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Judgment
Aruna Jagadeesan, J.—This suit has been filed to pass a judgment and Decree for a sum of Rs. 6,94,461/- with interest at 20% p.a. on Rs.
4,73,494.46/- from this date till date of payment and for a sum of Rs. 18,35,915.07/- towards damages suffered by the Plaintiff on account of
breach of contract by the Defendants and for costs.
The plaint averments are as follows:
a. The Plaintiff Company incorporated under the Indian Companies Act,1913 is carrying on the business of leather exports. The 1st Defendant is
aPartnership Firm and the Defendants 2 and 3 are its partners. The 1st Defendant approached the Plaintiff in January 1991 and expressed its
willingness to procure leather garments to be exported by the Plaintiff. This arrangement was understood to be on back-to-back basis, that is, the
orders to be secured by the 1st Defendant Firm would in turn be based on export orders finalised by the Plaintiff. Based on the assurance of the
1st Defendant of supply of quality leather garments, the Plaintiff approached one of its long standing foreign buyer, namely, Jeffrey Brown Leader
Limited. The Plaintiff requested the Defendants to submit samples of different styles of leather garments. The samples were checked and approved
by the Plaintiff on submission and were in turn forwarded to the said foreign buyer on29th May 1991. Based on the verbal offer of the 1st
Defendant and the samples approved, the Plaintiff sent its offer to the said Jeffrey Brown Leader Limited for export of leather garments in style
''LULU'' and ''2163''. The offer of the Plaintiff was accepted by Jeffrey Brown Leader Limited with a specific request that the delivery should be
effected by mid August 1991.
b. The 1st Defendant submitted its formal offer to the Plaintiff by a telex dated 4th June 1991 for 1000 pieces of style ''LULU'' at Rs. 1250/- per
piece to be delivered by the end of July 1991. Based on the Defendants'' offer, the Plaintiff confirmed to Jeffrey Brown Leader Limited its
acceptance of the order for export of 1000 garments of style ''Lulu'' to be shipped by the end of August 1991. The Plaintiff accepted the offer of
the 1st Defendant on even terms vide telex dated 5th June 1991 and informed the Defendants that the garments should be ready for inspection
latest by the end of July. The Plaintiff also agreed that the payment will be made for full value against delivery. The importance of supplying the right
merchandise was also stressed, as the Plaintiff was expected to do a large volume of business with Jeffrey Brown Leader Limited. The Plaintiff
received a formal offer for supply of garments by the end of July from the 1st Defendant bay letter dated 17th June 1991 with a request to the
Plaintiff to sent the contract for the same. On 20th June 1991, Jeffrey Brown Leader Limited placed a further order for 440 garments on the
Plaintiff. The Plaintiff immediately communicated to the Defendants its confirmation of the order for the additional 440 garments as also the
specifications as to size and measurements. The Plaintiff reiterated the need to keep the garments ready for inspection by the end of July 1991. The
Plaintiffs thereafter confirmed to Jeffrey Brown Leader Limited its acceptance of the additional order and also forwarded its invoice to enable
Jeffrey Brown Leader Limited to open a letter of credit.
c. After confirmation of the additional order, the Plaintiff forwarded its formal purchase order dated 20th June 1991 to the Defendants for
1440garments. The delivery clause clearly stipulated ''end of July 1991'' as the deadline for delivery of garments by the Defendants, for which the
Defendants had accepted. The contract also provided that the garments would be subject to inspection by the Plaintiffs as well as it buyer, Jeffrey
Brown Leader Limited. After finalising the orders with Jeffrey Brown Leader Limited as well as the Defendants, the Plaintiff made regular enquiries
to ascertain the progress of work on the order placed with the Defendants. The Defendants assured that the manufacture of the garments were on
schedule and would be ready for inspection by31st July 1991 as contracted. The Plaintiffs informed Jeffrey Brown Leader Limited that the entire
consignment or a minimum of 50% of the order would be shipped by20th August 1991. On 25th July 1991, when the representative of the Plaintiff
visited the factory of the Defendants, it was found that not even a single garment was ready for inspection at that time. The partner of the 1st
Defendant FirmNarasimhan asked for extension of time upto 15th August to complete the contract. The Plaintiff acceded to the said request of the
Defendants. Again during the first week of August, when the representative of the Plaintiff visited the factory of the Defendants, it was found that
only 30 garments out of 1440 were ready, that too not in conformity with the samples approved by the Plaintiff.
