9911796707
TMI Blog1962 (12) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... laintiff agreed to purchase by 3 contract in writing dated 24th July 1950 (being Exh. 57-A), the above, goods at the price as mentioned above. The relevant provisions in this contract run as follows: Delivery was to be taken at Chelisgaon. Ex-Mill Godown Delivery. As per annexure 'B' Export Licence No. UMM 336 dated 18th July 1950 against our Provisional Contract for Export Cloth dated 2nd July 1950 The plaintiff repeatedly demanded delivery of the goods, in this connection, his letters of demand dated 3rd February 1951 (being Exh. 69) and 22nd May 1951 (being Exh. 77), are clear and relevant. There are other letters of demand, which are on record. In connection with the contract as agreed between, the parties, the plaintiff paid ₹ 25,000 by way of deposit in the first instance. The plaintiff also furnished to the defendants' Mills an export licence dated 15th July 1950. In August 1950 the defendants' Mills forwarded to the plaintiff a proforma invoice in connection with 43,693 yards of the contract goods and called upon the plaintiff to pay ₹ 34,205-3-0. The plaintiff deposited ₹ 24,205-3-0 in the account of the defendants' Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96 yards of the contract goods at Re. 0-2-0 per yard; and (3) export duty amounting to ₹ 10,649-4-0. It is unnecessary to refer to the remaining items as they have not been awarded in favour of the plaintiff, who has not filed any cross-objections. 4. By their written statement the defendant's Mills raised several contentions and, inter alia, contended that the defendants' Mills had not committed breach of the contract; that the time for performance of the contract was not extended; that the plaintiff was not ready and willing to perform his part of the contract at material times; that the suit was barred fly the Law of Limitation; and that the plaintiff was not entitled to damages as claimed. 5. The learned Judge negatived the contention that the defendants' Mills had not committed breach of the contract or that the suit was barred by limitation. The learned Judge held that the time for performance of the contract was extended to 31st July 1951, and that the plaintiff was always ready and willing to perform his part of the contract. The learned Judge disallowed the plaintiff's claim to interest. As regards the claim for damages, on the evidence led, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of the contract goods and the probable dates for delivery thereof. In the correspondence the defendants Mills continuously informed the plaintiff that the goods were not ready for delivery. In connection with their liability to make deposit, the plaintiff made initial deposit of ₹ 25,000 as required. When the plaintiff was informed in August 1950 by delivery of pro forma invoice of the defendants' Mills that 49,696 yards were ready for delivery the plaintiff immediately in accordance with the provisions in the contract and what had been discussed between we parties in correspondence paid In cash ₹ 24,205-3-0 and made available, from out of the initial deposit of ₹ 25,000 ₹ 10,000. The plaintiff thus in fact paid the total price of ₹ 34,205-3-0 that was shown by the defendants' MIIIS in their pro forma invoice as payable towards the price of the goods, in spite of the above payments made by the plaintiff in August 1950, the defendants' Mills failed and neglected to give delivery of the quantity mentioned in the pro-forma invoice (49,693 yards), till 7th June 1952. in spite of the conduct of the defendants' Mills in neglecting d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim being a claim for damages the plaintiff should establish and prove the same by filing a suit against the defendants' Mills . Having regard to that order, by their application dated 6th June 1955, the plaintiff applied to the District Judge, East Khandesh, who was dealing with the winding up of the defendants' Mills to give to the plaintiff leave to file the suit for the balance of the claim. By his order dated 6th June 1955 the District Judge granted that permission and the plaintiff accordingly filed this suit on 6th June 1955. Mr. Daji also relies upon the provisions of Section 171 of the Companies Act, 1943, which was applicable to the facts of the case, the section provides: When a winding up order has been made, no suit or other legal proceeding shall be proceeded with or commenced against the company, except by leave of the court and subject to such terms as the Court may impose He also relies upon the explanation to Section 3 and Section 14 of the Limitation Act. His first contention is that having regard to Section 171 of the companies Act, institution of the suit was completely barred and that having regard to the explanation to Section 3 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnection with the language in the explanation to that section, their Lordships observed: The application of the liquidators would not be a suit within Section 3, if that section stood alone, unaccompanied by the explanation . Their Lordships did not accept the argument that the explanation showed by its concluding sentence, that the claim against a company in compulsory liquidation can be considered to be a suit instituted within those words in Section 3. They further observed: The explanation is not concerned with the question of what is a suit, or is to be considered a suit, within Section 3. It is addressed to quite a different subject-matter. It assumes the existence of a suit which has been instituted by the presentation of a plaint, and is concerned only with the point of time at which that suit is for the purpose of Section 3 to be treated as being instituted. The ordinary rule is stated by the explanation to be that the suit is instituted when the plaint is presented; but to this two exceptions are prescribed, namely, (1) in the case of a suit by a pauper, the time at which that