' GULZAR AHMED, J.---By this common Judgment we intend to dispose of two Civil Appeals i,e, C.A.
No, 371 of 2005 Messrs Essa Engineering Company Private Limited v. Pakistan Telecommunication Company Limited, etc. And C.A. No, 717 of 2005 Pakistan Telecommunication Company Limited, etc. v. Messrs Essa Engineering Company Private Limited, which have arisen out of Judgment dated 16- 3-2005 of the learned Division Bench of the Lahore High Court, Lahore, passed in R.F.A. No,335 of 2000, by which the appeal filed by Pakistan Telecommunication Company Limited was partly accepted.
2. Brief facts of the matter are that Pakistan Telecommunication Company Limited (PTCL) sought bids for purchase of 9700 tubes. The offer made by Messrs Essa Engineering Company Pvt. Limited (Contractor) being the lowest was accepted. The letter of acceptance dated 11-4-1996 with conditions of contract was issued by the PTCL. The specification of goods to be supplied by the Contractor to PTCL was provided as Hot Rolled conforming to specification No,ASTM/A/569/66-T Latest Revision/ Equivalent to BSS-1449/En-2. The Contractor initially supplied 3100 tubes and on inspection of these tubes 106 tubes were rejected by the PTCL as defective and on further standardized checking 1359 tubes out of the remaining 2994 tubes were also found to be substandard and underweight. The PTCL invoked the warranty clause 16 in the conditions of contract for replacement of the substandard tubes by the Contractor. The Contractor agreed for the replacement and in that connection prepared 1400 tubes and requested PTCL through its letter dated 10-10-1996 to inspect them. In the meanwhile the Contractor had also prepared 1260 tubes under the contract for supplying to PTCL and requested the PTCL to inspect them vide its letter dated 5-9-1996. The contractor made request for payment of the delivered tubes but it seems that no payment whatsoever was made to the Contractor. The two letters of the Contractor for inspection of 1260 and 1400 tubes were also acknowledged by the PTCL through its letter dated 12- 1-1997 wherein Director (Stores) PTCL asked the Divisional Engineer Testing, Telegraph, PTCL for conducting inspection and testing of the said two quantity of tubes. No inspection or testing was conducted by the PTCL rather it appears that the matter was referred to FIA for enquiry regarding supply of substandard tubes by the Contractor. It seems that the FIA enquiry did not bore any fruit and ultimately the case was closed. The Contractor pressed for payment but such request went unheeded by the PTCL and ultimately through letter dated 10-4-1998 PTCL approved payment in respect of 1634 tubes and through a further letter dated 31-8-1998 cancelled the contract for supply of the remaining tubes. The PTCL through its letter dated 2-11-1998 asked the Contractor to collect 1359 substandard tubes from its Mughalpura Store Depot. Being dissatisfied with the events and non-payment of its dues by the PTCL, the Contractor filed a suit against PTCL for recovery of Rs,3,49,93,356.82. Here on we will refer the Contractor as the (plaintiff) and the PTCL as the (defendant). The suit was contested by the defendant who filed its written statement. Issues were framed, evidence of the parties was recorded and thereafter vide judgment and decree dated 7- 7-2000 the learned Civil Judge 1st Class, Lahore, decreed the suit in the sum of Rs,2,25,05,871.52. This judgment and decree of the trial Court was challenged by the defendant by filing R.F.A. No,335 of 2000. After hearing the learned counsel for the parties, the learned Division Bench of Lahore High Court, Lahore, through its judgment dated 16-3-2005 partly accepted the appeal and modified the judgment and decree of the trial Court and reduced the amount of decree to Rs,82,42,770.78. Both the plaintiff as well as the defendant being aggrieved by the impugned judgment and decree of the High Court have filed the two appeals noted above.
