Case: Timblo Irmaos Limited, Margo Vs. Jorge Anibal Matos Sequeira and Another

BEG, J.1. The Plaintiff-appellant Timblo Irmaos Ltd, (hereinafter referred to as the Company) had sued Jorge Anibal Matos Sequeira, his wife (hereinafter referred to as Sequeiras) for recovery Rs. 2, 82, 141/- claimed under a contract of 23rd January, 1954, a sum of Rs. 1, 14, 700/-, claimed under another contract of 4th February, 1954.2. The Sequeiras counter-claimed Rs. 3 lakhs as price of 8000 tons of iron ore supplied to the Company;, pleaded that a sum of Rs. 1, 13, 000/-, advanced by the Company to the Sequeiras was to be adjusted after final determination of the amount due as price, of goods sold, supplied, The decree of the Trial Court was substantially affirmed in appeal.3. Nevertheless, the Additional Judicial Commissioner Goa, Daman &Diu, had modified the decree, the appellant company has come up to this Court in appeal as of right. Two questions arise for determination before us. The first is whether the second contract of 5th February, 1954, was duly covered by the authority conferred by the Sequeiras upon their attorney, Ramesh Jethalal Thakker, or not.4. The second relates to the amount of demurrage, if any, payable by the Sequeiras, the defendants-respondents, to the plaintiff appellant, Apparently, practice, custom have some bearing on these transactions in Goa. It is this reason that, although the power of Attorney was executed by Mr. Sequeira, yet, his wife was impleaded, according to the practice in Goa, no objection was raised either on the ground that she was wrongly impleaded or that the power of attorney was vitiated on the ground that it was executed only by her husband.5. In any case, the subsequent agreement of 23rd January, 1954, which was held to have been acted upon, the similar agreement of 5th February, 1954, of which also the defendants were bound to have, did have full knowledge, were never repudiated by Sequeiras, before the filing of the suit before us. Indeed, the agreement of 5th February, 1954, appears to be a sequal to the first agreement of 23rd January, 1954. We do not think that the two could be really separated in the way in which the Judicial Commissioner thought that they could be by holding that the one was acted upon whereas the other was not.In any case, the second was the result of, a part of the same series of dealings between the parties, As we have already mentioned, the learned Judicial Commissioner chose to concentrate on the single word "exploitation" torn out of its context. The word "exploitation" taken by itself, could have been used to describe, confer only such general powers as may be them. I f the word negotiate had stood alone, its meaning might have been doubtful, though, when applied to a bill of exchange or ordinary promissory note, it would probably be generally understood to mean to sell or discount, not to pledge it.6. Here it does not stand alone, and, looking at the words with which it is coupled, their Lordships are of opinion that it cannot have the effect which the appellant gives to it, and, reason, dispose of cannot have that effect", Coming now to the second question, we find that the findings of fact recorded by the Judicial Commissioner are unexceptionable. Firstly, it was found that, although, under the contract, the defendants-respondents could load iron ore at any time during 24 hours, which included the night, yet, the defendants were prevented from doing so owing to the failure of the plaintiff to provide either sufficient lighting or enough winches to enable due performance of the contract. Secondly, it was admitted that the appellant never opened a Letter of Credit with the named bank by 27 January, 1954, as promised by it.7. Thirdly, the delay in loading was held to be due to the fault of the company. The Judicial Commissioner rightly concluded that the company had not discharged its own part of the contract so that it could not claim demurrage or damages. Indeed, it was found that the company did not have to pay any demurrage at all to the shippers for delayed departure, Learned Counselrelied strongly on the following terms in the contract of 23rd January, 1954:, The contention was that this created an absolute liability to pay for delay in loading irrespective of whether the company had to pay the shippers any demurrage.It was urged that the liability was upon the seller irrespective of whether such payment had to be made to the shipping company or not. We think that the demurrage could not be claimed when the delay in loading was due to the default of the respondents themselves. It is apparent that the basis upon which the agreement to pay demurrage rested was that the appellant will afford proper facilities for loading.8. When the appellant itself had committed breaches of its obligations, it is difficult to see how the respondents could be made responsiblein loading. We think that the Judicial Commissioner had rightly disallowed this part of the claim, In the result, we partly allow this appeal, set aside the finding of the Judicial Commissioner as regards the binding nature of the contract dated 5th February, 1954. We hold that this document embodied the terms of an agreement which was legally binding on both sides before us.9. The case will now go back to the Trial Court for determination of the liabilities of the p arties to each other for alleged breaches of contract except to the extent to which the findings negative the claim to demurrage, the admitted payment of Rs. 1, 13, 000/by the appellant to the defendants which will have to be taken into account. The parties will bear their own costs, Ltd, Calcutta v. Commissioner of Excess Profits Tax, West Bengal(27 I.T.R. 188.) wherein the High Court held .that when a party at whose instance the reference had been made under section 66(1) of the Indian Income