Judgment :- 1. The defendant company is the appellant. The suit in the court below was for damages for alleged breach of two contracts for the supply of tea. The plaintiff is a dealer in tea, doing business at Quilon and the defendant company had charge of a tea estate which belonged to the Highland Produce Co. Ltd. The defendant company acted as agents and secretaries of this tea estate. 2. The suit is based upon an alleged breach of two distinct contracts relating to two kinds of dust tea. The first was called Pasuppara A Dust and the second Pasuppara No. 2 Dust. The contract with regard to the second quality of goods was Ext. A which was entered into on 4.8.1941. The trial court has found that there was no breach relating to this contract and has dismissed the plaintiff's claim arising from this contract. Plaintiff has not appealed. 3. With regard to the contract in respect of Pasuppara A Dust the Court below has found in favour of the plaintiff and has passed a decree for Rs. 44674-7-8 as damages for breach of the contract. It is from this decision that the present appeal is brought on behalf of the defendant company. 4. The contract in respect of this quality of goods was entered into on 17.12.1941 and it was marked as Ext. M at the trial. It related to the supply of tea during the year 1942. According to the plaintiff, under this contract the defendant appellant was bound to supply a minimum of 20,000 pounds of tea dust every month. These terms the defendant did not carry out. There was deficiency to the extent of 1,17,000 pounds. The plaintiff claimed damages on the basis of loss of profit in respect of the quantity which was short-supplied. 5. The suit was filed in Quilon. According to the defendant-appellant's learned counsel the court in Quilon had no jurisdiction because the contract was for the supply of goods at Alleppey.
There was deficiency to the extent of 1,17,000 pounds. The plaintiff claimed damages on the basis of loss of profit in respect of the quantity which was short-supplied. 5. The suit was filed in Quilon. According to the defendant-appellant's learned counsel the court in Quilon had no jurisdiction because the contract was for the supply of goods at Alleppey. But it is seen from the judgment of the court below and also from the evidence that as a matter of fact supply was made at Quilon and in the circumstances the question regarding jurisdiction is not seriously pressed, especially in view of the fact that it cannot be said that any damage was sustained by the defendant because of the suit having been filed in the court in Quilon. 6. The arguments of learned counsel on both sides turned upon the terms of the said contract, Ext. M. This contract is silent as to the quantity to be supplied every month. On behalf of the defendant it is contended that in view of the provisions of S.91 of the Evidence Act according to which when a contract is reduced to writing oral evidence about its terms cannot be given and the document is the only evidence that can be relied upon by the party who wishes to prove its terms, the court below erred in permitting the plaintiff to give oral evidence which he was precluded from doing under this section. That is the main point for decision in this appeal. 7. The contention of the appellant's learned counsel is that in the evidence given by the plaintiff he has stated in unequivocal terms that the oral conversation regarding the terms of the contract took place before the contract was reduced to writing in the form of Ext. M. But he stated further in his evidence that there is an assurance given about the minimum supply to be made every month. The terms of the contract are to the effect that the whole produce of the estate coming under the category of the quality of goods described in Ext. M should be supplied by the defendant to the plaintiff subject to certain reservations made in favour of the defendant.
The terms of the contract are to the effect that the whole produce of the estate coming under the category of the quality of goods described in Ext. M should be supplied by the defendant to the plaintiff subject to certain reservations made in favour of the defendant. For example, there is a provision, according to which the defendant could supply to others tea that was not reduced to tea dust but was retained in the shape of tea leaves. The quantity thus excluded from the scope of the contract was left to the discretion of the defendant company. There is also a provision that the defendant could supply a definite quantity of goods to persons outside the State within the territory of which the contract was entered into. The learned trial judge was permitted the plaintiff to give evidence that there was an understanding that the minimum quantity of goods to be supplied every month under this contract during the whole of the year 1942 was 20,000 pounds per month. The plaintiff tried to substantiate this contention by producing sub-contracts entered into with other dealers which indicate that the basis of those sub-contracts was this assurance given on behalf of the defendant company that they would supply 20,000 pounds at least every month. The learned judge also relies upon the fact that in the month of January of 1942 a few weeks after the contract was entered into, the plaintiff raised this question and there was no express denial on behalf of the defendant company of the averment contained in the plaintiff's letter that there was an obligation on the part of the defendant company to supply 20,000 pounds dust tea to him every month. It was only late in July 1942 that for the first time the defendant company thought of denying it. 8. It is no doubt true that according to S. 91 of the Evidence Act when the terms of a contract has been reduced to the form of a document no evidence shall be given in proof of the terms of such contract except the document itself unless it is a case in which secondary evidence of the contents of the document is admissible under the provisions of the Evidence Act.
