Merchant And Co. v. Pura Golakdih Coal Co. — 1960 DIGILAW 31 (PAT)

Judgment 1. In the suit out of which this appeal arises the plaintiff alleged that in pursuance of an order placed by the defendants the plaintiff despatched four wagons of soft coke from Pura Golakdih Colliery between the 3rd June, 1950 and the 7th June, 1950. The defendants had already obtained the sanction under the Colliery Control Order for the supply of coal to Janaklal Choudhury and the Secretary of the Jalpaiguri Multi-purpose Co-operative Society. The plaintiff made the supply of coal in pursuance of two contracts, Exs. 2 and 2 (a), entered into by the defendants. The orders of sanction are Exs. 3 and 3 (a) and they are signed by the Deputy Coal Commissioner. The plaintiff claimed that on account of the price of coal a sum of Rs. 461/13/9 was sent by the defendants but there still remained a sum of Rupees 1328/10/6 due from the defendant. 2. The defendants contested the suit, firstly on the ground that they were del credere agents and the suit for the price of the goods should have been brought against the consumers in the first place, and only in case the plaintiff failed to recover the amount from the consumers should the defendants be made liable. It was secondly contended that the consignments of coal never reached the consumers, but they were intercepted by the Sub-Divisional Officer of Malda who paid only a sum of Rs. 1100/9/- towards the price of the coal and the defendants had already remitted a sum of Rs. 461/13/9 to the plaintiff and they admitted that they were ready to pay to the plaintiff a sum of Rs. 594-14-6 after deducting their commission of Bs. 61A 3. The trial Court accepted the case of the plaintiff except with regard to the payment of commission and gave the plaintiff a decree for a sum of Rs. 655-14-6. The plaintiff took the matter in appeal to the lower appellate Court and contended that he was entitled to a decree for the entire claim, namely, a sum of Rs. 1740-10-0. The lower appellate Court accepted the claim of the plaintiff and gave a decree in his favour for the full amount claimed. 4. 655-14-6. The plaintiff took the matter in appeal to the lower appellate Court and contended that he was entitled to a decree for the entire claim, namely, a sum of Rs. 1740-10-0. The lower appellate Court accepted the claim of the plaintiff and gave a decree in his favour for the full amount claimed. 4. The first point urged on behalf of the appellant in this case is that the position of the defendants was that of del credere agents and consequently the plaintiff must have sued the actual consumers for the price of the coal supplied, and only if there was default on the part of the consumers or insolvency of the consumers and the plaintiff was unable to recover the amount from them for these reasons the defendants would be liable for the payment of the price. In support of this proposition reliance was placed by learned counsel for the appellant on Thomas Gabriel and Sons V/s. Churchill and Sim, (1914) 3 KB 1272. But we do not think that the principle laid down in this case has any application to the present case. The contracts between the plaintiff and the defendants in this case are contained in the two orders, Exs. 2 and 2 (a), dated the 24th and 25th March. 1950. Exhibit 2 is in the following terms : Older Merchant & Co., Coal Merchants. ..... .... .... Nc. 5-3.50 35, Armenian Street, Calcutta, 24th March, 1950. To Pure Goluckdih Coal Co., Jharia. Dear Sirs, Please arrange four wagons soft coke from Pure Goluckdih Colliery, grade-fresh raised and free from water marks, stones and all impurities to the following address : Consignee -- Jalpaiguri Multipurpose Society. Destination--Jalpaiguri. Rate--as settled per ton loaded, into wagons. Terms of payment -- from our Jharia office. Loading advice & R/R -- to Jharia office. D/Notes & duplicate L/A -- to Jharia office. Freight. Freight being payable by the party under To Pay system. Mode of despatch--February to May. Very soon Sanction No. ZBNJ/JPJ/3/D. Date 17-3-1950. Daily Limit-1 Yours faithfully, Merchant & Co. Sd/. Illegible, Partner. Exhibit 2 (a) contains similar terms. The important point to notice is that in these two contracts the defendants expressly undertook the responsibility for paying the price of the consignments of coal to be supplied by the plaintiff. The position of the defendants in this case is. therefore, in the eye of law. Sd/. Illegible, Partner. Exhibit 2 (a) contains similar terms. The important point to notice is that in these two contracts the defendants expressly undertook the responsibility for paying the price of the consignments of coal to be supplied by the plaintiff. The position of the defendants in this case is. therefore, in the