Decided on March 28,1952

P.A.S.V. Karuppuswami Mooppanar Respondents


- (1.) THESE are appeals preferred under the Letters Patent against the judgment of Satyanarayana Rao J., in S. A. Nos. 464 and 465 of 1946 whereby he reversed the judgment of the District Judge of Mathurai in A. S. Nos. 294 and 295 of 1944 which in turn had reversed the judgment of the Subordinate Judge of Mathurai in O. S. No. 100 of 1943 and No. 82 of 1943. The appellants in this Court were the plaintiffs in O. S. No. 100 of 1943, Sub -Court, Mathurai and the suit was for damages for non -acceptance of goods under a contract dated 13 -5 -1943. The defendant in this suit filed O. S No. 82 of 1943 in the Sub -Court, at Mathurai, against the plaintiffs in O. S. No. 100 of 1943 claiming damages for non -acceptance of goods under contract dated 3 -6 -1943. Both the suits were heard together and disposed of by a common judgment and so were the appeals in the District Court and in, this Court.
(2.) THE facts material for the purpose of these appeals are these : Both the parties are prominent merchants in Mathurai doing business in yarn. On 13 -5 -1943 they entered into an agreement, Ex. P. 1. under which the appellants agreed to sell and deliver ten bales of yarn to the respondent in August 1943. As the construction of this contract is one of the main points for determination in these appeals it is necessary to set out its terms in extenso : __________________________________________________________________ CONTRACT FORM Dated 13 -5 -1943 Name oE the seller : V. K. Ramaswnmy Chettiar and Sons, Madurai, M. D. 87 Name of bujer : P. A. S. V. Karuppasami Moopa nur A Co. Madurai, M. D No. 29 Sold through broker : C. A. Mathavachaii. __________________________________________________________________ The buyer agrees to purchase subject to conditions and terms noted below the following: goods and accepts the seller's go down delivery at seller's option between the first and last day of the below mentioned month and to pay the full value for the same before delivery and to accept the goods even if any delay is made for any reason by the sellers in giving delivery. __________________________________________________________________ Description ... 20 x 10 Harvey Mills Yaro Quantity ... (10) ten bales each containing 40 bundles of 10 lbs. Price. ... Rs. 27 -12 -0 twenty seven, annas twelve only net por bunrtle. Despatch ... August 19iS. Cnshbcfore delivery of the bales, Subject to the terms and conditions a bo -re the Mills, Madura godown delivery. __________________________________________________________________ The respondent paid an advance of Rs. 1100 under this contract. Vide Ex. P. 2. On 3 -6 -1943 there was another agreement between the parties under which the respondent agreed to sell and deliver to the appellants five bales in July 1943 Ex. P. 18. On 2 -8 -1943 the appellants gave notice to the respondent that ten bales of yarn were ready, that he might pay for and take delivery of them in accordance with the contract dated 13 -5 -1943, Ex. P. 3. The respondent neither replied to this notice nor did he make any attempt to pay for the goods and take delivery. On 26(16?) -8 -1943 the appellant sent a further notice, Ex. P.
(3.) THEREIN it was stated that alter the notice, Ex. p. 3, there was an agreement between the parties on 3 -8 -1943 under which five bales which had to be delivered to the appellants under Ex. P. 18 were adjusted out of the ten bales which had to be delivered by them and that the respondent was to take delivery of the remaining five bales before 20 -8 -1943. The notice called upon him to take delivery of the goods under this agreement. The respondent replied to this notice by Ex. P. 5 dated 30 -8 -1943. To understand the attitude taken up by the respondent in this reply it should be stated that on 19 -8 -1943 the Textile Commissioner, acting under the Yarn Control Order issued under Rule 81(2), Defence of India Rules, published a statement fixing the maximum price for yarn and on 31 -8 -1943 there was a formal statutory notification on the lines of the statement and it was published on 4 -8 -1943. The ceiling prices fixed under this statement were less than the contract rate under Ex. P. 1. In Ex. P. 5 the respondent denied that there was any such agreement on 3 -8 -1943 as was alleged in Ex. P. 4. This question is no longer