BISMI ABDULLAH AND SONS Vs. REGIONAL MANAGER F C I TRIVANDRUM

JUDGEMENT

(1.) Defendant in O. S. No. 61 of 1977 on the file of Subordinate Judge's Court, Cochin is the appellant in this appeal. The suit was one for recovery of a sum of Rs. 83,405 08 as damages on account of breach of contract for the sale of certain quantity of rice. According to plaintiff the defendant contracted to purchase rice worth Rs. 3,44,786.35 that the defendant committed breach of that contract that the said quantity of rice could fetch only Rs. 2,74,649.38 on resale that on account of the above breach and resale they suffered a loss of Rs. 70,489.08 and that they are entitled to storage charges amounting to Rs. 11,915.10 for the 2942 bags of rice from 8-11-1975 upto 22-3-1976. The learned Subordinate Judge granted a decree to the plaintiffs allowing them to realise a sum of Rs. 31,522.48 together with interest @ 6% per annum from the date of suit from the defendant with proportionate costs. Defendant challenges the said decree in this appeal.

(2.) The material averments made by the plaintiffs in the plaint which are germane for the decision of this appeal are as follows: Plaintiffs invited tenders on 8-10-1975 for the disposal of broken rice stocked in their godowns at Cochin. Defendant among others submitted tender on 22-10-1975 As per the condition of the tender which was accepted by the defendant he has to remit the entire price together with sales tax thereon within 7 days of the issue of confirmation of acceptance of tender by the first plaintiff. It was further agreed that on the failure of the defendant to make the aforesaid payment, the plaintiff will be free to forfeit the security deposit and resell the stock at the risk and cost of the defendant. The plaintiff while accepting the tender of the defendant issued a registered letter on 31-10-1975 requiring the defendant to remit the costs of the goods and sales tax thereon and to lift the stock in terms of the tender. The defendant failed to lift the goods within the said time on paying the price agreed upon. On 12-11-1973 the plaintiff sent a reminder requesting the defendant to lift the stock at least by 18-11-1975 failing which it was stated that the plaintiff would be constrained to retender the goods at the risk and cost of the defendant. The defendant did not comply with that request. On 17-11-1975 defendant wrote a letter stating that the rice was of substandard quality. The plaintiff on 19-11-1975 replied stating that they had tendered the rice only after satisfying themselves about the quality and requested the defendant once again to pay the price and lift the stock. The plaintiff also made it clear that if the stocks are not lifted before 25-11-1975 the same would be retendered at the defendant's risk and cost. The selfsame article was later sold to M/s. Meghjee Malsee and Sons. Defendant was carrying on correspondence putting forth untenable grounds to avoid their legal responsibility. After few correspondence, on 7-2-1976 the defendant stated that they are not bound to lift the stock at the rate quoted three months back. The delay of three months was solely caused on account of the laches of the defendant. On the defendant's breach of the agreement the plaintiffs called for fresh tender on 12-3-1976 and 13-3-1976. Five persons put in tenders on 22-3-1976. The amounts offered were very low and so they were not accepted. The offer submitted by M/s. Meghjee Malsee and Sons, Cochin for the purchase at Rs. 107/- per lot was accepted on 30-3-1976 as this would considerably reduce the loss. Hence the suit for the amount as stated earlier.

(3.) The defendant contested the suit by filing a written statement raising inter the alia following contentions, Defendant did not subscribe to the terms and conditions appended to the tender notice. The tender was not accompanied by the security deposit of 10% of the value of goods as required by the tender notice. There was no proper or valid acceptance of the tender. The very object of the tender was unlawful as it turned out that the plaintiffs wanted to sell broken rice which was unfit for human consumption. The refusal by the plaintiffs to issue warranty disclosed their knowledge and connivance that the very sale was of a prohibited category of goods. Plaintiffs acted in contravention of the provision of the Prevention of Food Adulteration Act, The rice for which the defendant had sent the tender and which was subsequently sold to M/S. Meghjee Malsee and Sons was confiscated by the Government Authorities and the purchasers were prosecuted for violation of the provisions of Prevention of Food Adulteration Act. In spite of the specific time limit fixed in the tender for performance of the agreement, the plaintiffs unilaterally went on extending the time limit. That act of the plaintiff will exonerate the defendant from all liabilities. The breach of the contract was committed by the plaintiffs and not by the defendant. The defendant was not liable to take delivery of the broken rice on account of the refusal by the plaintiffs to give warranty regarding the quality and fitness of the rice. The defendant had not inspected the rice as alleged by the plaintiffs. The correspondence between the parties brings out non conclusion of the contract, the void or voidable nature of contract and the vain exercises by the plaintiffs for novation or alteration of contract. The plaintiffs are not entitled to forfeit or retain the earnest money deposit of Rs. 1000/- made by the defendant. That amount is to be refunded. The plaintiff is not entitled to claim Rs. 70,489.98 as their loss on account of the defendant's breach of contract. Nor are they entitled to realise Rs. 11,915.10 towards storage charges from this defendant. The plaintiffs are not entitled to any relief in the suit. The suit has only to be dismissed.