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Sujanmal Vs. Radhey Shyam Agarwal and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 145 of 1967
Judge
Reported inAIR1976Raj98; 1975()WLN357
ActsSale of Goods Act, 1930 - Sections 32 and 36(2)
AppellantSujanmal
RespondentRadhey Shyam Agarwal and ors.
Appellant Advocate S.K. Mal Lodha, Adv.
Respondent Advocate H.P. Gupta, Adv.
DispositionAppeal dismissed
Cases ReferredIn Firm Birdhi Chand v. Ramdeo
Excerpt:
.....1930 - section 32--breach of contract--plaintiff net showing readiness & willingness to pay price on delivery of goods--held, defendants cannot be held responsible for breach of contract.;the obligation of the seller to deliver and that of the buyer to pay are implied concurrent conditions in the nature of mutual conditions precedent, and that neither of them can enforce the contract against the other without showing performance, or offer to perform, or averring readiness and willingness to perform his own promise. in the plaint as well, the plaintiffs did not disclose that inspite of having received letter ex. 2 they applied for delivery of the goods and they made it clear to the defendants that they were ready and willing to pay the price as soon as the delivery was to be made..........defendants by their letter ex. a/4 informed the plaintiffs that they were not responsible for the breachof contract and it were the plaintiffs themselves who rescinded the contract on 26-1-64. they did not accept any liability to pay any damages. accordingly, the plaintiffs claimed rs. 500 by way of nominal damages and rs. 870 as actual loss of profits @ rs. 4.35 per tin and rs. 1.25 as the expenses incurred in giving the notice.3. this claim was resisted by the defendants by their written statement dated 21-5-64. it was contended that radhey shyam alone was the proprie or of the firm jainarayan radhey shyam. jainarayan (second respondent) had nothing to do with the proprietorship of the firm. that apart, it was contended that the plaintiffs were themselves responsible for the breach of.....
Judgment:

J.P. Jain, J.

1. Sujanmal, one of the plaintiffs, has challenged the appellate decree by which the plaintiffs' suit for damages for breach of contract for Rupees 1371.25 against the first and second respondents, has been dismissed.

2. Briefly, the facts of the case are that Manmal (third respondent) and his son Sujanmal (appellant) as the proprietors of the Hindu undivided family firm Messrs. Dhoolchand Manmal, Chhoti Sadri, instituted a suit in the Court of Munsif, Chhoti Sadri, for the recovery of Rs. 1371.25 as damages for breach of contract against Radhey Shyam and his father Jainarayan (first and second respondents) as proprietors of the Hindu undivided family firm Messrs. Jainarayan Radhey Shyam, Nee-much Cant (M. P.) The case, as disclosed in the plaint, is that on 27-12-63 Radhey Shyam agreed to supply 200 tins of Rasada Vanaspati at the rate of Rs. 44 per tin (16.5001 to the plaintiffs' firm F.O.R. Chhoti Sadri. This agreement was in writing and signed by Radhey Shyam in favour of the plaintiffs' firm. The document is Ex. 1 on record. According to the plaintiffs the defendants did not supply the goods as agreed to by contract Ex. 1. Instead by letter Ex. 2 dated 2-1-64 defendant Radhey Shyam called upon the plaintiffs to pay the price of the goods in advance. The defendants, thus, according to the plaintiffs, committed breach of contract. The plaintiffs served notice Ex. 15 on 18-2-64 calling upon them to pay Rupees 500 by way of nominal damages and Rs 870 as loss of profits @ Rs. 4.35 per tin. To this notice the defendants by their letter Ex. A/4 informed the plaintiffs that they were not responsible for the breachof contract and it were the plaintiffs themselves who rescinded the contract on 26-1-64. They did not accept any liability to pay any damages. Accordingly, the plaintiffs claimed Rs. 500 by way of nominal damages and Rs. 870 as actual loss of profits @ Rs. 4.35 per tin and Rs. 1.25 as the expenses incurred in giving the notice.

