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PUNJAB & HARYANA HIGH COURT
K.L.Gosain and A.N.Grover JJ.
Dina Nath Dutt
Versus
Maha Vir Gupta
First Appeal No. 176 of 1950,
Decided On : MARCH 4, 1958
CONTRACT - Sale of Goods - Breach of Contract - Jurisdiction - Place of Suing - Objection - Waiver - Section 21, Civil Procedure Code - Time of Essence - Readiness and Willingness to Perform - Measure of Damages - Interest on Earnest Money.
Fact of the Case:
The plaintiff and the defendant entered into a contract for the sale of an ice plant. The plaintiff paid a deposit of Rs. 5,000/- and agreed to pay the balance of Rs. 80,000/- on or before 27th September 1946. The defendant failed to deliver the ice plant on the agreed date and sold it to another person for a higher price. The plaintiff filed a suit for recovery of the deposit and damages.
Finding of the Court:
1. The objection to the jurisdiction of the Rohtak Court was not raised at the earliest possible opportunity and, therefore, could not be entertained in appeal under Section 21 of the Civil Procedure Code. 2. Time was not of the essence of the contract and the plaintiff was not guilty of breach of contract. 3. The plaintiff was ready and willing to perform his part of the contract. 4. The measure of damages was the difference between the price agreed upon between the parties and the price at which the defendant actually sold the ice plant to another person. 5. Interest was rightly awarded on the sum of Rs. 5,000/- paid by way of earnest money.
Issues: 1. Whether the Rohtak Court had jurisdiction to try the suit. 2. Whether the plaintiff had performed or duly offered to perform his part of the contract. 3. Whether the defendant was able or in a position or had incapacitated himself to perform his part of the contract. 4. Whether the defendant was the owner of the goods in dispute on the date of the agreement in question and was in a position to deliver the contracted goods to the purchaser on the due date. 5. To what damages, if any, is the plaintiff entitled? 6. Whether time was of the essence of the contract of sale. 7. Whether the defendant was legally entitled to rescind the contract and resell the goods in dispute.
Ratio Decidendi: 1. An objection to the jurisdiction of a Court must be raised at the earliest possible opportunity. If it is not raised at the earliest possible opportunity, it cannot be entertained in appeal under Section 21 of the Civil Procedure Code. 2. Time is not of the essence of a contract unless it is expressly stated to be so in the contract or it is implied from the nature of the contract. 3. A party is ready and willing to perform his part of the contract if he has the capacity to pay and has made proper and reasonable preparations and arrangements for securing the purchase money. 4. The measure of damages for breach of a contract for the sale of goods is the difference between the price agreed upon between the parties and the price at which the seller actually sells the goods to another person. 5. Interest can be awarded on the sum paid by way of earnest money from the date of breach of contract.
Final Decision: The appeal was dismissed with costs. The cross-objections were allowed to the extent that the plaintiff was entitled to full costs in the trial Court as well.
1. This appeal arises out of a suit for recovery of Rs. 16,000/- as damages apart from interest claimed on a sum of Rs. 5,000/-. It appears that the defendant got an advertisement published in the Daily Statesman, Delhi Edition, in the issues of 9th, 10th and 11th July 1946 as follows:
"For sale one 15 ton ammonia ice-plant complete in working condition. Write for particulars to Bharat Engineering Works, Kanpur."
As a result of correspondence between the par ties a contract was entered into between the plaintiff and the defendant. It was embodied in the form of an order and was as follows:
"From Purchasers Name Mr. Maha Vir Gupta Village Anand Ashram P. O. Panipat DistrictTo Messrs The Bharat Engineering Works, Sole Makers of, Bharat Oil, Crude & Gas Engines, Bharat Building, Kalpi Road, Kanpur. Dear Sirs, I/we hereby place with you, subject to your usual terms of business as (detailed on back hereof) order for goods as specified below delivered Ex-site. Total price Rs. Approximate time of delivery. Terms of payment, Rs. 5,000/- as deposit against the order and balance against Railway Receipt payable at Kanpur. Forwarding Instructions. SPECIFICATIONS. One second hand 15 ton Ice Factory, complete with all the (torn) as working at Rohtak under the name of Rajendra Ice Factory, as Inspected and approved for the sum of Rupees Eighty five thousand only (Rs. 85,000)" nett. without building. Inventory of the plant will be made on Sunday at Rohtak. Coal and wood whatever is available at the Mill will be sold at the cost price to me. If required Balance amount of the ice plant will be paid within 15 days from date and plant will be removed by the end of December. In case further time is required the seller will obtain the permission from the owner of the building and will pay the reasonable rent, if any."
On the back of this there were certain general conditions of business out of which some will be referred to in due course. On 17-9-1946 the defendant addressed a letter, Exhibit P. 11, to Messrs Anant Ram Khem Chand, which seems to be the name of the joint family firm to which the plaintiff belonged. The aforesaid letter was as follows:
"In reply to your letter of 17th instant we inform, you that the Ice Plant is our property since we have purchased it and you are requested to make the payment to us under the contract and we will give you necessary removal instructions. Please note that payment be made within the promised time under contract."
Another letter, Exhibit P. 4, was sent by the defendant on 18-9-1946 saying that permission for removal of the plant had been obtained and the same would be delivered immediately the balance payment had been arranged. A request was made to make the necessary arrangements for payment of the balance amount so that the factory might be closed on 30th September, and its complete charge given. Yet another letter was sent on 21-9-1946 saying that the balance amount of Rs. 80,000/- be remitted as early as possible and it must reach the defendant by 27th of the month as per terms of the contract. This was followed by a telegram sent by the defendant dated 25th/26th September 1946. This telegram was as follows:
"Meet Delhi tomorrow with payment Imperial Ice Factory."
A letter was sent along with it in which the contents of the wire were repeated and the plaintiff was informed that Dina Nath would be reaching on 27th morning and a request was made that he should he contacted at the imperial Ice Factory and the payment of the balance amount be made. There was some meeting on 27th September, but thereafter the parties entered into more correspondence and on 9-10-1946 the defendant sold the ice plant to another person by the name of Shubh Karan for a sum of Rs. 96,000/- The present suit was instituted in March 1949 for recovery of the sum of Rs. 5000/- paid as advance money and for Rs. 11,000/- as damages resulting from the defendants act in wrongly putting an end to the contract and selling it to Sh
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