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Nagappa Pandyappa Kadar Vs. Badridas Shrikishan - Court Judgment

LegalCrystal Citation
SubjectProperty;Family
CourtMumbai
Decided On
Case Number First Appeal No. 265 of 1925
Judge
Reported inAIR1930Bom409; (1930)32BOMLR894
AppellantNagappa Pandyappa Kadar
RespondentBadridas Shrikishan
DispositionAppeal dismissed
Excerpt:
.....that in a case like the present the bales on the one side balance the bales on the other and the vayada rate must be the same as regards both contracts. in a case like this no delivery would be desired because the bales after delivery by a to b would only have to be returned by b to section consequently, i can understand what the witness says: 11. accordingly, the present case to my mind is clearly distinguishable from the decision of sir norman macleod and mr. the defendants there argued that the auction rate was not a proper amount and clearly the auction rate did not represent a fair market rate as on the date of breach. there delivery was duly given of the january and february portions but there was a failure to give delivery of the march instalment and thereby the purchaser..........6(e).4. the transactions are sot out in plaintiff no. 1's patta patti books for the three separate vayadas as exhibits 35, 31 and 22, respectively, and on turning to the evidence of plaintiff no. 1's partner, exhibit 29, he after referring to these exhibits says :-no bales remained to be delivered and taken, profits for rates only are to be paid. rs. 2,671-14-0 are due for august 1920 vayada, rs. 1,025 are paid. rs. 1,646-14-0 remain due. interest at six per cent, is to be paid up to payment.according to the custom of this bazar, we have demanded it...rs. 2,074-3-6 remained due to us from defendants for september vayuda and rs. 527-5-6 remained due for october 1920 vayada. rujuwat took place between us parties.5. now, there is no cross-examination of this witness. he gave this.....
Judgment:

Amberson Marten, Kt., C.J.

1. There are two points argued before us in this appeal, namely, first, whether judgment was rightly entered for plaintiff No. 2 as well as for plaintiff No. 1, and, secondly, whether interest prior to the suit was rightly awarded.

2. With regard to the first point, plaintiff No. 2 claims to be the assignee of plaintiff No. 1, and it is argued that the subject of the assignment was not a 'debt' and therefore an 'actionable claim' within the meaning of Section 3 of the Transfer of Property Act, but was a mere right to sue within the meaning of Section 6(e), and so could not be transferred. The defendants' interest in getting the judgment limited to plaintiff No. 1 is that they allege that they have a cross-decree and so we understand a cross-claim against plaintiff No. 1 which possibly they would be unable to enforce if the judgment were in favour of plaintiff No. 2 as well. As regards the decree, that we understand is the decree in suit No. 1791 of 1923 referred to at the end of the learned Judge's judgment. We are informed that that decree is now under appeal to this Court in Appeal No. 311 of 1925.

3. The subject-matter of the assignment arose out of three cross-transactions between plaintiff No. 1 and the defendants for the August, September and October vayadas of 1920, namely, for 175 bales, 75 bales, and 25 bales, respectively. It is important to observe that as regards each vayada the sales exactly counterbalanced the purchases, and consequently on balance there were no bales to be delivered or taken. Similarly, under those circumstances the exact rate of the vayada is immaterial because the same rate had to be applied on both sides of the account with regard to each of the said contracts making up the aggregate number of bales for the particular vayada. The effect, therefore, as a matter of arithmetic, was that there were to be mere payments of differences as regards each vayada and they amounted approximately to Rs. 2,091, Rs. 2,615, and Rs. 660, for the three vayadas in question. The appellants argue that although this was the net financial result, yet the sums were really damages for breach of contract, and accordingly on authority the plaintiff had merely a right to sue for recovering the amount, and accordingly the transfer was invalid under Section 6(e).

