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Amrit Banspati Co. Ltd. Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectContract;Civil
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 3042 of 1961
Judge
Reported inAIR1966All104
ActsContract Act, 1872 - Sections 8
AppellantAmrit Banspati Co. Ltd.
RespondentUnion of India (Uoi)
Appellant AdvocateS.N. Verma, Adv.
Respondent AdvocateJagdish Swarup, Adv.
DispositionAppeal dismissed
Excerpt:
contract - acceptance of offer - section 8 of contract act, 1872 - plaintiff claimed a sum of money from the railway and before payment plaintiff made additional claim on account of loss - pendency of claim - railway providing cheque with note of full and final settlement - plaintiff encashed the cheque - held, amount was tendered in full and final settlement. - - the plaintiff-appellant alleged into a plaint that a wagon containing ground-nut oil was booked from sholapur to be delivered at ghaziabad and the railway receipt was endorsed in its favour......company's claim. the trial court decreed the suit in part and awarded a sum of rs. 2634.34 np. the company accepted the decision but the railway filed an appeal. the learned judge held that the appellant could not claim anything more than the sum of rs. 26338. 12np. because it had been sent in full and final satisfaction of its claim. he allowed the appeal and dismissed the suit of the company who has come in this court in second appeal.2. i have heard mr. varma at some length and am of the opinion that the appeal must be dismissed. the company made its first claim for rs. 26472/11/- on 4th october 1956 and the second for rs. 5556/- on 26th september 1957. while both claims were pending, the railway sent it a cheque for rs. 26338. 12 np. making it clear that it was in full and final.....
Judgment:

S.S. Dhavan, J.

1. This is a plaintiffs second appeal from the decree of the 1st Additional Civil Judge of Meerut dismissing their suit for recovery of damages from the respondent Union of India. The plaintiff-appellant, Messrs Amrit Vanaspali Limited, is a company carrying on business in Ghaziabad and the defendant is the Union of India as the owner of the Central and Northern Railways. The plaintiff-appellant alleged into a plaint that a wagon containing ground-nut oil was booked from Sholapur to be delivered at Ghaziabad and the railway receipt was endorsed in its favour. It is commonground that the wagon was never delivered. The plaintiff then claimed a sum of Rs. 26472/11 as the cost price of the oil which was lost. Before this amount could be paid by the railway, the plaintiff made a second additional claim for Rs. 5556/- on account of losses alleged to have been suffered as a result of the rise in the price of the oil. The respondent Railway sent a sum of Rs. 26338. 12np. by a cheque dated 19th September 1957. The appellant Company cashed the cheque and sued for the balance.

The Railway resisted the claim on the ground that the cheque had been sent in full and final settlement of the Company's claim. The trial court decreed the suit in part and awarded a sum of Rs. 2634.34 np. The Company accepted the decision but the Railway filed an appeal. The learned Judge held that the appellant could not claim anything more than the sum of Rs. 26338. 12np. because it had been sent in full and final satisfaction of its claim. He allowed the appeal and dismissed the suit of the Company who has come in this court in second appeal.

2. I have heard Mr. Varma at some length and am of the opinion that the appeal must be dismissed. The Company made its first claim for Rs. 26472/11/- on 4th October 1956 and the second for Rs. 5556/- on 26th September 1957. While both claims were pending, the Railway sent it a cheque for Rs. 26338. 12 np. making it clear that it was in full and final settlement of the plaintiff's claim. In these circumstances, the appellant must be deemed to have accepted the implied condition that the amount was tendered in full settlement.

3. Section 8 of the Contract Act provides that performance of the conditions of a proposal, or the acceptance of any consideration For a reciprocal promise which may be offered with a proposal is an acceptance of the proposal. The language of the section is rather vague but its meaning is clear. It is based on the principle that if an offer is made subject to a condition, the offence cannot accept the benefit under the offer without accepting the condition. He cannot take the attitude, 'I shall accept the benefit but refect the condition.' This principle has been followed by this court in several cases. Behari Lal v. Radhye Shyam, AIR 1953 All 745, Sunder Lal v. Ram Krishan, 1960 All LJ 152: (AIR 1960 All 544). These decisions were based upon an earlier decision of this court Ram Kripal Pande v. Shiromani Sugar Mill which was published in 1948 All LW 355. In that case an employee claimed wages for work done by him but the employer sent a cheque for a smaller amount with a letter saying that it was in full satisfaction of the amount due to the employee. The latter cashed the cheque and sued for the balance. The court held that he could not do so after having accepted payment and must be deemed to have accepted the term attached to the cheque.

4. Mr. Varma relied upon two decisions, one of this court and another of the Calcutta High Court in support of his argument that theappellant Company was entitled to disregard the condition attached to the cheque sent by the Railway. But the question in both these cases related to Section 63 of the Indian Contract Act which deals with what is known as accord and satisfaction. It was held in these cases that a person entitled to a promise may accept a lesser performance and if he does so the obligation will be fully discharged. In cases of accord and satisfaction there is no dispute with regard to the performance of the contract nor any conditional offer by one party.

5. The appeal is dismissed.


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