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1960 Supreme(Cal) 57
HIGH COURT OF CALCUTTA
P. B. Mukharji, H. K. Bose
B. R. HERMAN AND MOHATTA (INDIA) LTD. - Appellant
Versus
PRAN BALLAV MAJUMDAR - Respondent
Appeal 134 Of 1957
Decided On : FEBRUARY 29, 1960
R.N.PYNE, S.C.SEN, SANKAR GHOSH, Sisir Mukherjee
The seller is not bound to deliver the goods until the buyer applies for delivery.
Headnote:
SALE OF GOODS - C.I.F. CONTRACT - NATURE AND SCOPE - VARIATIONS IN C.I.F. CONTRACT - PAYMENT OF PRICE AND TENDER OF DOCUMENTS - CONCURRENT CONDITIONS - BUYER'S OBLIGATION TO PAY PRICE - DELIVERY OF GOODS EX-JETTY - SELLER'S DUTY TO CLEAR GOODS AT PORT OF DESTINATION - CONSTRUCTION OF CONTRACT - BREACH OF CONTRACT - REFUND OF ADVANCE DEPOSIT - SECTION 35 OF THE SALE OF GOODS ACT, 1930 - APPLICABILITY TO C.I.F. CONTRACT.
Fact of the Case:
The appellant entered into two written contracts with the respondent for the sale of caustic soda to be imported from U.S.A. at the price of Rs. 32/8/- per cwt. Ex. Jetty Calcutta on inter alia the terms and conditions that shipment was to be November-December, 1948 and the respondent would have to pay 25 per cent of the price by way of advance deposit. The respondent paid Rs. 8,125/- being the 25 per cent of the price of the goods. The goods were not shipped during November and December, 1948 and the appellant failed to deliver any goods of November-December shipment or at all and they thus committed breach of the contracts. The respondent, therefore, claimed refund of Rs. 8,125/- and Rs. 5,000/- as damages for loss of profit.
Finding of the Court:
1. The contract in question is a C.I.F. contract with special modifications particularly with regard to the clause relating to price and payment. 2. The seller undertook to pay in the first instance the C.I.F. value of the goods and customs duty and also the clearing charges at the port of destination and after clearing the goods to give delivery to the buyer ex-jetty. 3. The buyer is not under any obligation to pay the balance of the price until after arrival of the goods at the port-of destination and until after the clearing of the goods through the Customs and the landing of the goods have taken place. 4. The seller committed breach of the contract and failed to give delivery in terms of the contract although this was the undoubted obligation of the sellers to do under Section 31 of the Sale of Goods Act. 5. The seller was also under the obligation to tender the agreed documents specified in Clause 2 of the contract to the buyer in the present case after the arrival of the goods at the port of destination and after they were landed at the Jetty against payment of the balance of the price. 6. The seller did not give any intimation of the arrival of the goods or the ship nor did they give any notice to the buyer that the goods having arrived the buyers had not taken delivery of them at the jetty and that the sellers would be removing them to their godown. 7. The seller did not tender the necessary documents. 8. The tender of the goods by the appellant was made Ex godown and not Ex jetty as stipulated under the contract. 9. The buyer is entitled to obtain a refund of the money paid by him whether such payment is regarded as an advance simpliciter or as a guarantee for the future performance of the contract.
Issues: 1. Whether the contract in question is a C.I.F. contract or a hybrid C.I.F. contract or an ordinary contract for delivery of goods? 2. Whether the seller tendered the necessary documents? 3. Whether the seller gave delivery of goods Ex-jetty as stipulated under the contract? 4. Whether the buyer is entitled to obtain refund of Rs. 8,151/- which was paid by way of advance deposit?