4. The transactions are sot out in plaintiff No. 1's Patta Patti books for the three separate vayadas as Exhibits 35, 31 and 22, respectively, and on turning to the evidence of plaintiff No. 1's partner, Exhibit 29, he after referring to these exhibits says :-

No bales remained to be delivered and taken, Profits for rates only are to be paid. Rs. 2,671-14-0 are due for August 1920 vayada, Rs. 1,025 are paid. Rs. 1,646-14-0 remain due. Interest at six per cent, is to be paid up to payment.

According to the custom of this Bazar, we have demanded it...Rs. 2,074-3-6 remained due to us from defendants for September vayuda and Rs. 527-5-6 remained due for October 1920 vayada. Rujuwat took place between us parties.

5. Now, there is no cross-examination of this witness. He gave this evidence on November 3, 1924, and the rojnama shows that on January 27, 1925, he was tendered for cross-examination, but it was declined, and both parties stated that they wished to call no more evidence. The learned Judge says that the parties were agreed as to the bales, rates and vayada of all the contracts in dispute, and he finds that it is not a mere right to sue that is transferred but that a definite sum is due to plaintiff No. 1 and it is assigned.

6. Speaking of cross-contracts, a case came before Mr. Justice Crump in Uderam v. Shivbhajan : (1920)22BOMLR711 . That was a case where there was a contract between A and B and the defendant as surety guaranteed the performance of the contract. But on the plaintiff hearing rumours of the financial weakness of B, he entered into a cross-contract with B for the same number of bales and for the same vayada date. The surety then contended that this in effect rescinded the first contract and consequently he was discharged from all liability. Mr. Justice Crump negatived the surety's contention and held that on the face of them the two contracts remained wholly independent and that each continued in full force and effect until it was discharged, He pointed out that each party had a right to demand delivery from the other but as the quantities were equal the practical result must have been that there would be no delivery. This was a necessary consequence of the two contracts and was their combined effect. But there was no novation in the sense in which the term is used in Section 62 of the Indian Contract Act. Then he says (p. 716):-'

The payment of differences is no more than the necessary result of any attempt to insist on the performances of both contracts. If the procedure of tendering the price against the goods and the goods against the price were solemnly enacted the result clearly would be that the advantage of the one party over the other would be measured precisely by the difference between the contract rotes. It is therefore in my opinion unsound to argue that because the parties had in mind the payment of differences only, the two contracts were extinguished.

7. He accordingly held that the surety was not discharged.

8. I am almost sure that in a subsequent case this appellate Court had occasion to consider the observations of Mr. Justice Crump in the case cited, but I have not got the reference. It is, however, clear that in a case like the present the bales on the one side balance the bales on the other and the vayada rate must be the same as regards both contracts. So the only difference can be in the aggregate sums of the two contracts, and this can be ascertained and paid as soon as the vayada has passed. That indeed is what the witness says: 'No bales remained to be delivered and taken. Profits for rates only are to be paid.'

9. But it may be said that nevertheless the true view is that the amount in question represented damages for breach of contract. For the sake of argument let that be so. But if the parties had thought that their case must rest on that view, then one party or the other ought to have taken delivery or demanded deliverey but in fact they did not do so. In a case like this no delivery would be desired because the bales after delivery by A to B would only have to be returned by B to Section Consequently, I can understand what the witness says: 'Rujuwat took place between us parties.'

10. It is contended on behalf of the appellants that this amount was put in the plaintiff's books though there was no actual trade settlement of the accounts between the parties. To my mind, if they wished to raise any point of that sort they should have cross-examined the witness in the Court below as to what according to the defendants took place. I think it clear that in fact only differences were to be paid, and consequently the parties were agreed that there should be no delivery. So on the uncontradicted evidence before the Judge, I think, he was entitled to find that in fact the amounts were ascertained and a sum was arrived at between the parties. That being so, that to my mind would mean, apart from any authority, that there was here an ascertained sum due from the defendants to the plaintiff', in other words, a debt.

