SHARMA, J. - (1.) THIS is the defendants appeal, and arises out of a suit for the recovery of Rs. 10,200/- on account of the balance of the price of a 26 H. P. engine and 3 expellers, Rs. 221/- interest, and Rs. 20/- rent, totalling Rs. 10,441/-, or in the alternative for Rs. 6,200/- on account of damages for breach of contract.
(2.) THE plaintiff Bakhtawarlal's case is that the defendant entered into a contract on Baishakh Sudi 12, Samvat 2001, corresponding to 5th May, 1944 at Sambhar, with the plaintiff for the purchase of a 26 H. P. engine with a tank and all its equipments for Rs. 9,000/- and 3 expellers for Rs. 2,000/ -. Rs. 800/-were paid in advance, and it was agreed that the balance would be paid within 15 or 30 days, and the delivery of the purchased goods would then be taken. THE agreement was reduced into writing in two parts - one signed by Sugan Chand, defendant No. 3 on behalf of defendants Nos. 1 and 2, Govar-dhan and Amarchand, which was delivered to the plaintiff, and the other signed by the plaintiff, which was delivered to the defendant. After the expiry of 30 days, the defendants did not turn up to make payment of the balance of the price, and take delivery of the engine and the oil expellers. THE plaintiff sent reminders to the defendants for payment of the balance, and for taking delivery of the engine and the oil expellers, so that a mechanic might be sent to install the engine at the defendant's place and put it in a working order. THE defendants promised to pay the balance within two to four days, but it was not done, although many more reminders were sent thereafter. Finally. , a notice dated 2nd August, 1944 was served on the defendants, but they did not send any reply to it. It was alleged that the plaintiff was always prepared to perform his part of the contract, but as the defendants, despite many reminders and notice, did not make payment, the suit had to be filed. THE plaintiff claimed in the first instance a sum of Rs. 10,441/- as follows: - (1) Rs. 10,200/- balance of the price of the engine and the expellers; (2) Rs. 221/- interest at the rate of 6% p. a. till the date of the institution of the suit; and (3) Rs. 20/- rent @ Rs. 5/- p. m. alleged to have been paid for the premises in which the engine and the expellers were kept. Rs. 10,441/- Alternatively, he claimed Rs. 7,000/- as damages, and crediting the sum of Rs. 800/- paid in advance, he prayed for the recovery of Rs. 6,200/- on that account. From the array of defendants, Amarchand's name was subsequently struck off, and the suit proceeded only against Goverdhanlal and Suganchand. The defendant, Goverdhan, denied that any contract was entered into between the plaintiff and the defendant on Baisahakh Sudi 12, Svt. 2001, but pleaded that there was a contract between them on Baisakh Sudi 14 of the same year (22nd April, 1944) for the purchase of a 26 H. P. engine with a tank and all its accessories for Rs. 9,000/- and there expellers for Rs. 2,000/- by the defendants, and that Rs. 800/- were paid as advance out of the price settled. It was further pleaded that the plaintiff had agreed that he would send the goods at Kuchaman Road, and get them installed and put them in working order through his mechanic, and that if any part was lacking, he would supply it at his own cost, and would give the delivery within 15 to 30 days at Nawa, and then take the balance of the price. It was denied that the delivery was agreed to be taken at Sambhar. It was also pleaded that the defendant was always prepared to abide by the agreement, and insisted on the plaintiff to send the engine to Kuchaman Road and put it in working order there and then take the balance of the price, but the plaintiff said that the engine was not in working order and spare part were ordered from outside, as they were not locally available, and on their arrival the engine would be sent to Kucha-man Road and installed as per agreement, and after giving the delivery the balance of the price would be taken. It was denied that any reminders were sent by the plaintiff. It was submitted that the engine was not in working order either at the time the contract was made or even after the suit was filed, and it was the plaintiff who failed to deliver the engine and the expellers as agreed, and was responsible for the breach of the contract. It was averred that the suit was filed only as a counterblast when the defendant asked for the delivery of the engine and the expellers as per terms of the contract. Further, it was pleaded that the court at Sambhar had no jurisdiction to entertain the suit, and that a suit had already been filed by the defendants against the plaintiff in District Court No. 2 at Jodhpur for Rs. 700/- as damages plus Rs. 800/- paid in advance by them. Sugan Chand, defendant No. 3, supported the case of Goverdhan defendant. He also pleaded that he was unnecessarily made a party to the suit, as he had no personal liability to pay any amount, and that the contract was on behalf of Goverdhan Amarchand. The following issues were framed by the trial court on the pleadings of the parties: - "1. Whether the contract for the sale of the engine and the expellers in dispute took place between the plaintiff on one side and Sugan Chand defendant on the other on Baisakh Sudi 12, Samvat 2001. and whether the agreement Ex. 1 was executed and Sugan Chand had authority on behalf of the firm Goverdhan Amar Chand to enter into the contract in question ? 