(1) This is an appeal filed by Messrs. Ganga Ram Sat Narain against the decree of the lower Court granting the plaintiff Gyan Singh of Messrs. Gyan Singh and Company a declaration that the plaintiff was rightful holder of the sum of Rs. 10,000/- in dispute and that the defendant had no right to claim the said amount back from him.
(2) Generally speaking the facts are not in dispute. On 11-7-1947 the plaintiff firm, which is represented by Gian Singh, the sole proprietor, agreed to purchase 400 bales of a certain kind of cloth called Patti Phulanain at Rs. 75/- per bale and handed over two cheques for Rs. 4,000/- each to the defendant who agreed to deliver the goods within seven or eight days on payment of the balance of the purchase price. The plaintiff entered into a further contract for 200 more bales on the same terms on 12-7-1947. The defendant firm which is represented by Ram Kumar, the Managing Proprietor, was unable to cash the plaintiff's cheques which were in fact dishonoured, but on the 15th of July Gyan Singh took back the cheques and paid Rs. 10,000/- in cash to Ram Kumar who gave him a receipt and promised to supply the 600 bales within two or three days on payment of the balance.
(3) In the plaint it was alleged simply that the plaintiff had approached the defendant on the 17th of July and demanded delivery of the goods, for which he was prepared to pay the balance, and as the price had gone up in the meantime the defendant refused to deliver the goods, and also that he did not return the sum of Rs. 10,000/- with the result that within a few days Gyan Singh made a report to the police on which a case under S. 420, Indian Penal Code was registered against Ram Kumar and his brother Sat Narain. It is not in dispute that within the next few days after he had been arrested Ram Kumar handed over Rs. 10,000/- to the police and on 8-8-1947 Gyan Singh applied to the Court of the Magistrate where the case was pending for this sum to be made over to him.
This was done during the pendency of the case, at the conclusion of which Sat Narain was acquitted but Ram Kumar was convicted. Eventually Ram Kumar was also acquitted in appeal by the learned Sessions Judge who, however, declined to pass any order for the return of Rs. 10,000/- to Ram Kumar. The latter filed a revision petition in the High Court in which, on 29-9-1956, J. L. Kapur J. passed an order that the sum of Rupees 10,000/- should be returned by Gyan Singh to Ram Kumar pending a decision of the rights and liabilities of the parties on the contract in a civil Court.
(4) It was in consequence of this order that the present suit was filed by Gyan Singh in the beginning of December, 1950, and he applied for and obtained an order from the Court maintaining the status quo or in other words permitting the plaintiff to retain the possession of Rs. 10,000/- on furnishing security for its return in the event of the dismissal of the suit. An appeal by the defendant against this order was dismissed by Harnam Singh J. on 11-9-1952.
(5) It appears that when he was examined as an accused person in the criminal case, Ram Kumar made the following statement in reply to the question, 'Did you refuse to deliver the goods on 17th of July, 1947 and you also denied having received Rs. 10,000/- ?'
'On 15-7-1947, I told him that I had returned his two cheques, and that if desired to maintain the bargain then he should give me the amount. On it he gave me Rs. 10,000/- having borrowed the same from Mohar Lal Gajja Nand as he had no more money. On 17-7-1947 the complainant asked me to return his money as rainy season had set in and there was likelihood of goods being damaged and that the prices had gone down. He further asked me to specify in the agreement that good goods would be supplied. But I was not prepared to do so. A Panchayat of the Cloth Merchants of the Market was convened and they decided that I should return his money and that the bargain would be treated as cancelled. I returned Rs. 10,000/- of Gyan Singh to the police of my owa accord.' It is clear from para 10 of the plaint that the plaintiff was placing a good deal of reliance on this statement though at the same time part of the plaint can be construed as meaning that the plaintiff's claim to retain Rs. 10,000/- was also based on the allegation that the defendant had committed a breach of the contract and that he was entitled to the return of Rs. 10,000/- paid by him as advance part payment of the goods. However, the plaintiff's case was clarified when statements of that parties were recorded before issues were framed in the suit. Ram Kumar defendant first made a statement to the following effect:
'I have heard and seen the original statement, the copy of which is Exhibit P. 1. I made this persons (members) of the Panchayat advised me that it would be better if I pay back the plaintiff's money to him as he was an influential man and has association with the big officers and the City Magistrate and would get me involved in some case. But I refused. The plaintiff was not present at that time. The police said to me that I would be bailed out if I returned the sum of rupees ten thousand. Upon that I handed over rupees ten thousand to the police. I did not cancel the transaction Mangal Chand, Hari Charan, Mahadev Parshad, Tewari Jee and Net Ram were the members of that Panchayat.' The plaintiff's counsel then made the following statement:
'The defendant at the intervention of the Panchayat agreed to cancel the contract and return the amount of Rs. 10,000/- to the plaintiff. The plaintiff bases his claim only on the said agreement made with him by the defendant cancelling the contract and promising to return the money and actually returning the money to the police'. It was in these circumstances that issues were framed as follows:
1. Whether the defendant had cancelled the contract and promised to return to the plaintiff the money that he had received from him?
