1. S. ALI ASLAM JAFRI, J.---This appeal under section 3 of the Law Reforms (Amendment) Act, 1972, has been filed by the appellant/plaintiff to assail the judgment dated 28-2-1991 and decree dated 25- 4-1991 through which Suit No,111 of 1975 for recovery of Rs,62,878.30 was dismissed with no order as to costs by a learned Single Judge of this Court. The facts in brief appear to be that plaintiff invited tenders for supply of Gorjan Hardwood Sleepers through a public notice. Defendant submitted tender which was accepted and purchase order was placed on 12-1-1971 for supply of 500 sleepers out of which 200 sleepers were to be of the specification 10" x 6" x 12" while the specification for the remaining sleepers as desired was 12" x 6" x 15". As per agreement dated 28-12-1970, the defendant offered to supply the material/sleeper within 15 days from his ready stock. It is the case of the plaintiff that time was essence of the contract. The defendant supplied 240 sleepers of 10" x 6" x 12" instead of required number of 200 out of which 59 rejected and 181 were approved and accepted. Thus, a balance of 19 sleepers was left out of this lot. 270 sleepers of the other specification i,e, 12" x 6" x 15" were supplied out of the required number of 300, out of which 177 sleepers were approved and accepted whereas 123 sleepers were left as unapproved and unaccepted. According to the plaintiff, the defendant failed to supply the required material/sleepers within the contract period, therefore, he was called upon by the plaintiff on 18-10-1971 to supply the remaining quantity within 7 days from the receipt of the letter, but the defendant again failed to supply the balance quantity of 142 sleepers. Thus, by a Board resolution dated 15-3-1972 defendant's contract was cancelled and he was duly informed by letter dated 1-4-1972. Since the defendant vide his letter dated 5-4-1972 had shown his inability. To supply the remaining quantity of the sleepers, hence the plaintiff invited fresh tenders for the remaining quantity and offer of M/s. Asghar Ali Nawroze Trading Co. Was accepted on 24-5-1972 for Rs,85,463.88. The plaintiff had to pay only Rs,20,397.76 for the balance quantity to the defendant and since Rs,62,878.88 more were paid to the new contractor which was suffered as a loss by the plaintiff due to non-performance of contract by the defendant, hence suit for recovery of the said amount was filed. Defendant resisted the suit denying his liability and pleaded that immediately after the order was placed on 2-1-1971, tendered quantity of the material was available with him and the plaintiff was called upon to take delivery who vide its letter dated 9-1-1971 informed that on account of the alleged want of labour, space and time the ordered material/timber could not be turned, measured and inspected at the defendant's premises and, as such, defendant was required to deliver the entire timber at lynnyard. The material so supplied was provisionally accepted by the plaintiff and in case the plaintiff required to reject any part of the material, it should have been within a reasonable time. However, on 1-3-1971 plaintiff rejected the entire quantity of the material supplied. In view of the protest from the defendant, the material was once again inspected on 25- 3-1971 and 131 sleepers from Item No,1 and 125 from Item No,2 were accepted by the plaintiff. With reference to alleged willingness of the defendant to replace the rejected material with other material as per requirements, defendant stated that it was under threat and duress of being blacklisted. The defendant stated to have substituted the material from time to time, but the plaintiff without any justification kept on rejecting the same. The authority of the plaintiff to cancel the contract on 15-3-1972 and purchase the remaining quantity at the cost of defendant was denied more particularly when there was no occasion for cancellation. The defendant, therefore, prayed for dismissal of the suit. In view of the pleading of the parties following issues were framed:--
(1) Whether the defendant failed and neglected to deliver the contracted quantity of the goods in accordance with the terms of the contract?
(2) Whether the plaintiffs had rejected any quantity of the goods wrongly. If so, what is its effect?
(3) Whether the defendant under threat and duress agreed to substitute any quantity of the goods.
