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(Firm) Kesla Mal Nand Kishore Vs. Cooper Allen and Co. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1936All717; 165Ind.Cas.473
Appellant(Firm) Kesla Mal Nand Kishore
RespondentCooper Allen and Co.
Excerpt:
.....agreement between the parties is incorrect, and there was a distinct oral agreement that 41,000 maunds of bark would be supplied by the plaintiff and no more, and that any excess in any month should be included in this 41,000 maunds. inskip distinctly stated in cross-examination, that in the written memorandum ex. we think that the court below failed to approach this issue from the correct point of view, and that the court below was incorrect in failing to take into account the oral evidence of mr. for these reasons we consider that the plaintiff has failed to establish that he is due any damages from the defendant in regard to these 8,000 maunds because in our view the defendant had complied with all he was legally bound to do under the contract of 26th september 1930, inasmuch as he..........us from time to time for local purchases.2. the plaint claims that by march 1931 the quantity of bark supplied under the contract for the instalments came to 18,198 maunds 30 seers, and that other quantities, namely 16,773 maunds 6 sears, in december 1930 and 3,986 maunds 15 seers supplied in march 1931, were not to count towards the instalments, but were separate from the total and were paid at a different rate, twenty panseries per rupee instead of six panseries per rupee. further, in para. 6, the plaint sets out that in april the plaintiff sent 4.776 maunds 24 seers of bark and the defendant only took delivery of part, that is 2,515 maunds 20 seers, and refused to take the rest. this was shown by a telegram of 25th april 1931, printed on p. 33: 'your contract completed, we are.....
Judgment:

1. This is a first appeal by the plaintiff against a portion of his suit for damages which has been dismissed by the learned Additional District Judge of Cawnpore. The rest of the claim of the plaintiff has been decreed. The plaintiff is a firm Kesha Mal Nand Kishore, of Ambala Cantonment in the Punjab, and the defendant is a firm of tanners, Cooper Allen and Co., Cawnpore. The plaint sets out that there was a contract between the parties on 26th September 1930, which is printed on pp. 23 and 24, and that according to that contract, the plaintiff had to supply 41,000 maunds of good dry chopped babul bark to the defendant for his tannery at the rate of six panseries per rupee, and that certain quantities as follows were to be delivered during the months of October 1930 to 15th June 1931. The important part of the contract with which we are concerned is as follows:

You agree to supply us with 41,000 (forty-one thousand) maunds good dry chopped Babul Bark of this season's cutting, delivered inside one (our) Factory and for which we agree to pay you at the rate of six panseries per rupee. You further agree to deliver the above quantity as follows:

1000 maunds during ... October, 1930.2000 ' ' ... November, 1930.3000 ' ' ... December, 1930.8000 ' ' ... January, 1931.8000 ' ' ... February, 1931.6000 ' ' ... March, 1931.5000 ' ' ... April, 1931.3000 ' ' ... May, 1931.5000 ' upto ... 15th June, 1931.--------41000 maunds. --------In the event of your failing to adhere to the above deliveries we reserve the right to cancel the balance remaining undelivered during any one month or accept same and also any supplies in excess of the monthly quota at the purchase price fixed by us from time to time for local purchases.

