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1904 DIGILAW 6 (SC)

DURGA PROSAD SUREKA v. BHAJAN LALL

1904-03-23

LORD DAVEY, LORD ROBERTSON, SIR ARTHUR WILSON

body1904
Judgement Appeal from a decree of the High Court (March 29, 1901) reversing a decree of Sale J. (July 25, 1900) and dismissing the appellants suit without costs. The question decided in the appeal was whether, under the circumstances stated in their Lordships judgment, the appellants suit was based exclusively on bought and sold notes, no evidence being admissible to prove an antecedent contract between the parties at variance with the notes. This contract related to 125,000 cases of Russian kerosene oil, being the whole of a cargo which had been sold by Messrs. Graham & Co. to the respondents, and by them were sold to the appellants. The notes, however, were limited to 100,000 only, and were drawn up by the brokers because Graham & Co. refused to transfer their contract to the appellants. The plaint alleged a fraudulent insertion by the defendants in the notes of the lesser number of cases in lieu of the whole cargo, and prayed for delivery of the whole cargo at the contract rate of payment, and that if necessary the notes might be rectified by the substitution of the right figures. The respondents denied the imputed fraud, alleged that the notes expressed the true contract, and contended that, if both parties were under a mistake of fact, there was no binding agreement. Sale J. found that the plaintiff had been induced to consent to the bought and sold notes being drawn up as they were by the deliberate and false representation of Ghanesham, the defendant. He decided that the plaintiff was not entitled to a rectification of the bought and sold notes, but found that the presumption that the bought and sold notes were intended to express the real obligation between the parties had been satisfactorily rebutted, and that the plaintiff was entitled to fall back on his antecedent agreement. The High Court affirmed the finding as to Ghaneshams fraud, but was of opinion that the plaintiffs suit was based on the bought and sold notes, and for their rectification ; that no rectification could be allowed, as this relief had been refused by the Court below, and there had been no appeal by the plaintiffs from this portion of the decree. The Court decided that the suit was not based on any other contract, and that where the terms of a contract had been reduced to writing, no other evidence except the writing could be given of the terms of the contract. The Court also decided that the plaintiff was entitled to rescind the contract for fraud, but that relief the plaintiff did not seek. Asquith, K.C., Haldane, K.C., Phillips, and Bonnerjee, for the appellants, contended that under proviso 1 of s. 92 of the Indian Evidence Act, and under s. 19 of the Indian Contract Act, 1872, the appellant was entitled to avoid the bought and sold notes and to rely on his original agreement. There was no necessity to rectify the notes; they were found not to express the true contract between the parties, but to have fraudulently misrepresented the true contract. Under these circumstances they were a nullity, and the appellants were entitled to prove the real arrangement which had been effected between them and the respondents. Reference was made to Cowie v. Remfry. (( 1846) 3 Moo. Ind. Ap. 448.) Cohen, K.C., Lawson Walton, K.C., and De Gruyther, for the respondents, contended that no binding contract had been proved. The evidence shewed that both parties were under a mistake of fact. Even if that were not so, and the bought and sold notes were invalidated, there was no sufficient evidence of any other contract between the parties, or whether the appellants had adopted all or any of the terms of Graham & Co.s contract with the respondents. The appellants were not heard in reply. The judgment of their Lordships was delivered by LORD ROBERTSON. The facts in this case, as found by both Courts, are simple and very cogent. In October, 1899 (the matter being brought to a final conclusion on October 30, 1899), the appellant Sureka bought from the respondents the whole of a certain cargo of Russian kerosene oil, which the respondents had themselves bought from merchants named Graham & Co. at 50 pence per case. Seeing that the market was rising, and repenting them of their bargain, the respondents, by fraud, inserted in the bought and sold notes the figures 100,000 cases, as descriptive of the quantity of oil sold, whereas the truth was that the cargo amounted to 125,000. This opportunity of fraud came the respondents way, because the original sellers (Messrs. Seeing that the market was rising, and repenting them of their bargain, the respondents, by fraud, inserted in the bought and sold notes the figures 100,000 cases, as descriptive of the quantity of oil sold, whereas the truth was that the cargo amounted to 125,000. This opportunity of fraud came the respondents way, because the original sellers (Messrs. Graham & Co.) did not fall in with, or at least were said by the respondents not to fall in with, the arrangement first proposed, namely, that the original sale by them should be simply transferred to the appellant Sureka as buyer. Accordingly, the bought