2. If so, what is its effect?
(4) Whether the defendant was justified in refusing to deliver the balance quantity of the contracted goods. If so, what is its effect?
(5) Whether the plaintiffs were entitled to cancel the contract on the ground of non-delivery of the balance quantity of the goods by the defendant. If so, what is its effect?
(6) Whether the plaintiffs are entitled to recover from the defendant the difference between the defendant's contract price and the price at which they had repurchased the balance quantity?
(7) What reliefs or relief the plaintiffs are entitled to? In support of its case plaintiff examined their Office Superintendent of Stores Sharif Ahmad and Assistant Manager Akhtar Ali who' produced a number of documents viz. Correspondence between the parties so also the documents pertaining to the contract. In rebuttal defendant examined one Hatim Bhai Timber Merchant, who also produced a number of documents with regard to the transaction of the goods. After examining the material on record and hearing the learned counsel for the parties, the learned Single Judge decided Issue No,1 in negative. Issues Nos. 2, 3 and 4 in affirmative. Issues Nos.
3. 5 and 6 in negative and dismissed the suit, however with no order as to costs. We have heard Sardar Muhammad Arif Khan for the appellant/plaintiff and Mr. Muhammad Shahid for the respondent/defendant and with their assistance examined the evidence oral as well as documentary brought on record. Issues Nos. 1 and 2 being interconnected have been discussed together by the learned Single Judge who came to the conclusion that plaintiff failed to prove that defendant neglected to deliver the contract quantity of the goods in accordance with the terms of the contract and, as such, while dealing with Issue No,2 the learned Single Judge arrived at a 'conclusion that the quantity of the goods as rejected by the plaintiffs was a wrongful act on their part. Sardar Muhammad Arif Khan learned counsel has attacked the said findings being a result of non-reading and misreading of record which shows that as per terms of the contract the material to be supplied should have been according to the specifications as desired by the plaintiffs. Exh.5/3 viz. The purchase order dated 2-1-1971 which is an undisputed document clearly shows that the required material was to be supplied by the defendant from the ready stock and the supply was to be completed within 15 days thereof subject to joint inspection at firm's premises before delivery.
4. With reference to the quality of the goods it was required to bed of good clean quality free from sponges or brittle conditions free from warp twist or spring or crook and should have reasonably straight grain throughout. Learned counsel while referring to a number of documents forming part of correspondence between the parties argued that the material lying in the store of the defendant could not be inspected there in details due to non-availability of the labour and the proper space required. As such, the defendant was directed to dispatch the material to lynnyard where it could be inspected jointly. Learned counsel further argued that after shifting the material to lynnyard, the plaintiffs desired joint inspection vide their letter dated 17-2-1971 fixing the date and time of the joint inspection to be 18th February, 1971 at 9-00 a.m. At Lynnyard and the defendant had to bring his labour as well. Despite having received that letter (Exh.5/9) defendant did not turn-up for the joint inspection as desired and, as such, on 1st March, 1971 the plaintiffs informed the defendant that the entire quantity having been found substandard and being not in accordance with the specifications mentioned in the purchase order was rejected and the defendant should replace the same with the material as per specifications within one week from the date of receipt of that letter, but the defendant failed to replace the rejected material despite the letter dated 5th March, 1971 (Exh.5/12/1) stating that the defendant could not make him present on the date of joint inspection in view of some hearing in Martial Law Court. However, he requested the plaintiffs to re- examine the timber and undertook to replace few pieces of unacceptable timber if so directed.
5. Referring to Exh.5/12/4 a letter from plaintiffs to the defendant in reply to his letter dated 5-3-1971 the defendant was asked to replace 59 pieces from lot No,1 and 93 pieces from lot No,2 within 7 days from the date of receipt of the letter specifying clearly that no extension of time would be granted for the late supply. This letter was replied by the defendant through letter dated 9th April, 1971 (Exh.5/12/5) stating therein that defendant was having 100 pieces of required items of each specifications, as such inspection of the above pieces be made at the earliest. For the balance quantity the defendant stated that he was approaching the Controller of Stores for granting an extension in delivery period in view of the prevailing situation in East Pakistan at that time.
