DHANRAJ MILLS LIMITED CO Vs. NARSINGH PRASAD BOOBNA

JUDGEMENT

(1.) This appeal arises out of a decree passed by the learned Additional Subordinate Judge of Patna, referring to arbitration a suit to recover damages for breach of contract. The contract in question was entered into on 12 November 1939, by one Murlidhar Lath, acting as the agent of the plaintiffs, who are cloth merchants in Patna City, and the defendant, which is a limited company and is the owner of the Dhanraj Cotton Mills at Bombay. The person who acted on behalf of the company was one Ramgopal Ruia, who was a Director of the Dhanraj Mills Limited and, the Managing Director of Ram Gopal Ganpat Rai & Sons, Limited, who were the Managing Agents. Under this contract the Dhanraj Mills were to supply to the plaintiffs 2001 bales of dhotis, the goods to to be delivered in instalments during the first six months of 1940 "as and when manufactured." The contract was in a printed form containing a large number of conditions. On 13 November 1939, there was added in manuscript a clause which has led to the litigation and which was in these terms: This contract is made under a clear understanding that the management want to work the mill night shift. If, however, the management does not work the mill night shift, or stop working night shift due to increase in labour charges or whatsoever any other reason the contract will be cancelled without claiming any allowance by the buyers. Whatever goods of the contract then ready will be taken delivery of by buyers at contract rate. According to the plaintiffs, their agent, Murlidhar, had no authority to vary the contract in this way and, in any event, his consent to the variation made in the contract as originally concluded was obtained by means of fraud. The defendant, on the other hand, asserted that Murlidhar had full authority from the plaintiffs and asserted, moreover, that Murlidhar had agreed on 12 November 1939, that the company should be entitled to renounce the contract if it was decided not to work a night shift or if the working of a night shift had to be stopped. It was, it was contended, a mere accident that the clause added in manuscript in the printed form was signed by Murlidhar on 13 November 1939, and not on the previous day. It was said that, while the contract was being made out Ramgopalji had been called away to attend a meeting and, instead, of waiting to have the contract completed and signing it on the following day, Murlidhar insisted on signing so much of it as had already been made out on that day, as it was an auspicious day, being the Moorat Diwali.

(2.) Ram Gopol Ruia in his evidence endeavoured to make out that on 12th November 1939, he had not considered, or seriously considered, the possibility of introducing a night shift in the mills. According to him, it was Murlidhar who suggested this to him knowing that the mill was not likely to be in a position to supply 2001 bales of dhotis unless it worked a night shift. Murlidhar had, he said, pressed him to enter into the contract on the specific understanding that, if eventually it was found impossible to work a night shift, the mill would be entitled to renounce the contract. It is quite clear that the mill would have been unable to fulfil this contract unless, during some part of the period, it worked by night as well as by day. Ram Gopal's story that on 12 November 1939, the idea of working a night shift had not been seriously considered by him, and that, as soon as he put it before the director in charge of the working of the mills the latter pronounced it to be quite unfeasible, is however absurd. Mr. Edward, the director, who, according to Ram Gopal, vetoed the proposal was not put into the witness- box. Another employee of the mills, Har Prasad, was much more frank and straightforward than Ramgopal. This man admitted that, prior to 12 November 1939, steps had been taken to instal or add to the electric lights in the mill and also to arrange for extra labour. There is also evidence to show that on 30th. November 1939, when the mill renounced the contract, large purchases of raw cotton, had been made. It is, in my opinion, perfectly clear that, when the contract was entered into, both parties to it assumed that a night shift was to be worked. The learned Subordinate Judge appears to have assumed that, as the plaintiffs knew that the contract was entered into on the understanding that the mill was to work by night as well as by day, they must also have known that a clause had been inserted in the contract to provide against the possibility of the night shift not being worked or being discontinued. Clause 15 in the printed form provides inter alia for cases in which the mill worked short time or had to be temporarily closed down. Counsel for the appellants has suggested that the clause which was added in manuscript on 13 November 1939, is very similar to Clause 15 in the printed, form. As will appear later, I am unable to take this view of the matter. So the present, it is enough to say that the conduct of the plaintiffs and also of their agent, Murlidhar, is wholly in consistent with the plaintiffs having been aware prior to 20 November 1939, when they received a copy of the contract, that a condition had been inserted in it under which it was to be at the option of the defendant company to work or not to work a night shift and, in the event of its deciding not to work the night shift, to renounce the contract.

(3.) Shortly after signing the contract on 12 November 1939, Murlidhar sent a telegram to the plaintiffs, intimating that he had done so. This telegram shows that Murlidhar had also sent a letter to the plaintiffs. This letter was not produced at the trial, and the learned Subordinate Judge seems to have inferred from this that, if it had been produced, it would have contained some reference to the clause which was added to the contract next day. While I agree with the learned Subordinate Judge that this letter was a material document and that it should have been produced, I am satisfied that it cannot possibly have contained any reference to this particular matter. It appears that, after despatching the telegram, Murlidhar endeavoured to get into telephonic communication with the plaintiffs, but was unable to do so. Murlidhar, however, telephoned again to the plaintiffs on the next day. It has been shown that this telephone call was put through at 13.48 hours, which was an hour or two before the contract, as it stood originally, was varied. It may, I think, safely be assumed that, if Murlidhar had, in his letter, said anything about a provision in the contract relating to the possibility of a night shift not being worked or, if worked, being discontinued, he would have said something about it also in his telephone conversation. Now, on 14 November 1939, the plaintiffs sold 251 bales out of the 2001 bales they had ordered from the Dhanraj Mills, and on 16 November 1939, the sold another 101 bales. It is, in my opinion, quite impossible to suppose for a moment, that they would have sold these comparatively large quantities of the goods they had ordered from the defendant company if they had known or even suspected that the goods might not be delivered. I am satisfied that the plaintiffs knew nothing about this clause in the contract until they received a copy of it, and I am also satisfied that they did not receive this copy until 20 November 1939, Immediately on seeing it the plaintiffs wrote to the defendant company and also to their agent, Murlidhar, asking Murlidhar how it had come to be inserted and asking him also to get it deleted. On 25 November 1939, which must have been very shortly after Murlidhar received this letter from his principals, Ram Gopal sent a telegram to the plaintiffs asking them to come to Bombay by the first available train as Murlidhar was "quarrelling" with them. The story of Ramgopal that the trouble between Murlidhar and himself had arisen in consequence of Murlidhar wanting him to advance money to him out of monies with him belonging to the plaintiffs is, on the face of it, a pitiful falsehood. It is, I think, manifest that the reason why Ramgopal sent for the plaintiffs was that Murlidhar, in accordance with the instructions he had received, was pressing him to work the night shift, and for some reason or other he was unwilling either to do this or to delete the disputed clause in the contract. The plaintiffs or at least one of them, remained in Bombay for the better part of two weeks, endeavouring to come to some amicable and satisfactory arrangement with the defendant company, although on 30th November 1939, the defendant company had formally renounced the contract. To sum up, I am completely satisfied that the plaintiffs were unaware that any clause of this kind was to be inserted in the contract and that, if they had been made aware of the intention of Ramgopal to insert it, they would never have agreed to it.