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TMI Blog1976 (3) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... each of contract committed by the defendant. The defendant's case is that it was no doubt true that the first two contracts were entered into no the dates specified by the plaintiff in the plaint, but in so far as the third contract is concerned, there was no written contract but only an oral contract to supply one wagon. His further claim is that from time to time the plaintiff injuncted him from normally performing the contract on the ground that he had sufficient stocks of tins or on the ground that the demand had come down and that, therefore, he could not fully perform the agreed contracts. He would refer to the correspondence which we shall presently consider and would add that in or about February-March, 1970 there was an increase in the excise duty payable on tins and as such increase has to be borne in law by the buyer, he demanded whether the plaintiff was inclined to agree to the despatch of the goods at prices which would include such excise duty also and the plaintiff categorically refusing to suffer any such additional responsibility the defendant could not, though he was anxious otherwise to, perform the contract in terms thereof. The defendant's case is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember and the next three wagons by 15th of December and the last 3 wagons by the 22nd of December. The defendant under Ex. B-3 would say that his proprietor was out of station and that the orders under Exs. B-1 and B-2 would be confirmed on Wednesday but claims that he has already despatched one wagon and indicates that there has been an increase in the market price of the goods. Under Exs. B-4 the defendant, in continuation of his telegram impliedly agrees to accept the offer made by plaintiff under Exs. B-1 and B-2 and in part performance of the same would despatch 5 wagons of tin but incidentally he wanted an increase in price. As early as November 20, 1969 under Ex. B-5, the defendant made if clear that he would be performing the contract as desired by the plaintiff under Exs. B-1 and B-2 but without making any condition precedent for its performance in the matter of increase in price. He however indicated that the market price has increased. Exs. B-6 and B-7 are further telegrams, former by the plaintiff and the latter by the defendant in which it is made clear that the quantity as well as the price offered for the supply of tin was agreed to by the defendant. 4. The second c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiff requests the defendant to send two wagons of the containers and complains that in respect of the earlier supply there was a difference in weight, but conspicuously added that 'for our future requirements we shall write to you well in advance.' This is followed up by a letter of the defendant dated 26-2-1970, Ex. B-17. In this letter the defendant denies that there was any difference in weight in the matter of the supplies already made and would agree to despatch the tins which the plaintiff wanted, one wagon load at the rate of ₹ 360/- per 100 tins and the other at ₹ 425/- per 1000 tins. The plaintiff, on receipt the necessity for the despatch of two wagons in part performance of the subsisting contracts. 6. At or about that time, excise duty was imposed on tin and it became necessary for the defendant to issue a circular to all his buyers including the plaintiff. It is common round that under Ex. A-49 dated 2-3-1970 the defendant informed the plaintiff amongst others that the excise duty has gone up and that they will be levying such duty on all containers which they would be supplying to the plaintiff form 1-3-1970. The plaintiff, in reply to Ex. B- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant's case is that he was informed orally that the plaintiff would not pay such excess excise duty as part of price. It is in the light of this that we should now look into Ex. B-23 the notice issued by the lawyer on behalf of the plaintiff. In this notice for the first time without adverting to the earlier interdicts and express despatch instructions given by the plaintiff in the course of the working of the contracts, the plaintiff, through the lawyer, would say that as regards the first contract the defendant was to deliver two wagons at the rate of ₹ 360/- per 100 tins and as regards the second contract, the defendant was yet to deliver 19 wagon loads of tins at the contract four wagons remain yet undelivered. After having quantified the default alleged to have been committed by the defendant, the plaintiff's counsel under Ex. B-23 says thus: 'My clients are not concerned with the excise duty. You are also not entitled to add excise duty in the price of goods...... Because of the sudden increase in price you are not willing to supply the goods as contracted.' Having said that, he claimed, based on a calculation made by him, a sum of ₹ 43,875/- as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de hors the earlier correspondence and the true intention behind the postponement of the performance of the contract on the part of the defendant. The learned counsel would agree that at stated intervals there were varied despatch instructions which sometimes interdicted the defendant from performing the contract. In fact Exs. B-8 and B-9 and B-14 are couched in emphatic terms. The plaintiff would say 'do not despatch' or 'stop despatch'. These unambiguous instructions from the buyer cannot be explained away lightly. The instructions that followed under Exs. B-16 end B-19 though