Anakapallee Co-operative Agricultural and Industrial Society Ltd. vs R. Palaniappan

Bellie, J.—The defendant-Anakapallee Co-operative Agricultural and Industrial Society is the appellant. A suit for recovery of Rs. 40,500

as damages has been decreed.

The suit was Sled on the allegations that the plaintiff is a licensed wholesale dealer in free sale sugar carrying on business at Madras. As per law

some quantity of sugar produced is allowed for free sale at the prices available in the market. The plaintiff offered to purchase free sale sugar

available for release in December, 1975 from the defendant. The plaintiff sent his offer by telegram Ex. A-1 dated 10.12.1975, to purchase at Rs.

255 per bag. The defendant by its telegram Ex. A-2 dated 11.12.1975, offered to supply 5 G.C. Wagons of Grade D. 29/74-75 Sugar at Rs.

256 per bag (not Rs. 255 offered by the plaintiff) plus duty F.O.R. Anakapallee and asked the plaintiff to reply for confirmation. The plaintiff by its

telegram Ex. A-4 dated 11.12.1975 despatched at 4.00 P.M. that day to the defendant accepted and confirmed the offer made by the defendant

to purchase sugar at Rs. 256 per bag plus duty. According to the plaintiff on the despatch of the telegram Ex. A-4 by the plaintiff to the defendant

the contract became concluded. After such conclusion of the contract the plaintiff sent a telegram Ex. A-5 dated 12.12.1975 referring to the earlier

telegram Ex. A-4 dated 11.12.1975 and stating that the plaintiff would be sending an amount of Rs. 20 per bag as advance. Strangely the plaintiff

received a telegram Ex. A-6 dated 13.12.1975, from the defendant informing him that his offer was not accepted by the defendant and requested

the plaintiff not to send advance. The defendant sent another telegram Ex. A-7 on the same day i.e., 13.12.1975 stating to the effect that the

plaintiffs telegram Ex. A-4 dated 11.12.1975, was not confirmed. On 15.12.1975 the plaintiff sent a telegram Ex. A-8 to the defendant calling

upon the defendant to deliver or otherwise legal action would be taken. The plaintiff understands that the defendant has sold the goods for a higher

rate. The defendant thus committed breach of contract and is liable to pay damages. The plaintiff estimated damages at Rs. 36 per bag as the

difference between the contract rate and the market value, and thus according to the plaintiff for 1,125 bags the defendant would be liable to pay a

compensation of Rs. 40,500. For this sum the suit has been filed.

The defendant contested the suit contending inter alia that while in the defendant''s telegram Ex. A-2 the place of delivery of sugar has been

mentioned as F.O.R. Anakapallee, and therefore, the defendant''s offer was to the effect that it would deliver the goods at Anakapallee station, but

the plaintiffs telegram in reply to that did not mention any place and therefore there was no agreement with regard to the place of delivery of goods.

For this reason the defendant by telegram dated 13.12.1975 informed the plaintiff that they were not accepting the offer of the plaintiff. Even in the

next telegram of the plaintiff Ex. A-5 dated 12.12.1975, he did not mentioned about the place of delivery. In these circumstances it cannot be said

that there was a concluded contract. Thus no commission of breach of contract by the defendant arises.

The learned trial Judge, on consideration of the main issues out of the six issues framed by him, held that there was a concluded contract as

pleaded by the plaintiff and that the defendant committed breach of contract and therefore it is liable to pay damages. He accepted the quantum of

damages claimed by the plaintiff. On these findings he decreed the suit as prayed for with costs.

In the appeal, Mr. S.A. Rajan, learned Counsel for the appellant-defendant contends that the finding of the trial court that there was a concluded

contract is wrong and consequently the finding that there was a breach of contract by the defendant is also wrong. The learned Counsel submits

that a reading of the telegram would show that there was no agreement with regard to material particulars and therefore, it cannot be said that there

was a contract concluded. He submits that the defendant did not agree to sell to the plaintiff the goods at the rate of Rs. 255.00 per bag offered by

the plaintiff, but instead it made a counter offer to sell at the rate of Rs. 256 per bag in its telegram Ex. A-2 and in this counter offer the defendant

has mentioned ''F.O.R. Anakapallee."" which means the delivery place for him was Anakapallee, but the plaintiff in its reply telegram Ex. A-4 has

not mentioned anything about the place but has stated ''Confirmed total wagons at 256.00 plus duty'' and thus no mention about the place of

delivery has been made, and this being the case it cannot be said that the contract was concluded. But this argument is not acceptable for the

reason that a reading of Ex. A-4 would show that impliedly the plaintiff has agreed to the place of delivery stated by the defendant.

