BIRDHI CHAND SUMERMAL Vs. RAMDEO

JUDGEMENT

(1.) THIS is a first appeal by the defendants arising out of a suit for recovery of damages on account of the alleged breach of contract on their part to take delivery of 485 bales of gunny bags which they had contracted to purchase from the plaintiffs. In order to appreciate the various questions which have been canvassed on behalf of the appellants, it would be necessary to set out the facts leading to this litigation.

(2.) THE case of the plaintiff-respondents is that they carry on business at Sambhar along with one Ramvallabh who has been made a proforma-defendant, and defendants Nos. l to 3 also carry on business at Sambhar under the name and style Firm Birdhichand Sumermal, which is a partnership firm. It is alleged by the plaintiffs that on Magh Badi 4, Smt. 2003 equivalent to 10-1-47 the defendant firm Birdhichand Sumermal purchased bales of gunny bags from the plaintiffs in two lots to be delivered on Fagan Sudi Poonam, Smt. 2003 equivalent to 7-3-47, one of 225 bales at the rate of Rs. 80/14/- per hundred bags and the other of 260 bales at the rate of Rs. 80/15/- per hundred bags. Thus, the total contractual price of these 485 bales of gunny bags came to Rs. 1,96,203/2/ -. It was averred in the plaint that this transaction was entered into between the parties according to the usage prevalent in the market with respect to such transactions. It was specifically stated that according to the usage, the delivery of the bales could be given and taken within a period of five days from the due date i. e. upto Badi 5th of the next month* THE plaintiffs' case is that the defendants neither offered the price of the bales nor came forward to take delivery of the same. Consequently, oh Chait Badi 1, i. e, 8-3-47, the plaintiffs gave a registered notice to the defendants to take delivery of the bales which were lying in their godown on payment of the price. A copy of this notice has been placed on the record and marked Ex. 11. This notice was delivered to the defendants on 10-3-47 and the postal acknowledgment signed by one Champalal on behalf of the defendants has been placed on the record and marked Ex. 10. THE defendants, however, did not give any reply to this notice and, therefore, another notice was given by the plaintiffs to the defendants on 12-3-47 asking the latter that they may take delivery of the stipulated bales on 13-3-47 on payment of price of the same to the Punjab National Bank Ltd. , Sambhar. This notice was delivered to the defendants on 13-13-47. A copy of this notice has been marked Ex. 14 and the postal acknowledgment of the same is Ex. 13. THE plaintiffs go on to state that even the second notice proved ineffectual and thus the defendants committed breach of contract. THE plaintiffs, therefore, gave a third notice to the defendants on 14-3-47 informing them that 485 bales which the defendants had agreed to purchase but had failed to take delivery of the same, would be auctioned in the market. This notice was delivered at the defendants' firm on 15-3-47 and its postal acknowledgment dated 15-3-47 has been placed on the record and marked Ex. 18. Even then the defendants did not reply and consequently the plaintiffs, it is alleged, gave a fourth notice on 15-3-47 informing the defendants that the bales would be auctioned on 16-3-47. THE plaintiffs' case is that when the defendants did not turn up to take delivery of the bales nor did they care to reply to any of the notices served by the plaintiffs on them, the bales of gunny bags were auctioned in the market and since the market price of these bales had considerably gone down, the plaintiffs were able to recover only Rs. 1,70,125/- as price of these bales and were thus put to a loss of Rs. 26078/2/ -. To this, they added Rs. 121/-on account of commission, Rs. 1/2/- by way of miscellaneous expenses and Rs. 6080/1/3 as interest by way of damages at the rate of ten annas percent per month and thereby claimed a total sum of Rs. 32,280/9/3. THE plaintiffs also stated in para No. 12 of the plaint that the parties had made a reference to the arbitrator Shri Ramnarain Jajoo on 14-4-47 and the arbitrator gave an award on 26 4-47 according to which the defendants were made liable to pay Rs. 26, 199/6/- as damages to the plaintiffs. But the defendants did not comply with the award. THE plaintiffs also claimed pendente lite and future interest at the rate of ten annas percent per month.

(3.) ON the other hand, Mr. Parikh, learned counsel for the respondents, has urged that the plaintiffs do not seek to enforce the award by this suit nor the award has been made the basis of the suit. He submits that the suit has been based on the original cause of action His contention is that after the coming into force of the Indian Arbitration Act No. X of 1940, the passing of an award by itself does not extinguish the rights of the parties until such award is subjected to the process mentioned in the Act and, therefore, the present suit based on the original demand is maintainable. He has also contended that the lower court has come to a positive finding that neither an agreement to refer the subject-matter of dispute to arbitration nor the award have been proved. He has also invited our attention to the Grounds of Appeal filed by the defendants in this Court and has submitted that the finding given by the lower court in this respect has not been challenged and, therefore, it must be assumed for the decision of this appeal that there was neither an agreement for referring the subject-matter of dispute to arbitration nor any award was made.