Skip to content


Municipal Commissioners of the Hooghly Chinsurah Municipality Vs. Spence Ltd. and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberAppeal No. 39 of 1965
Judge
Reported inAIR1978Cal49
ActsSale of Goods Act, 1930 - Section 24
AppellantMunicipal Commissioners of the Hooghly Chinsurah Municipality
RespondentSpence Ltd. and ors.
DispositionAppeal dismissed
Excerpt:
- .....divn.' 11. from the aforesaid letter dated 8th april 1958 it appears that the same referred to the company's letter dated 2nd april 1958 wherein were mentioned the make, the price and the other particulars of the said tractor. the oral evidence suggest that negotiations were carried on by the broker s. k. banerjee on behalf of the plaintiff company.12. from the letter dated 9th april 1958 it is clear that the terms and conditions mentioned in the municipality's letters were specifically accepted. over and above the said terms offered by the municipality, the company agreed to give additional benefits as discussed by and between the municipality and the company's representative, the said s. k. banerjee. accordingly, there cannot be any question of any counter offer being made for further.....
Judgment:

Ramendra Mohan Datta, J.

1. This appeal has been preferred from the judgment and decree dated 7th Aug. 1964 passed by A. N. Ray, J. (as he then was). The learned Judge passed the decree in favour of the plaintiff-respondent Spence Ltd. for the sum of Rs. 8,760/- as thebalance of the purchase price of the 'Normag' 25 H.P. Diesel Tractor; for interest on decree at 6% and costs. The suit was decreed only as against the Municipal Commissioners of the Hooghly Chinsurah Municipality the appellant herein and the defendant No. 1 in the plaint. The suit was dismissed as against the other two defendant-respondents who were the then Administrator of the appellant Municipality and the State of West Bengal.

2. The facts shortly are that the respondent No. 1 Spence Ltd. agreed to sell and the appellant agreed to purchase from Spence Ltd. one 'Normag' Diesel Tractor of 25 H.P. on, inter alia, the following terms and conditions:--

(a) The price of the said tractor would be Rs. 10,760/- nett, inclusive of all duties and taxes.

(b) The said tractor would be demonstrated before the defendant No. 1 for two days, namely, on 12th and 13th April, 1958.

(c) On being satisfied with the performance of the said tractor for 2 days the defendant No. 1 would take delivery of the said tractor and make immediate payment of 70% of the price amounting to Rs. 7,532/- and would thereafter pay the balance of the purchase price by 3 monthly instalments.

3. The said contract was entered into by exchange of two letters dated 8th April, 1958 written on behalf of the appellant and containing the offer and the acceptance thereof by the respondent No. 1 Spence Ltd. as communicated by its letter dated 9th April, 1958. Thereafter, Spence Ltd. sent the said tractor on 11th April, 1958 for demonstration. The tractor was demonstrated by the appellant on 12th and 13th April, 1958. According to Spence Ltd. the appellants were fully satisfied with the performance of the said tractor end accepted delivery thereof in terms of the said contract of sale. In token of acceptance of delivery of the said tractor the appellant paid to Spence Ltd. a sum of Rs. 2,000/- out of the sum of Rs. 7,532/- being the 70% of the price payable upon performance satisfaction as aforesaid. In spite of the said tractor being duly delivered the appellant wrongfully failed and neglected to pay to the plaintiff the balance of the said 70% payment or of the said purchase price. On or about 10th September, 1958 due notice under Section 535 of the Bengal Municipal Act had beenserved upon the defendant-appellant but still the same remained unreplied.

