Skip to content


M. Siddique and Co., by Power-of-attorney Agent, Ali Mohammed Vs. P.L. Rangiah Chettiar - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1948Mad122; (1947)2MLJ79
AppellantM. Siddique and Co., by Power-of-attorney Agent, Ali Mohammed
RespondentP.L. Rangiah Chettiar
Cases ReferredHarcourt v. Fox
Excerpt:
- - you seem to have written your above-dated letter to me not taking into consideration the day to day events that are taking place, regarding the yarn and cloth business and also of the contracts after the promulgation of the ordinance .you know when the government of india promulgated the ordinance they have clearly stated 40 to 50 per cent. 14. the defendant raised several pleas in his written statement originally filed as well as in an additional written statement. if the contract had been so duly performed, the plaintiffs would have been entitled only to recover the price in accordance with the rate fixed by the textile commissioner in his order dated 19th august, 1943, and the plaintiffs cannot be in a better position because the contract has been broken. there is nothing in the.....rajamannar, j.1. this appeal arises out of a suit filed by the appellants in the court of the subordinate judge of coimbatore against the respondent to recover a sum of rs. 10,625-4-0 as damages for breach of contract. that court granted them a decree for rs. 3,539-1-0. the plaintiffs-appellants claim in the appeal the balance of rs. 7,086-3-0 whereas the defendant-respondent has filed a memorandum of obiections praying for the total dismissal of the suit. both parties are wholesale dealers in cotton yarn.2. on the 26th april, 1943, the plaintiffs agreed to sell and the defendant agreed to purchase 31 bales of palaniandavar mills cotton yarn, counts 40 x 10 x 40, each bale containing 40 bundles of 10 lbs. each at a price of rs. 42-4-0 nett per 10 lbs. the terms of the contract were.....
Judgment:

Rajamannar, J.

1. This appeal arises out of a suit filed by the appellants in the Court of the Subordinate Judge of Coimbatore against the respondent to recover a sum of Rs. 10,625-4-0 as damages for breach of contract. That Court granted them a decree for Rs. 3,539-1-0. The plaintiffs-appellants claim in the appeal the balance of Rs. 7,086-3-0 whereas the defendant-respondent has filed a memorandum of obiections praying for the total dismissal of the suit. Both parties are wholesale dealers in cotton yarn.

2. On the 26th April, 1943, the plaintiffs agreed to sell and the defendant agreed to purchase 31 bales of Palaniandavar Mills cotton yarn, counts 40 X 10 X 40, each bale containing 40 bundles of 10 lbs. each at a price of Rs. 42-4-0 nett per 10 lbs. The terms of the contract were reduced to writing and included besides the quantity, quality, description and price the following among other terms:

(1) Vaida or despatch July 1943. Ex-mills delivery.

(2) The buyer agrees to accept the seller's godown delivery at seller's option between the first and last day of July and to pay the full value for the same before delivery and to accept the goods even if any delay is made for any reason by sellers in giving delivery.

(3) The payment-against R. R. and delivery at Coimbatore or through the bank, all charges to be borne by the buyers.

(4) If the buyer fails to take delivery as required by the seller's notice, the seller shall have right to sell such goods by public or private sale at buyer's risk after giving due notice to the buyer.

On 6th July, 1943, the plaintiffs intimated to the defendant that the bales sold to him were ready and required him to make arrangements to take delivery early. The defendant replied on 7th July, 1943, that he would make arrangements to take delivery of the bales by the end of the month or early next month subject to the pending decisions of the Government. The reference was obviously to the action proposed to be taken by the Government as announced by the Cotton Cloth and Yarn Control Order of 1943, published at New Delhi on the 17th June, 1943, in exercise of the powers conferred by Rule 81 of the Defence of India Rules. This order inter alia provided that an officer called the Textile Commissioner may by notification in the Official Gazette ' fix the maximum prices both ex-factory and retail at which all or any classes or specifications of cloth or yarn may be sold.' Clause 12 of the Order is as follows:

No manufacturer or retail dealer shall sell or offer to sell any cloth or yarn in excess of the maximum ex-factory or retail price, as the case may be, fixed under this order in respect thereof; and no person shall otherwise contravene any notice or direction of a Textile Commissioner issued under this order.

