Bishambhar Dayal, J. - (1.) This is a defendant's First Appeal arising out of a suit for recovery of damages on account of breach of contract. The plaintiff M/s Harinath Omkarnath is a registered firm carrying on the business of cloth merchants at Mathura. They described themselves as agents of certain cloth mills but in para. 1 of the plaint they stated that they are selling agents (Monopolists) for Mathura and have been selling cloth in wholesale manufactured by different Mills in Bombay Presidency, Baroda and Kanpur. Their case was that the defendants who were dealing in printed cloth had agreed to purchase from the plaintiffs the following quantity of cloth: * * *
(2.) The delivery according to the plaintiffs was agreed to be made at the respective Mills and the price was to be recovered by presentation of the railway receipts and bills at Mathura. Some quantity of cloth was taken delivery of by the defendants in pursuance of these contracts but on the 26th of May, 1943, the State of Uttar Pradesh promulgated the Cotton Cloth and Yarn (Future and Option) Control Order of 1943 on account of which prices considerably fell down in Mathura. The defendants falsely started taking refuge behind the said order and refused to take delivery of the rest of the goods. But subsequently when it was explained to them that the orders issued by the U.P. Government related only to Future and Option and had nothing to do with the goods purchased for actual delivery, the defendants consulted their lawyers and ultimately represented to the plaintiffs that they should obtain some concession from the Mills. Thereupon Sri Onkar Nath, one of the partners of the plaintiffs firm along with some representatives of the cloth dealers of Mathura went to the Mill owners. After a talk with the management of the Mills they, succeeded in obtaining a reduction of 25% in the quantity of goods from the Bharat Vijay Mills Ltd., Kalol (hereinafter called as Kalol Mills) and also got the date of delivery of the goods of Kalol Mills extended upto the 15th of September, 1943 instead of June, 1943. From the Ambika Mills Ahmedabad (hereinafter called the Ambika Mills) also they succeeded in getting a reduction of 15% in the price of the goods and also an extension of time for the delivery of goods upto the 15th of Aug., 1943 instead of July, 1943. The defendants got the contract in respect of six bales of the Kalol Mills cancelled by paying compensation to the plaintiffs but they failed to take delivery of the rest of the goods by the 15th of September, 1943. It was admitted in the plaint that on the 19th of Aug., 1943, the Central Government issued an order fixing prices of all kinds of cloth. But according to the plaintiffs, this order only applied to transactions entered into on or after the 19th of August, 1943. It was alleged that on the 24th of August, 1943 the plaintiffs offered one bale of Kalol Mills cloth to the defendants and they also presented a bill for the supply of the cloth of the Ambika Mills. The defendants accepted one bale of the Kalol Mills but merely signed the bill relating to the goods of the Ambika Mills and noted the words "seen" on that bill, that subsequently the defendants wrongly took the plea that they were prepared to accept the balance of the goods at the price fixed by the Government and were not prepared to pay at the agreed rate. In fact, the defendants did not want to take delivery of the goods and broke the contract. Ultimately the plaintiffs intimated to the defendants that the goods would be auctioned at their risk. After such intimation they sold the goods of the Kalol Mills at Rs. 20-10-0 per piece and the goods of the Ambika Mills were sold in three lots of seven bales each at Rs. 27, Rs. 27-12-0 and Rs. 28-10-0 per bale. The plaintiffs thereby suffered a loss of Rs. 12,378-8-0 for which they claimed a decree against the defendants. Details of the loss are given in the plaint.
(3.) The defendants in this suit were Hiralal Kedarnath. In their written statement, they took up several pleas but we shall notice here only those with which we are concerned in this appeal. Their contention first of all was that according to their own showing the plaintiffs were mere selling agents of disclosed principals, i.e. the Mills and therefore they had no right to sue. It was urged in the alternative that if the plaintiffs were whole sale cloth dealers on their own account, they were bound by the U.P. Cotton Cloth Piece Goods (Future and Option) Prohibition Order, 1943 and the U.P. Cotton Cloth and Yarn Control Order, 1943, that the time of the delivery was of the essence of the contract, that the delivery was to be made at Mathura and not at the Mills and that the plaintiffs only supplied 12 bales of cloth of Kalol Mills within the stipulated period and failed to supply the rest of the bales of cloth according to the contract. The defendants further alleged that the plaintiffs also failed to supply goods regarding contract No. 9/132 (Ambika Mills) and they themselves broke the contract. The plaintiffs having themselves broken the contract, were not entitled to any relief. They also pleaded that the rates fixed by the Government Notifications were binding on the parties and whether the contract had been entered into before or after such fixation of rates, it was applicable to the deliveries made after the Notifications were issued. They also pleaded that the alleged auction by the plaintiffs was fictitious and was not binding upon the defendants.;