3. The learned counsel for the plaintiff after taking us through the facts and record of the matter contended that the defendant has neither made any counter claim nor had claimed setoff in its written statement in respect of 1359 tubes and that in terms of section 59 of the Sale of Goods Act, 1930 (the Act) the High Court was not justified in reducing the plaintiffs claim from 2994 tubes to that of 1634 tubes. He further contended that although the learned High Court has allowed payment of 1400 tubes to the plaintiff but has denied its claim in respect of 1260 tubes, which were duly prepared by the plaintiff but for no fault of it's own the same were not accepted by the defendant. He contended that the plaintiff is also entitled to payment in respect of 1260 tubes and its denial was unjustified. The learned counsel further contended that the plaintiffs claim towards the loss suffered on account of purchase and sale of raw material and the wastage of machinery was decreed by the trial Court but the learned High Court without any reason has disallowed this claim of the plaintiff. In support of his submissions, he has relied upon the cases of "Commissioner of Sales Tax v. Prem Nath Motors (P) Ltd." (ILR 1978 Delhi 273); "G.N. Behera v. Messrs Nancy:Iran Bhikamc hand Rice Mills Firm and another" (AIR 1966 Assam and Nagaland 95); "Sued Niamat All and another v. Dewan Jairam Dass and another" (PLD 1983 SC 5); and "Maple Flock Companu Limited v. Universal Furniture Products (Wembleu) Limited" (The Law Times Volume 150 P. 69).
4. On the other hand, learned counsel appearing for the defendant at the very outset has contended that the Act has no application to the case in hand inasmuch as the plaintiff has admitted the supply of 1359 substandard tubes and has agreed to replace them and in pursuance thereof has prepared 1400 tubes. He admitted as a fact that the plaintiff had asked the defendant for inspection of 1400 and 1260 tubes but such inspection was not undertaken by the defendant on account of the fact that the FIA was conducting an enquiry against the plaintiff for supplying of substandard tubes and thus making of such an exercise was considered by the defendant to be of no avail. He contended that the defendant has asked the plaintiff to lift 1359 substandard tubes but the plaintiff itself has avoided doing so for which the defendant cannot be made liable and that the plaintiff is still free to lift the said 1359 substandard tubes from the store of the defendant. The learned counsel further contended that the claim for loss on account of selling of raw material and machinery was not pleaded in the plaint and the defendant had no occasion to meet such claim of the plaintiff and no issue on these claims was struck between the parties and such claim cannot be considered or allowed by the Court. In rebuttal, the learned counsel for the plaintiff has contended that although there is no specific pleading and prayer in the plaint for the loss on account of raw material and wastage of machinery but the evidence and substance on record show that such claim of the plaintiff was very much there and it was also established. - In support of his such argument, the learned counsel has relied upon the case of "Bhaqwah Prasad v.
Chandramaul" (AIR 1966 SC 735).
5. We have minutely considered the submissions of learned counsel for the parties and the relevant law relied upon by them and have gone through the record of the case.
6. The case has certain feature which on record does not appear to be much in dispute i,e, that there was a contract for supply of 9700 specified tubes made between the plaintiff and the defendant. The plaintiff made initial supply of 3100 tubes out of which 106 tubes on initial testing were rejected and from the remaining 2994 tubes on standardized testing 1359 tubes were further found to be substandard. The warranty clause in the contract was invoked by the defendant. The plaintiff agreed to replace 1359 substandard tubes and in doing so ha$ prepared 1400 tubes. The plaintiff under the contract has further prepared 1260 tubes for supplying to the defendant. The plaintiff requested the defendant to inspect 1400 tubes and 1260 tubes but the defendant neither inspected nor took delivery of these tubes.
7. The learned trial Court in its judgment and decree has allowed the claim of the plaintiff in respect of 2994 tubes, 2600 tubes with interest @ 16% per annum and also for loss of raw material and of machinery and decreed the suit in the sum of Rs,2,25,05,871.52. The claim for general damages was not allowed by the learned trial Court. On the other hand, in appeal by the defendant, the learned High Court discarded the claim of the plaintiff in respect of 1359 substandard tubes and from the initial supply allowed claim of the plaintiff only to the extent of 1634 tubes. As regards 1400 tubes, the learned High Court observed that the claim in respect of such tubes is contained in para 7 of the plaint but there is no mention of the claim in respect of 1260 tubes in the plaint and came to the conclusion that the decree of the learned trial Court in respect of 1260 tubes was not sustainable.
As regard the loss on raw material and machinery, the learned High Court concluded that there is no mention of these two claims in the plaint and therefore did not allow them. Finally the learned High Court by modifying the decree of the learned trial Court allowed the claims of the plaintiff as follows:-- (i)Price of 1634 tubes @ Rs.1698 per tube Rs.27,74,532.00 (ii)Interest @ 16% from 14-10-1996 to 7-7-2000 Rs.16,64,718.75 (iii)Price of 1400 tubes @ Rs.1698 per tube Rs.23,77,200.00 (iv)Interest @ Rs.16% from 10-10-1996 to 7-7-2000Rs.14,26,320.00 Total Rs.82,42,770.78
8. As regards the submission of learned counsel for the plaintiff that the claim of 1359 tubes could not have been disallowed for that no counter claim was made nor setoff was claimed by the defendant in its written statement and in this respect has relied upon section 59 of the Act and cited the cases of Prem Nath Motors (P) Ltd. And that of Sued Niamat Ali, supra. Section 59 of the Act reads as under:- "59. Remedu for breach of warraniu.---(1) Where there is breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty entitled to reject the goods; but he may-
(a) set up against the seller the breach of warranty in diminution or extinction of the price; or
(b) sue the seller for damages for breach of warranty.
(2) the fact that a buyer has set up a breach of warranty in diminution or extinction of the price does not prevent him from suing for the same breach of warranty if he has suffered further damage."
'This provision as it reads provides for a situation where in a contract of warranty between seller and the buyer, the seller makes a breach of such warranty, the buyer not only is entitled to reject the goods but is also entitled to set up against the seller the breach of warranty in diminution or extinction of the price or sue the seller for damages for breach of warranty. Setting up against the seller the breach of warranty in diminution or extinction of price, this situation arise where the seller brings a suit against the buyer either for damages or for price of the goods. The buyer as a defendant at this stage is entitled to set up a claim against the seller i,e, breach of warranty and as a consequence ask for diminution or extinction of price. In the present case, the facts appear to be quite different from the one as are postulated in section 59 of the Act in that upon supply of 3100 tubes by the plaintiff to the defendant no dispute was raised by the plaintiff of initial rejection of 106 tubes by the defendant. Further, on standardized testing the defendant has rejected another lot of 1359 tubes as substandard upon which warranty clause 16 of the contract was invoked by the defendant through its telegram dated 14-9-1996 and letter dated 15-9-1996. The plaintiff did not contest or object to the invoking of warranty clause by the defendant but agreed to replace 1359 substandard tubes and in doing so went on to prepare 1400 tubes as a replacement and informed the defendant through its letters dated 10-10-1996 and 14-10-1996 to inspect 1400 tubes. This being the admitted fact on the record, and such fact being also pleaded by `the plaintiff in its plaint, apparently there did not arise an occasion to the defendant to set up against the seller for breach of warranty either a claim of diminution or extinction of price for that in making of 1400 tubes as replacement on account of invocation of warranty clause in the contract the plaintiff accepted the fact that it is not entitled to the price of 1359 tubes which stood rejected by the defendant as substandard. In the face of these facts and circumstances where the plaintiff itself gave in to the breach of warranty and agreed to replace 1359 tubes with those of 1400 tubes, it itself in doing so admitted that it is not entitled to claim the price of 1359 tubes and thus in our view, there was hardly any reason or justification with the defendant to set up claim against the plaintiff in the plaintiffs suit as provided in section 59 of the Act. For the same reason, we find that case-law relied upon by the learned counsel for the plaintiff is distinguishable from the facts and circumstances of the present case.
9. As regards the submission in respect of 1260 tubes, the learned counsel for the plaintiff has contended that the claim of these tubes was very much contained in para 8 of the plaint wherein the plaintiff has requested for inspection of the remaining quantity of tubes for delivery and has specifically referred to a letter dated 24-12-1996. Such letter of the plaintiff is available at page 130 of C.M.A. No,3695 of 2010 which has been marked as Exh.P.41 and this letter refers to inspection calls dated 5-9-1996 and 14-9-1996. The inspection call of 5-9-1996 is available at page 27 of the same C.M.A. And has been marked as Exh.P.12 and it specifically states that 1260 tubes have been completed and the Divisional Engineer Testing, Telegraph Stores, Lahore, was requested to depute his representative for inspection.
