MUHAMMAD HABIDULLAH Vs. BIRD & CO

JUDGEMENT

(1.) The present appeal arises out of a contract made between the appellant and the respondents by which the appellant was to supply 4000 sleepers of a special pattern at any station on the Bengal-Nagpur Railway by May 31, 1913. As a condition of the contract, the appellant had to deposit and did deposit Rs. 5000 with the respondents as security for liquidated damages at a certain rate per foot for all sleepers not delivered on the said May 31. The sleepers had to pass inspection. Only 1746 sleepers were delivered and passed inspection. The time for delivery was extended, but no more deliveries were made, and the parties in December, 1913, broke off negotiations. The appellant then raised action asking for (1) the return of the deposit; and (2) damages in respect of his profit on the balance of sleepers not supplied. The respondents counterclaimed for damages in respect of sleepers not delivered.

(2.) The Subordinate Judge held that time was of the essence of the contract as originally made, but that the respondents had by delaying inspection not given the appellant proper opportunity of supplying the whole of the sleepers by May 81; that thereafter both parties were willing and anxious that the contract should go on, time being, he held, under these circumstances no longer of the essence. He further held that when in the month of December the respondents alleged non-performance, and maintained that they would claim the penalty, that was equivalent to putting an end to the contract on their part, and he gave judgment for a return of the deposit and for damages calculated on the profit which would have accrued in respect of the unsupplied balance. On appeal, this judgment was reversed. The High Court, agreeing with the Subordinate Judge that time was of the essence of the contract as originally made, held that the fault in non-delivery by that date lay with the appellant, who never had 4000 sleepers ready for delivery by that time, and could not excuse himself, because at one particular station of the railway there was no room to lay out 4000 sleepers at one time. They held that the respondents had excused non-delivery at May 31, and had, in response to application to that effect by the appellant's agent, allowed the time of delivery to be prorogued until November 30; that non-delivery having been then made the appellant was in breach; that, although the liquidated damages condition could no longer apply, the respondents were entitled to damages for the non-delivered portion on the calculation of the profit which they would have made comparing the price under the principal contract with the railway company with the price they had to pay under the contract with the appellant. They accordingly dismissed the appellant's claim for damages, and gave him a decree for the deposit under deduction of the damages due to the respondents as above calculated.

(3.) The view of the evidence which commended itself to the High Court is set out with great minuteness in the judgment of the High Court, and as their Lordships agree with the learned judges, they do not think it necessary to repeat what is there said. The crucial facts are as follows : (1) Time was of the essence of the original contract; (2) the appellant was in default in not making complete delivery in time-i. e., at May 31, 1913; (3) the appellant applied for and was granted by the respondents an extension of time until November 30, 1913, for delivery of the balance over the 1746 sleepers which had been delivered ; and (4) delivery of the balance was not made by the respondents on November 30, and they were consequently in default.