3. It may be mentioned that in terms it did not deal with the price of cloth or yarn sold by one wholesale dealer to another wholesale dealer or by a wholesale dealer to a retail dealer. This was not apparently recognised till some time later.

4. The plaintiffs protested in their letter of 8th July, 1943, against the suggestion that any decision of the Government would affect their transaction and they called upon the defendant to take delivery of the bales immediately without any delay. After waiting for some time they again addressed the defendant on the 19th July, once more calling upon the defendant to take delivery immediately of the bales which were kept ready. They added as a post-script the following:

As per Government orders we have to complete the balance stock very early and so please note that since we have no fresh yarn licence, if you make any further delay in taking delivery of the above bales you will be held fully responsible for any actions if taken by the Government.

5. The defendant's reply to this demand was cryptic and was in these terms:

In this connection I cannot commit myself with further writings of mine except to confirm the statements already made in my letter, dated 7th instant, with please note.

The plaintiffs wrote on the 20th July acknowledging this letter and informing the defendant that there was nothing in the Government order affecting the contracts entered into before the order and called upon him to take delivery of the bales immediately. On the 20th July, 1943, the defendant wrote a long letter in reply. The material portions of that letter are as below:

You seem to have written your above-dated letter to me not taking into consideration the day to day events that are taking place, regarding the yarn and cloth business and also of the contracts after the promulgation of the ordinance ...You know when the Government of India promulgated the ordinance they have clearly stated 40 to 50 per cent. of the prices are to be cut down as prices are high. Our contract took place before passing of the ordinance without the knowledge of such an ordinance being promulgated by the Government... Please note deliveries cannot be effected to your satisfaction and at the same time I have to inform you please postpone; yourself taking deliveries also either from mills or from merchants till the final decisions arrived at.

The plaintiffs again repeated in their letter of the 29th July their request that the defendant should take delivery of the bales immediately and reiterate their position which they had taken up already, viz., that there was nothing in the Government order affecting the contracts already entered into. The defendant in his letter of the 31st July, 1943, came out with a new proposal. He wrote as follows:

You know further we are not in free market. The contract was entered into when the market was in a free state and when nobody knew the coming of the so-called ordinance. The passing of the ordinance is to bring down the rates only and not to make the market go up. With this intention the Government promulgated the ordinance to bring down the prices by 40 to 50 per cent. This matter I have brought to your knowledge in all my previous letters. Yet without yourself taking into consideration all the things you are simply hurrying me up to take delivery. The ordinance was passed to bring down the level by 40 to 50 per cent. and this idea of the Government has been achieved. You know we are not in free market and prices cannot go high even if one waits six months or one year which is not at all possible under the present conditions due to the ordinance market. As such please let me know whether you can forego 40 to 50 percent, as per Government's intention. On receipt of your reply to this I will see to take delivery.

6. To this letter the plaintiffs replied that the market had come down only by 25 per cent, but in any event they could not allow any reduction in the prices fixed under the contract and called upon the defendant to take delivery immediately. This demand only resulted in another letter from the defendant on the 1st August, 1943, in a vein similar to that of his letter of the 31st July.

7. It is common ground that subsequent to this letter, the parties met on the 2nd August, 1943. Both the plaintiffs' agent and the defendant admit that they met on that day and had a talk relating to the suit contract. On that day after the personal interview the plaintiffs addressed the following letter:

Ref.: 31 bales of 40's Palaniandavar July delivery sold to you at Rs. 42-4-0 per 10 lbs. as per contract dated the 26th April, 1943, through broker Mr. Chinnappa Mudaliar. We hereby confirm our settlement of to-day in person with you with regard to the above contract as under:

We have allowed you a reduction in the price Rs. 10-8-0 (Rupees ten and annas eight only) per 10 lb. and therefore agree to deliver the above bales at Rs. 31 (Rupees thirty-one and annas twelve (?) only) per 10 lb.

You should take delivery of the above bales immediately. Thus the above contract is settled between us.