10. As the learned counsel for the plaintiff has specifically relied upon para 8 of the plaint for substantiating the plaintiffs claim in respect of 1260 tubes, the same is reproduced as follows:-- "(8) That plaintiff never avoided the performance of the contract and has always showed its willingness to perform the part of the contract. The plaintiff made several requests to defendants verbally as well as through letters for the inspection of the remaining quantity of C-8 tubes for onward delivery. The defendants were asked vide letter No, ESSA/040197-01 dated 20-12-1996 for inspection but the defendants failed to carry out inspection of finished tubes and did not make any payments towards the supplied tubes which was contrary to the terms and condition of the contract and purchase order.
' The defendants vide letter No, LH/TL/ EEC,/ 94- 95 / 43 dated 24-12-1997 that avoided the payment on the frivolous and sham ground that the defendant No,1 authorities were conducting an inquiry, therefore, the replacement and balance delivery of goods will be done after the completion of the said inquiry."
11. Letter (erroneouslu mentioned as dated 20-12-1996) actually is dated 24-12-1996 has been produced as Exh.P.41 which is available at page 130 of C.M.A. No,3695 of 2010. The plaintiff has addressed this letter to the Director (Stores) PTCL, Lahore, where it has requested that the inspection be carried out for the two calls, one dated 5-9-1996 and the other dated 14-9-1996. The inspection call dated 5-9-1996 of the plaintiff has been produced as Exh.P.12 and is available at page 27 of this very C.M.A. And it specifically mentions that the plaintiff has completed 1260 tubes and has requested the Division Engineer Vesting, Telegraph Stores, Lahore, to depute his represent 'live for inspection. The defendant in para 8 of its written statement has submitted its reply to para 8 of the plaint, which is as follows:- "Para 8 is not admitted hence denied as stated above that the plaintiff has played fraud and misrepresentation while replacing the sub-standard tubes with the collusion of staff of the PTCL, therefore, he has not performed the contract as agreed."
12. In the first place, what we note is that the plaintiff in para 8 of the plaint has specifically claimed that it has prepared 1260 tubes for supplying them to the defendant and in this regard has also referred to the inspection call made by it to the defendant. The defendant in its reply to para 8 of the plaint has made a general denial without specifically denying the plaintiffs letter dated 24-12- 1996 in which details in respect of inspection calls are very much mentioned which includes the inspection call of 1260 tubes. We were also shown letter dated 12-1-1997 of the Director (Stores)
PTCL, Lahore, addressed to the Divisional Engineer Testing, Telegraph Stores, PTCL, Lahore, where it is specifically mentioned that the plaintiff has offered a quantity of 1260 tubes on 5-9-1996 and a quantity of 1400 tubes on 14-10-1996 for inspection/testing but the testing has not so far been conducted and the request was made that the testing be conducted if the offer made by the plaintiff is within the valid dates. Although this letter of defendant has been filed at page 34 of the same C.M.A. But it is not clear whether it was produced in evidence or not because there is no exhibit number on it. Nevertheless, the learned counsel for the defendant did not dispute or raise objection regarding authenticity and correctness of this letter nor did he object to its reading.
13. On the basis of the above pleadings and the documentary evidence referred to above which has come on the record, it is abundantly clear that the plaintiff did in fact prepared 1260 tubes for supplying to the defendant and had also requested them to be inspected by a representative of the defendant. But as it appears from the record, the defendant did not inspect them nor took delivery of these 1260 tubes. The learned High Court has altogether discarded the claim of the plaintiff in respect of 1260 tubes on mere assertion that this claim of the plaintiff is not contained in the plaint. This assertion of the learned High Court, in our view, was not correct. The above discussion amply shows that the plaintiff has not only made a claim in its plaint in respect of 1260 tubes but through evidence has also established this fact as mentioned in the letters produced as Exh.P.41 and Exh.P.12. Such evidence of the plaintiff is further fortified by letter dated 12-1-1997 of defendant. Thus, in the face of pleadings of the parties and documentary evidence available on record, there was hardly any real basis or justification to discard the claim of the plaintiff in respect of 1260 tubes.
14. Learned counsel for the plaintiff has also argued that the plaintiff is entitled to claim damages on account of loss suffered on raw material and of wastage of machinery. The learned counsel for the plaintiff while making this submission was confronted with the fact that this very claim of the plaintiff is not contained in the plaint and how such claim of the plaintiff can validly be considered or dealt with on mere oral submission. The learned counsel for the plaintiff in this regard has urged that despite such claim being not specifically contained in the plaint but while producing evidence, the plaintiff has made out a case for granting relief in respect of these two claims and has referred to the case of BhaQwati Prasad, supra. The facts in the cited case were that the plaintiff, an owner of a house, has filed a suit for ejectment and for payment of arrears of rent against the defendant.
The defendant in his written statement while admitting the ownership of land beneath the house of the plaintiff took the plea that the construction of the house so raised on the land was made by him at his own cost and that the defendant was to remain in possession of the house until the amount spent by him on the construction was repaid. On framing of issues and recording of evidence of the parties, the trial Court did not believe the version of the defendant with regard to construction of the house. The trial Court on the basis of admission of the defendant that of ownership of the plaintiff came to the conclusion that the relationship of the landlord and tenant was proved and thus passed a decree for ejectment as well as for rent. The defendant appealed to the Allahabad High Court who agreed with the trial Court but gave finding that the defendant was in possession of the house as a licensee and the plea of tenancy was not accepted on account of statutory bar prevailing in the area. The learned High Court in its decree set aside the decree of the trial Court to the extent of payment of rent. Both the plaintiff and defendant filed appeals before the Indian Supreme Court against the decree passed by the High Court. A plea was raised from the side of the defendant that the plaintiffs claim was based squarely on tenancy and once such case of the plaintiff was rejected by the High Court the claim for ejectment should also have been negatived. It was under these circumstances, their lordships in the Indian Supreme Court have dealt with such argument in the following paras as follows:-- "(9) There can be no doubt that if a party asks for a relief on a clear and specific ground, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to attempt to sustain the same claim on a ground which is entirely new. The same principle was laid down by this Court in Sheodhari Rai v. Suraj Prasacl Singh, AIR 1954 SC 758. In that case, it was held that where the defendant in his written statement sets up a title to the disputed lands as the nearest reversioner, the Court cannot, on his failure to prove the said case, permit him to make out a new case which is not only not made in the written statement, but which is wholly inconsistent with the title set up by the defendant in the written statement. The new plea on which the defendant sought to rely in that case was that he was holding the suit property under a shikmi settlement from the nearest reversioner. It would be noticed that this new plea was in fact not made in the written statement, had not been included in any issue and, therefore, no evidence was or could have been led about it. In such a case clearly a party cannot be permitted to justify its claim on a ground which is entirely new and which is inconsistent with the ground made by it in its pleadings.
(10)But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over-ride the legitimate considerations of substance. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely, in the issues, an evidence has been led about them, then the argument that a particular matter was not expressly taken in the leadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce consideration of prejudice, and in doing justice to one party, the Court cannot do injustice to another.
