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Karson Agency (India) and anr. Vs. Bhajan Singh Hardit Singh and Co. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 93-D of 1957
Judge
Reported inAIR1963P& H120
ActsLimitation Act, 1908 - Schedule - Ariticles 115 and 120
AppellantKarson Agency (India) and anr.
RespondentBhajan Singh Hardit Singh and Co.
Appellant Advocate A.R. Whig, Adv.
Respondent Advocate Gurbachan Singh and; Anoop Singh, Advs.
DispositionAppeal allowed
Cases ReferredSoundararajan and Co. Ltd. v. K. P. A. T. Annamalai Nadar
Excerpt:
.....case cited above, that the ascertainment of the amount to be claimed in a suit for damages for breach of contract is something separate and distinct from the occasion of such ascertainment, which is the real cause of action. when the goods are resold after the buyer has failed to comply with a notice to take delivery, the resulting resale, either may obviate the necessity for filing a suit at all if the price realised equals or exceeds the contract price or else it may determine the amount for which the suit is to be brought but i am in respectful agreement with the view of the learned judges of the madras high court that this does not alter the fact that the cause of action is the breach of the contract and these are the words used in article 115. 7. the result is that, holding the..........by a firm messrs. bhajan singh hardial singh and co. claiming the above sum as compensation for breach of contract. the facts are that on the 14th of feburary 1951 the appellants agreed to purchase from the plaintiffs 500 yards of worsted of indian woollen mills, steel colour, to be delivered in june or july at rs. 23/4- per yard, and they paid rs. 1.000/- in advance. the plaintiff firm sent a bill for 500 yards of the specified worsted on the 25th of july 1951 stating that they would deliver the worsted on payment of the balance of rs. 10,625/- after allowing for the sum paid in advance. the defendants, however, did not take delivery and early in august 1951 the plaintiffs sent a notice to the defendants that unless they paid the price and took delivery within four days the cloth.....
Judgment:

D. Falshaw, C.J.

1. This is a second appeal by a defendant firm Messrs. Karson Agency (India) and its proprietor B. L. Kaura against the decree for Rs. 3,392/9/6 passed by the trial Court and affirmed in first appeal.

2. The suit was instituted on the 19th of November 1954 by a firm Messrs. Bhajan Singh Hardial Singh and Co. claiming the above sum as compensation for breach of contract. The facts are that on the 14th of Feburary 1951 the appellants agreed to purchase from the plaintiffs 500 yards of worsted of Indian Woollen Mills, steel colour, to be delivered in June or July at Rs. 23/4- per yard, and they paid Rs. 1.000/- in advance. The plaintiff firm sent a bill for 500 yards of the specified worsted on the 25th of July 1951 stating that they would deliver the worsted on payment of the balance of Rs. 10,625/- after allowing for the sum paid in advance. The defendants, however, did not take delivery and early in August 1951 the plaintiffs sent a notice to the defendants that unless they paid the price and took delivery within four days the cloth would be resold at the defendant's risk. Even then no delivery was taken and the doth was sold in smaller quantities on various dates between the 8th and the 20th of November 1951, the total sum realised being Rs: 7,349/1/9, and the plaintiffs accordingly claimed Rs. 3,392/9/6 on account of loss suffered by the defendants' breach of the contract.

3. These facts have been found by the Courts below to be established, and the only point argued before me in second appeal was the question of limitation. The point involved in this question is whether the suit is governed by Article 115 of the schedule to the Limitation Act or the residuary Article 120, The Courts below have found that Article 120 applied and that the suit was therefore in time as it was filed well within six years from the date when the right to sue accrued. Article 115 fixes the limitation for a suit for compensation for the breach of any contract, express or implied, not in writing registered, and not herein specially provided, as three years from the date when the contract is broken or where there are successive breaches when the breach in respect of which the suit is instituted occurs or where the breach is continuing, when it ceases. The Courts below appear to have taken the view that this Article did not apply at all since the plaintiff, to whom two remedies were open, namely either to sue for the price of the goods leaving to the purchaser to take delivery of the goods lying with him at his own convenience, or else the remedy under Section 54(2) of the Sale of Goods Act i.e. stoppage in transit and resale after notice, chose the latter remedy. It was held that such a case was not covered by Article 115 and that the starling point of limitation was the date on which the last item of the goods in dispute was resold by the seller. It does not appear to have been explained by either of the lower Court exactly why the choice of this remedy by the seller took the suit out of the scope of Article 115, and no authority has been cited.