4. The appellant-defendant's defence in the suit was that it was agreed by end between one S.K. Banerjee who represented the said Spence Ltd. and the appellant that the tractor would be a brand new one and of the latest model end imported in 1957 and the letter dated 8th April, 1958 was written on that footing. The appellant stated that the tractor sent for demonstration by Spence Ltd. was not in accordance with the terms and conditions of the contract. The appellant never accepted delivery thereof. According to the appellant the tractor was kept subject to the plaintiff producing the requisite documents to prove that the tractor was a 1957 model and imported in Sept. 1957. The payment of Rs. 2,000/- was made in the suspense account pending the completion of the sale. The appellant pleaded an oral agreement dated 17th April, 1958 alleged to have been entered into by and between the said S. K. Banerjee on behalf of the Spence Ltd. and P. K. Chatterjee on behalf of the appellant, inter alia, as follows :--

(a) Final delivery of the said tractor would be taken by the defendants if requisite documents were produced by the plaintiff to establish that the tractor was a 1957 model machine imported in Sept. 1957.

(b) Pending such final delivery the defendants would pay to the plaintiff the sum of Rs. 2,000/- on suspense account towards part payment of the price of the said tractor.

(c) If the plaintiff failed to produce the requisite document to establish that the tractor was a 1957 model machine imported in Sept. 1957 the contract would stand cancelled and the plaintiff would refund the sum of Rs. 2,000/-.

5. On behalf of the municipality it was stated that the said terms were recorded hi writing in a letter dated 17th April, 1958; that the same was signed by the said S.K. Banerjee and on that basis the sum of Rs. 2,000/- was paid to Spence Ltd. in the suspense account. Thereafter, the said Spence Ltd. having failed to produce the necessary documents that the tractor was a 1957 model machine or imported in September, 1957, the Municipality by its letter dated 22nd May, 1958 requested Spence Ltd. to take back the tractor and refund the said sum of Rs. 2,000/- paid to it as aforesaid.

6. The Municipality being the appellant herein denied its liability. Several other points were taken in the written statement but it is not necessary to go into the same inasmuch as the appellant has argued only on the merits of the case. The defendant No. 2 in the suit was the administrator of Hooghly Chinsurah Municipality. He filed a separate written statement and in supporting the defendant No. 1 submitted that the plaintiff's claim was e false one.

7. On behalf of Spence Ltd. one Kishori Mohan Auddy was called as a witness. The gist of his evidence was that he saw that this tractor was used for one year and in a workable condition. The next witness was Ashutosh Samaddar, the Accountant of the plaintiff company since 1935. He said hovv the tractor was sold to and purchased by the Municipality through the said S. K. Banerjee, the broker in the transaction, He also said that it was a new tractor made in Germany. It wag imported some four or five years before 1958. It was placed with the Central Bank of India in December 1957. It was taken delivery of from the Central Bank of India. Nobody had used it. The tractor was sent for demonstration pursuant to the agreement. The challan and the bill were made out. The demonstration was given by one of company's mechanic along with S. K. Banerjee for 2 days. No complaint was received. It was found satisfactory. The company asked for 70% payment for Rs. 7,532/- but the municipality paid only Rs. 2,000/- by cheque. Banerjee was given a letter of authority to bring the money. There was no agreement that the tractor would be returned on condition that Rs. 2,000/- was to be refunded. The balance money was demanded but it was not paid. Accordingly, the solicitor's letter was served and when the money was not. forthcoming the suit was filed. Banerjee was never authorised to enter into any agreement as pleaded in the written statement of the Municipality. He was there only to negotiate and to demonstrate the tractor. He was paid a sum of Rs. 600/- in part payment of his remuneration. On behalf of the defendant Municipality the witness was cross-examined at length but neither the agreement could be proved nor the said letter dated 17th April, 1958 containing the agreement could be tendered in evidence.

8. The only witness that was called on behalf of the Municipality was oneBhagirath Majhi who was a motor mechanic in Municipality. He was in charge of repairing the motor cars and tractors when those would be found in any defective condition. The gist of his evidence was that it was in workable condition for two months and then he repotted it to the Chairman that the tractor would not serve any purpose. According to him the defects lay in the tappet, in the connected piston, its engine becoming hot and the water getting heated in the radiator. The piston would strike at the head of the engine.

9. NO other witness was called on behalf of the Municipality end no further attempt was made to prove the said oral agreement as pleaded in the written statement nor was any attempt made to prove the said vital letter dated 17 April, 1958.