suit is (for the purposes of Section 3) instituted, is to be taken as an earlier date, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty in accepting the contention of Mr. Daji that the liquidators must be considered as the Court of first instance, if the language of the explanation to Section 3 as quoted above was not clear in providing that a claim lodged before the liquidator is relevant in connection with a suit against a company in liquidation, it is also clear having regard to the provisions of the Companies Act that all claims in respect of a company in winding up must be made by lodging them before the liquidator. It is not necessary or compulsory for any party having a claim against a company in liquidation to file a suit for recovering the amount due to the party. It is, on the contrary, necessary under the provisions of the companies Act that ordinarily a creditor of a company in winding up must initially lodge a claim for the amount due to him before the liquidator in accordance with the scheme prescribed by the Companies Act. The Act further provides for appeal and reference to the Civil Court for decision in the ultimate instance of the claims preferred before the liquidator. In appeals before the Court, the decisions of liquidator are liable to be confirmed, modified, and altered in all respects. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be rejection though not on the ground of detect of jurisdiction, in any event, on the cause of a like nature. It was permissible for the District Judge to deal completely with the claim of the plaintiff. He, however, appears to have felt difficulty in summarily dealing with the plaintiff's claim. He accordingly rejected the claim and directed the plaintiff to the suit. These must be held to be the circumstances indicating the cause of a like nature within, the meaning of that phrase in Section 14 of the Limitation Act. Having regard to the above findings, in our view, the period that expired between June 14, 1952 and April 3D, 1955, must be excluded in computing the period of limitation for the filing of this suit. 16. In this connection, reference may be made to the case of Upper India Rice Mills Ltd. v. Jaunpur Sugar Factory Ltd. AIR1927All161 where it is observed: The rule is that the liquidator of a company which is in liquidation being a trustee for the creditors, time does not run after an order, or resolution, for winding up. The date for testing the liability is the commencement of the winding up. 6-12-1962. 17. Mr. Divekar for the Appellants has rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Contract Act, which relates to effect of failure to perform at fixed time the contract in which time is essential . The first paragraph of the section in effect provides that in a contract where time is of essence and the contract is to be performed at or before the specified time and the promisee fails to perform his obligation at or before the specified time, so much of the contract that has not been performed becomes voidable at the option of the promisee. The second paragraph of the section relates only to contracts where time for performance is not of essence and is not relevant to the purposes of this suit. The third paragraph of the section provides: If, in case of a contract voidable on account of the promiser's failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisee of his intention to do so . As the contract between the parties was for sale of goods, the time for delivery must be held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff as damages in respect of breach of the contract by nondelivery of 1,00,000 yards of the contract goods. The breach admittedly occurred on July 31, 1950. Though it is not clear from the judgment of the trial Court, it appears that the damages in the above sum nave been awarded on the footing that the plaintiff was entitled to payment of all less of profits that he would nave recovered if the contract goods had been delivered. For awarding damages on the above footing, nothing is mentioned by way of explanation in the judgment. It is, therefore, necessary to record that generally having regard to the provisions of Section 73 of the contract Act, the party suffering damages is entitled to receive from the party who has broken the contract compensation for loss or damage which naturally arises in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. The above language of the section has been construed again and again to mean that in an cases ordinarily the damages must be assessee by finding out the difference between the contract rate and the market rate of the contract goods at the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n purchasers. The learned Judge appears to nave accepted that position and considered we evidence led on behalf of the plaintiff on that footing, there are 3 contracts, Exhs. 172, 173 and 174, which the plaintiff made for re-sale of the whole of the quantity of the contract goods on August 14, 1950. Exh. 172 is for sale of 49,693 yards at the rate of ₹ 1-3-0 per yard F. O. B. Bombay to Messrs. Rawji Amarsi and Co., Mombasa, Exh. 173 is for sale of 50,000 yards at the rate of ₹ 1-3-0 per yard F.O.B. Bombay to Messrs. Kalidas Kanji (Africa) Ltd., Mombasa, Exh. 174 is for sale of 50,000 yards on the same terms as to price to Messrs Juthalal Velji Ltd., Daresselaam. The plaintiff led his own evidence as also evidence of partners and directors of the above foreign contracting parties to prove the above contracts. The plaintiff admitted that for the consignment of the goods to the foreign parties he had to take delivery of the grey calendar cloth from the defendants' Mills and to have it processed and thereafter shipped the same from Bombay. The plaintiff led conclusive evidence to prove the expenses that he incurred in connection with processing and up to the stage of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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