High Court Of Madhya Pradesh
V. R. Nevaskar and T. C. Shrivastava, JJ.
MOHAMMAD HUSSAIN - Appellant
Versus
FIRM ANDANI CO. - Respondents
First Appeal 17 Of 1953
Decided On : 07/29/1958
LIMITATION - CONTRACT - FAILURE OF CONSIDERATION - ARTICLE 97 OR 115 OF THE LIMITATION ACT - INTERPRETATION AND APPLICATION - KEY LEGAL PRINCIPLE: Failure of consideration occurs when the subject matter of a contract ceases to exist or when a party commits breach and the other party puts an end to the contract.
Fact of the Case:
Plaintiff paid Rs. 5000/- to the defendant as an advance for the purchase of corrugated iron sheets covering a certain property. The defendant failed to deliver the sheets within the agreed time and the plaintiff filed a suit for refund of the amount paid. The defendant pleaded limitation.
Finding of the Court:
The court held that the plaintiff's claim was barred by limitation. The court found that the consideration for the contract failed when the defendant failed to deliver the sheets within the agreed time and the plaintiff put an end to the contract by filing a criminal prosecution against the defendant.
Issues: Whether Article 97 or Article 115 of the Limitation Act applies to the case.
Ratio Decidendi: The court held that Article 97 of the Limitation Act applies to the case. The court reasoned that the consideration for the contract failed when the defendant failed to deliver the sheets within the agreed time and the plaintiff put an end to the contract. The court also held that the plaintiff's claim was barred by limitation because the suit was filed more than three years after the date of failure of consideration.
Final Decision: The court dismissed the plaintiff's appeal.
( 1 ) THE appeal involves consideration of a question regarding limitation.
( 2 ) PLAINTIFF Mohammad Hussain Bohara of Sanawad filed this suit for the recovery of Rs. 6800/- on the allegations that the defendant had agreed to sell to him the corrugated iron sheets covering the entire premises of the "merchant Gin' at sanawad which the latter had agreed to purchase from a third party at the rate of annas 3 1/4 per square foot. The contract was entered into on 31-1-1949 and the plaintiff paid Rs. 5000/- towards the contract. The delivery of the sheets was agreed to be given within thirty days. A document containing, these terms was executed between the parties. The defendant, it is said, failed to give delivery as agreed before 3-3-1949 and prayed for the extension of the period for delivery. The plaintiff agreed to the extension by a fortnight. There was further extension by three days subsequent to the date fixed for delivery under the earlier extension up to 1-4-1949. But even then the defendant failed to deliver. Later the defendant, who had contracted to purchase the 'merchant Gin' had his contract of sale cancelled and the said property was sold to a third party. The plaintiff called back the amount of rs. 5000/- advanced by him as also interest thereon by way of damages at rupee one per cent, hut the defendant failed to comply. The plaintiff therefore sued for rs. 5000/- as principal and Rs. 1800a as interest from 2-3-1949 up to 2-3-1952.
( 3 ) THE cause of action for the suit was stated to have arisen on 2-3-1949 and on the dates up to which the period of delivery was extended i. e. , on 17-3-1949 and 1-4-1949.
( 4 ) THE defendant admitted the agreement dated 31-1-1949 as pleaded by the plaintiff and also admitted that he could not give delivery by 2-3-1949. According to him he had requested for extension of time but that was not acceded to by the plaintiff. On the contrary, according to him, the plaintiff turned down the request on the ground that the time was the essence of the contract; There was no extension either till 17-3-1949 or 1-4-1949 as pleaded by the plaintiff. There was failure to deliver on his part on the agreed date 2-3-1949 and for that reason time began to run against the plaintiff from that date. The claim of the plaintiff was therefore said to be barred by limitation.
( 5 ) THE trial court framed issues bearing on the question of alleged extensions of period of delivery by mutual agreement till 17-3-1949 and 1-4-1949 as according to him on findings on these questions the issue pertaining to limitation depended.
( 6 ) THAT court considered the oral and documentary evidence bearing on these questions. Documentary evidence consisted of three telegrams one dated 2-31949 given by the defendant to the plaintiff expressing inability to give delivery and requesting for extension of time by fifteen days, telegraphic reply dated 3-31949 by the plaintiff refusing to give extension asserting that the time was the essence of the contract and threatening legal action in case delivery was not given on that day and lastly plaintiff's telegram dated 15-3-1949 stating that he would meet the next day for taking delivery at Sanawad and bringing to the notice of the defendant the rumours of his Indore transaction and threatening legal action if this were true. Besides this there was the admitted conduct of the plaintiff in filing criminal prosecution against the defendant on 22-3-1949 for the act of the latter in securing Rs. 5000/- from him by resorting to cheating and also the oral evidence of two witnesses Dharamchand and Fakruddin regarding the incident of extension dated 17-3-1949 and witness Rajabali regarding the incident of 3-3-1949.
( 7 ) THE learned trial Judge considered the story of extension of 3rd not reliable as the statement of Rajabali appeared to him to be unnatural and halting and was also inconsistent with the reply given by the plaintiff on the same date. As regards the incident of
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