WASOO ENTERPRISER Vs. J J OIL MILLS BHAVNAGAR

JUDGEMENT

(1.) This is an appeal against a decree passed by the Civil Judge Senior Bhavnagar directing defendants Nos. 1 3 and 4 to pay to the plaintiffs Rs. 12 879 as and by way of damages for breach of contract dated 14th August 1951 alleged to have been committed by them. The plaintiffs are a partnership firm and they carry on business of manufacture and sale of groundnut oil in Bhavnagar. The first defendants are also a partnership firm of which the original defendant No. 2 and defendant No. 3 were at the material time partners. The fourth defendants are a Limited Company carrying on business in Hongkong. On or about 14th August 1954 as a result of negotiations which took place between Messrs. D.N. Marshall & Company acting as broker for the plaintiffs on the one hand and the first defendants on the other a contract was entered into between the plaintiffs and the first defendants for sale of 50 tonnes of groundnut oil packed in sound secondhand 40/45 gallon drums at the price of *129/10/-per ton of 2240 lbs. C. & F. Hongkong on the terms and conditions recorded in a contract note bearing No. 320 dated 14th August 1954 executed by and between the plaintiffs and the first defendants. The contract contained the following term as regards shipment and it is on this term that the entire controversy between the parties has centered in this appeal: Shipment :-

(2.) The defendants in their written statement took up various contentions of which there were three of a preliminary nature and they were: (1) that the Court had no jurisdiction to entertain the suit; (2) that there was no cause of action for the suit; and (3) that the plaintiffs firm was not registered. On merits the defendants disputed the plaintiffs allegation that defendants No. 1 had acted as agents of defendants No. 4 in respect of the contract and they alleged that the contract was between the plaintiffs and the first defendants as principal to principal and the fourth defendants had nothing to do with the same. The defendants also contended that the time of shipment mentioned in the contract namely shipment during August 1954 was of the essence of the contract and was in fact a condition of the contract and the plaintiffs were not entitled to insist that the first defendants should take delivery of the goods even if they were shipped after 31st August 1954. The defendants stated that it was no doubt true that pursuant to the request of the plaintiffs they extended the time of shipment upto 10th September 1954 and the plaintiffs could have therefore effected shipment by that date but the plaintiffs failed to do so and the first defendants were thereafter not bound to extend the time of shipment or to amend the letter of credit providing for such extended time and the first defendants were therefore not guilty of breach of the contract when they refused to amend the letter of credit and treated the contract as at an end by their letter dated 10tb September 1954 Exhibit 31.

(3.) On these pleadings various issues were raised by the trial Court of which the first three issues embodied the preliminary contentions; the fourth issue raised the question whether the first defendant was acting as the agent of defendants No. 4; issues Nos. 5 and 6 related to the merits of the controversy namely whether the defendants had committed a breach of the contract and whether there was an agreement to ship the goods on a particular date and the seventh issue dealt with the question of damages to which the plaintiffs may be held entitled. Now when the matter reached hearing before the lower Court a rather curious procedure was followed and the learned advocate appearing on behalf of the defendants was responsible for the same. He made an application to the trial Court for hearing issues Nos. 5 and 6 which related to the main controversy between the parties as preliminary issues and the trial Court strangely enough acceded to that request. It appears that some evidence was led on these two issues and the trial Court thereafter delivered a judgment dated 10th February 1958 which we must confess is even stranger than the decision to hear these two issues as preliminary issues. The trial Court decided the fifth issue in favour of the plaintiffs by holding that the defendants had committed a breach of the contract but so far as the sixth issue in regard to the time of shipment being of the essence of the contract was concerned the trial Court reserved the decision of that issue. We must frankly confess our inability to perceive how the trial Court could give a finding on the issue as to breach of the contract without considering the question whether the time of shipment was of the essence of the contract or not. But that is how the case progressed before the trial Court and after this judgment was delivered the other issues were tried by the trial Court. Evidence of both parties was led and the trial Court by a further judgment dated 29th September 1959 found that time was not of the essence of the contract and that the first defendants were guilty of breach of the contract inasmuch as they repudiated the contract on 10th September 1954 by their letter Exhibit 31. So far as the fourth issue relating to agency was concerned the trial Court found that the first defendants were acting as agents of the fourth defendants and that the fourth defendants were also therefore liable for breach of the contract. The preliminary contentions embodied in the first three issues were decided in favour of the plaintiffs and since the plaintiffs succeeded on merits the plaintiffs were held entitled to claim damages in the sum of Rs. 2 879 from the defendants. During the pendency of the suit however defendant No. 2 died and his heirs were not brought on record and a decree for Rs. 12 879 was therefore passed by the trial Court only against defendants Nos. 1 3 and 4 and that is the decree from which the present appeal is preferred.