Case: Keshavlal Lallubhai Patel Vs. Lalbhai Trikumlal Mills

1. This is an appeal by the plaintiffs against the decree passed by the High Court of Bombay dismissing their suit to recover from the defendant Rs. 1,52,334-8-9 as damages for breach of contract for non-delivery of certain cotton goods. The plaintiffs claim had been decreed by the trial court but on appeal it has been dismissed.The appellants are the partners of M/s. K. B. Navinchandra and Co. This partnership had placed an order with the respondent for 251 bales of printed chints on or about July 4, 1942, and the said order had been accepted by the respondent by its letter dated July 11 and July 20,The delivery period for the said goods was fixed for the months of September and OctoberAnother order was placed by the appellants with the respondent for 31 bales of printed chints on July 24, 1942, and this order was accepted by the respondent on July 25,The delivery of these goods was to be given in the month of October 1942.3. On August 9, 1942, the workers in the respondent mills went on strike in sympathy with the Quit-India movement which had then commenced . In consequence, the respondent wrote to the appellants firm on August 15, 1942 and stated that, in view of the strike and the political situation, the delivery time of all the pending contracts should be automatically understood as extended for the period the working of the mills was stopped and until the normal state of affairs recurred. The strike came to an end and the mills resumed working on November 22,On December 5, 1942, Jasubhai, who was then in charge of the management of the mills was approached by the appellants Keshavlal and Ratilal for obtaining delivery of the goods. He, however, told them that the appellants contracts were void and so no delivery could be claimed or given. On December 6, 1942, the said Jasubhai wrote to the appellants informing them that their contracts were not binding on the mills as they were null and void. It may be mentioned at this stage that when the contracts were made between the appellants and the respondent, Chinubhai Lalbhai was in charge of the managing agency of the mills. Subsequently, on September 18, 1942, as a result of the compromise between Chinubhai and his brothers Jasubhai and Babubhai, this managing agency of the mills fell to the share of Jasubhai and Babubhai.4. On December 17, 1942, the appellants wrote to the respondent that, as the respondent had extended the time of delivery of all goods by its letter dated August 15, 1942, the respondent was bound to deliver the contracted goods and that, if the respondent did not do so, the appellants would be compelled to take legal proceedings against the respondent. In reply, the respondent repeated its earlier contentions by its letter dated December 20,The appellants then formally demanded the delivery of goods in January and again in February 1943, and since the demand was not complied with, the appellants filed the present suit on January 9, 1946, claiming damages to the extent of Rs. 1,52,334-8-9 with interest and costs.In the plaint, it was alleged that the suit was in time because the request made by the respondent for extension of time had been accepted by the appellants. The suit was resisted by the respondent on several grounds. In particular, the respondent urged that there was no agreement between the parties with regard to the extension of time and so the suit was barred by limitation. The learned trial judge framed several issues with two of which the present appeal is concerned. These two issues related to the question of extension of time for the performance of the contract and the plea of limitation. On both these points, the learned Judge found in favour of the appellants. In the result the appellants claim was decreed. The respondent then preferred an appeal in the High Court at Bombay and his appeal was allowed. The learned Judges of the High Court have held that the oral evidence led by the appellants to show the acceptance of the respondents proposal for the extension of time could not be treated as true or reliable. They also rejected the appellants case on the ground that the conduct of the appellants subsequent to the stoppage of the respondents mills did not show acceptance of the respondents proposal for extension of time. Besides, in the opinion of the High Court even if acceptance had been proved, it was not possible to ascribe any certain or definite meaning to the words used by the respondent in its letter dated August 15, 1942, (Ex. 78) and so this agreement to extend time was void since it was vague and uncertain. That is why it was held that the appellants suit was barred by time. It is these findings which are challenged before us by the appellants in the present appeal.It is obvious that the value of the claim in the trial Court as well as before us is more than Rs. 20,000 and the judgment of the High Court under appeal has reversed the decree passed by the learned trial Judge. The appellants are thus entitled to agitate both questions of fact and of law before us in this appeal.