(11) Therefore, in dealing with Mr. Setalvad's argument, our enquiry should not be so much about the form of the pleadings as their substance; we must find out whether the ground of licence on which the plaintiffs claim for ejectment has been confirmed by the High court was in substance the subject matter of the trial or not; did the defendant, know that alternatively, the plaintiff would rely upon the plea of licence and has evidence been given about the said plea by both the parties or not? If the answers to these questions are in favour of the plaintiff, then the technical objection that the plaint did not specifically make out a case for licence, would not avail the defendant
(15) It is hardly necessary to emphasis that in a matter of this kind, it is undesirable and inexpedient to lay down any general rule. The importance of the pleadings cannot, of course, be ignored, because it is the pleadings that lead to the framing of issues and a trial in every civil case has inevitably to be confined to the issues framed in the suit. The whole object of framing the issues would be defeated if parties are allowed to travel beyond them and claim or oppose reliefs on grounds not made in the pleadings and not covered by the issues. But cases may occur in which though a particular plea is not specifically included in the issues, parties might know that in substance the said plea is being tried and might lead evidence about it. It is only in such a case where the Court is satisfied that the ground on which reliance is placed by one or the other of the parties, was in substance, at issue between them and that both of them have had opportunity to lead evidence about it at the trial that the formal requirement of pleadings can be relaxed. In the present case, hewing regard to all the facts, we are unable to hold that the High Court erred in confirming the decree for ejectment passed by the trial Court on the ground that the defendant was in possession of the suit premises as a licensee. In this case, the High Court was obviously impressed by the thought that once the defendant was shown to be in possession of the suit premises as a licensee, it would be futile to require the plaintiff to file another suit against the defendant for ejectment on that basis. We are not prepared to hold that in adopting this approach in the circumstances of this case, the High Court can be said to have gone wrong in law".
15. In the above cited judgment of the Hon'ble Supreme Court of India, the simple case was that plaintiff has filed a suit for ejectment and has also prayed for payment of arrears of rent on which the defendant has taken a plea that the land belonged to the plaintiff but the house built on it was constructed by him from his own funds and he has a right to remain in possession until such funds are exhausted. The learned High Court has not accepted the plea of tenancy on the ground that it was not permissible in law for there being restriction and found the defendant to be a licensee and thus maintained the order of the trial Court of ejectment of the defendant from the house in question. The objection taken by the defendant in the Hon'ble Supreme Court of India was that the High Court could not change the relationship from that of a tenant to a licensee, as it was not pleaded it could not have ordered ejectment of the defendant on the basis that he was a licensee.
The Hon'ble Supreme Court of India has ultimately dealt with this matter, which is reflected in the above quoted portion of its judgment where the main thrust was that though a particular plea is not specifically included in the issues, parties might know that in substance the said plea is being tried and might lead evidence about it and it is only in such a case where the Court is satisfied that the ground on which reliance is placed by one or the other of the parties, was in substance, at issue between them and both of them have had opportunity to lead evidence about it at the trial that the formal requirement of pleadings can be relaxed. The Hon'ble Supreme Court of India, however, kept in view and did not detract from the age old established principle and importance of pleadings and emphasized that it is the pleadings that led to the framing of issues and a trial in every civil case has inevitably to be confined to the issues framed in the suit and further put a note of caution that the whole object of framing of issues would be defeated, if the parties are allowed to travel beyond them and claim or oppose relief on the grounds not made in the pleadings and not covered by the issues. The Court further observed on the merit of the case that where the High Court was obviously impressed that once the defendant was shown to be in possession of the suit premises as a licensee, it would be futile to require the plaintiff to file another suit against the defendant for ejectment on that basis and thus maintained the decision of the High Court.
16. In the present case, the situation however is altogether different in that in the plaint of plaintiff there is no mention whatsoever of the fact of the plaintiff having acquired machinery or had raw material lying with it and as to what treatment the plaintiff has given to such two items after the contract was revoked. The plaintiff in the plaint has confined his claim to five items only, which are mentioned in para 18 and are reproduced as follows:-- (a)For the supply of tubes mentioned in para 6 hereinabove.Rs.50,83,842 (b)As interest of on Rs,50,83,842 @ 21% Rs.106,7606/82 (c)2600 tubes as mentioned in para(sic.) Rs.44,14,800 (d)Interest on Rs.44,14,800 @ 21% Rs.92,7108 (e)Damages as mentioned in para 15 hereinabove Rs.2,35,00,000 Grand Total: Rs.3,49,93,356.82 ' Damages claimed in para 15 of the plaint are as follows:-- (i)Loss caused due to delay Rs.25 lacs 25 Lacs (ii)Expenses incurred at FIA inquiry Rs.10. lacs10 Lac (iii)Mental torture Rs.1 crore 1 Crore (iv)Good will injured Rs.1 crore 1 Crore ' On the pleadings of the parties following issues were framed in the "(1) Whether the plaintiff is entitled to obtain a decree for recovery of Rs,3,49,93,356.82 on the basis of facts mentioned in the plaint as prayed? OPP
(2) Whether the suit is not signed and verified by the competent person, therefore, the same is liable to be rejected? OPD
(3) Whether the suit is not maintainable as the plaint does not disclose any malice towards the defendants and therefore, the same is liable to be rejected? OPD
(4) Relief."
17. The perusal of above claim made in the plaint and the issues framed on the pleadings of parties clearly demonstrate that the plaintiff did not at all make any claim in the suit with regard to the raw material and machinery nor any issue on such plea was struck in the suit. As noted above pleadings of the parties are the benchmark of their respective claims on which issues are drawn and evidence is led which is restricted to the issues struck between the parties alone and not beyond them. If any evidence beyond the purview of issues does come on record, no party can on such evidence set up altogether a new case and press the same for getting relief merely on basis of an out of context evidence. The rule enunciated by the Indian Supreme Court in the above cited case has no relevance to the case of plaintiff as the subject matter of machinery and raw material was never an issue nor it could be said that it was the ground which both parties understood to be in issue in the case. Going on such premises will be highly detrimental and to the grave prejudice of the defendant as it cannot be taken by surprise. We, therefore, are not persuaded to accept this argument of the learned counsel for the plaintiff.
18. Having dealt with the submissions of the learned counsel for the parties, we now come to consider as to what relief, if any, the plaintiff is entitled to. The learned trial Court has allowed to the plaintiff the price of 2994 and 2600 tubes with interest and loss on raw material and loss of machinery installed. The learned High Court, in the impugned judgment, has modified the decree of the trial Court by allowing price of 1634 and 1400 tubes with interest and disallowed the claim of raw material and machinery. The learned counsel for the defendant has contended that the price of 1400 tubes could not have been allowed by the learned High Court for the reason that these tubes -tvere not supplied by the plaintiff to the defendant and are still in custody of the plaintiff and that the defendant has repeatedly asked the plaintiff to lift from its store 1359 substandard tubes, which the plaintiff has still not done. To this, it may be added that the plaintiff has also prepared 1260 tubes which on account of their non-inspection by the defendant could not be delivered to it until the contract was revoked. It was also contended before us by the learned counsel for the plaintiff that the tubes prepared by the plaintiff has no other market except that of the defendant and the plaintiff was in no position to sell these tubes as it has no buyer in the market and thus the plaintiff has to be paid the whole price of the tubes as they are of no use whatsoever to the plaintiff nor the plaintiff can make any salvage out of them, more so for the reason that the tubes have been affixed with the monogram of the defendant. This contention of the learned counsel for the plaintiff was not disputed by the learned counsel for the defendant rather he candidly admitted that these tubes have no market except that of the defendant. In the face of these facts, it is to be considered now as to how the matter with regard to these two items i,e, 1400 tubes and 1260 tubes are to be dealt with. We may also note here that the learned trial Court as well as the learned High Court has allowed to the plaintiff the price of tubes @a Rs,1,698 per tube and before us neither the counsel for the plaintiff has raised any objection on such pricing of the tubes nor the counsel for the defendant made any submission in this regard. We, therefore, assume that both the parties are agreeable on the point of price of the tubes to be the acceptable compensation.
19. We find upon record that 1400 tubes and 1260 tubes prepared by the plaintiff (1400 tubes against warranty and 1260 tubes for making further supplies under the contract) are lying with the plaintiff as their delivery has not been taken by the defendant and for this, as noted above, the plaintiff is not to be blamed and in the face of the admitted fact that the plaintiff cannot fetch any other market for these tubes as these tubes can only be used by the defendant and no other, the result bf which will be obvious, that resale value of these tubes cannot be ascertained. In this situation, where the tubes are lying with the plaintiff and their price as per the contract has not been paid, the provision of section 55 of Act apparently will become applicable which runs as follows:-- "55. Suit for price. ---(1) Where under a contract of sale the property in the goods has passed to the buyer and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may sue him for the price of the goods.
(2) Where under a contract of sale the price is payable on a day certain irrespective of delivery and the buyer wrongfully neglects or refuses to pay such price, the seller may sue him for the price although the property in the goods has not passed and the goods have not been appropriated to the contract."
