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Devi Lal Vs. (Goswami Maharaj) Govind Lal - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 199 of 1955
Judge
Reported inAIR1961Raj283
ActsSale of Goods Act, 1930 - Sections 35, 38(1) and 60
AppellantDevi Lal
Respondent(Goswami Maharaj) Govind Lal
Appellant Advocate Hastimal, Adv.
Respondent Advocate M.C. Bhandari, Adv.
DispositionAppeal dismissed
Cases ReferredOxendale v. Wetherell
Excerpt:
.....to supply the rest. it was pleaded by the defendant that the plaintiff failed to pay the full price of ghee which the defendant had supplied to the plaintiff and paid only rs. a further plea has been taken that under section 35 of the sale of goods act, in the absence of any express contract, it was the duty of the plaintiff to apply for the delivery of the ghee and as the plaintiff had failed to call for the delivery, the defendant was not bound to supply the remaining quantity of ghee to the plaintiff. where there is an entire contract to deliver a large quantity of goods, consisting of distinct parcels, within a specified time, and the seller delivers part, he cannot, before the expiration of that time, bring an action to recover the price of that part delivered, because the..........that the plaintiff had committed default by not paying the full amount of the price of the ghee supplied by the defendant. the condition for the payment of damages for the additional payment at the rate of rs. 2/- per maund of ghee was considered to be penal by the trial court. taking this view of the matter, the trial court dismissed the suit of the plaintiff in toto. on appeal, the learned dis'trict judge decreed the suit for rs. 1,836-11-0 treating the remaining amount as penal under section 74 of the contract act. hence this appeal on behalf of the defendant.5. on behalf of the appellant, it is urged that the defence set up by him based on the pleas referred to above should have been sustained and the suit should have been dismissed by the lower appellate court. a further.....
Judgment:

D.M. Bhandari, J.

1. This is a Civil Second Appeal in a suit for the recovery of damages for breach of contract.

2. The suit was instituted by Munsarim of the Nathdwara temple on the 11th of February 1944, in the court of the Munsiff, Nathdwara, alleging that the temple stood in need of purchase of 251 Mds. of ghee on the 9th of August, 1945. Merdhants dealing in the supply of ghee were called at the premises of the temple and bidding took place for quoting the rates at which they were prepared to supply the requisite quantity of ghee to the temple by Bhadwa Sudi Poonam Sambat 2001. The bid of the defendant Devilal to supply ghee at Rs. 54/- per maund (according to the weighment prevalent in the temple) was accepted. He also executed the document (Ex. P/2) agreeing to supply the ghee at that rate by Bhadwa Sudi Poonam, Sambat 2001 and in case of default to compensate for the loss that it might incur in purchasing it from the market and further agreed to pay Rs. 2/- per maund over and above the loss incurred by the temple as penalty.

The plaintiff alleged that the defendant supplied only 20 Mds. -- 20 seers -- 7 chhataks of ghee and failed to supply the rest. He further alleged that the price of the ghee on Bhadwa Sudi Poonam Sambat 2001 became Rs. 65/- per maund at which rate the plaintiff purchased it in the market and thereby incurred a loss of Rs. 2,538-5-3. The plaintiff further claimed additional damages at Rs. 2/- per maund which the defendant had agreed to pay under Ex. P/2. The plaintiff gave credit to the defendant to the extent of Rs. 701/10/3 which was the unpaid price of the ghee weighing Mds. 20--9 Srs. 7 Chhataks which the defendant had already supplied to him. Thus, the plaintiff claimed a decree for Rs. 2,298-3-6.

3. The defendant took various pleas and I may refer to those only which have been pressed before me on behalf of the appellant for dismissing the suit of the plaintiff. It was pleaded by the defendant that the plaintiff failed to pay the full price of ghee which the defendant had supplied to the plaintiff and paid only Rs. 390/- and retainedthe sum of Rs. 701-10-0 without any reason. On account of this he was not bound to supply the remaining quantity of ghee. It was further pleaded that the plaintiff was ready and willing to supply the ghee but the defendant was not ready and willing to pay the price thereof. It was also pleaded that the market rate on Bhadwa Sudi 15, Sambat 2001, was not Rs. 65/- per maund but was about Rs. 54/- per maund.

4. The trial court dismissed the suit on the ground that it was neither alleged nor proved by the plaintiff that he was ready and willing to pay the price of the ghee and as such, the plaintiff could not be awarded any compensation for the breach of contract. It was also observed that the plaintiff had committed default by not paying the full amount of the price of the ghee supplied by the defendant. The condition for the payment of damages for the additional payment at the rate of Rs. 2/- per maund of ghee was considered to be penal by the trial court. Taking this view of the matter, the trial court dismissed the suit of the plaintiff in toto. On appeal, the learned Dis'trict Judge decreed the suit for Rs. 1,836-11-0 treating the remaining amount as penal under Section 74 of the Contract Act. Hence this appeal on behalf of the defendant.