d. On 10th August 1991, the representative of the Defendants pleaded inability to honour their commitment by 15th August 1991 and informed
that only 400garments out of 1440 would be ready by 15th August 1991. The Plaintiff agreed to take 400 garments by 16th August 1991. The
Plaintiff supplied raw leather valued atRs.4,73,494.46/- from the open market to complete the production of 1440 garments and informed Jeffrey
Brown Leader Limited that 700 garments would be despatched by24th August 1991 and the balance by 31st August 1991. During the course of
inspection on 12th August 1991, the Plaintiff found that the garments were not inconformity with the samples and the specifications approved by
the Plaintiff. Due to the defects, the garments had to be returned for rectification, which resulted in further delay. On 28th August 1991, on
inspection 252 garments were approved and cleared by the Plaintiff for despatch. In the mean time, the Defendants raised an invoice dated 19th
August 1991 for Rs. 3,12,500/- for 250 garments. The Defendants sent a letter dated 23rd August 1991 requesting the Plaintiff to make payment
within two days of presentation of bills. The Plaintiff sent a telex message dated5thJune 1991 that the payment would be made for the full value of
the goods against delivery. After final inspection on 28th August 1991, the Plaintiff requested the Defendants to make arrangements for delivery of
252 garments. On 29th August 1991,the Defendants expressed inability to deliver the goods due to alleged limitation imposed by their bankers.
The Defendants were deliberately avoiding delivery of the goods for one reason or the other.
e. The Plaintiff requested Jeffrey Brown Leader Limited for extension of time by end of September 1991 for shipment, by procuring raw materials
from other associates and the Jeffrey Brown Leader Limited reduced the quantity of garments to 1180. Thereafter, the Defendants expressed their
willingness to deliver the goods provided that the payment was made prior to delivery and the Plaintiff sent a reply dated 31st August 1991, calling
upon the Defendants to repay the Plaintiff Rs. 4.73/- lakhs being the cost of the raw leather supplied to the Defendants, to which the Defendants
sent a reply dated 9th September 1991expressing their desire to settle the matter amicably and the Plaintiff also sent a telex message dated 20th
September 1991 to the Defendants to come forward to resolve the issue on 23rd September 1991. After discussions on 23rd September1991,
the Plaintiff agreed to take delivery of 252 garments, since the Plaintiff had arranged for production of the balance with other manufacturers.
However, the Defendants insisted that they were prepared to deliver the entire lot as per the contract and the Plaintiff should accept the same. The
Plaintiff offered to take the available stock with the Defendant at Rs. 1000/- per piece, for which the Defendants did not agree. As the matter
could not be resolved, the Plaintiff sent a telex dated 11th October 1991, calling upon the Defendants to reimburse the Plaintiff a sum of Rs.
4,73,494.46/- being the cost of the raw leather supplied. The Defendant replied by telex dated 12th October 1991 asking the Plaintiff to lift the
garments. The Defendants sent a letter dated 25.10.1991 to the Plaintiff requesting to make payments and to take the garments kept ready. In the
mean time, the Plaintiff procured 912 finished garments from the other sources and shipped the same to Jeffrey Brown Leader Limited at Rs.
1465.50/- per piece. Therefore, the Plaintiff suffered a loss to the tune of Rs. 1,96,536/-. Thereafter, the Plaintiff sent a reminder letter dated 29th
January 1992 calling upon the Defendant to repay the sum of Rs. 4,73,494.46/- to the Plaintiff with interest at the rate of 20% for three months.
The Defendants sent a reply dated 24th January 1992, enclosing a letter alleged to have been sent on 28th December 1991, wherein the
Defendant had stated that they were forced to liquidate their stock of 800 garments at Rs. 1000/-each. Hence, the Plaintiff sent a legal notice
dated 7th August 1992, calling upon the Defendants to pay to the Plaintiff a sum of Rs. 4,73,494.46/- being the cost of the raw leather supplied,
interest thereon at 20% p.a. from September 1991 till the date of payment and for damages to the tune of Rs. 18,35,915.07/- for the loss suffered
on account of breach of contract. The Defendants sent a reply notice dated20.8.1992 making baseless allegations and untenable claims against the
Plaintiff. In such circumstances, this civil suit has been filed.
