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Mahadev Ganga Prasad Vs. Gouri Shankar Sanganaria - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtOrissa
Decided On
Case NumberA.F.A.D. No. 151 of 1946
Judge
Reported inAIR1950Ori42
ActsEvidence Act, 1872 - Sections 92; Sale of Goods Act, 1930 - Sections 17 and 41; Contract Act, 1872 - Sections 37, 39, 63, 229 and 234
AppellantMahadev Ganga Prasad
RespondentGouri Shankar Sanganaria
Appellant AdvocateL.K. Das Gupta, Adv.
Respondent AdvocateP.C. Chatterjee, Adv.
DispositionAppeal allowed
Cases ReferredIn Ishwar Das Dharm Chand v. Khanu Mat Ghammandilal
Excerpt:
.....of the mills, and amounted to an acquiescence in the cancellation of the contract. as having been sent by devidutt mangilal the plaintiff should suddenly turn round and complain that he did not have proper notice that the goods contracted for had arrived. the plaintiffs was himself responsible for raising the dust and cannot therefore now complain that he could not see......the seller produced a sample and represented that the bulk would be of equal quality. there was a sale notice which did not refer to the sample, and it was held to be not a sale by sample. lord ellenborough observed : 'when the sale notice is silent as to the sample, i cannot permit it to be incorporated into the contract as it would amount to the admission of parole evidence to contradict a written document. in truth the present was not a sale by sample and the sample can only be used as evidence of deceitful representation.'in a later case gardiner v. gray, (1815) 4 camp. 144 : (171 e. r. 46), a specimen of the goods was exhibited to the buyer at the time of the sale. there was a written contract which merely described the goods as of a particular denomination, and it was held that it.....
Judgment:

Panigrahi, J.

1. The suit out of which this appeal arises was instituted by the respondent plaintiff for recovery of damages for an alleged breach of contract to sell 5 bales of KKK sarees by the appellant.

2. The plaintiff's case is that defendant No. l, the appellant, is the proprietor of Jagjiv Rao Mills, Gwalior, and that he entered into a contract for the sale of five bales of cotton sarees on 4th June 1941 through their local Agents, Messrs. Baharilal Madanlal, who were impleaded as defendants 2 and 3. It ia alleged that the contrast was entered into on the representation of defendants 2 and 3 who showed a sample of the sarees contracted for. This contract was formally confirmed by the appellant, defendant l, on 12th June 1941 and the terms of the contract are embodied in a printed agreement which is Ex. A in the case. The plaintiff's case is that he made several demands on defend ants 2 and 3 to supply the contracted articles bub that they failed to fulfil the terms of the contract and that ultimately be sent a registered notice (EX. l) to defendant 1 on 18th March 1932 demanding performance of the contract. The defendant-appellant, in his reply dated 3rd April 1942 (EX. 1 a) informed the plaintiff that the bales contracted for had been despatched to there agents, defendants 2 and 3, in October 1941, but that on the plaintiff's refusal to take delivery of the articles he treated the contract as cancelled and that he was not guilty of the alleged breach of contract. The plaintiff claimed RS. 1195-15-9 as damages.

3. The main contest on behalf of the defendants was that the contract was not for sale of goods by sample and that the only warranty of the contract was that the goods to be supplied should be of the standard marketable quality manu. factored by the Gwalior Mills, and that the description KKK did not import any particular quality of the cloth contracted for. Defendant 1 also pleaded that he actually despatched the goods to his local agents and that the R. R. for the consignments were offered to the plaintiffs by the said agents, defendants 2 and 3, personally and also through the Comilla Banking Corporation Ltd., but that the plaintiff refused to accept delivery as the market was then dull, and repudiated the contract. The appellant wag, therefore, justified in treating the contract as cancelled. Defendants 2 and 3 were given up by the plaintiff in the trial Court, and the trial proceeded as against defendant I alone.

4. Both the Courts below held that the contract was a contract by sample and that the defendants having failed to deliver the goods according to sample, as demanded by the plaintiff, were guilty of a breach of the contract and accordingly awarded damages to the plaintiff.

