Through this suit for recovery of money the plaintiffs have claimed Rs.1,203,300 by way of refund of money and damages for breach of contract on the part of the defendants. According to the plaint the defendant invited public offer for the sale of 20 pontoons available with them on as is where is basis and the plaintiffs, who are dealers in iron and general scraps made an offer of Rs.4,150 per metric ton. The plaintiff's offer was accepted by the defendants on 3-4-1980 with slight modification. The plaintiffs advanced a total sum of Rs.325,000 to the defendants on different dates in April, 1980. However, while only four pontoons were delivered to the plaintiff, some difficulties were experienced in giving effect and after some correspondence the agreement was modified in terms of the defendants' letter dated 5-5-1980 addressed to the plaintiffs. The salient feature whereof appeared to be as
(i) The remaining pontoons would be delivered to the plaintiff No. 1. "Timber Point Site" within 45 days from the issuance of the letter i.e. Up to 20-6-1990; (ii) The Wooden tenders fitted to few barges, would be removed by the defendants; (iii) that the total not weight of the goods agreeing to be delivered would be 315 metric tons and a total price of Rs. 1,307,000 would be payable by the plaintiff; (iv) having adjusted Rs. 325,000 already paid, the defendant would be paid Rs. 200,000 on 5-5-1980 and the remainder in two instalments of Rs. 391,125 each payable on 26-5-1980 and 18-6- 1980.
2. According to the plaintiffs the defendants failed to fulfil their contractual commitment in delivering the goods within the agreed time, though apart from having received payment of Rs.
325,000 the plaintiffs were persuaded to make further payment of Rs. 150,000 during the period between -6-5-1980 and 26-7-1980. Moreover, on 27-7-1980 some more pontoons were delivered and the defendants failed to deliver the remaining 7 pontoons. Additionally the defendants removed certain attachment to the pontoons in violation of the agreement between the parties.
3. The defendants filed written statement, alleging that it was the plaintiffs and not the defendants who had resiled from the terms of the contract. It was further alleged that the defendants were under no obligations to deliver equipment i.e. Winches, fair leads, steels pipes and other attachment, pontoons. Moreover, the plaintiffs claimed for loss of anticipated profits by way of compensation for breach of contract was repudiated.
4. On the basis of the pleadings the following consent issues were settled:--
(1) Whether the Agreement by letter, dated 5th April, 1980 was substituted by subsequent agreement letter dated 5-5-1980?
(2) Whether the defendants committed default in the delivery of Pontoons to the plaintiffs in time in breach of the agreement dated 5-5-1980?
(3) Whether the defendants were entitled to remove attachment to the Pontoon before delivery of the same to the plaintiffs?
(4) Whether the plaintiffs paid a total sum of Rs.9,50,000 to the defendants in terms of the agreement as stated in the title of claim?
(5) Whether the plaintiffs are entitled to the damages and payment of a total sum of Rs.12,03,000 as stated in the title of claim?
(6) Whether the defendants mala fide and wrongfully delayed the defaulted delivery of the pontoons and before announcement of budget and fall of market in June, 1980 and are justified in cancelling the contract without notice?
(7) Whether the plaintiffs are entitled to the claim with interest as stated in the plaint, if so, what should the final decree be?
5. It appears from the pleadings and evidence that the parties are not at issue as regards the terms of the original agreement dated 5-4-1980 (Exh.37) and its subsequent modification in terms of the defendants' letter to the plaintiff dated 5-5-1980 (Exh.40). It is also not disputed that an amount of Rs.9,50,000 was paid by the plaintiffs from time to time. The process of admission and denial was carried and admitted documents have been brought on record. Plaintiff Saddaruddin and one Ahmad Nabi Zuberi filed affidavits-in-evidence on behalf of the parties respectively and were duly cross-examined. Thereafter, learned counsel for the parties were kind enough to file written arguments and were also heard on 27-10-1999. On the basis of the above material I proceed to record my issue-wise findings as under:--
6. ISSUES NOS. 1 AND 3.--These issues need to be taken up together. Prima face Issue No. 1 seems to be academic in sense that while the validity and effectiveness of both the original agreement dated 5-4-1980 and the subsequent letter of the defendant dated 5-5-1980 are admitted. The plaintiffs contend that the letter preceded to supersede the original contract, whereas according to the defendant it only added to varied the terms whereof. However, it assumes practical importance when read with Issue No.3 inasmuch as the plaintiff's claim is largely founded upon the contention that though the defendants were entitled to remove attachment and equipments on the pontoons in terms of the original agreement, they ceased to remain so entitled according to the subsequent rate dated 5-5-1980. Indeed the original agreement (Exh.37) expressly stipulates that "buyers will accept the pontoons on as is where is basis. In the equipment winches fairleads and other material over the pontoons will be removed by the seller before actual delivery of the pontoons is made to the buyers". It is further stipulated that the buyer is authorised to bring his material and labour for cutting or performing such acts necessary to delivery of the pontoons under the supervision of he security staff of the sellers. By a letter dated 23-4-1980 the plaintiff suggested to the defendants that the agreed process was causing avoidable loss in terms .Of time and expense to the parties and they be allowed to take delivery of the entire pontoons without dismantling. It was further suggested that the entire goods be delivered on the basis of a total not weight of 300 metric tons.
In response to the aforesaid order the defendant made a "counter office" dated 5-5-1980 stating, inter alia, that they were only prepared to accept a total not weight as 315 metric tons instead of actual weight at the Government Bridge, Mauripur (as mentioned in the original agreement) or 300 metric tons as proposed by the plaintiff. It was further stipulated that the pontoons will be delivered at a particular site and the loading and cutting process will not be supervised by the defendants.
At the same time wooden tender to a few barges will have to be delivered to the defendants.
