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Balaram Paramsukdass Firm Vs. Gudiyatam Govinda Chetty - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1925Mad1232; (1925)49MLJ200
AppellantBalaram Paramsukdass Firm
RespondentGudiyatam Govinda Chetty
Cases ReferredDoloret v. Rothschild
Excerpt:
- - b in which they stated that the respondent, having been unable to pay the money due under the contract, had offered to pay interest at per cent and had failed to take delivery in spite of repeated requests. consequently the plaintiffs' suit must fail and is dismissed with costs throughout......for delivery is the pournami clay, delivery need not be made until some days subsequently. the custom pleaded is one said to be prevalent in the bombay market and whether it is applicable to a contract entered into by madras merchants is somewhat doubtful, unless these merchants intended to be guided by the bombay custom ; but, as this point has not been taken by the appellants at the trial and there is really insufficient evidence to decide it, we have to consider whether the custom pleaded exists in the bombay market. the contract being for the purchase of silver, whose price, according to the evidence, varies not only from day to day, but from hour to hour, it would appear that time is of the essence of the contract, for, when a time is fixed for the delivery, that time might be.....
Judgment:

Phillips, J.

1. In this case the respondent entered into a contract with the defendants for the purchase of silver to be delivered at Bombay on the 25th of February, 1918. The plaintiff did not apply for delivery on that date and accordingly on the 28th of February the defendants wrote Ex. B in which they stated that the respondent, having been unable to pay the money due under the contract, had offered to pay interest at per cent and had failed to take delivery in spite of repeated requests. The respondent was, therefore, asked to take delivery and pay the money. The last sentence in the letter is : ' Failing immediate payment of the said amount and obtaining delivery of the goods, my clients will institute a suit against you.' A reply to this letter was sent on the 2nd of March--Ex. D--in which the respondent pleaded a custom according to which he was not bound to take delivery until eight days after the contract date, i.e., Pournami day. The defendants then treated the contract as at an end and sold the silver. On the 4th of March the plaintiff wrote and said that he was applying for delivery, and it would appear from a telegram filed as Ex. F that delivery was then refused.

2. The real question at issue here is whether there is a custom that, when the date fixed for delivery is the Pournami clay, delivery need not be made until some days subsequently. The custom pleaded is one said to be prevalent in the Bombay market and whether it is applicable to a contract entered into by Madras merchants is somewhat doubtful, unless these merchants intended to be guided by the Bombay custom ; but, as this point has not been taken by the appellants at the trial and there is really insufficient evidence to decide it, we have to consider whether the custom pleaded exists in the Bombay market. The contract being for the purchase of silver, whose price, according to the evidence, varies not only from day to day, but from hour to hour, it would appear that time is of the essence of the contract, for, when a time is fixed for the delivery, that time might be very advantageous to one party whereas a day later or earlier might be very disadvantageous. As pointed out in Doloret v. Rothschild 57 ER 233. in such contracts time undoubtedly is of the essence of the contract. That being so, the alleged custom put forward by the respondent is a custom which is at variance with the actual term of the contract, viz., the custom alters the date fixed for performance ; and in such a case it seems to me essential that there must be a definite custom pleaded and proved. In the plaint the plaintiff alleges that the custom is to extend the time by eight days. In his evidence as P.W. 1 he states that delivery may be taken either on the 8th or the 1oth day after Pournami. This is not the same custom as appears in the plaint. P.W. 2 says that delivery can be taken for ten days after Pournami, and P.W. 3 also says the same. P.W. 4 says that delivery can be taken in 8, 9 or 10 days. If the custom pleaded, had been for ten days, it might perhaps be said that there was a certain amount of unanimity in the evidence, but the plea being that eight days' grace are customary it is not at all supported by evidence that there is such a custom for ten days. When the price is fluctuating from day to day, there may be a very considerable difference in the prices on the 8th and the 1oth day respectively. The evidence goes to establish a custom which is not pleaded in the plaint. Apart from that, the witnesses who speak to the custom are all apparently big merchants who-deal in silver, but they all admit that their account-books will not show any evidence of this custom. They have had contracts for Pournami day and it should not be difficult to show that in the case of some of these contracts at any rate advantage was taken of the alleged custom to give delivery after the due date. There is not a scrap of documentary evidence to prove the custom which rests on this oral evidence alone. As against this, a witness examined in Bombay on commission states that there is not this custom and he produces accounts which show damages on bars of silver for the 'Mahasuddha' settlement. It is not quite clear what this witness exactly means, but it would appear that there is an entry of damages in respect of one of these contracts. No doubt, the defendant's agent as P.W. 2 states that the plaintiff can take delivery four or five days later, and we see that in Ex. B he does give the plaintiff an opportunity of taking delivery after the due date; but as that notice demanded immediate payment, it cannot be said to have extended the time up to the date on which the plaintiff applied for delivery. I cannot agree with the learned judge that this custom which is at variance with a very important term of the contract has been made out. If it has not been made out, the defendants have committed no breach. Consequently the plaintiffs' suit must fail and is dismissed with costs throughout.


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