5. On behalf of the appellant, it is urged that the defence set up by him based on the pleas referred to above should have been sustained and the suit should have been dismissed by the lower appellate court. A further plea has been taken that under Section 35 of the Sale of Goods Act, in the absence of any express contract, it was the duty of the plaintiff to apply for the delivery of the ghee and as the plaintiff had failed to call for the delivery, the defendant was not bound to supply the remaining quantity of ghee to the plaintiff. On behalf of the respondent, it has been urged that the agreement with the defendant was that he was to supply the whole quantity of ghee by Bhadwa Sudi Pooman, Sambat 2001 and he could not claim the price of the ghee which he had supplied without supplying the balance.

It is also urged that the plaintiff was ready and willing to pay the full price if the entire quantity of ghee v/as delivered by the plaintiff to the defendant on or before Bhadwa Sudi Poonam Sambat 2001. It is urged that the plaintiff did not apply for the delivery of the ghee as the defendant had even before Bhadwa Sudi Poonam Sambat 2001 refused to give delivery of the ghee as the price had risen considerably by that time. It is said that this is borne out by the admission of the defendant contained in Ex. P/3 which is a letter which the defendant had written to the plaintiff on Asarh Badi 4, Sambat 2003 in which he had stated that the amount of Rs. 700/- which way lying in deposit may be forfeited and he may be excused for the payment of any further damages.

6. The first point to be considered is whether the defendant had refused to supply the remaining quantity of ghee at any time before Bhadwa Sudi Poonam. Sambat, 2001. The defendant when he came in the witness box has stated that it was agreed verbally that the defendant will be paid the price of the ghee on his making the supply. Thedefendant said that he had supplied ghee of about Rs. 1,091/- and some annas and the plaintiff Paid the amount of Rs. 390/- only and did not pay the balance in spite of verbal demands several times. He then further stated that he was not prepared to supply the balance of the ghee as he had not been paid the price of the ghee which he had already supplied. It may also be mentioned that the defendant had stated that he had supplied 20 Mds. 9 srs. 7 chhataks of ghee on the 2nd or 3rd day of the agreement (Ex. P/2).

Thus, the reason given by the defendant for refusing to supply the ghee was that he was entitled to get the price of part of the ghee which he supplied to the plaintiff as sooa as it was supplied to the plaintiff, and this part of the contract was not observed by the plaintiff. In this connection, it might be mentioned that the case of the defendant that there was an oral agreement to that effect has not been held proved by the courts below. There is a solitary statement of the defendant on this point and it cannot be believed especially when there is no such condition in Ex. P/2.

7. Learned counsel for the appellant has urged that even in the absence of any such express agreement, the defendant was entitled to the Payment of the price of Mds. 20-9 Srs. 7 chhataks of the ghee which was supplied by him as soon as the delivery was accepted by the plaintiff.

8. The contract between the parties was to supply the entire quantity of ghee by Bhadwa Sudi Poonam Sambat 2001. There was no agreement between the parties to supply the ghee by instalments. There was also no agreement to pay the price of part of the ghee as and when it was supplied. The case is, therefore, governed by the principles of law enunciated by Park, J. in Oxendale v. Wetherell, (1829) 109 ER 143. In that case, there was a contract of sale of 250 bushels ot wheat within a specified time by the vendor to the vendee. The vendor delivered 130 bushels of wheat but did not deliver the residue. It was observed by Park, J.

'Where there is an entire contract to deliver a large quantity of goods, consisting of distinct parcels, within a specified time, and the seller delivers part, he cannot, before the expiration of that time, bring an action to recover the price of that part delivered, because the purchaser may, if the vendor fail to complete his contract, return the part delivered. But if he retain the part delivered after the seller has failed in performing his contract, the latter may recover the value of the goods which he has so delivered.'

The same is the position under the Indian Sale of Goods Act. Section 31 of that Act casts duty on the seller to deliver the goods and On the buyer to accept and pay for them in accordance with the terms of the contract of sale. Under Section 38(1) of that Act, the buyer of goods is not bound to accept delivery of goods by instalments unless otherwise agreed. Even where there is an agreement for delivery by instalments and no agreement to pay the price of these instalments, the contract does not cease to be an entire contract for the delivery of the whole quantity. The position in lawis as stated by Benjamin on Sale (8th Edition) at Page 719.