7. Mr. A.I Akbar, learned counsel for the plaintiff emphasised that though under the original agreement winches fairleads and other equipment could be removed by the plaintiff the subsequent contract arising from acceptance of the letter dated 5-5-1980 that only wooden tenders were to be returned to the defendants and remaining equipment was to be delivered to the plaintiffs.
8. Learned counsel seems to be correct to the extent that the letter dated 5-5-1980 does not expressly mention the equipment required to be removed by the defendant under the original agreement. A careful comparison of the two documents, however, would indicate that there was no intention on the part of the parties to displace the original agreement by a new one. In the first instance though the word 'counter offer' has been used, there is nothing in the letter dated 5-5- 1980 to indicate that in case the same was not acceptable to the plaintiff they would be altogether absolved from fulfilling their commitment under the original agreement. Secondly the agreement had been partly performed and some pontoons had been delivered to the plaintiffs admittedly after removal of attachment and equipment, etc. There is nothing to show that the defendant had committed to return the same .To the plaintiff. Obviously wooden tenders were not part of the original sale contract and their return to the defendants was mentioned in the letter dated 5-5- 1980 because the dismantling process had to be carried out without supervision of the defendants.
I am, therefore, clearly of the opinion that the letter dated 5-5-1980 could only be treated as a modification of the terms of the original contract and not in complete supersession thereof.
9. Apart from my findings on Issue No. 1 above it may be pertinent to mention through their letter dated 16-6-1980 (Exh.39) the defendants themselves acknowledge that the equipment etc., had to be removed by the defendant. They, however, resiled from this position through a subsequent letter, dated 18-6-1980 (Exh.7/5) contending that such attachments were in the nature of pontoons.
This position, however, appears to be patently contradicted by the terms of the original agreement which clearly states that while pontoons would be delivered at "as is where is basis" the equipment etc., would be removed.
10. Moreover, the plaintiffs have themselves acknowledge that they are dealers in scraps. They had submitted their bid on the basis of a public tender inquiry by a State-owned Corporation and offering to pay Rs.4,150 per metric ton of steel scrap with the explicit understanding that attachments and equipment etc., will not be delivered to them. They could not turn round and lay a claim over such attachment on the same price in the garb of a revised agreement. My finding on both Issues Nos. l and 3 are, therefore, in the negative. Issue No.2,--admittedly in terms of the modified agreement through the defendants' letter, dated 5-5-1980 the defendants were required to deliver the pontoons within 45 days of the issuance of such letter i.e. Up to 20-6-1980 and the plaintiffs were required to make payment according to a specific schedule in three instalments up to 18-6-1980. There is nothing to indicate that payment was contingent upon delivery or vice versa.
It is also admitted that neither the total delivery of pontoons was effected nor entire payment was made within the time stipulated in the aforesaid letter. On the contrary it is admitted that some payments were made in July, 1980 and some deliveries were also effected after the specified dates. It can, therefore, safely be inferred that the parties by their conduct did not treat time to be of the essence of the contract. Moreover, the plaintiffs have not been able to show that they accepted late delivery of pontoons reserving their right to claim damages for such late delivery. As such it is apparent that the parties chose to keep the contract alive even after the expiry of the agreed dates of payment and delivery and the defendants could not be held liable for breach of contract merely on the ground of not adhering to the time schedule.
11. ISSUE N0.4.--The defendants have not seriously disputed that an amount of Rs.9,50,000 was received and have only claimed that the outstanding balance of Rs.357,250 remains payable by the plaintiff. As such this issue is decided in the affirmative.
12. ISSUE No.6.--This issue can be split into two parts. As far as the question of mala fide and wrongful delay in the delivery of pontoons before announcement of budget and fall of market price is concerned, apart from my findings on Issue No.2 above, I am of the view that it would not be fair to blame the defendants for the same. It is established on record that there was a dispute between the parties as to the interpretation of the terms of the contract with reference to the question, whether equipment and attachment, etc., were to be delivered to the plaintiffs. Moreover, the plaintiffs could not be deemed to be aware of the fiscal policy of the Government to be announced through budget. In any event they themselves were liable to suffer on account of fall in such prices because they could not receive the same price in a subsequent sale of the contracted goods. In any event instead of terminating the contract the plaintiffs themselves kept demanding delivery of the undelivered pontoons through their telegram and notices issued in July, 1990 (Exhs.7/5 to 7/8).
13. The question of cancellation of the contract on the part of the defendants, however, appears to be on a different footing. It may be pertinent to mention that the defendants themselves accepted substantial payments from the plaintiffs after the expiry of the agreement date i.e. 18-6-1980.
Admittedly they also delivered the same pontoons thereafter on such date It was only on the insistence of the plaintiffs to deliver the remaining pontoons that the defendants vide their telegram (Exh.7/10) as late as on 3-9-1980, informed the plaintiffs that their contract had been terminated and the goods had been sold to another party at their risk. No evidence has been led to show that such risk sale was affected after notice to the plaintiffs and even particulars thereof have not been furnished. As such I am of the view that such sale, if any, was completely unjustified.
In the circumstances while I am of the view that the plaintiffs are not entitled to any damages for late delivery of pontoons the defendants were certainly under obligation to deliver the remaining seven pontoons. The approximate weight of such pontoons has been calculated by the plaintiffs to be 114 tons and their price in terms of the contract as Rs. 4,73,100. No evidence in rebuttal has been led by the defendants. After adjusting the amount of Rs. 3,57,250, the remaining price of these pontoons comes to Rs. 1,15,850. Indeed the defendants resiled from their contractual commitment in not delivering these pontoons despite repeated demands. I would, therefore, decreed the suit in the sum of Rs. 1,15,850, together with interest at the rate of 12% per annum from the date of filing of suit till final payment is made.