Time for payment is of the essence in specialized manufacturing contracts with high expenditure. However, partial performance after a payment default waives the right to rescind, treating the contract as subsisting until a final breach occurs.

Sir John Edge :-

The suit in which this appeal has arisen was brought on the original civil jurisdiction side of the High Court at Calcutta on the 27th August, 1918, by His Highness the then Thakur Sahib of Morvi against Burn and Com pany, Limited, to recover damages for the alleged conversion of 42 railway wagons, and for an alleged breach of contract to make and deliver the same wagons. The property in the wagons had never vested in His Highness of Morvi; who had never been, constructively or other wise, in possession of them. The claim for conversion has been dropped. The original plaintiff died and his son, who succeeded him as the Thakur Sahib of Morvi, was on the 19th July, 1922, brought on the record as the plaintiff. The original plaintiff, was, and his succes sor) the present plaintiff, is, the proprietor of the Morvi State Railway.

The contract was made between His Highness the then Thakur Sahib of Morvi through the Manager of the Morvi State Railway, his agent, and Burn and Com pany, Limited, of Howrah and Calcutta, in British India. The contract was for the manufacture of 50 railway wagons by the defendant company at the Company's works at Howrah and their delivery to the Morvi State Railway upon certain terms which will be later more fully mentioned. The contract was made by correspondence between the manager of the Morvi State Railway, who lived at Morvi, and the defendant company at Calcutta. The suit has throughout been treated as a suit upon a contract to which the Indian Contract Act, 1872 (Act IX of 1872) applies.

The correspondence began on the 29th October, 1914, by a letter to the defen dant company from the manager of the Morvi State Railway, asking the company to quote rates for 25 covered wagons and 25 open wagons as per specifications and drawings which he enclosed. The specifi cations showed that the wagons were to be metre gauge railway wagons. Between the 29th October, 1914 and the 23rd January, 1915, several letters passed between His Highness's agent and the defendant company, the result of which was the contract in suit. By the contract which was agreed upon the defendant company agreed to manufacture and to deliver to the Morvi State Railway, upon terms as to payment which will be men tioned, 25 covered and 25 open goods wagons, 50 railway wagons in all, at the price of Rs. 1,825 for each covered wagon and at the price of Rs. 1,875 for each open wagon, the wagons to be in accordance with certain specifications and drawings, and the 50 wagons to be delivered in six months from the date of the receipt by the defendant company of an order for the wagons. The terms of payment were that His Highness of Morvi should pay to the defendant Company one-third of the contract price on the order for the wagons being given, and the one third of the price when the under-frames of the wagons should be wheeled, and the remaining one-third when the wagons should be deli vered. One-third of the total contract price amounted to Rs. 30,833. The con tract contained no provision that the contract time for the delivery of the wagons should be extended in case the defendant company should be delayed in completing the wagons owing to the war or any other cause beyond the company's control.

On the 23rd January, 1915, His High ness of Morvi, through his agent, sent to the defendant company his final order for the 50 wagons and said "we have no more drawings to send than we have already sent. From the specifications and drawing sent, you will kindly prepare working drawings in detail and send them for our approval."

After the receipt by the defendant com pany of the order of the 23rd January, 1915, for the wagons, the defendant com pany was much delayed in performing the contract by the difficulties, owing to the war, of obtaining some of the neces sary parts of the wagons and the wagons were not ready for delivery at the time specified by the contract. His Highness of Morvi did not at any time exercise such right, if any, as