5. In second appeal, the main contention urged on behalf of the appellant is that the Courts below misconceived the scope of the contract; and that the contract was not a contract for sale of goods by sample, and that the Courts erred in admitting evidence which had the effect of varying the terms of the written contract (EX. A). The contract is in a printed form in Hindi and a translation of it has been placed before us. Exhibit A merely indicates that the purchase was to be made of five bales sarees No. KKKKK (admitted to be a mistake for KKK), 12 x 42, @ Rs. 2-10-6 per pair, mill delivery, June-July shipment, Agents Beharilal Madanlal. On the reverse of this are given the conditions of the agreement of purchase.

6. The main clauses of the agreement relied upon by the appellant are Clauses 2, 4, 8 and 9 which are as follows :

'Clause 2. Details of purchase will be debited to the customer on the day of the booking of the goods in the Railway. The purchaser shall send money direct to the seller as soon as the R. R. will reach him. The seller is at liberty either to send the B. B. through the Bank or to realise money in advance or to proceed as he thinks proper,

Clause 4. It the purchaser does not release the R. R. for any reason or fails to take delivery of the goods from the Railway, the seller will be at liberty to release and store the goods in his warehouse at the risk of the purchaser . . . the seller is further empowerd to Bell or auction the goods after 7 days notice to the purchaser.

Clause 8. The seller will supply goods to the purchaser of the same number, size and quality as indented by the latter. If there be a slight difference in measurement and quality the purchaser will not be entitled to prefer any claims, nor will be cancel the Souda, But if there will be any material variations, the purchaser will intimate to the seller in writing within a week from the date of each arrival of the goods.

Clause 9. This clause is to the eSact that the seller would manufacture gooda of standard quality and would deliver the same to the purchaser. If the purchaser entertains any doubts as to the quality ot the goods, he shall, with the consent of the seller, make a survey of the goods through an expert, with the knowledge of the purchaser. If tho verdict of the surveyor be that the cloth of tho goods is inferior, then the purchaser baa the right to take some other goods according to the convenience ot the seller,'

7. I have set out these main clauses of the contract of sale and it will be noticed that no mention of any sample is made in the contract. The express contract being silent about a sample being exhibited or about the quality conforming to a sample shown at the time of the contract, no evidence can be looked into to determine whether the contract was by sample. The trial Court erred in allowing evidence to be given that the contract was one really by sample though the written agreement says nothing about such a sample. The only warranty provided for in the written contract is that the goods contracted for would be of the standard quality manufactured by the seller and that a alight difference or variation in the quality will not entitle the purchaser to put an end to the contract. None of the above clauses in the agreement gives a right to the purchaser to cancel the contract on the ground that the contents of the bales, when opened, would not tally with the quality of the sample shown. It is also admitted that no sample was retained by the plaintiff, nor is it possible to know the quality of the cloths in the bales which were refused. The plaintiff admitted in his deposition that no quality of cloth can be inferred merely by saying that it is KKK 12 yards Gwalior Mills. This clearly indicates that the contract was by description and not by sample. Sale by sample is defined in Section 17, Sale of Goods Act which reads as follows :

'A contract of sale is a contract for sale by sample where there ia a term in the contract, express or implied, to that effect.'

I have said already that there is no express provision in the contract that the sale is by sample, nor can I infer any implied condition to that effect. In Meyer v. Everth, (1814) 4 camp. p. 22: (171 E. R. 8), the seller produced a sample and represented that the bulk would be of equal quality. There was a sale notice which did not refer to the sample, and it was held to be not a sale by sample. Lord Ellenborough observed :

'When the sale notice is silent as to the sample, I cannot permit it to be incorporated into the contract as it would amount to the admission of parole evidence to contradict a written document. In truth the present was not a sale by sample and the sample can only be used as evidence of deceitful representation.'

In a later case Gardiner v. Gray, (1815) 4 camp. 144 : (171 E. R. 46), a specimen of the goods was exhibited to the buyer at the time of the sale. There was a written contract which merely described the goods as of a particular denomination, and it was held that it was not a sale by sample, but there was an implied warranty that they shall be of merchantable quality of the denomination mentioned in the contract.

