LAWS(PVC)-1942-2-32

W J YOUNIE Vs. TULSIRAM JANKIRAM

Decided On February 18, 1942
W J YOUNIE Appellant
V/S
TULSIRAM JANKIRAM Respondents

JUDGEMENT

(1.) The first three plaintiffs are the receivers appointed by defendant 4 bank on 16 July 1938 under its powers in indentures of mortgage and charge dated 7 May 1934 and 16th October 1935, by which Messrs. John King & Co. Ltd. (now in liquidation) charged their assets, including the Victoria Engine Works, Howrah, in favour of the bank. It is convenient hereafter to refer to plaintiffs 1, 2 and 3 as "the plaintiffs." No point arises with regard to vesting of the Engine Works in the plaintiffs, nor their right and authority to deal with and dispose of the property, buildings, plant and materials thereupon or to bring the present suit. In September 1939 the plaintiffs invited tenders upon the terms contained in their Conditions of Tender with the Conditions of Contract attached thereto. By letters passing between the plaintiffs and defendants 2 dated 30 September 1939 and 3 October 1939 and by telephonic conversations between the plaintiffs and defendants 2 as agents for defendant 1, a contract was made between the plaintiffs and defendant 1. In the written statement of the latter the authority of defendants 2 to act and contract as agents for defendant 1 is denied. Mr. S.N. Banerjee, learned Counsel for defendant 1, however, stated at the outset that his client admitted that throughout defendants 2 were agents for defendant 1, and the suit contract was made by them on his client's behalf upon the terms contained in the letters and abovementioned documents. In the plaint, it is alleged that by the suit contract defendant 1 agreed to pay Rs. 80,000 to the plaintiffs and to demolish the structures and buildings erected upon the site of the Victoria Engine Works and to remove the demolished and other materials, which then became his property, the contract to be completed by 28 March 1940. A further sum of Rs. 10,000, as security deposit, was payable with the tender which was to be forfeited, and all materials lying, erected or stored on the premises at the time of breach to be confiscated by the plaintiffs and to become their absolute property in the event of non- compliance by defendant 1 of the Conditions of the Contract. A further term of the contract provided that the ownership of all materials and structures should be vested in the plaintiffs so long as they were lying at the site and would only become defendant l's property after removal.

(2.) On 4 October 1939, a meeting was held between the representatives of the plaintiffs, defendant land defendants 2, respectively, when it was arranged that in addition defendant 1 should be entitled to remove the several effects set out in a record of the meeting dated 5th October 1939, in addition to the materials covered by the contract. The price of Rs. 80,000 was duly paid, but the security deposit of Rs. 10,000 was not furnished by defendant 1. On 3 October 1939 the plaintiffs wrote to defendants 2 asking for this sum to be deposited, when the price of Rs. 80,000 was remitted, thirty days after possession was taken by defendant 1, and the letter confirmed that defendants 2's durwans had taken possession of the buildings. On 7 October 1939 defendants 2 replied stating they were calling upon their principals to furnish them with the security deposit. On 2 November, 1989, defendants 2 wrote confirming they would be responsible for realisation and payment to the plaintiffs of the security deposit of Rs. 10,000 in, - the event of the purchaser failing - to fulfil the terms and conditions of sale. The letter continues that in defendants 2's position as agents they had obligations to principals and buyers, and it was a recognised procedure that any amount demanded in the terms of sale by way of extra security deposit should be with held by them as trustees until the due fulfilment of the contract. The plaintiffs replied on 4 November 1939 that they were not agreeable that defendants 2 should hold the security deposit and requested this to be forwarded immediately. Defendants 2 wrote to defendant 1 on 7th November asking for payment of the security deposit with the balance of the purchase price by 17 November 1939, failing which, without further notice, they would proceed to effect a resale of the structures. On 12 January 1940 the plaintiffs wrote to defendants 2 complaining of the removal of scrap, and that unless defendant 1 compensated them for this material already removed and suspended his salvage operations or entered into some acceptable agreement for its purchase, they would be compelled to call upon "you" for immediate payment of his deposit money. A copy of this letter was forwarded by defendants 2 to defendant 1 on 16 January.

(3.) On 23 January the plaintiffs wrote to defendants 2 referring to a meeting on the previous Saturday. They confirmed they were prepared to accept Rs. 1200 for the purchase of the salvage rights of scrap material lying underground on the factory site. This letter appeared to terminate a dispute which had arisen regarding the right of defendant 1 to remove the scrap material from the site of the Engine Works. On 21 March 1940 (seven days before the expiration of the period for completion of the contract) defendants 2 wrote to the plaintiffs stating that it would not be possible to complete the work of clearing the site within the stipulated time and requesting an extension of three months ending June 1940. The letter continued that in view of the fact that the work of demolition had proceeded regularly from the day possession was given to defendant 1 the writers trusted the plaintiffs would see their way to allow the extension, and should they be agreeable "we" will accept the responsibility in regard to the extra security deposit of Rs. 10,000; and would undertake to be responsible for realization on the plaintiffs behalf from defendant 1 of such expenses which would probably be incurred by way of municipal taxes.