In the Written Statement filed on behalf of the Defendants, it is averred as follows:
a. The 1st Defendant is a small scale industry. Suppressing the material facts, the Plaintiff filed the suit with false claims. The Defendants are not
aware as to what transpired between the Plaintiff and Jeffrey Brown Leader Limited. The Plaintiff has supplied materials to Jeffrey Brown Leader
Limited at extra cost and have unjustly enriched themselves. The Plaintiff was not even ready and willing to give advance towards their order.
When the Defendants demanded advance, the Plaintiff informed that as a Policy of the Company, they cannot advance or open any letter of credit
for local supplies. Without advance, it will be very difficult for them to supply the garments. It was finally agreed that the Plaintiff would pay the
money and the take the garments in lots of 250 units each. The Plaintiff placed orders for quantity of 1000 pieces in black and 440 pieces in brown
at the rate of Rs. 1250/- per piece. Since the Plaintiff was not willing topay advance, the Defendants took up the work with an adhoc bank
advance of Rs. 4 to5 lakhs and the time is not the essence of the contract. The allegation that in the factory of the Defendants on 25.7.1991, not
even a single garment was ready for inspection is false. The Defendants have been processing only the order placed on them by the Plaintiff. The
extension of time was done by mutual consent. The allegation that the garments were not in conformity with the samples by the Plaintiff is false. The
Defendants have been fabricating the leather garments as per the order and as per the specifications after raising advance from their bankers. The
raw leather was supplied by the Plaintiff only to manufacture about250 to 300 garments.
b. When the Plaintiff came forward with an offer to supply raw leather, the Defendants had completed 400 garments in full shape and as per the
specifications. There has been novation of the contract, from time to time, at the instance of the Plaintiff and they cannot go behind the same. When
the Defendants requested the Plaintiff to take delivery of the finished garments, duly packed after inspection, after making payment, the Plaintiff
started evading and started raising untenable pleas. The Defendants raised an Invoice No. 19 dated19.8.1991 for 250 garments for a value of Rs.
3,12,500/- and requested the Plaintiff to take delivery of the same and make payment, but the Plaintiff did not turn up. The production of the
garments as per the purchase order dated 30.6.1991 was going on in the factory of the Defendants. After completion of manufacture of
400garments, the Defendants raised another Invoice No. 20 dated 23.8.1991 for 400garments for the value of Rs. 5 lakhs. But, the Plaintiff did
not take delivery and make the payment. Even thereafter, the Defendants continued to manufacture of garments and totally 800 leather garments
were fully ready as per the specifications and the Defendants raised two invoices for 650 garments and the remaining 150 garments were inspected
and approved by the representative of the Plaintiff and they were ready for being packed. But, the representative of the Plaintiff, though promised
that they will come with payment after consulting with their Head Office, did not turn up. The Plaintiff sent a telex message dated5.6.1991 stating
that payment would be made for the full value of the goods against delivery, but the Plaintiff did not make payment for the value of the goods
against delivery. The Defendants have been insisting that the Plaintiff has to take delivery of the goods against payment which can be made to their
bankers. The Defendants were ready to deliver the goods against payment when they have completed800 garments in good shape and as per the
specifications in August 1991. The Plaintiff said that they had applied for extension of time from Jeffrey Brown Leader Limited, but the Plaintiff
have fabricated the garments with their associates at Bangalore and despatched the same. The Plaintiff could have taken delivery of the finished
leather garments from the Defendants and could have exported the same. The Export Manager of the Plaintiff came forward with suggestion in the
month of September 1991 that the Defendants should be ready to delivery the garments at the rate of Rs. 1,000/- per piece, which is nothing but a
clear act of breach of contract and breach of trust. When the garments were ready, there was no necessity for the Plaintiff to place orders with
others. There was no delay in the execution of the order by the Defendants.
c. The Defendants have incurred a loss to the tune of Rs. 80,000/- byway of interest and they have also lost orders to the tune of Rs. 1,50,000/-
and the revenue loss of Rs. 1,50,000/- because of the bankers choosing to limit the financial assistance. Thus, the Defendants have incurred a loss
of Rs. 4,30,000/-due to the breach committed by the Plaintiff. Hence, the Defendants raised a debt note for Rs. 4,30,000/- which they sent to the
Plaintiff along with their letter dated 28.12.1991. After a period of 7 months, the Plaintiff sent a legal notice dated 7.8.1992 making false claims,
for which the Defendants sent a reply dated20.8.1992. The Plaintiff cannot dictate terms and unilaterally vary the terms of the contract. When the
contract between the Plaintiff and the Defendants was subsisting, there is no question of the Plaintiff procuring orders from some other sources.
