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Mahomed Ibrahim Mahomed Jaffir Sahib and Co. Vs. Nalam Lakshmikantam and anr. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in53Ind.Cas.125
AppellantMahomed Ibrahim Mahomed Jaffir Sahib and Co.
RespondentNalam Lakshmikantam and anr.
Cases ReferredSee Bullock v. London General Omnibus Company
Excerpt:
.....they should do otherwise. instruct me to call upon you to deliver to them the balance of 4,660 bags of covelong salt with the certificate referred to above and also send them the permission from inspector mentioned above, and to give you notice that if you fail to comply with the said request on or before the 31st of this month, they will cancel the agreement entered into by them with you on 30th november 1916 and sue you for the damages incurred by them for breach of the said agreement. we have to make you distinctly understand that we have not made any contract to supply the goods within any stipulated time. on the 30th of january another letter was sent by the plaintiffs' vakil, which complained of the shortage of the supply of salt and threatened to cancel the contract if..........from covelong to elephant gate basin, madras.4. that the said company will take delivery of the salt bags from boats immediately on arrival at the basin.5. that the rate fixed and approved for each bag of salt so delivered at elephant gate basin is rs 3 4 6 per bag.6. that the amount due for each consignment of salt at the above mentioned rate will be paid before taking delivery of the bags at the elephant gate basin.7. that the advance amount of rs. 1,000 lodged with us will be adjusted at the last consignment while settling the whole account.'8. the course of business is this: the salt is collected from lands over which the sea flows in the neighbourhood of covelong and put into the government salt factory at that place for cleansing and refinement. it is taken out of the factory by.....
Judgment:

Coutts Trotter, J.

1. This is a suit for damages for non-delivery of certain salt Contracted to be delivered by the defendants to the plaintiffs. The facts of the case have taken some trouble to elucidate, but at the end of the case they were practically not in dispute. The 2nd defendant, Messrs. Hoist and Nathan, were added as parties to the suit on the motion of the 1st defendant, but a perusal of the agreement of the 11th of December 1915 between the 1st and 2nd defendants makes it dear that the 1st defendant was to sell the salt covered by the agreement and that no privity of contract could possibly exist between Messrs. Hoist and Nathan and third parties with whom the 1st defendant entered into contracts.

2. The contract sued upon is dated the 30th of November 1916. It recites an advance of Rs. 1,000 by the plaintiffs to the 1st defendant for the supply of 5,000 bags of Covelong salt and is in the following terms: 'Received from Messrs. Mahomed Ibrahim Mahomed Jaffir and Co., Madras, the sum of Rs. 1,000 being the advance for the supply of 5,000 bags of Covelong salt for export from Madras to Calcutta under the following terms:

1. That the abovesaid Company shall supply gunnies and twine at the Covelong Salt Factory.

2. That on receipt of gunnies, necessary application will be made for removal of salt.

3. That on obtaining permission from Inspector for removal, the gunnies will be filled in as per rules of the department and the bags will be department by boats from Covelong to Elephant Gate Basin, Madras.

4. That the said Company will take delivery of the salt bags from boats immediately on arrival at the Basin.

5. That the rate fixed and approved for each bag of salt so delivered at Elephant Gate Basin is Rs 3 4 6 per bag.

6. That the amount due for each consignment of salt at the above mentioned rate will be paid before taking delivery of the bags at the Elephant Gate Basin.

7. That the advance amount of Rs. 1,000 lodged with us will be adjusted at the last consignment while settling the whole account.'

8. The course of business is this: the salt is collected from lands over which the sea flows in the neighbourhood of Covelong and put into the Government Salt Factory at that place for cleansing and refinement. It is taken out of the factory by the contractors in the position of the defendants, who have to provide gunny bags to pack it with and to pay the price and the tax. The Buckingham canal goes past Covelong and there is a wharf within the boundaries of the factory, from which the bags of salt can be loaded into boats for conveyance by the canal to Madras. By the terms of the contract the plaintiffs were to supply the gunny bags and twine for receiving the salt. In practice, the defendants take a lump sum from the plaintiffs to cover the cost of the bags and provide them themselves. It is now beyond dispute that there was ample salt at Covelong at the disposal of defendants for them to fulfil their contract and they could not and do not attempt to show that there were not enough bags into which to pack the salt. The trouble, arose over the conditions of the waterway and the facilities of despatch. The first two consignments were sent off on the 8th and the 17th of January and totalled 740 bags shipped on twelve canal boats. The subsequent despatches were as follows:

25th January 4 3001st February 6 5072nd 6 4009th 10 60010th 12 74516th 17 10005th March 7 500

3. Under normal conditions the transit from Covelong to Madras takes three or four days, and I think I may assume that, if the boats had arrived in Madras after the normal interval from their despatch from Covelong, there would have been a substantial compliance with the terms of the contract. In fact, during the latter part of January and whole of February the water in the Buckingham canal was very low and the boats arrived as far as Papanchavadi. which is some thirteen miles from Covelong and nine to the Elephant Gate Basin, and proceeded no further.