10. The first contention of Mr. Dutt, learned Advocate for the appellant was that the contract was not a concluded contract inasmuch as the letter dated 9th April, 1958 written on behalf of the plaintiff, was in effect a counter offer and not in acceptance of the appellant's offer contained in the letter dated 8th April, 1958. The said two letters are set out as follows:

'Office of the commissioner of theHooghly, Chinsurah Municipality.From Prabhat Kumar Messrs. Spence Limited.Chatterjee, B.L. P-38, Mission Row.Chairman ExtensionCalcutta-13.Hooghly Chinsurah 8th April, 1958.Municipality.No. 236/AC Dear Sirs,

With reference to your office No. DNK/ tnd-143/58, dated the 2nd instant on the above subject, we are interested in the purchase of 1 No. 'Normag' Diesel Tractor of 25 H.P. the price of which is stated to be Rs. 10,760/- nett inclusive of all duties and taxes and delivered free to this office at Hooghly, which please confirm. The price quoted is by guess and in case the price is less it is subject to modification accordingly.

Regarding terms of payment, please note that we are prepared to pay you a down payment of 70 p.c. of the price of the tractor i.e. Rs. 7,532/- and the balance in three monthly instalments.

If you agree to this, you are requested to send your tractor to; demonstration and test here by our Engineers, on Friday next, the 11th instant, by 2 P.M. and to arrange to keep it with us fortrial for another two days i.e. the following Saturday & Sunday, the 12th and 13th instant respectively. Your operator will be required to attend to the trial of the factor for these days and if after this trial period, your tractor is found to be upto the mark of satisfaction for us final delivery of the tractor will be taken by us on the initial payment of the 70 p.c. as referred to above.

Yours faithfully,

Sd/- P. K. Chatterjee,

Chairman.'

'Ref. No. DNK/981/58 P-S8, Mission Row Extn

Calcutta-13

Dated 9th April, 1958.

P. K Chatterjee,

Esq. B. L.

'Chairman, Hooghly,

Chinsurah Municipality.

P. O. Hooghly.

Dear Sir,Sub : Tractor. We thank you for your kind favour No. 236/AC of the 8th instant on the above subject and take it as a firm order from your side, since we agree categorically to the terms and conditions of your intended purchase of one No. Normag 25 H.P. Diesel Tractor from us, coupled with the fact that we are confident of the success of our machine in its demonstration, test and trial.

Our tractor with the operator will report at your office on Friday the 11th instant by 2 P.M. and when it satisfies you in the test and demonstration during the trial period fixed by you, we shall thank you to take final delivery of the machine then and there and favour us with your initial payment of Rs. 7,532/-on the following Tuesday the 15th instant.

Regarding your misgivings about the correctness of the price of our Normag 25 H. P. Diesel Tractor as quoted to you, by Mr. S. K. Banerjee, we assure you that Mr. Banerjee's quotation is correct and we hereby confirm his quotation that the nett price of our Normag 25 H.P. Diesel Tractor delivered free to your place end inclusive of all duties and sales tax is Rs. 10,760/- (Rupees Ten Thousand Seven Hundred and Sixty only).

Further we beg to add and confirm also the following as stated to you by our Mr. Banerjee :--

1) Specifications technical data of the Normag 25 H. P. Diesel Tractor, please find from the enclosed literature.

2) Guarantee: for one year to be from all manufacturing defects. Thisguarantee does not cover damage done to the machine through accident, mishandling or negligence on the part of your personnel and is also subject only to the recommended type of fuel and lubricants etc. being used.

3) After sales service : for a period of six months once in every month by our mechanic at no cost to you.

4) Spares: Spares are available on demand subject to prior sale. We recommend spares to be stocked by you as per separate list.

With renewed thanks for your valued patronage and assuring you always of our best services.

Enclo :

Yours faithfully,

Spence Limited.

Sd/- D. N. Khushalani

Engineering Divn.'

