Skip to content


The Paper Sales Ltd. Vs. Chokhani Bros. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case Number O.C.J. Appeal No. 52 of 1944 and Suit No. 435 of 1943
Judge
Reported inAIR1946Bom429; (1946)48BOMLR274
AppellantThe Paper Sales Ltd.
RespondentChokhani Bros.
Excerpt:
indian contract act (ix of 1872), sections 55, 63 - contract, performance of-time essence of the contract-failure to perform-extension of time-extension beyond period of performance-illegality of contract-burden of proof.;under section 56 of the indian contract act, 1872, the right of the promisee to avoid the contract after breach is not circumscribed by any chronological limitations. nor is the element of time introduced into section 63 of the act.;hence, where after several agreements for extension of time for the performance of a contract there is an ultimate agreement that time should be extended to a particular date, it matters not that there are gaps between the intervening agreements, any more than it matters that there is, in the case of a single agreement to extend, an interval.....leonard stone, kt., c.j.1. this is an appeal from two judgments of mr.. justice chagla dated march 15, 1944, and november 10, 1944, by which he ordered the appellants to pay to the respondents rs. 2,77,000 as damages for breach of contract.2. the fact that there was a contract whereby the appellants agreed to sell to the respondents one hundred tons of special featherweight bond paper, more particularly described in exhibit e, which is a letter dated july 10/15, 1942, is not now in dispute. nor is it disputed that the appellants are in breach of that contract. the controversy is directed to the date of the breach and to the quantum of damages, if any. mr. colt-man for the appellants admits with considerable force and logic that in order to determine that controversy it is essential to.....
Judgment:

Leonard Stone, Kt., C.J.

1. This is an appeal from two judgments of Mr.. Justice Chagla dated March 15, 1944, and November 10, 1944, by which he ordered the appellants to pay to the respondents Rs. 2,77,000 as damages for breach of contract.

2. The fact that there was a contract whereby the appellants agreed to sell to the respondents one hundred tons of special featherweight bond paper, more particularly described in exhibit E, which is a letter dated July 10/15, 1942, is not now in dispute. Nor is it disputed that the appellants are in breach of that contract. The controversy is directed to the date of the breach and to the quantum of damages, if any. Mr. Colt-man for the appellants admits with considerable force and logic that in order to determine that controversy it is essential to start at the beginning and to ascertain the terms of the contract. Unfortunately the position in this regard has become confused by the course which the proceedings have taken which necessitated an amendment by the respondents of their plaint after the hearing of the action had commenced and by a mistake in the respondents' pleadings which even at this late stage still persists. It is Mr. Coltman's submission that even after the amendment the contract and the extensions of time as pleaded have not been proved by the respondents. It is accordingly necessary to examine the pleadings in order to ascertain how the matter stands.

3. The plaint, as it originally stood, pleaded the contract in these terms:

As a result of the said negotiations the defendants agreed to sell to the plaintiffs and the plaintiffs agreed to purchase from the defendants on or about the 17th July 1942 100 tons of special featherweight bond 40 gms. per sq. mtr, at the rate of 12 annas per lb. nett f.o.r. Bombay, quality as per sample attached with the said letter dated the 27th June 1942, delivery of the goods to be effected at the earliest possible date without any binding of any specific period. Hereto annexed collectively marked Exhibit ' A' are copies of the letter dated 27th June 1942 addressed to the plaintiffs by the said International General United Trading Company and the letters dated the 1015 July ,1942 and 17th July 1942 exchanged between the plaintiffs and the defendants recording the terms and conditions of the said contract.

The plaintiffs also paid to the defendants as agreed a sum of Rs. 15,000 by way of deposit against the said contract.

4. The International General United Trading Company was the predecessor of the appellants, and there is no dispute that the appellants now stand in the place of the former company. With regard to the letters. The first letter which is dated June 27, 1942, is from the International General United Trading Company to the respondents:

We shall thank you to kindly send us your written confirmation of your order for 100 tons of Special Featherweight Bond Finishing Printing Paper-40 grams substance of Sirpur Paper Mills Limited at Rs., 0-12-0 per lb. nett f.o.r. Bombay with a cheque for Rs. 17,000 only, being deposit of 10%' against the Mills demand of 25% deposit.