' In the case of "Messrs Kalka Prasad Ram Charon v. Harts Chandra" (AIR 1957 Allahabad 25) a learned Division Bench of that Court has observed as follows:-- '
"11. It is next contended by the learned counsel for the respondent that he had two rights, viz., a right of resale under S.54(2) and an independent right under S.55 to sue for the price of the goods.
This contention is perfectly correct. It was open to him not to sell the goods and to sue for the price leaving it to the purchaser to take delivery of the goods lying with him (the seller) at his own convenience."
20. Thus, in the wake of provision of section 55 of the Act where the property in goods has passed to the buyer and where the property in goods has not passed to the buyer but the price is payable on a day certain irrespective of delivery the seller will be entitled to sue for the price of the goods.
The plaintiff has prepared 1400 tubes towards satisfaction of warranty on or before 10-10-1996 and another 1260 tubes in making further supply under the contract on or before 5-9-1996, which are the dates on which the plaintiff has given notice to the defendant to inspect such tubes but neither these tubes were inspected nor their delivery was taken by the defendant and this act of the defendant was a unilateral one without finding any fault in the said 1400 and 1260 tubes. Clause 18 of the contract between the plaintiff and defendant, inter alia, provides that the payment will be allowed according to delivery schedule and on receipt of certificate by A.E. Stores MGP-LHR to the effect that the stores have been received in good condition. Clause 13 of the contract provides for a delivery period and it states that the supply of stores should be completed within six months period from the issue of A/T which includes three weeks of mobilization and preparation. Perusal of these two clauses in the contract amply shows that the plaintiff was required to make supplies of tubes within a specified period and after it had supplied the tubes to the satisfaction of the defendant, the payment was to be made. It is not the case of the defendant before us that 1400 and 1260 tubes were not prepared by the plaintiff within the delivery period and thus, once the plaintiff has prepared these tubes and had intimated the defendant that the tubes are ready for inspection and delivery, the burden will be on the defendant to satisfy as to why the tubes were not inspected by it and their delivery not taken. As is apparent from the record no explanation from the defendant has come forward for non-inspection and non-taking of delivery of these tubes except that there was an enquiry pending with the FIA. The FIA enquiry also terminated without any finding against the plaintiff but still the defendant did not inspect or took delivery of these tubes. The 1400 and 1260 tubes are still stated to be lying with the plaintiff and according to the period of delivery in the contract the same has matured long before and as per term of the contract, it can validly be said that the plaintiff has become entitled to the price of the said tubes even though the tubes are lying in its custody. Thus, the plaintiff stood in a position akin to the one provided in section 55 of the Act and as observed by the Allahabad High Court, which observation appears to us to be reasonable, the plaintiff will be entitled to the price of these tubes leaving the defendant to take the delivery of these tubes at its convenience. In the wake of this legal position, there is no escape from the conclusion that the plaintiff has to be paid by the defendant the price of 1400 and 1260 tubes. The learned High Court has already allowed to the plaintiff the price of 1400 tubes, which in our view, is just and fair. Further we also find that the plaintiff is entitled to the price of 1260 tubes. We, therefore, additionally decree the claim of the plaintiff for the price of 1260 tubes with interest @ 16% per annum from 5-9-1996 to 7-7-2000. It is further ordered that it will be open for the defendant to take delivery from the plaintiff of 1400 tubes and 1260 tubes in whatever shape they are now and the plaintiff will also be free to lift from the store of the defendant the rejected 1359 tubes. The claim of the plaintiff towards raw material and the machinery, in the facts and circumstances of the case was wrongly allowed by the learned trial Court and the learned High Court has rightly not allowed the said two claims of the plaintiff. We also for the reasons already discussed above, find no merit in the arguments of the learned counsel for the plaintiff with regard to the claim of raw material and machinery and reject the same.
21. For the foregoing reasons, appeal of the plaintiff (C.A. No, 371 of 2005) is partially allowed to the extent as noted above while appeal of the defendant (C.A. No,717 of 2005) is dismissed with no order as to costs.