2. The plaint claims that by March 1931 the quantity of bark supplied under the contract for the instalments came to 18,198 maunds 30 seers, and that other quantities, namely 16,773 maunds 6 sears, in December 1930 and 3,986 maunds 15 seers supplied in March 1931, were not to count towards the instalments, but were separate from the total and were paid at a different rate, twenty panseries per rupee instead of six panseries per rupee. Further, in para. 6, the plaint sets out that in April the plaintiff sent 4.776 maunds 24 seers of bark and the defendant only took delivery of part, that is 2,515 maunds 20 seers, and refused to take the rest. This was shown by a telegram of 25th April 1931, printed on p. 33: 'Your contract completed, we are instructing railway to return fast five waggons dated 18th to 22nd April.' In para. 7 it is said that the defendant broke the contract and prevented the plaintiff from sending the remaining bark due under the contract. The plaintiff had to sell at Ambala 8,000 maunds of bark on 19th May 1931, and realised only Rupees 1,000 for it. The plaintiff therefore claimed for Rs. 10,276-5-4 damages from the defendant, as the price of 10,487 maunds 20 seers of bark, the balance of bark to be supplied in April, May and June according to the contract. The written statement was that all the bark supplied by the plaintiff was counted towards the agreement, and that the quantity accepted by the defendant, including the last amount in April 1931, came to a total of 41,468 maunds, and therefore the defendant had fulfilled his part of the contract. The main question was whether the contract meant that the excess supplied by the plaintiff over the monthly-quota should or should not be included in the total of 41,000 maunds.

3. The actual figure of the excess is specially noticeable in the month of December, when 19,773 maunds were supplied instead of 3,000 maunds, and again in the month of March, when 9,986 maunds were supplied instead of 6,000 maunds. The Court below adopted the View of the contract put forward by the plaintiff and held that this excess should not count towards the total of 41,000 maunds. On that view the Court below decreed a certain portion of the claim for the plaintiff, namely 2,264 maunds 4 seers, which had been sent to Cawnpore in April 1931, damages on this being Rs. 2,286-14-0, (this figure should have been Rupees 2,248-14-0, the difference between Rupees 3,019-3-3 and Rs. 770-5-3), and also a sum of Rs. 439-7-9, the total being Rupees 2,688-5-9. The amount of Rs. 439-7-9 was in regard to 470 maunds. The Court below however dismissed the claim for 8,000 maunds which should have been supplied according to the instalments of May and June, 3000 in May and 5000 in June. The plaintiff tendered evidence that he did not send this quantity of 8,000 maunds to Cawnpore because the defendant had refused to accept any more bark under the contract, and the plaintiff therefore auctioned this consignment in Ambala. The Court stated on p. 21:

But the difficulty that arises in this case is that the goods were to be delivered at Cawnpore. The rates at Cawnpore were certainly higher, so the plaintiff should have despatched 8,000 maunds of bark to Cawnpore and sold it off here, or if he did not do that, he should have proved the prevalent rate in the month of May 1931 at Cawnpore. He did neither. Therefore I am sorry to hold that the plaintiff can recover no damages for the resale of the goods at Ambala.

4. The Court therefore dismissed the claim for damages for this 8,000 maunds. The plaintiff has brought an appeal claiming damages to the extent of Rupees 8,027-7-4 for 8,000 maunds. His claim as argued before us was that the contractual rate for these 8,000 maunds was Rs. 10,666, and that even if the Court below had objected to taking Rs. 1,000 as the value realised by the plaintiff for these 8,000 maunds, then the Court might have applied the rate of twenty pansaries per rupee at Cawnpore, which would give a figure of Rs. 3,200 and decreed the plaintiff the difference, Rs. 7,466. The plaintiff relied on the telegram on p. 32 from the defendant, dated 22nd April 1931: 'Five railway receipts to hand can only accept at twenty panseries,' as showing that this would be the rate at Cawnpore on that date, and this was also referred to as the current rate in the letter on p. 30 of 3rd March 1931, by the defendant to the plaintiff. We think that on the view which the Court below took of the contract the Court should not have dismissed this claim for damages on the ground that the plaintiff had not proved the prevailing rate in the month of May 1931, at Cawnpore.