6. Exh.5/12/6 which is a letter dated 26-4-1971 addressed to the defendant shows that joint inspection was held on 24-4-1971 in presence of the representative of the defendant and the two lots of timber provided for inspection were again found to be of substandard quality, and not in accordance with the specifications hence the same were rejected. The defendant was advised to arrange and provide the timber as per specification for inspection immediately. Vide letter dated 4th May, 1971 (Exh.5/12/7) addressed to the plaintiffs, the defendant regretted that his representative through an oversight had shown wrong lots to the representative of the plaintiffs which were not meant for supply to the plaintiffs and requested to depute the inspectors again for carrying out inspection of the proper lots by fixing a date and time for the said purpose at the premises of the defendant.
7. There is another letter (Exh.5/12/8) from the defendant requesting the plaintiffs to allow the defendant to take the delivery of rejected timber. By letter dated 18th October, 1971 (Exh.5/12/9) from the plaintiffs, the defendant was again reminded to supply the balance quantity of each item within 7 days from the date of receipt of the letter failing which action was to be taken as per terms and conditions of the related contract/tender ,No,297 dated 24-9-1970. This letter which was sent by way of a final notice was acknowledged by the defendant through his letter dated 25th October, 1971 (Exh.5/12/10) stating therein that in the meantime situation in East Pakistan had become critical and turned into civil war as such the defendant was unable to supply any commodity which was coming from East Pakistan and offered to supply the same when the conditions became normal in East Pakistan or to cancel the contract for the remaining quantity with a further request to return the amount of security without imposition of penalty clause, or in alternate if the material still lying with the defendant suited to the plaintiffs, the same could be taken. By another letter dated 3rd November, 1971 (Exh.5/12/12) defendant still showed his willingness to supply the timber as required provided time was given to import it from East Pakistan which might take three to foul. Months. Learned counsel after referring to the documents referred to above argued that despite sufficient time having been granted to the defendant to supply the required quantity of the timber as per specifications, he failed to perform his part of contract, hence vide letter dated 1st April, 1972 (Exh.5/12/13) the defendant was informed that the contract regarding supply of the balance quantities was cancelled and the plaintiffs had decided to procure the balance quantity at the risk and cost of the defendant. Learned counsel, therefore, vehemently urged that such overwhelming evidence available on record was ignored by the learned Single Judge and the two issues have been decided against the plaintiffs on the basis of misreading and non-reading of the evidence which on the contrary clearly shows that it was the defendant who failed to perform his part of the contract despite sufficient time having been allowed. Learned counsel further argued that rigors of sections 41 and 42 of the Sale of Goods Act do not stand attracted to the facts of the case in hand. If the evidence as referred to above, would have been taken into consideration by the learned Single Judge, rule laid down in Rahim Bux Piracha v.
8. Muhammad Ibrahim 1978 SCM R 220 should have appeared to be distinguishable. Learned counsel also argued that the rule laid down in the case of The Firm of Probhu Dial Bahnwari Lal of Delhi v.
9. Dina Nath Kapur AIR 1922 Lahore 127 is also distinguishable. With reference to finding at Issue No,3 learned counsel argued that the findings are not in accordance with the facts and law. Exh.5/12/14 which is a letter from defendant to plaintiffs sent on 5th April, 1972, clearly shows the inability of the defendant to supply the remaining quantity of the specified goods which was to be imported from East Pakistan, as the timber available in the stock was already rejected being substandard and not in accordance with the required specifications.
10. Learned counsel further urged that as per terms of the contract the delivery was to be made within 15 days from the stock available with the defendant and the time was of the essence of contract, thus, the finding of the learned Single Judge on Issue No,3 that it was under threat and duress that the defendant agreed to substitute any quantity of the goods is not based on the documentary evidence available on record. With reference to findings on Issues Nos.4 & 5 learned counsel argued that the same appear to have been based by the learned Single Judge mainly on its findings on Issues Nos.1 and 2, hence the same are also not sustainable In law.. While attacking findings on Issue No,6 learned counsel argued that the difference between the rates quoted by the defendant' and subsequent purchase from M/s. Asghar Ali and Nawrauz Trading Company for the remaining quantity which the defendant failed to supply, is a sufficient proof of loss sustained by the plaintiff which justifies the recovery of the said differential amount from the defendant as per terms of the contract. Clauses (2) & (3) of the agreement are relevant which say that contractor for the supply of the stores to the plaintiff/Board of the descriptions and in the quantities set forth with schedule annexed with the agreement shall at all times indemnify the Board. Learned counsel, therefore, prayed that after setting aside the judgment and decree passed by the learned Single Judge, suit be decreed as prayed with costs throughout.
11. In rebuttal Mr. Muhammad Shahid, learned counsel for the defendant, has argued that findings of the learned Single Judge on all the issues are based on proper appreciation of law and facts. It was beyond the control and power of the defendant to have supplied the remaining material which was rejected allegedly being of substandard and that there is no proof for the same as none of the members of the Committee who inspected the material was examined in Court. Learned counsel further argued that the time consumed by the plaintiffs in, the first examination at Lynnyard on 16- 2-1971 after about 40 days shows mala fide on their part and the material which was timber lying in open and exposed to sun and other environmental effects, as such, even if found to be, substandard, the defendant cannot be blamed for the same. Learned counsel reiterated the same reasoning's as advanced by the learned Single Judge while deciding the issues against the plaintiffs.
12. As a result of careful scrutiny of the evidence available on record, we find force in the contentions of the learned counsel for the appellants that findings of the learned Single Judge on various issues as recorded against the appellants/plaintiffs are result of misreading and non-reading of the evidence. As per terms of the agreement Ex. 5/6 time was of the essence of the contract and the defendant had undertaken to supply" specified material from the stock available with him within the specified time and the supply was to be completed within fifteen days but till the filing of suit or to say till the cancellation of the contract due to non-performance of the contract by the defendant as communicated vide letter dated 1st April, 1972 (Exh.5/12/13) the defendant failed to supply the required number of the sleepers as per specification though further time was allowed in view of requests made by him. Thus, the finding on Issue No,1 should have been that defendant failed and neglected to deliver the contracted quantity of the goods in accordance with the terms of the contract.
13. The finding recorded by the learned Single Judge on Issue No,2 is also not factually correct. The correspondence between the parties, as referred to above, clearly shows that the plaintiffs had rejected the substandard quantity which was never objected by the defendant. On the contrary he tried to replace the same by substituting the material as per specifications but failed to supply the required material/sleepers as per specifications, though, the contract was awarded to him on a clear understanding that he shall supply the specified material from the stock available with him.
14. Thus, to hold that there was no negligence on the part of defendant is not supported by record.
15. While deciding. Issues Nos.1 and '2 'in favour of the defendant learned Single Judge has considered the delay in inspection of the material as a cause for becoming the required sleepers as of substandard. With due respects we are unable t6 subscribe to this view. Delayed inspection at Lynnyard cannot be attributed to the plaintiffs. Moreover, there is no evidence to show that by such lapse of time the wooden sleepers became of substandard particularly when the defendant has neither examined himself nor any expert to substantiate such contention. The readiness and willingness of the defendant to replace the substandard material from time to time which actually was done to some extent shows that the view taken by the learned Single Judge is not correct.
