Acceptance of bank draft and placement of fresh order without mentioning breach of first contract constitutes dispensation of performance under Section 63 of the Indian Contract Act.

1. In the suit which is the subject-matter of this appeal the plaintiff claimed damages for breach of contract from the defendants. It appears that on 19-8-1946, the plaintiff entered into a contract with, the defendants for the supply of Rs. 3000 gross of safety matches at the rate of Rs. 4/- per gross, the plaintiff also deposited a sum of Rs. 900.00 in advance with the defendants. On 12-11-1946, the defendants wrote a letter to the plaintiff cancelling the order and also returned the sum of Rs. 900.00 deposited by the plaintiff as advance. The amount was sent by the defendants to the plaintiff by a Bank draft. It is the admitted position that the plaintiff realised the money covered by the bank draft. On 18-11-1946, the plaintiff sent a letter to the defendants requesting that another wagon of safety matches may be supplied in January. 1947. The plaintiff sent a pleaders notice on 20-11-1946, claiming damages from the defendants for breach of contract dated 19-8-1946. The plaintiff thereafter brought the present suit against the defendants. The suit was contested by the defendants on the principal ground that though there was a breach of the first contract the plaintiff had dispensed wholly with the performance of that first contract and the plaintiff was, therefore, not entitled to claim any damages for the breach.

The trial Court decreed the suit, but the decree was upset by the Additional District Judge of Dar-bhanga, who heard the appeal, on the ground that there has been a waiver on the part of the plaintiff of the performance of the first contract and so the plaintiff was not entitled to damages for breach of that contract. The Additional District Judge came, to the finding that the letter, exhibit 1 (b), dated the 12th November, 1946, was received by the plaintiff on 18-11-1946, before the plaintiff despatched the letter exhibit A (1). Exhibit 1 (b) reads as follows:

"Dear Sirs,

Enclosed please find a Bank Draft for Rs. 900/-(Rupees Nine Hundred) only lying with us as deposit for safety maches. As there is no chance of Supply of matches in the near future we have cancelled your order and hence the money is being returned to you. Please own receipt.

Thanking you

Yours faithfully

For B. N. Kataruka and Sons.

sd/illg."

The other letter exhibit A(l) written by the plaintiff, placing a fresh contract for the supply ol matches, is reproduced below :

"Dear Sir,

Will you please supply us one wagon matches in January, 1947. So we request you to let us know, so that we may be able to deposit the advance money in time.

Thaking you much for an early compliance.

Yours faithfully.

Sd/L. Nayak.

For Lakhan Nayan Tapeshwar Naik".

The learned Additional District Judge came to the finding that the plaintiff despatched exhibit A(l) after be had received the letter of cancellation of : the first contract from the defendants, exhibit 1(b). He also came to the finding that the bank draft for Rs. 900.00 was accepted by the plaintiff. On the basis of this evidence the learned Additional District Judge held that there was a waiver of the performance of the first contract on the part of the plaintiff and so the decree for damages could not be granted to him. When the matter came up in second appeal, the learned Single Judge reversed the decision of the Additional District Judge of Dar-bhanga and held that the plaintiff was entitled to a decree for damages to the extent of Rs. 750.00 for breach of contract.

2. The main question for consideration in this Letters Patent appeal is whether the plaintiff had dispensed with the performance of the contract within the meaning of Sec. 63 of the Indian Contract Act and whether the learned Single Judge was right in holding that the plaintiff was entitled to a decree for damages for breach of contract. On behalf of the appellants the argument put forward was that upon the evidence the inference must bo draw