4. in my opinion there is no doubt that the suit falls under Article 115, since it cannot possibly be denied that it is a suit for compensation for breach of contract, It has, however, been argued on behalf of the plaintiffs that even if Article 115 applies, the suit was still within time as it was brought within three years of the date on which the last part of the cloth was resold, and it is argued that even under Article 115 this is the starting ptint of limitation.

5. On the other hand the case of Soundararajan and Co. Ltd. v. K. P. A. T. Annamalai Nadar, AIR 1960 Mad 480, has been cited, which appears to support the contention of the learned counsel for the appellants that under Article 115 the starting point of limitation is the date on which the defendants refused or failed to take delivery of the goods tendered to them within the time specified in the contract. That case arose out of a suit brought by a purchaser for damages for breach of contract against a seller. We are not concerned with the plaintiif's suit which was dismissed in appeal by Ramaswami and Anantanarayanan, JJ., but only with a counter-claim made by the defendant. This is dealt with in paragraph 12 of the judgment on page 482 as follows :--'The defendant-firm has advanced a claim of further appeal upon which separate court-fee has been paid and which is really in the nature of a cross-suit. This relates to a sum of Rs. 6,390/- representing the loss-sustained by the defendant-firm after re-sale of the goods, adjusting the advances already paid by the plaintiff. There is no doubt a condition in the contract by which the defendant-firm could effect the re-sale at the buyer's risk, in case the buyer rejected delivery. But we find, upon a scrutiny of the relevant dates, that this claim indefinitely out of time. It ought to have been instituted within three years of the date of the breach of the contract, and it is no defence to this objection to urge that it was only the occasion of resale which enabled the defendant-firm to ascertain exactly the degree of damages, or the precise amount which could represent the injury suffered by them. The occasion far ascertainment will have to be distinguished from the date upon which the cause of action arose and from which limitation began to run'.

On behalf of the plaintiffs it is argued that the cause of action could really only be said to arise when the last of the goods were, resold, and on this point reliance is placed on the terms of Section 54(2) which reads-

'Where the goods are of a perishable nature or where the unpaid seller who has exercised his right of lien or stoppage in transit gives notice to the buyer or his intention to re-sell, the unpaid seller may, if the buyer does not within a reasonable time pay or tender the price, resell the goods within a reasonable time and recover from the original buyer damages for any loss occasioned by his breach of contract, but the buyer shall not be entitled to any profit which may occur on the re-sale. If such notice is not given, the unpaid seller shall not be entitled to recover such damages and the buyer shall be entitled to the profit, if any, on the re-sale.' It is thus argued that a suit for damages regarding loss, on re-sale can only be brought if notice has been issued to the buyer and not complied with within reasonable time, and that therefore the cause of action can only be said to arise after the re-sale of the goods is completed.

6. It appears to me however, that in deciding the starting point of limitation it is only the words of the relevant Article which have to be construed, and, since there is no question in the present case of either successive breaches or a continuing breach, the starting point is the date when the contract was broken, and that date occurred when the defendants failed or refused to take delivery of the goods. This is precisely the point made by the learned Judges in the Madras case cited above, that the ascertainment of the amount to be claimed in a suit for damages for breach of contract is something separate and distinct from the occasion of such ascertainment, which is the real cause of action. When the goods are resold after the buyer has failed to comply with a notice to take delivery, the resulting resale, either may obviate the necessity for filing a suit at all if the price realised equals or exceeds the contract price or else it may determine the amount for which the suit is to be brought but I am in respectful agreement with the view of the learned Judges of the Madras High Court that this does not alter the fact that the cause of action is the breach of the contract and these are the words used in Article 115.

7. The result is that, holding the plaintiff's suit to be barred by time I accept the appeal and dismiss the suit, but I consider that it is a fit case for ordering that the parties should bear their own costs throughout.


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