' An immediate compliance will be highly appreciated.

The second letter which is dated July 10/15, 1942, is from the respondents to the appellants:

Re: 100 tons Special Featherweight Bond,

Dear Sirs,

As per telephonic talk we had with you we confirm herewith having purchased from you the undermentioned:

100 tons Special Featherweight Bond 40 gms. per sq. mtr.;@ 0-12-0 per lb. nett f.o.r. Bombay, delivery to be completed within 21 months, quality as per sample attached with your letter dated 27th June 1942.

We also agree as desired in your above referred letter to send to you deposit against this contract. Please note we are arranging to send you a sum of Rs. 15,000 aa deposit within a day or two.

Thanking you.

5. It is now common ground that the third letter, viz. that of July 17, 1942, has nothing whatever to do with this case. It is a letter written with regard to some other contract between the parties. But it is significant that it is from this wholly irrelevant letter that the delivery date ' at the earliest possible date ' is taken and that is how in para. 4 of the plaint the time for delivery is pleaded as being the earliest possible date, although the letter of July 10/15, 1942, in which delivery was to be in two months, is relied upon as recording the terms of the contract.

6. The appellants by their written statement of defence so far as material admit the letters of June 27 and July 10/15, deny that the letter of July 17 has any relevance and deny that the contract was as pleaded in para. 4 of the plaint and in particular that the date for delivery was at the earliest possible date.

7. In that state of the pleadings the matter came on for trial and it appears to) have been then realised by the respondents that their plaint was not in order and leave to amend and for an adjournment was sought and granted. As a result new para. 16 A appeared in the plaint: but surprisingly no amendment was made to the defective para. 4. Paragraph 16 A is in these terms:

In the alternative and without prejudice to the contention aforesaid, the plaintiffs say that the time for delivery of the balance of goods deliverable by the defendants to the plaintiffs . under the said contract was from time to time extended by the plaintiffs up to the end of December 1942 pursuant to the request of the defendants and it was only when the defendants failed and neglected to deliver the said balance even by the extended period viz. the end of December ,1942 that the defendants addressed to the plaintiffs their attorneys' letter dated the 31st December 1942 part of Ex. D to the plaint purporting to send a reply to the plaintiffs' former attorneys' letter dated the 23rd December 1942 (wrongly described therein as the letter dated the 22nd December ,1942). The plaintiffs say that the defendants were as afore-stated bound to deliver the said balance of the goods to the plaintiffs by the end of December 1942 or in any event within a reasonable time thereof. The defendants however failed and neglected to do so and committed a breach of the said contract as hereinbefore stated.

8. Particulars of paragraph of 16A were ordered and by the particulars delivered four different extensions of time for delivery are pleaded. Under the terms of the letter dated July 10/15, 1942, delivery was to be completed ' within two months.' In the Court below and in this Court the delivery date, in spite of the unusual way of dating this letter, has been treated as being of September 15, 1942. The four extensions set out in the particulars are pleaded as being arrived at on the request of the appellants and agreed to by Mr. Keshavdev on behalf of the respondents, that is to say the extensions are pleaded as being the subject-matter of agreements, and not as casual extensions to be presumed from the respondents' forbearance, to avoid the contract under Section 55 of the Indian Contract Act,, 1872. The agreements for extension as pleaded are these:

(1) Agreement arrived at 'in or about the second week of September 1942' for delivery 'by the end of the month.'

(2) Agreement arrived at ' in the beginning of October 1942 ' for delivery ' in or about a fortnight.' . .

(3) Agreement arrived at 'about the middle of October 1942' for delivery 'in about a month.