8. The plaintiff complains that the seller failed to abide by the terms of the contract and deliver the goods and, is therefore, guilty of a breach of the contract. Exhibits 1 and 3 series have been filed to prove the alleged breach by the defendant. Exhibit 2 is a letter dated 2lst August 1941 sent by the plaintiff's pleader to the pleader of Devidutt Mangilal who were the agents of the defendant 1 and were trading as Beharilal Madanlal. This letter shows that the plaintiff had contracted to purchase 10 bales of cotton cloth from Devidutt Mangilal, which included 5 bales of KKKKK sarees of 10 yrds. each. The plaintiff complained that he had taken delivery of one bale of KKKKK sarees and had found the quality to be inferior to the sample shown. The letter then proceeds :

'My olienta are willing to accept the bales at once if your clients guarantee my olienta that the goods contained in the parcel, under the bills referred to in jour letter, are according to sample shown by your clients.'

Referring to the goods, the subject-matter of the present suit, the letter says :

'further please note that your clients, as agents ot Gwalior Mill, have further contracted to supply 5 bales of 5 K earees at Es. 2-10 6 per pail according to sample. My clients also request that your clients will give guarantee that the supply of the same will be according to sample. It they do cot do so, my clients will not receive the goods, and will sue your clients for the loss as well.'

Devidutt Mangilal sent their reply on the same day, which is EX. 2-a, through their lawyer, denying that the contract was by sample and asserting that the contract was made for goods of merchantable quality. The letter further says:

'My client is now fully justified in treating the contract as cancelled, without any further reference to you.'

Referring to the contract entered into by them as agents of the Gwalior Mills, the letter proceeds :

'As regards the other Souda of five bales your client has entered into a contract with the mills (Mahadev Ganga Pragad of Gwalior) and if your client fails to take it, he will have to suffer dire consequences at the hands of the Mills.'

The plaintiff's pleader again sent a letter on 23rd August 1941 (which is Ex. G) in reply to EX. 2-a, asserting that the contract was by sample. Paragraph 3 of the letter referring to the present contract says :

'As regards the other eouda. of five bales with Mahadev Gangaprasad of Gwalior Mills, the souda has been done through your clients as the local agents of Mahadev Gangapraead, and on your client showing the sample about which he now denies. Unless the goods are not delivered according to sample then your clients, the said Devidutt Mangilal, will be held ultimately liable.'

After this there was np correspondence by the plaintiffs with either defendant 1, or with defendants 2 and 8. It is significant that the plaintiff intimated that he would hold Devidutt Mangilal and not Beharilal Madanlal, defendants 2 and 3, liable for failure of the-contract as they had induced him to enter into a contract by exhibiting a sample. On 16th October 1941, defendants 2 and 3 served a D. P. Bill on the plaintiff through the Comilla Banking Corporation. The letter forwarded by defendants 2 and 8 to the Comilla Banking Corporation and the Sola for Rs. 630-6-0, being the value of the two consignments sent by defendant I under R. R. No. 766/67 and 767/67, were sent to the Bank by the defendants and are exhibited aa EXS. D and D.i. On the same day the Bank sent an intimation, Ex. c, to the plaintiff to the effect that two R. Rs. of the value of Rs. 630-6-0 were awaiting delivery and that the drawer of the Bill was Devidutt Mangilal. The plaintiff's case is that on receipt of EX. C, he enquired of Devidutt Mangilal as to what these railway receipts related to but that their reply was that the plaintiff was at liberty to act as he liked. According to the evidence of D. W. 2, who is the gumaatha of defendants 2 and 3, he went to the plaintiff and asked him to take delivery of the parcel containing KKK 12 yards sarees. He saya that the plaintiff went to defendant 2 and enquired from him as to what article had been consigned, and that defendant 2 told him that they were the contracted articles and asked him to take the same. He says :

'My first offer to the plaintiff was after 10th or 12th October. The plaintiff told this : 'I won't take'.'