Reasoning:
It is fairly clear from the record that the attitude adopted by the respondent in the present dispute was actuated more by Jasubhais prejudice against Chinubhai and it may be safely asserted that some of the pleas taken by the respondent were known to the respondent to be untenable. The appellants rely upon this conduct of the respondent and suggest that the oral testimony of Ratilal and Keshavlal is consistent with probabilities and should be believed. Chinubhai also gave evidence in the case. He stated that the proposal to extend time had been conveyed by Laxmidas under his instructions. It is common ground that similar request was made to all the constituents of the mills both in Ahmedabad and outside Ahmedabad. Chinubhai did not remember whether he had got any written reply to the letter of 15th August 1942, from the appellants but the effect of some of the statements made by him would generally appear to be that he had received oral acceptance of the said proposal from the appellants. However, in answer to further questions put to him in cross-examination. Chinubhai stated that he did not remember whether the appellants accepted the offer or not. It is, however, clear that the evidence of Chinubhai is not at all inconsistent with the statements made by Ratilal and Keshavlal. It is common ground that the prices of the goods were rising at the material time and so it is more likely that the appellants were willing to extend time because they would naturally be keen on obtaining delivery of the goods under the contract. In both the Courts below an argument appears to have been urged by reference to the sauda books kept by the respondent. Shri Dharamasi Harilal had brought the sauda books in the Court but neither party got the books exhibited in the case. The learned trial Judge took the view that, since the sauda books were not produced and proved by the respondent, it led to the inference that, if the books had been produced, they would have shown an endorsement made against the suit contracts that the extension of time had been agreed upon by the appellant. On the other hand, the learned Judges of the High Court were inclined to draw the inference that since the appellants did not want the said sauda books to be exhibited, it would appear that the said books did not contain any note about the extension. In our opinion, it would be unsafe to draw either of these two inferences in the present case. Therefore, the decision of the question would depend upon the appreciation of oral evidence considered in the light of probabilities and other relevant circumstances in the case. On the whole, we are disposed to take the view that the evidence given by Ratilal and Keshavlal is true.The true legal position in regard to the extension of time for the performance of a contract is quite clear under S. 63 of the Indian Contract Act.Every promisee, as the section provides, may extend time for the performance of the contract.The question as to how extension of time may be agreed upon by the parties has been the subject-matter of some argument at the Bar in the present appeal. There can be, no doubt, we think, that both the buyer and the seller must agree to extend time for the delivery of goods.It would not be open to the promisee by his unilateral act to extend the time for performance of his own accord for his own benefit. It is true that the agreement to extend time need not necessarily be reduced to writing. It may be proved by oral evidence. In some cases it may be proved by evidence of conduct. Forbearance on the part of the buyer to make a demand for the delivery of goods on the due date as fixed in the original contract may conceivably be relevant on the question of the intention of the buyer to accept the sellers proposal to extend time. It would be difficult to lay down any hard and fast rule about the requirements of proof of such an agreement. It would naturally be a question of fact in each case to be determined in the light of evidence adduced by the parties.Having regard to the probabilities in this case, and to the conduct of the parties at the relevant time, we think the appellants are entitled to urge that their oral evidence about the acceptance of the respondents proposal for the extension of time should be believed and the finding of the learned trial judge on this question should besuch plea appears to have been taken even in the grounds of appeal preferred by the respondent in the High Court at Bombay; but apparently the plea was allowed to be raised in the High Court and the appellants took no objection to it at the stage. It cannot be said that it was not open to the High Court to allow such a plea to be raised even for the first time in appeal.After all, the plea raised is a plea of law based solely upon the construction of the letter which is the basis of the case for the extension of time for the performance of the contract and so it was competent to the appeal Court to allow such a plea to be raised under O. 41, R.Civil P. C. If, on a fair construction, the condition mentioned in the document is held to be vague or uncertain, no evidence can be admitted to remove the said vagueness or uncertainty. The provisions of S. 93, Evidence Act are clear on this point. It is the language of the document alone that will decide the question. It would not be open to the parties or to the Court to attempt to remove the defect of vagueness or uncertainty by relaying upon any extrinsic evidence. Such an attempt would really mean the making of a new contract between the parties. That is why we do not think that the appellants can now effectively raise the point that the plea of vagueness should not have been entertained in the High Court.