Skip to content


Ramdhan Das Ram Kissan Firm Vs. Kishori Chand Geor Firm - Court Judgment

LegalCrystal Citation
SubjectContract
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 322 of 1950
Judge
Reported inAIR1954Ori254
ActsSale of Goods Act, 1930 - Sections 11; Contract Act, 1872 - Sections 73
AppellantRamdhan Das Ram Kissan Firm
RespondentKishori Chand Geor Firm
Appellant AdvocateG.C. Das, Adv.
Respondent AdvocateS.C. Chakravarty, Adv.
DispositionAppeal dismissed
Cases ReferredSharp v. Christmas
Excerpt:
.....the defendant firm had no excuse for failure to supply the contracted brand of tobacco. 6. the first point must fail on the findings of fact of both the courts. the applicability of the aforesaid decision to the present case would arise only if the defendant-firm bad established that tobacco of the variety known as k. das relied on section 11, sale of good act, which runs as follows: but it is well settled by a series of decisibns that in ordinary commercial contract for sale of goods time is prima facie of the essence with respect to delivery 'bowes v......should have accepted the defendant firm's offer dated 6-1-46 to supply tobacco of p. s. and s, b. variety, time of delivery of the goods being not of the essence of the contract;(iii) both the courts were not justified in takingthe market price on the dates preceding andsucceeding the date of the breach of contractfor the purpose of ascertaining the marketrate on the date of the bread. 6. the first point must fail on the findings of fact of both the courts. doubtless, the trial court observed that there was very little tock of k. g. variety of tobacco by margasir-punima (december, 1945) at cuttack in the markt and it was not possible for the defendant-firm to deliver the goods as contracted by them. but he trial courtfurther found that one kumar sahuwho had contracted with the plaintiff.....
Judgment:

Narasimham, J.

1. This is an appeal by the defendant-firm again the concurrent decisions of the two lower Court decreeing the plaintiff-firm's suit for damages of breach of contract.

2. The plaintiff and the defendant are two firm carrying on business in Cuttack town. The plain tiff-firm alleged that the defendant-firm entered to two forward contracts dated 22-8-45 and 23-8-45 with them for the supply of a certain quantity of tobacco of the variety known as 'Motichur K. G. No. 2' at the stipulated prices. The due date for the first contract was 19-11-45 and for the second contract 19-12-45. It was alleged that the defendant firm failed to supply the goods on the stipulated dates and the plaintiff firm, therefore, claimed damages on the basis of the difference between the contracted rate and market rate for the goods 19-11-45 and 19-12-45.

3. The defendant firm, however, denied the fire contract altogether. They admitted the second cortract but alleged that they were unable to supply the goods on the date fixed due to the conduct of the plaintiff firm in purchasing all available stock of Motichur K. G. No. 2 apprehending a fall to the prices and fraudulently changing the trade mark to P. S. and S. B.' and selling the same a such a low rate as Rs. 73/- per maund. On 6-1-4 the defendant firm offered to supply Motichur of P. S. and S. B. brand but the plaintiff firm refused to accept the same.

The defendant firm, therefore, made a counter claim for damages against the plaintiff firm. Both the Courts held that the first contract was well proved by the entry in the Sauda Book of the plaintiff firm (Ext. 1) and the evidence of their broker (P. W. 4). This is a pure finding of fact which was rightly not challenged in this appeal. As the second contract was admitted it may thus to be taken as well established that both the contracts were entered into by the defendant firm with the plaintiff firm as alleged in the plaint.

4. Both the Courts further held that the plainti)--firm did not comer all tobacco of K. G. variety in the market as alleged by the defendant firm no. did they alter the brand from K. G. No. 2 to P. S. and S. B. Hence, they held that the defendant firm had no excuse for failure to supply the contracted brand of tobacco. As regards the measure of damages, they held that the plaintiff firm were entitled to the difference between the market price and the contracted price on the due dates. The market price on the due date in respect of the first contract (19-11-45) was available from the evidence on record. But the market price on the due date in respect of the second contract (19-12-45) was not available as no transaction took place on that date. Both the Courts, therefore, took .in to consfderation the rate that was prevalent just before and just after that date relying on -- 'J ' mohan Das v. Nusserwanji', 26 Bom 744 (A). ;

