RATANLAL KHUSHALRAI Vs. BRIJMOHAN PRALHADKA

JUDGEMENT

(1.) This is an appeal from the judgment of Mr. Justice Kania raising certain questions of commercial usage and commercial law which are discussed at length in the judgment of the learned Judge. It would really be enough to say that I entirely agree with his judgment except as to the point of interest with which I will deal presently. In deference to the strenuous argument of Mr. Mehta I will state very shortly my own reasons for thinking the appeal must fail.

(2.) The claim of the plaintiffs is based on their having been instructed as defendants brokers to purchase 450 tons of linseed for the vaida of September 1921. A hundred tons were subsequently sold. As to twenty-five there was an Havala; that reduces the amount to 325 tons. The learned Judge held that as to seventy-five tons the plaintiffs never did purchase them in the market as brokers, but allocated to the defendants contract seventy-five tons belonging to the plaintiffs, and he held that the plaintiffs were not entitled, being employed as brokers, to convert themselves at will into principals. There is no appeal from that part of the order and that reduces the amount with which we have to deal to 250 tons. The learned Judge has held as a fact that the plaintiffs did purchase in the market as brokers for the defendants 250 tons. Mr. Taraporewala contends that having acquired 250 tons as brokers then the relationship between the plaintiffs and the defendants became that of sellers and buyers. Mr. Mehta contends that the relationship between them was that of principal and agent, and that if there had been a breach of the contract at the due date the plaintiffs could only have recovered damages by showing that they had as brokers dealt with the 250 tons in the market with third parties and that they had suffered losses on that basis. To my mind it is not necessary to consider that question in this case because on August 27, 1921, the defendants repudiated the whole transaction denying that they ever instructed the plaintiffs to buy any linseed at all. On that repudiation it was open to the plaintiffs either to refuse to accept the repudiation and wait till the due date keeping the transactions open, or they could accept the repudiation. They did in fact by their letter of August 29 accept the repudiation, and I think they might then have waited until the due date in order to see what damage they had suffered by reason of the repudiation the amount of which damage would depend on the price of linseed on the due date. In fact in their letter of August 29, 1921, they say that they accept the repudiation of the contract and they have closed the outstanding transaction of 325 tons of linseed for September vaida according to the Bazar Dhara at Rs. 16-12-3 per cwt., being the closing rate of the 30 instant. So that they say that they have closed the account as at the date of August 30, and the learned Judge has held them bound by that statement and has awarded them damages on that basis, and that I think was right.

(3.) Mr. Mehta has argued that the plaintiffs were bound to show that as agents they had in fact sold against the plaintiffs to third . parties, but in my view it is not open to him in one breath to repudiate the whole contract and in the next breath to say that the plaintiffs must continue to show that they acted as agents under the contract. I think they were entitled to accept the repudiation and close the account at the current rate on the date of repudiation. This is the basis on which damages have been given.