Krishna Stores vs Sodormal and Others

N.K. Das, J.—Plaintiff is the Appellant against a concurrent decision. Plaintiff''s case is that it was a registered dealer at Kantabanji in the district of Balangir in Orissa. Defendant no, 1 is the proprietor of a firm (Defendant No. 3) at Rajim in the district of Raipur in Madhya Pradesh. On 28-3-1966, Defendant No. 1 through Defendant No. 2 (the commission agent) contracted and purchased 90 quintals of til-oil cakes. The bill amount was payable at Kantabanji through bank. On 4-4-1966 the Plaintiff despatched the goods from Meramandali to Rajim. The bail, R/R and hundi were also sent through the State Bank of India, Kantabanji Branch for collection. On 11-4-1966 the bill was presented by the Plaintiff for payment, but payment was refused by Defendant No. 1. On 25-4-1966, the State Bank of India, Kantabanji Branch returned the hundi to the Plaintiff with ''Unpaid'' advice. So, it is alleged that the Defendant No. 1 committed breach of contract by not taking delivery of goods and paying the bill amount. Plaintiff then resold the goods and sustained a loss of Rs. 1400/- which has been claimed as damages in the suit.

In the written statement, Defendant No. 1 has contended that one of the partners of the Plaintiff-firm, to whom Defendant No. 1 can only identify, along with Defendant No. 2 came to Rajim and represented to sell two wagons of til oil cakes. In pursuance of the contract, one wagon was actually despatched from Balangir to Raipur and the other one was ready to be despatched from Meramandali Defendant No. 1 paid Rs. 1500/- to the Plaintiff and it was agreed that the aforesaid amount would be adjusted towards the bill amount. Plaintiff was informed over telephone to draw the hundi and send the R/R through bank to Defendant No. 1. It was agreed that Rs. 500/- would be deducted from the bill for the first wagon and the balance amount would be adjusted towards the bill for the second wagon. In fact, a sum of Rs. 500/- was deducted from the bill for the first wagon, but the Plaintiff, it is alleged, did not deduct the balance amount of Rs. 100/- from the bill in respect of the second wagon. When the goods were unloaded at Raipur, Defendant No. 1 found the same to be of inferior quality and so he intimated his unwillingness to the Plaintiff to honour the hundi.

Defendant No. 2 in a separate written statement has contended that he was a broker on commission basis and he was to arrange customers for purchase of goods. On 28-3-1966 and 29-3-1966. on the request of the Plaintiff, he contacted Defendant No. 1 and Defendant No. 3 who agreed to purchase and, accordingly, contract was made for purchase of 90 quintals of oil cakes. The parties themselves entered into the contract and he is not liable for any loss, nor there is any cause of action against him.

The learned trial Court dismissed the wit on the ground that the Court at Titilagarh has no jurisdiction to try the suit. Defendant No. 2 is not liable as he was an agent. Although there is no evidence on record regarding payment of Rs. 1500/- by Defendant No. 1, yet payment of Rs. 500/- as advance by Defendant No. 1 was proved on admission. It further held that the question of loss if any, sustained by the Plaintiff need not be answered as the Court has no jurisdiction to try the suit.

The first Appellate Court came to the conclusion that the contract was entered into at Raipur in Madhya Pradesh and so the trial Court has no jurisdiction to entertain the suit. It was further held that the Plaintiff committed breach of contract and there was no breach from the side of Defendants 1 and 3. It was also held that the quantum of loss was not disputed. Accordingly, the learned Appellate Court ordered for return of the plaint.

Mr. Mohanty, the learned Counsel for the Appellant, contends that even assuming that the contract was entered into at Rajim in Madhya Pradesh, the Court at Titilagarh has jurisdiction to try the suit, inasmuch as the repudiation of the contract which was intimated by Defendant No. 1, was received by the Plaintiff at Kantabanji, within the jurisdiction of the Court at Titilagarh. In this connection, he has relied on Ext. 7, the telegram, admittedly sent by Defendant no, 1 and the hundi returned by the State Bank of India, Kantabanji Branch intimating the Plaintiff that the hundi was not honoured by Defendant No. 1. The learned Appellate Court has come to the conclusion that the contract was entered into between the parties at Rajim in Madhya Pradesh and, as such the trial Court has no jurisdiction to entertain the suit. Apparently, it is not a suit for specific performance of contract, or, in other words, to enforce the contract. This is undisputedly a case for damages for breach of contract. The fact that there was a contract and the same has been repudiated by Defendant No. 1 is not disputed. There is no dispute about the fact, as evident from materials on record, that the repudiation, as alleged by Defendant No. 1, was made at Rajim and the same was received by the Plaintiff at Kantabanji and this intimation was by means of Ext. 7 and Ext. 2. The legal position is that in a suit for damages for breach of contract, the renunciation of the contract is to be complete only when communicated to the other party and the other party receives intimation of the same. Reliance has been placed in this respect on a Division Bench decision Dhanraj Mills Limited Liability Co. v. Narsingh Prasad Boobna and Ors. AIR 1949 Pat. 279, wherein it has been held:

Any disclaimer or renunciation of a contract to be effective must be communicated to the other party to the contract. Unless and until it is communicated, there is no such disclaimer or renunciation as would entitle the other party to it to exercise its option either to sue immediately for damages or to await the period fixed for the performance of the contract and then sue if it is not performed. Thus the disclaimer or renunciation is not complete until it is communicated and, therefore, takes place at the place w here the letter or telegram containing the disclaimer or renunciation is despatched. And the Court at the place where such communication of renunciation of the contract is complete has got jurisdiction to try the suit for damages for breach of contract.