The suit claim is false, frivolous and vexatious. In such circumstances, the suit is liable to be dismissed with costs.
The following issues were framed for determination:
Whether the suit is not maintainable in view of the 1st Defendant being an unregistered Firm?
Whether the time is the essence of the contract?
Whether the Defendants have committed breach of contract?
Whether the Plaintiff has fulfilled its part of contractual obligation as agreed?
Whether the goods supplied were in conformity with the specifications?
Whether the Plaintiff is entitled to a sum of Rs. 6,94,461/- together with further interest?
Whether the Plaintiff is entitled to a sum of Rs. 18,35,915.07/- towards damages on account of breach of contract by the Defendants?
To what other relief''s the Plaintiff is entitled to?
On the side of the Plaintiff, the Plaintiff examined its Branch Finance Manager as PW.1 and marked Exs.P1 to P43. On the side of the
Defendants, the 2nd Defendant was examined as DW.1 and Ex.D1 and D2 were marked.
This Court heard the learned Counsel on either side and also perused materials on record.
Issue No. (1):
The 1st Defendant is an unregistered partnership Firm and the Defendants 2 and 3 are the partners. The contention raised in the Written
Statement is that the suit is not maintainable, as the 1st Defendant is an unregistered Firm. It is disclosed from the evidence of DW.1, the 2nd
Defendant herein who is also one of the partners of the 1st Defendant Firm that apart from the Defendants 2 and 3, there are other partners of the
1st Firm, namely, R. Ramesh,S. Venu, V. Srinivasan and Mythili Ramachandran. The learned Counsel for the Plaintiff would submit that there is no
provision in the Indian Partnership Act,1932 prohibiting any suit being filed against an unregistered partnership Firm. He would submit that a suit
can be filed under Order 30 of the CPC against a Firm without joining all or any of the individual partners by name as Defendant and a valid and
binding decree can be passed which will be executable against the Firm''s property. The learned Counsel would further submit that a decree
against the Firm will lie not only against Firms'' property, but also against all the partners and if a decree is passed against the Firm, then such a
decree is executable against the partners of such Firm.
In support of his submissions, the learned Counsel for the Plaintiff relied on the judgment of the Honorable Supreme Court reported in Ashutosh
Vs. State of Rajasthan and Others, wherein the HonourableSupreme Court while considering the scope of Order 21 Rule 50 of Code of CPC in
respect of a decree passed against the Firm and after adverting to the observations made by the Honourable Supreme Court in the case of Her
Highness Maharani Mandalsa Devi and Others Vs. M. Ramnarain (P) Ltd. and Others, held that a suit may be filed and a decree may be obtained
against a Firm under Order 30 of Code of CPC and such a decree may be executed against the property of the partnership Firm and against all
the partners by following the procedure of Order 21, Rule 50 of CPC.
Applying the above said settled principle of law to the facts of the case, it is not disputed that the 1st Defendant partnership Firm is an
unregistered one. Admittedly, all the other partners have not been imp leaded. Since a Firm has no legal existence, the partnership property will
vest in all the partners and in that sense, every partner has an interest in the property of the partnership Firm. Order 30 Rule 1 of Code of CPC
makes it permissible to file a suit by or to be sued in Firm''s name not as a distinct legal entity, but as a convenient mode of describing the partners
at the time accrual of the cause of action. The Firm, as a party to the suit is merely a collective name of its partners and suit is really against all the
partners of the Firm at the time of the cause of action though for institution of a suit by or on behalf of a Firm, the Firm must be registered u/s 69 of
the Partnership Act. It is true that a Firm does not have a legal entity, but Order 30, Rule 1 of Code of CPC permits two or more persons claiming
as partners may sue or be sued in the name of the Firm.
