HIRABAI V BHAGIRATH & CO. (AIR 1964 BOM 174)

HIRABAI V BHAGIRATH & CO. (AIR 1964 BOM 174)

The plaintiff company was to get a share in the agency commission on account of its ownership of the managing agency which was temporarily transferred to the defendant company and was to be restored to the plaintiff company at the end of 15 years. The court observed that true test is whether a participation in profits constitutes the relationship of principal and agent between the person receiving the profits and those actually carrying on the business. In the present case, there is nothing in the agreement to suggest that the defendant company was to carry on the business of the mill on behalf of itself and the plaintiff company. The responsibility of the management of the business was completely taken over by the defendant company.