But however I am not unable to concur with the finding of the trial court that the contract is a concluded one because as to when the defendant

shall supply the goods has not been stated. That is, it is not stated as to whether the defendant has to supply the goods on demand by the plaintiff

or within any period of time. On a reading of the telegrams Exs. A-1 to A-6 together it appears to me that still there was something to be done for

a concluded agreement. As seen above the plaintiff in its telegram Ex. A-5 has stated,

Advance sending Rs. 20 per bag.

From this it appears that only on receipt of advance the agreement becomes a concluded contract. Even in this telegram the plaintiff has not

actually sent the advance but it is merely stated that he would send the advance. Perhaps the plaintiff thought that on hearing from the defendant

that it agreed to receive the advance, and then on sending advance he would tell as to when i.e., any date or within any particular period the

defendant should send the bags. Considering these circumstances it cannot be stated that there was a concluded contract. The defendant has

informed the plaintiff by its telegram Ex. A-6 dated 13.12.1975, that the plaintiff''s offer under Ex. A-4 was not accepted and asked him not to

send the advance. In these circumstances no question of the defendant committing any breach of contract arises.

Mr. A.S. Raman, learned Counsel for the respondent-plaintiff, would argue that it was not incumbent upon the plaintiff to send the advance but

on his own accord he informed the defendant that he would send the advance and therefore plaintiff''s stating that he would send the advance will

not in any way affect the agreement which was already a concluded contract. This submission is not acceptable to me. I do not think any purchaser

would send any advance without any purpose even though the seller has not asked for it.

Then, the plaintiff has not asked for delivery of the goods before the defendant wrote to him informing that his offer was not accepted and asking

him not to send advance. In law (See Section 35 of Sale, of Goods Act)'' apart from any express contract the seller of goods is not bound to

deliver them until the buyer applies for delivery. Therefore only when the buyer applied for delivery and the seller refused, a cause of action arises

for the buyer to file a suit for any damages. Of course subsequent to the defendant''s telegram Ex. A-6 the plaintiff has sent a telegram Ex. A-8

dated 15.12.1990, asking the defendant to arrange for delivery and telling him that otherwise legal action would be taken. It is apparent that this

telegram has been sent only for the purpose of creating a cause of action for the suit and this cannot be taken to have any bearing on the alleged

contract. Therefore it is very clear that the defendant is not guilty of any breach of contract as alleged by the plaintiff.

It must be remembered that the entire thing i.e., the correspondence was over within four days. It would be unjust on the part of the plaintiff to

say that the defendant has committed breach of contract and therefore he sustained damages. According to the plaintiff the market rate at the time

of breach of agreement was Rs. 292 per bag i.e., Rs. 36 more than the contract rate. But, as stated above, the date of the alleged contract was

11.12.1975 and the date of the alleged breach was just two days later i.e., on 13.12.1975 and it is unbelievable that within two days the market

price of Rs. 256 at which rate the plaintiff agreed to purchase has risen by Rs. 36 per bag. The market rate on 13.12.1975 would be almost the

same as on 11.12.1975 and if at all there was any rise that would be only marginal. In these circumstances, certainly it is most unjust for the plaintiff

to claim damages at the rate of Rs. 36 per bag totalling to a huge sum of Rs. 40,500. I am very clearly of the view that the plaintiff has not made

out a case for the claim of the said damages. The trial court has not appreciated the facts and the circumstances of the case properly and it has

wrongly accepted the case of the plaintiff. Therefore the Judgment and Decree of the trial Court cannot be sustained. The result is that the appeal is

allowed and the suit is dismissed. In these circumstances there will be no order as to costs.