5. The next point which arises is what view we take of the contract. It was argued on behalf of the appellant that this Bench was not entitled to construe the contract, and that this Bench was in some way bound to accept the view of the contract which had been taken by the Court below. The argument was that because the defendant had submitted to the decree of the Court below passed on that view of the contract, and had not filed either an appeal or a cross-objection, therefore this Court in the appeal of the plaintiff could not construe this contract for itself. It was further argued that it was not necessary to construe the con. tract for the purpose of this appeal, and that the appeal stood apart from the contract. On the contrary, we find that the first ground of appeal is as follows:

Because the learned Judge erred in not assessing damages to which the plaintiff was entitled by reason of the wrongful refusal of the defendant to receive the quantities of bark which the plaintiff had undertaken to supply in May 1931 and June 1931 under the contract, dated 26th September 1930.

6. The appellant himself therefore bases his case on the contract, and we consider that it is necessary for this Court to construe the contract. In Order 41, Rule 22, Sub-rule (1), it is provided:

Any respondent, though he may not have appealed from any part of the decree may not only support the decree on any of the grounds decided against him in the Court below....

7. The respondent in our opinion is not barred from supporting the dismissal of this claim for damages for 8,000 maunds on the ground which the Court below held against him, namely that the goods supplied by the plaintiff and accepted by him, completed his obligations on the contract. Learned Counsel for the appellant referred to a ruling reported in Sri Ranga Thathachariar v. Srinivasa Thathachariar 1927 50 Mad 866, but that ruling dealt with an entirely different case, and there was no question of the construction by the appellate Court of a document. The Court held that Rule 22 of Order 41 contemplated the decision of the Court below being supported by grounds other than those on which the lower Court proceeded, and that it was not open to the respondent to have adjudicated by the appellate Court rights or causes of action which have been decided against the respondent in the Court below, and in respect of which he has filed no appeal or memorandum of objections. We are of opinion that this ruling is in favour of the respondent, and not against him. Now the contract which we have quoted clearly begins by stating that the quantity of goods to be supplied is 41,000 maunds. It then specifies that this quantity is to be supplied in instalments in nine months, the amount for each month being fixed. Then follows the clause which is in our opinion worded in somewhat defective English. The clause begins by stating that if there is a failure to adhere to the above deliveries, the defendant reserves the right to cancel the balance remaining undelivered during any one month. This is quite intelligible. The words then follow: 'or accept the same.' As it stands, these words are not intelligible. It is not possible to accept the balance which is undelivered. To make this clause intelligible learned Counsel suggests that the words should be supplied: 'at a later date.' The words then follow, 'and also any supplies in excess of the monthly quota.' Now it is not clear what words govern this phrase. It is suggested by the appellant that the words to be supplied are those taken from the earlier part of the clause, namely, 'we reserve the right to...accept.' It is possible to read the clause in this way. Learned Counsel laid stress on the fact that these supplies in excess were to be accepted 'at the purchase price fixed by us from time to time for local purchases.'

8. As we have seen from the letter and telegram quoted, these excess supplies were paid for at a considerably lower rate, namely 100 seers a rupee, instead of 30 seers, the contract rate. Learned Counsel desires us to conclude from the fact that payment for the excess supplies was at a lower rate and that those excess supplies were not to be included in the 41,000 maunds. His argument was that because the parties had agreed for 41,000 maunds at six panseries per rupee, the supply of a certain quantity at a cheaper rate could not form part of that agreement, but he is forgetting that the contract required that those supplies were to be made by fixed instalments at a fixed date, and it was only where there was compliance with those two conditions that the fixed rate of six panseries per rupee would be given. It appears to us that the cheaper rate was applied where the plaintiff failed to comply with the terms of the contract, and this was by way of a penalty for the failure of the plaintiff to comply. Learned Counsel desires that the clause should be read as if the words followed at the end: Such supplies shall not count to the total of 41,000 maunds.' Now these words are not expressly stated in the contract, nor on the other hand are words to the contrary expressly stated. The contract is defective in the sense that it omits to make any express provision as to whether the excess above the monthly quota was or was not to count towards the total of 41,000 maunds. If we were to construe the contract as it stands without any additional evidence, we should consider that as the contract in its first two clauses expressly lays down that 41,000 maunds shall be the total, than the excess supplied beyond the monthly quota was to be included in that 41,000 maunds, that is, we take the opposite view of the construction of the contract to the view which has been taken by the Court below. But we are of opinion that evidence is admissible on this point under the provisions of Section 92, proviso (2), Evidence Act, which states:

The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document.