9. Then follow allegations that in November, 1942, there was an agreement about the delivery of one wagonload of the paper; but this was a small proportion of the paper to be delivered. Referring to this arrangement the particulars set out the circumstances of the fourth alleged extension:

The plaintiffs having not received the goods as promised and having learnt that the goods were being delivered to some other party, the plaintiffs by their own letter as well as by their attorneys' letter both dated the 23rd November 1942 called upon the defendants to-deliver the contract goods.

Thereupon the defendants' Managing Director Mr. H. M. Shah with certain other person saw Mr. Keshavdev at his office in Stock Exchange Building in or about the last week of November 1942 and promised to deliver the remaining goods by the end of December 1942 and requested Mr. Keshavdev to wait till then and Mr. Keshavdev agreed to do so.

10. It will be convenient before passing to the evidence to refer to the case, Anandram Mangturam v. Bholaram : AIR1946Bom1 , upon which Mr. Coltman relies. That case, which is a recent decision of this Court, follows a decision of the Madras High Court (Mutthaya Maniagarm v. Lekku Reddiar I.L.R. (1912) 37 Mad. 412 and a later decision of the Privy Council (Muhammad Habid Ullah v. Bird &, Co. (1921) 24 Bom. L.R. 687 and holds that where the purchaser seeks to have damages for breach of a contract assessed at a later date than that fixed by the contract for delivery, the effect of Section 55 of the Indian Contract Act, 1872, is to put an agreement come to after the original date of performance of a contract has expired on the same footing as the original agreement. But it must be an agreement. Mere forbearance from suing or giving a formal notice of rescission does not amount to an extension of time for the performance of a contract within the meaning of Section 63 of the Act, so as to alter the relevant date on which damages are to be assessed. Accordingly in the case before us in order for the date at which damages are to be assessed to be extended from September 15, 1942, to December 31, 1942, being the date upon which the respondents rely, there must be an agreement extending the date of delivery. Mr. Coltman's submission on this part of the case is that the evidence of Mr. Keshavdev in support of the agreements to extend set out in the particulars falls far short of discharging the onus of proof which undoubtedly lies on the respondents. Mr. Coltman also attacks the veracity of Mr. Keshavdev and points to alleged inconsistencies in his evidence with certain letters written to the Mills who were producing the paper, and by the respondents' attorneys. The learned Judge in the Court below has said this about Mr. Keshavdev's evidence:

I have watched the demeanour of Keshavdev in the witness-box, and I have no hesitation in saying that, as far as the matters which he has deposed to in this case are concerned, he has struck me as a witness of truth; and I have ho Hesitation in accepting his testimony as to the agreement for the extension of time. Fortunately for him the whole of his testimony is strongly corroborated, as I shall point out, by the correspondence that has taken place between the defendant Company and the Sirpur Mills and between the parties themselves.

11. That there are, when the question of the extension is considered, various omissions such as is to be found in Mr. Kanga's letter of January 11, 1943, which in effect is the letter of the respondents' solicitors before action and which, although it summarises the history of the matter, makes no mention of the extensions, cannot be disputed. But Mr. Keshavdev in his evidence has given this frank explanation:

From the 17th of July onwards my belief was that under the contract I was bound to take delivery of the goods whenever tile Mills consigned them to the defendants and that there was no fixed time for delivery.

Question: ' Therefore there was no question of extension of time for giving delivery '

Answer: ' The extension of time arose in this way that whenever I asked Bhawnani when be would deliver the goods he used to mention a certain period and I used to agree to wait till that period.'

' I told my Solicitors that the contract in suit was set out in the letters of the 15th and 17th of July.