material because in the suit both the parties disclaimed this arrangement and were content to have their rights determined on the basis of the original contracts. Then the notice stated that the plaintiffs had not "August ready bales" with them on 2 -8 -1943 when they sent Ex. P. 3 a complaint which was made for the first time; and offered to take delivery of the goods at the prices fixed in the statement of the Textile Commissioner. With reference to the five bales purchased by the appellants under Ex. p. 18, the notice stated that as they had failed to take delivery, the goods would be sold by public auction and that the appellants would be liable for damages resulting on such resale. To appreciate this move of the respondent it must be mentioned that the yarn control statement dated 19 -8 -1943 operated only on contracts where deliveries remained to be made after 15 -8 -1943 and the result would be that while Ex. P. 18 would not be hit by it because delivery had to be made in July, Ex. P. 1 would be hit, if the contract was subsisting on 15 -8 -1943. The scheme of the respondent was obviously to recover from the appellants the full contract price for the five bales under Ex. P. 18 while paying them only the controlled price for the ten bales under Ex. p. 1. After further exchange of notices between the parties, two suits came to be filed on the two contracts. In O. S. No. 82 of 1943 the respondent claimed damages for breach of the contract dated 3 -8 -1943, Ex. P. 18 and also refund of the advance of Rs. 1100 paid under Ex. P. 1. In O. S. No. 100 of 1943 the appellants claimed damages for breach of the contract dated 13 -5 -1943, Ex. p. 1. In O. S. No. 82 of 1943 both the Courts below held that the appellants had broken the contract and that they would be liable in damages; and this question is no longer in Issue between the parties. As for the claim for return of Rs. 1100 it is bound up with the decision in O. S. No. 100 of 1943 as to who broke the contract, Ex. p. 1 and L. P. A. No. 68 of 1949 relates to this. 3. In L. P. A. No. 67 of 1949 the question that has to be decided is whether Ex. P. 1. was broken by the appellants or by the respondent. That in turn depends on the question whether the contract was alive on 15 -8 -1943. If it was, it is conceded by the appellants that it would fall within the mischief of yarn control order notifications; in which case the appellants would be in breach as they refused to deliver the goods on payment of the ceiling price as per the offer of the respondent in Ex. P. 5. It is likewise conceded on behalf of the respondent that if in fact the contract, Ex. p. 1 had been broken on 2 -8 -1943 and was not alive on 15 -8 -1943 the breach was on the part of the respondent. The contention of the appellants is that they had made a proper tender of the goods on 2 -8 -1943 under Ex. P. 3, that the respondent refused to accept the same and thereby committed breach of the contract and that the contract was not subsisting on 15 -8 -1943. The respondent contends firstly that the goods tendered under Ex. P. 3 were not in accordance with the contract and that there was no proper tender; and secondly that even if there was a proper tender of the goods on 2 -8 -1943 and the respondent was in default in not accepting them, the appellants did not elect to put an end to the contract but that it was kept alive and was subsisting on 15 -8 -1943. These are the two questions that arise for determination. 4. On the first question the contention of the respondent is that he agreed under the contract, Ex. P. I, to purchase only yarn which was to be despatched from the Madura Mills in August 1943, that the goods actually tendered on 2 -8 -1943 were not goods despatched by the Mills in August 1943 and that, therefore, they were not in accordance with the contract. If this contention is well -founded, there is no question but that there was no proper tender by the appellants on 2 -8 -1943. The appellants did not deny that the goods tendered were not despatched by the Madura Mills in Aug. 1943 but their contention was that there was no agreement that the goods to be delivered under Ex. P. 1, should have been goods despatched by the Madura Mills in August 1943. The decision on this question turns on the interpretation to be put on the terms of Ex. P. 1.;

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