Madras High Court
Firm M.M. Textiles vs Firm Raghuram Textiles on 21 August, 1990
Equivalent citations: (1990)2MLJ557
JUDGMENT Abdul Hadi, J.
1. The defendant-firm is the appellant. The suit by the respondent is for recovery of Rs.22,169.26 with interest. The said sum is composed of the following items:(1) Rs. 15,933.76 towards balance price for textiles (H.L. Semi variety cloth) of 3455 metres sold by the plaintiff, (who is carrying on textile business at Erode) to the defendent, (who is carrying on business at Bangalore) and delivered according to the defendant's directions through lorry at Bombay and (2) (a). Rs.4,853.10 towards the loss suffered by the plaintiff in the resale of the textiles of the balance 6833 metres of the same variety which were also sent by lorry to Bombay from Erode on instruction from the defendant, but, due to the defendant not taking delivery at Bombay lorry office, were brough back to Erode by the plaintiff and sold there. (2) (b). Rs.1362.40 towards the freight charges for sending the goods to Bombay and bringing them back to Erode as aforesaid, in respect of the above said 6833 metres of cloth.
2. According to the plaintiff-firm it was selling to the defendant, between 12.9.1985 to 11.9.86, textiles including the above said 3455 + 6833, i.e. 10388 metres. The above said 10,388 metres of cloth were sent to Bombay as per Ex. B.13 (dated 17-5-1976) indent placed by the defendant with the plaintiff and the relevant invoices under which the plaintiff sent the goods are Exs. B.14 and B.15 (both dated 17.5.1976).
3. The defence to the suit is that the plaintiff agreed to give discounts at 9 1/4 % on the sale price, but did not give and that hence the said discount has to be deducted from the above said sum of Rs.15,933.76 in respect Of the above said 3455 metres. The further defence is that the defendant is not liable for the above said Rs.4,853.10 and Rs. 1,362.40 since the goods were defective in being not in accordance with the specification, viz., "H.L. Semi Variety" of a particular "grammage", viz., weight of 120 to 125 grams per metre, that the plaintiff has consequently committed breach of contract and the defendant was not bound to accept the goods and that even assuming there was no such defect, the plaintiff should not have taken back the goods to Erode, but must have sold them at Bombay and claimed damages only at the rate of the goods at Bombay at or about the date of breach.
4. The court below held that with reference to the above said 3455 metres, the defendant was liable to pay the entire Rs.15,933.76 and that it was the defendant who committed breach of contract in not having takgn delivery of the goods and that the defendant is also liable to the plaintiff for the above said sum of Rs.4,853.10 and Rs. 1,362.40. The Court below also held that the defendant was not entitled to the above said discount and that even if so entitled, the defendant is not entitled to the relief relating to discount since the said claim was a counter claim and no Court fee was paid on it. Hence the defendant has preferred this appeal."
5. The points for determination are:
(1) Whether in respect of the above said 3455 metres, the defendant is entitled to the above discount to the extent of Rs. 10,317.94p. as calculated and submitted by the learned Counsel for the appellant and whether it can be claimed without paying any further court fee?
(2) Whether in respect of the above said 6833 metres, the goods were sent not in accordance with specifications under the contract of sale and whether the defendant committed breach of contract in not accepting the goods when they reached Bombay and if so whether the Plaintiff was justified in taking back the goods to Erode and effecting resale there and claiming damages accordingly?
6. Regarding the discount claimed, the learned Counsel for the appellant argued that P.W. 1, the husband of one of the plaintiffs partner admitted in cross examination as follows:
The abovesaid indent Ex. B. 13 dated 17.5.1976 also shows that the defendant is entitled to 9 1/4 % discount. In certain invoices including the above referred to Ex. B. 14(1396.50 meters) and Ex. B. 15(2058.50 metres) the above said discounts were not given. P.W. 1 has also admitted So, it is clear that the defendant is entitled to have the discount with reference to the abovesaid suit transaction covered under Exs.B.14 and B.15, that is, in all for the said above 3455 metres sold for Rs.4,887 + Rs.7,204.75. that is, in all Rs.12,992.50 at the above said rate of 9 1/4%. The question of discount for the balance of 6833 metres does not arise at all since the goods were taken back by the plaintiff as stated above. Further invoices Ex. B. 32(19.5.1976), Ex. B.34(20.5.1976), Ex. B.33 (22.5.1976), Ex. B.19(22.5.1976) and Ex. B.18 (24.5.1976), covering about 16733.50 metres do not relate to the above referred to "H.L. Semi variety" cloth, about which alone this suit is concerned as per paragraph 6 of the plaint. Discounts relating to these invoices, if any, and other discounts referred to by the learned Counsel for the appellant cannot be claimed in this suit without paying court fee.