12. It comes to this, that the taint of the irrelevant letter of July 17 and the consequent belief in the mind of Mr. Keshavdev that delivery was to be at the earliest possible date has persisted from the inception of this transaction and must be borne in mind when considering whether Mr. Keshavdev has discharged the onus of proof with regard to any extension of time for delivery. Mr. Coltman's submissions with regard to these extensions is that in order to arrive at the ultimate date, December 31, 1942, there must be a continuous and unbroken chain of extensions covering the whole period from the delivery date in the contract, September 15, 1942, up to December 31, 1942, and he supports this argument by the pictorial simile of a wall in which, whilst the top rows of bricks are firmly bonded, the lower rows are loosely put together, so that the whole wall must collapse. In my judgment this line of reasoning is unsound, since by Section 55 of the Indian Contract Act the right of the promise to avoid the contract after breach is not circumscribed by any chronological limitations. Nor is the element of time introduced into Section 63 of the Indian Contract Act. In a case therefore in which after several agreements for extension there is an ultimate agreement that time should be extended to a particular date, it matters not that there are gaps between the intervening agreements, any more than it matters that there is, in the case of a single agreement to extend, an interval between the expiry of the original contract date for delivery and the making of the extension agreement for a new delivery date. What is vital is the final agreement to extend the delivery date. In this case the final extension is the one which I have referred to as the fourth extension, by which the respondents allege that time was extended by agreement till December 31, 1942. The only witness for the respondents on this point was Mr. Keshavdev, and in his evidence-in-chief he says this:

In the last week of November 1942, Himatlal Shah, a director of the defendant company and one Salebhoy of the Samsher Printing Press saw me at our office,

Salebhoy told me that the defendants had received from the Mills 15 tons of the contract goods but Bhawnani had delivered these to some other party and he told me that the defendants were prepared to pay me compensation in the sum of Rs, 25,000 for non-delivery of these goods and that in future the defendants would give me delivery of the goods as and when received from the Mills. I agreed to take delivery in future as suggested by them, but with regard to the compensation I claimed a larger amount and they told me that they will let me know after consulting the Board of Directors. Nothing happened after that till the 31st of December 1942 when we received a letter from the defendants Advocate.

13. If the matter had rested there, there can be no doubt that this evidence alone would not have proved an agreement to extend the time for delivery up to December 31, 1942. But Mr. Keshavdev's evidence must be looked at as a whole, and under cross-examination he gave the following further evidence:

Himatlal Shah and Salebhoy saw me at our office after Exhibits M and N were written. I knew Salebhoy before he saw me in November ,1942,

Salebhoy owns a printing press and a paper shop and is a respectable man.

Salebhoy came with Himatlal because they are closely connected and Salebhoy made a suggestion of compromise on behalf of Himatlal Shah,

Salebhoy did not suggest that I should accept Rs. 25,000 in settlement of the whole dispute between us and the defendants but only with regard to the 15 tons of the contract goods which had been delivered to some other party. He also told me that with regard to the remaining goods the defendants would be in a position to deliver the sale by the end of December 1942.

Salebhoy did not give a definite promise that the balance of the goods would be delivered by the end of December but he said that in all probability the goods would be delivered by that time. ...

I told Salebhoy that I was prepared to take delivery of the goods whenever the Mills delivered them and he said that the defendants would give delivery as and when the Mills delivered them and that would be by the end of December.

14. Mr. Coltman has severely criticised the somewhat vague nature of this evidence, but it must be remembered that Mr. Keshavdev's evidence has been accepted by the learned Judge, and that although he seems by November, 1942, to have realised that the appellants were in default and could be pressed, he did not appreciate that the original date for completion was September 15 which had long since passed. With reference to the November meeting the learned Judge said:

But fortunately there is one interview deposed to by Keshavdev and which is admitted ,by the defendant Company, and that is the interview which took place at the end of November 1942 between Keshavdev, Himatlal Shah and Salebhoy; and the defendant company has called Salebhoy to give a version of that interview contrary to the one given by Keshavdev in his evidence. Salebhoy in his evidence states that at the end of November 1942 the defendant sent him and Himatlal Shah to the plaintiffs' office in order to bring about at compromise of the plaintiffs' claim against the defendants. Himatlal and Salebhoy went to the plaintiffs' office and saw Keshavdev. Salebhoy told Keshavdev that it would be advisable if the plaintiffs settled their claim against the defendants and he also told Keshavdev that he was authorised to offer Rs. 20,000 to Rs. 25,000. Keshavdev told Salebhoy that his claim came to about Rupees Three lakhs to Rupees Three and a half lakhs and he could not possibly settle it for that small amount. Salebhoy told Keshavdev that his authority was limited to offering Rs. 20,000 to Rs. 25,000 and left. This curious emissary of peace who was sent toy the defendant company to the plaintiffs' office did not, according to him, even know what the dispute between the plaintiffs and the defendant company was. According to Salebhoy, .all that he knew was that he was offering Rs. 20,000 to Rs. 25,000 and the plaintiffs were claiming Rupees Three and a half lakhs. He did not trouble about the why or wherefores of this claim of the plaintiffs. The evidence of Salebhoy is so inherently improbable that it would be impossible for any Court to accept it. But one rather significant fact emerges from Salebhoy's evidence and that is that he admitted in cross-examination that Keshavdev told him that he did not want the money; he wanted his goods; and he wanted the delivery as soon as possible, as he had already sold these goods to a third party. This undoubtedly corroborates Keshavdev when he says that the time for the performance of the contract had been extended by mutual agreement. But what is difficult to understand-and Mr. Coltman has made no attempt to explain it-is why Himatlal, Shah, a director of the defendant company, was not called when admittedly he was present at this interview, The only presumption that I can draw is that if Himatlal Shah had stepped into the witness-box, he would have supported the story of Keshavdev and not that of Salebhoy.

THE learned Judge then sums up as follows:

On the oral evidence and the documentary evidence which I have just reviewed, I hold that the time for delivery was extended from time to time up to December 31, 1942, and also that it was on December 31, 1942, that the defendant company finally repudiated the contract, and I therefore hold that the date of the breach was December 31, 1942.

15. Mr. Coltman for the appellants submits that this finding by the learned Judge is not in accordance with the evidence. It is true that the evidence cannot be said to be very explicit, but looked at as a whole certain matters emerge with regard to the November interview:

(1) that Keshavdev rejected compensation and demanded the goods, which he had already sold to someone else,

(2) that the offer was made that delivery would be made when the goods were received from the Mills, and

(3) that the representation was made that the goods would be received from the Mills ' by the end of December.

16. It was upon this offer and representation being made that Keshavdev agreed to wait and to extend the time for delivery to a new date. If not directly fixed as being December 31, 1942, the new agreed date for delivery was to be within a reasonable time computed by reference to delivery by the Mills and the representation I have already referred to. That date can, in my opinion, looking at the. evidence as a whole, be properly fixed as December 31; 1942. Accordingly I am not prepared to> disturb the finding of the learned Judge to that effect.

17. This brings me to Mr. Coltman's second ground of appeal, that is to say, the quantum of damages, it being submitted that no damages have been proved at all. This raises a curious point, since what is said is, that the only evidence of market rates by which damages can be measured is evidence of transactions which are illegal as being sales colloquially spoken of as 'black market' transactions. If this were so, I should have no hesitation in holding that the Court would not entertain any such evidence for the purpose of assessing damages. What occurred was this. Alter the learned Judge had delivered his judgment on March 15, 1944, he adjourned the question of the quantum of damages to come before him at a later date, and in due course, having heard further evidence, he delivered judgment with regard to the damages on November 10, 1944. At the hearing to assess the damages the appellants called no evidence at all, and the only witness for the respondents who gave evidence with regard to actual sales was Hyder Mohsin Kameralli. This witness gave evidence with regard to five actual sales, the first three being in July and August 1942 and, therefore, not of material value. But the other two sales were actually effected on December 31, 1942, and, therefore, were sales at the critical date. In respect of these two sales, the two relevant entries in the debit journal of the firm by whom the witness was employed were produced and these entries are exhibits A 13 and A 14.

