1. This is a reference by the Chief Judge of the Bombay Court of Small Causes, under Section 69 of the Presidency Small Cause Courts Act, in a suit filed by the plaintiffs to recover damages from the defendants for breach of a contract of sale of twenty-five tons of Mauritius sugar.
2. By a contract, dated October 21, 1924, the defendants agreed to buy from the plaintiffs fifty tons Mauritius crystal sugar, fair average quality, shipment November-December, divided equally at a price of Section 20/9 per cwt. free Bombay Harbour, to be shipped on the conditions specified in the agreement as follows:
1. The price was to include cost, freight and insurance of particular average. The plaintiffs were not to be responsible for damages other than that recoverable under W.P.A. insurance policy. All duties and all landing customs and dock charges were to be paid by the buyers.
2. On arrival in Bombay Docks of the whole or any portion of the goods of any shipment under the contract the buyers should forthwith pay for and take delivery of them within seven clear days.
3. The plaintiffs should allow the buyers on all payments made prior to the seventh day after arrival interest at five per cent, from the date of payment upto and including the said seventh day after arrival of the goods.
4. If the buyers failed either wholly or partially to carry out the condition in Clause 2 the plaintiffs should hold the goods at their risk with liberty to sell them.
5. Payment was to be made in rupees at the rate of exchange current at the time of payment for Bank demand bills on London.
6. The buyers should accept the invoice net weight, but either party might claim weighment of any consignment and should receive allowance for any shortage ascertained at the contract price.
7. The bill-or bills-of-lading should be conclusive evidence of the date of shipment.
8. The buyers would not have the right to cancel the contract or any part thereof on account of late shipment in consequence of war, ice, frost, floods, riots, fire or accident causing whole or partial stoppage at the manufacturer's works, strikes or lock-outs at such works or elsewhere, or any causes of force majeure or circumstances over which the plaintiffs should have no control, provided that plaintiffs should notify to the buyers of such delay not later than fifteen days after the final due date of shipment. In any event the buyers should have no claim on the plaintiffs for any loss resulting from such delay in shipment.
9. In the event of any difference or dispute arising between the buyers and the plaintiffs in regard to the quality of the goods or in regard to the meaning or effect of the contract or the rights and liabilities of the plaintiffs or the buyers, such dispute or difference was to be referred to the arbitration of two European merchants.
3. In performance of the contract the plaintiffs sent an invoice, dated December 22, 1924, to the defendants for 319 bags of the contract sugar said to have been shipped per Sections 'Buran Minto' from Mauritius to Bombay by order and on account and risk of the defendants.
4. It was notified that the steamer had arrived and the invoice of plaintiffs' sellers H.A.A. Tyab was endorsed. It was admitted that the goods had not been shipped to the orders and on account and risk of the plaintiffs. They had been imported by Messrs. Volkart Bros, and the plaintiffs were the last purchasers.
5. It was also admitted that the goods were of the contract description. The defendants insisted on an invoice of goods imported direct by the plaintiffs and refused to take delivery. After the suit was filed, the defendants asked for a stay under para 18 of the Second Schedule of the Civil P.C. but a stay was refused on the ground that the defendants had not proved that they were ready and willing to refer the dispute to arbitration before the institution of the suit.
6. The Judge said that the question for determination in the suit was whether under the circumstances the plaintiff's had performed their part of the contract by tendering locally purchased goods. The phrase 'locally purchased' is somewhat ambiguous; it would include a tender of goods ex godown.
7. I should prefer to frame the question at issue as follows:
Whether a tender of goods of the contract shipment, quality, and description, imported not by the plaintiff's but by another firm, was a good tender under the terms of the contract.
8. The learned Judge was of opinion that such a tender was not a due performance of the contract. But his attention was drawn to an unreported decision of Kemp, J., in a somewhat similar case, in which it had been held that a tender of goods not directly imported by the seller was a fulfilment of the contract which, as the Chief Judge remarks, was in terms almost identical with the contract in suit. He was, however, satisfied that the terms in the suit contract could be sufficiently distinguished to enable him to disregard the decision of Kemp, J., but nevertheless he still felt a reasonable doubt which justified him in making the reference.
9. I think the Chief Judge was right in not being deterred from making a reference by the decision in Bhanaji v. De Brito  30 Bom. 226 which would not apply to cases in which the ruling of the High Court relied on as affording a guide to the Small Causes Court was not to be found in the Law Reports; but at the same time, if the learned Judge had a reasonable doubt whether his own opinion was right there was no reason why he should not have followed the decision of Kemp, J. The learned Judge has been at considerable pains to distinguish the terms of the suit contract from the terms of the contract in the case before Kemp, J., but he failed to observe that for the purpose of answering the question he had to decide they were identical.
10. The real question is whether it was a condition, using the word in its strict sense, as opposed to its general meaning analogous to a 'term', see Harichand v. Govind A.I.R. 1923 P.C. 47 that the contract goods should be imported direct by the seller. The words at the beginning of the contract ' on the conditions specified as under,' in my opinion, must be read in the same way as if they had been ' on the terms specified as under.'
11. Clause 8 merely provided for the rights and liabilities of the parties in case there was delay in shipment from the causes mentioned therein, and it cannot be inferred therefrom that it was a 'condition ' of the contract that the sellers should be the direct importers of the sugar.
12. Only a question might arise : if the sellers could not tender delivery because all shipments for a particular month had been delayed from any of such causes, whether they could take advantage of that clause if they had made no attempt to order the goods themselves. But the fact that such a question might arise and might even afford a ground for considerable discussion is not relevant to the present question, as it cannot alter what is a 'term' of the contract, so as to make it a 'condition' that the sellers should import the goods themselves.
13. It would be open to the parties to a contract of the kind to include such a 'condition' in the contract; but it should be perfectly obvious that no person engaged in the sugar trade would even contemplate entering into such a contract. It makes no difference who imports the sugar as long as the sugar is of contract quality, description, and shipment. I would answer the question in the affirmative. The defendant to pay the costs of the reference.
14. I agree.