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Sital Prasad Vs. Ranjit Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1931All583; 136Ind.Cas.158
AppellantSital Prasad
RespondentRanjit Singh and ors.
Excerpt:
.....of opinion that a breach of contract on the part of the defendants having been established, the plaintiffs are entitled to claim damages on the basis of the difference between the contract price and the market price on the date of the breach......intention was that in no case could damages be assessed on the basis of the difference between the contract price and the price fetched on a, resale, since no notice of the projected sale was given to the defendants under the imperative provision of section 107, con-tract act.11. plaintiffs do not aver that they ever gave any notice to the defendants of the contemplated sale.12. where the property in the goods had passed to the defendants, but the latter were in default and refused either to pay the balance of the price or to take delivery of the goods on the due dates/two remedies were available to the plaintiffs: (1) to claim compensation on the basis of the difference between the contract price and the market price on the date of the breach; or(2) to resell the property under section.....
Judgment:

Sen, J.

1. This and the connected appeal arise out of a suit for damages, consequent upon a breach of contract relating to the purchase of two grain pits, situate in Mauzas Sambhalka and Bhuniyori respectively. The plaintiffs claimed Rs. 948-12-3 for principal and interest up to the date of suit as also pendente lite and future interest.

2. Plaintiffs alleged and the defendants did not dispute that the latter had agreed to purchase the two grain pits at certain rates detailed in the plaint, and that earnest money had been duly paid but that the defendants had failed to pay the balance of the price and take delivery. The balance was payable up to Chait Badi 15th and delivery ought to have been taken up to Chait Sudi 2nd corresponding to 17th March 1923.

3. Plaintiffs averred that there was a trade usage in the grain market of Shamli, that where the buyer failed in his obligation as to payment and delivery on due dates, the seller was entitled to resell the grain pits according to the market rate and that in pursuance of this usage the plaintiffs resold the grain pit in Sambhalka. This resulted in a loss to the plaintiffs of Rs. 587-1-3. They claimed this sum together with Rupees 138-5-0 interest up to the date of the suit. This grain pit belonged to the plaintiffs.

4. No resale was held of the second grain pit which was alleged to have been purchased from Kallu Mal Kedar Nath. Plaintiffs alleged that they had to pay to Kallu Mal Kedar Nath Rs. 141-3-0 for this grain pit. They claim for recovery of this sum and Rs. 41-12-0 as interest.

5. The suit was contested on the ground that the contract between the parties was really of the nature of a wager, that a claim for damages for its breach was not legally maintainable, and that the plaintiffs were not competent to sell the grain pit at Sambhalka without complying with the provisions of Section 107, Contract Act.

6. The Court of first instance found that the plaintiffs had not, as a matter of fact, purchased the second grain pit from Kallu Mal Kedar Nath and were not in a position to sell the grain pit to the defendants on 25th June 1922 when the bargain was struck relating to this grain pit, and held that the claim regarding this was untenable. It decreed the plaintiffs' claim for Rs. 587-1-3 principal and Rs. 138-5-0 interest as to the other grain pit.

7. Both the parties appealed. The lower appellate Court allowed the plaintiffs' appeal and dismissed the cross-appeal, The result was that the plaintiffs' claim stood decreed in its entirety.

8. The defendants in their appeal to this Court contend that the plaintiffs were not entitled to resell the grain pit situate in Mauza Sambhalka without complying with the conditions laid down in Section 107, Contract Act. In answer, the plaintiffs set up a trade usage under which it was not necessary fox them to serve a notice upon the defendants as a condition precedent to their selling the grain pit.

9. It is open to a party to plead a trade usage in conflict wife the provisions of the Contract Act. If a party relies upon a trade usage, its incidents and details ought to be indicated with clearness and precision; and where there is an issue between the parties as to the existence of such a usage, the onus of proof lies upon the party propounding the same.