Ratio Decidendi: 1. The essential feature of an ordinary C.I.F. contract as compared with an ordinary contract for the sale of goods rests in the fact that performance of the bargain is to be fulfilled by delivery of documents representing the goods and not by the actual physical delivery of the goods by the seller. 2. The only obligation on the buyer, apart from express agreement is to be ready and willing to pay the price in exchange for the documents. 3. In a C.I.F. contract the seller has to tender the C.I.F. documents or the agreed documents to the buyer at the latter's residence or place of business in the absence of any contract to tender the documents at any other place. 4. The seller is not bound to deliver the goods until the buyer applies for delivery. 5. Section 35 of the Sale of Goods Act only refers to delivery of goods and does not apply where under the contract goods are sold by what is known as the sale of documents such as in c.i.f. contracts.
Final Decision: Appeal dismissed with costs.
( 1 ) THIS appeal is from a decision of Mr. Justice G. K. Mitter and involves determination of the true nature and scope of two contracts for the sale of certain goods. On 9-11-1948 the appellant-Company entered into two written contracts with the respondent for the sale of caustic soda to be imported from U. S. A, at the price of Rs. 32/8/- per cwt. Ex. Jetty Calcutta on inter alia the terms and conditions that shipment was to be November-December, 1948 and the respondent would have to pay 25 per cent of the price by way of advance deposit. In pursuance of the contracts, the respondent on 15-11-1948 paid Rs. 8,125/- being the 25 per cent of the price of the goods. The case of the respondent, as alleged in the plaint, is that the goods were not shioped during November and December, 1948 and the appellant failed to deliver any goods of November-December shipment or at all and they thus committed breach of the contracts. The respondent, therefore, claimed refund of Rs. 8,125/- and Rs. 5,000/- as damages for loss: of profit. Before the learned trial Judge no evidence was given as to the claim for damages. The-only relief that the learned Judge has granted is a decree for refund of the sum of Rs. 8,125/- in favour of the plaintiff-respondent. It may be pointed out that although in the plaint a definite case was made that the defendant-company had wrongly entered the terms of the two contracts in their printed C. I. F. contract form and the two contracts were not really C. I. F. contracts but were Ex. Jetty contracts, the plaintiff did not pursue the case at the hearing that the terms had been wrongly entered in C. I. F. contract form-as alleged in the plaint. Before us the main contention of the learned counsel for the appellant is that the learned trial Judge is wrong in his finding that the defendant-appellant had committed a breach of the contracts. Before dealing with the contentions raised, it will be convenient to set out at this stage the relevant clauses of the contract. There is a heading in the contract form which is as follows:"indent on C. I. F. Terms, No. FC/114. Shipment:-- November/december. 1948. Price: Rs. 3278/- Ex. Jetty. (This was substituted after scoring out the following words Rs. 25/8/- (Twenty-five and annas eight only) per cwt, C. I. F. Calcutta ). Payment-- An advance deposit of 25 per cent of the C. I. F. value and duty i. e. Rs. 6,500/- (Rupees Six thousand five hundred Only) we shall pay forthwith, on acceptance of this Indent while the balance we undertake to pay immediately on presentation of shipping documents. "it may be pointed out in this connection that in the other contract the following words appear against this item 'payment. '"payment--An advance deposit of 25 per cent, of the C. I. F. value plus customs duty and clearing charges amounting to Rs. 1,625/- (Rupees one thousand six hundred and Twenty five only) x x x"then clause 2 of the contract runs as follows:"payment shall, on receipt by the Indentors of notice to pay, be made forthwith to the firm in case at Calcutta against documents which shall consist of- (1) The Firms or at their option their Home friends' invoice. (2) Rill of Lading or at the Firm's option Delivery Order or Letter or Guarantee or Delivery Telegram and (3) Policy of Insurance or at the Firm's option Certificate of Insurance or Letter of Insurance. No payment or any part thereof when due hereunder shall under any circumstances be withheld by the Indentors owing to any claim whatsoever in respect of the goods and all such claims if any shall be notified in writing to the Firm within 14 days from the arrival of the goods at port of destination after which no claim shall be entertained by the firm. "clause 5 of the contract is as follows:--"it is hereby expressly agreed that the goods under this Indent shall after arrival of the steamer at port of destination continue to remain at the sole risks in all respects of the Indentors and that on failure of the Indento
