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TMI Blog1965 (2) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... or supplying them 200 tons of scrap iron. On account of the breach of contract by the respondent, the appellant could not comply with his contract with M/s. Export Corporation which in its turn, purchased the necessary scrap iron from the open market and obtained from the appellant the difference in the amount they had to pay and what they would have paid to the appellant in pursuance of the contract. 2. The respondent contested the suit on grounds inter alia that there had been no completed contract between the parties and that the appellant suffered no damages. The controlled price of scrap iron on January 30, 1953, was the same as it was in July 1952 when the contract was made. It was further contended for the defendant that it was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rap iron for purposes of export. We do not find anything in the Defence of India Rules, 1939, under which the Scrap Control Order was issued in 1943, or in the Essential Supplies (Temporary Powers) Act, 1946, that the Control Orders would not apply to sales of controlled articles for export. Rule 81 of the Defence of India Rules, 1939, authorised the Central Government, inter alia, to provide by order for maintaining supplies and services essential to the life of the community, for the controlling of the prices at which articles or things of any description whatsoever may be sold and there is nothing to suggest that this control of prices was to apply only to sales of any articles within the country and not for purposes of export. Similarly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Scrap Control Order was not applicable to scraps-meant for export and added: Scraps which are permitted for export are generally collected from uncontrolled sources by the exporters. Two things are to be noted. One is that it is not clear from this letter whether the Scrap Control Order was not applicable to scraps meant for export in 1952 and the other is that some sort of permission appeared to have been necessary for exporting scrap iron and that scrap iron for export was generally collected from uncontrolled sources, that is to say, ordinarily the Controller did not authorise purchase of scrap iron for export from controlled sources. 8. The Notification fixing the prices for the sale of scrap iron was applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent late in October 1952 when it was informed that the scrap iron was to be despatched to the Export Corporation. The respondent could have possibly inferred then that the scrap iron it was to sell to the appellant was meant for export. Such information to it was belated. Its liability to damages for breach of contract on the basis of the market price of scrap iron for export would not depend on its belated know ledge but would depend on its knowledge of the fact at the time it entered into the contract. 10. The appellant stated in para 7 of the plaint that the plaintiff, to the knowledge of the defendant company, sold the said 200 tons of iron scrap purchased from the defendant to M/s. Export Corporation who required the -same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant relies in support of his contention is that he had purchased to the knowledge of the respondent company scrap iron for export, is the use of the expression 'very fancy price' in the first letter he had written to the respondent on June 9, 1952. The letter said: We take pleasure to inform you that we are at present purchasing the scrap iron of the following descriptions at a very fancy price. and required the respondent to communicate the exact quantity of each of the items mentioned in that letter, available for sale, together with their lowest price. It is urged that when prices were controlled, a suggestion to purchase at a very fancy price was a clear indication of the appellant's purchasing the-various items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent in the present case would be nil. The appellant agreed to purchase scrap iron from the respondent at ₹ 100 per ton. It may be presumed that he was paying ₹ 70, the controlled price, and ₹ 30, the balance, for other incidental charges. On account of the non-delivery of scrap iron, he could have purchased the scrap iron from the market at the same controlled price and similar incidental charges. This means that he did not stand to pay a higher price than what he was to pay to the respondent and there fore he could not have suffered any loss on account of the breach of contract by the respondent. The actual loss, which, according to the appellant, he suffered on account of the breach of contract by the respondent was the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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