not so emphatic however injuncted the defendant from performing the contract in accordance with the tenor and literature of the same. Under Ex. B-19 which is the latest letter on this aspect dated 3-3-1970 the plaintiff said that further despatches need be made 'only after hearing from us.' The word 'only ' used by the plaintiff has some significance. Mr. Narayanaswami was unable to point out any letter prior to 13-4-1970 which is the lawyer's notice under which the plaintiff gave any instructions at all regarding despatch. If therefore, for the first time the counsel dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enable him to claim such performance at a time when it is most advantageous to him. In our view the buyer cannot adopt such a self-serving policy. The plaintiff himself was not keen upon performance but he was further interested in part performance of the contracts. He would only ask for one wagon or two wagons in his correspondence and would, on more than one occasion, say 'stop despatch.' In such circumstances, the plaintiff, the buyer cannot of his own and to his advantage pick end chose the time for performance. What prompted the plaintiff to keep silent without furthering the instructions given under Ex. B-9 between March 3, 1970 and April 13, 1970 is not at all explained. In such circumstances, it would be highly inequitable and unjust to accept claim for compensation or damages on the part of such a self-interested buyer who postpones the demand for delivery without cause but obviously with intent to gain a material advantage to himself. As early as 1912 this principle in a different form was stated by a Division Bench of our court in Muthayamanigaran v. Lakku Reddiar, MANU/TN/0096/1912MANU/TN/0096/1912 : (1912)22MLJ413 . Sec. 63 of the Contract Act does not entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion) should have ever been given by the plaintiff in the matter of the performance of the contracts. The only demand for performance is under the lawyer's notice Ex. B-23 to which the defendant replied under Ex. B-24 asking the plaintiff whether he was willing to suffer extra excise duty which was by then imposed by law and asked him to inform his willingness in that behalf. It is admitted that the plaintiff did not reply to Ex. B-24. 12. We shall now take up the question whether the plaintiff could, in the circumstances of this case, and on the basis of this demand for performance under Ex. B-23, lay a suit for damages for non-performance of the demand couched in the lawyer's notice. It is common ground that excise duty was increased as is seen from Ex. A-49 and other letters such as Exs. B-22 and B-24 written by the defendant. In a contract for sale of goods the essential ingredient in it is the price. It is this price which is described as consideration for a contract in the Contract Act. Every promise forming the consideration for each other is an agreement. An agreement enforceable by law is contract. Section 25 says that an agreement made without consideration is vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d compel the seller to demand as of right the payment of such levy or increase in levy in excise duty and add the same to the contract price and ask of its payment. The compendium of the initial contract price and the tax or the duty or the increase in the excise duty would automatically become the agreed price between the parties. Such payment of price and delivery of goods are concurrent conditions and one is an exchange for the other. As already referred to in Sec. 32 of the Sale of Goods Act, any attempt on the part of the buyer to avoid such a statutory obligation would entitle the seller not to perform his reciprocal concurrent obligation of delivering the goods. 13. In the instant case the facts are clear. The defendant hinted about the increase in excise duty under Exs. A-49 and B-22 Ignorantia legis neminem excusat. The plaintiff is bound to know the provisions of the Sale of Goods Act. As a matter of fact he very well knows about it. At any rate when he spoke through his lawyer in Ex. B-23 he was conscious about it. He would instruct his lawyer to say that they are not concerned with excise duty and that the defendant is not entitled to add the excise duty with the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed the defendant did not raise the same as a shield to avoid the performance of the contracts. But on the other hand the defendant was willing and ready to send three wagons of tins as agreed to. Therefore, there was an open breach of contract in so far as three out of the total unperformed quantity of the goods in the contracts are concerned and the defendant cannot escape the normal liability to pay damages which would flow from such a deliberate breach. We have already referred to the fact that the defendant from time to time as well as the plaintiff were referring to the increase in the market price of the goods. The defendant having agreed to supply three wagons after so much of controversy cannot escape the liability to suffer damages which would result from the avoidance of such an offer made by him to perform a part of the contract. We are, therefore, of the view that the plaintiff should suffer damages for the non-supply of these three wagons. 16. We have already held that apart from the above, in the circumstances of the case and having regard to the fact that there was no consensus as between the parties in the matter of the price of the goods to be supplied and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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