4. It is suggested that the boats might have been got to Madras by one or two methods, either by using portage over the shallow places and re-loading the cargo where the water was deep enough again or by distributing the cargo of the fully laden boats among other boats and so ensuring that no boat had so heavy a load that she could not be pulled through the shallowest part. I do not doubt that both of the suggested courses were physically possible. I am convinced that as a matter of business both were commercially impracticable. It is reasonably dear from the evidence that there were not enough boats available for all the cargo to be carried through in half-laden boats, and with regard to the portage scheme, though it may be theoretically possible, the evidence is conclusive that no one has ever attempted to do it with a cargo of salt. The figures given by the look-keeper at Adayar South Look appear to me to be conclusive on this point. He has produced the record of the boats carrying salt cargoes for the months of j January, February and March, and it speaks for itself. In the month of January 80 boats went through the took with salt cargoes, 29 from the 1st to the 10th, 21 from the 11th to the 20kh and 30 from the 21st to 31st. In the month of February not one single boat went through with a salt cargo, though 264 boats went through loaded with cargoes of different descriptions. In the month of Maroh no salt boat went through from the 1st to the 20th and one only from the 21st to the 31st. During that month 346 boats went through carrying other cargoes. The result was that the boats laden with salt destined to fulfil this contract stopped at Pappan-ahavidi, nine miles from their destination, and the evidence has satisfied me that it was commercially impracticable that they Should do otherwise.

5. The effect of this state of things on the contracting parties and how they dealt with it can be seen from the correspondence to which I now turn. The shortage was beginning to be felt towards the end of January and the plaintiffs' Vakil, Mr. Narayanasawmi Aiyar, addressed a fetter on the 22nd of January to the 1st defendant in the following terms:

6. 'With reference to the letter dated 18th January 1917 addressed by Messrs. Hoist and Nathan to my clients Messrs. Mahomed Ibrahim and Mahomed Jaffir & Co, carrying on business at No. 55 Kandappa Chetty Street, Georgetown, Madras, I have been instructed to state that though my clients have been going to Elephant Gate and making enquiries there and also of you for the last three days, they are informed that no boats containing the consignment referred to in the said letter have yet arrived at Elephant Gate Basin.

7. 'My clients further instruct me to state that by agreement dated 30th November 1916 you have agreed that on obtaining, permission from Inspector for removal of salt and for exporting the same to Calcutta you would despatch the salt to my clients, that you on or about 20th; December 1916 obtained permission from Inspector for such removal and export and that you have not yet sent the Salt stipulated for in the said agreement to My clients.

8. 'My:' clients further state with each consignment of goods stipulated for you must Send a certificate that it contains Covelong salt.

9. 'My clients again; instruct me to call upon you to deliver to them the balance of 4,660 bags of Covelong salt with the certificate referred to above and also send them the permission from Inspector mentioned above, and to give you notice that if you fail to comply with the said request on or before the 31st of this month, they will cancel the agreement entered into by them with you on 30th November 1916 and sue you for the damages incurred by them for breach of the said agreement.'

10. That was answered by a letter from the 1st defendant on the 24th of January, of which the material passage is as follows: 'We have come to understand that owing to there being no water in the Buckingham canal the passage of boats has become very difficult and we are not in the least responsible for the delay in transport of these bags, as we have no control over this contingency. We have to make you distinctly understand that we have not made any contract to supply the goods within any stipulated time.'

11. It is quite true that there was no stipulated time for the performance of the contract, but it is not disputed that whatever the defendant was under an obligation to do under the terms of his contract, and that is a matter which I will discuss hereafter, he had to do it within a reasonable time. On the 30th of January another letter was sent by the plaintiffs' Vakil, which complained of the shortage of the supply of salt and threatened to cancel the contract if delivery of the outstanding balance of over 4,000 bags was not made within five days. That was answered by a letter from the defendant, which bears no date but was obviously written at the beginning of February, explaining that the failure of water in the canal was the cause of the shortage of supply and offering to give delivery at Papancbavidi and to make concession in the question of the cost of conveyance by land from Papanchavidi to Elephant Gate. On the 20th of February a letter was written on behalf of the plaintiffs, which in effect was a repudiation of the contract. It is not disputed that at that time no more than the first consignment of 740 bags despatched early in January had reached the plaintiffs and it is equally dear that upwards of 4,000 bags had been loaded by the defendant at Covelong. The question I have to decide is whether, that repudiation was justified or not. That again turns upon the question, whether the delay in transit under the terms of the contract and the course of dealing between the parties falls upon the plaintiff or the defendant.