2. Whether the plaintiff received Rs. 800/- as an advance on Baisakh Sudi 5, St. 2001, through Sugan Chand defendant on behalf of the firm Goverdhan Amar Chand, and if so, what is its effect ? 3. Whether the plaintiff is entitled to recover the balance of Rs. 10,200/-with Rs. 221/- interest and Rs. 20/- rent for the premises in which the engine was kept, or any other amount, and if so, from which of the defendants ? 4. In case the defendants do not take delivery of the engine and the expellers, is the plaintiff entitled to recover Rs. 6,200/- on account of damages from the defendants? 5. Whether the contract was made personally by Goverdhan defendant No. 1 on Baishakh Sudi 14, Samvat 2001, at Sambhar with the plaintiff who had executed the agreement in favour of defendant No. 1, and whether that agreement was lost from the possession of defendant No. 1 of which Ex. A. 2 is a copy, and whether the defendants were entitled to produce secondary evidence in respect thereof? 6. Whether the defendant No. 1 had entered into an agreement with the plaintiff that the latter would fit the engine and the expellers at Kuchaman at his own cost, and after he had given the delivery of the goods in question in working order, the plaintiff would get the balance of the price? What relief, if any, the plaintiff is entitled to? 7. The learned District Judge, Sambhar-Shamlat, who tried the case, gave his findings in favour of the plaintiff on all the issues excepting that it was held that the plaintiff was not entitled to the primary relief of the recovery of the balance of the price of the goods sold and interest and, rent, but was only entitled to the recovery of Rs. 6,200/- on account of damages for breach of the contract, after deducting Rs. 800/- paid in advance. A decree was, therefore, passed in favour of the plaintiff for the recovery of Rs. 6,200/- with costs and future interest at the rate of 6-1/4 p. a. Against this judgment and decree the defendant Goverdhan has come in appeal. Mr. G. L. Agarwal, appearing on behalf of the appellant did not seriously challenge the findings of the lower court so far as they related to the question of the breach of the contract. It may, therefore, be taken that the defendant was responsible for the breach of the contract, and we need not go into evidence on this point. The main contention of Mr. Agarwal was that in order to assess the damages for the breach of the contract, the price of the property in dispute on the date of the breach of the contract ought to have been taken into account, and not the price which prevailed during the pendency of the suit. It was argued that no evidence worth the name was produced on behalf of the plaintiff to prove what the price of the property in dispute was at the time the breach of contract took place. The entire evidence is directed to show that the price of the property in dispute at the time the evidence of the witnesses was recorded was far below the price the defendant had contracted to pay. It was argued that the plaintiff having failed to prove what was the price of the property in dispute at the time of the breach of the contract, no decree ought to have been given to him for the recovery of any damages. On behalf of the plaintiff respondent it was argued that the plaintiff could not sell the property, because the defendant could have demanded delivery of it at any time. Even in the suit the plaintiff has prayed primarily that he should be awarded a decree for the contracted price of the property, and in giving this decree the court would very well have ordered the plaintiff to deliver the property to the defendant. It was further argued that even if the plaintiff had failed to prove damages for breach of the contract, he was entitled to have a decree for the price which the defendant had contracted to pay for the property, and by virtue of Order XLI, Rule 33, of the Code of Civil Procedure, this court could substitute such a decree for the decree which had been awarded by the lower court. From the arguments of learned counsel for both the parties the following points emerge for determination: - (1) Whether the plaintiff has been able to prove that he is entitled to Rs. 7000/- as damages for breach of the contract? (2) In case, the answer to point No. 1 is in the negative, is the plaintiff entitled to recover the balance of the price of the property sold? (3) If the answer to point No. 2 is in the affirmative, can the plaintiff get a decree for the balance of the price, although he did not file any appeal against that part of the lower court's decree by which this relief was refused to him? Taking up first point No. 1, it can be said at once that the law is clear that for the measure of damages, the price which the property in dispute could fetch on the date of the breach of contract ought to be taken into consideration,, and not the price which it could fetch long after the said date. For this purpose it will be necessary to look into Ex. 1, which evidences the contract between the parties. It would be profitable to give a full translation of it in English, and it is given below: - "compliments to Bhai Gordhan Amarchand of village Nawa from Bakhta-war Lal Tat of Sambhar. Whereas one engine of 26 H. P. with a tank and other accessories has been sold by me to you for Rs. 9000/-, out of that sum you have already paid Rs. 800/-, and after taking the balance, the engine will be fitted. Our driver will go and fit the engine, and you will have to pay all his expenses. If there is shafting, it will also be delivered to you, otherwise not. As regards the remaining parts, whichever is missing would be supplied by us at our cost and the engine would be delivered to you in a working order. Baishakh Sudi 13, Svt. 2001. Engine would be taken delivery of in 15 days or at the most in 30 days. Sd/- Bakhtawar Lal Tak. Three expellers in complete condition have been sold to you for Rs. 2000/-, which would be delivered to you on taking its price. Sd/- Bakhtawar Lal Sd/- Gordhan Amarchand in the hand of Sugan Chand. " It may be mentioned that the defendant has filed a copy of Ex. A-2 which is said to be a true copy of the contract actually arrived at. The contents of the original Ex. A-1 produced by the plaintiff with this difference only that instead of Baishakh Sudi 12, the date is given as Baishakh Sudi 14, and in the clause relating to delivery between 15 or 30 days the word davanga finds place in place of the word davanga, that is, in place of "delivery will be taken", the words "delivery will be given" find place in this copy, Ex. A. 2. So far, therefore, as the terms of contract are concerned, there is no difference between the two documents. The delivery was to be given within 15 to 30 days from the date of the contract. In other words the 30th day was the last day upto which the delivery was to be taken and the price was to be paid. The date of the breach, therefore, is the last date on which, according to the contract, price ought to have been paid and delivery ought to have been taken. The lower court has held on very good grounds that the plaintiff's version is correct that the contract was made on Baishakh Sudi 12, Svt. 2001. The last date, therefore, on which delivery ought to have been taken and price ought to have been paid was Jeth Sudi 12, Svt. 2001, which corresponds to 3rd June, 1944. Now according to sec. 30 of the Indian Sales of Goods Act, where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may sue him for damages for non-acceptance. The plaintiff was. therefore, clearly entitled to file a suit for breach of contract when the defendant did not accept delivery of the goods and pay their price within the time prescribed. The question is as to which date should be taken into account for the purpose of assessing the damages. Sec. 56 of the Indian Sale of Goods Act corresponds to sub-sec. (1) of sec. 50 of the English Act, which runs as follows : - "where the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action against him for damages for non-acceptance. " Sec. 56 of the Indian Sale of Goods Act does not provided as to how the damages are to be measured. Sec. 50 of the English Act, however, lays down the principle for the measure of damages also in sub-secs. (2) and (3), which are as follows: - " (2) The measure of damages is the estimated loss directly and mutually resulting in the ordinary course of events from the buyer's breach of contract. (3) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the contract price and the market or current price at the time or times or when the goods ought to have been accepted, or if no time was fixed for acceptance then at the time of the refusal to accept. " The damages in this case are, therefore, to be measured in accordance with the principles laid down in sec. 73 of the Indian Contract Act, which is as follows: - "73. When a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. In estimating the loss or damage arising from a breach of contract the means which existed of remedying inconvenience caused by the non-performance of the contract must be taken into account. " It will be seen that the English Act by sub-sec. (3) of sec. 50 clearly says that when there is an available market for the goods sold, the measure of damages is prima facie to be ascertained by the difference between the contract price and the market price or current price at the time or times when the goods ought to have been accepted. It has therefore, been held by the English courts that in assessing damages the market or current price at the time of the breach of contract should be taken into account. In Bodocanachi, Sons & Co. vs. Milburn Brothers (1) ( (1887) 18 Q. B. D. 67.) the plaintiffs chartered the defendant's ship for carriage of a cargo of cotton seed from Alexandria to the United Kingdom. A cargo was shipped under the charter-party at Alexandria by and on account of the charterers, and a bill of lading was given containing an exception, which was not in the charter-party, protecting the shipowners from liability for damages arising from any act, neglect, or default of the pilot master, or mariners. The cargo was lost by the negligence of the master. In an action for non-delivery of the cargo, it was held that in estimating the damages the market value of the goods at the port of discharge at the time when the cargo should have arrived must be looked to, and not the price at which the plaintiffs had sold the cargo in anticipation of its arrival. The judgment in the above case was followed by the House of Lords in Williams Brothers vs. Ed. T. Agius Ltd. (2) (L. R. 1914 Appeal Cases 510. ). In that case the defendant had contracted to sell to the plaintiff a cargo of coal to be shipped in November, 1911, at the price of 16s. 3d. per ton c. i. f. Genoa or certain other specified ports in Italy, and failed to deliver the cargo. The contract contained an arbitration clause in respect of all matters arising out of the contract. In October, 1911, the plaintiff agreed to sell to a certain merchant of Turin a cargo of coal of the same amount and description at 19s. per ton c. i. f. Genoa. It November the merchant of Turin sold to the defendant the cargo he had bought from the plaintiff at 20s. per ton, and ceded to the defendant all his rights and liabilities under his contract with the plaintiff. At the date of the dafendant's breach of contract the market price of the coal was 23s. 6d. per ton. A dis-pute arose between the plaintiff and the defendant whether the measure of damages in respect of the non-delivery of the cargo was the difference between the contract price of 16s. 3d. per ton and the market price at time of the breach or the difference between the contract price and the price at which the plaintiff sold to the merchant of Turin. The matter was referred to arbitration under the terms of contract. The arbitration found that the plaintiff intended to resell to the merchant of Turin the cargo due to him from the defendant, and appropriated that cargo to his contract with the merchant of Turin, and he gave his award in the form of a special case. It was held that the arbitrator had no jurisdiction to deal with matters outside the contract, and the true measure of damages was the difference between the contract price and the market price at the time of the breach.
(3.) IN C. Sharpe & Co. , Ltd. vs. Nosawa & Co. (1) (L. R. 1917 King's Bench Division 814.) it was held that the damages should be measured by the difference between the contract price and the market price on the day when the goods ought to have been delivered within the meaning of sec. 51 (3) of the English Act. IN that case it was also held that the delivery intended by the contract was a constructive delivery by tender of the shipping documents as soon as possible after shipment, and that the said documents if sent forward with reasonable despatch would have reached London on July 21, and July 21 was, therefore, the date, the price prevailing on which should be taken into account, and not the date when the goods actually arrived on August 30. In Melachrino and another vs. Nickoll and Knight (2) ( (1920) (1) K. B. D. 695.) it was held that: - "where there is an anticipatory breath by a seller of a contract to deliver at a fixed date goods for which there is a market, the true rule as to the measure of damages is that the buyer, without buying against the seller, may bring his action at once, but if he does so his damages must assessed with reference to the market price of the goods at the lime when they ought to have been delivered under the contract" The English cases are, therefore, unanimous that in measuring damages the price prevailing on the date of the breach should be taken into account whether the suit for damages is brought after such date or in the case of anticipatory breach of contract before such date. Of course it would be difficult to find out the price on the date fixed for delivery in the case of an anticipatory breach of contract, but even in such a case, in the last cited case it has been held that if the action comes on for trial before the contractual date for delivery has arrived, the court must arrive at that price as best as it can. As has been said above in sec. 73 of the Contract Act which provides for the measure of damages for breach of contract the language of sub-sec. (2) and (3) of sec. 50 of the English Act has not been incorporated. In the said section the principle laid down in the case of Hadley