend the plaint to include an alleged implied agreement between the company and the appellant in 1922. The courts refused the amendment, noting that any claim based on the implied agreement would be time-barred. The absence of a plea of estoppel against the company and the focus on the breach of the original agreement were key factors in denying the request to amend the plaint. 5. Application of Section 87B(c), Companies Act: The appellant relied on Section 87B(c) of the Companies Act, which deals with the transfer of office by a managing agent. However, the courts held that this section did not apply to the case at hand. While the appellant was considered an original partner for the purposes of a specific proviso in the Act, it did not confer original partner status concerning the managing agents' agreement. Therefore, the court dismissed the appeal, affirming the decisions of the lower courts. In conclusion, the appeal was dismissed, and the appellant's claim for damages for breach of the agreement was rejected based on the lack of privity between the company and the reconstituted firm, the recognition of the firm as a distinct entity subject to changes in composition, and the inapplicability of the Companies Act provision cited by the appellant.
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