Time is of the essence of a contract if it is expressly agreed to be so, if delay operates as an injury, or if the nature and necessity of the contract require it to be so construed.

Raj Kishore Prasad, J.

1. The present application, in revision, has been presented, by the defendants, under Sec.25 of the Provincial Small Cause Courts Act, against the judgment of the learned Small Cause Court Judge, Muzaffarpur, decreeing the plaintiffs suit for damages for breach of contract,

2. What happened was this :

On the 6th January, 1956, an order was placed by the plaintiff with defendant 1 -- Orissa Textile Limited Cuttack -- through its selling agent at Muzaffarpur, defendant 2, for supplying five bales of dhotis of certain specifications at certain fixed rates, besides Excise Duty, etc. The said goods were to be sent to Muzaffarpur Railway Station by Goods Train at owners risk, and their delivery was to be given within January, 1956. This order, which is exhibit 3, was accepted by defendant 1, through its agent, defendant 2, by its letter of the 27th January, 1956, Exhibit E, by which defendant 1 agreed to deliver the goods within January-February, 1956.

3. Out of these five bales, only one bale was supplied to the plaintiff till February, 1956, but the remaining four bales were not at all supplied by the defendants to the plaintiff. Defendant 2, the agent of defendant 1, however, by a letter of the 6th March, 1956, Exhibit A (1), informed the plaintiff that the four bales, which remained to be delivered could be delivered to him if he agreed to pay the new Excise Duty. The plaintiff, in his reply, by a letter of the 10th March, 1956, Exhibit A, informed defendant 2, that he was prepared to take delivery of the remaining bales, but only at the old contract rate. The remaining goods therefore, were not supplied by the defendants to the plaintiff.

4. The plaintiff, therefore, on the 23rd November, 1957, brought the suit, out of which the present application arises, for recovery of damages for breach of the contract, exhibits 3 and E, referred to before.

5. The suit was contested by the defendants on several grounds. Three of them, with which alone we are concerned here, will appear from the arguments advanced in this Court, and, dealt with hereinafter.

6. The learned Judge found that time was the essence of the contract, that defendant 2 also wast liable for the claim of the plaintiff; and that the plaintiff was entitled to damages at the rate of -/8/- annas per pair of dhoti as claimed. He, accordingly, decreed the plaintiffs suit.

7. The first question, which has been pressed by Mr. Jaleshwar Prasad, appearing for the petitioner, is that time was not the essence of the contract between the parties.

8. On this point the relevant provision of law is Sec.11, Indian Sale of Goods Act, 1930 (Act III of 1930), which is ,in these terms :

"11. Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to, time is of the essence of the contract or not depends on the terms of the contract.

9. The first part of Sec.11, quoted above, makes an exception only in favour of time of payment and is dependent on the intention of the parties. The second part is merely a matter of contract. Though Sec.11 makes it clear that stipulations as to time of payment would ordinarily be not of the essence of a contract for sale of goods yet on the question whether time of delivery of goods would also be not of the essence of the contract, the section merely says that it depends on the terms of the contract. In the case of time of payment, therefore, the intention of the parties is the decisive factor, whereas, in the case of time of the delivery of goods, the terms of the contract are the decisive factor.

10. But, in the ordinary commercial contracts for sale of goods, time is prima facie of the essence of the contract with respect to delivery. Where forward contracts are entered into by parties, who are anticipating fluctuations in prices, in the absence of any evidence to the contrary, the prima f