RADHAKRISHNA SIVADUTTA RAI AND ORS. v. TAYEBALLI DAWOODBHAI
Citation: [1962] SUPP. 1 S.C.R. 81; 1961 INSC 293
Court: Supreme Court of India
Bench: BHUVNESHWAR PRASAD SINHA , P.B. GAJENDRAGADKAR, RAGHUBAR DAYAL
Judgment date:
Case summary
1961 INSC 293. Supreme Court of India judgment dated 1961-10-13. RADHAKRISHNA SIVADUTTA RAI AND ORS. v. TAYEBALLI DAWOODBHAI. Read the judgment and case...
Judgment text
(1) S. C. R. SUPREME COURT REPORTS 81 High Court by the Banking Companies Act, 1949 (X of 1949) is pa. rt of its ordinary civil jurisdiction within the meaning of Art. 183 of the Limitation Act, and an order passed in exercise of its ordinary Original Civil Jurisdiction is governed by Art. 183 and not by Art. 182 of the Limitation Act. In that case on an application preferred by the Official Liquidator of the Hanuman Bank Ltd. , a direction for payment by the High Conrt of certain sums of money by the appellant Munia on or before a certain date was made. To an application for enforcement of that liability Art. 183 of the Limitation Act was held applicable. In our view, the High Court was right in holding that the application for execution filed by the Official Liquidator was within limitation. The appeal, therefore, fails and is dismissed with costs. Appeal dismi&sed. RADHAKRISHNA SIVADUTTA RAI AND ORS. v. TAYEBALLI DAWOODBHAI (B. P. SINHA, c. J. , P. B.
GAJJ\]NDRAGADKAR and RAGHUJIAR DAYAt, JJ. ) Bread/, of coritract-Buit for damages-Broker•' bought and sold notea, if and when constitute terms of the comract-Commercial U8(l{le-Conlract on behalf af discloBPJl partner-Maintainabi-lity of •uit-lndian Contract Act, 1872 (9 of 1872), s. 230. · The appellant sued the respondent for damages for breach of contract. The respondent pleaded . that the app• ellant had contra~ted as agent for its disclosed principal and had no right to sue. The bought and sold notes issued by the brokers 1howed that the appellant had entered into ihe contract on account of the disclosed principal; but in the confirmation slips and subsequent letters exchanged between the parties no reference was made to the principal nor did the appcllan! J describe themselves as acting or signing on his behalf.
H eU, that it is well established in commercial usage 1h~t the bought and sold notes issued by the brows, where there is no \'ariation or disparity between them, constitute th~ contract that 1nust bind the parti~5. But where the bought and sold notes show material varia-tions, neither of them nor both of thrm taken together can be relied upon for proving the terms of the contract. Since there was 110 di! parity in the instant ca! C bct\vccn the two note e datecl March 1, 1957, of the Calcutta High Court in Appeal from Original Decree No. 71 of 1954. G. S. Patluik and ;Vaunit Lal, for the appellants. A. I'. Visuunatha Sa•tri, S. N. Andley, Ram. esh-wai- Nath and l'. L. Vohra; for the respondent. 1961. October 13. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. -This appeal by '. 1 certificate granted by the Calcutta High Court arises out of a suit filed by tho three appellants against the respondent to recover Rs. 83,640/-.
The three appellants are raspeotivcly the Firm Radhakishan Shivdutt Rai which carries on business at Banaras and Ramknmar Lal for himself and aa karta of his joint family as well as Marian Gopal for himRelf anrl as karta of his joint family, the latter two being (I) s. c. R. SUPREl\IE COURT REPORTS 8 3 the partners in the first-mentioned Firm Radhakrishna Sivadutta Rai; for convenience we will refer to the partnership firm hereafter as the appellant. The respondent Tayeballi Dawoodbh~i is a partnership firm which carries (Jn business at Calcutta. The appellant's case was that the appellant and the respondent had entered into a contract in the first instance on December 18, 1950, through brokers named T. N. Mehrotra' & Co. , Calcutta. This contract was later confirmed by two letters written respectively on January 3 and 15, 1951, Ly the appelhmt to the reRpondcnt and replied to by the rcsμomlent. By thiR contraot the respondent agreed to sell !
000 bales of Banaras Hemp particulars of which were set out in the plaint. According to the appellant, by a letter written on March 14, 1951, the appellant in part performance of the said contract accepted delivery of llO bales of Banaras Hemp No. I and 50 bales of Banaras Hemp No. 2; this delivery was made by the respondent to L. N. Poddar & Co. , who acted as the agent of the appellant and paid the price of the said 160 bales. In this transaction the respondent realised Rs. 3,840 from the said l.. N. Poddar & Co. in excess of the actual price of the goods delivered to the said company. Inspite of the repeat-ed demands made by the appellant the respondent failed to deliver the balance of the goods contracted for and thus committed breach of the contract. That is how the appellant claimed Rs. 79,800 as difference between the market rate on March 31, 1951, and the contract rate of the balance deliver-able under the contract in suit.
This amount was claimed as damages for the breach of contract. In addition an amount of Rs. 3,840 was claimed as having been paid in eitcess of tho value of 160 bales delivered to L. N. Poddar & Co. , on behalf of the appellant. This claim was resisted by the respondent on several grounds. The principal contention urged by the respondent, however, was that in relation to 84 SUPRE! 'llE COURT REPORTS [1962) SUPP. the contract in ~uit the appellant had acted as agent for its disclosed principal Messrs Khaitan and Sons Ltd. , and as such it was not entitled to bring the present suit. The respondent further a. lleged tha. t the said disclosed principal McBSrs. Khaitan and Sons had settled all their rights and claims under the suit contract with their agent and so tho present claim for damages was not maintainable. In regard t-0 the clann for Rs. 3,840 the respondent pleaded that the appellant's case was untrue.