Please confirm this letter and take delivery immediately and oblige.

8. The defendant's reply on 3rd August, 1943, was as follows:

Your letter of the 2nd instant, regarding the settlement arrived at as agreed by both of us by a reduction of Rs. 10-8-0 per bundle from the contracted rate is to hand. I herewith consent and confirm the same.

While confirming this letter please note the delivery of these bales will be taken by about the 15th instant. Meanwhile please send me a cheque for Rs. 4,680 as per bill and also letter, dated 5th June, 1943, being difference towards 26 bales 20s. Somasundaram. You may either send a cheque for the amount or deduct the amount from the bill when Palaniandavar bales are delivered to me.

9. The reference in the latter part of the letter is to a totally different contract with which we are not concerned in this appeal. There is nothing in the language of this letter to suggest that the defendant made the sending of a cheque a condition precedent to his taking delivery of the bales from the plaintiffs. There is nothing on record to show what happened subsequently after this letter was received by the plaintiffs until the 19th August, 1943, when the plaintiffs addressed a letter to the defendant enclosing an invoice for the goods. They stated in that letter that they were sorry to note that in spite of the settlement of the 2nd August, the defendant had not taken delivery of the above bales and that the invoice was being sent for the amount calculated in accordance with the settlement.

10. The date on which this letter was addressed is rather important because on that date the Textile Commissioner in agreement with the Chairman of the Textile Control Board after approval by the Government of India in the Department of Industries and Civil Supplies issued a statement in and by which he fixed the ceiling price for certain standard varieties of cloth and yarn including the variety of yarn covered by the suit contract, viz., the 40's by which an ex-mill ceiling price of Rs. 25-5-6 was fixed per bundle of 10 lbs. The statement also contained the following directions:

The above are the maximum ex-mill ceiling prices. It has been agreed that cloth and yarn will be sold at these prices or at corresponding prices for other qualities in retail at a uniform maximum price all over India, which shall not exceed a margin of 15 per cent. over the ceiling prices excluding freight and other charges which will not be above 5 per cent. or a total gross margin of 20 per cent. The public will therefore be enabled to buy their supplies at the above prices, plus 20 per cent.

It has been further agreed that in respect of undelivered goods originally contracted for delivery in August, 1943, and onwards prices for all deliveries subsequent to the date of this announcement will be reduced to the ceiling prices mentioned above. The Board has undertaken to ensure that merchants who receive those concessions from the mills will pass them on in full to their buyers. Supplies should therefore be immediately available to the consumer at the above prices.

11. It may be noticed that by this order the ceiling prices were not fixed in respect of sales by one wholesale dealer to another wholesale dealer or by one wholesale dealer to a retail dealer.

12. The defendant who had evidently been waiting for such a Government order immediately wrote to the plaintiffs drawing their attention to it and requesting them to send a bill as per that order for the value of 31 bales along with a cheque for Rs. 4,680 in respect of the other contract. The plaintiffs replied on 21st August that the Government order only applied to the August contracts and as their contract was of July they were entitled to the payment of the amount as per their invoice. They added the following post-script:

Please note that if you do not take delivery of the 31 bales against payment within 24 hours of the receipt of this letter the bales will be sold at market rate at your risk and you will be held fully responsible for all losses thereof.

13. The defendant in his reply on the same date drew the attention of the plaintiffs to the fact that the Government order would apply to all deliveries made subsequent to the date of announcement and that the prices should be at the Government rate and for the first time the defendant added a further condition that before delivering 31 bales even at the Government rate the plaintiffs should send the amount of Rs. 4,680 in respect of a different contract or allow them to deduct that amount from the cost of the 31 bales. The defendant unambiguously declared that, unless the plaintiffs did so, he would not take delivery even of a single bale. There is a further exchange of letters. In their letter of the 22nd August, the plaintiffs pointed to the defendant that it was agreed that delivery should be taken at the reduced rate by the 15th August. Eventually on the 30th August, 1943, 31 bales were sold by public auction at the risk of the defendant for a sum of Rs. 28,830. The plaintiffs then sent to the defendant a bill for the difference between the price as per contract after allowing the reduction agreed upon less the amount received at the re-sale, viz., Rs. 10,625-4-0. Then there was an exchange of notices between the parties through their lawyers and the suit was instituted on the 7th December, 1943, for the recovery of the said sum.