12. A point was taken for the defendant, which I suggested myself in the Course of the argument and which I think being entirely a point of law on the construction of the contract was open to the defendant, viz, that he discharged his obligation when he shipped the goods on board the boats at Covelong. Clause 3 of the contract provides that the bags are to be despatched by boats from Covelong to Elephant Gate Basin, and it is urged that, when they were put on boats at Covelong, the obligation of the defendant in that respect was discharged, in ether words, that this was in effect an f. o. b. contract. Fragano v. Long (1), Tregelles v. Sewell (2) and Wiltshire Iron Company, In re, Pearson, Ex parte (3) were cited as illustrating this position. But in the English shipping oases one usually has a bill of lading or a policy of insurance or both, the custody of which at any given moment of the transaction is a guide to help one in determining at what point of time the property passed, and in this case, of course, there is nothing of the sort. The plaintiffs relied upon the latter clauses of 'the contract, Nos. 7, 5 and 6, as showing that the property in the goods was not intended to pass until they were delivered on payment at Elephant Gate Basin. The defendant contends that these terms relate merely to payment and while conceding that the effect of the contract may be to disentitle him from suing for the price of the goods until they arrived at Elephant Gate Basin, argues that he is nevertheless not liable for damages for delay during transit. If that were the position in law, it would approximate to that in the well-known case of Calcutta and Burmah Steam Navigation Company Limited v. De Mattos (1863) 32 L. J. Q. B. 322 In that case De Mattos agreed to ship coal from London to Rangoon there to be delivered to the buyers. Half the price was to be paid on shipment against delivery of in-voices and bills of lading and a policy for half the invoice amount. Some of the goods were lost during the voyage and it was held that the property passed to the buyers on shipment although, by the special terms of the contract, the vendor was not entitled to recover the price until the goads arrived at Rangoon. That state of things is admirably expressed in a passage of the judgment of Blackburn, J., at page 328, which runs as follows: But the parties may intend an intermediate state of things; they may intend that the vendor shall deliver the goods to the carrier, and that, when he has done so, he shall have fulfilled his undertaking, so that he shall not be liable in damages for a breach of contract if the goods do not reach their destination; and yet they may intend that the whole or part of the price shall not be payable unless the goods do arrive. They may bargain that the property shall vest in the purchaser, as owner, as soon as the goods are shipped, that they shall then be both sold and delivered, and yet that the price (in whole or in part) shall be payable only on the contingency of the goods arriving; just as they might, if they pleased, contract, that the price should not be payable unless a particular tree falls; but without any contract on the vendor's part in the one case to procure the goods to arrive, or in the other to cause the tree to fall. Where the contract is of this kind, the position of the vendor and purchaser, in case the goods do not arrive, is analogous to that of freighter and shipowner, in the ordinary contract of carriage on board a ship, in case the goods are prevented from arriving by one of the excepted perils. The shipowner is not bound' to carry and deliver at all events; but, though he is excused if prevented by the ' excepted perils, yet no freight is earned or payable unless the goods are delivered.' Certain facts relating to the course of business were proved in this case which, to my mind, preclude me from holding that the property passed to the buyer on shipment. The effect of that evidence is shortly this, when the salt was despatched on its journey, a watchman was sent with it who was responsible for its custody and who was employed and paid by the vendors. The despatch of the salt and its expected arrival at Madras was notified by the vendors from Covelong not to the purchaser but to their own agents in Madras; and when it did arrive, the vendors in Madras either sent a delivery order to the purchaser or sent one of their men to meet the boats with the purchaser's representative and indicate that delivery was to be made to the purchaser. These facts appear to me to establish that the vendors effectually reserved to themselves the jus disponendi and that though the placing of the salt in bags marked with the purchaser's initials at Covelong was undoubtedly an appropriation of the goods, it was a conditional appropriation only. [See Mirabita v. Imperial Ottoman Bank (1878) 3 Ex. D. 164. Gabarrow v. Kreeft (1876) 10 Ex. 274. and Moakes v. Nicolson (1866) 19 C. B.290 I am, therefore, of opinion that by this contract the property in the goods did not pass on shipment, but that the vendor kept them as his property until they should be paid for and delivered and that the appropriation at Covelong was conditional only.

