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P.R. and Co. Vs. Bhagvan Das Chaturbhuj - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Judge
Reported in2Ind.Cas.475
AppellantP.R. and Co.
RespondentBhagvan Das Chaturbhuj
Excerpt:
..... - the defendant afterwards failed to take delivery or to pay for the goods and the plaintiffs brought this suit to recover the amount payable under the contract less the said allowances amounting with interest to the date of suit to rs. 1,11,573-4-9. 2. the learned judge of the lower court found that the property in the goods had passed to the defendant and that he was bound to take delivery and pay for the goods but being of opinion that a suit for damages for breach of contract in not accepting the goods was the only remedy open to the plaintiffs and the plaintiffs not having proved damages based upon the difference between the contract rate and the market rate at the date of the defendant's failure to take the goods he dismissed the suit with costs. 18. then i was much impressed by..........passed to the buyer and he neglects to pay the seller may maintain an action for the price. the indian contract act does not contain any such provision. the indian contract act is exhaustive of the law of india relating to the sale of goods; therefore, such an action is since the passing of the indian contract act no longer maintainable in india.4. i think it can be demonstrated that this inference as to the intention of the indian legislature is erroneous.5. before the passing of the indian contract act wherever a consideration was executed for which a debt payable at the time of action had accrued due either under an express promise or under one implied by law the debt might be sued for in an indehitatus count (bullen & leake's precedents of pleading 2nd edn., p. 29); thus the count.....
Judgment:

Basil Scott, C.J.

1. On the 3rd of September, 1907, the defendant agreed to purchase from the plaintiffs 440 cases of Turkey Red goods on the terms of a, written contract. Disputes arose as to whether the goods tendered by the plaintiffs were equal to sample and eventually the defendant agreed to take the goods subject to certain allowances. The defendant afterwards failed to take delivery or to pay for the goods and the plaintiffs brought this suit to recover the amount payable under the contract less the said allowances amounting with interest to the date of suit to Rs. 1,11,573-4-9.

2. The learned Judge of the lower Court found that the property in the goods had passed to the defendant and that he was bound to take delivery and pay for the goods but being of opinion that a suit for damages for breach of contract in not accepting the goods was the only remedy open to the plaintiffs and the plaintiffs not having proved damages based upon the difference between the contract rate and the market rate at the date of the defendant's failure to take the goods he dismissed the suit with costs.

3. The reasoning by which the learned Judge arrived at the conclusion that a suit for the price! of goods sold is not maintainable is briefly as follows:

The English Sales, of Goods Act, 1893 explicitly provides that where the property has passed to the buyer and he neglects to pay the seller may maintain an action for the price. The Indian Contract Act does not contain any such provision. The Indian Contract Act is exhaustive of the law of India relating to the sale of goods; therefore, such an action is since the passing of the Indian Contract Act no longer maintainable in India.

4. I think it can be demonstrated that this inference as to the intention of the Indian legislature is erroneous.

5. Before the passing of the Indian Contract Act wherever a consideration was executed for which a debt payable at the time of action had accrued due either under an express promise or under one implied by law the debt might be sued for in an indehitatus count (Bullen & Leake's Precedents of Pleading 2nd Edn., p. 29); thus the count lay where the consideration moving from the seller of goods was executed by his providing goods and only the money debt due by the buyer remained. The form of count in such a case both in England and in Bombay would have been for money payable by the defendant to the plaintiffs for goods bargained and sold by the plaintiffs to the defendant. The cause of action was said to sound in debt and not in damages.

6. Counsel for the respondent in supporting the judgment of the lower Court was driven to contend that since the passing of the Indian Contract Act the only money claim possible under a contract is a claim for damages for breach and that no claim for debt can arise out of contract. He contended for example that a suit for the price of goods sold and delivered which he admitted to be maintainable was really a claim for compensation for breach of contract. That this was not the view of the legislature is apparent from the schedule of forms prescribed by Section 644 of the Code of Civil Procedure of 1882 in which Part A relates to claims for debts and liquidated demands mostly arising out of contract and Part B to claims for compensation for breach of contract. Forms 10 & 12 are forms of plaints for the price of goods sold of which delivery has not been taken.

7. In Section 128(f)(i) of the Civil Procedure Code, 1908, which was passed some months before this suit was heard though it did not become law until the 1st of January last, it is provided that rules may be made for summary procedure in suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant with or without interest arising on a contract express or implied.

8. Here we have a reproduction with certain immaterial changes due to altered circumstances of the words of Section 25 of the Common Law Procedure Act 1852, which, as can be demonstrated from the forms of pleading in Schedule B, Nos. 1 and 36, included suits for the price of goods bargained and sold.

9. I take it, therefore, that in Section 128 of the Code of 1908 we have legislative recognition that such suits as were mainatainble in respect of debts at the time of the Common Law Procedure Act 1852 are still maintainable in British India.

10. The conclusion is that the Indian Contract Act has not altered the law relating to the recovery of debts and liquidated demands.

11. The fact that a party to a contract may under Section 39 when the other side has refused to perform it put an end to it and sue for compensation for the breach does not oblige him to take that course at his peril; he may if he prefers it sue to recover any debt due to him which has arisen from his execution of his part of the contract.

Batchelor, J.

12. By a contract made between the parties the plaintiffs agreed to sell and the defendants agreed to buy 440 cases of Turkey Red goods valued at over a lakh of rupees. The defendants on various grounds declined to take the delivery of the goods, and the plaintiffs brought this suit to recover the price with interest at six per cent.

