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C.V. George and Company Vs. Marshall Sons (Manufacturing) Ltd. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1983)2MLJ525
AppellantC.V. George and Company
RespondentMarshall Sons (Manufacturing) Ltd.
Cases Referred and C.C. Exporterss v. B.
Excerpt:
- .....1971, has committed breach of an important condition of the contract and under section 59 of the sale of goods act, it is open to the appellant to treat a breach of condition as breach of warranty and set up against the respondent the breach of warranty in diminution of the price. the learned counsel for the appellant further contended that the appellant is entitled to claim by way of damages a total sum of rs. 12,496 under four counts as mentioned in paragraph 10 of the judgment of the trial court and those amounts should go in diminution of the price claimed by the respondent for the supply of the hot mix plant.4. under exhibit b-1, the appellant asked for quotation for supply of ones hot mix plant. the respondent replied giving its detailed quotation under exhibit b-1. thereafter,.....
Judgment:

P. Venugopal, J.

1. The defendant is the appellant and the plaintiff is the respondent in this appeal. The defendant is a contractor at Cochin and the plaintiff is a dealer in Hot Mix plant and Mini Crushers. On 6th May, 1971, the defendant sent a letter to the plaintiff asking for quotation for supply of one hot mix plant. The plaintiff sent a reply on 1lth May, 197l, with all the necessary details. Then the defendant again on 21st June, 1971, asked for a revised quotation from the plaintiff. The revised quotation was sent by the plaintiff on 29th July, 1971. The plaintiff's case is that it agreed to deliver the hot mix plant in three to four months' time from the date of receipt of the order but subject to conditions beyond its control the hot mix plant could not be supplied earlier than January, 1972. The defendant's case is that as per the agreement between them, the hot mix plant should have been supplied by the middle of September, 1971 and time was essence of the contract and the plant was supplied only on 30th January. l972, and the delay was without any reasonable or probable cause. The further plea of the defendant is that as the hot mix plant was not delivered within the time stipulated, it is entitled to claim damages under four counts, namely (1) Rs. 2,000 being the cost of 12 volt electrical starter equipment with battery complete ; (2) Rs. 321.97 being the expenditure incurred towards the cost of materials and labour charges for welding and rectification of defects before the commission of the plant: (3) Rs. 2,000 being the value of 0.75 ton of steel and (4) Rs. 8,175 being the hire charges for hiring plant from the Cochin Corporation.

2. The trial Court held (1) there was no agreement between the parties for delivery of the hot mix plant by the middle of September, 1971, and the parties did not have intention of making the time essence of the contract; (2) Barring the value of 12 volt electrical starter equipment the other three claims would amount to plea of set off or counter claim and in this view, the claim for damages in respect of hire charges, expenditure alleged to have been incurred towards labour charges and alleged shortage in tonnage of steel cannot be gone into; and (3) even if for any reason, it is held that the amounts claimed under these three counts did not amount to a plea of set off or counter claim, the evidence adduced, has not established the claim made by the defendant. As regards the value of 12 volt electrical starter equipment, the Court estimated the value at Rs. 500. On these findings, the trial Court gave a decree in favour of the plain tiff for a sum of Rs. 12,096, and interest at 6% per annum from 27th' January, 197l, till the date of plaint and proportionate costs. Against this decree and judgment of the trial Court, the defendant has preferred the present appeal.

3. Relying on the two decisions of the Supreme Court in Mahabir Prasad v. Durga Datta : [1961]3SCR639 and C.C. Exporterss v. B.&C.; Mills : [1961]3SCR845 learned Counsel for the appellant contended that in commercial contracts time is ordinarily of the essence of contract and under Exhibit A-2, the appellant wrote to the respondent that the machinery should be supplied by the middle of September a t the latest and the two subsequent letters Exhibit A-6 and A-7 written by the respondent clearly indicate that it is conscious of the deadline and the time limit fixed under Exhibit A-2 and as time was the essence of the contract, the respondent by not supplying the hot mix plant in the middle of September, 1971, has committed breach of an important condition of the contract and under Section 59 of the Sale of Goods Act, it is open to the appellant to treat a breach of condition as breach of warranty and set up against the respondent the breach of warranty in diminution of the price. The learned Counsel for the appellant further contended that the appellant is entitled to claim by way of damages a total sum of Rs. 12,496 under four counts as mentioned in paragraph 10 of the judgment of the trial Court and those amounts should go in diminution of the price claimed by the respondent for the supply of the hot mix plant.