14. The defendant raised several pleas in his written statement originally filed as well as in an additional written statement. He denied that he committed a breach of contract and alleged that the default was on the part of the plaintiffs who refused to deliver at the prices fixed by the Government. The learned Subordinate Judge held that the breach of contract was committed by the defendant and not by the plaintiffs. He held, however, that the order of the Textile Commissioner dated the 19th August, 1943 (the date given by the learned Judge as 21st August, 1943, is apparently a mistake) would apply to the suit contract and that the plaintiffs would be entitled only to the difference between the price calculated according to the ceiling prices and the amount fetched at the resale, viz., Rs. 3,539-1-0. He accordingly passed a decree for that amount in favour of the plaintiffs and dismissed the rest of their claim.

15. Though the suit was instituted on the 7th December, 1943, the decision of the main question arising in the suit and in appeal ultimately rests on the construction of the provisions of the ordinance passed subsequently on the 13th January, 1944. The attempt of the plaintiffs-appellants has been to escape from the operation of the provisions of this ordinance while on the other hand the defendant-respondent would rely upon its terms as applying to the present case. It is therefore important to reproduce the material provisions of this ordinance. It is called the Cotton Cloth and Yarn (Contracts) Ordinance, 1944, and was made and promulgated by the Governor-General in exercise of the powers conferred by Section 72 of the Government of India Act on the 13th January, 1944, and came into force at once. Section 2(1) and (2) are as follows:

(1) Where after the making of any contract for the sale of cotton cloth or cotton yarn by one wholesale dealer to another or by a wholesale dealer to a retail dealer the maximum prices ex-factory and retail at which such cloth or yarn may be sold have been fixed by an order made under the Cotton Cloth and Yarn (Control) Order, 1943, then notwithstanding anything to the contrary in such contract, when any delivery takes place in pursuance of that contract on or after the date of the said order, the maximum price which may be charged for such cloth or yarn shall not in any case exceed the maximum retail price fixed by the said order, nor shall it in the case of the first or any subsequent sale after delivery from the manufacturer exceed by more than a percentage to be fixed in this behalf by the Textile Commissioner, the price paid on the occasion of the last preceding transfer, or if the said order has fixed a maximum price in respect of such sale, that maximum price ; and where in pursuance of any such contract, the buyer has paid a price exceeding that laid down in this section, whether voluntarily or in execution of a decree passed by a Court or otherwise, he shall be entitled to receive from the seller any sum so paid in excess.

(2) The provisions of this section apply to contracts made whether before or after the commencement of this ordinance, and to sales made in pursuance of any such contract on or after the 15th day of August, 1943.

16. It is common ground that the date of the order made under the Cotton Cloth and Yarn Control Order, 1943, referred to in Section 2(1) of the ordinance is 19th August, 1943.

17. Mr. C.R. Pattabhiraman, learned counsel for the appellants, based his contention that the ordinance has no application to the suit transaction on two grounds.

18. The first ground is that the ordinance only applies to cases where there has been delivery on or after the date of the order fixing the ceiling prices, viz., 19th August, 1943, and admittedly in this case there was no delivery of the goods to the defendant and so the ordinance has no application. The logical result of this argument, as learned counsel himself frankly conceded, would be that if the defendant had taken delivery in accordance with the demand of the plaintiffs in their letter of the 19th or 22nd August, 1943, then they would not be entided to charge the defendant with a price higher than the ceiling price fixed by the Textile Commissioner but as the defendant had refused to take delivery he could be made liable for the original contract price far in excess of the ceiling price. I am unable to agree with this contention. The fact that the defendant refused to accept delivery cannot render his liability greater than if he had accepted delivery. The principle in assessing the damages on a breach of contract is to place the parties in the same position as they would have been if the contract had been duly performed. If the contract had been so duly performed, the plaintiffs would have been entitled only to recover the price in accordance with the rate fixed by the Textile Commissioner in his order dated 19th August, 1943, and the plaintiffs cannot be in a better position because the contract has been broken. The contention of the learned advocate for the appellants practically invites me to hold that the defendant has to be penalised with an additional liability for his wrongful act of breach of contract. There is nothing in the ordinance to support this contention which must therefore fail.

