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High Court Of Madhya Pradesh
T. Shrivastava and P. K. Tare, JJ.
FIRM GOPAL COMPANY LTD. - Appellant
Versus
FIRM HAZARILAL COMPANY - Respondents
First Appeal 79 Of 1959
Decided On : 02/23/1962
CONTRACT - Consideration - Promise to perform an existing duty under a contract with a third person - Whether good consideration - Abandonment of a disputed claim - Whether good consideration - Interest - Whether allowable before the date of suit.
Fact of the Case:
The plaintiff, a dissolved partnership firm, sued the defendants, selling agents of Bhopal Textiles Limited, for recovery of Rs. 25,000/- or, in the alternative, loss on 63 bales of cloth estimated at Rs. 15,333/4/- only with interest. The plaintiff had contracted to purchase 2101 bales of cloth from Bhopal Textiles, of which 1050 bales were to be lifted in May 1948 and the rest in June 1948. The plaintiff took delivery of 623 bales during the period ending May 1948. The plaintiff alleged that the price of cloth fell down and he would have been put to a heavy loss if he had lifted the rest of the bales. Further, he alleged that the contract was entered into as a consequence of some misrepresentation made by the defendants. The defendants admitted that the plaintiff took delivery of 623 bales under the contract and refused to take the remaining 1478 bales. They also admitted that they had made an offer to the plaintiff as alleged; but added that this was just with a desire to help the plaintiff. Accordingly, the plaintiff lifted the remaining bales of the May quota and the Mills absolved them of the liability to lift the June quota. As regards the offer made by the defendants to take 63 bales themselves or pay Rs. 25000/-, the defendants stated that the plaintiff exercised his option to give 63 bales and not the other alternative of taking Rs. 25000/-. The question of taking the bales did not arise, as the plaintiff did not later offer these.
Finding of the Court:
The trial Court found that the offer made by the defendants was accepted by the plaintiff exercising their choice for taking Rs. 25000/-and not for delivering 63 bales. The contract was held to be for consideration and valid. The claim was accordingly decreed for the amount with interest.
Issues: 1. Whether there was an agreement between the parties that the defendants would pay Rs. 25000/- to the plaintiff? 2. Whether the agreement is without consideration and not therefore enforceable at law.
Ratio Decidendi: 1. The court held that the promise to pay Rs. 25000/- was not gratuitous, as it was made at the desire of the defendants and the plaintiff agreed to take delivery of the bales as a consequence of the promise. The court further held that the defendants derived benefit from the plaintiff's promise to lift the bales, as it saved them trouble and avoided any occasion to the Mills to disturb their agency contract. 2. The court held that a promise to perform an existing duty under a contract with a third person can be good consideration for a promise, as it brings into existence a new contract between different parties. The court also held that the abandonment of a disputed claim is a valuable consideration, even if the claim is ultimately found to be unsustainable.
Final Decision: The court dismissed the appeal with modifications. The amount due was reduced to Rs. 25,000/- only and the defendants were directed to pay proportionate costs to the plaintiff in this court and in the trial Court.
( 1 ) THIS appeal is by the defendants against the judgment in Civil Suit No. 14 of 1952 of the Court of the Additional District Judge, Bhopal, decided on 31-12-1958, decreeing the claim of the respondent for Rs. 29,300. 00 and costs.
( 2 ) THE suit was brought by the firm 'messrs. Hazariial', a dissolved partnership firm, through. Hazariial, one of its five partners. The appellant No. 1 gopal and company, acts as selling agent of the Bhopal Textiles Limited, Bhopal. Appellant no. 2 Shiv Narain was one of the Directors OT Gopal and Co. On 9-5-1948 the plaintiff had contracted to purchase from the Bhopal Textiles 2101 bales of cloth of which 1050 hales were to be lifted in May 1948 and the rest in June 1948. The contract is incorporated in the document Ex. D-1, which gives the details of cloth sold. The plaintiff first took delivery of 623 bales during the period ending May 1948.
( 3 ) THE plaintiff alleged that the price of cloth fell down and he would have been put to a heavy loss if he had lifted the rest of the bales. Further, he alleged that the contract was entered into as a consequence of some misrepresentation made by the defendants. However, the details of the misrepresentation were not disclosed in the plaint. The plaintiff went on to say that he refused to take delivery of the rest of the goods. After the refusal, the defendants proposed to him to take delivery of 427 bales remaining from the quota of May, whereupon they (defendants) would get the contract cancelled by the Mills for June quota and further offered to purchase 67 bales out of May quota at the contracted price or pay Rs. 25,000. 00 Instead at the option of the plaintiff. The plaintiff agreed to take rs. 25,000. 00 but the defendants did not pay the sum. The suit is for recovery of this amount with interest. In the alternative, the plaintiff also claimed the loss on 63 bales estimated at Rs. 15,333/4/- only with interest.
( 4 ) THE defendants admitted that the plaintiff took delivery of 623 bales under the contract and refused to take the remaining 1478 bales. They also admitted that they had made an offer to the plaintiff as alleged; but added that this was just with a desire to help the plaintiff. Accordingly, the plaintiff lifted the remaining bales of the May quota and the Mills absolved them of the liability to lift the June quota. As regards the offer made by the defendants to take 63 bales themselves or pay Rs. 25000/-, the defendants stated that the plaintiff exercised his option to give 63 bales and not the other alternative of taking Rs. 25000/ -. The question of taking the bales did not arise, as the plaintiff did not later offer these. The claim was -resisted on the ground that the promise was without any consideration and thus unenforceable.
( 5 ) THE trial Court found that the offer made by the defendants was accepted by the plaintiff exercising their choice for taking Rs. 25000/-and not for delivering 63 bales. The contract was held to be for consideration and valid. The claim was accordingly decreed for the amount with interest.
( 6 ) BEFORE we take up the case on merits, we may dispose of an objection raised by the learned counsel for the appellants, viz. , that the suit as not tenable as the plaintiff firm is a dissolved firm and only one partner thereof has been named in the cause title. Under order 30, Rule 1 of the Civil Procedure Code, the right to sue in the firm name is given to persons who "were partners at the time of the accruing of the cause of action". The material date is thus the date of the cause of equivalent Citation: action and not the date of suit. It is clear from the language of the rule itself that dissolution of the firm at the time of filing of the suit does not matter, provided the firm existed when the cause of action accrued. This is the view tanen in Seth Agarchand v. Kasam, ILR (1937) Nag 28: (AIR 193/ Nag 314 ). Shri R. S. Dabir for the appellants further contended that the suit must have bee
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