DAS GUPTA - (1.) THIS appeal is from a judgment of the Court of Appeal of the Bombay High Court confirming the decision of a single judge of that Court in a suit for damages for breach of a contract of sale. By a contract in writing dated 9/08/1950 entered into at Bombay, the appellants who carry on business at Bombay as import and export merchants agreed to sell to the respondent, a company carrying on business also at Bombay as a Cotton Spinning and Weaving Mill, and the respondent agreed to purchase 50,000 lbs. Of Italian Staple Fibre Cotton of the quality mentioned therein, at Rs. 1,350.00- per Candy Ex docks, Shipment October/November, 1950. Of this quantity 10,000 lbs. was delivered to and accepted by the respondent company on 31/10/1950. The balance amount of 40,000 lbs. not having been delivered in terms of the contract the respondent company brought the present suit for damages on the allegation that the appellant firm had wrongfully failed and neglected to deliver this balance amount of the contract goods. The appellant admitted failure to deliver this amount; but pleaded that this was not wrongful failure to deliver. The appellant averred in its written statement that the non-supply of the goods arose by reason of the "intermediary parties (meaning thereby the suppliers) failing to supply and deliver goods to the defendant and also of the circumstances beyond their control"; and claimed that it was exempted from any liability to the plaintiff company under printed term 16 of the contract. The defendant further pleaded that the shipment time mentioned in the contract was not guaranteed, and the time of shipment was not of the essence of the contract. The trial Judge held that the shipment time was guaranteed, except in so far as delay in shipment might be due to delay in obtaining import licence- which however was in the present case obtained in good time -; that time of shipment was of the essence of the contract; and finally that there was no case here of any " intermediary parties" failing to supply or deliver the goods and as the defendant firm had not made any adequate contract which would have enabled it to obtain the supply of goods - if such contract had not been broken - from which it could have delivered these 40,000 lbs, the further defence that the non-supply was due to "circumstances beyond their control" also failed. Accordingly the Trial Judge held that there had been wrongful breach of the contract by the appellant firm and the plaintiff company - the respondent - was entitled to damages. The actual assessment of damages was referred to the Commissioner.
(2.) ON appeal by the defendant, the Appeal Court held agreeing with the Trial Judge that as there was no delay in obtaining the import licence, the obligation to deliver to the plaintiff contract goods of October/November shipment continued. The learned judges also pointed out that "the failure to give delivery primarily arose because the defendants never were ready and willing to carry out their obligation to give delivery because they had made no arrangement to get goods from Italy which they could have delivered at the contract time". Therefore, the Court of Appeal held that it was not open to defendant to rely on any of the clauses in the contract which condones delay on their part or which excuses them from giving delivery. The appeal was accordingly dismissed. It is against this order of dismissal that the present appeal has been preferred by the defendant firm after having obtained special leave from this Court. Three contentions were raised before us in support of the appeal. The first contention is that the shipment date was not guaranteed; the second contention, which really is involved in the first, is that the shipment time was not of the essence of the contract. Lastly, if was urged that the contracts which the defendant firm had made its Italian suppliers, were adequate for their obtaining supplies in good time to enable them - if these contracts were not broken - to complete the requisite delivery to the plaintiff company in proper time.
(3.) THE contract was on a printed document, with the terms regarding quantity, quality, price, shipment, payment, and the remarks column filed in manuscript. Against Shipment - we find "October/November, 1950." In the remarks column we find the following written : "1. Invoice weight to be accepted 2. This contract is subject to import licence and therefore the shipment date is not guaranteed." We find thus that whatever may have been said earlier in the printed portion of the contract the parties took care, after specifying "October/November, 1950" as the date of shipment to make a definite condition in the remark column, on the important question whether the shipment date was being guaranteed or not and if so, to what extent. The words are : "This contract is subject to import licence, and therefore the shipment date is not guaranteed." Remembering, as we must, that in commercial contracts, time is ordinarily of the essence of the contract and giving the word "therefore" its natural, grammatical meaning, we must hold that what the parties intended was that to the extent that delay in shipment stands in the way of keeping to the shipment date October/November, 1950, this shipment date was not guaranteed; but with this exception shipment October/November, 1950, was guaranteed. It has been strenuously contended by the learned Attorney-General, that the parties were mentioning only one of the many reasons which might cause delay in shipment and the conjunction "therefore" was used only to show the connection between one of the many reasons - by way of illustration and a general agreement that the shipment date was not guaranteed. We do not consider this explanation of the use of "therefore" acceptable. If the parties intended that quite apart from delay in obtaining import licence, shipment date was not guaranteed, the natural way of expressing such intention - an intention contrary to the usual intention in commercial contracts of treating time as the essence of the contract - would be to say : "This contract is subject to import licence and the shipment date is not guaranteed." There might be other ways of expressing the same intention, but it is only reasonable to expect that anybody following the ordinary rules of grammar would not use "therefore" in such a context except to mean that only to the extent that delay was due to delay in obtaining import licence shipment time was not guaranteed.;