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Nippon Menkwa Kabyshika Kaisha Vs. Gurmukrai Sukhanand and Co. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 489 of 1908
Judge
Reported in(1908)10BOMLR1024
AppellantNippon Menkwa Kabyshika Kaisha
RespondentGurmukrai Sukhanand and Co.
Excerpt:
high court rules, rule 131-third party notice-application to he before filing written statement-practice and procedure.; an application for a third party notice, under rule 131 of the bombay high court rules, must be made before the written statement is filed, unless special leave has been obtained from the court. - - defendant failed to take delivery and after filing his written statement applied for leave to issue a third party notice against messrs. the issue of the third party notice was clearly wrong and directions must be refused......the right to damages is given in consequence of the breach of the original contract between the parties. it is an incident which the law attaches to the breach of a contract, and is not a provision of the contract itself.5. there is nothing to show that when defendant, contracted to sell 100 bales of cotton to the third party, the third party-contracted to indemnify defendant against his contract with the plaintiff or any other contract. the defendant has only a claim to damages against him arising from the breach of the con_ tract with him. the issue of the third party notice was clearly wrong and directions must be refused. the defendant must pay the costs of the plaintiff and the third party. counsel certified.
Judgment:

Macleod, J.

1. The plaintiffs have filed this suit against the defendant for damages for breach of contract. Defendant had agreed to purchase 500 bales of cotton and took delivery of 400 bales. On the 16th March 1908 plaintiffs had sent the defendant a delivery order issued by Messrs. Dellaporta and Patel which had come to plaintiff through two intermediate purchasers for the remaining 100 bales. Defendant failed to take delivery and after filing his written statement applied for leave to issue a third party notice against Messrs. Gulraj Singhanee to whom, he had handed plaintiff's delivery order in fulfilment of his contract with them. The application does not appear to have been made on affidavit, as it should have been.

2. The third party filed his appearance and the defendant has taken out this summons for directions. The plaintiff and the third party ask me to refuse to give directions.

3. In the first place it has been argued that the application, for the issue of the notice was made too late as under Rule 131 the notice shall be served within the time limited for filing the written statement of defence unless the leave of the Court or a Judge has been obtained. As other rules of this High Court relating to third party procedure have been adopted from Order XVI, Rules 48 to 55, it is advisable that the same practice should be observed when this procedure is made use of as is followed by the English Courts. This application under Rule 131 made in this case after the written statement had been filed was obviously too late, and as special leave had not been obtained, directions should be refused on that ground alone. The Birmingham and District Land Company Limited v. The London and North-Western Railway Company (1887) 56 L.T. 702. of the Annual Practice for 1908, Vol. I, the English Practice is set forth : 'It is now established that a defendant must apply before defence is delivered.' No doubt when a suit is filed as a Short (Cause no written statement is called for and a written statement is often putin at the last moment by the defendant to get a transfer to the long cause list, but leave should be obtained if the application is made after the written statement has been filed. I am also of opinion that on the merits directions should be refused. The right of a defendant to introduce a third party depends on, whether the defendant cam claim contribution or indemnity from the third party under contract express or implied. There is no question here of contribution. If the defenant had contracted to sell to the third party the hundred bales he had contracted to buy from the plaintiff, it might be that the third party had contracted to indemnify the defendant from the consequences of his not taking delivery from the plaintiff. But the contract between the plaintiff and defendant on the one hand and the contract between the defendant and the third party on the other ate entirely separate transactions. The third party may also have 'contracted to sell 100 bales of cotton to A and A to B and, so on ad infinitum, and the plaintiff's delivery order might have been handed down from buyer to seller in fulfilment of their various contracts, but each contract remains a separate transaction. No doubt a third party is entitled to bring in a further third party and there may therefore be any number of sets of third parties, but that could only be done if the right to contribution or indemnity existed between the various sets. The defendant in this case cannot show how the third party has agreed by contract express or implied to indemnify him against the plaintiff's claims in case of the defendant failing to take delivery of the 100 bales of cotton. The contract between the defendant and the third party may have been made before the contract between the plaintiff and defendant, and even if it was made after, defendant could have offered delivery to the third party in any way he chose and not necessarily by handing over the plaintiff's delivery order. In the Birmingham and District Land Company v. London and North Western Company (1886) 34 Ch. D. 273 Cotton L.J. says :-

But I must say that unless there was imported into the contract between the person who was brought in and the defendants, the contract which the defendants had bound themselves by agreement with the plaintiffs to perform, I cannot see how it could be said that there was a contract of indemnity as between the defendants and the person who entered into the second compact with them in order to enable the original contract to be performed.

4. And Bowen L.J. says at p. 274 :-

But it is quite clear to my mind that a right to damages, which is all that the defendants have here if they are entitled to : anything, is not a right to indemnity as such. It is the converse of such a right. A right to indemnity as such is given by the original bargain between the parties. The right to damages is given in consequence of the breach of the original contract between the parties. It is an incident which the law attaches to the breach of a contract, and is not a provision of the contract itself.

5. There is nothing to show that when defendant, contracted to sell 100 bales of cotton to the third party, the third party-contracted to indemnify defendant against his contract with the plaintiff or any other contract. The defendant has only a claim to damages against him arising from the breach of the con_ tract with him. The issue of the third party notice was clearly wrong and directions must be refused. The defendant must pay the costs of the plaintiff and the third party. Counsel certified.


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