19. The second ground urged by Mr. C.R. Pattabhiraman is that the ordinance has no application to this case because under Section 2, Sub-section (2) the provisions of the ordinance only apply to sales made on or after the 15th day of August, 1943, and in the present case there is a sale made before that date. This contention involves a determination of (1) a question of fact, viz., whether there was a sale made before the 15th day of August, 1943, and (2) a question of law, viz., whether the provisions of the ordinance would not apply to the case of a completed sale before the 15th day of August, 1943, when delivery is made or is contemplated to be made after the 19th of August, 1943, i.e., the date on which the ceiling prices were fixed.

20. According to the appellants, by their letter of the 6th July, 1943, in which they informed the defendant that the bales sold to him were ready and asking him to take delivery, they definitely appropriated specific goods towards the contract entered into with the defendant. On the 7th July, 1943, the defendant in reply to this letter informed the plaintiffs that arrangements would be made to take delivery of the bales by the end of the month or early next month. This reply would amount to an acceptance Of the appropriation made by the plaintiffs. The condition mentioned in the defendants letter, viz., 'subject to the pending decisions of the Government which please note' had reference only to the prices that may be fixed ; but otherwise there was no objection to the act of appropriation. The property in the goods therefore passed to the buyer, i.e., the defendant, and there was a concluded sale. The subsequent correspondence proceeds entirely on the basis that definite goods had been appropriated and the defendant was only trying to evade taking delivery in the hope of securing the benefit of Government notification compulsorily reducing the price. Mr. Pattabhiraman next submitted that at any rate when, after 31st July, 1943, the parties met and arrived at a settlement as regards reduction in price and exchanged the letters dated 2nd August and 3rd August, 1943 (Exs. P. 11 and P.11-a) respectively, there was an unconditional assent. He relied upon the language of the letter addressed by the defendant on the 3rd August, 1943 (Ex. P. 11-a) in which he definitely consented and confirmed the settlement arrived at. The only request made by the defendant was that delivery of the bales may be postponed till about the 15th August, and the plaintiff's letter of the 22nd August (Ex. P. 14) shows that they evidently accepted this proposition. Mr. Pattabhiraman relied upon certain English decisions in support of his contention that the evidence in this case is sufficient to establish a concluded sale. The first of them is the early case of Rohde v. Thwaites (1827) 6 B. & C. 388 : 108 B.R. 495.'A having in his warehouse a quantity of sugar, in bulk, more than sufficient to fill twenty hogsheads, agreed to sell twenty hogsheads to B, but there was no note in writing of the contract sufficient to satisfy the Statute of Frauds. Four hogsheads were delivered to and accepted by B. A filled up and appropriated to B sixteen other hogsheads, and informed him that they were ready, and desired him to take them away. B said he would take them as soon as he could. It was held that the appropriation having been made by A, and assented to by B the property in the sixteen hogsheads thereby passed to the latter, and that their value might be recovered by A, under a count for goods bargained and sold.' Bayley, J., observed as follows:

In fact, the plaintiffs did appropriate, for the benefit of the defendant, sixteen hogsheads of sugar, and they communicated to the defendant that they had so appropriated them, and desired him to take them away ; and the latter adopted that act of the plaintiffs, and said he would send for them as soon as he could. I am of opinion that by reason of that appropriation made by the plaintiffs, and assented to by the defendant, the property in the sixteen hogsheads of sugar passed to the vendee.

Holroyd, J., said:

I am of opinion that the selection of the sixteen hogsheads by the plaintiffs, and the adoption of that act by the defendant, converted that which before was a mere agreement to sell into an actual sale, and that the property in the sugars thereby passed to the defendant; and consequently, that he was entitled to recover the value of the whole under the count for goods bargained and sold.