11. Accordingly, the present case to my mind is clearly distinguishable from the decision of Sir Norman Macleod and Mr. Justice Crump in Hirachand v. Nemchand (1923) 215 Bom. L.R. 445, where it was held that a right to sue for damages consequent upon an alleged breach of contract cannot be transferred. There what had taken place was this : One Jivraj had purchased goods from a mill and had sold the goods to the defendant. The defendant broke his contract. Then Jivraj sold the goods by auction on the defendant's account and the difference between the contract price and the auction price resulted in a loss of Rs. 13,784 to Jivraj. Jivraj assigned that loss to the plaintiff, and it was held that he was not entitled to recover it as it was not a debt. That was a clear case of unliquidated damages for breach of contract. The defendants there argued that the auction rate was not a proper amount and clearly the auction rate did not represent a fair market rate as on the date of breach. Consequently, it was a clear case to my mind where the damages were unascertained and could not be ascertained until you obtained a decision of the Court.

11. The same observations apply to the decision in the case of Abu, Mahomed v. S.C. Chunder ILR (1909) Cal. 345. That was a case of a purchase of gunny bags to be delivered in equal portions during the months of January to May 1900, each amounting to a separate contract. There delivery was duly given of the January and February portions but there was a failure to give delivery of the March instalment and thereby the purchaser sustained damages to the extent of Rs. 1,112-8-0, being the difference between the contract price of the goods and the market price prevailing on March 31, 190&. This was held to be merely a claim for unliquidated damages for breach of contract, and therefore not assignable. There to prove the claim, the market price at the date of breach would have to be ascertained, and this might involve calling several witnesses.

12. The other case cited, Varahaswami v. Ramachandra Raju ILR (1913) Mad. 138, was a totally different case, namely, for damages for failing to collect certain rents. That claim was held not to be assignable whether it was founded on tort or contract.

13. The conclusion, therefore, which I have arrived at is that on the date of the assignment in the present case, namely, August 29,1923, there was and had been for a long time past a debt owing by the defendants to plaintiff No. 1, and it was accordingly an 'actionable claim' within the meaning of Section 3 of the Transfer of Property Act and was assignable under Section 130 of that Act.

14. A question has been raised as to the form of this document. The first portion of the unofficial translation was inaccurate but having obtained an official translation of the material portion we find that by the deed, namely, Exhibit 33, plaintiff No. 1 agreed to sell the three debts in question of the three vayadas in satisfaction of a somewhat lesser sum due by plaintiff No. 1 to plaintiff No. 2. Then this is followed by a subsequent document, Exhibit 59, dated January 31, 1925, Speaking for myself I do not see the necessity for it. But even as to that document some question is raised as to its precise form. To my mind, however, it is clear that it is at any rate a confirmation of the previous document, Exhibit 33, as being the final assignment of those particular debts. I of course appreciate that while the first document, Exhibit 33, was executed a few days before the suit, the second document, Exhibit 59, was executed a long time afterwards. But I do not see that that makes any substantial difference in the case we have before us.

15. In my opinion the learned Judge arrived at the right conclusion on this part of the case, and, accordingly, judgment was rightly entered for both plaintiff No. 1 and plaintiff No. 2.

16. As regards the question of interest it was argued that it was interest on damages, but on my above finding that there was an ascertained debt that argument to a large degree disappears. Here again the plaintiff's uncontradicted statement in evidence that interest at six per cent, was to be paid according to the custom of the bazar, to my mind, puts an end to that question. It often happens on the Original Side that we give interest where the evidence shows that this is in accordance with the custom of the market in any particular transaction. In the written statement in the present case it was rather the rate of interest that was demurred to than that no interest at all was payable. And the learned Judge accepted that view when he stated that the usual interest charged for such balances in the bazar is six per cent. In my opinion he was right in this part of the case also.

17. Accordingly, I would dismiss this appeal with costs. One set of costs.

Patkar, J.

18. I agree and I have nothing to add.


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