7. So far as the discount for the abovesaid 3455 metres, it could be claimed in this suit and no court fee need be paid for it, because the said claim arises out of the same cause of action on which the plaintiffs claim is based and is neither a set off nor a counter claim spoken to in Section 8 of the Tamil Nadu Court Fees and Suits Valuation Act. When the defendant claims the said discount it only makes an attack on the correctness of the plaintiffs claim without importing a different or subsequent cause of action (vide Rambala Mulaswami v. Sreeramamurthi , K. Pillai v. S. Ganapathi and Apparaswami v. P.S. Ramanatheeswara .
8. No doubt, the learned Counsel for the plaintiff argued that no relief in this suit should be given regarding this discount since the defendant pleaded in paragraph 11 of its written statement thus:
The defendant craves leave to file a separate suit in respect of "Amounts due" to the defendant from the plaintiff and for losses and damages sustained in respect of the transactions the defendant had with the plaintiff.
(underlining is mine) No doubt in the proceeding sentences of the written statement, the defendant speaks of discount not being given and the fact that the statement of account is not correct. But, it cannot be said that by the expression "amounts due" in the above extracted sentence, the defendant wanted to file a separate suit with reference to the above discount relating to the sale of the above referred 3455 metres also. Now defendant would say that he could file a separate suit with reference to such discount which he could have legitimately and conveniently claimed in the very suit filed against him. Certainly, by the expression "amounts due" the defendant did not refer to the abovesaid discount with reference to the above said 3455 metres. The expression relates to its other claims and not the abovesaid discount.
9. Then the respondent's counsel submitted that the discount, even if payable, has to be adjusted with the amount due to the plaintiff from the two sister concerns of the defendant, viz., M.G. Silks and Mysore Silk Fabrics and that there is such an agreement between the parties. But, there is neither plea nor proof regarding the same. Further, Exs.A.16, A. 11, A.7 and A.8, which are the account books of the plaintiff, giving out entries relating to the defendants's account for the period between 12-9-1975 to 11-2-1988 do not show any such adjustment having been made. Further, the abovesaid discount (in all, amounting to Rs.8,890.93) was specifically claimed by the defendant in its letter Ex. A.10 dated 28-10-1976 and there was no reply to the abovesaid Ex. A.10, making a counter claim for the above said adjustment. Only about 5 months after Ex. A.10, the present suit was filed on 24.3.1977. By then, the plaintiff could have sent such reply, but, it did not do so.
10. The learned Counsel for the respondent, however, contended that there was no issue in the suit regarding the abovesaid question of adjustment, that the defendant also pleaded that it would file a separate suit as stated above, and that hence the plaintiff did not let in necessary evidence regarding the said adjustment and that hence the suit should be remainded for fresh trial on the said issue after framing specific issue regarding the same. Further, it was also argued by the learned Counsel for the respondent-plaintiff that the defendant did not produce its account books and that if so produced, they would have shown the abovesaid adjustment. He, therefore, requested for a remand of the case to the trial Court: But, I do not think there is any justification for this request. Though there was no such issue, it cannot be said that the question was not is contemplation between the parties. Actually questions were put to the witness as relating to the said issue. In Nagubai v. B. Shama Rao it has been held that where parties go to trial with the knowledge that a particular question is in issue, though no specific issue has been framed, there was no surprise element and the decision rendered on such issue cannot be upset on the ground that a specific issue was not framed.
11. Further, no adverse inference could be drawn from the non-production of account books of the defendant, in the light of the above said Exs. A. 16, A.11, A.7 and A.8 account book entries of the plaintiff.
12. Therefore, I hold that from the decree for Rs.15,933.76 given by the trial court, deduction has to be made towards the above said 91/4% discount on the abovesaid Rs.12,092.50, the value of the above said 3455 metres, that is Rs. 1,188.55.
13. Regarding the other claim for Rs.4,853.10 and Rs. 1,362.40, the submission of the- learned Counsel for the appellant is that the cloth of 6833 metres supplied, did not conform to description of a particular grammage, they being less than 120 grame per metre. The written statement no doubt does not plead specifically about this aspect, However, it says in paragraph 7 as follows:
The plaintiff committed breach both regarding quality, quantity, variety and point of time of delivery, the defendant had no option but to refuse to take delivery and also because the plaintiff had been informed by letter that not to despatch as earlier orders were not satisfactorily complied with.
Then, Ex. B.38 dated 26.5.1976, the letter by the defendant to the plaintiff mentions as follows:
The weight comes to 100 gms. per metre whereas the actual weight should be 120 gms. You should have dispatched only 120 gms. instead of 100 gms. as instructed by us. Due to weight difference these goods cannot be sold at Bombay. We do not know what to do with these goods, lying at Bombay. Your immediate alternative action is very much needed in this regard. In further supplies only 120 gms. weight goods must be supplied by you and not 100 gms. goods which please note and as you have already promised is.