9. Now the documents referred to in Section 92 are:

Any such contract, grant, or other disposition of property, or any matter required by law to be reduced to the form of a document.

10. As regards the degree of formality, it is obvious that matters required by law to be reduced to the form of a document must be more formal than matters which are not so required. Similarly grants of dispositions of immoveable property, which require to be reduced to the form of a document, require more formality than matters which may be settled by oral agreement. The present case, therefore, of a mere contract is one which does not require any great formality, and in fact the document cannot be considered as a particularly formal document at all. As we have pointed out, the English of the document is certainly defective, and there is no express provision at all on the point whether the excess should or should not count towards the total of 41,000 maunds. No case has been shown to us for the appellant in which any Court has refused to allow oral evidence in a matter at all similar to the present case. We are of opinion, therefore, that under proviso (2) or Section 92, Evidence Act, oral evidence was admissible. Oral evidence, in fact, has been taken. Mr. A. C. Inskip, the assistant manager of Messrs. Cooper Allen & Co., the defendant, on pp. 15 and 16, has given a detailed account of the making of this contract with the person representing the plaintiff who was one Nand Kishore, the proprietor of the plaintiff firm. He states on p. 15:

The understanding was that 41,000 maunds of bark would be supplied by the plaintiff and no more.

11. It is true that he proceeds to say:

Whatever was the understanding between us was reduced to writing. We had distinctly said to the man who was here on plaintiff's behalf that we would take 41,000 maunds and no more.

12. On p. 16 at line 24 he states:

In Ex. C/a it is not laid down that the supply would not exceed 41,000 maunds, but that was the understanding and it was said so in letters afterwards. We wanted 41,000 maunds only and so we put down 41,000 maunds in the contract, and if we required more and were to accept more we would have mentioned no quantity in the contract. If supplied according to the agreement we had to pay for these 41,000 maunds at 6 'panseries' par rupee. If the plaintiff did not supply full amount of bark in any month and he supplied the balance in the next month we had to take it at the market rate and also we had the option of not taking it at all and cancelling the contract so far as that unsupplied quantity was concerned.

13. Now the member of the plaintiff's firm. Nand Kishore, was not produced as a witness to contradict this evidence. The excuse given by Banwari Lal, the mukhtar-i-am of the plaintiff, on p. 13, line 22, is:

Nand Kishore is proprietor of the plaintiff Nand Kishore is lying sick at Ambala and has not come today to Cawnpore. He has had fever since last 5 or 7 days.

14. Banwari Lal made some attempt to contradict the evidence of Mr. Inskip, but he broke down on the point of who signed the contract, as he alleged that Mr. Inskip had not signed, and when the contract was produced, Mr. Inskip showed his initials and identified them, and the witness then admitted that his allegation was incorrect. Mr. Inskip was positive on the point that Banwari Lal was not present when the contract was made at Cawnpore, and that is in our view correct. We therefore consider that the evidence of Mr. Inskip should be accepted, as it is not contradicted by any evidence from the plaintiff, Nand Kishore. This evidence clearly establishes that the view of the plaintiff as to the terms of the agreement between the parties is incorrect, and there was a distinct oral agreement that 41,000 maunds of bark would be supplied by the plaintiff and no more, and that any excess in any month should be included in this 41,000 maunds. The way in which Mr. Iftikhar Hussain, the Additional District Judge, has dealt with this matter is very unsatisfactory. He has not referred to the provisions of Section 92, proviso (2), Evidence Act, at all. He says that Mr. Inskip

admits that whatever was settled was put down in the agreement. So in my opinion it was simply what Mr. Inskip thought to be the meaning of the contract. We are not bound by his interpretation.