tax Act, 1922 does not appear at the hearing of the reference, the High Court i s not bound to answer the question referred to it, should not do so.10. It is urged by Mr. Manchanda that the above decision has been followed by some of the other High Courts. As against that Mr. Desai on behalf of t he appellant has urged that the correctness of those decisions is open to question in view of the decision of this Court in the case of Commissioner of Income-tax, Madras v. S. Chenniappa Mudaliar(74. I.T.R 4 1.).It was held by this Court in that case that an appeal filed by the assessee before the Tribunal under section 33 of the Act should be disposed of on merits, should not be dismissed in default because of non-appearance of the appellant. The Court in this context referred to section 33(4) of the Act, particularly the word "therein" used in that sub-section. It is urged by Mr. Desai that as the Tribunal is bound to dispose of the appeal on merits even though a party is not present, likewise the High Court when a question of law is referred to it, should dispose of the reference on merits, answer the question referred to it.11. In our opinion, it is not essential to express an opinion about this aspect of the matter, because we are of the opinion that the High Court was not functus Officio in entertaining the application which had been filed on behalf of the appellant for re-hearing the reference, disposing of the matter on merits, Our attention had been invited to the decision of the Allahabad High Court in Roop Narain Ramchandra (P) Ltd. v. Commissioner of Income-tax, U.p.(84 I.T.R. 181.) wherein the High Court held that it has no power to recall an order returning a reference unanswered.stated above, we are unable to agree with the view taken by the Allahabad High Court in that decision.12. The facts brought out in the application flied on behalf of the appellant show, in our opinion, that there was sufficient cause-appearance on behalf of the appellant on the date of hearing as well as-filing of the paper books within time. It also cannot be said that there was lack of diligence on the part of the appellant in approaching of the High Court for recalling its earlier order, for disposing of the reference on merits.13.

Decision reasoning: 1[ds]In our opinion, it is not essential to express an opinion about this aspect of the matter, because we are of the opinion that the High Court was not functus Officio in entertaining the application which had been filed on behalf of the appellant for re-hearing the reference, disposing of the matter on merits, Our attention had been invited to the decision of the Allahabad High Court in Roop Narain Ramchandra (P) Ltd. v. Commissioner of Income-tax, U.p.(84 I.T.R. 181.) wherein the High Court held that it has no power to recall an order returning a reference unanswered.stated above, we are unable to agree with the view taken by the Allahabad High Court in thatfacts brought out in the application flied on behalf of the appellant show, in our opinion, that there was sufficient cause-appearance on behalf of the appellant on the date of hearing as well as-filing of the paper books within time. It also cannot be said that there was lack of diligence on the part of the appellant in approaching of the High Court for recalling its earlier order, for disposing of the reference onthe answer given by respondent No. 3 to this contention was that the omission of Explanation (iv) was prospective and not retrospective and since Explanation (iv) was in force at the date when respondent No. 3 filed her application for release, she had a vested right to obtain release of the rented premises in her favour by virtue Explanation (iv) and that vested right was not taken away by the prospective omission of Explanation (iv) and hence she was entitled to rely on it despite its omission by U.P. Act No. 28 of 1976. We have not pronounced on these rival conten- tions since we think it would be better to leave it to the District Court to decide which contention is correct. If the District Court finds that by reason of the omission of Explanation (iv) by U.P. Act No. 28 of 1976 respondent No. 3 is no .longer entitled to rely on it to sustain her claim for release of the rented premises in her favour, it will be unnecessary for the District Court to examine the further question as to whether Explanation (iv) is attracted on the facts of the present case, If, on the other hand, District Court finds that the omission of Explanation (iv) by U.P. Act No. 28 of 1976 being prospective and not retrospective, respondent No. 3 is entitled to avail of that Explanation, t he District Court will proceed to decide whether the two tenements or the .around floor constituted one single unit of accommodation so as to attract the applicability of Explanation (iv) and for this purpose, the District Court may, if it so thinks necessary, either take further evidence itself or require further evidence to be taken by the Prescribed Authority. If the District Court finds that the case is covered by Explanation (iv), there would be no question of examining comparative hardship of the appellant and respondent No. 3, and respondent No. 3 would straight away be entitled to an order of release of the rented premises in her favour. On the other hand, if the District Court comes to the conclusion that by reason of the omission of Explanation (iv) of the U.P. Act No. 28 of 1976 respondent No. 3 is not entitled to rely on it or that Explanation (iv) is not applicable on the facts of the present case, the application of respondent No. 3 would fail, since it has already been found by the District Court and we do not propose to disturb this finding that the appellant would suffer greater hardship by granting of the application than what would be suffered by respondent No. 3 if the application were to be refused.