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S.V.P.N. Chidambara Nadar Vs. M. Vadivel Nadar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1936Mad47; 159Ind.Cas.1031
AppellantS.V.P.N. Chidambara Nadar
RespondentM. Vadivel Nadar
Cases ReferredPrag Narain v. Mul Chand
Excerpt:
- - plaintiff clearly acted under section 107, contract act......balance of the tobacco which had greatly depreciated in value, for rs. 13-2-0 as compared with the contract price of rs. 82-3-0. plaintiff filed this suit for the balance due deducting only the small sum aforesaid. the lower court held that he was bound to give defendant credit for the price of the tobacco at the date of breach; that if he wished to re-sell he was bound to do so within a reasonable time and not to wait until the goods owing to natural causes and to fall in prices had lost practically all their value. plaintiff now applies to have this finding revised on the ground that he was entitled to recover the unpaid price of the goods. respondent's answer is that having availed himself of the alternative remedy of re-sale under section 107, contract act, it was no longer open to.....
Judgment:
ORDER

Stodart, J.

1. Defendant agreed on 20th June 1930 to buy a certain ascertained quantity of tobacco weighing 56 thulams at Rs. 2-1-0 and to take delivery in a week. He took and paid for only 16 thulams. In January 1933 plaintiff gave him notice of re-sale and it is plaintiff's case that he sold the balance of the tobacco which had greatly depreciated in value, for Rs. 13-2-0 as compared with the contract price of Rs. 82-3-0. Plaintiff filed this suit for the balance due deducting only the small sum aforesaid. The lower Court held that he was bound to give defendant credit for the price of the tobacco at the date of breach; that if he wished to re-sell he was bound to do so within a reasonable time and not to wait until the goods owing to natural causes and to fall in prices had lost practically all their value. Plaintiff now applies to have this finding revised on the ground that he was entitled to recover the unpaid price of the goods. Respondent's answer is that having availed himself of the alternative remedy of re-sale under Section 107, Contract Act, it was no longer open to him to recover the price. Respondent's argument is that by re-selling the goods plaintiff had put it out of his power to perform his part of the contract, namely, delivery of the goods, and consequently could not call on the defendant to perform his part payment of the price of the goods.

2. The question for decision is whether the lower Court was wrong in holding (I) that having exercised the option of re-sale after notice, the plaintiff was not entitled to sue for the price and (II) that, in re-selling, the plaintiff was not entitled to wait till the goods had become worthless. It is argued at the outset that plaintiff did not really avail himself of the remedy of re-sale but merely gave the defendant credit for the depreciated value of the goods which the defendant had in effect by his long delay, abandoned. But that is not the fact. On 19-1-1933 plaintiff gave formal notice of re-sale requiring defendant to come in three days and take delivery of the tobacco failing which it would be sold and the sale proceeds credited against the balance due. Plaintiff clearly acted under Section 107, Contract Act. Nevertheless, was he still entitled to sue for the price of the goods? In my opinion he was not. Once the goods are sold, a. suit for the price of them no longer lies. The seller, as I have said, since he cannot deliver the goods, is debarred from requiring the buyer to pay the. price of them. A suit for the price of the goods is quite different to a suit for the recovery of loss on re-sale. For in the former case an opportunity is afforded to the buyer to file a counter claim for loss due to plaintiff's default in not taking proper care of the goods. Jai Narayan Babu Lal v. Narain Das Jaini Mal 1922 3 Lah 296 does not help the petitioner. That was not a case where the goods were re-sold under Section 107, Contract Act, but in accordance with a stipulation contained in the contract (p. 308). And what was decided there was, that having acted in accordance with this stipulation, it was still open to the seller to enforce another clause in the contract, namely, to refer the dispute to arbitration. Buldeo Doss v. Howe (1881) 6 Cal 64 and the English case Robinson v. Behar (1927) 1 KB 513 do not help the petitioner either, for they are merely authorities for the position that the defaulting buyer cannot compel the unpaid seller to re-sell. In answer to a suit for the unpaid price he cannot say to the seller:

You should take your alternative remedy and re-sell the goods and sue me only for the loss on re-sale.

3. Lastly, was the lower Court right in holding that the seller was bound to exercise his right of resale under Section 107, within a reasonable time? Petitioner's case is that he could wait for any length of time within the period of limitation. But the finding of the lower Court is based on reason and authority. It follows Prag Narain v. Mul Chand (1897) 19 All 535 where the following observations occur:

A seller, may with the deliberate intention of causing loss to the buyer, delay the re-sale till the market has fallen....In the case of a re-sale, the buyer is entirely deprived of his property, and that distinguishes the case of a claim for damages on a re-sale, from that of a claim for the unpaid price. In the latter case the buyer could get the property and be in a position subsequently to compensate himself by waiting for a rise in the market.

4. See also Mayne on Damages, Edn. 5, at p. 176, (quoted in the case just cited),

As there is no obligation on the part of the seller to sell at all, so, if he refrains from selling at the time of the breach, he takes upon himself all risk arising from further depreciation.

5. The right to re-sell is intended for the benefit of the seller. It enables him tore-cover quickly a part-perhaps the whole of the price, which he might never or only partially do if he proceeded against the defaulting buyer. It enables him to get rid of stock which is taking up room in his ware-house. It puts an end to the responsibility and expenses entailed in holding stock on behalf of another. The exercise of such a privilege implies a corresponding duty to resell at such a time as will cause a minimum of loss to the buyer; in other words as soon as possible after the breach. In the result this petition is dismissed with costs.


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