21. In the next case of Pignataro v. Gilroy (1919) 1 K.B. 459 the acceptance of the buyer to the appropriation made by the seller was inferred from a mere neglect of the buyer to reply to the notice of appropriation. In that case, the seller wrote to the buyer that the bags covered by the contract were ready for delivery and added that he would be pleased if the buyer could send for them at once as they were very short of room. The buyer did not send for them ; he never replied to the letter. Sometime later, the bags were stolen. It was held that the property in the bags had passed to the buyer and he was not entitled to damages for non-delivery.

22. Learned counsel also referred to the following passage from the speech of Lord Loreburn, L.C., in Badische Anilin Und Soda Fabrik v. Hickson (1906) A.C. 419 :

A contract to sell unascertained goods is not a complete sale, but a promise to sell. There must be added to it some act which completes the sale, such as delivery or the appropriation of specific goods to the contract by the assent, express or implied, of both buyer and seller. Such appropriation will convert the executory agreement into a complete sale.

What actually happens need not involve any change either in the condition of the goods or in their location. They were the property of the seller before the appropriation ; they became the property of the buyer as soon as they are appropriated ; and that is all.

23. He also relied on Section 23, Sub-section (1) of the Indian Sale of Goods Act, which runs thus:

Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.

24. I think there is considerable force in the contention raised on behalf of the appellants. There is no doubt whatever, and it was never suggested to the contrary, that there were always ready at the plaintiff's godown the 31 bales answering to the contract description. According to the contract, the buyer had to accept the sellers' godown delivery. It is in the evidence of the defendant himself that the plaintiffs' shop is in a street adjacent to the street in which his shop is situated and only a few 100 yards away. The defendant never said that there were no bales which had been appropriated towards the contract. On the other hand he admitted that the plaintiffs were asking him to take delivery from 6th July, but he wanted to take delivery after the Textile Commissioner had fixed the prices. I am inclined to think that the letters of the 6th and 7th July, 1943 (Exs. P-2 and P-3) are evidence of a concluded sale. But even assuming they are not, I think that on the 3rd August, 1943, when the defendant definitely assented to and confirmed the settlement made on the 2nd August, 1943, there was a completed sale of ascertained goods and the only request of the defendant was for a postponement of delivery of the goods. Assuming that the original contract came to an end on the expiry of the 31st July, 1943, the goods which had been set apart by the defendant under that contract had become ascertained goods and they were sold for a reduced price on the 2nd August, 1943, and the defendant definitely agreed to it by his letter of the 3rd August, 1943.

25. The learned Advocate-General for the defendant contended that there was no act of appropriation in the sense of earmarking and isolation. I do not see what more was necessary than the intimation contained in the letter of 6th July that the 31 bales sold to the defendant were ready and could be taken delivery at any time. The memorandum of the auction sale (Ex. P. 15-a) mentions the bale numbers and there is nothing to indicate that these bales were not in the plaintiffs' godown. Actually the plaintiffs more than once pointed out to the defendant that the stock lying with them should be cleared very soon to comply with Government orders. The learned Advocate-General also urged that this point was not sufficiently raised by the plaintiffs in their plaint but evidently he overlooked the fact that when the plaint was filed on 7th December, 1943, Ordinance II of 1944 had not been promulgated. On that date there can be no doubt that the plaintiffs could claim the rate fixed under the contract subject of course to the reduction agreed upon. It was after the institution of the suit that the ordinance came into force and it was also considered by the learned trial Judge. In the memorandum of grounds of appeal, one of the grounds clearly raises this point. Ground No. 5 runs as follows:

The lower Court ought to have held that on the correspondence that passed between the parties, there was a sale of 31 bales of 40's Palaniandavar Mills yarn on 2nd August, 1943, the delivery of which was however by consent postponed to 15th August, 1943.

There can be no doubt that where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of the payment of the price or the time for delivery of the goods, or both is postponed (Section 20 of the Sale of Goods Act).