S. 92 amplifies this rule of law by setting forth that where the terms of a contract are reduced to the form of a document and that document has been proved according to S. 91 "no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or substracting from, its terms". The contract in the present case merely contains an undertaking to supply to the plaintiff-respondent the produce of the estate of the particular variety specified in the contract. There is no assurance given in writing that this stipulation will comprise a monthly supply of at least 20,000 lbs. The plaintiff respondent was however permitted to call evidence to establish this stipulation and the question is whether this procedure adopted by the trial court and the decision based upon the evidence given by the plaintiff on this question on which the contract is silent is justifiable in law. 9. S.91 of the Evidence Act provides: "91. When the terms of a contract, or of a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions hereinbefore contained. Exception 1:- When a public officer is required by law to be appointed in writing and when it is shown that any particular person has acted as such officer, the writing by which he is appointed need not be proved. Exception 2:- Wills (admitted to probate in British India) may be proved by the probate. Explanation 1:- This Section applies equally to cases in which the contracts, grants or dispositions of property referred to are contained in one document and to cases in which they are contained in more documents than one. Explanation 2:- Where there are more originals than one, one original only need be proved.
Explanation 1:- This Section applies equally to cases in which the contracts, grants or dispositions of property referred to are contained in one document and to cases in which they are contained in more documents than one. Explanation 2:- Where there are more originals than one, one original only need be proved. Explanation 3:- The statement, in any document whatever, of a fact other than the facts referred to in this Section shall not preclude the admission of oral evidence as to the same fact. 10. The terms of the contract between the parties in this case have been reduced to the form of a document and the document itself has been produced in the case marked as Ext. M. Reliance s placed by learned counsel for the plaintiff-respondent upon proviso (2) to S. 92 according to which "the existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the court shall have regard to the degree of formality of the document." The question is whether this proviso would apply to the facts of this case. Ext. M was preceded by a personal conversation between the plaintiff and the representative of the defendant company. Ext. M purports to be a record of all the terms and conditions agreed upon between the parties as a result of that conversation. The document was prepared in duplicate, one was signed by the defendant and handed over to the plaintiff and a copy thereof indicating the plaintiff's acceptance of the contract was signed by him and handed over to the defendant. It is thus a formal document prepared and signed by the parties after deliberation and discussion. Cl. (ix) of Ext. M reserves liberty to the defendant to turn over a portion of the tea produced in the estate into leaf grades as and when they deem it necessary in the interests of the company. The extent of the tea produced which can be thus turned over into leaf grades is not fixed and is left entirely to the discretion of the defendant. 11. Cl. (1) of Ext.
The extent of the tea produced which can be thus turned over into leaf grades is not fixed and is left entirely to the discretion of the defendant. 11. Cl. (1) of Ext. M providing for the sale of the entire output of Pasupara A dust produced in the estate for 12 months has therefore reference to whatever is produced as dust, subject to the exercise of the discretion given to the defendant to make any portion of the tea produced into leaf grades. A fixation of the quantity of Pasupara A dust to be supplied to the plaintiff would, therefore be inconsistent with the express liberty given to the defendant under Cl. (ix). If the oral contract guaranteed a supply of 20,000 lbs. per month, which would work out to 2,40,000 lbs. per year, nothing would be left from out of the total produce (estimated at 3 lakhs lbs.) as from out of it is reserved for sale directly by the defendant, 5,000 lbs. per month that is, 60,000 lbs. per year, under Cl. (viii) of Ext. M. The two together would exhaust the entire estimated produce of 3 lakhs, leaving nothing for the operation of Cl. (ix), which gives liberty to the defendant to turn over part of the produce into leaf grade. The oral contract set up is thus not merely inconsistent with, but destructive of the express terms of the contract contained in Cl. (ix) of Ext. M. 12. It is thus clear that the alleged oral agreement guaranteeing a minimum supply of 20,000 lbs. per month to the plaintiff cannot be proved. 13. In Twentsche Overseas Trading Co. Ltd. v. Uganda Sugar Factory Ltd. (A.I.R. 1945 Privy Council 144) where one 'T' company contracted to supply steel rails Krupp section to U company with a carefully drawn specification defining precisely what were the goods called for by the contract which did not define what was to be the source of the goods and where, therefore, the contract was silent on the point, it was attempted to set up and prove an oral agreement that the goods to be supplied should be the manufacture of Ferrostaal the Judicial Committee of the Privy Council declined to accept evidence of the oral contract. The relevant portion of the head note runs thus: "Collateral contracts must from their very nature be rare.
