Case: M/s. Madhya Pradesh Industries Ltd Vs. M/s. Rai Bahadur Shriram Durga Prasad Ltd

can be hardly any doubt that the sellers did not comply with the terms of Cl. (5) of the agreement. Analysis both by M/s. Hughes and Davies and M/s. J. S. Williams was an essential part of the contract. In fact at the time of the arguments, we were told that M/s. Hughes and Davies were the nominees of the sellers and M/s. J. S. Williams were the nominees of the buyers. The condition that the samples of the ore to be supplied should be analysis both by M/s. Hughes and Davies and by M/s. J. S. Williams is one of the essential conditions of the contract. It was not open to the sellers to ignore that term. It is true that the contract does not provide for the contingency of either M/s. Hughes and Davies or M/s. J. S. Williams refusing or being unable to analysis the samples taken. We are unable to agree with the contention of Mr. M. C. Chagla, learned Counsel for the sellers that cl. (5) of the contract is not an essential part of the contract. It is clear from the terms of the contract that the parties considered the quality of the ore to be supplied as one of the essential conditions of the contract. When M/s. J. S. Williams refused to analyse the samples, the sellers did not even call upon the buyers to nominate someone else in the place of M/s. J. S. Williams. On the other hand the sellers intimated to the buyers that they were willing to send the samples for analysis to a particular company at Calcutta and if the buyers did not accept that offer, the analysis made by M/s. Hughes and Davies would become final. The buyers rejected that ultimatum. Under the circumstances we are of the opinion that the offers made in May and June were not in accordance with the terms of the contract. 6. According to the buyers the true import of cl. (5) of the contract is that in respect of each supply the parties must first make effort to jointly draw the samples. It is only if there is any dispute between them as regards the drawing of samples in respect of any supply, the parties can call upon M/s. Hughes and Davies to draw the samples. In respect of the supplies made in March and April, the sellers did not afford any opportunity to the buyers to draw the samples jointly. That being so, the samples drawn in respect of those supplies were not drawn in accordance with the contract. But according to the sellers even as far back as January, 1954 they began to entertain a doubt that when samples were drawn jointly, the representative of the buyers indulged in certain manipulations and therefore it decided once and for all that in future samples should be drawn only by M/s. Hughes and Davies. It is contended on behalf of the sellers that after they came to the conclusion that the buyers representative indulged in manipulations at the time of drawing samples jointly, there was no purpose in going through the farce of attempting to draw samples jointly before calling upon M/s. Hughes and Davies to draw samples. The High Court has accepted the construction contended for on behalf of the buyers. We have not thought it necessary to examine as to which of these contentions is the correct one because in our opinion in view of the fact that the supplies made by the sellers in January, February, May and June were not in accordance with the terms of the contract, the sellers were responsible for the breach of the contract. 7. The contention of the sellers that each supply should be considered as a separate contract is untenable. The contract between the parties is one and indivisible. It is a contract to sell and purchase 7500 tons of ore of specified quality. It is true that the sellers were permitted to supply the agreed quantity in instalments but that did not convert each supply into a separate contract. 8. Even if we come to the conclusion that the supplies made in March and April were in accordance with the terms of the contract those supplies would amount to only 2510 tons of ore. The buyers had contracted to purchase 7500 tons. A supply of 2510 tons of ore cannot be considered as complying with the contract. Hence we agree with the trial court as well as with the High Court that it is the sellers who committed the breach of the contract. 9. From the material on record, it is clear that the buyers were waiting for an opportunity to breach the contract. After the contract was entered into, there was a steep fall in the price of manganese ore. It came down from 121 per ton in January, 1954 to Rs. 88/8/- in May of that year. There was slight rise in June but that was very insignificant. Evidently because of that reason, the buyers were looking out for an opportunity to get out of the contract but unfortunately the sellers gave them that opportunity. The rejection by the buyers of the ore supplied in March and April appears to be quite unreasonable. We are satisfied that in this case the conduct of the buyers was not above board. 10. The contract does not provide for payment of any interest on the advance made. Hence the question whether interest should be given on that amount is within the discretion of the court. Similarly the question of interest on that advance during the pendency of the suit is within the discretion of the court. We think under the circumstances of the case, it will be just and proper to disallow the buyers, any interest on the advance made till the date of the decree of the trial court. For the same reason we think that in this Court the parties should be asked to bear their own costs.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]It is clear from the terms of the contract that the parties considered the quality of the ore to be supplied as one of the essential conditions of the contract. When M/s. J. S. Williams refused to analyse the samples, the sellers did not even call upon the buyers to nominate someone else in the place of M/s. J. S. Williams. On the other hand the sellers intimated to the buyers that they were willing to send the samples for analysis to a particular company at Calcutta and if the buyers did not accept that offer, the analysis made by M/s. Hughes and Davies would become final. The buyers rejected that ultimatum. Under the circumstances we are of the opinion that the offers made in May and June were not in accordance with the terms of the contractThe High Court has accepted the construction contended for on behalf of the buyers. We have not thought it necessary to examine as to which of these contentions is the correct one because in our opinion in view of the fact that the supplies made by the sellers in January, February, May and June were not in accordance with the terms of the contract, the sellers were responsible for the breach of the contract7. The contention of the sellers that each supply should be considered as a separate contract is untenable. The contract between the parties is one and indivisible. It is a contract to sell and purchase 7500 tons of ore of specified quality. It is true that the sellers were permitted to supply the agreed quantity in instalments but that did not convert each supply into a separate contract8. Even if we come to the conclusion that the supplies made in March and April were in accordance with the terms of the contract those supplies would amount to only 2510 tons of ore. The buyers had contracted to purchase 7500 tons. A supply of 2510 tons of ore cannot be considered as complying with the contract. Hence we agree with the trial court as well as with the High Court that it is the sellers who committed the breach of the contract9. From the material on record, it is clear that the buyers were waiting for an opportunity to breach the contract. After the contract was entered into, there was a steep fall in the price of manganese ore. It came down from 121 per ton in January, 1954 to Rs. 88/8/in May of that year. There was slight rise in June but that was very insignificant. Evidently because of that reason, the buyers were looking out for an opportunity to get out of the contract but unfortunately the sellers gave them that opportunity. The rejection by the buyers of the ore supplied in March and April appears to be quite unreasonable. We are satisfied that in this case the conduct of the buyers was not above board10. The contract does not provide for payment of any interest on the advance made. Hence the question whether interest should be given on that amount is within the discretion of the court. Similarly the question of interest on that advance during the pendency of the suit is within the discretion of the court. We think under the circumstances of the case, it will be just and proper to disallow the buyers, any interest on the advance made till the date of the decree of the trial court. For the same reason we think that in this Court the parties should be asked to bear their own costs.