MOTICHAND Vs. VISHRAM

JUDGEMENT

(1.) 1. The order in this case will also cover Civil Revision No. 269 of 1933. The suits out of which these revisions arise were brought by the plaintiffs against the same defendant on similar facts and, by consent the suits were heard together.

(2.) THE plaintiffs are dealers in silver and on 12th January 1930, had agreed with the defendant to purchase from him a bar of silver weighing 2,800 tolas at the rate of Rs. 49-4-0 per hundred tolas. Delivery was to be made on 1st April 1930. In the meantime the Government of India had levied an import duty on silver at the rate of annas four per ounce and when the plaintiffs demanded delivery the defandant offered to deliver the silver at the contract rate with an addition of Rs. 9-6-0 duty per 100 tolas. The market rate of silver at the time was Rs. 53 per 100 tolas. The plaintiffs refused to accept the delivery at the rate enhanced by the charge of the increased duty. They then sued the defendant for damages arising out of a breach of contract, and the defendant put in a cross-claim also for a breach of contract on the part of the plaintiff 1. The defendant originally contended that the plaintiffs were bound by the usage of the Nagpur market whereby the increase in price resulting by the imposition of the duty was to be borne by the purchasers. Before evidence was led, this plea was abandoned and the defence relied solely on Section 10, Tariff Act. That section runs as follows: In the event of any duty of customs or excise on any article being imposed, increased, decreased or remitted after the making of any contract for the sale of such article without stipulation as to the payment of duty where duty was not chargeable at the time of the making of the contract, or for the sale of such article duty-paid, where duty was chargeable at that time; (a) if such imposition or increase so takes effect that the duty or increased duty, as the case may be, (or any part thereof), is paid, the seller may add so much to the contract price as will be (equivalent to the amount paid in respect of such duty) or increase of duty, and he shall be entitled to be paid and to sue for and recover such addition, and; (b) if such decrease or remission so takes effect that the decreased duty only or no duty, as the case may be, is paid, the purchaser may deduct so much from the contract-price as will be equivalent to the decrease of duty, or remitted duty, and he shall not be liable to pay, or be sued, for, or in respect of, such deduction.

(3.) THE cases which the learned Counsel for the applicant has cited are in no way in his favour, but establish the case of the plaintiffs. In Peer Mahommed Essack v. Hajee Sakur Ganny A.I.R. 1933 Mad. 24 the contract was to purchase certain articles from the defendant from a bonded warehouse. Between the dates of the contract and delivery an increase in import duty was imposed and although the goods tendered were in India before the date of the increase in the import duty, it was held that as the sale was from a bonded warehouse, the goods could not be removed from there until the increased duty was paid and that consequently the seller was entitled to withhold delivery until the contract price together with the duty was tendered. In Jhamandas v. Tirathdas A.I.R. 1933 Sind 404 it was held that it was immaterial, in a contract for the sale of goods, for the vendor to show that he himself paid the increased import duty and all that was necessary for him to show was that the increased duty had been paid on the goods tendered. These decisions do no more than point out the essential feature of Section 10, Tariff Act, which is that before the increased duty can be passed on to the purchaser, that duty must have been already levied on the goods tendered. All that the applicant offers to show in his evidence is that he had purchased silver at an increased rate. This, in commerce, is the inevitable result of an enforced rise in tariffs, but it certainly does not follow that proof of having purchased the goods at an increased rate is proof that the goods purchased have paid the additional duty. The defence which should have been adopted by the applicant on his pleadings is clear, and he is not now entitled to ask that the case should be remanded in order to afford him an opportunity of pleading and proving that the increased duty had actually been paid on the silver which he offered to the plaintiffs, The result is that the application in revision fails and is dismissed with costs. Pleader's fee Rs. 35.