Venkatarama Aiyar, J.-These are appeals preferred under the Letters Patent against the judgment of Satyanarayana Rao, J., in S.A. Nos. 464 and 465 of 1946 whereby he reversed the judgment of the District Judge of Madurai in A.S. Nos. 294 and 295 of 1944 which in turn had reversed the judgment of the Subordinate Judge of Madurai in O.S. No. 100 of 1943 and No. 82 of 1943. The appellants in this Court were the plaintiffs in O.S. No. 100 of 1943, Sub-Court, Madurai and the suit was for damages for non-acceptance of goods under a contract, dated 13th May, 1943. The defendant in this suit filed O.S. No. 82 of 1943 in the Sub-Court at Madurai, against the plaintiffs in O.S. No. 100 of 1943 claiming damages for non-acceptance of goods under contract, dated 3rd June, 1943. Both the suits were heard together and disposed of by a common judgment and so were the appeals in the District Court and in this Court.

The facts material for the purpose of these appeals are these:

Both the parties are prominent merchants in Madurai doing business in yarn On 13th May, 1943, they entered into an agreement, Exhibit P-1, under which the appellants agreed to sell and deliver ten bales of yam to the respondent in August 1943. As the construction of this contract is one of the main points for determination in these appeals it is necessary to set out its terms in extenso:

Contract Form.

Dated, 13th May, 1943.

Name of the seller-V.K. Ramaswamy Chettiar &38; Sons, Madurai, M.D. 87.

Name of buyer-P.A.S.V. Karuppaswami Moopanar &38; Co., Madurai, M.D. No. 29.

Sold through broker C.A. Mathavachari.

The buyer agrees to purchase subject to conditions and terms noted below: The following goods and accepts the seller’s godown delivery at seller’s option between the first and last day of the below mentioned month and to pay the full value for the same before delivery and to accept the goods even if any delay is made for any reason by the sellers in giving delivery.

Description-20½/10 Harvey Mills yarn.

Quantity-(10) ten bales each containing 40 bundles of 10 lbs.

Price-Rs. 27-12-0 (twenty seven, annas twelve) only net per bundle.

Despatch-August 1943. Cash before delivery of the bales. Subject to the terms and conditions of the above Mills, Madura godown delivery.

The respondent paid an advance of Rs. 1,100 under this contract (Vide Exhibit P-2.) On 3rd June, 1943, there was another agreement between the parties under which the respondent agreed to sell and deliver to the appellants five bales in July 1943 Exhibit P-18. On 2nd August, 1943, the appellants gave notice to the respondent that ten bales of yarn were ready, that he might pay for and take delivery of them in accordance with the contract, dated 13th May, 1943, Exhibit P-3. The respondent neither replied to this notice nor did he make any attempt to pay for the goods and take delivery. On 26th August, 1943, the appellant sent a further notice Exhibit P-4. Therein it was stated that after the notice, Exhibit P-3, there was an agreement between the parties on 3rd August, 1943, under which five bales which had to be delivered to the appellants under Exhibit P-18 were adjusted out of the ten bales which had to be delivered by them and that the respondent was to take delivery of the remaining five bales before 20th August, 1943. The notice called upon him to take delivery of the goods under this agreement. The respondent replied to this notice by Exhibit P-5, dated 30th August, 1943. To understand the attitude taken up by the respondent in this reply it should be stated that on 19th August, 1943, the Textile Commissioner acting under the Yarn Control Order issued under rule 81(2) of the Defence of India Rules, published a statement fixing the maximum price for yarn and on 31st August, 1943, there was a formal statutory notification on the lines of the statement and it was published on 4th September, 1943. The ceiling prices fixed under this statement were less than the contract rate under Exhibit P-1. In Exhibit P-5 the re

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