In the present case, the suit is filed against the Firm and two of the partners imp leaded as the Defendants 2 and 3. They have filed Written
Statement on behalf of the Firm and on behalf of themselves. In respect of a suit filed against a Firm, Rule 8 of Order 30 of Code of CPC enables
a person served as a partner of the Firm to appear under protest and to deny that he is a partner of the Firm which is sued. But, in the instant case,
no such protest is made by the Defendants 2 and 3. As the Defendants 2 and 3 had filed their appearance without protest, their appearance will be
deemed to be on behalf of the Firm. In this case, the procedure prescribed under Order 30 of Code of CPC has been adopted and therefore, the
Plaintiff is within his legal rights in suing the partnership Firm and its partners the Defendants 2 and 3. In view of the reasons stated above, the suit is
held maintainable and the issue (1) is answered accordingly.
Issue Nos. 2 to 8:
It is not in dispute that there is a concluded contract between the Plaintiff and the Defendants for the supply of leather garments at the first instance
for 1000 pieces of jackets in black and later for 400 pieces of jackets in brown. The garments were meant to be exported by the Plaintiff to a
buyer in the United Kingdom, namely, Jeffrey Brown Leader Limited. Ex.P4 is the telex message from the said Jeffrey Brown Leader Limited
placing order to the Plaintiff for supply of 1000 pieces of jackets in black in style 864891 in different sizes. UnderEx.P5 the 1st Defendant had
offered to supply the said 1000 pieces of Lulu SheepNappa Jackets on the specification given by the Plaintiff regarding size and quantity. Ex.P6 is
the telex message sent to the 1st Defendant by the Plaintiff accepting the offer, wherein it is said that the garments should be made ready for
inspection by the end of July 1991. It is also mentioned that payment would be made for the full value against delivery and the Plaintiff would give a
disclaimer and undertaking to the bank to enable the 1st Defendant to avail packing credit at the confessional rate. Ex.P13 is the formal letter dated
17.6.1991 from the Defendants to the Plaintiff confirming the offer for the supply of 1000 pieces with size break up 10, 12, 14, 16, 18, 20, 22,
24, 26, 28 and 32 at Rs. 1250/- per garment accepting to deliver by the end of July 1991 after approving the samples by the Plaintiff. In none of
the communications to the Defendants, the Plaintiff''s contract with Jeffrey Brown Leader Limited for the supply of garments is mentioned. In
Ex.P13, it is stated that the sales would be under Form-Transactions. In the telex message dated 20.6.1991, the said Jeffrey Brown Leader
Limited had given alterations in measurements and size for 1000 pieces and further placed an order for 440 pieces in brown, both to be
despatched by mid August 1991. On the same day, the Plaintiff has passed on the telex message to the 1st Defendant in Ex.P15 giving the
specification as noted by Jeffrey Brown Leader Limited and also placed order for 440 pieces in brown specifying that the garments should be
made ready for inspection by end July 1991. In Ex.P16 telex message dated20.6.1991, the Plaintiff had accepted to supply 440 pieces of jackets
in brown and requested Jeffrey Brown Leader Limited to establish the letter of credit in favour of the Plaintiff.
Subsequent to the above said negotiation, the Plaintiff has placed the order with the 1st Defendant for the supply of 1000 pieces of jackets in
black and 440 pieces of brown jackets and specifying the time of delivery as end July1991 and fixing the price at Rs. 1250/- per piece. Ex.P17 is
the copy of the said order. Admittedly, no advance amount has been paid. Though the Plaintiff agreed to give a disclaimer and undertaking to the
1st Defendant''s bank, but no such disclaimer was given. According to the 1st Defendant, they have made their own arrangements by availing loan
from the Bank for the manufacture of the garments as ordered by the Plaintiff.
The period fixed for delivery by Jeffrey Brown Leader Limited is mid August 1991. The Plaintiff has asked the 1st Defendant to get ready with
the garments 1000+440 pieces for inspection by the end of July 1991. Though in Ex.P17there is an express stipulation to the effect that the goods
to be delivered by the end of July 1991, but the time was extended to 15th August 1991. It is to be mentioned here that the time of delivery is
fixed by the Plaintiff based on the correspondence with Jeffrey Brown Leader Limited, as the same would be evident from the telex message dated
15.7.1991 given by the said Company to the Plaintiff. In the said telex message, the Plaintiff has been asked to despatch the goods before20th
August, 1991, but however if not possible, the Plaintiff has been requested to send 50% of each size and colour by 20th August 1991. The Plaintiff
also had senta reply to the effect that it would send the entire quantity by 20th August1991and if not possible it would despatch at least 50% of the
ordered quantity in all sizes. Admittedly, the Defendants were not made aware of the above said time stipulation made by the said foreign
Company to the Plaintiff. But, only thereafter, the Plaintiff has extended the delivery date from end July 1991 to 15thAugust 1991. At this juncture,
it is relevant and important to note that the Plaintiff has conveyed to the Jeffrey Brown Leader Limited by fax message that due to heavy rains in
South India, processing and drying of the leather has been hampered resulting in undue delay. This has not come from the Defendant. It is relevant
to note that the same has come from the Plaintiff explaining the delay. Hence, it is evidently clear that the delay has occasioned due to unforeseen
circumstances. In the above said circumstances of the case, though the time was stipulated in this case for delivery of goods, but it could be
inferred that time was not considered as the essence of the contract. In order to find out whether the time was the essence of the contract in the
instant case, we have to look at the nature of the contract, the surrounding circumstances and also the intention of the parties. Mere inclusion of a
clause in Ex.P17 order that the delivery should be made by the end of July 1991 will not indicate that the time is the essence of the contract. On
going through the correspondences between the parties, more particularly Ex.P23 dated 13.8.1991, it is clear that the Plaintiff was well aware that
the delivery cannot be made within the time stipulated in the contract. In this case, whether the time is the essence of the contract could be inferred
from the following circumstances.
It is clear from the correspondences made between the Plaintiff and the Defendants that the fault in non delivery of garments by the end of July
1991 by the Defendant was excused and in fact, in response to the such acceptance from the foreign Company with whom the Plaintiff had entered
into a contract, it had extended the time to mid August 1991. As per the invoice dated 19.8.1991, Ex.D1=Ex.P24, the Defendant has made ready
250 pieces of garments and had duly informed the Plaintiff by letter dated 23.8.1991 regarding the invoice submitted on 19.8.1991 for a value of
Rs. 3,12,300/-. They have also further informed that invoice for 400 garments for a value of Rs. 5,00,000/- is also being sent for payment. The
Plaintiff has not responded to it and had remained silent till they sent a reply dated 31.8.1991 Ex.P29 for the letter sent by the Defendants on
30.8.1991 under Ex.P28. The silence on the part of the Plaintiff in either not rejecting the goods nor responding to the letter sent by the Defendant
would clearly show that the Plaintiff did not elect to avoid the contract and held it as subsisting.
The Plaintiff by its conduct had given a go-by to the original term of the contract as regards the time being the essence of the contract. There is
no provision or clause in the contract that on failure to perform the work by the given time, the contract would stand terminated without any further
act on the part of the parties. Even if the time was the essence of the contract, u/s 55 of the Contract Act, 1872 such a contract will not come to an
end by itself after the expiry of the period and the promise has to terminate it by proper notice as provided in Section 66 of the Contract Act,
otherwise, the option to avoid the contract will be deemed to have been waived and the contract subsisting.
In the instant case, though the Defendants had made ready 250pieces of garments, as per their invoice No. 19 dated 19.8.1991 Ex.P24 and
sent the goods to the Plaintiff with Ex.P25 letter intimating that another 400 pieces of garments were under the finishing stage and sought for
payment, the Plaintiff failed to make any payment. It is pertinent to point that no advance was paid by the Plaintiff. According to the Defendants,
250 pieces were made ready as per the Plaintiff''s specifications and it was duly inspected and approved by one of their representatives of the
Plaintiff namely one Kiran Mohan. It is also seen that the Defendants have completed the manufacture of another 400 garments which was also
said to have been inspected by the Plaintiff''s representative namely Kiran Mohan and one Rajkumar. But, those persons were not examined by the
Plaintiff. Ex.D2 invoice is for 400 garments dated 23.8.1991. The Plaintiff has not taken delivery of those articles. It is not the case of the Plaintiff
that those garments were manufactured not as per their specifications. The said fact does not reflect in the correspondences between the parties
prior to Ex.P29. On the failure to take delivery of the goods by the Plaintiff, the first notice have emanated from the Defendants on 30.8.1991,
wherein it has been stated that they had already submitted the bill for 250 pieces and further 400 pieces were also ready requesting the Plaintiff to
make payment for the bill. It appears from the correspondence between the parties that even though the payment was released by the office of the
Plaintiff, but the Plaintiff was holding it for some reason. The Defendants have requested the Plaintiff to take delivery and make payment. Only after
receiving the said letter, the Plaintiff has replied on 31.8.1991 returning the invoicesEx.D1 and D2, but, however, suggesting for settlement of the
dispute. It also appears that the Plaintiff has come forward to take delivery provided that the Defendant reduces the prices from Rs. 1250/- per
garment to Rs. 1000/- per garment. Thereafter, both the parties, have tried for settlement, but without any fruitful result.
It is seen from the evidence placed on record that the Defendants never refused to deliver the garments, but in fact 650 garments had been
made ready as per the invoice Ex.D1 and D2 and wanted for payment by the Plaintiff. But, there was no reply from the Plaintiff and no compliance
also made. Thereafter, as the Plaintiff categorically refused to take delivery, the finished garments had been sold in the open market by the
Defendants which had fetched Rs. 1000/- per garment.
The Plaintiff claims that they procured 912 finished garments from other sources and shipped the same to Jeffrey Brown Leader Limited at a
considerable higher cost of Rs. 1,465.50/- per piece. At the outset, when 650garments were made ready as on 19.8.1991 and 23.8.1991 and the
Defendants have duly intimated to the Plaintiff about the delivery at the rate of Rs. 1250/- per piece, there was no necessity for the Plaintiff to
procure the garments at a higher cost of Rs. 1465.50/- per piece. That apart, the Plaintiff has not substantiated their claim by producing evidence
about the said procurement made by them at Rs. 1465.50/-per piece.
In the instant case, the Plaintiff has agreed to make payment against delivery and when delivery was made by invoices Ex.D1 and D2 the
Plaintiff has not made any payment in spite of presentation of bills by the Defendants within the time stipulated at least for 650 garments. The
Plaintiff was well aware of the cause for the delay in manufacturing the garments which is disclosed from Ex.P23. It is not every delay which will
give rise to the Plaintiff a right to rescind the contract unilaterally. The correspondence which had passed between the parties show that the
Plaintiff''s attitude towards completion of the transaction was lacking and the transaction could not be completed largely because of the attitude of
the Plaintiff. Therefore, notwithstanding the express stipulation as to time for performance of the contract, the surrounding circumstances and the
conduct of the parties would excuse the Defendants'' failure to complete the transacting within time. Therefore, I am of the considered view that the
Defendants cannot be held guilty of breach of contract. In such circumstances, the Plaintiff is not entitled to the relief of damages from the
Defendants.
However, the evidence disclosed that the Plaintiff has supplied leather worth of Rs. 4.73/- lakhs. The Defendants have admitted the said
supply inEx.P39 letter dated 24.1.1992. Even in Ex.P28, the letter sent by the Defendants to the Plaintiff, the supply of leather on various dates
between 12.8.1991 and22.8.1991 has been admitted by the Defendants. Ex.P22 contains the details of leather supplied between the period
12.8.1991 to 22.8.1991 to the value ofRs.4,73,494.46/-. Admittedly, the said leather supplied by the Plaintiff were made use of by the
Defendants in preparing the garments. The Defendants, after breaking up of the contract between the Plaintiff and the Defendants, have sold the
finished garments at Rs. 1000/- per piece to third parties. Therefore, the Defendants are liable to return a sum of Rs. 4,73,494.46/- being the cost
of leather skin supplied at the instance of the Plaintiff. The Plaintiff is entitled to the interest of 12;p.a. for the said sum from the date of the suit till
the date of payment. Accordingly, issues 2 to 8 are answered.
In the result, the suit is decreed in part and the Plaintiff is entitled to a decree for a sum of Rs. 4,73,494.46/- together with interest at 12; p.a.
from the date of the suit till the date of payment. However, in the circumstances of the case, there will be no order as to costs.