10. The defendants denied that the plaintiffs had resold the grain pit in Satnbhalka. On this point there is no clear finding by either of the Courts below. In the view we are about to take, it is not necessary to call for a finding as to whether there was a resale or not, Their main intention was that in no case could damages be assessed on the basis of the difference between the contract price and the price fetched on a, resale, since no notice of the projected sale was given to the defendants under the imperative provision of Section 107, Con-tract Act.

11. Plaintiffs do not aver that they ever gave any notice to the defendants of the contemplated sale.

12. Where the property in the goods had passed to the defendants, but the latter were in default and refused either to pay the balance of the price or to take delivery of the goods on the due dates/two remedies were available to the plaintiffs: (1) to claim compensation on the basis of the difference between the contract price and the market price on the date of the breach; or(2) to resell the property under Section 107 and recover the difference, if any, between the contract price and the price realized by the resale. The present suit is not to enforce the first remedy, nor is it a suit to recover losses sustained by a resale held under Section 107, Contract Act. A trade usage has been set up by the plaintiffs the details of which have been given in para 3 of the plaint. It has not been pleaded that by force of this usage 'the plaintiffs were competent to sell the grain pits belonging to the defendants without any notice to them . of the projected sale. The Court of first instance neither framed nor tried an issue as to the existence or the incidents of the usage as alleged by the plaintiffs.

13. The lower appellate Court deals with the question subsidiarily in its treatment [of Section 107, Contract Act. It held that the provision of Section 107 was not mandatory but was optional, a view with which we entirely disagree. The claim for recovery of loss caused by a resale may be an optional remedy. But the plaintiffs cannot be permitted to resell the goods in defiance of the conditions imposed by Section 107, Contract Act, unless they establish a trade usage at variance with its provisions. We have already observed that the plaintiffs have not pleaded that under the usage prevailing in the grain market of Shamli it was not necessary to give the defendants a notice of the contemplated sale where the latter are guilty of a breach of the obligations under the contract. The lower appellate Court holds that the usage is proved, but its finding rests upon the statements of two witnesses, Gokul Chand and Kishori Lal, which have not only no bearing upon , the question of notice, but are vague and nebulous to a degree. The following is the summary of their statements as given in the judgment of the lower appellate Court:

Gokul Chand has given up the custom when ho comes to say that the vendor has to wait till Chait Sudi 1st, when he will inform 'itala dekar' the vendee, if his shop subsists (i. e., if the vendee is to be found), and then the grain pit can ho resold by the vendor. Kishori Lal, plaintiff, his said that a vendor could resell it without any enquiry from the vendee.

14. The statement of Gokul Chand does not support the usage and is open to the construction that it is necessary to give a notice to the purchaser. Kishori Lal does not say a word about notice but speaks of the necessity of an inquiry from the vendee. Upon the data accepted by the lower appellate Court, the inference, in affirmance of the usage as now set up before us, was wholly unwarranted. Where there is evidence legally sufficient to support a finding as to the existence of a usage, this Court cannot set aside that finding on the-ground that the quantum of evidence is meagre and scanty. But where the usage has not been pleaded with precision and the evidence adduced is vague and inconsistent, a finding may be over-set-by this Court on the grounds that it was not justified by the pleadings and was not supported by evidence of a relevant character. We therefore hold that the plaintiffs have failed to prove a trade usage entitling them to Sell the grain pit without notice to the defendants.

15. The plaintiffs' claim however cannot be permitted to rest here. We are clearly of opinion that a breach of contract on the part of the defendants having been established, the plaintiffs are entitled to claim damages on the basis of the difference between the contract price and the market price on the date of the breach.

16. Before we can finally dispose of this appeal we think it desirable to have a finding from the Court below on the following issue:

What was the difference between the contract price and the market price of wheat in Shamli on 17th March 1923

17. Parties shall be at liberty to produce further evidence. The lower appellate Court is directed to submit its finding within two months of the receipt of the record. Upon return of the finding ten days' time will be allowed for objections.

18. We are of opinion that the plaintiffs were entitled to interest for the period pendente lite and future right up to the date of realization. The contention about interest is therefore overruled. No reason has been assigned why interest for the period between the institution of the suit up to the date of realization should be refused.


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