The relevant portion of the head note runs thus: "Collateral contracts must from their very nature be rare. A collateral agreement must be in every sense a complete legal contract, and the effect must be to vary or add to the terms of the contract. Such collateral contracts are viewed with suspicion by the law. They must be proved strictly. Not only the terms of such contracts but the existence of animus contrahendi on the part of all the parties to them must be clearly shown. Any laxity on these points would enable parties to escape from the full performance of the obligations of contracts unquestionably entered into by them and more especially would have effect of lessening the authority of written contracts by making it possible to vary by suggesting the existence of verbal collateral agreements relating to the same subject-matter." "Held that to introduce into the specification the terms that the goods should be the manufacture of Ferrostaal would be to vary the contract by defining what the contract had left open". 14. In Dinkerrai Lalit Kumar and others v. Sukhdayal Rambilas and others (A.I.R. 1947 Bombay 293) where in a commercial contract to supply certain piece-goods, the written agreement did not provide for the time of delivery, an oral agreement was attempted to be set up specifying the time. The High Court of Bombay held: "Once the parties reduce the terms of their contract into writing, the court can only look at the writing alone in order to constitute what the terms of the contract were. The terms of the contract cannot be ascertained by allowing parole evidence as to what transpired antecedent to the contract or what the party did subsequent to the contract". 15. When the written record purports to reduce to writing all the terms of the contract between the parties, and does not reserve any part of the earlier contract uncovered by the document, oral evidence would not be admissible. (See G.M. Cutts v. T.F. Brown, I.L.R. 6 Calcutta 328). 16. The plaintiff does not, in his plaint, set up a case that there was any separate oral agreement to attract the application of proviso (2) to S. 92 of the Evidence Act. Paragraph 4 of the plaint sets up the details of the terms of the agreement dated 17th December 1941, mentions the guarantee of a minimum of supply of 20,000 lbs.
Paragraph 4 of the plaint sets up the details of the terms of the agreement dated 17th December 1941, mentions the guarantee of a minimum of supply of 20,000 lbs. per month, refers to the liberty of the defendants to turn over a portion of the tea produced in the estate into leaf grades and proceeds to say that it was further mutually understood that the quantity to be turned over into leaf grades was not to affect the minimum agreed upon viz. 20,000 lbs. of A Dust per mensem. Paragraph 5 of the plaint reads thus:- "On 17.12.1941 defendant sent a letter to plaintiff confirming the terms of agreement in respect of Pasupara A Dust referred to supra. The said letter is filed herewith". It is clear from these two paragraphs of the plaint that the plaintiff had no case of any separate oral agreement. It would also be clear that the plaintiff had no case that any of the terms of the contract agreed upon between the parties was omitted to be recorded in the letter. The circumstance that the guarantee of a minimum supply of 20,000 lbs. per month would be inconsistent with the liberty given to the defendant to turn over a portion of the produce into leaf grades is recognised and a further agreement is set up that the said liberty is subject to the guarantee regarding the minimum supply. Here the plaintiff has overshot the mark. The estimated annual yield being 3 lakhs lbs., though it is stated to be over that, the so-called excess should, for this purpose be taken to be nominal (the total being 3 lakhs lbs.) out of which the defendant is admittedly entitled, by virtue of Cl. (viii) of Ext. M to appropriate 60,000 lbs. for direct sale to the defendant's customers, there would be a balance only of 2,40,000 lbs. and if the plaintiff is given a guarantee of supply to the extent of 20,000 lbs. per month, for 12 months that would consume the entire balance with the result that the liberty reserved to the defendant in Cl.(ix) of Ext. M to turn over a portion of the tea produced into leaf grade would be rendered nugatory. 17. Under these circumstances the plaintiff cannot rely upon any separate oral agreement or a term in the agreement guaranteeing a minimum supply of 20,000 lbs.