3. This claim was resisted by the defendants by their written statement dated 21-5-64. It was contended that Radhey Shyam alone was the proprie or of the firm Jainarayan Radhey Shyam. Jainarayan (second respondent) had nothing to do with the proprietorship of the firm. That apart, it was contended that the plaintiffs were themselves responsible for the breach of contract. Radhey Shyam justified the claim of the price in advance by his letter dated 2-1-64 on the ground that it was so stipulated between the parties at the time of writing document Ex. 1, though this fact was not mentioned in the said document. He further pleaded that on 26-1-64 plaintiff Sujanmal came to him and asked him to cancel the contract contained in Ex. 1 and in this view of the matter it was alleged that he was not liable to pay any damages. It was, further alleged that the price of Rasada Vanaspati was not raised till 14-2-1964. After the Central Government in its Food and Agricultural Department increased the prices by its notification dated 13-2-1964 with effect from 14-2-64, the plaintiff Sujanmal served the defendants with the notice Ex. 15. According to the defendants the plaintiffs have not suffered any loss on account of the alleged breach of contract.

4. The learned trial Judge held that it were the defendants who committed the 'breach of contract and the said 'breach was committed on 15-2-64. On the basis of the Central Government notification dated 13th February, 1964 (Ex. 16) he found that the plaintiffs suffered the loss of Rs. 4.35 per tin. He allowed the plaintiffs' claim for Rs. 870. He disallowed the claim of the plaintiffs for nominal damages. He decreed the plaintiffs' suit for Rs. 871.25 p. with proportionate costs by his order dated 4-4-66.

5. This decree was challenged by both the defendants Radhey Shyam and Jai Narayan in appeal. The learned District Judge, Partapgarh, placing reliance on the pleadings of the plaintiffs held that the breach of contract took place on 2-1-64 and on the material available on record he found that there was no change in the price of Rasada Vanaspati on that date. He accordingly held that the plaintiffs' claim for loss of profit was not tenable. He dismissed the plaintiffs' suit.

6. I have heard learned counsel for the parties at a considerable length.

The questions which arise for the disposal of this appeal are whether the defendants committed the breach of contract and if so what is the date of such breach? The next question that would arise for consideration would be as to the market price on or about the date of the breach.

7. Before I take up the contentions I would like to refer to the relevant provisions of the Sale of Goods Act, 1930 :

'11. Stipulation as to time,--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 a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract.'

'31. Duties of seller and buyer.--It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale.'

'32. Payment and delivery are concurrent conditions.--Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.'

'33. Delivery.--Delivery of goods sold may be made by doing anything which the parties agree shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorised to hold them on his behalf.'

'35. Buyer to apply for delivery.--Apart from any express contract, the seller of goods is not bound to deliver them until the buyer applies for delivery.'

'36 Rules as to delivery.-

(1) ...............

(2) Where under the contract of sale the seller is bound to send the goods to the buyer, but no time for sending them is fixed, the seller is bound to send them within a reasonable time.'

'57. Damages for non-delivery.--Where the seller wrongfully neglects or refuses to deliver the goods to the buyer, the buyer may sue the seller for damages for non-delivery.'

8. Document Ex. 1 is an admitted document. By this Radhey Shyam agreed to supply 20 tins of Rasada Vanaspati @ Rs. 44 per tin F.O.R. Chhoti Sadri. According to this agreement the liability of sales tax would be that of the plaintiffs. This document does not mention the time as to when the delivery was to be effected. It also fails to state as to how the payment was to be made. Learned counsel for the parties has not joined the controversy as regards the time of the delivery. They agree that no time for effecting delivery having been made in the contract, the contract was to be performed within a reasonable time. Section 36, Subsection (2) extracted above is to this effect. If no time is specified in the contract, the law implied a reasonable time within which the contract is to be performed. As to what is the reasonable time in the present case, will, however, has to be determined. I will deal with it at the appropriate stage.