and sold notes were signed, the appellant Sureka only discovering afterwards that instead of recording the contract they falsely stated it. In this state of the facts, the right of the purchaser was indisputable, namely, to have the whole cargo, or damages. The trick practised on him in the bought and sold notes had no legal effect on his original right. Nor did that right depend either for constitution or for evidence on the bought and sold notes. In India a contract of sale of goods can be proved by parol; and, the bought and sold notes having in this instance been falsified, the aggrieved purchaser was entitled to disregard them and prove his contract by other and antecedent material. This he has done conclusively by the evidence of the broker and by the telegrams. The appellant Sureka came into Court on January 15, 1900, with a plaint, in which he prayed, inter alia— (a) That it be declared that under the said contract entered into by and between him and the defendants, dated the said 1st day of November, 1899, the plaintiff is entitled, at the rate of 50 pence per case, to the whole of the said cargo sold to the defendants as aforesaid. (b) That the defendants be decreed to make over possession to the plaintiff of the whole of the said cargo, on his paying them for the same at the rate of 50 pence per case, which payment the plaintiff had always been and is now ready and willing and hereby offers to make. (b) That the defendants be decreed to make over possession to the plaintiff of the whole of the said cargo, on his paying them for the same at the rate of 50 pence per case, which payment the plaintiff had always been and is now ready and willing and hereby offers to make. (c) That, if necessary, the said bought and sold notes be rectified and varied by the substitution of words and figures "one full cargo containing say about (125,000) one lac and twenty-five thousand," in place of the words and figures " (100,000) one lac," now appearing therein. * * * * * (h) That the plaintiff may have such further or other relief as the nature of the case shall require. Upon this prayer, now that there has been all this litigation about it, it may be remarked that the plaintiff treats the falsified bought and sold notes with more ceremony than they deserve; that his first prayer ought to have made no reference to the date of those documents as the date of the contract, and that the second prayer was unnecessary. But their Lordships see no room for question that the prayers quoted afforded adequate means for rendering justice. On July 25, 1900, Sale J. gave Sureka a decree declaring that by virtue of the agreement between the appellant Sureka and the respondents on October 30, 1899, Sureka was entitled to the entire quantity of cases of kerosene oil mentioned in the contract between the respondents and Messrs. Graham & Co., and giving the appellant, Sureka, damages. On the case coming by appeal before the High Court a view of the case was taken which their Lordships consider much too narrow. The High Court treated the action as founded on the bought and sold notes; and, holding the appellant to his reference to them by date (November 1, 1899), in prayer (a), and to his application, in prayer (c), that those should be rectified, they pointed out that he had been refused this relief and had not appealed against the refusal, or objected to the decree under s. 561 of the Code of Civil Procedure. Accordingly the High Court expressed their rather surprising conclusion as follows " We think therefore that, inasmuch as under the circumstances it is not now competent to us to rectify the bought and sold notes, and since the plaintiff is precluded from proving his contract by any evidence other than the document itself, the appeal must be allowed and the suit dismissed." The learned counsel for the respondents did not support this ground of .judgment. The High Court was completely possessed of the case of the appellant Sureka; his case rested not on the falsified bought and sold notes, which he was there to repudiate, but on the perfectly competent evidence which, while disproving the bought and sold notes, proved the contract which they falsely purported to record. For this case no rectification was needed, and it was not touched by the 92nd section of the Evidence Act. Nor did the misconception which led to the mention of November 1, 1899, create any substantial obstacle in the way of justice being done or necessitate so unsatisfactory a conclusion as that which has led to this appeal. In default of any defence of the judgment of the High Court, the learned counsel for the respondents suggested one topic which may be disposed of in a sentence. The telegrams, it was said, do not set out a complete contract, and, in particular, do not import the conditions of Graham & Co.s contract. This argument, if it had any effect, is irreconcilable with the concurrent findings of both Courts. But the answer is, that if the telegrams do not prove what is said to be wanting, the brokers evidence does. Their Lordships will humbly advise His Majesty that the appeal ought to be allowed and the decree of the High Court reversed with costs, and the decree of Sale J. restored. The respondents will pay the costs of the appeal.