26. The question that next falls for decision is whether the provisions of the ordinance apply when there was a concluded sale before the 15th August, 1943, but delivery was contemplated to be given after the 19th August, 1943. Of this latter fact i there can be no doubt in this case because the plaintiffs were willing to extend the time for delivery even up to the 22nd August (Vide Ex. P-14). The learned. Advocate-General contended that once delivery actually takes place, or is contemplated to take place after the date of the order fixing the ceiling prices, i.e., 19th August, 1943, the provisions of the ordinance apply and for this position he relies upon Section 2, Sub-section (1) of the ordinance. But he was unable to suggest any case to which the latter part of Sub-section (2) of section, 2 would have application. If, according to him, the reference is only to sales in respect of which delivery also has been made before the 15th August, 1943, then there was no reason to add those words because 15th August, 1943, is earlier than the date fixing the ceiling prices and it must be remembered that the ordinance was passed long after the date on which the ceiling prices were fixed. The learned Advocate-General was therefore forced to argue that these words, viz., ' sales made in pursuance of any such contract on or after the 15th day of August, 1943 ' are superfluous. This argument does not commend itself to me as it is opposed to all sound canons of construction. The following passage from Craies on Statute Law, 4th edition, to which attention was drawn in the course of arguments by My Lord the Chief Justice is apposite in this connection:

In R. v. Berchet (1688) 1 Show. 106 : 89 E.R. 480 it is said to be a known rule of interpretation of statutes, that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent. And in Harcourt v. Fox (1693) 1 Show : 89 E.R 733 Lord Holt said : I think we should be very bold men, when we are entrusted with the interpretation of Acts of Parliament, to reject any words that are sensible in an Act.

I think a construction is possible which can prevent the latter part of Sub-section (2) of Section 2 from being disregarded as superfluous. It may be noted that the ordinance refers to contracts for sale and to sales distinctly. Whereas in Sub-section (1) of Section 2 the language is:

Where after the making of any contract for the sale of cotton cloth or cotton yarn ... when any delivery takes place in pursuance of that contract...

In Sub-section (2), the language is:

the provisions of this section apply to contracts made whether before or after the commencement of his ordinance, and to sales made in pursuance of any such contract on or after the 15th day of August, 1943.

In my opinion ' sales ' in Sub-section (2) mean concluded sales in which the property has passed from the seller to the buyer irrespective of the fact whether delivery has taken place or not. If a concluded sale has been made before the 15th August, 1943, the ordinance will have no application to such a sale though delivery may take place or may be contemplated to take place after the 19th August, 1943, because such delivery would take place not in pursuance of a contract for sale but in pursuance of the sale. The ordinance applies to all executory contracts whether before or after its commencement, but if there is an executed or completed sale, if it is before the 15th August, 1943, the ordinance will not apply ; but if it is after the 15th August, 1943, though it may be before the 19th August, 1943,, the ordinance will apply. I therefore hold that the ordinance does not apply to this case.

27. It only remains for me to consider briefly the point raised by the learned Advocate-General in the memorandum of objections filed on behalf of the defendant objecting to the decree passed by the lower Court, that is, that the defendant did not commit breach of coatract but that the breach was committed only by the plaintiffs. The argument advanced is that the plaintiffs were not justified in demanding a price higher than the ceiling price as a condition for delivering the goods. No doubt on the day of such demand ordinance No. II of 1944 was not in existence but as that ordinance is retrospective the plaintiffs must be deemed to have acted illegally in demanding a higher price and therefore should be held to have committed a breach. The argument to my mind appears to be most extravagant.

There is nothing in the ordinance to render anything illegal which was legal at the time when it was done. When the plaintiff's demanded the price as settled on 2nd August, 1943, there was no Government order or notification which precluded them from doing so. It was the defendant who was purposely evading taking delivery in the hope of securing some benefit by the promulgation of a Government order. It is impossible to hold that the plaintiffs committed any wrongful act on account of which they should be held to have committed a breach. The learned trial Judge was right in holding that the defendant is guilty of a breach of contract.

28. It follows that the appeal must be allowed and the plaintiffs are entitled to a decree as prayed for with costs both here and in the trial Court.

29. The memorandum of objections must be dismissed with costs.

Frederick William Gentle, C.J.

30. I agree and have nothing to add.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //