Case: Kurapati Venkata Mallayyaand Another Vs. Thondepu Ramaswami And Co. And Another

himself and Ex. A-31 which is a letter dated June 21, 1946 addressed by the representative of the Russian Government to the appellant-firm. The High Court has, however, lost sight of the fact that Mallayya had stated in his evidence that two contracts had been entered into by the appellant-firm with the Russian Government and that the rate of Re. 0-8-6 per pound was fixed with reference to the other contract towards which the tobacco supplied by the respondent-firm was to be tendered. This answer was elicited by the respondent-firm in cross-examination and we see no reason why it should not be accepted. The High Court has, however, made no reference whatsoever to this answer. Disagreeing with it we, therefore, hold that the respondent-firm has failed to establish that the parties had agreed upon the rate at which the tobacco was sold when the contract was entered into and that that rate was 8 annas per pound. 16. The question then is what would be the appropriate rate? The High Court has made a passing reference to the evidence of made a passing reference to the evidence of P. W. 1 Lolla Venkata Subrahmanyam, P. W.-2 Addagalla Rama Koteshwara Rao, and P. W. 3 Kathari Lingamurthi and observed : "Their evidence renders it probable that the price of tobacco sold by the plaintiff-firm to the defendant-firm might well have been fixed at 8 annas per pound." P. W. 1 Venkata Subrahmanyam is a dealer in tobacco. He produced three invoices Exs. A-1, A-2 and A-3. Each of them refers to tobacco leaf. What he has stated is that the rate of tobacco strips is 21/2 annas per pound higher than that for tobacco leaf. It seems to us unsafe to deduce the price of tobacco strips from the price of tobacco leaf. Apart from that the transactions referred to in the invoices are subsequent to that in suit. The witness has admitted that the price of tobacco varies from day to day and also that it varies from grade to grade. Bearing in mind these statements and also the circumstances that Exs. A-1 to A-3 do not show the grades of tobacco the evidence of this witness is of no assistance. The second witness, P. W. 2 Ramakoteswara Rao has merely produced one letter received from London Ex. A-4, credit note Ex. A-5 and two invoices Exs. A-6 and A-7. Apart from the fact that he has no personal knowledge of anything these documents would only show the price of tobacco which is sold to the merchants in London. It is an admitted fact that the tobacco which the Russians wanted to buy was cheap tobacco, that is, tobacco which was not acceptable by London traders. Therefore, neither the evidence of this witness nor the documents avail the respondent-firm anything. P. W. 3 Lingamurthy has produced two invoices both of which relate to transactions subsequent to the one in question before us and they do not disclose the grades of tobacco covered by the sales to which the invoices relate. Further, the invoices refer to the stock of 1945-46 whereas the tobacco sold by the respondent-firm to the appellant-firm was of 1944 or earlier stock. In the circumstances, this evidence has no relevance for the purpose of determining the price of the tobacco strips in question. P. W. 4 Ramaswamy in his evidence has referred to certain transaction entered into by him; but it is not clear from his evidence as to the age and grades of tobacco in those transactions. That evidence is thus vague and of little value. In the circumstances we hold that the evidence adduced on behalf of the respondent-firm is inadequate for establishing the value of the tobacco strips sold by it to the appellant-firm. 17. Just because of this suit need not fail. For, the appellant-firm has, by making an entry in its account books, admitted that the value of this tobacco is Rs. 5,639/3/-. The observations of the trial court on this point are as follows :"As per Exhibit B-5, the 1st defendant credited the suit firm with a sum of Rs 5,639-3-0 for the value of 112 bales of tobacco at Rs. 100 per candy of 500 pounds. In Exhibit B-10, a candy of 500 pounds was valued at Rs. 67-8-0. If the tobacco sold by the suit firm to the first defendant firm corresponded to the quality of tobacco in respect of which the invoices Exhibits. B-10 and B-12 were issued, there would have been no difficulty in the suit firm securing local customers and the stock of tobacco with the suit firm need not have remained idle from January, 1944 till June, 1946. Having regard to the fact that the tobacco which was sold by the suit firm to the 1st defendant firm was about 3 years old, the price of Rs. 100/- which was noted in Ex. B-5 appears to be a reasonable price." 18. We agree with what the trial Court has said that the price payable to the respondent-firm in respect of the tobacco strips would be Rs. 5,639/3/-. As regards interest, apart from the evidence of Ramaswamy P. W. 4 there is no other evidence on record to show that the parties had agreed that it should be payable in default of payment of the price within 11/2 months of delivery. As we have not accepted his evidence to the effect that the price has been settled when the transaction had been entered into, we cannot possibly accept his further statement that interest was agreed upon at that time. No custom or trade usage under which interest could be claimed has been established but under S. 61 of the Sale of Goods Act the respondent is entitled to interest at 6 per cent per annum from the date of the transaction to the date or suit. We further award interest to the respondent-firm at 6 per cent per annum from the date of suit till realisation.