For the aforesaid principle, reliance was placed on a decision reported in Arthur Butler and Co., Ltd. Vs. District Board of Gaya, and a portion of Law in England as enunciated by Leake to the effect:

Renunciation of the contract, if not accepted by the other party as a present breach, may be withdrawn at "any time before the performance is due ; but if not in fact withdrawn it is evidence of continued intention to the same effect.

It has been further held in that decision:

The question is "when did the renunciation become complete?" The answer to my mind is that it became complete as against" the Defendants when the minds of the two parties became at one regarding the non-performance of the contract. The refusal of the Defendants to perform the contract corresponds to a proposal and became complete only when it came to the knowledge of the Plaintiffs.

This principle has also been followed in Fertilizer Corporation of India Ltd. Vs. Sanjit Kumar Ghosh and Another, .

In a recent decision of this Court S.P. Gantayet v. Principal, Regional Engineering College, Warangal, A.P. 1977 (2) C. W. R. 874, it has been held by a Division Bench that the Court where a part of cause of action arises has jurisdiction to try the suit. Cause of action has always been understood as referable to the bundle of facts in a legal proceeding and if a limb of that bundle of facts is available, seen or discernible in one particular place which is a seat of the Court, then such Court has jurisdiction. The allegations made in the plaint have to be scrutinised to determine if any of the facts stated therein are required to be proved, if traversed for giving a judgment in the case and it is to be seen whether any limb of that bundle of facts was available or detected or found in the particular place where the suit is filed.

Both the Courts below have not acted according to law, inasmuch as they have lost sight of the fact that this is a suit for damages for breach of contract. They have approached the case from a wrong standpoint, namely, that the suit is, as if, one for specific performance of contract. The aforesaid decisions have clearly laid down that revocation of contract is complete when it reaches the person to whom it is communicated. In view of the aforesaid decisions, it should be held therefore that the trial Court has jurisdiction to try the suit and the finding of the learned Appellate Court in that respect is not sustainable.

The second contention urged on behalf of the Appellant is that Defendant No. 1 having pleaded that the contract was conditional, onus lies on Defendant No. 1 to establish the said allegation. Defendant No. 1 has failed to discharge the onus as there is no reliable evidence as to payment of Rs 1000/-, as alleged by Defendant No. 1. Both the Courts have lost sight of the materials on record in this respect. The fact of payment of Rs. 500/. is admitted. Defendant No. 1 does not come to the dock though it is definitely alleged that the contract was with him. He has neither filed written statement nor has deposed on oath. On the other hand, his father has signed the written statement and has deposed in the suit. His father has stated that there was a contract with Defendant No. 1 and payment of Rs. 500/- was made by the Plaintiff. There is no evidence excepting the bald statement of his father that Defendant No. 1 has paid Rs. 1000/- more as advance. It appears from the testimony of the father of Defendant No. 1 that such payment has not been mentioned In any Khata account maintained by Defendant No. 1. The case of Defendant No. 1 is that he had no previous acquaintance either with the Plaintiff or with Defendant No. 2, and the story that he paid Rs. 1000/- more without getting a receipt is also very difficult to accept. The evidence goes further to show that the name of the person to whom the amount was paid was not ascertained. Though the case of Defendant No. 1 is that the wagon was to come to Rajim, yet in evidence it is stated that the wagon came to Raipur and the goods contained in the wagon were found to be of inferior quality and, as such, delivery was not taken. From the evidence of the father of Defendant No. 1, it transpires that he is not able to give any details of the alleged wagon.

In Firm Ganeshi Lal Kundan Lal v. Firm Debi Sahia Gulzari Mal A. I. R. 1927 Lah 481, a Division Bench has held that the party who alleges that a contract is conditional on the happening of a certain contingency must prove the existence of such a condition by clear and unequivocal evidence.

As I have already pointed out, there is no evidence worthwhile to support the contention of Defendant No. 1 that a sum of Rs. 1000/- was paid in advance and there was a condition for adjustment of the same towards the bill for the second consignment. In view of such materials on record, the learned Court below was wrong in not coming to the conclusion that the onus lies on Defendant No. 1 to establish the condition for the contract when breach of the contract is admitted.

It has already been found by the learned Appellate Court that there is no dispute about the quantum of damage claimed by the Plaintiff. The finding that Defendant No. 2 is not liable is not challenged in this Court.

In view of the aforesaid circumstances, I hold that the suit is maintainable in the trial Court and Defendant No. 1 has failed to establish the conditional contract. The breach being admitted and the quantum of damage not being disputed, the suit is to be decreed.

In the result, the appeal is allowed and the decision of the Court below is set aside. The suit is decreed with costs against Defendant No. 1 only, and dismissed against other Defendants without costs.

Appeal allowed.