2. Whether the suit is not maintainable in its present form.
3. Whether the plaint is not properly stamped?
4. Whether the said suit is time barred?
(6) The judgment of the lower Court shows that the points raised in the third and fourth issues were not pressed and a brief finding, which is not now challenged was given to the effect that the suit was clearly maintainable in its present form. Thus the only issue dealt with at length was the first issue on which the lower Court found although the evidence produced and the statement of Ram Kumar defendant showed that some sort of Panchayat had been convened and gave a decision or recommendation to the effect that the contract should be treated as cancelled and the sum paid in advance returned to Gyan Singh, there was no proof whatever that Ram Kumar had even accepted or agreed to Act on this recommendation and it was accordingly held that the finding on this point did not in any way held the plaintiff's case.
(7) The learned Subordinate Judge, however, then went on to discuss the question whether, as had been alleged in the written statement of the defendants, Rs. 10,000/- constituted a security for the due performance of his part of the contract by the plaintiff and so was liable to be forfeited by the defendants in the event of the breach of the contract by the plaintiff, or whether the sum merely constituted an advance payment which was liable to be refunded on the termination of the contract as a result of a breach by either party. The finding given was that the sum was merely paid as advance payment and was not a security for due performance of the contract by the plaintiff, and that in fact a breach of the contract was committed by the defendant, and it was on this finding that the decree was given in the plaintiff's favour.
(8) On behalf of the defendant-appellant it has been strenuously contended that since before the issues were framed the plaintiff's counsel had made a clear and unambiguous statement that his claim was solely based on the allegation that Ram Kumar had agreed to accept the decision of the Panchayat that the contract be treated as cancelled and the sum paid in advance returned, and that it was in pursuance of this agreement that Ram Kumar handed the money over to the police, and also since the only issue framed on the merits of the case was on the basis of this statement of the plaintiff's counsel, the lower Court should having correctly found that Ram Kumar had never accepted and agreed to abide by the decision or recommendation of the so-called Panchayat, have forthwith dismissed the plaintiff's suit, and that it was entirely wrong on the part of the learned Subordinate Judge to have gone into the question of which party was responsible for the breach of the contract, and whether the defendant was entitled to retain the whole or any portion of Rs. 10,000/-.
(9) The first question for consideration is whether the finding of the lower Court on the issue as framed was correct. On this point the only evidence produced by the plaintiff was his own statement and that of Mangal Singh P. W. 2 who claimed to have beep one of the persons who went with Gyan Singh to the defendant. Mangat Singh stated that Gyan Singh requested Sat Narain, the brother of Ram Kumar, to receive the balance of the purchase price and deliver the cloth but Sat Narain said that the price of the cloth had risen and therefore he was not in a position to give delivery but he agreed to return Rs. 10,000/- and that Ram Kumar, who was also present, promised to return the money in a few days.
Gyan Singh stated that he had withdrawn sufficient money from a bank to pay the balance of the purchase price, and he went with some dealers from the Cloth Market in whose presence Ram Kumar agreed to return Rs. 10,000/- but he failed to do so. This evidence cannot be regarded as convincing. It is to be noted that the statements of these two witnesses are inconsistent. Mangat Singh named Sham Singh and Karam Chand as the other persons who had gone with Gyan Singh to the defendant for the settlement of his claim whereas Gyan Singh named, apart from Mangat Singh, Sohan Lal, Jagat Ram and Budh Sain. None of these persons are among those named by Ram Kumar as members of the Panchayat in his statement before issues.
(10) On the other hand Ram Kumar gave evidence himself and produced Brij Lal and Hari Charan, the latter of whom had been named by Ram Kumar in his earlier statement, and these witnesses stated that they had gone to the defendant with a view to get him to settle the plaintiff's claim but Ram Kumar would not agree because the price of the cloths in question had by that time gone down. On this evidence it certainly cannot be said that whatever persons went to Ram Kumar to get this dispute with Gyan Singh settled, whether they were the persons named by Ram Kumar or those named by the plaintiff, it has been proved that Ram Kumar ever agreed to treat the contract as cancelled and return the plaintiff's money to him.
(11) It was, however, contended on behalf of the plaintiff that even so the Court was justified in going into the question of which party had been guilty of the breach of the contract, and whether Rs. 10,000/- paid were merely an advance payment or a payment by way of security for due performance of the contract by the plaintiff, and whether the price of the cloth in question had gone up or down at the relevant period, for the purpose of deciding which party was likely to have resiled from the contract, since these matters were clearly in the mind of the parties.
In this connection reliance was placed on the decision of the Supreme Court in Firm Sriniwas Ram Kumar v. Mahabir Prasad, AIR 1951 SC 177, which relates to a case in which the plaintiff had sued for specific performance of a contract of sale of a house and the trial Court had found that while the plaintiff's case regarding specific performance was not established it was proved that Rs. 30,000/- paid by him amounted to a loan and gave the plaintiff a decree for Rs. 30,000/- which was reversed by the Patna High Court on the ground that the decree was not based on any claim made in plaint.
This decision was reversed by the Supreme Court which held that the high Court had taken an undoubtedly rigid and technical view in spite of the fact that it was no part of the plaintiff's case in the plaint that the sum was advanced by way of loan. This was in fact the plea taken by the defendant themselves and it was clearly in the minds of the parties when they were leading evidence, and it was found that there was no injustice in the order of the trial Court and that it would not be proper to drive the plaintiff to a separate suit. Reliance was also placed on the decision in Nagubai Ammal v. B. Shama Rao, (S) AIR 1956 SC 593, in which again a suit had been decided on a plea not raised in the plaint by the plaintiff regarding the doctrine of lis pendens. Here again it was found that this matter had been raised at a preliminary stage by the plaintiff and the parties had led evidence regarding it.
(12) It seems to me, however, that there is a great deal of difference between a case in which a suit has been decided on a point not specifically raised in the plaint, but clearly present in the minds of the parties while they were leading their evidence and even, as in the 1st of the cases cited above based on an admission contained in the pleas of the defendant, and a case in which alternative grounds for granting the relief claimed are set up in the plaint and one of these grounds is specifically given up. The statements of parties or counsel recorded before the framing of issues for the purpose of clarifying the points in dispute are just as much part of the pleadings and the plaint as the written statement and there can be no doubt about the power of a counsel to given up a plea raised in the plaint in the course of such a statement.
In Buta Ram v. Sayyad Mohammad, AIR 1935 Lah 71, it was held by Bhide and Din Mohammad JJ., that the lawyer's general power in the conduct of a suit includes the abandonment of issues, and in that case it was held that the plea which had been given up could not be revived later. Some attempt was made on behalf of the plaintiff to argue that no plea had been given up in the statement of the plaintiff's counsel, but in fact there is no ambiguity whatever in the statement to the effect that the plaintiff based his case solely on an alleged agreement of the defendant to accept the decision of the Panchayat to the effect that the contract was to be treated as cancelled and the sum paid returned.
(13) It was also argued that evidence led by the parties would show that they had in mind the question of whether the price of the cloth had gone up or down in the days following the conclusion of the contract as well as the other points involved. This, however, does not appear to be correct. Undoubtedly the first witness examined by the plaintiff, Nihal Chand, who alleged that he had arranged to buy some of the cloth from the plaintiff, stated that he had contracted to buy the cloth at Rs. 78/- per bale, and that when the contract fell through he was awarded some damages on account of profit by the Mercantile Association, but this witness was not even cross-examined and this fact, as is contended on behalf of the appellant, is an indication that the defendant did not regard himself as being concerned with the question whether the price of the cloth had gone up or down.
No doubt the two witnesses examined on behalf of the defendant, besides Ram Kumar, made statements that price had gone down to Rs. 70/- per bale, but this was really only part of their statement generally justifying the action of Ram Kumar in refusing to accept the suggestion of the Panchayat to treat the contract as terminated and return the money, and in my opinion, if this matter had really been in the forefront of the minds of the parties, care could have been taken by them to adduce stronger and better evidence. There is in fact nothing in the evidence as led to dispel the idea that the parties were fighting merely over the issue as framed, namely, whether the defendant had cancelled the contract, and promised to return the money he had received.
(14) In the circumstances I am of the opinion that, as was contended on behalf of the appellant, once the Court had found that Ram Kumar had never accepted the decision or recommendation of the Panchayat that the contract should be treated as terminated, and that he should return the money, the suit of the plaintiff should have been held to have failed and the learned Subordinate Judge had no business to embark on any discussion as to which party was responsible for the breach of the contract, and whether the money paid was only advance payment or was paid as security for due performance of the contract by the plaintiff. It would accordingly accept the appeal and dismiss the plaintiff's suit but I consider it is a fit case in which the parties should be left to bear their own costs throughout.
(15) I agree.
(16) Appeal allowed.