1977 (11) TMI 138 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the delivery orders.
2. Compliance with the contract terms.
3. Existence and applicability of trade customs and usage.
4. Impact of statutory provisions on the contract.
5. Estoppel and conduct of the parties.

Issue-wise Detailed Analysis:

1. Validity of the Delivery Orders:
The core issue was whether the delivery orders tendered by the plaintiff were valid as per the contract terms. The plaintiff argued that the delivery orders were proper tenders by virtue of trade customs and usage in the Calcutta jute market. The defendant contended that the delivery orders were not in terms of the contracts and did not constitute valid tenders. The Trial Judge and the Division Bench of the Calcutta High Court found that the delivery orders did not comply with the contract terms, as they contained conditions that the mills or suppliers could refuse delivery unless further conditions were met. These conditional delivery orders were not considered documents of title under section 2(4) of the Sale of Goods Act, 1930.

2. Compliance with the Contract Terms:
The plaintiff alleged that the tenders made were in terms of the contracts between the parties. The defendant denied this, asserting that the delivery orders were not in accordance with the contracts and were not documents of title. The Trial Judge and the Division Bench held that the delivery orders issued by the mills required the transferees to register and accept the obligations of the original buyers, which were not identical to the obligations under the contracts between the parties. Thus, the delivery orders did not entitle the defendant to obtain delivery of the goods in terms of the contracts.

3. Existence and Applicability of Trade Customs and Usage:
The plaintiff claimed that the delivery orders were valid tenders by virtue of trade customs and usage in the Calcutta jute market. However, the defendant denied the existence of such customs or usage. The Trial Judge and the Division Bench found that no such custom or usage was proved on the evidence. They also held that even if such a custom existed, it could not override the express terms of the contracts or the statutory provisions.

4. Impact of Statutory Provisions on the Contract:
The courts considered whether the alleged trade customs could modify the legal requirements of a document of title or the terms of the contract. They concluded that a custom could not contravene express statutory provisions or the terms of an agreement. Section 92 of the Evidence Act bars oral evidence to contradict, vary, add to, or subtract from the terms of an agreement, except for proving usage or custom annexed to contracts. The courts found that the delivery orders did not meet the statutory definition of a document of title under section 2(4) of the Sale of Goods Act.

5. Estoppel and Conduct of the Parties:
The plaintiff argued that the defendant was estopped from denying the validity of the delivery orders, as they had accepted similar orders in previous transactions. The Trial Judge noted that no case of estoppel was pleaded by the plaintiff and therefore could not be raised. However, the conduct of the parties indicated that the delivery orders were accepted in previous dealings, suggesting that the defendant was aware of the terms and conditions associated with such orders.

Conclusion:
The Supreme Court, in agreement with the findings of the Calcutta High Court, held that the delivery orders tendered by the plaintiff did not fulfill the terms of the contract between the parties. The appeal was dismissed with costs, affirming that the delivery orders containing additional conditions did not constitute valid tenders as per the contract and statutory requirements.