9. There is no manner of doubt that the contract Ex. 1 is also silent to the time of the payment. The defendants' contention that it was agreed between the parties at the time of writing the document Ex. 1 that the buyers (plaintiffs) will pay the price of the goods in advance, cannot be accepted, as there is no evidence apart from the statement of Radhey Shyam himself. But it is manifest from the provisions of the law extracted above that a contract of sale always involves reciprocal promises, the seller promising to deliver the goods sold and the buyer to accept and pay for them. In the absence of a contract to the contrary they are to be performed simultaneously and each party should be ready and willing to perform his promise before he can call upon the other to perform his. The seller owes to the buyer as onerous a duty to deliver the goods, as the buyer owes to the seller the duty to accept and pay for them In Firm Birdhi Chand v. Ramdeo, 1970 Raj LW 148 = (ILR (1969) 19 Raj 481) it was held,--

'In a contract for sale of goods unless otherwise agreed, delivery of goods and payment of price are concurrent conditions and where the plaintiff in a suit on breach of contract happens to be a seller, he must allege and prove that he was ready and willing to deliver the goods.'

Similarly where the plaintiff in a suit for breach of contract happens to be a buyer he must prove that he applied for delivery and he was ready and willing to pay the price of the goods. This proposition of law is clearly borne out from the provisions of the Sale of Goods Act, referred to above.

10. In the present case soon after the contract was settled between the parties on 27-12-63 the defendant Radhey Shyam sent a letter dated 2-1-64 (Ex. 2) and called upon the plaintiffs' firm to deposit the price of the goods in advance. It was stated in the letter that the amount was to be paid within 2 or 3 days, so that the delivery of goods sold could be effected within time. It is admitted by the plaintiff Sujanmal in his statement on oath that he did not answer this notice, either in writing or orally He did notrepudiate the claim of the defendant Radhey Shyam when the latter asked him to send the price of the goods in advance. I will accept the contention of Mr. Lodha that the defendant was not justified in asking for the price in advance; but all the same it was necessary for the plaintiffs to have stated in answer to the letter Ex. 2 that in the absence of an express contract the plaintiffs were not bound to pay the price in advance, though he was prepared to take delivery and pay the price of the goods as soon as the delivery was effected. By not having said so the plaintiffs did not show their readiness and willingness to pay the price in accordance with the provisions of Section 32 of the Act. I have read the statement of Sujanmal, which has been recorded at two stages, one on 30-7-65 and the other on 29-11-65, with care. He did not at all mention that he had applied for the delivery of goods under Section 35 of the Act or showed his readiness and willingness to pay the price at the time of the delivery of the goods. His statement dated 23-12-65, wherein he stated that he met the defendant Radhey Shyam on 8-1-64, 15-1-64, 23-1-64 and 15-2-64 and the defendant has been telling him that the goods were not available at his end. cannot be accepted. He did not mention these facts in his plaint and, as noticed earlier, he admitted in the cross-examination that he did not reply to the notice Ex. 2 either orally or in writing. When there is no contract to the contrary, the law says that the payment and delivery are the concurrent conditions. The general rule is very well laid down in Section 32. It is to the effect that the obligation of the seller to deliver and that of the buyer to pay are implied concurrent conditions in the nature of mutual conditions precedent, and that neither of them can enforce the contract against the other without showing performance, or offer to perform, or averring readiness and willingness to perform his own promise. In the plaint as well, the plaintiffs did not disclose that in spite of having received letter Ex. 2 they applied for delivery of the goods and they made it clear to the defendants that they were ready and willing to pay the price as soon as the delivery was to be made to them. In this view of the matter I am unable to see how the plaintiffs can justifiably hold the defendants responsible for breach of contract. On this ground alone the plaintiffs' claim deserves to be dismissed.

11. Assuming for a moment that the breach of contract was committed by the defendants, in that event it is to be determined as to when the breach was committed. The learned trial Judge found the breach to have been committed on 15-2-64. I find no basis for this finding.