vs. Bexendale (3) ( (1854) 9 Ex. 341) has been adopted. Yet by the courts in India as well as by the Privy Council it has been held that ordinarily the measure of damages will be the price prevailing on the date of the breach of contract. In the case of Messrs Mohan Bhasin Share Agency vs. Khuda Baksh (4) (AIR 1939 Lahore 260.) the contract was for the sale of 200 shares in Heinze Tin Limited, and the price ought to have been paid at the latest a week after the 29th June or 1st July, 1937. When the price was not paid and delivery not taken on 29th June, the plaintiff sent a notice dated 29th June, 1937, saying that if the defendant failed to take delivery of the shares within a week, the same would be sold thereafter at his risk and account. The shares, were, however, not resold till the 6th of September, 1937. It was held that account would not be taken of the price at which the shares were resold on 6th September, 1937, but the price that could be taken into account could be the market price at the date of breach or at the date of sale effected as soon as reasonably possible after the breach, and that the presumption in the circumstances of the case was that the sellers were holding the shares in the hope of a rise, and hence the speculation was of the sellers and not of the buyer. In the case of Ramalingam Chettiyar vs. Gokuldas Madavji & Co. (5) (AIR 1926 Mad. 1021.), it was held that - "when there is an available market for the goods the difference between the contract price and the market price on the date of the breach is the damages prima facie payable, and when the plaintiff claims damages on any other special basis he must prove his case. " In the case of Mackertich vs. Nobo Coomar Ray (1) (ILR XXX Cal. , 477.), it was held that - "if a vendor has any specific period of time allowed to him to deliver goods, and before the time has elapsed gives notice to the purchaser that he will be unable to complete the delivery, the purchaser not rescinding the contract, the measure of damages is the difference between the contract price and the price of the subject-matter on the last day of the period within which the delivery ought to have been made. " In the case of A. K. A. S. Jamal vs. Moola Dawood Sons & Co. (2) (AIR 1915 P. C. , 48.), it was held that - "a plaintiff who sues for damages for breach of contract of sale owes the duty of taking all reasonable steps to mitigate the loss consequent upon the breach and cannot claim as damages any sum which is due to his own neglect. But the loss to be ascertained is the loss at the date of the breach. " In the case of Keshavlal Brothers & Co. vs. Diwan & Co. (3) (AIR 1923 P. C. , 105.), the respondent company entered into contract with the appellant company to supply 200 tons of coal monthly from November to April, 1917. The respondent company failed to supply the coal as agreed upon, and the appellant company sued for damages for breach of contract assessing the damages at the difference between the agreed price and the market price. The first court gave a decree assessing the damages at the difference between the agreed price and the market price on the date of breach. The High Court, however, reversed it, but their Lordships of the Privy Council held that the principle according to which the damages were awarded by the first court was the correct principle, and, therefore, allowed the appeal and reversing the decree of the High Court restored that of the first court. There is thus abundant authority both of the English courts as well as of the courts in India on the point that ordinarily damages should be assessed with reference to the market or current price prevailing on date the contract was broken. Coming to the present case, we find that the contract was broken at the latest on Jeth Sudi 12, Svt. 2001 (3rd June, 1944), or at the most a day later. Ordinarily, therefore, the price which the goods in dispute could have fetched at that time ought to have been taken into account for measuring damages. In the present case there is absolutely no evidence to show that there was no available market for the property in dispute at the time of the breach of the contract. There is also no evidence whatsoever on the record to show what was the price the property in dispute could have fetched on Jeth Sudi 12, Svt. 2001, or within a reasonable time thereafter. All the evidence that has been produced by the plaintiff is directed to prove what price the property in dispute could fetch long after, at the time the evidence was recorded in this case. The evidence was recorded from March, 1948, to Dec, 1948. The witnesses who were produced to prove the price of the property in dispute were Nizamuddin who was examined on 23rd November, 1948, and Bakhtawarlal, who was examined on 7th December, 1948. Nizamuddin says - "its price to-day must be at the most Rs. 3000/- or Rs. 3500/. Now-a-days the price is comparatively lower than before and as oil is also not available, the buyers are also few and the condition on account of this engine remaining idle, its price has gone down and its condition has deteriorated. " The witness, therefore, gives the price near about the month of November, 1948, and also says that before that the price was higher, and that this price due to the condition of the engine having deteriorated. In his evidence Bakhtawar Lal says, "now the price of the engine is about Rs. 2000/- or Rs. 2500/ -. " This witness also, therefore, gives the price somewhere in the month or December. 1948. The lower court was wrong in taking this price into account in fixing damages. There is, therefore, absolutely no evidence on which the court can base its decision in the matter of damages. The plaintiff has hopelessly failed to prove what was the price the property could fetch at the time of breach of the contract, and therefore, it was not possible to assess any damages. The relief for damages can not therefore, be given. Even Mr. D. M. Bhandari could not seriously press that the price prevailing at the time the evidence was recorded could be taken into account for awarding damages. He argued that the plaintiff could not sell the property as in his opinion it had become the property of the buyer and the latter could claim it from him. This contention is antenable. After the breach of the contract the plaintiff had become entitled to claim damages and he was authorised to sell it at the most after a short notice. The defendant had no right to claim the property from him in such a case. It was the plaintiff's duty to mitigate damages as much as he could and he was not justified in keeping the property long after the breach had occurred and allow it to deteriorate till its price became very much reduced. Coming to point No. 2, Mr. Bhandari argued that the primary relief of the plaintiff was for recovery of the balance of price, and therefore, if the court thought that damages could not be properly assessed, the plaintiff should be given his primary relief. For this he based his reliance upon sec. 55 of the Sale of Goods Act, which runs as follows - (1) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refusal to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods. (2) Where under a contract of sale the price is payable on a certain day irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract. " Sub-sec. (1) of sec. 55 applies when under a contract of sale the property in the goods has passed to the buyer, and sub-sec. (2) applies when, although the property in the goods has not passed to the buyer under the contract, yet the price is payable on a certain day irrespective of delivery. It becomes necessary to examine the contract between the parties in order to find out whether under the contract the property in the goods had passed to the buyer, or the price was payable on a certain day irrespective of delivery. The contract says that delivery will be given (or taken) within 15 to 30 days from the date of contract, and that the driver of the plaintiff himself will go and install the engine at the defendants' place, excepting shifting, if lacking, would be supplied by him at his own cost. According to sec. 21 of the Sale of Goods Act, where there in a contract for the sale of specific goods and the seller is bound to do something to the goods for the purpose of putting them into a deliverable state, the property does not pass until such thing is done and the buyer has notice thereof. In the present case it cannot be said that the seller had nothing to do to the goods for the purpose of putting them in a deliverable state. The seller was required under the terms of the contract to supply all the parts which were missing at his own cost and send his driver to the buyer's place, to install the engine and put it in working order. Unless these things were done, it could not be said that the property was in a deliverable state. It cannot, therefore, be said that the property in the goods had passed to the buyer before the breach of contract took place. Coming to sub-sec. (2) of sec. 55, in order that the plaintiff might be found entitled to the recovery of the price, it should be payable on a certain day, irrespective of delivery. According to the terms of the contract, the balance of price was not to be paid on a certain day irrespective of delivery. Delivery and the payment of price were to go together. The plaintiff was to send his driver to install the engine, and put it in working order at the most within 30 days of the date of contract, and the defendant was to pay the balance of the price. It cannot, therefore, be said that under the terms of the contract the price was payable on a certain day irrespective of delivery. The plaintiff was, therefore, not entitled for recovery of the balance of the price, and the learned court of first instance was perfectly justified in not decreeing his suit in that respect. In view of the answer to point No. 2, it is not necessary to give any finding on this point. ;