M to turn over a portion of the tea produced into leaf grade would be rendered nugatory. 17. Under these circumstances the plaintiff cannot rely upon any separate oral agreement or a term in the agreement guaranteeing a minimum supply of 20,000 lbs. per month because, no such oral agreement is set up, assuming it was meant to be set up by the allegation in paragraph 4 of the plaint, it would be inconsistent with Cl. (ix) of the written contract. On both these grounds the alleged oral agreement would be inadmissible in evidence. 18. The only point of the plaintiff is that the defendant has violated the alleged term of the contract relating to the minimum supply of 20,000 lbs. per month, out of the estimated quantity of 3 lakhs lbs., the plaintiff deducts 60,000 lbs. regarding which liberty for sale is given to the defendant as also the quantity supplied by the defendant, arrives at a balance of 1,17,000 lbs, on which at the rate of 8 as per pound damages are assessed. 19. In the view that we take about the inadmissiblity of oral evidence of the alleged guarantee of supply of 20,000 lbs. per month, it is unnecessary to discuss the oral evidence adduced in the case. It may however be mentioned that the admitted payment of price in excess of the agreed rate upon 7,500 lbs. as evidenced by Ext. O would be a strong circumstance against the truth of the oral agreement set up. The explanation offered on behalf of the plaintiff by his advocate for making this extra payment has not appealed to the court below nor does it appeal to us as acceptable. Ext. O is sought to be used against the defendant as probabilising the case of the guaranteed supply of 20,000 lbs. per month. No doubt the word used "excess supply" in Ext. O in inartistic and leads to comment. When the plaintiff is entitled to the supply of the entire output of Pasupara A Dust at a particular rate, his payment of excess price on the supply made cannot be explained except on the ground that such supply related to tea which the defendant could have turned into leaf but diverted into dust at the request of the plaintiff. Exts. XXVII and XXVIII invoices for 2500 lbs. and 5,000 lbs.
Exts. XXVII and XXVIII invoices for 2500 lbs. and 5,000 lbs. respectively in respect of those diverted dust appear to probabilise the version of the defendant. 20. Another circumstance already adverted to is that if the alleged guarantee of 20,000 lbs. per month be true, then there would be nothing left from out of the total produce in the estate for being turned into leaf grade according to the discretion of the defendant as expressly provided in Cl. (ix) of Ext. M. This circumstance would show that the alleged oral agreement could not be true. It is therefore unnecessary to discuss the oral evidence as to the minimum guarantee. It is enough to say that in the light of the circumstances appearing in the case, oral evidence tendered on behalf of the plaintiff on this point cannot be accepted. 21. The court below comments upon the delay of the defendant in repudiating the oral agreement alleged by the plaintiff which is mentioned in certain subsequent correspondence. In the light of the circumstances and probabilities of the case above-mentioned, this delay does not seen to us to be material and cannot lead to any inference adverse to the defendant. 22. The learned counsel for the respondent submitted in the course of argument that even if the case of the plaintiff regarding a minimum guarantee of 20,000 lbs. be not found in favour of the plaintiff, he is entitled to be compensated for short delivery as, according to him, the total produce of A Dust in the estate has not been delivered to him. The accounts regarding the production and supply were placed before us and the evidence regarding supply made to certain parties on account of the plaintiff was also pointed out. On a calculation the balance that might be found not delivered is negligible. 23. Mr. Varadaraja Iyengar on behalf of the appellant defendant contended that the only claim in the plaint is for violation of the alleged guarantee of supply at the rate of 20,000 lbs. a month and that no alternative case has been set up complaining that the entire produce of A Dust in the estate has not been delivered to the plaintiff and that is the reason why the attention of the parties has not been directed to this point.
a month and that no alternative case has been set up complaining that the entire produce of A Dust in the estate has not been delivered to the plaintiff and that is the reason why the attention of the parties has not been directed to this point. A perusal of the plaint would make it clear that the only basis of the claim made by the plaintiff is the violation of the alleged agreement to supply 20,000 lbs. per month and that no claim is made on account of short delivery of the total produce in the estate found in the absence of the alleged guarantee of monthly supply. We are thus unable to find on this point in favour of the plaintiff-respondent. 24. In the result the appeal is allowed with costs in both the courts. Allowed.