5. Mr. Das on behalf of the appellant raised following questions of law:

(i) There was a commercial impossibility in peforming the second contract inasmuch as K. CNo. 2 was not available in the market in December, 1945;

(ii) The finding of the appellate Court was thatK. G. No. 2 was of the same quality as P. S.and S. B. and consequenty the plaintiff-firm11 should have accepted the defendant firm's offer dated 6-1-46 to supply tobacco of P. S. and S, B. variety, time of delivery of the goods being not of the essence of the contract;

(iii) Both the Courts were not justified in takingthe market price on the dates preceding andsucceeding the date of the breach of contractfor the purpose of ascertaining the marketrate on the date of the bread.

6. The first point must fail on the findings of fact of both the Courts. Doubtless, the trial Court observed that there was very little tock of K. G. variety of tobacco by Margasir-Punima (December, 1945) at Cuttack in the markt and it was not possible for the defendant-firm to deliver the goods as contracted by them. But he trial Courtfurther found that one Kumar Sahuwho had contracted with the plaintiff firm to suply 4,500 bag if K. G. No. 2 delivered 375 bags between 28-11-5 and 27-12-45. Similarly, on Ramchandra Banshidhar supplied 25 bags of K,G. variety on 2-12-45 and Sundar Das Damoda: Hansaraj sold 25 bags of the same variety on 9-1945.

Hence tobacco of K. G. variety as available at 'attack in December, 1945, though not in large quantities, and in the absence of any clear evidence on the side of the defendantirm it cannot be held that the contract could not b performed due to commercial impossibility. The place of manufacture of the variety of tobacco MS admittedly at Bhotmali and there is nothing onrecord to show that the defendant-firm could not ive secured that variety of tobacco from that place and supplied it to the plaintiff-firm on the due da.

7. The second point, however,'equires detailed consideration. Mr. Das's argumen was that K. G. No. 2 and P. S. and S. B. varietie of tabacco were identical. The letters 'K. G.' stood for 'Keshori chand Gheorchand' which is the me of the plaintiff-firm. The letters 'P. S.' stood in 'Pushraj Sagarial' and 'S. B.' for 'Sampatroy Badeb'. All these persons are said to be partners of the firm 'Keshori-Cheorchand'. It was therefore aeged by the defendant-firm that the plaintiff-fin purchased all available stock of K. G. variety otobacco and finding that the market was falling langed the brand to 'P. S. and S. B.' and sold the me in the market at a low price thereby putting the defendant-firm to loss. This is, however, a pur question of fact on which both the Courts held against the defendant-firm. Apart from the urorroborated testimony of the defendant-firm the is practically no evidence to show that the plaintiff-firm corneredK. G. variety of tobacco and aered the brand to P. S. and S. B.

8. Mr. Das next contended that the appellateCourt had come to a clear finds that K. G. No. 2of the same quality as P. S and S. B. and thatenough the parties had stiputed in the originalatract that K. G. No, 2 along would be supplied,was intended by both of them that 'K. G. No.should stand for quality art not for descriptionthe goods. Mr. Das therefore urged that soIon as tobacco of the same quality as K. G. No. 2-wa supplied the plaintiff firm were bound to accpet the same in accordance with the true intention of the parties when they entered into the contract.

He relied on -- 'Hopkins v. Hitchcock', (1863)' LJCP 154 (B). In that case the contract between the parties was for the supply of iron marked 'S. and H.' The iron which was supplied was. however, marked 'H and Co.' The parties were aware that the original firm of iron manufacturer was 'S. and H. Co.' but it had been changed to 'H. and Co.' and that the iron manufactured by both the companies was of identical quality. On these materials the Court found as a fact on a true construction of the contract that there was no stipulation for supply of a particular brand of iron, the letters 'S. and H' being used to describe a particular quality of iron only. The applicability of the aforesaid decision to the present case would arise only if the defendant-firm bad established that tobacco of the variety known as K. G. No. 2 was identical in quality with tobacco marked P. S. and S. B. The judgments of both the lower Courts would not support the assumption that the said two varieties of tobacco were of the same quality.