(underlining is nine) In Ex. B.39 dated 26.5.1976, the letter by the plaintiff to the defendant, in response to the earlier telephone talk the plaintiff had with the defendant, it is stated as follows:
We regret very much that even without inspecting our goods, you are speaking our variety as though it were having low weight....Please note that our goods will not weights such grammage weight and pointed by you but our semi bleach comes to the range from 110 gms. to 425 gms.
In reply to Ex. B.39 the defendant states in Ex. B.40 dated 27.5.1976 as follows:
You should accept our. true information given to you because it was given to you after specific inspection and weighing of the goods at Bombay which you must note. Thirdly as per agreement with you, you have to supply only goods, weighing 120 gms and not 100 gms.
Then again in Ex. B.46 dated 18.6.1976 the defendant states as follows:
...if you are certain that the goods of the 3 Lrs. being returned to you for the second time are perfect in quality and workmanship and of honest grammage, we would in principle, be prepared to consider taking delivery of them subject to joint inspection by your and our representatives prior to acceptance.
(The above referred to goods of the 3.Lrs. refers to the above said 6833 metre). Further, it is also stated in Ex. B.46 as follows:
Therefore, quality is the most important consideration when placing an order, and since grammage reflects the degree of quality attained in the products supplied. It is hardly possible to ignore it. You will recall that you have yourselves dealt with on this grammage aspect in your own previous letters; besides in a previous order for identical fabric, grammage has been specified as 120-125 gms.
14. Despite this offer for joint inspection, admittedly plantiff did not take any step for taking joint inspection. In fact, there was no reply to Ex. B.46 at all by the plaintiff. Further, P.W. 1 admitted as follows:
So, I think that I can safely conclude that the above said 6833 metres of cloth were not in accordance with the description specified and the defendent is justified in refusing to take delivery and so, the plaintiff cannot claim the above said Rs. 4853.10 and Rs. 1362.40.
15. The learned Counsel for the appellant also argued that even assuring that the goods were not be defective and the defendant was not justified in not taking delivery, the plaintiff ought to have sold the goods at Bombay itself and claimed damages, if any, in the light of the price prevailing at Bombay for the said goods on or about the date of breach of contract. He drew attention to Section 16(2) of Sale of Goods Act, which runs as follows:
Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not), there is an implied condition that the goods shall be of merchantable quality.
Regarding the goods being not merchantable he also draw my attention to the following deposition of D.W.1:
That apart, the above referred to passages in Ex. B.38 and B.46 also point out that the abovesaid goods are not merchantable. The learned Councel drew my attention to Section 41(1) of the Sale of Goods Act, which runs as follows:
Where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.
He also cited Murlidhar Chiranjilal v. Harishchandra Dwarkadas A.I.R. 1961 S.C. 366 where the Supreme Court held, while assessing the quantum of damages under Section 73 of the Contract Act, that when goods were to be supplied at Kanpur from Calcutta, rate of goods in Kanpur and not in Calcutta, in or about the date of breach would determine the quantum of damages. So, the learned Counsel's contention is that in the present case, the rate at Bombay having not been pleaded or proved, the above said damages to the extent of Rs.4,853 cannot be claimed. The learned Counsel for the respondent could not say anything differently on this legal submission of the learned Counsel for the appellant. I also accept the said legal submission as correct.
16. The learned Counsel for the appellant referred to Section 43 of the Sale of Goods Act and submitted that the buyer need not himself return the goods to the seller when he has rightly refused to take delivery and it is enough it he intimates the seller that he refuses to accept the goods. In the present case, the defendent has given such as intimation. Therefore, the learned Counsel for the appellant contended that the plaintiff was not entitled to claim the above said Rs. 1,362.40 also. He also cited Chettiar & Co. v. Express Newspapers and Kirsorimal Kashiram v. Venkatachalapathy (1983) 1 M.L.J 279 in support of his submission that since the goods (6833 metres) had not passed on to the defendant, the resale by the plaintiff cannot be at the risk of the defendant and the plaintiff cannot claim the difference between the contract price and resale price. The respondent's Counsel did not take exception to this legal submission also and I also accept it.
17. In the result, the appeal is allowed in part and the judgment and decree of the trial Court are modified by reducing Rs. l.188.55 from the above Rs.15,933.76 decreed and by deleting the other portions of the decree relating to Rs.4,853.10P. arid Rs.l,362.40p. There will, therefore, be a decree for Rs.l4,745.21p.only, with interest thereon at 6 percent per annum from the date of the plaint till the date of realisation and with proportionate costs throughout.