Several other pleas were also raised but with the said pleas we arc not con~t>rnerl in the pres11nt appeal. Mr. Justice Bose who trice! the suit framed twe Ivo i88ues. On the principal point in controversy between the parties the learned judge found that the appellant had entered into the contract with the respondent on its own account and not on account of the disclosed principal as allogcd by the respondent. According to the learned judge the reference to Messrs. Khaitan and Sons Ltd. , made in the bought and sold notes on which the respondent's plea was based bad been inserted by the brokers "by mistake or due to some misconception. " The learned judge also found that the rcHpondent had commited a breach of the contra. ct as allegerl by the a. ppe-llant. Tbe appelhtnt's case with regard to the excess payment of Rs. 3,840 made by L. N. Poddar & Co. was, however, held not to have been proved. In the result a decree was passed in favour of the appellant for Rs. 79,800 a.
long with interest as stipulated in the decree. Against this decree the respondent preferred an appeal; and the main point which was urged on its behalf was directed against the finding of the trial judge that the contract had been entered into by the appellant for itself and not on account of the disclosed principal. This contention ,wa. s based in the Court of Ap]>"al, as in the trial court, on the bought and sold notes; and it was urged that .. (1) S. C. R. SUPREME OOURT REPORTS 85 the bought and sold notes clearly showed that the appellant had entered into the· contract on account of the disclosed principal Messrs. Kh~itan and Sons Ltd. Before the Appellate Court the respondent's ease was that the said bought and sold notes c s do not tally the sold not'l alone cannot constitute the terms of the contract.
In dealing with this question, however, their Lordships referred to the mercantile custom in regard to the bought and sold notl'B and observed that "the established usage of dealing in the mercantile world should be held in high · respect; the very existence of such usage shows that in pradice it has been found useful and b(lueficial; the presumption is in its favour, and no departure from it is to be inferred from doubtful circumstances". That is why the Privy Council reached the conclusion that "this must be considered as a transaction in the contemplation of the parties by bought and sold notes, and that the contract is contained in both of tho notes, and not in one;" inevitably there being a material variaticon between the two notes "the consequen'! C follows, from all legal principles, that no binding contract has been effected".
This decision shows that the roPrcantile usage of entering into contracts evid-enced by the bought and sold notes issuetl by the brokera was treated by the Privy Council as well recognised. The next decision to whioh roferonco may be usefully made is the case of Sievewright v. Archibald( ). In that ease again there was a variation in the bought and sold notes and the variation was material, and so it was held that there was no (I) (1851) 117 E. R. 1221, 1228, 1219. (I) S. C. R. SUPREME OOURT REPORTS 95 sufficient memorandum of a contract to satisfy the Statute of Frauds. In dealing with the question raised for the decision of the Court Lord Campbell, C. J. , has made certain genera. I observations which throw considerable light on the genesis of tb. e bought 1md sold notes and the effect which is us-ually attributed to the said notes by commercial usage. "If the bought note cai,i. be considered a memorandum of the parol agreement", observed Lord Campbell, C. J.
, "so may the sold note; and which of them is to prevail.? It seems to me, therefore, that we get back to the same point at which we-were when the variance was first objected, and the de rs intended to alter the position disclosed by the notes. The letters, like the confirmation slips, are, and must be, presumed to be consistent with the notes; and so it would be unrearnnable to attach undue importanoe to the signature 'and to the use of the relevant words "we" and "you" on which reliance has been placed. In our opinion, therefore, the Appellate Court was right in holding that even if the bought and sold notes are read along with the confirmation slips and the two letters of January 3, 1951, and January 15, 1951, the conclusion is inescapable that the appellant entered into the contract on behalf of the disclosed principal Kh'litan & Sons Ltd. If that be so, it follows as a matter of law that the appellant is not entitled to bring the present suit. llfr.
Pathak faintly attempted to argue in the alternative that even if the appellant was acting on behalf of the disclosed principal it would be entitled to sue because from the subsequent conduct of the parties a contract to the contrary could be reasonably inferred. Wo have, however, not allowed Mr. Pathak to argue this point. It was conceded by the appellant before the Appell11. te Court that if it was held that the plain till' firm was acting as agent for Khaitan & Sons Ltd. , the suit WM not maintainable. This concession was made in view of the provisions of s. 236 of the Contract Act. Besides, the alternative plea which Mr. Pathak wanted to raise does not appear to have been expree. &ly pleaded or considered in the trial court. In the result the appeal fails and is dismissed. In the circumstances of this ce. se we direct that the parties should bear their own eoete in this Court. . Appeal di. nnissed. HARBANS SINGH AND ANOTHER v. STATE OF PUNJAB (P. B. GAJENDB. AGADKAB, A. K.
SABKAR, K. N. WANOHOO and K. C. DAS GUPTA, JJ. ) Appeal agail&d tJ«JUittal-lflW/u... u by appellaU rourt, whtn ptrmiuibk-Dyfftg ~orroboralion, if neceut1ry. Thr. High Court set aside the Trial Court's order of acquittal of the appellants and convictr. d them on a charge of murder under s. 302 of the Indian Penal Code. On appeal by the appellants by special leave. H•IJ. , that this Court in its earlier decisions emphaaised that interference with an order of acquittal should be baaed only on "compelling and substantial reasons" and held that unless such reasons were present an Appeal Court should not interfere with an order of acquittal, but this Court did not try to curtail the powers of the appellate court . un~er s. 423 of the Code of Criminal Procedure. Though 1n •ts more recent pronouncements this Court hid less emphasis on
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