18. Now the question of legality stands as follows. By an order of the Central Government dated January 16, 1942, under the powers contained in the Defence of India Rules, the articles specified in the first schedule ' shall not be sold by any Paper Mill in wholesale quantities to any dealer or other person at prices (f.o.r.) higher than those specified in column 2 of the said schedule for deliveries ' at places therein named. So far as material the article described in the first schedule is paper, which is ' Bleached woodfree MF writing and MF printing paper 14 Ibs. demy and above, including, pulp boards but excluding blotting paper,' and the controlled price is 6 as. 6 p. Then, on May 25, 1942, the Government of Bombay in exercise of the powers conferred by the Defence of India Rules ordered that ' Indian-made paper, for which the Government of India has fixed maximum wholesale prices under its Notification in the Department of Commerce, No. Econ. Ad. (P.O.)1 16/41, dated January 16, 1942, shall not be sold retail at any place in the City of Bombay at prices higher than those mentioned in the annexed schedule.'

19. It is not suggested that the two sales recorded by exhibits A13 and A 14 contravened the Central Government's order. What is said is that they contravened the order of the Government of Bombay. Mr. M. V. Desai points out that this order only applies to retail sales, whereas he submits that the two examples of sales given by the witness are wholesale sales. On the one hand the witness's employers, as appears from his evidence, are wholesale merchants, and on the other hand the witness speaking generally says:

We sold this paper both wholesale and retail and in respect of some of the sales we have issued cash memos.

20. Nothing in the debit journal entries of the two sales of December 31, 1942, shows whether they are wholesale sales or retail sales. It is to be observed that there was no cross-examination to the effect that these two examples were retail sales and were accordingly within the ambit of the order of the Government of Bombay and therefore illegal. Nor does it appear that in the Court below this point with regard to the two sales being illegal was taken at all.

21. The law presumes against an illegality, and the burden of proving that an illegality has taken place rests on the party who so asserts. In my judgment, as there is not any evidence at all that these two sales given by way of example are retail sales and,, therefore, illegal, it must be assumed that they were wholesale sales and, therefore, valid. That being so, it cannot be said that there is not any evidence upon which the learned Judge could assess damages. In my opinion there is no reason why this Court should interfere with the conclusion as to the quantum of damages which the learned Judge has arrived at. Accordingly this appeal must be dismissed with costs.

Kania, J.

22. I agree. The relevant portions of the evidence of Keshavdev on which the success of the plaintiffs' case depends have been set out in the judgment of the learned Chief Justice.

23. Before us only two questions were argued on behalf of the appellants: (1) What was the date of the breach and (2) What damages, if any, the plaintiffs are entitled to This discussion must therefore proceed on the footing that there was a contract for the sale of 100 tons of paper by, the defendants to the plaintiffs on the terms contained in the letter dated July 10/15, 1942, and that the defendants had committed a breach thereof. These two facts for the present appeal are admitted by the appellants.

24. The question of the date of breach must depend on proof of the extensions of time; for delivery as pleaded by the plaintiffs in the particulars furnished in pursuance of the Court's order, after the plaintiffs amended the plaint by inserting para. 16A therein, On behalf of the appellants it was first contended that till after the hearing started Keshavdev and the plaintiffs were all along under the impression that delivery was to be effected at the earliest possible date without any binding of any specific period. It was contended that if this was the term of the contract according to the plaintiffs, there could arise no occasion for an agreement to extend time, because on that averment of the plaintiffs the time for performance had not expired. It was therefore-contended that the evidence of Keshavdev was completely got up and unreliable. In my opinion this argument is unsound. The question of what v/as in the mind of persons who were discussing the period of delivery after September 15 is irrelevant to the question whether in fact an agreement for delivery at a later date was arrived at. The evidence of Keshavdev shows that after September 15 he asked for delivery and on behalf of the appellants Keshavdev was told that delivery would be given by a certain later date and Keshavdev agreed to wait till then. Whether Keshavdev demanded delivery under the impression that the term was as set out in para. 4 or on the footing that September 15 was under the original contract the last date, is immaterial to the question that he asked for delivery and was offered delivery at a later date and he agreed to take delivery on such date.