13. It was next argued for the defendant that this case fell within the principle of what are called the Coronation cases, Krell v. Henry (1903) 2 K. B. 740; 19 T. L. R. 711. and the rest, and that assuming the vendor to have taken the responsibility of carriage and delivery upon himself, he was excused by the impossibility of performance. I understand the Coronation oases and the older cases which they followed to establish this proposition, that where the contract between the parties is made wholly with reference to a state of things which was supposed to exist and on the supposition that that state of things does exist, the contractual obligation is dissolved if, in fact, the circumstances on which the whole contract is based do not exist. A contract to sing or play in a particular hall is dissolved if, unknown to the parties, the hall has been burned down. A contract with a hirer of seats to view a public ceremony is dissolved if that public ceremony is cancelled and cannot take place. I do not think that the principles enunciated in these cases have any application here. It seems to me impossible to say that these parties based their contract on the supposition that clear facilities of transport existed between Covelong and Madras in such a sense that their contract could be said to be deprived of its fundamental assumption and to become meaningless and insignificant if those facilities did not exist.

14. The last point taken by the defendant is to my mind conclusive. Accepting the position that he reserved the property in the goods to himself and that it did not pass on shipment, and admitting there was no such impossibility as would excuse him on the principle enunciated in the Coronation cases, he contends that he has substantially complied with the obligations cast upon him by the contract. His obligation on this footing no doubt was to deliver the goods at Madras, bat the mode of transit contemplated by the parties was that he should ship the goods at Covelong on the boats ordinarily available for conveying salt from Covelong to Madras by the Buckingham canal. That being the method of transit contemplated by the parties, the defendant contends that he is not in default and that he has shewn his ability to deliver the goods within reasonable time.' The plaintiffs' repudiation was on the 20th of February, Had they not repudiated on that date, it is reasonably dear and I so find as a fact that they would have had delivery of the balance of the contract quantity at the end of March and the beginning of April. The question is whether that is delivery within a reasonable time.' On this point I shall refer to the well-known cases relating to a charter's liability for demurrage or damages for detention when he is under an obligation to discharge the ship according to the custom of the port with due despatch. [See Postlethwaite v. Freeland (1880) 5 A. C. 599 Carlton Steamship Company v. Castle Mail Packets Company (1898) A C. 486 and Hulthen v. Stewart & Co. (1908) A. C. 389. These Cases appear to ma to lay down the principle that the question Of what is a reasonable time for the performance of the contract is one to be decided not by general abstract considerations but by the particular circumstance of each case. The principle appears to me to be most clearly expressed in the words of Lord 'Watson in Hick v. Raymond (10), where his Lordship uses these words; When the language of a contract does not expressly, or by necessary implication, fix any time for the performance of a contractual obligation, the law implies that it shall be performed within a reasonable time. The rule is of general application, and is not confined to contracts for the carriage of goods by sea. In the case of other contracts the condition of reasonable time has been frequently interpreted; and has invariably been held to mean that the party upon whom it is incumbent duly fulfils his obligation, notwithstanding protracted delay, so long as such delay is attributable to causes beyond his control, and he has neither acted negligently nor unreasonably. ' The unsuccessful contention in each of these cases was that you could ascertain what was a reasonable time in normal circumstances for discharge of the ship and, translate the indefinite words of the contract into terms of days and hours. The House of Lords throughout refused to accept this contention and laid it down that in every case you must have regard to the particular circumstances and conditions existing at the moment. Following that principle I think I must hold that I must have regard to the failure of water in the Buckingham canal at the material times, to the number of boats actually available and to the fact that no one attempted to carry salt cargoes beyond Pappanchavidi in February and March as indicating that the delay in transit .was attributable to causes beyond the control of the vendors and that they had acted neither negligently nor unreasonably.

15. I must accordingly find that the defendant has discharged his obligations under the contract and is not liable in damages for delay in delivery to the plaintiffs. On the other hand, he cannot, in my opinion, retain the advance of Rs. 1,000 and the money paid for the gunny bags, except in so far as he on set off against them the price of the 740 gunny bags actually delivered. In the result there will be judgment for the plaintiffs for Rs. 2,491 with Vakil's fee and institution fees on that amount as costs. The whole casa was fought on the question of damages, as to which the defendant has succeeded. I decline, therefore, to give plaintiffs the hearing fees. On the other hand the defendant did not bring into Court the money due on the deposit and the bags; and I must, therefore, decline to give him costs, though on the issue really fought he has succeeded. Interest at 6 par cent. on this amount.

16. The plaintiff must pay the costs of the 2nd defendant: but may add them to the costs he recovers from the 1st defendant. [See Bullock v. London General Omnibus Company (1907) 1 K. B. 264.


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