On the other hand the first appellate court held that the breach of contract was committed on 2-1-64. He referred to paras 3 and 9 of the plaint. It is no doubt true that the plaintiffs stated in para 3 of the plaint that the defendants in having asked for the price of the goods in advance committed the breach of the terms of the contract by serving letter Ex. 2 on 2-1-64. In para 9, 2-1-64 has been shown the date on which the cause of action arose. 26-2-1964 has been mentioned as the date on which the defendants refused to pay damages claimed by the plaintiffs. In view of the specific pleadings it cannot be said that the first appellate court was very much in error to determine the date of the breach of the contract. Mr. Lodha pointed out from Ex. 2 and from the pleadings of the defendants that the contract was broken even according to the defendants on 26-1-64. The letter Ex. 2 called upon the plaintiffs to pay the price of the goods in advance within 2 or 3 days, as to enable the defendants to effect delivery within time. Mr. Lodha appears to be correct when he submits that by letter Ex. 2 itself, 2-1-64 cannot justifiably be said to be the date of breach of contract. That apart, according to the defendants' written statement the plaintiff Sujanmal went to the firm of the defendants on 26-1-64 and got the original contract dated 27-12-64 cancelled. On this premise it has been argued that if 15-2-64 is not the date on which the contract was broken at least 26-1-64 is the date of breach of contract according to the defendants' own showing. After having read the statement of Radhey Shyam I am unable to accept his version that the plaintiff Sujanmal himself went to his shop and got the contract rescinded on 26-1-64. I am, therefore, unable to place reliance on this part of his statement. I have already come to the conclusion that the plaintiffs' version that the breach of contract was committed on 15-2-64, cannot equally be accepted. Thus, the evidence on the point is not able to assist this court to arrive at the precise date of breach of contract.

12. However, the contract Ex. I having not mentioned the date of delivery, the court can always find a reasonable time for performance of the contract under Section 36(2) of the Act. As to what is the reasonable time in a given case, is a question of fact, which can be determined on the facts and circumstances of each case. The law implies a reasonable time within which the contract is to be performed when the contract itself is silent as to the time of performance. Once a reasonable time is implied within the meaning of Section 36. Sub-clause (2), the contract becomes a contract to be performed at a fixed time as much as if the parties themselves have fixed a specific time. In the one case it is the act of parties which determines the time when the contract is to be performed; in the other case it is by implication of law that the time is determined. As to what is a reasonable time, this depends upon the particular circumstances, the nature of the commodity, the question of transport, the time during which the contract was entered into and so on. According to the contract the delivery was to be effected at Chhoti Sadri. The seller was to supply the goods from Neemuch. It has come in the judgment of the lower appellate Court that the distance between Chhoti Sadri and Neemuch is only 12 miles and this has not been disputed. According to the statement of Radhey Shyam, he had on the date of the contract more than 200 tins of Rasada Vanaspati. Chhoti Sadri is not a railway, station, but there is a railway out agency, and the goods could also be transported by road. In the circumstances of the present case. I, therefore, find that one month's time is reasonable within which the contract was to be performed by the parties. The contract having been made on 27-12-63, it could be performed by 27-1-64.

13. It is very well borne out fromevidence that Rasada Vanaspati was a commodity the prices of which were controlled by the Central Government. The notification Ex. 16 has been brought on record by the plaintiffs. It is dated 13th February, 1964. It has been passed in supersession of the earlier notification dated 11th December, 1963. The notification dated 11th December, 1963, is Ex. A/6 and has been placed on record by the defendants. From these two notifications it is abundantly clear that there has been no increase in the price in between this period. It is not disputed by learned counsel for the parties that loss of profit can be calculated by determining the difference from the agreed rate of sale and the market rate on the date of the breach of contract. The agreed rate was Rs. 44 per tin and in conformity with the notification Ex. A/6. There had been no rise in the price of Rasada Vanaspati till 14th February, 1964. As such there had been no loss of profit to the plaintiffs. I may as well mention here the contention of Mr. Lodha that plaintiff Sujanmal has tried to prove that he purchased Lion Vanaspati on 24-1-64 @ Rs. 46.60 per tin. This statement cannot be accepted, obviously for two reasons.--one that it relates to Vanaspati of Lion trade mark and two there was no rise in the market price. The rate at which Sujanmal is said to have purchased Lion Vanaspati cannot be taken to be the market rate. If Sujanmalis telling the truth it must be the rate in the black market. Thus, I am clearly of the opinion that there had been no loss of profit to the plaintiffs.

14. As a result of the foregoing discussion the decree passed by the first appellate court calls for no interference. The appeal is accordingly dismissed with costs.

15. Learned counsel for the appellant prays for leave to appeal to the Division Bench. The prayer is rejected.


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