Mr. Das relied on the penultimate sentence of the judgment of the lower appellate Court while discussing point No. (2) to the following effect:

'and there is satisfactory evidence to hold that S. B. and P. S. marks of Motichur was of the-same quality as K. G. No. 2 Motichur.'

He urged that this was a clear finding of fact about the qualities of the two varieties being the same. But in the earlier portions of the judgment the lower appellate Court has observed:

'Though they placed orders for K. G., perhaps they received inferior stock as the former was not available at Bhotmali.'

Again, it was observed:

'they are not bound to receive P. S. and S. B.marks even if it be accepted for the same qualityas K. G. No. 2 sun mark.

Hence, if the entire discussion of the lower appellate Court regarding point No, 2 'be' carefully considered it would applear that he did', not come to a finding that K. C. No. 2 and P. S.'and S. B. are of the same variety land, that perhaps thee word 'not' was omitted through oversight' in the penultimate sentence of that paragraph quoted above. The trial Court has come to a finding that P. S. and S. B. is inferior stuff compared to K. G. No. 2 and the appellate Court has, in essence, confirmed this finding. As there is some ambiguity in the judgment of the appellate Court we went through the evidence adduced by the parties in this connection. Apart from the bare statement of the defendant (D. W. 1) there is practically no evidence on record to show that they are of the same quality.

On the other hand, the defendant's own exhibit (Ext. A-3) gives the price of tobacco of P. S. and S. B. variety on 16-11-48 at Rs. 85/- per maund and Ext. A-8 gives the price of K. G. No. 2 on the same date to be Rs. 90/- per maund. This difference of Rs. 5/- per maund as disclosed from the defendant's exhibits in respect of the two varities of tobacco prevailing in the market on thesame day would lead to a reasonable inference that the qualities of the two varities were not the same. Hence, the assumption on which Mr. Das has buit up his argument cannot be accepted.

9. Again, Mr. Das is not right in saying that the time of delivery was not of the essence of thecontract. Mr. Das relied on Section 11, Sale of Good Act, which runs as follows:

'Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of contract of a sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.'

Though the section makes it clear that stipulations as to time of 'payment would ordinarly be not of the essence of a contract for sale of goods, yet that section does not support Mr. Das's contention that the time of delivery of goods would also be not of the essence of the contract. On this question the section merely says that it depends on the terms of the contract. But it is well settled by a series of decisibns that in ordinary commercial contract for sale of goods time is prima facie of the essence with respect to delivery 'Bowes v. Shand', (1877) 2 AC 455 at pp. 463 and 464 (C);-- 'Reuter v. Sala', (1879) 4 CPD 239 at p. 249 (D) and -- 'Sharp v. Christmas', (1892) 8 TLR 687 (E). Here, the very nature of the contract between the parties is sufficient to show that the time of delivery was of the essence of the contract. Forward contracts were entered into by the parties who were anticipating fluctuations in prices. The defendant's own exhibits (Ext. A series) show how the price of tobacco fluctuated from 14-11-45 to31-12-45. In the absence of any evidence to the contrary the prima facie view that in commercial transactions of the type time was of the essence of delivery may be accepted.

It was, however, urged that these were mere forward contracts in which actual delivery(SIC) never the main consideration and that the (SIC) were gambling on fluctuation in prices. This (SIC) ment also would go against Mr. Das's conten (SIC) inasmuch as the parties who were gambling (SIC) fluctuation in prices must obviously have inten that time was of the essence of the contract. Hence, the plaintiff-frm were not bound to accept the belated offer of the defendant-firm on 6-1-46 to supply P. S. and S. B. variety of tobacco.

10. As reguds the third point, the Bombay decision relied on by the lower Courts, namely, -- '26 Bom 744 (A)' s a complete answer. The rate on the date of the breach (19-12-45) was not available. Mr. Das, however, urged that Ext. A-9 showed that K. G. varety was avilable at the rate of R(SIC) 72/8- per maud on 28-12-45 and that the trial Court should not have estimated the price at Rs 96/- per mauni on 19-12-45. The lower appellat Court has, however, discussed the importance of Ext. A-9 and given reasons for disbelieving the rate as given in that exhibit. This is a pure question of fact which cannot be reagitated in the second appeal.

11. I would, therefore, affirm the judgments (SIC). both the Courts and dismiss the appeal with cost.

Mohapara J.

12. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //