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Ramgopal Chunilal Vs. Ramsarup Baldevdas - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 15 of 1933 and Suit No. 864 of 1932
Judge
Reported inAIR1934Bom91; (1934)36BOMLR84
AppellantRamgopal Chunilal
RespondentRamsarup Baldevdas
DispositionAppeal dismissed
Excerpt:
.....contracts-indian limitation act (ix of 1908), section 3, expln.-presentation of plaint to proper officer-leave of court under clause 12 of letters patent to institute suit-presentation before obtaining of leave whether sufficient for purposes of limitation.;where there are two contracts one for sale, and the other for purchase, of the same amount of the same class of goods, the obvious intention of the parties is that the contracts should not be carried out according to their terms but should be treated as balancing each other. in such a case, generally, the parties intend that the contracts shall be cancelled, and that, in lieu of the existing contracts, there shall be a fresh contract under which one party has to pay and the other to receive on the due date the difference, and that..........shall be a fresh contract under which one party has to pay and the other to receive on the due date the difference, and that neither party is to insist on the original contracts being carried out according to their terms. in my view the court may readily infer such a fresh contract, either from the terms of the instructions for the second contract in referring to an intention to close the first contract, or from the manner in which the contracts have been dealt with in the books, e.g., by treating the first two contracts as cancelled, and replaced by a liability to pay or a right to receive the difference, or by other sufficient evidence. but, in my opinion, the liability to pay or receive the difference on the contracts would only arise, in the absence of agreement to the contrary,.....
Judgment:

John Beaumont, Kt., C.J.

1. This appeal raises a question under the Indian Limitation Act. There are really two distinct points. First, what is the date on which the cause of action arose, and, secondly, when was the suit instituted within the meaning of Section 3 of the Indian Limitation Act. As regards the first point, the suit is a suit for the recovery of differences upon certain contracts. There were four contracts entered into by the plaintiffs on behalf of the defendant. They were all for April-May 1929 delivery. Each of the first two contracts was for the purchase of one hundred bales of cotton, and each of the other two contracts was for the sale of one hundred bales. The due date under all the contracts was May 25, 1929. The defendant's contention is that the two contracts for sale cancelled the two contracts for purchase, and the defendant's liability to pay the difference arose on that cancellation; and if that is so, the cause of action arose sometime in 1928 and the suit would be out of time. Mr. Justice Blackwell decided against the defendant, and held that the cause of action arose on May 25, 1929, being the due date under the contracts. In arriving at that conclusion he relied to some extent on the decision in Uderam v. Shivbhajan : (1920)22BOMLR711 In that case the learned Judge pointed out that where you have a contract for sale followed by a contract for purchase or vice versa, although in a business sense the second contract may be said to cancel the first, yet in point of law the two contracts are independent, and each may be per formed according to its terms. That, no doubt, is true up to a point; but, I think that the case invites this comment. Where you have two contracts one for sale, and the other for purchase, of the same amount of the same class of goods, e.g., one hundred bales of cotton for settlement on the same day, the obvious intention of the parties is, I think; that the contracts should not be carried out according to their terms but should be treated as balancing each other. I think that in such a case, generally speaking, the parties intend that the contracts shall be cancelled, and that in lieu of the existing contracts, there shall be a fresh contract under which one party has to pay and the other to receive on the due date the difference, and that neither party is to insist on the original contracts being carried out according to their terms. In my view the Court may readily infer such a fresh contract, either from the terms of the instructions for the second contract in referring to an intention to close the first contract, or from the manner in which the contracts have been dealt with in the books, e.g., by treating the first two contracts as cancelled, and replaced by a liability to pay or a right to receive the difference, or by other sufficient evidence. But, in my opinion, the liability to pay or receive the difference on the contracts would only arise, in the absence of agreement to the contrary, on the day fixed for the performance of the original contracts. Now in the present case we have got the plaintiff's evidence as to what was intended when the contracts for sale were entered into. It is quite clear that the intention of the parties was that the contracts for purchase should be treated as cancelled by the contracts for sale, and that in lieu of any liability under those contracts the defendant was to pay and the plaintiff to receive the difference. But, I think, that it is also clear from the plaintiffs' evidence that that difference was not to be paid until the due date of the original contracts, viz., May 25, 1929. In the witness box the plaintiffs' witness stated that on and after November 2, 1928, which was the date of the last of the four contracts, the only right which the plaintiffs had against the defendant was to recover the difference between the purchase price and the sale price and expenses, and that they could only exercise the right on the due date, which was May 25, 1929. The conduct of the plaintiffs is quite consistent with that evidence, because, they sent to the defendant a statement of account of the balance due and deducted interest by way of discount if the money was paid before the due date. In my opinion, therefore, the liability of the defendant was to pay this difference, which is the sum sued for, on May 25, 1929.

2. The next question is whether the suit was instituted within three years from that date, i.e., on or before May 25, 1932. Now, as is frequently done by parties, the plaintiffs in this case started their suit at the last possible moment, and on May 25, 1932, the plaint was handed to an officer in the Prothonotary's office. In Section 3 of the Indian Limitation Act it is provided that 'every suit instituted after the period of limitation prescribed therefor by the first schedule shall be dismissed, although limitation has not been set up as a defence'. Then, in explanation it is provided that 'a suit is instituted, in ordinary cases, when the plaint is presented to the proper officer'. Under Order IV, rule 1, of the Code of Civil Procedure, it is provided that 'every suit shall be instituted by presenting a plaint to the Court or such officer as it appoints in this behalf.' Rule 2 of that Order provides that 'the Court shall cause the particulars of every suit to be entered in a book to be kept for the purpose and called the register of civil suits. Such entries shall be numbered in every year according to the order in which the plaints are admitted'. Now in this case the plaint shows on its face that leave to sue is required under Clause 12 of the Letters Patent. The appellant's contention is that in such a case the plaint cannot be presented except to a Judge, who is the only person who can give leave to sue under the Letters Patent, and that the presentation of the plaint to the proper officer in the Prothonotary's office does not institute the suit where leave to sue is required under Clause 12. It is quite clear under our Rules and practice that the proper officer to receive the plaint is the Prothonotary, or somebody in his office to whom the duty is delegated by him. The only question is whether that rule can apply to a case to which Clause 12 of the Letters Patent is applicable. It is settled law that giving of leave under Clause 12 is a judicial act which cannot be delegated by the Court to the Prothonotary or any other officer, and the clause provides in effect that until leave is granted the Court shall not receive, try or determine the suit. But, I think, that the argument of the appellant really involves a confusion between ' presentation of the plaint' and 'admission or receipt of the suit'. To my mind, the plaint, even where leave is required, is presented when it is handed over by the plaintiff or his agent to the proper officer in the Prothonotary's office. If leave is required, the plaint must be submitted to the Chamber Judge and leave obtained from him under Clause 12 of the Letters Patent. When that leave is obtained the officer in the Prothonotary's office must see that the plaint is in Order and admit it under Order IV, Rule 2, and he cannot admit the plaint until the leave of the Judge has been obtained. But, to my mind, the obtaining of the leave of the Judge and the admission of the plaint does not affect in any way the presentation of the plaint for the purposes of the Indian Limitation Act. That being so, I think that the decision of the learned Judge is right and this suit was instituted within the period of limitation, viz., on May 25, 1932, and the plaintiffs are entitled to judgment in their favour. The appeal is, therefore, dismissed with costs.


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