11. From the aforesaid letter dated 8th April 1958 it appears that the same referred to the company's letter dated 2nd April 1958 wherein were mentioned the make, the price and the other particulars of the said tractor. The oral evidence suggest that negotiations were carried on by the broker S. K. Banerjee on behalf of the plaintiff company.

12. From the letter dated 9th April 1958 it is clear that the terms and conditions mentioned in the Municipality's letters were specifically accepted. Over and above the said terms offered by the Municipality, the company agreed to give additional benefits as discussed by and between the Municipality and the company's representative, the said S. K. Banerjee. Accordingly, there cannot be any question of any counter offer being made for further acceptance by the Municipality. That being the position, I am of opinion that the contract was a concluded and a binding contract. It would appear from the letter dated 17th April 1958, the document tendered herein, that in terms of the contract the company asked for the 70% payment. By that time, demonstrations of the tractor hed already taken place and the Municipality must have been satisfied about the performance of the tractor and must have had accepted the deal as would be evident from their conduct which was evinced from the fact that they made a part payment to the extent of the sum of Rs. 2,000/- on 18th April 1958. The further feet that the Municipality used the said tractor for two months would also go to prove that the contract was a concluded contract. Because had it beenotherwise, the Municipality would have stopped using the said tractor and insisted upon the company to prove by certificates that the tractor was of 1958 make.

13. The next point urged by Mr. Dutt was about the oral agreement as pleaded in para 4 of the written statement. In my opinion, the appellant had signally failed to prove the same. If Prabhat Kumar Chatterjee, the then Chairman of Hooghly Chinsurah Municipality with whom the contract was concluded or the alleged subsequent agreement dated 17th April 1958 was entered into, had been called then the truth of it could be established. There is no explanation as to why the said very vital witness was not called to prove the oral agreement as pleaded in the written statement. There being no evidence to the contrary that the said S. K. Banerjee was acting as the broker to the transaction and was not in employment of the plaintiff company, it was not incumbent upon the plaintiff respondent to call the said S. K. Banerjee as a witness. Under those circumstances, I am satisfied that the learned Judge was right in holding that the said oral agreement had not been established.

14. Mr. Dutt next argued that the payment of Rs. 2,000/- was made as and' by way of payment in the suspense account and not in part payment. In my opinion, in the absence of any oral evidence in support thereof and the Municipality having failed to prove the said letter containing the said alleged agreement at the ' trial, such an argument cannot be accepted. S. K. Banerjee was authorised to collect Rs. 7,532/- but the company received a cheque for Rs. 2,000/-only. Thereafter, in the month of May, the Municipality asked for a certificate that the tractor was a new one and that it was not used before delivery. In pursuance thereof the company sent a certificate. The oral evidence of Samaddar also supported that it was never used before. Under those circumstances, even though the plaintiff company was not under any obligation to furnish such certificate, the company duly performed its part and, accordingly, the Municipality was bound to pay the balance amount.

15. In my opinion, the Municipality was not justified in rejecting the tractor efter using the same for at least two months cr so. The question of rejection could have arisen at the very beginningif the Municipality was not satisfied that it was a new one. Even assuming there was any such agreement as alleged in the written statement the Municipality should not have used the tractor until its requirements were complied with. That not having been done it ought to have rejected the tractor immediately thereafter instead of continuing to use the same. In my opinion, the reasonable, time to reject the tractor had already passed and the property in the goodsl had passed to the Municipality and did not remain with the plaintiff. According ly, the purported rejection was invalid. There is clear evidence that the appellant Municipality exercised the right of a proprietary character in respect of the said tractor. The learned Judge was right in finding that the Municipality had accepted the tractor. The correspondence would show that the company duly offered to look into the defects in terms of the guarantee contained in the said agreement but the Municipality insisted on rejecting it.

16. That being the position, in my opinion, the learned Judge was right in passing the decree in this case.

17. The result, therefore, is that the appeal having no merit must be and is hereby dismissed. Inasmuch as nobody appeared on behalf of the respondent company there will be no order as to costs.

Hazea, J.

18. I agree.


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