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

Explanation:
1[ds]10. It is no doubt true that in para 28 while dealing with the question of price the trial court has observed: "Much reliance cannot be placed on the rate mentioned in Exhibits A-13 and A-14 and the price has to be determined independently having regard to the fact that the price of tobacco depreciates gradually with its age." It will thus be seen that the trial court has not rejected these entries outright but only rejected them in so far as they were intended to establish the price agreed to be paid to the respondent firm11. All this shows that for accepting the entries in toto the High Court has given certain reasons and even though we may not agree with them it cannot be said that there is any unusual circumstance which would warrant our reviewing afresh the evidence on the point as to whether the transaction in question was a sale or notWe fail to see the significance of this because the appellant-firm admits that 112 bales of tobacco were actually received by it from the respondent-firm. It will thus be seen that there are no exceptional circumstances or unusual reasons which would induce us to re-examine the entire evidence on the point ourselves. We, therefore, decline to do soIn our opinion, the authority given to the Receiver "to collect the debts" is wide enough to empower the Receiver to take such legal steps as he thought necessary for collecting the debts including instituting a suit. The suit as originally instituted, was thus perfectly competent. The High Court has observed that even assuming that it would have been more appropriate for the Receiver to show in the cause title that it was the firm which was the real plaintiff and that the firm was suing through him it was merely a case of misdescription and that the plaint could be amended at any time for the purpose of showing the correct description of the plaintiff. We agree with the High Court that where there is a case of misdescription of parties it is open to the court to allow an amendment of the plaint at any time and the question of limitation would not arise in such a caseThe High Court has come to a conclusion different from that of the trial court, and therefore, we allowed the parties to take us through the evidence. It was said that once it is found that there was a contract of sale it must necessarily be held to be for a price and that price also must ordinarily be said to have been agreed upon when the contract was made. That may be so, but it would not be correct to say that it is an invariable rule that where a contract of sale has taken place a price must necessarily have been agreed upon15. In the case before us, no doubt, the respondent-firm has alleged that when the transaction was entered into, the parties fixed the price at 8 annas per pound. The trial court was not prepared to accept the testimony of P. W. 4 Ramaswamy, a partner of the firm, to the effect that the price was settled at 8 annas per pound when the contract was made. It also refused to place reliance upon Ex. A-14 which is an entry dated June 5, 1946 in the khata of the appellant-firmThese circumstances, in our opinion, detract from the value of this entry and we would, therefore, be justified in accepting the opinion of the trial court on the point which had the original document before it rather than of the High Court. We may also refer to the verification register Ex. A-28 which has already been set out earlier. The fact that the words "no price" occur therein clearly suggests that no price had been agreed upon at the time of the transaction. Our conclusion is fortified by the circumstance that the amount stated is Rs. 14,090 and not Rs. 14,098 and besides the figure of Rs. 14,090 is put in brackets. Had that been the price agreed upon it would not have been put in brackets. Another circumstance which makes the respondent-firms claim doubtful is that the institution of the suit was delayed till the last moment and even the notice of demand was made almost at the close of three years from the date of transaction. This suggests that no price had actually been agreed upon between the parties and the respondent-firm was in a quandary as to what amount should be claimed by it from the appellant-firm. Again, as has been rightly pointed out by trial court the tobacco was at least 21/2 years old when it was purchased by the appellant-firm and, therefore, its rate could not have been as high as 8 annas per pound which according to the evidence appear to be the rate for the tobacco of the year 1945. Further, the appellant-firm had agreed to supply 1,500 bales out of the 3,000 bales with respect to which it had entered into a contract with the Russian Government at 8 annas per pound, as is clear from Ex.B-16, which is the telegram dated May 15, 1946 sent by the representative of the Russian Government to the appellant-firm. So far as the remaining tobacco was concerned 1,250 bales were to be of tobacco leaf and only 250 bales were to be of tobacco strips. No doubt so far as these strips were concerned the rate was to be Re. 0-9-0 per pound. But as explained by the defendant in his evidence this was the price of first variety whereas the price of the second variety was 8 annas and the goods supplied by the respondent-firm were intended to be tendered for the contract with respect to the second variety. Normally no businessman would do business unless there is some profit in his transactions. If the appellant-firm had agreed to purchase the 112 bales in question at the rate of 8 annas per pound it would not only have not earned any profit by selling them to the Russian Government at the same rate but it would have incurred a loss because it had to incur the expenses for transporting the bales, first from the respondent-firms godown to its godown and then from there to Kakinada. It also had to incur labour charges as well as godown charges. In the circumstances it would not be reasonable to infer that the appellant-firm had agreed to purchase the tobacco at 8 annas per pound. It was, however, said that where a person has to tender a large quantity of a commodity against a contract within a particular time and was in difficulties in procuring the commodity in sufficient quantities he would rather forgo making any profit and would procure that commodity at an uneconomic price rather than commit a default and thus lay himself open to a claim for damages. We must bear in mind that the contract with the Russian Government was for delivery during the period "June-July", that is to say, the goods had to be tendered from the beginning of June till the end of July. The contract with the respondent-firm was entered into in the beginning of June. It is not shown that there was any dearth of tobacco strips of this particular variety in Guntur at that time nor even was a question put to Kurapati Venkata Mallyya in his cross-examination on the point. It would, therefore, be drawing a far-fetched inference if we were to say that the appellant-firm was prepared to do business with respondent-firm without earning any profit and in fact by incurring some loss. Finally we may mention that it was observed by the High Court that the Russians had agreed to buy tobacco at Re. 0-8-6 per pound and, therefore, the appellant-firm could still be making profit by purchasing tobacco from the respondent-firm at 8 annas per pound. In this connection the High Court has referred to the evidence of K. Venkata Mallayya himself and Ex. A-31 which is a letter dated June 21, 1946 addressed by the representative of the Russian Government to the appellant-firm. The High Court has, however, lost sight of the fact that Mallayya had stated in his evidence that two contracts had been entered into by the appellant-firm with the Russian Government and that the rate of Re. 0-8-6 per pound was fixed with reference to the other contract towards which the tobacco supplied by the respondent-firm was to be tendered. This answer was elicited by the respondent-firm in cross-examination and we see no reason why it should not be accepted. The High Court has, however, made no reference whatsoever to this answer. Disagreeing with it we, therefore, hold that the respondent-firm has failed to establish that the parties had agreed upon the rate at which the tobacco was sold when the contract was entered into and that that rate was 8 annas per poundApart from the fact that he has no personal knowledge of anything these documents would only show the price of tobacco which is sold to the merchants in London. It is an admitted fact that the tobacco which the Russians wanted to buy was cheap tobacco, that is, tobacco which was not acceptable by London traders. Therefore, neither the evidence of this witness nor the documents avail the respondent-firm anything. P. W. 3 Lingamurthy has produced two invoices both of which relate to transactions subsequent to the one in question before us and they do not disclose the grades of tobacco covered by the sales to which the invoices relate. Further, the invoices refer to the stock of 1945-46 whereas the tobacco sold by the respondent-firm to the appellant-firm was of 1944 or earlier stock. In the circumstances, this evidence has no relevance for the purpose of determining the price of the tobacco strips in question. P. W. 4 Ramaswamy in his evidence has referred to certain transaction entered into by him; but it is not clear from his evidence as to the age and grades of tobacco in those transactions. That evidence is thus vague and of little value. In the circumstances we hold that the evidence adduced on behalf of the respondent-firm is inadequate for establishing the value of the tobacco strips sold by it to the appellant-firm18. We agree with what the trial Court has said that the price payable to the respondent-firm in respect of the tobacco strips would be Rs. 5,639/3/-. As regards interest, apart from the evidence of Ramaswamy P. W. 4 there is no other evidence on record to show that the parties had agreed that it should be payable in default of payment of the price within 11/2 months of delivery. As we have not accepted his evidence to the effect that the price has been settled when the transaction had been entered into, we cannot possibly accept his further statement that interest was agreed upon at that time. No custom or trade usage under which interest could be claimed has been established but under S. 61 of the Sale of Goods Act the respondent is entitled to interest at 6 per cent per annum from the date of the transaction to the date or suit. We further award interest to the respondent-firm at 6 per cent per annum from the date of suit till realisation.