25. The next question to be considered is whether the extensions pleaded by the plaintiffs have been established. In my opinion, the argument of the appellants that unless each one of the extensions as pleaded was proved satisfactorily the allegation that time was extended till the end of December cannot be held proved, is unsound. It is not a chain which the plaintiffs are called upon to establish. It is sufficient if they establish that at a certain interview both parties agreed that time for delivery should be the end of December under the contract made between the parties in July, 1942. For that again it is quite immaterial to consider whether the arrangement was made before: the period of delivery stipulated in the initial contract had expired or remained un-expired. That contention is set at rest by the judgment of the Privy Council in Muhammad Habid Ullah v. Bird & Co. . It is therefore immaterial .whether on the record there is evidence to prove the first, second and third extensions, if the plaintiffs satisfactorily establish that the parties had agreed to extend time of delivery up to the, end of December at the last interview.

26. This brings me to the question whether at the interview in the third week of November the parties had agreed to extend time as contended by the plaintiffs. The material and relevant evidence of Keshavdev on this point has been set out fully in the judgment of the learned Chief Justice. Reading that evidence it may be arguable that a definite and specific agreement as set out in the particulars to extend time till December 31 was not established. It must, however, be remembered that the parties to the conversation were two businessmen, none of whom was a lawyer. The effect of that conversation was that the question of delivery of the balance of the goods was discussed between them and Keshavdev demanded delivery of the balance. Mr. Shah or Salebhoy on the defendants' behalf did not contend that they were not bound to give delivery. They did not contend that the time to give delivery had expired and the defendants were under no obligation to give delivery. They stated that they would give delivery of the goods when received from the mills and Salebhoy stated that he could not promise a definite date but he expected the goods to be delivered by the end of December. Keshavdev's statement in evidence-in-chief was that he agreed to take delivery of the goods in future on those terms. From this evidence it is therefore safe to hold that both the sides agreed to an extension of time for delivery and it was agreed that the goods were to be delivered as soon as received from the mills and that was expected to be by the end of December. Even assuming that this does not amount to a definite agreement to give delivery by the end of December, it must amount to a promise to give delivery of the goods within a reasonable time after the interview, and the statement of Salebhoy was that under the circumstances that reasonable time would be the end of December. To this Keshavdev agreed. Differently approached, therefore, the arrangement between the parties themselves was to give and accept delivery of the goods if tendered up to the end of December. I, therefore, agree that there is no reason to disturb the finding of the learned Judge on the question of extension of time up to the end of December.

27. It was argued on behalf of the appellants that the correspondence which took place between the parties was against any such agreement. Mr. Coltman took us through each of the letters exchanged between the parties. It must be recognised that the question to be considered is, ' Was there an occasion to set out the agreement ' If so, the omission to do so may affect the credibility of the witness. But if there was no occasion to set out the extension, the omission cannot lead to an adverse inference against the fact of an extension. Throughout this correspondence the appellants had at no time contended that they had ceased to be liable to give delivery. Even in the last letter of December 31 they had stated that but for the mills stating that they were unable to deliver the goods the balance of 58 tons (according to the defendants) remained to be supplied to the plaintiffs against their order. That correspondence therefore did not give rise to any occasion for the plaintiffs to set up the plea of extension of time after September 15. Even in the previous correspondence all along the complaint was either for non-delivery of a promised consignment and an excuse for not doing so in that connection. I must also point out that when the two letters of demand were sent by the plaintiffs to the defendants on November 23, if the defendants' case was that the time for delivery had expired and there was nothing to be done, it is surprising how they could write the letter of November 24, 1942. There after referring to the three letters previously received they stated as follows: ' We have to state that we shall write to you in reply in due course.' No further letter was sent by them till December 31. If their contention that the time to perform the contract had expired, their natural reply should have been that the contract was at an end and there remained nothing to be done and the correspondence must cease. Instead of adopting that attitude they wrote the reply in the above-quoted terms. So far as the defendants themselves are concerned, the evidence is still more clear. In the minutes of the meeting of the Board of Directors held on November 16, 1942, (exhibit A7) Mr. H. M. Shah was appointed managing director and the directors resolved that the goods when received should be delivered to the plaintiffs according -to the company's contract with them. That clearly negatives the contention that the contract had come to an end or that the time for performance had expired and there was no outstanding liability to give delivery under the contract. The documents therefore instead of supporting the defendants' case clearly support the plaintiffs' case. I agree with the conclusion of the learned trial Judge on the construction of the correspondence and the minutes of the meeting of the directors. I agree therefore that the plaintiffs had established the extension of time up to December 31, 1942.