13. Several questions of fact were raised by the defendant at the trial and were all decided by Knight, J. in the plaintiff's favour. With these questions, however, we have no further concern, as the lower Court's findings are accepted by counsel for the respondent. It will be enough to observe that the state of facts on which this appeal is to be decided is that the defendants had no excuse or justification for refusing delivery of the goods offered, and that the property in these goods had passed to the defendant. Despite these findings the learned Judge conceived himself obliged to dismiss the suit on the ground' that a suit for the recovery of the price was not maintainable; the plaintiff's sole remedy being a claim for compensation in damages estimated at the difference between the agreed price and the price at which the plaints could have sold the goods to another person. The question to be determined is whether this view is correct, or whether the plaintiffs are entitled to sue for and recover the full agreed price.

14. Briefly stated the learned Judge's opinion is based upon the view, urged now by counsel for the respondents, that the Indian Contract Act is exhaustive, and that by virtue of ss; 120 and 73 of the Act the plaintiff's sole remedy was a suit for compensation for any loss, or damage caused to them by the defendants' breach of the contract. It is the admitted fact that the Indian Contract Act does not specifically authorise a suit to recover the price of goods sold even where the property, in the goods has passed to the buyer. Moreover, as the learned Judge below has pointed out, it has been laid down by their Lordships of the Privy Council that the essence of a Code is to be exhaustive on the matters in respect of which it declares the law, and that it is not the province of a Judge to disregard or to go outside the latter of the enactment according to its true construction. See Gokul Mandar v. Pudmanand Singh 291. A. 202 : 29 C. 707 : 6 C.W.N. 825 and the judgment of Lord Herschell in Bank of England v. Vagliano Brothers (1891) A.C. 107; 144 L.J.Q.B. 145 : 55 J.P. 676 : 39 W.R. 657 : 64 L.T. 353.

15. The case is carried a step further in Mohori Bibee v. Dharrnodas Ghose 30 C. 539 : 7 C.W.N. 441 : 30 I.A. 114 : 5 Bom. L.R. 421 where the Judicial Committee in dealing with this particular Act pronounce that so far as it goes it is exhaustive and imperative.

16. That, as I understand it, is a fair statement of the case for the respondents. The answer to it appears to me to be that this is not a suit for compensation upon the breach of the contract, but is a suit in debt for money owing. Ex concessis the property in the goods had passed to the buyers, and that being so, the agreed price became, I think, a sum of money due and owing to the sellers. True, the buyers were guilty of a breach of the contract as defined in Section 120 of the Act, but that circumstance did not impose on the sellers an obligation to accept the breach and sue in damages. It was, I conceive, still open to them to affirm the contract and claim the price which had become due under it. That remedy, it is admitted, would have been available to them in Bombay under the English common law before the introduction of the Indian Contract Act of 1872, as it would be available to them now in England under Section 49 (1) of the Sale of Goods Act, 1893. It is urged that since no such remedy is provided in the Indian Contract Act, it must be taken to have been excluded on those principles of the construction of a Code to which I have made reference. But the argument is beside the point, if my view of the true character of this suit is right, for in that case the relief claimed is outside the ambit of Section 73. That section prescribes the method of assessing the compensation due to a plaintiff suing upon a breach of contract, but it does not affect to extinguish or to limit a plaintiff's right to recover a determined sum due to him upon a contract which he for his part keeps on foot. If that is so, the mere absence from the act of a specific provision giving the remedy of a suit to recover the price cannot be construed as the distinct legislative withdrawal of that remedy. Though the debt is, no doubt, owing upon a contract, it is owing upon a still affirmed contract, and the suit is in debt and not in damages. Of the principles applicable to such a suit there is no reason to suppose that the Contract Act is the repository, still less that it is the sole repository, for the Act does not purport to do more than define and amend certain parts of the law relating to contracts.' Further room for this opinion is made by the decision of the Privy Council in Irawaddy Flotilla Co. v. Bugwandass 18 I.A. 121 : 18 C. 620 where their Lordships say that 'the Act of 1872 does not profess to be a complete Code dealing with the law relating to the contracts.... There is nothing to show that the legislature intended to deal with exhaustively with any particular Chapter or sub-division of the law relating to contracts.'

17. As to illustration (h) to Section 73, I do not think that it advances the case either way, for first we are not told that the property in the iron sold had passed to the buyer, B, and, secondly, A's suit was expressly a suit brought under Section 73, and the illustration merely describes the method in which the compensation should be reckoned.

18. Then I was much impressed by the Advocate-General's argument that even in the case of goods sold and delivered the Act makes no provision for a suit to recover the price, though admittedly such a suit would be perfectly good. Council for the respondents endeavoured to meet this point by the contention that there the agreed price would be identical with the compensation denned in the section. That may be so, but I am not the less of opinion that the ground of the recover-ability would be that the money was a debt due upon a contract still subsisting quoad the plaintiff; that seems to me both a simpler and a truer account of the case than to regard the price as the 'compensation for loss or damage caused which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.' To my mind the mere recital of these words of the section suggests that it was never intended, and is not appropriate to govern such a suit, but has reference only to the question of computing the amount of damages allowable in a suit where a party damnified by a breach of contract seeks only to be indemnified. That, I think is not the case, here : the plaintiffs do not ask the Court to assess in money the damage suffered by them in consequence of the defendant's breach of the contract: that has already been done by the parties themselves, and the plaintiffs only seek to obtain that particular sum of money which by the terms of the contract is now money belonging to them in the hands of the defendants.

19. Forms Nos. 10 and 12 of schedule IV of the Code of Civil Procedure of 1882, which was in force when the suit was instituted, afford further support to the view that the Legislature never intended or attempted to invalidate a suit for the price of goods bargained and sold.

20. The plaintiffs' suit is admittedly good unless it is prohibited by virtue of Section 73 of the Contract Act. For the foregoing reasons I am of opinion that it is not so prohibited, and I, therefore, agree that the appeal should be allowed with costs.


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