'Where there is an agreement (which may be inferred) for delivery by instalments, the contract is not split up into separate contracts for each instalment; the contract is still an entire contract for the whole quantity, though it is divisible in performance. The seller is, therefore, liable if he fail to make Up the complete quantity, and cannot recover any part of the price unless there be a provision that instalments are to be separately paid for.'

9. American law is in no way different. Reference in this connection may be made to Williston on Sales, Vol. II (Revised Edition), Page 466a.-

'Where by the terms of a contract the performance is to be paid for at a certain rate so that the contract price for a portion of the performance can readily be calculated, it is still true that in the absence of an agreement express or implied to that effect, no part of the price is payable until the whole performance has been received. It is essential not only that the price for a part can be calculated, but that expressly or impliedly there shall be a promise to pay for a part.'

10. I am, therefore, of the opinion that the defendant appellant Devi Lal could not insist on the payment of the price of the part of ghee supplied by him before supplying the entire quality of ghee as had been agreed upon. It follows, therefore, that he could not refuse to supply the remaining part of the quantity of the ghee. If he refused to do so he committed the breach of the contract for which the plaintiff could hold him liable. In this case, the defendant appellant had refused to supply the entire quantity of ghee even before the final date of delivery i.e., Bhadwa Sudi Poonam Sambat 2001. No question arises in this case, therefore, of the application of Section 35 under which the duty has been cast upon the buyer to apply for delivery.

It would have been an idle formality on the part of the buyer to apply for delivery in the circumstances of this case as the seller had refused to perform his part of the contract without an justification even before the final date of delivery had arrived. In the case of anticipatory breach of contract on the part of the seller, Section 35 ha; no application when the buyer treats the contraci as rescinded by virtue of Section 60 of the Sale of Goods Act. The evidence on record shows that the plaintiff respondent treated the contract as rescinded even before the last date of delivery had arrived. On Bhadwa Sudi 10, Sambat 2001, 5 days before the date of delivery, a clerk in the Kharch Bhandar of the plaintiff submitted the report that the residue of the ghee was not expected to be supplied by the defendant and so it may be purchased from the market. A bidding for the purchase of 230 Mds. of ghee was held on the 22nd of September, 1945 in which the condition for the supply of ghee by the bidders was to supply it within a week. The last bidder promised to supply ghee at Rs. 65/-per maund by Asoj Poonam, Sambat 2001. This bid was accepted and supply of ghee at that rate was duly made. Under Ex. P/2, the defendant was to reimburse the plaintiff for the loss he sustained in purchasing the ghee from the market.

The argument of the learned counsel for thedefendant that the plaintiff should have applied for the delivery of the ghee under Section 35 of the Indian Sale of Goods Act has no force in the circumstances of the case as before that date according to the defendant himself, he had refused to supply the entire quantity of ghee to the plaintiff on the ground which cannot be considered valid in law. For the same reason, the argument that the plaintiff had failed to plead or prove that he was ready and willing to perform his part of the contract of payment of price is to be rejected. In this case there was refusal on the part of the defendant to supply the entire quantity of ghee before the final date of supply had arrived and it was not necessary for the buyer to either plead or prove that he was ready and willing to pay the price of the ghee on the date of the delivery.

11. The last argument of the learned counsel for the appellant is that there is no evidence on record as to what was the market price of ghee prevailing on Bhadwa Sudi Poonam, Sambat, 2001 and in the absence of such evidence, the courts below have wrongly held that the defendant is liable to pay the damages assessing it On the basis that the market price was at Rs. 65/- per maund. Under Ex. P/2, the defendant was liable to compensate the plaintiff for any loss sustained in purchasing the ghee from the market. The plaintiff has taken appropriate steps to purchase the ghee from the market. The bidding for purchasing the remaining quantity of ghee as mentioned earlier took place on the 22nd of September, 1945, and the ghee was to be supplied within one week. The last bidder, however, wanted some time more to supply the ghee and he stipulated to supply it by Asoj Sudi Poonam, Sambat 2001 at Rs. 65/- per maund. It appears from a perusal of Ex. Pw./2 which is the record of the bidding that the bidders wanted time to procure ghee. In these circumstances, the lower appellate court was justified in awarding damages treating the market price at the rate of Rs. 65/- per maund.

12. AS a result of the aforesaid discussion, the appeal has got no force and is dismissed. It, however, appears that the case of the anticipatory breach of contract was not placed precisely in the plaint. I, therefore, think it proper to order that the parties shall bear their own costs in all the three courts. To this extent, the decree of the learned District Judge, Udaipur dated the 12th of May, 1955, is modified.


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