16. Even otherwise, it does not appeal to reason that the Sleepers of Gorjan Hardwood which were required for the purpose of being used in laying the railway line could be of such soft and fragile nature which could become of substandard by laying in open for some days. Interestingly as observed above defendant Qutubuddin has not appeared in the witness-box without any reasonable cause or explanation and the only witness examined from the side of defendant was his brother Hatim Bhai. Indeed, non-inspection of the goods supplied within a reasonable time, as referred in the impugned judgment, can be taken into consideration as a relevant factor in appropriate cases. However, what is reasonable time shall vary from case to case. Even in the case of Sewa Ram v. Udegir (AIR 1922 Lahore 126) as referred by the learned Single Judge, it has been observed "what is the reasonable time is purely a question of fact and has to be decided on the circumstances of each case". Dealing with such aspect of the matter in the case of Rahim Bux Paracha v. Muhammad Ibrahim (1978 SCM R 220) with reference to the nature of the goods and reduction in their rates in the meantime was considered as a relevant factor by their Lordships by observing that "the question whether reasonable opportunity is given for inspection depends on the facts of each case but "reasonable" opportunity does not mean "unlimited" period".
17. We are in agreement with he above referred view expressed by the Hon'ble apex Court but what we find that in view of the facts and circumstances of the case the delay in inspection of the material neither appears to be relevant nor can be attributed to the plaintiff. The observation of the learned Single Judge that the material became of substandard in the meantime, is something not based on any evidence.
18. In the absence of any protest from the defendant that he had undertaken to substitute the remaining quantity of the goods as per specifications under duress or threat, more particularly when Qutubuddin proprietor of the defendant firm preferred not to appear in witness box, the plea of duress or threats cannot be given any weight. Even otherwise, the defendant was under obligation as per terms of the contract to supply the material as per specifications. Hence the plea taken by the defendant that he agreed to do so under duress or coercion is definitely an afterthought. Thus, it appears that the defendant failed to discharge the burden in respect of Issue No,3 which was on him.
19. With reference to finding on Issue No,4 we are unable to agree with the view taken by the learned Single Judge that defendant was justified in refusing to deliver the balance quantity of the contracted goods. The agreement executed between the parties and the correspondence leave no room for doubt that the material available with the defendant at the time of taking the contract was not as per specifications. Non-examination of the material at the relevant time cannot be attributed to the plaintiff. It is not denied that it was due to non-availability of the labour which was to be arranged by the defendant and lack of proper space available at the place of inspection, that the material could not be examined so as to be certified strictly in accordance with the required specifications. It was for the said reason that defendant was asked to arrange the shifting of the material to lynnyard. The defendant when asked to remain present with labour for inspection purpose, failed to appear on the plea that he had to appear on that date before the Martial Law Court. However, when the defendant subsequently appeared the material was examined and the sleepers which were found to be of substandard were rejected. The evidence from the defendant side also show that some other material of substandard nature was shown to the representatives of the plaintiffs for which the defendant expressed his regrets and tried to justify by stating that his employees had pointed out another lot of the sleepers which was not meant for supply to the plaintiffs. In spite of sufficient time having expired and after his inability to supply the remaining material for various reasons expressed by him including the separation of East Pakistan and non- availability of required material with him, there appears to be nothing wrong to have been committed by the plaintiffs by cancelling the contract and purchasing the remaining material from the market after inviting fresh offers from the suppliers of the said material. Since the defendant failed to perform his part of the contract as such as per terms of the contract the plaintiffs are entitled to recover the differential amount which they paid in excess to M/s. Asghar Ali Nawroze Trading Co. For the remaining quantity.
20. In view of discussion made on Issues Nos.1 to 4 we are of the opinion that the plaintiffs were entitled to cancel the contract on the ground of non-supply of the balance quantity of the goods by the defendant as per agreement. Thus, Issue No,6 also needs to be replied in affirmative. For what has been discussed above we would allow this appeal, set aside the judgment and decree passed by the learned Single Judge and decree the suit of the appellant/plaintiff as prayed however with no order as to costs.