4. Under Exhibit B-1, the appellant asked for quotation for supply of ones hot mix plant. The respondent replied giving its detailed quotation under Exhibit B-1. Thereafter, the appellant asked for a revised quotation under Exhibit B-3 to which the respondent replied under Exhibit B-9. Even before any stipulation came from the appellant regarding time of delivery the respondent under Exhibit B-9 stated that the hot mix plant will be supplied in about three to four months time subject to conditions beyond its control. The appellant sent a reply under Exhibit A-2. With regard to time fixed for delivery. The appellant stated under Exhibit A-2 that ''During the discussion with Mr. C.V. George and your Manager, it was agreed that the hot mix plant will be made ready by last week of September, whereas in your letter, you have asked for 3-4 months. This point may be brought to the personal notice of Mr. Kelvakar and arrangements may be made to supply this plant by middle of September at the latest''. No reply was sent by the respondent for Exhibit A-2. An analysis of Exhibits B-1 to B-3, B-S and A-2 show (a) the respondent had to supply the hot mix plant after it is manufactured by its associate company ; (b) even before the appellant stipulated any period for delivery, the respondent stated in Exhibit B-9 that it would supply the hot mix plant in a bout three to four month's time subject to conditions beyond its control; and (c) though the appellant wanted delivery of the hot mix plant in the middle of September, 1971, the respondent did not send any reply agreeing to the appellant's stipulation. On the other hand, nearly a month after the time within which the appellant wanted to have the delivery of the plant (that is middle of September, 1971), the respondent under Exhibit A-6 wrote to the appellant that it has been advised by its associates that the plant will be ready for delivery in the middle of next month or even earlier and it has requested its associate company to expedite delivery of the machine. On 22nd November, 1971, the respondent again wrote Exhibit A-7 to the appellant stating that in view of the go slow policy adopted by the workers in the factory for the past one month, it would not be possible for its associate company to deliver the plant by the end of November, and they would endeavour to supply the plant by 10th December, 1971. It is significant to note that no objection or protest was sent by the appellant to Exhibit A-6 and A-7 stating that time for performance of the contract was agreed and fixed as middle of September, 1971. On a careful perusal of the correspondence between the parties as referred to above, it is seen that no time was fixed for performance of the contract. There was stipulation by the respondent under Exhibit B-9 to deliver the plant in about three to four months' time from the date of receipt of order Subject to conditions beyond its control and a suggestion by the appellant under Exhibit A-2 that the point regarding delivery should be brought to the personal notice of Mr. Kelvakar and arrangements may be made to supply the plant by the middle of September, 1971. Thus, it can be seen that there was no consensus ad idem regarding the period within which the plant has to be delivered to the appellant. In the absence of any stipulation fixing the period of delivery of the plant the contract has to be performed within a reasonable time.

5. The next question to be considered is whether the contract was performed by the respondent within a reasonable time. As already stated, the respondent has indicated under Exhibit B-9 that it will supply the plant in about 3 to 4 months time from the date of receipt of order subject to conditions beyond its control. The appellant placed the order or 3lst July, 1971. Three month's time expired on 30th December, 1971. Even before the expiry of the period, the respondent wrote Exhibit A-6 the its associate company ha d advised that the plant will be ready for delivery in the middle of November, and it has advised its associate company to pay special attention and expedite delivery of the plant. The respondent again wrote under Exhibit A-7 stating that in view of the go-slow policy adopted by the workers in the factory of its associate company, there was a delay in the manufacture of the plant and it would be supplied before 10th December, 1971. The plant was ultimately delivered to the appellant on 30th January, 1972. Having regard to the time stipulated by the respondent under Exhibit B-9 and having regard to the difficulties faced by its associate company, the details of which are stated both in Exhibits A-6 and A-9, there is absolutely no difficulty in holding that the respondent has performed the contract within a reasonable time.

6. The next question is whether the appellant is entitled to claim set off for the sum of Rs. 12,496. Under the first count, the appellant has claimed Rs. 2,000 being the cost of 12 volt electrical starter equipment with battery complete, and the trial Court has allowed a sum of Rs. 500 under this count. The other three claims have been disallowed by the trial Court. The questions for consideration is whether these disallowed claims can be allowed (a) under Section 59 of the Sale of Goods Act. Under Section 55 of the Contract, Act, if, in case of a contract voidable on account of the promisor's failure to perform his promisei at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim, compensation of the promise at the time agreed unless, at the time of such acceptance, he gives notice to the promisor of his insertion to do so. The essential requirement of Section 55 of the Contract Act is. if the appellant wants to claim compensation for any loss occasioned by the non-performance of the contract within the stipulated time and if the appellant accepts performance of the contract, he must issue notice to the respondent of his intention to claim damages. It is therefore clear that if the appellant wants to claim damages by resorting to Section 55 of the Contract Act he must issue a notice to the respondent of his intention to claim damages at the time when he accepts performance of the contract. In the instant case, the goods were delivered to the appellant only on 30th January, 1972. Exhibit B-5 was issued by the appellant to the respondent on 8th December, 1971, which is long prior to the date when the goods were supplied to it and the performance of the contract was accepted by the appellant. Since Exhibit B-5 was not issued at the time when the appellant accepted the performance of the contract, the appellant cannot resort to Section 55 of the Contract Act to sustain a claim for damages against the respondent.

7. The next question for consideration is whether under Section 59 of the Sale of Goods Act, it is open to the appellant to treat any breach of a condition on the part of the respondent as breach of warranty and set up against the respondent the breach of warranty in diminution of the price. We have already held that time is not the essence of contract and there is no breach of condition on the part of the respondent. Even granting for argument's sake that time was essence of the contract and there was a breach of condition by the respondent, even then Section 59 of the Sale of Goods Act, cannot be attracted, as the definition of 'condition and warranty' in Section 12 of the Sale of Goods Act is limited to stipulations in a contract of sale with reference to goods and stipulations with regard to time and other matters are outside the definition contained in Section 12 of Sale of Goods Act.

8. Learned Counsel for the appellant relied on Section 12(2) of the Sale of Goods Act and sought to contend that the stipulation regarding time for the purpose of contract is essential to the main purpose of the contract and hence a stipulation with regard to time is also a condition with reference to goods. Sections 13, 14 and 15 of the Sale of Goods Act dealing with condition and warranty, clearly indicate that to constitute a condition within the meaning of Section 12 of the Sale of Goods Act the condition or stipulation must be with reference to quality of good sand any condition with regard to time for performance of the contract, is not a condition which falls within the ambit of Section 12 of the Sale of Goods Act. Thus, in any view of the matter, the appellant cannot, by relying on Sections 12 and 59 of the Sale of Goods Act, set up the alleged breach of warranty in diminution or extinction of the price claimed by the respondent.

9. In the result, the decree and judgment of the trial Court are confirmed and the appeal stands dismissed with costs.


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