The plaintiffs' case now is that he did not take delivery of the bales because the demand draft purported to have been drawn by Devidutt Mangilal and not in their capacity as Beharilal Madanlal, Agents of defendant 1. Uptil now the plaintiff never made any diatinction between Devidutt Mangilal and their dealings as agents of 'defendant 1. In fact, the plaintiff's notice cancelling the contract was addressed to Devidutt Mangilal. Be that aa it may, an enquiry in the Oomilla Banking Corporation would have disclosed that this Hundi EX. C had been drawn by Beharilal Madanlal and that the Sola had been made out by defendants 2 and 3 as the selling agents of Mahadev Gangapraaad. The plaintiff, for some reason oc other, did not make any enquiry at the Bank, though the contract expressly stipulated that the R. R. would be delivered through the Bank. On the other hand, he Bays that he went to Devidutt Mangilal, who are no other than defendants 2 and 3, to enquire about the contents of the consignment. The defendants were justified in telling the plaintiffs to accept the bales or to take the risk of refusal according to their pleasure. It appears from the correspon. dence, exhibited in the case that long after this the plaintiffs sent a letter dated 18th March 1942 EX. 1, to defendant 1, demanding performance of the contract. Defendant l sent a reply dated 3rd April 1942. (EX. 1-a) complaining that the plaintiff had refused to take delivery and that the contract had been cancelled.

9. On these facts, the question arises as to whether defendant 1 is guilty of non performance, or whether the plaintiff had rescinded the contract earlier. It is clear from the corres pondence that defendant l sent five bales of cloth between the 4th and 17th of October 1941, and that the plaintiff demanded a guarantee from defendants 2 and 3, and that the latter treated the contract as cancelled in view of the categorical, threat of the plaintiff that he would not accapt the consignment in the absence of a guarantee. That the contract was not by sample and that the denomination KKK had no significance other than that it should be of merchantable quality is clearly established. Oar attention was drawn to the case Ramjivan v. Bhikaji & Co., A. I. R. (11) 1924 P. C. 143 : (48 Bom 519) which lays down that numbers put on the cloth were mere reference numbers and did not give any warranty or indication of the quality or description of the contents. The duties of the seller and the buyer are laid down in chap. IV, Sale of Goods Act. The buyer is bound to accept and pay for the goods ia accordance with the terms of the contract for sale.

10. Section 36, Sale of Good Act lays down the rules as to delivery. One such rule is that if the goods are not in existence at the time of the contract, the delivery shall be made at the place at which they are manufactured or produced. This is also incorporated in paras. 2 and 3 of the printed agreement. Paragraph 2 saya that the details of the purchase will be debited to the customers on the day of the booking of the goods in the railway .... The seller is at liberty either to send the R. R. through the Bank or to realise money in advance or to proceed as he thinks proper. Paragraph 3 says that as soon as the goods arrive at the station, the risk shifts on to the purchaser. There was, therefore, delivery of the goods to the purchaser under the terms of the contract and the only right of the purchaser thereafter was the right to examine the goods as provided for under Section 41 of the Act. That section makes a distinction between the delivery of the goods to the buyer and hia acceptance of the same after examination. There is, however, no provision for the buyer to refuse to receive the goods. He may receive the articles and yet not accept them. The plaintiff's case that he was justified in not receiving the goods at all, does not find support either from the express terms of the contract, as stipulated between the parties, oc from any of the provisions of the Sale of Goods Act.

11. It is next to be considered as to whether the contract stood cancelled even before the delivery was made in October 1941. The plaintiff's notice of 21st August 1941 (EX. 2), asking for a guarantee and intimating his refusal to receive the goods unless a guarantee was forth, coming was served on the agent of the seller. This notice expressly says; 'Your clients, asagents of Gwalior Mills, bave further contracted to supply, etc.' Section 229, Contract Act says that,

'any notice given to, or information obtained by, the agent, provided it be given or obtained in the course of business transacted by him for the principal, shall as between the principal and third parties, have the same legal consequence as if it had been given to or obtained by the principal.'

The notice, therefore, amounted to an intimation to defendant 1, that the plaintiff would not receive the goods unless a guarantee was given that the goodg supplied would be according to sample. Defendant 1, was justified, as has been contended by him, in treating the contract as cancelled in view of this unequivocal notice.

