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G.K. Chengravelu Chetti and Sons. Vs. Akarapu Venkanna and Sons - Court Judgment

LegalCrystal Citation
SubjectContract;Civil
CourtChennai
Decided On
Reported inAIR1925Mad971; (1925)49MLJ300
AppellantG.K. Chengravelu Chetti and Sons.
RespondentAkarapu Venkanna and Sons
Cases ReferredMorton v. Lamb
Excerpt:
- - we are clearly of the opinion that the view of the majority of the judges is correct. the action on the findings of the learned judge is thus bound to fail. no such application was made and indeed it is unnecessary to pursue the matter further, for the finding in effect is that the transaction is a wagering contract and even then the plaintiffs are bound to fail and the suit must be dismissed......the seller be the plaintiff, he must allege and prove that he was ready and willing to deliver the goods. the plaintiffs in this case having themselves committed default, cannot take advantage of what is said to be a default on the part of the defendants. the action on the findings of the learned judge is thus bound to fail.7. so far, the case does not present much difficulty. the suit was filed on the footing of a breach of contract and the allegation in the plaint was that the plaintiffs performed their part and that the defendants committed default. the learned judge, however, on the evidence before him, came to the conclusion that the parties did not intend either to deliver the goods or pay the price but their object was only to settle their rights by payment of differences. the.....
Judgment:

1. Certain questions have been submitted for our opinion under the provisions of the Presidency Small Cause Courts. The facts which led to the reference may be briefly stated. The plaintiffs entered into a contract with the defendants on the 7th of September, 1921. It related to ten bales of yarn which the defendants agreed to sell to plaintiffs. The material portion of the contract may be reproduced:

The buyer agrees to purchase the undermentioned goods at the undermentioned terms and price and accepts the seller's godown delivery and pay cash for the same. Particulars for the account : Ten bales for 400 bundles at Rs. 19-12-0 per bundle. Delivery from 1st October before 31st October, 1921.

2. The first question to be decided by us is, what is the true construction of this contract Are the promises in the nature of concurrent conditions the promise relating to the payment of the price and the promise, relating to the delivery of the goods Or, is the payment of the price by the plaintiffs conditional on the performance by the defendants of their part of the contract, namely, delivery of the goods We entertain no doubt that on a true construction of this contract, the parties have agreed that the performance of their respective promises is to be simultaneous, that is to say, that each shall be ready and willing to perform his promise at one and the same time. Anson says:

Modern decisions incline against the construction of promises as independent of one another.... In a contract for the sale of goods, the rule of Common Law, now embodied in the Sale of Goods Act, was that unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions?.' Anson on Contracts, 16th Edition, 1923, page 359.

Where each party is to do an act at the same time as the other, as where goods in the sale for cash' are to be delivered by the vendor and the price to be paid by the buyer, these are concurrent condition and neither party can maintain an action for breach of contract without averring that he performed or offered to perform what he himself was bound to do.' Benjamin on Sales, 6th Edition, pages 638 to 639.

3. Section 51 of the Indian Contract Act enacts the law on the point in similar terms.

4. Let us now see what has happened in this case. The plaintiffs, on the 31st of October, 1921, that is, the last day fixed for the performance of the contract, sent a letter to the defendants calling upon them to give delivery of the goods in question. The learned Trial Judge has found that the plaintiffs' version that they sent the price of the goods along with the letter is untrue. The defendants on the same date wrote back to say that they were unable to send the goods owing to rain and added:

Within 24 hours after seeing this letter you should pay money for the aforesaid ten bales and take delivery of the same.

5. The Trial Judge on this part of the case finds that the defendants gave a false excuse, namely, that of rain, and that in fact they did not have goods in their godowns. He is also of opinion that the plaintiffs are wealthy merchants and that, therefore, they could have easily paid the price. On these findings he allowed the plaintiffs' claim and awarded damages. When the case was taken before the Full Bench of the Court of Small Causes, it was heard by all the three Judges of that Court including the Trial Judge. The other two Judges were of the opinion that the plaintiffs could not recover damages on the facts proved. We are clearly of the opinion that the view of the majority of the Judges is correct. It will be seen that the defendants did not repudiate the contract and Shriram Rupram v. Madangopal Gowardhan (1903) ILR 30 C 865 relied upon by defence has, therefore, no application. The mere fact that the defendants did not have the goods in their possession does not show that they were either unable or unwilling to perform the contract. If the price had been paid, it is not impossible that the defendants would have procured the goods and given delivery. Was it the duty of the defendants to satisfy the plaintiffs that they had the goods with them before the price was tendered? Anson states the law thus at page 354:

If A and X agree that the performance of their respective promises shall be simultaneous, the conditions are concurrent. Thus in a sale of goods where no time is fixed for payment, the buyer must be ready to pay and the seller ready to deliver at one and the same time.

6. The learned author quotes the case of Morton v. Lamb (1797) 7 TR 125 : 4 RR 395:

Morton agreed to buy a certain quantity of corn from Lamb at a fixed price, the corn to be delivered in one month. It was not delivered and Morton sued for damages, alleging that he had been always ready and willing to receive the corn. But the Court held that this was not enough to make a cause of action. He should have alleged that he was always ready and willing to pay for the corn ; he might, for aught that appeared on the pleadings, have discharged the defendant by his non-readiness to pay.

Thus, where the contract relates to sale of goods, the plaintiff if he happens to be a buyer must allege and prove that he was ready and willing to pay for the goods and likewise if the seller be the plaintiff, he must allege and prove that he was ready and willing to deliver the goods. The plaintiffs in this case having themselves committed default, cannot take advantage of what is said to be a default on the part of the defendants. The action on the findings of the learned Judge is thus bound to fail.

7. So far, the case does not present much difficulty. The suit was filed on the footing of a breach of contract and the allegation in the plaint was that the plaintiffs performed their part and that the defendants committed default. The learned Judge, however, on the evidence before him, came to the conclusion that the parties did not intend either to deliver the goods or pay the price but their object was only to settle their rights by payment of differences. The learned Judge seemed to think that the defendants, finding that the market was rising, were unwilling to keep to their bargain and that, therefore, they should be mulcted in damages. This is how the learned Judge explains his own judgment:

It (my judgment) is rightly or wrongly based on the finding that the contract is a speculative one, the most common characteristic of which is that the parties waive the ordinary steps of paying or tendering the price and tendering or delivering the goods, but settle their rights by payment of the differences.

8. This is not the case set out in the plaint, and the defendants were not called upon to meet it. If the plaintiffs had applied for permission to amend the plaint, the application would probably be disposed of with reference to Order 7, Rule 14 of the Small Cause Courts Rules analogous to Order 6, Rule 17 of the Civil Procedure Code. No such application was made and indeed it is unnecessary to pursue the matter further, for the finding in effect is that the transaction is a wagering contract and even then the plaintiffs are bound to fail and the suit must be dismissed. No hard and fast rule can be laid down as to when a plaint should be allowed to be amended or when it should not be. But we do not propose to answer that question as in the circumstances it does not arise.

9. We have not attempted to answer seriatim the questions submitted to us. The Trial Judge has added a note to say that one of the questions submitted to us does not arise. Our observations are sufficiently indicative of our opinion, and the case will go back to the Small Cause Court for being disposed of according to law.


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