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1928 Supreme(SC) 10
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT SUMMER, LOUD ATKINSON, LORD SINHA, SIR JOHN WALLIS, AND SIR LANCELOT SANDERSON.
CHUNNA MAL-RAM NATH, FIRM - Appellant
Versus
MOOL CHAND-RAM BHAGAT, FIRM (DEFENDANTS) - Respondents
On Appeal from the High Court at Lahore.
Decided On : February 13, 1928.
Solicitors for appellants :T. L. Wilson & Co. Solicitors for respondents: Ranken Ford & Chester.
Section 63 of the Indian Contract Act allows a promisee to unilaterally dispense with the performance of a promise without requiring a separate agreement or consideration. A party who dispenses with performance cannot later claim damages for the breach of that promise.
Headnote:(A) Indian Contract Act, 1872 - Sections 39 and 63 - Dispensation of performance - When a party to a contract repeatedly and emphatically refuses to accept performance of a promise and declares the contract cancelled, such action constitutes a dispensation of performance under Section 63 - A party who wholly dispenses with the performance of a promise cannot subsequently recover damages for the breach of that same promise.
(B) Section 63, Indian Contract Act, 1872 - Requirement of agreement - The power of a promisee to dispense with or remit performance under Section 63 does not require a separate agreement or contract between the parties, nor does it require consideration - The language of the section is clear and should not be enlarged by implications of foreign legal doctrines.
Facts of the case:
A contract was entered into for the sale of goods to be delivered in specific packing. Due to a government prohibition on such packing, the seller offered to deliver the goods in bales. The buyer repeatedly refused to accept the goods in bales and explicitly stated that the contract was cancelled. The buyer subsequently filed a suit for damages for non-delivery.
Findings of Court:
The buyer's repeated repudiation of the obligation to accept the goods in bales amounted to a dispensation of the seller's performance under the law. Consequently, the buyer is not entitled to recover damages for the non-delivery of goods they had expressly dispensed with.
Issues: Whether the buyer's refusal to accept goods in bales and subsequent declaration of cancellation constituted a dispensation of performance under Section 63 of the Indian Contract Act, and whether such dispensation requires a separate agreement to be legally effective.
Ratio Decidendi: Under Section 63 of the Indian Contract Act, a promisee may dispense with the performance of the proposal made to them. This dispensation is unilateral and does not require a separate agreement or consideration. Once a party has wholly dispensed with the performance of a promise, they lose the right to claim damages for the breach of that promise.
Result: Appeal dismissed with costs.
Appeal (No. 80 of 1927) from a decree of the High Court (January 5, 1925) reversing a decree of the
Senior Subordinate Judge of Delhi.
The appellants brought a suit against the respondents in May, 1920, claiming damages for breach of
contract in failing to deliver goods under a contract of sale made in 1916.
The facts of the case appear from the judgment of the Judicial Committee. The trial judge made a decree for Rs.47,737 damages.
4 Law Rep. 55 Ind. App. 154 ( 1927- 1928) C hunna Mal-Ram Nath, Firm V. Mool C hand-Ram Bhagat, Firm 15
Both parties appealed to the High Court, the defendants contending that they were under no liability, and the plaintiffs contending that the damages awarded were insufficient.
The defendants appeal was allowed by the High Court, and the suit dismissed. The learned judges (Harrison and Campbell JJ.) were of opinion that the plaintiffs were entitled to put an end to the contract under s. 29 of the Indian Contract Act, 1872, and had done so. They considered also that the suit was not maintainable having regard to s. 63,
1927. Nov. 29. De Gruyther K.C. and Wallach for the appellants.
Sir George Lowndes K.C. and Dube for the respondents.
[Reference was made to the Indian Contract Act, ss. 39, 56, 63 ; Bradley v. Newson Sons & Co. ([ 1919] A. C. 16.); and Abaji Sitaram Modak v. Trimbak Municipality . (( 1903) I. L, R. 28 B. 66.)]
1928. Feb. 13. The judgment of their Lordships was delivered by
LORD ATKINSON. This is an appeal from decrees of the High Court of Judicature at Lahore dated January 5, 1925, which reversed the decree of the Senior Subordinate Judge of Delhi dated January 14, 1924, and dismissed the suit of the plaintiff with costs.
The suit out of which this appeal has arisen was one claiming damages for the non-delivery by the respondents of certain goods which the latter had agreed to sell and the appellants had agreed to purchase.
The principal question for decision in the appeal is whether under the circumstances proved in the case the plaintiffs are entitled to recover damages from the respondents for the alleged breach of their contract for the sale and delivery of the aforesaid goods.
In the order of Court of the Subordinate Judge of Delhi dated August 9, 1921, it is stated that the respondents (the defendants) had presented for the second time an application to be at liberty to add a plea that the plaintiffs were not ready or willing to perform their part of the contract entered into between the parties, and apropos of this application the Court said " The real question in dispute is whether the plaintiff, in face of the correspondence, could claim damages, and could he consider the contract as subsisting.
These points are covered by the issues already framed by me. If I find that the contract was cancelled and the plaintiff could not claim damages, the point as to readiness and willingness would not arise. If it is held by me that the contract subsisted, the question, as to readiness and willingness, would not crop up. We have got letters sent by the defendant that he considered the contract as cancelled, and if I hold that he was not justified in considering the contract as cancelled, he had no locus standi to raise the plea as to the want of -readiness and willingness on the part of the plaintiff."
The material parts of the aforesaid contract, which was dated November 29, 1916, and is very long, ran as follows "We had purchased one hundred and fifty (150) cases of white shirting marked D.-l May to November, i.e., seven shipments, of the office of R. J. Wood, at 205. 2d. We have sold the same to you at a net profit of Re. 0-4-0 per piece. The patterns and the invoices of the goods will be given to you on receipt. You shall have to take delivery of the goods on payment of their price to the Bank. You shall have to remove the goods on compliance with the condition of the office of R. J.
4 Law Rep. 55 Ind. App. 154 ( 1927- 1928) C hunna Mal-Ram Nath, Firm V. Mool C hand-Ram Bha
