- (1.) THIS is a defendant's second appeal arising out of a suit for damages on account of the alleged breach of contract.
(2.) THE plaintiff-respondent No. 1 Brahm Dutt Bhargava carries on business in the town of Kishangarh, under the name and style 'shri Mahesh Metal Works'. THE plaintiff's case is that on 5-5 1956 the defendant-respondent No. 2 Dulichand as agent and on behalf of the appellant Punamchand, who carries on business at Ajmer under the name and style 'prakash Metal Works' made an agreement with the plaintiff for purchase of 20 to 25 pieces of brass cannons weighing about 200 mds. lying at Jaipur at the rate of Rs. 111/ per Md. THE original written agreement alleged to have been executed by Dulichand in favour of the plaintiff has been placed on the record and marked Ex 1. It is alleged by the plaintiff that he wrote a postcard to the appellant dated 1-5-1956 enquiring from him as to when he would reach Jaipur for taking delivery of the pieces of cannon, but having not received any reply the plaintiff sent a letter dated 14-5-1956 to the defendant by registered post to comply with the terms of the agreement Ex. 1. This letter was received by the defendant appellant on 19-5-1956 and by his letter dated 22-5-1956 posted on 25-5-1956 the defendant No. 1 disowned the agreement Ex. 1 alleged to have been entered by defendant No. 2 Dulichand on his behalf on the ground that Dulichand had no authority from him to make such a contract. THE original letter dated 22. 5. 1956 has also been placed on the record and marked Ex. A. 1. THE plaintiff's case is that even having received the reply Ex. A. 1. from the appellant, the plaintiff wrote another letter both to the appellant as well as Duli Chand calling upon them to take delivery of the pieces of cannon on payment of the price failing which the plaintiff would resell the goods and recover the loss to which he may be put by resale from both the defendants. Copies of these letters are Ex. 6 and Ex. 8. THE appellant, however, by his letter dated 27-6-56 (Ex. A. 2) reiterated the stand taken by him in his earlier letter dated 22-5-1959 (Ex. A. 1 ). THEreafter the plaintiff sold the pieces of cannon in question by public auction on 51-7-56 at the rate of Rs, 98/7/- per Md. as a result of which the plaintiff got Rs. 2537-69 paisa less than the price settled by the agreement Ex 1. To this amount he added Rs. 124-72 paise as charges for auction, Rs. 739-77 paisa on account of interest) at the rate of 6 per cent per annum and Rs. 1*42 paisa on account of notice expenses and thereby claimed a decree for Rs. 5403-60 paise against both the defendant by instituting the present suit in the Court of Civil Judge, Kishangarh on 1-5-1959. The defendant No. I Dulichand did not appear inspite of service and was therefore proceeded exparte. The appellant-defendant No. 1 Punam Chand resisted the plaintiff's suit and pleaded inter alia that defendant No. 2 Dulichand had no authority on his behalf to enter into the contract in dispute and consequently he was not bound by the same. He also denied the amount of damages and interest claimed by the plaintiff. After recording the evidence produced by the parties the learned Civil Judge, Kishangarh by his judgment dated 31-1-1962 decreed the plaintiff's suit against the defendant No, 1 for Rs. 3403-60 paisa but dismissed the same against defendant No. 2 Dulichand. Aggrieved by the judgment and decree of the trial court defendant No. 1 Punamchand filed appeal in the Court of District Judge, Ajmer, who confirmed the decree of the trial court by his judgment dated 12-9-1963. Consequently, the defen-hand has come in second appeal to this Court. Learned counsel for the appellant has urged the following three points in support of this appeal: (i) That no interest should have been awarded to the plaintiff on the amount of damages; (ii) that it is not established on the record that Dulichand had authority as the agent of the appellant to enter into the contract in question with the plaintiff, and i (iii) that in any case the plaintiff was not entitled to get damages for the alleged breach of contract on the basis of resale of the goods in question and could at best have claimed as damages the difference between the contract price and the market price of the goods in question on the date of the breach of contract which should be deemed to have taken place on the date when the appellant communicated repudiation of the contract to the plaintiff and since in the present case there is no evidence regarding the market rate of the cannon in question on such date, the suit is liable to be dismissed. I would take up the contentions raised by the learned counsel for the appellant in the same order in which they have been stated above. The first contention regarding award of interest should not detain me long. Nothing has been mentioned in the plaint with respect to the ground on which interest is claimed. The trial court has not given any reasons for awarding interest on the amount of damages claimed by the plaintiff and there is no discussion on the point by the first appellate court. The law is well settled that interest can be claimed either on the basis of contract or on the basis of trade and usage or under statute. The latest case on the point is; Union of India vs. W. P. Factories (l), and in this connection their Lordships were pleased to observe as follows: " In the absence of any usage or contract, express or implied or of any provision of law to justify the award of interest, it is not possible to award interest by way of damages. " In view of this latest pronouncement of their Lordships it is not necessary to refer to earlier cases on the point such as B. N. Railway vs. Ruttanji Ramji (2), Thawar Das vs. Union of India (3), Mahabir Prasad vs. Durga Datta (4), and Union of India vs. Rallia Ram (5 ). The present case also does not fall within those cases in which the courts of equity grant interest. In this view of the matter, interest as damages cannot be awarded, and the learned counsel for the plaintiff-respondent also candidly conceded that in view of the well settled position in law he could not support the decree passed by the courts below awarding interest to the plaintiff. The next point for consideration is whether the learned District Judge was right in holding that defendant No 2 Dulichand had authority to enter into the agreement in question for purchase of pieces of cannon on behalf of the plaintiff To prove his allegation in this respect the plaintiff examined himself as P. W. 1 (Brahm Dutta) and three more witnesses P. W. 2 Kedarnath, P. W. 3 Parmanand and P. W. 4 Mannalal, and also relied upon five documents Ex. 22 to Ex. 26. In rebuttal the defendant - appellant examined two witnesses : D. W. 1 Punamchand (defendant) and DW-2 Kanchan Lal. The trial court held that Dulichand had an implied authority to enter into the contract on behalf of defendant-appellant and the conduct of both the defendants was such that the plaintiff was led to believe that the defendant No. 2 had such authority. The District Judge came to the conclusion on the basis of the evidence of the plaintiff Brahm Dutta and his manager Kedarnath that it was proved that defendant No. 2 had an express authority to transact business on behalf of defendant No. 1. In support of his conclusion the learned District Judge also relied on the following circumstances: (a) That Dulichand was the first cousin of defendant No. 1 Punamchand. (b) That the appellant continued to employ Dulichand after the alleged contract Ex. 1. (c) That Dulichand had not been put into the witness-box. (d) That the letters and invoices Ex. 22, Ex. 24, Ex. 25 and Ex. 26 had been signed by Dulichand on behalf of defendant-appellant. Learned counsel for the appellant has urged that there is variance between the plaintiff's pleadings and proof on the point inasmuch as in paras Nos. 2 and 3 of the plaint it has been pleaded that Dulichand was the appellant's Munim and Manager and in that capacity used to represent the appellant and further that defendant-appellant had himself represented to the plaintiff that Dulichand had authority on his behalf to enter into contracts, whereas in the course of evidence the plaintiff has tried to prove that Dulichand had an implied authority to make contracts on behalf of the appellant. M therefore, not convinced that there is any variance between the plaintiff's pleadings and proof on this point. In para nuMber three of the plaint plaintiff has Made Mention of express authority having been given by the appellant to defendant No. 2i Dulichand to Make contracts on behalf of the forMer. In para No 2 the plaintiff has tried to set out a case of iMplied authority as it is Mentioned therein that Dulichand was working as MuniM and Manager of the appellant and used to act in that capacity. S. 186 of the Indian Contract Act provides that the authority of an agent May be express or iMplied, and the next sec. 187 defines express and iMplied authority as follows: " 187. An authority is said to be expressed, when it is given by words spoken or written. An authority is said to be iMplied when it is to be inferred froM the circuMstances of the case; and things spoken or written, or the ordinary course of dealing,, May be accounted circuMstances of the case. " P. W. 2 Kedarnath, who is the manager of the plaintiff has stated that Dulichand used to come to the plaintiff's office for entering into transactions and taking delivery of the goods in the capacity of the authorised representative of the defendant-appellant Punamchand. He has further stated that in the beginning Punamchand himself brought Dulichand at the plaintiff's place of business and told Punamchand that since he himself was very busy Dulichand would come and do all acts on his behalf with respect to the transactions and money dealings. The criticism of the learned counsel for the appellant with respect to this witness is that his evidence is very vague and he does not specifically mention that Punamchand had given authority to Dulichand to enter into transactions on his behalf and all that the witness stated was that Dulichand would carry out the clearance of the transactions"
(3.) LKSNS ds ysunsu fd;k djsxk** However, I find it difficult to accept the the interpretation put by the learned counsel on the statement of this witness and agree with the learned District Judge that Punamchand had represented to the plaintiff that Dulichand had his authority in the matter of entering into transactions on his behalf with the plaintiff and also making and receiving payments in connection with the same. P. W. 1 Brahm Dutt (plaintiff) has also stated that Dulichand used to come to him for entering into transactions with him on behalf of Punam Chand and that after the execution of Ex. 1 by Dulichand Punamchand and Duli Chand had both come to him together and had also entered into certain transactions. He has also stated that besides Ex. 1 Dulichand had entered into other transactions with him on behalf of the appellant, the details of which could be given by his manager. It may be pertinent here to point out that in the course of the cross-examination of Kedarnath, the manager of the plaintiff a question was put to Kedarnath whether there was any writing of Dulichand to evidence other transactions made by him on behalf of the plaintiff to which the witness replied in the affirmative and stated that he had not brought the same to the Court on that day. The appellant, however, did not pursue the matter and made no request to the Court to ask the witness to bring such writing and produce the same. PW-3 Parmanand, who is also an employee of the plaintiff has stated that Dulichand used come to the plaintiff's office for delivering and accepting goods and used to do all acts on behalf of the appellant. He has also corroborated the statement of Kedarnath to the effect that Punamchand had stated in his presence that Dulichand would be coming to the plaintiff delivering and accepting the goods as well as cheques, Hundies, Bills etc. , and would also do all other acts on his behalf. To the same effect, more or less, is the statement of PW. 4 Mannalal. Besides this oral evidence the learned District Judge has also placed reliance on the documents Ex. 22 to Ex. 26, which are letters and bills signed by Dulichand on behalf of the plaintiff which furnish a corroborative evidence of the fact that Dulichand had authority to act on behalf of the appellant. The learned District Judge has also drawn an adverse inference against the appellant for not producing Dulichand in evidence. This finding arrived at by the learned District Judge that Dulichand had authority to enter into the transaction in question on behalf of the appellant with the plaintiff cannot be said to be based on no evidence. The question whether this evidence was sufficient cannot be made ground of attack in second appeal, and taking into consideration the over all effect of the evidence produced by the parties I see no substantial reason to take a different view of the matter from the one taken by the learned District Judge. I am, therefore, in agreement with the finding arrived at by the learned District Judge that the plaintiff has succeeded in proving that Dulichand had authority on behalf of the appellant, to enter into the transaction in question and hereby over-rule the contention raised by the learned counsel for the appellant in this connection. This brings me to the question of award of damages. Learned counsel for the appellant has urged that the present case is governed by sac, 56 of the sale of Goods Act, 1930, which runs as follows: " 56, Where the buyer wrongfully neglects or refuses to accept and pay for goods, the seller may sue him for damages for non-acceptance. " His submission is that sec. 54 (2) of the Sale of Goods Act (which for shortness will be referred to as 'the Act') has no application to the facts and circumstances of the present case. It would, therefore, be proper to reproduce here sec. 54 (2) of the Act: " 54 (2) Where the goods are of a perishable nature, or where the unpaid seller who has exercised his right of lien or stoppage in transit gives notice to the buyer of his intention to sell, the unpaid seller may, if the buyer does not within a reasonable time pay or tender the price, re-sell the goods within a reasonable time and recover from the original buyer damages for any loss occasioned by his breach of contract, but the buyer shall not be entitled to any profit which may occur on the re-sale. If such notice is not given, the unpaid seller shall not be entitled to recover such damages and the buyer shall be entitled to the profit, if any, on the re-sale. " It is beyond dispute that if the present case falls within the four corners of sec. 54 (2) of the Act, a decree for damages, awarded by the lower courts being the difference between the contract price and the amount got by the plaintiff by resale of the goods, is proper. The question as to under what circumstances sec. 54 (2) would apply has been the subject matter of a decision by their Lordships of the Supreme Court in P. S. N. S. & Co. vs. Express Newspapers (6 ). Their Lordships observed. " The seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he had the right of resale under sec. 54 (2) of the Sale of Goods Act. The statutory power of resale under sec. 54 (2) arises if the property in the goods has passed to the buyer subject to the lien of the unpaid seller. Where the property in the goods has not passed to the buyer the seller has no right of resale under sec. 54 (2)," It is clear from the aforesaid observations of their Lordships that the seller has the right of resale only where the property in the goods has passed to the buyer. The question, therefore, which arises in the present case is whether the property in the pieces of cannon in question had passed to the appellant (buyer) before the resale? The contention of the learned counsel for the appellant is that the seller was bound to weigh so as to determine the quantity of brass contained in the pieces of cannon and also to ascertain the quantity of iron mixed up with the brass for the purpose of ascertaining the price, and therefore, the property in the goods did not pass to the buyer until such weighing was done. In support of his contention he has relied upon Sec. 22 of the Sale of Goods Act which reads as under: " 22. Where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to weigh, measure, test or to do some other act or thing with reference to the goods for the purpose of ascertaining the price, the property does not pass until such act or thing is done and the buyer has notice thereof. " On the other hand, learned counsel for the respondents submits that the property in the goods had passed to the buyer when the contract Ex. 1 was executed, as it is clear from the terms of the contract, that the intention of the parties was that the property in the goods would be transferred to the buyer immediately on execution of the contract. In this connection he has referred to S. 19 of the Act which lays down that where there is a contract for sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred, and for the purpose of ascertaining the intention of the parties regard shall be had to the term of the contract, the conduct of the parties and the circumstances of the case. In support of his contention learned counsel relied on Hoe Kim Seing vs. Maung Ba Chit (7), and Shoshi Mohun Pal Chowdhry vs. Nobo Krishto Poddar (8 ). Before I embark upon the consideration of the rival contentions of the learned counsel for the parties, I may refer to the terms of the contract (Ex. 1) in some detail, as according to the learned counsel for both the parties the answer to the problem depends upon the interpretation of the terms of the contract. ;