15. This is an error of the Court below, as Mr. Inskip distinctly stated in cross-examination, that in the written memorandum Ex. C/a the matter was not mentioned that the supply should not exceed 41,000 maunds, but that was the understanding and it was so said in letters afterwards. On p. 20, line 3, the Court below states:

As it was not to be paid at the agreed rate it cannot be believed that the plaintiff meant the excess amount to be the part of 41,000 maunds.

16. Now it is not sufficient for the Court to decide the terms of the contract on what may have been meant by one party. It is necessary for the Court to come to a finding that the parties were ad eundem at what was agreed between them. It would of course be to the advantage of the plaintiff to supply the greatest possible amount of the babul tree bark, which is easily collected in large quantities by the simple expedient of sending coolies out to jungles to strip babul trees of their bark, but we have to look to the position of the defendant. The defendant owns a tanning factory and requires a fixed quantity of the babul tree bark per month for the purpose of tanning. The mere fact that the plaintiff might desire to supply an indefinite amount is no criterion that the parties agreed that an indefinite amount should be supplied. We think that the Court below failed to approach this issue from the correct point of view, and that the Court below was incorrect in failing to take into account the oral evidence of Mr. Inskip on this point. For these reasons, both on the oral evidence of Mr. Inskip and on our view of the terms of the contract, we come to the conclusion that the agreement between the parties was that the excess supplied in any one month should go as part of the total of 41,000 maunds. Learned Counsel for the appellant endeavoured to show from subsequent letters that there was something in the correspondence which would favour his point of view. The first letter on p. 24 was dated 16th November 1930, and it refers to the agreement for supplying 41,000 maunds, and in this letter the plaintiff asked for an order for 2,000 maunds more of chopped bark because he had already purchased 2,000 maunds more. This indicates that the plaintiff thought 41,000 maunds was the maximum limit, but the reply of the defendant on 19th November 1930, was that they could not see their way to increase the quantities of cut babul bark supplied under the agreement. Learned Counsel laid stress on the final clause:

You can however continue to send in supplies, but if they are in excess of the amount stipulated in the agreement letter we must reserve the right to pay for the excess supply at the rate ruling on date of arrival.

17. There is no suggestion here that the excess would not count towards the 41,000 maunds. On 17th December 1930 the defendant wrote to the plaintiff saying:

Due to the continued trade depression we find we shall not be in a position to accept supplies in excess of the quantity mentioned in the contract during any one month. We must therefore insist on your adhering to the delivery periods as mentioned in the contract letter (letter on p. 27).

18. Again there is no suggestion that any excess should not count towards the total of 41,000 maunds. The same request was written by the defendant to the plaintiff on 18th February 1931, p. 29, of the paper book. On 16th April 1931, before the supplies for April had arrived, as the telegram on p. 33 shows that these supplies arrived on 18th-22nd April, there was a letter from the defendant to the plaintiff:

We would now request you to consider this date as cancelled and would inform you that all supplies of Babul Bark must be delivered in our factory by 30th May 1931. Any deliveries made after this date will not be accepted under any circumstances.

19. In our view this letter indicates that the defendant considered that it was only a few thousand maunds which remained; to be delivered under the contract, and not, as the plaintiff would read, nearly 20,000 maunds. There is nothing in this correspondence to support the contention of the plaintiff. For these reasons we consider that the plaintiff has failed to establish that he is due any damages from the defendant in regard to these 8,000 maunds because in our view the defendant had complied with all he was legally bound to do under the contract of 26th September 1930, inasmuch as he had taken delivery of 41,000 maunds before the question of these 8,000 maunds which the plaintiff desired to send in May and June 1931 arose. The plaintiff in our view was claiming to send the defendant 8,000 maunds for which there was no contract between the parties, and therefore the plaintiff cannot obtain any damages for non acceptance of these 8,000 maunds by the defendant. On this view of the case we dismiss this first appeal with costs.


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