12. There is yet another aspect in which this notice may be considered. The plaintiff expressly warned the agents that they would be held responsible for the loss, and did not purport to make the principal liable. It may be that the plaintiff then took the position that in so far as the representation according to sample was made by the Agents, they were acting beyond the scope of their authority and that the principal defendant had no knowledge of the same. It may be that the agents are guilty of a fraudulent misrepresentation in having given the plaintiff an assurance that the sale would be according to sample, but they were clearly acting beyond the scope of their authority in doing so. In such cases, the principal would not be liable for any loss that the plaintiff may have suffered. Section 234, Contract Act provides for a case of this type. When a person, who has made a contract with an agent, induces the principal to act upon the belief that the agent alone will be held liable, he cannot afterwards hold the principal liable. In my judgment, therefore, the contract terminated when Ex. 2 was served on the agents of the seller and the plaintiff disabled himself from pursuing any remedy against the seller.

13. The matter may also be considered from another angle. Under Section 39, Contract Act, when a party to a contract has refused to perform, or disabled 'himself from performing his promise in ita entirety, the promisee may put an end to the contract unless he has signified by words or Conduct his acquiescence in ita continuance. The plaintiff has failed to prove that the principal did anything subsequent to the sending of Ex. 2, to warrant the inference that he regarded the contract as continuing and that he acquiesced in such continuance. Exhibit 1, the letter of 18th March 1942 affects an attitude of injured innocence regarding the performance of the contract and it is absolutely silent as to what had trans pired between the agent and himself in August, and calls upon the seller to despatch the goods. This was only an attempt by the plaintiff to recover lost ground and to revive a contract that had already been dead. The threat to refuse acceptance waa a notice to the seller that the plaintiff had dispensed with the performance of the promise made to him. In a similar case; reported in Chunamal Ramnath v. Mool Chandl Ram Bhagat, 66 I. A. 164 : (A. I. R. (15) 1928 P. C. 99) the buyer intimated to the seller that he would not accept if the goods were packed in bales instead of in cases and tins. The sellers did nothing thereafter, except to intimate to the buyer that he would be responsible for all consequences. Their Lordships of the Judicial Committee held in the circumstances that if delivery was not in conformity with the terms of the contract, the buyers clearly expressed that they would not accept them, and this had been acquiesced by the seller. Exhibit 2-A, the reply to the plaintiff's letter, was a sufficient notice to the plaintiff that if he failed to take delivery he would suffer consequences at the bands of the Mills, and amounted to an acquiescence in the cancellation of the contract. The plaintiff had not led any evidence to establish that the goods tendered would not be of merchantable quality as stipulated for in the con. tract. The argument that the seller did nothing to signify acceptance of the repudiation is not sound, because the dispensation under Section 63 is by itself a complete answer. The plaintiff again and' again dispensed with the performance of the' seller's promise to deliver the goods contracted for and he cannot therefore recover damages for the breach of a promise touching the performance of a thing that be had wholly dispensed with. In Ishwar Das Dharm Chand v. Khanu Mat Ghammandilal reported in, 8 bah. 276 : (A. I. R. (14) 1927 Lah. 449), the plaintiffs, refused to accept on various grounds, one of which was that the number on the bale did not correspond to the number given in the invoice. Their Lordships held that this discrepancy would not entitle the buyer to reject the goods. I have, therefore, no difficulty in arriving at the conclusion that the plaintiff had repudiated the conract by bis notice (Ex. 2) and that his attempts seven months jater to revive a contract that was dead was a brutum fulmen and is of no consequence. The plaintiff's refusal to receive the R. R. notice of which was given to him by EX. C, was a breach of his contract and the reason assigned in justification of his non-performance is a mere pretext. He hud treated Devidutt Mangilal throughout the correspondence as the persons responsible for having induced him to enter into the contract and had warned them and had threatened to bold them responsible for any damage that he may incur. It is therefore surprising that when the notice of the Comilla Banking Corporation mentions the B. R. as having been sent by Devidutt Mangilal the plaintiff should suddenly turn round and complain that he did not have proper notice that the goods contracted for had arrived. The plaintiffs was himself responsible for raising the dust and cannot therefore now complain that he could not see.

14. The Courts below have entirely misconceived the nature and purport of the contract and the judgments under appeal cannot there, fore be upheld. We accept the appeal and set aside the judgments and decrees of the Courts below and direct that the plaintiff's suit should be dismissed with costa throughout.

Ray, C.J.

15. I agree.


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