MADRAS ENGINEERING WORKS LTD Vs. MUNICIPAL COUCIL

JUDGEMENT

(1.) This is a suit brought by the Madras Engineering Works, Limited, against the Municipal Council of Trichinopoly. The plaintiff company tendered in December, 1919, forthesupply to the Council of two boilers for the purpose of their water works, and on the 19 January, 1920, they tendered at the price of Rs. 9, 145 per boiler free on rail Madras, and they conclude the letter by which they forward the quotation thus: "This quotation is subject to the usual strike Clause failure in transport or any other unforeseen circumstance over which we have no control." They also state that delivery was to be within five months. That tender was accepted by the Council and the acceptance was notified by a letter from Mr. O Brian, the Chief Inspector of Steam Boilers in Madras, who was obviously acting as agent for the Council with regard to the arrangement about these boilers. The boilers were not delivered in time, and taking the contract as being concluded on the 7 of February we may have been in default some time towards the end of July.

(2.) Meanwhile, the Engineering Company wrote on the 5 of July 1920 again addressing Mr. O Brian a letter in which they state that the estimate which has been accepted "was prepared on a basis of exchange of Schedule 2/2 and was also subject to the usual freight, transport or unforeseen circumstances over which we have no control." They say that they were told from England that the prices had advanced 10 per cent, and they raise the question of exchange. It is perfectly clear that at the date that letter was written, the plaintiff had no right whatever to attempt to maintain that they were entitled as of right to have these extra charges, But no answer was given and the matter dragged on! As I have already said, by the e July, to take a liberal interpretation of the term "about five months" which appears in the contract, somewhere about the e July, or the beginning of August, the plaintiff company would be in default. Then I think they were entitled to say to the Council, "We have failed to deliver in time. You have your remedies against us if you choose to pursue them for that default of ours. Or if you will agree to pay the extra charges that we asked for at the time when we were not entitled to ask for them, then we will, notwithstanding that the contract is technically at an end by breach, nevertheless, deliver these boilers at an enhanced rate." In other words to make a new contract with the Council. I have not heard the evidence which I was to have heard from Mr. Wilson and Mr. O Brian on behalf of the plaintiff company; 1 have only read the correspondence and the pleadings. But it is extremely probable from the language used in the correspondence that Mr. O Brian acting on behalf of the Council, did agree to the enhanced price. That, I think, is strongly suggested by the letter of the 31 August 1920 from Mr. O Brien to the Chairman of the Municipal Council in which he speaks of the slight extra cost being one that will be soon recovered by the reduction in fuel consumption. The plaintiff company by a letter of Mr. Wilson, the Managing Director, dated the 3 September 1920, tell the Chairman of the Council that he was wise in adopting the course which he had decided upon. The boilers were duly delivered and the Municipal Council has had the benefit of them ever since. When they were pressed for payment they declined to pay any more than the original contract price.

(3.) A point was taken by the Council in their pleading that there was no consideration for the enhanced price because the only consideration that could be supposed to exist was an abstention by the Engineering Works from a breach of their contract which of course, is in law no consideration at all. But that plea is not well-founded because at the time when if at all this agreement was concluded, the contract was gone as I have already pointed out.