Back
Andhra Pradesh High Court
Judges : A.V.KRISHNA RAO, O.CHINNAPPA REDDY
Motilal Srinivasa Sarda - Appellant
Versus
Netha Co-operative Spinning Mills Ltd. - Respondent
Decided On : 08-06-74
SALE OF GOODS - REPUDIATION OF CONTRACT - SEVERABILITY - DAMAGES - READINESS AND WILLINGNESS TO PERFORM - SURVEY CERTIFICATE - BREACH OF CONTRACT - DATE OF BREACH.
Fact of the Case:
The plaintiff, a firm of cotton suppliers, filed a suit against the defendant, a cotton textile mill, for recovery of Rs. 51,915.14, which included damages for breach of contract and unpaid sale price. The trial court decreed the suit in respect of the unpaid sale price and dismissed the suit for damages for breach of contract. The defendant did not appeal against this portion of the decree, and it became final.
Finding of the Court:
The court found that the cotton supplied by the plaintiff on 24-6-1963 was inferior and defective in quality, containing willowed roving and waste cotton, and that the defendant was entitled to reject the goods by repudiation of the contract. It also found that the plaintiff had not proved the tender of performance before September 1963 and therefore could not claim any damages.
Issues: 1. Whether the defendant was justified in repudiating the contract on the ground of defective quality of cotton supplied by the plaintiff? 2. Whether the contracts Exts. A-1 and A-2 are two distinct contracts or one single contract? 3. Whether the plaintiff was entitled to damages for breach of contract? 4. Whether the plaintiff had kept the contract alive on his part by tendering the goods and proving the existence of 450 bales with him at any time before September, 1963? 5. Whether Ext. B-1 Survey Certificate was valid and related to the goods supplied by the plaintiff?
Ratio Decidendi: 1. The court held that the defendant was justified in repudiating the contract on the ground of defective quality of cotton supplied by the plaintiff, as the cotton contained willowed roving and waste cotton, which was not in accordance with the agreed quality. 2. The court held that Exts. A-1 and A-2 constituted one single contract and were validly repudiated by the defendant in their entirety, as the parties treated them as one indivisible contract and not severable. 3. The court held that the plaintiff was not entitled to damages for breach of contract, as he had not kept the contract alive on his part by tendering the goods and proving the existence of 450 bales with him at any time before September, 1963. 4. The court held that the plaintiff had not proved that he had kept the contract alive on his part by either any communication or by tendering the goods, and also that he was in a position to perform his part of the contract by proving the existence of 450 bales with him at any time before September, 1963. 5. The court held that Ext. B-1 Survey Certificate was valid and related to the goods supplied by the plaintiff, as it was produced by the plaintiff at the time of the delivery of the first 50 bales on 7-6-1963 and was accepted by the defendant.
Final Decision: The appeal was dismissed with costs.
( 1 ) THE plaintiffs firm is the appellant. The suit was filed for recovery of Rs. 51,915. 14. The said amount included a claim by way of damages for breach of contract committed by the defendant and also for unpaid sale price inclusive of interest. The trial Court decreed the suit in respect of the unpaid sale price and dismissed the suit for damages for breach of contract. There is no appeal by the defendant regarding this portion of the decree and that has become final.
( 2 ) THE case of the plaintiff in the plaint is that it is a firm carrying on business as suppliers of different varieties of cotton to several cotton Textile Mills. The defendant is one such mill. The defendant had placed orders for the supply of cotton bales of Koppal Lakshmi Variety by their letters dated 7-5-1963 (Ex. A-1) and 8-6-1963 (Ex. A-2 ). By the order dated 7-5-19153 the plaintiffs were to supply 300 bales, while by the order dated 8-6-1903 they had to supply 300 bales of cotton. Pursuant to the order dated 7-5-1963, the plaintiff had supplied 50 bales of cotton on 7-6-1963. The defendant had paid only a portion of the money and there was a balance of Rupees 6,543. 23 due from the defendant in respect of that supply. On 24-6-1963 the plaintiff had supplied another consignment of 50 bales of cotton pursuant to the order dated 7-5-1963. Out of the said 50 bales, three bales were opened and after approval by the Spinning Supervisor of the defendant mills, they were taken delivery of by the defendant. On 24-6-1963 P W. 1 a partner of the plaintiff-firm went to the defendant for receiving the payment. It was stated then that the Spinning Master of the defendant mills was away and that they would like to get the cotton tested by him. However, the defendant by its letter dated 24-6-1963 (Ex. A-6) had intimated that they rejected the consignment of the 50 bales delivered on 24-6-1963 and also refused to take delivery of the remaining cotton bales under the contracts dated 7-5-1963 and 8-6-1963. The defendant had unlawfully terminated the contract, though the cotton supplied was according to specifications. The supply of cotton in 1963 could only be done if there was a survey certificate issued by the Regional Textile Commissioner appointed by the textile Commissioner of India. The 50 bales supplied on 7-6-1963 which were accepted by the defendant and the 50 bales supplied on 24-6-1963 were all covered by the same survey certificate, Ex. B-1 and were of the required standard. The plaintiff was ever ready and willing to perform the obligations under the contracts. The defendant by refusing to take delivery and terminating the contracts was guilty of breach of contracts. As per Exts. A-1 and A-2. the rate agreed to was Rs. 1090. 00 per candy and the market rate in the months of August and September was Rs. 961. 00 per candy. The plaintiffs are, therefore, entitled to the difference between the contract rate and the market price by way of damages. In the cause of action paragraph, it was stated inter alia that the cause of action arose on 26-6-1963 when the defendant had by its letter purported to terminate the contracts.
( 3 ) THE defendants in the written Statement had stated that even with regard to the delivering of the 50 bales on 7-6-1963, four bales were found to be not in accordance with the quality agreed to be supplied and set out facts which according to them did not involve them in any liability to pay Rs. 6543. 00 in respect of the delivery. Regarding the supply of 50 bales on 24-6-1963, it was stated that those bales were examined in the presence of Srinivasa Sarda (P. W. 1 ). a partner of the plaintiff-firm and it was found that the cotton was not of the approved quality and hence the defendant had rejected those 50 bales. He said that cotton was sent to a Cotton Expert who had certified that the cotton contained willowed roving. It was contended that the plaintiffs deliberately committed breach of contract by not suppl
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
