JOINT FAMILY FIRM OF GIRDHARILAL PRABHU DAYAL Vs. JETHMAL PROPRIETOR OF FIRM CHATARBHOJ JETHMAL HINGOLI

JUDGEMENT

(1.) This is an appeal by the plaintiff against the judgment and decree of the City Civil Court, Hyderabad in O. S. No. 42 of 1958 dismissing the suit. The plaintiff is a joint family firm carrying on business in grains, gram, castor seeds etc., at Siddiambar Bazar, Hyderabad. The defendant is a merchant and is carrying on business as a commission agent and a general merchant at Hingoli.

(2.) The case for the plaintiff is shortly as follows : - The defendant met the plaintiff at Hyderabad and agreed to work as commission agent for purchasing and supplying as per the instructions of the plaintiff cotton seeds at Hingoli. It was agreed that the price of the goods so purchased by the defendant must be paid at Hyderabad on Hundis drawn by the defendant. Fifty per cent of the value must be paid in advance and the balance against the railway receipt forwarded along with the Hundis payable at Hyderabad, Accordingly, as per the orders placed by the plaintiff the defendant purchased 600 pallas of cotton seeds and intimated the same to the plaintiff. As advance towards the purchase price of the cotton seeds, the defendant drew Hundis on the plaintiff in a total amount of O. S. Rs. 7,300.00 and received the amount. By telegram dated 24-7-1952, the plaintiff instructed the defendant to despatch the cotton seeds to Hyderabad. But, by telegram dated 25-7-1952, the defendant informed the plaintiff that there was no stock of cotton seeds standing to the credit of the plaintiff and thereby committed breach of the contract entered into by the plaintiff and the defendant. At the end of August, 1952, the market rate for cotton seeds in Hyderabad was O. S. Rs. 28-4-0 per palla and, thus, the plaintiff suffered damage to the extent of O. S. Es. 7,900/-. The plaintiff prayed for a decree ultimately for O. S, Rs. 9,555-7-3 being the total amount due with interest at 6 per cent per annum equivalent to I. G. Rs. 8,190-6-3. In his written statement, the defendant denied that he came to Hyderabad and entered into an agreement with the plaintiff at Hyderabad. The defendant was having dealings with the plaintiff-firm even from the year 1949 and the transactions used to take place by letters and telegrams and the business was carried on for the last several years as per the business conventions and customs prevalent in this regard. It was denied that there was any agreement to despatch the goods purchased by the defendant on behalf of the plaintiff from Hingoli to Hyderabad. It is not true that there was any agreement that the price must be paid at Hyderabad. The entire price of the goods purchased was to be paid by the plaintiff to the defendant as and when the goods were purchased. It was denied that only fifty per cent of the price bas to be paid as advance and the balance against the railway receipt forwarded along with the Hundis payable at Hyderabad. The orders for the purchase of 600 pallas were placed on different dates by telegrams and letters, and these orders of purchase included not only the purchase of cotton seeds but also other goods like Lac, Massoor etc. The City Civil Court at Hyderabad had no jurisdiction to entertain the suit as no part of cause of action arose within its jurisdiction. Out of 600 pallas of cotton seeds, there is one transaction of 200 pallas of cotton seeds which related to a forward contract for which the delivery was for Phagun. Out of this, 100 pallas were purchased at the rate of Rs. 23-15-0 on 18-1-1952, The plaintiff failed to pay the amount as per the contract within the stipulated period and as per the business rules. The defendant sold the said 200 pallas on the due date at the rate of O. S. Rs. 10-11-0 per palla, the ruling market rate on 11-3-1952 which was the due date and thereby incurred a loss of O. S. Rs. 2,680-4-0 which has been adjusted in the account of the plaintiff and the same has been intimated to him along with the account. Regarding the remaining 400 pallas of cotton seeds, the plaintiff did not send the price in spite of several demands. Therefore, the defendant sold them and credited the price realised to the plaintiff. As per the account, the defendant has to pay the plaintiff only a. sum of O, S. Rs, 851-10-6 which he waa ready to pay. On these pleadings, the following issues were framed: - "(1) Is the plaintiffs firm, a partnership firm? If BO, is the suit liable to be dismissed on the ground that it is not registered? (2) Was there an agreement to purchase and despatch cotton seeds from Hingoli to Hyderabad City to the plaintiffs business place on terms set out in para (3) of the plaint? (3) Has the defendant incurred a loss of Rs. 2,890-4-0 in the transaction of zoo pallas of cotton seeds? If so, is he entitled to adjust the loss in the account of the plaintiff? (4) Were the cotton seeds sold at the prevailing market rate on the ground of the plaintiffs failure to give instruction even on demand? (5) Has the plaintiff suffered a loss of Es. 7.778-8-3 due to denial and clear breach of duty by the defendant? (6) Has this Court jurisdiction to try the suit? (7) Is the suit within limitation? (8) Have the arbitrators given an award? Have the parties agreed to it? If so, what is its effect? (9) What relief is the plaintiff entitled to? On the first issue, the lower Court found that the plaintiffs firm is not a partnership firm and that, therefore, the suit is not liable to be dismissed on the ground that it is not registered. It also held that the plaintiffs case of the contract as set out in the plaint is not true and that the defendants version that the orders were executed on intimation is true. It also held that out of the 600 pallas, 200 pallas cotton seeds were taken delivery of at Phagun and that the 400 pallas were for ready delivery. It was further held by the lower Court that the rate of cotton seeds on 11-3-1952 was O. S. Rs. 1o-11-o per palla and that the defendant incurred a loss of O. S. Rs. 2,680-4-0 on 11-3-1952, the date of settlement for 200 pallas. It was fur- ther held by the lower Court that the plaintiff failed to comply with the several demands mada by the defendant to pay the price or to pay at least such amount which would cover the expense incurred by the defendant in the matter of the purchase of these 400 pallas of cotton seeds and that, therefore, the defendant was justified in selling the stock as he received no word from the plaintiff notwithstanding repeated intimations. On issue No. 5, the lower Court held that the defendant did not commit any breach of contract. It also held that the suit is barred with respect to the transaction relating to 200 pallas-Phagun delivery as it was filed more than three years from 11-3-1952. On the question of jurisdiction, the lower Court held that it had jurisdiction to entertain the suit as the Hundis were being drawn on bankers at Hyderabad for collection.

(3.) The first question for determination is whether the plaintiffs case regarding the contract which was alleged to have been entered into at Hyderabad is true. In the plaint, it is stated that the contract was entered into in the month of Poosh, 2008. The contract was not reduced to writing. (His Lordship examined oral and documentary evidence and proceeded:) For these reasons, we believe that the transaction relating to the 200 pallas of cotton seeds -- Phagun delivery was settled to the knowledge of the plaintiff and that it ended with a loss of O. S. Rs. 2,680-4-0 and that Ex. B-14 is a true copy of the letter written by the defendant to the plaintiff and that the plaintiff suppressed the original of Ex, B-14 and has falsely denied having received the same. It follows that the lower Court has rightly found Issue No. I against the plaintiff and that Issue No. 2 also must be held against the plaintiff and in favour of the defendant.