28. On the question of damages the plaintiffs called Hyder Mohsin Kamberally. His evidence was severely criticised and it was contended that the same should not be .accepted. It was pointed out that he was an interested witness and had made contradictory statements in the course of his evidence. With all this criticism one must recognise that, excluding all his oral evidence which was not supported by documents, the plaintiffs had proved their case. The plaintiffs proved through this witness two sales evidenced by exhibits A 13 and A 14. There was no cross-examination of the witness about the genuineness of these sales. The sales of paper covered by these two memos not being disputed, prima facie they are legal transactions. If the defendants wanted to contend that they were illegal transactions, on which the Court should not base its judgment, it was their duty to elicit the necessary facts to lead the Court to that conclusion. Unfortunately in the cross-examination of this witness facts were elicited to show that the sale was of paper described in the Government of India notification of January 16, 1942. That itself was not sufficient to invalidate the transactions, because that notification only controls sales by a paper mill to any person. Neither exhibit A 13 nor exhibit A14 is a sale by a paper mill. The notification which might have helped the appellants was the notification of the Government of Bombay which controlled the prices of retail sales in the City of Bombay. It appears however that the fact that the notification controlled only retail sales was overlooked. The result is that throughout the cross-examination of this witness it is not suggested that exhibits A 13 and A 14 were for retail sales. The rest of the evidence of this witness also does not help the appellants. The witness was a manager of a firm who dealt ordinarily as wholesale merchants though they also made retail sales. From that however it cannot be stated that the two sales were retail. Looking at the quantities mentioned in the two sales it cannot be stated that they were wholesale or retail. A sale of 200 reams as stated by the witness would be of three tons, and according to him another sale of 200 reams was a wholesale transaction. If so, no conclusion could necessarily be drawn from the fact that one of the sales was of 176 reams and the other was of 60 reams. The latter sale was to the Indian Paper Agency, Karachi. If the name of the purchaser is any help in arriving at the conclusion, it certainly does not help the appellants. In any event, on this vague evidence the appellants cannot be held to have established that the sales were proved to be illegal and the Court -should not rely on those two sales.

29. The next step to be established is that the quality of the goods covered by those two sales was the quality of the goods sold under the contract in suit. The oral evidence of this witness alone may not be sufficient to prove this. But he has actually proved sales of goods of these two qualities at about the same date with a slightly lower -price for the Star Bank or Bond paper. It is therefore proved that in the normal course of business the paper sold to the plaintiffs was not inferior to the Star Bank paper. Therefore, the evidence is sufficient to establish that the two sales were a proper guide for the Court to award damages. If the defendants were so minded, they were not prevented from leading evidence to show that there were other transactions at less rates. The Court has to do its best it can on the evidence before it, and as the two-sales, the genuineness of which was not challenged, have been satisfactorily established and as none is shown to be illegal, on the evidence on record, there is no reason to differ from the conclusion of the learned Judge that the damages should be awarded on the footing of these two sales. I therefore agree that the appeal should be dismissed, with costs.

30. Appeal dismissed with costs. Messrs. N. C. Dalai & Co. with whom Rs. 1,500 were deposited for security for costs under the Prothonotary's order dated September 29, 1945, to hand over the same to the respondents' attorneys without claiming any lien thereon towards the costs of the appellants in this case.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //