Firm Ishwar Sahu and Puran Sahu and Another vs Mohammad Abdul Ghafoor

Ray, J.—This appeal is preferred by the defendants in a suit for recovery of damages for breach of a contract caused by the defendants'' failure to supply certain quantity of maund to the plaintiff. It is admitted that on 2-1-1943 the defendants contracted to sell 400 maunds of mauna to him at the rate of Rs. 4-2-0 per maursd. The goods were at that time lying at the Ranchi B.N. Railway station. The defendants took an advance of Rs. 100 and contracted to sell the 400 maunds out of the two consignments then lying at the station. The date of delivery was stipulated to be within 15 days of the date of contract

The trial Court dismissed the suit holding that it was an agreement to sell specific goods, and the goods without any fault on the part of the seller could not become available for delivery within the time fixed. In this view he exonerated the defendants from their liability for breach of contract, if any. As Mr. Lalnarain Sinha has adopted the reasoning of the trial Court as part of his argument, I should quote a passage from the said judgment:

His evidence will clearly show that the sale was made in respect to the specific goods that was lying on the station. The contract was to be enforced after the fulfilment of the contingency of taking delivery of the goods from the railway station. That contingency had not arrived before the institution of the suit. Therefore, there is no evidence that the defendants wrongfully neglected or refused to deliver the goods to the plaintiff. Section 4(4), Sale of Goods Act, runs as follows:

An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.

But if the event does not happen the promise cannot be enforced. In this case D.W. 2 has stated in his evidence that the mahua which wag lying at the Railway Station was contracted for sale. D.W. 2 has further explained that they believed and hoped that the goods would be delivered within 10 to 15 days from the Railway Station and on this expectation the 15 days'' time was inserted in the receipt. The delivery of the goods of the consignments was not taken from the Railway Station on the day the suit was filed, and hence the contract cannot be enforced.

As will appear from the passage above, his view was that time was not the essence of the contract, and its performance was dependent upon the happening of certain events which in his opinion did not happen without any default on the part of the defendants.

The learned lower appellate Court reversed the trial Court''s findings. He said:

It is admitted that the plaintiff had to purchase only 400 maunds (which were contained in only 200 bags): of, mahua out of the 800 maunds which had arrived at the Railway station. D.W. 2 has admitted that out of the 400 bags ''only 50 bags (containing 100 maunds of mahua only) had been changed during the transit. The defendants were therefore perfectly at liberty to take the remaining 350 bags of mahua, if they so liked. There is further nothing on the record to show that the bags had been changed in both the consignments. It may be farther noted that it has been held repeatedly that a consignee cannot refuse to take delivery of goods on any plea whatsoever and that all that he can do is that he can have the articles weighed and inspected in presence of people at the time of delivery and he can afterwards sue for any damages which he might have sustained. This view is clear from a decision of the Patna High Court reported in Surajmal Marwari v. B.N. Ry. Co. AIR 1920 Pat. 493. It is thus clear that the article was not delivered to the plaintiff on account of the fault of the defendants themselves, and therefore, they cannot take up the plea that this wag a contingent contract and that because the contingency never happened they are not liable to pay, any damages.

He therefore, held that the defendants were guilty of negligence in not taking delivery of the specific goods in respect of which they had entered into a contract. In taking this view, his found that time was the essence of the contract.

The learned Counsel for the respondent has invited my attention to the decision in Harnandrai Fulchand v. Pragdas Budhsen AIR 1923 P.C. 54 in which the case mainly relied upon, by the learned Counsel, namely, the case in Taylor v. Cladwell (1863) 3 B. & S. 826 has been dealt with. This case lays down a principle which is binding oft me. The facts as well as the decision will appear sufficiently clear from the head note of the case which is quoted here in below:

By a written contract, dated 26-11-1917, the respondent firm sold to the appellant firm 864 bales of dhoties, as specified, to be manufactured by named'' Mills, with whom the sellers had contracted for a larger number of bales. The contract provided that the goods, are to be taken delivery of as soon as the same may he received from the Mills; delivery to be caused to be given in full by 31st December 1918. The sellers, delivered only part of the goods, owing to the mills; failing to manufacture or deliver to them the balance.

Held, that the buyers were entitled to recover damages from the sellers; the words quoted above as tot delivery did not limit the goods to be. delivered to those supplied by the Mills in 1918, nor did they make delivery by the Mills a condition precedent, and the-sellers were not relieved of their obligation by frustration of the contract, or by any implied condition.

Judgment of the High Court reversed.

The present case on facts seems to be much stronger than the case before their Lordships of; the Privy Council. I should, therefore, over rule the contention of the learned Counsel for the appellants that the principle of frustration of the contract applies to the present case.

The next point that was argued was that the learned lower appellate Court has not come to any definite finding as to what was the prices of mahua on 17th January 1943, when the contract was to be fulfilled but was broken. The passage in the judgment of the lower appellate Court relevant on the point is:

It is admitted that on 9th February 1943 the defendants themselves sold mahua to the plaintiff at Rs. 5-8-0 per maund. It is further admitted by D.W. 2 in his cross-examination that the price of mahua in February had increased to 2 to 3 annas per maund. In his examination-in-chlef he had said that in January 1943, mahua was selling at the rate of Rs. 4 to Rs. 5 per maund. It is further admitted by the parties that the mahua which had been contracted to be sold was of good quality. I may therefore take it that the mahua which was to be purchased by the plaintiff was at least valued at Rs. 5-2-0 per maund on 17th January 1943 when the contract was to be fulfilled. There is no doubt therefore that the plaintiff has suffered damages to the extent of about Rs. 400, at the rate of Rs. 1 per maund. The plaintiff is further entitled to get back the amount of advance paid by him. The plaintiff, in my opinion, is thus entitled to get a decree for Rs. 500 only from the defendants.

The attack upon the judgment was that it was not clear from the evidence of D.W. 2 which appears to be the basis of the Courts finding what the price of mahua of the same specification as that of mahua contracted for was. The appellate Court writes, referring to the evidence of D.W. 2 in his examination-in-chief, that in January 1943, mahua was selling at the rate of Rs. 4 to Rs. 5 per maund. It is further admitted by the parties that the mahua which had been contracted to be sold was of good quality. I may, therefore, take it that the mahua which was to be purchased by the plaintiff was at least valued at Rs. 5-2-0 per maund on 17th January 1943 when the contract was to be fulfilled. The submission is that D.W. 2''s statement that mahua was selling at Rs. 4 to Rs. 5 per maund does not necessarily fix the price at Rs. 5 per maund, and the price according to the witness varying between RS. 4 to Rs. 5, the defendants will be given the benefit by taking the minimum as the price for extracting the difference for the purpose of ascertainment of damages. This contention, however, which had at first attracted my attention and approbation appears to be far from sound when the statement previous to the statement referred to in the judgment is kept in view. The previous statement was that in the month of January 1943, the price of mahua varied according to quality. The variation as between bad and good quality was as much as Rs. 4 to Rs. 5. In the following sentence the witness stated what the price in the month of February was namely, Rs. 5/8 and what was the increase upon the rate prevailing in January. It being admitted between the patties that the mahua contracted for was of good quality, the Court of appeal below was right in taking Rs. 5 as the price of mahua of good quality. This contention of Mr. Sinha that nothing was proved so as to form a basis of determination of the damages must fail. But the Court of appeal below instead of taking: Rs. 5 takes Rs. 5/2 per maund to be the value. In this respect I should consider him wrong. The learned Counsel for the respondent says that this figure has been arrived at by deducting the increase in the rate of price in February up to the price prevailing in January. I should, however, consider that if we rely upon the statement of D.W. 2 as an admission, we must rely upon it as a whole. When a definite figure is quoted'' for the prevailing price in January for mahua of good quality, it would be far from correct to enhance it by a derivative method of calculation. I should, therefore, modify the damages granted proportionately, that is to say, the damages will be calculated by taking the prevailing price, ten be Rs. 5 per maund instead of Rs. 5/2 as taken; by the Court of appeal below.

The appeal, therefore, is allowed in part. The appellants, however, in the circumstances of this case, will pay the costs of the respondent throughout.