eye of law. not that of mere del credere agents. There is an express undertaking in these two contracts on behalf of the defendants that they will pay the price of the wagons of coal to be supplied by the plaintiff. In our opinion, the present case is eoverned by the principle laid down in Rusholme and Bolton and Roberts Hadfield, Ltd. V/s. S. G. Read and Co. (London) Ltd., 1955-1 All ER 180, where Pearce. J. held, on the construction of the contracts between the parties in that case, that the liability of the defendants in that case was not limited to that of mere del credere agents, but that there was an express liability undertaken by the defendants with regard to the payment of the price. It was. therefore, held that the defendants having assumed the liability of a principal buyer as between themselves and the plaintiff, they were liable to the plaintiff for damages for breach of contract. It was contended on behalf of the appellant in this case that the coal was supplied bv the plaintiff after obtaining the sanction of the Deputy Coal Commissioner in accordance with the terms of the Colliery Control Order. 1945. Reference was made to Sec. 6 of the Colliery Control Order which states as follows : "6. (1) Where a colliery owner has signified to the Deputy Coal Commissioner (Distribution) in writing his willingness to sell direct to consumers and an allotment is made by the Deputy Coal Commissioner (Distribution) to a consumer with his consent for such direct sale, the coal shall be delivered to the consumer at the price fixed under Clause 4, and no, commission or other charges shall be paid in addition, except that where a broker is employed, a brokerage not exceeding six annas per ton may be paid by the colliery owner to the broker. 2. 2. Where a consumer purchases coal through a del credere agent, such agent shall not, on the sale of such coal, charge or receive from the consumer a margin over the price fixed under Clause 4 which exceeds (a) one rupee per ton in the case of coal; or (b) one rupee eight annas per ton in the case of Soit Coke; or (c) two rupees eight annas per ton in the case of Hard Coke and if, in any such transaction as aforesaid, a broker is employed or the del credere agent himself serves as a broker, a brokerage not exceeding six annas per ton may be paid by the colliery owner to the broker or, as the case may be, to the del credere agent. 3. Where in any transaction governed by Sub-clauses (1) or (2) more than one broker or del credere agent is employed, the total of the brokerages or margins charged in respect of the transaction shall not exceed the maximum prescribed in the sale sub-clauses and shall be divided between the brokers or agents in such proportion as may be agreed upon. 4. If any question arises whether a person is a del credere agent or a broker or both del credere agent and broker in respect of any transaction, it shall be referred to the Deputy Coal Commissioner (Distribution) whose decision shall be final. 5. Nothing in this clause shall apply in relation to a transaction involving less than one wagon load of coal." We do not think that the circumstance that the coal was supplied under the provisions of the Colliery Control Order makes any difference in the legal position of the defendants, and the responsibility of paying the price of the goods under the express terms of the contracts, Exs. 2 and 2 (a). The provisions of the Colliery Control Order impose certain statutory restrictions on the right of the contracting parties with regard to the fixation of the price. But those provisions do not override the express terms of the two contracts, Exs. 2 and 2 (a), entered into between the plaintiff and the defendants, whereby the defendants agreed to take the responsibility of paying the price of the coal supplied. We, therefore, reject the argument of learned counsel for the appellant that the defendants in this case were merely in the position of del credere agents. 2 and 2 (a), entered into between the plaintiff and the defendants, whereby the defendants agreed to take the responsibility of paying the price of the coal supplied. We, therefore, reject the argument of learned counsel for the appellant that the defendants in this case were merely in the position of del credere agents. We are of the opinion that the defendants were bound under the express terms of the two contracts, Exs. 2 and 2 (a), to pay for the wagons of coal which the plaintiff supplied in terms of the two contracts. 5. A point was also taken on behalf of the appellant that since it had received only a sum of Rs. 1100-9-0 from the Sub-Divisional Officer of Malda, its liability to the plaintiff is limited to that amount. We do not think that there is any substance in this argument. It is the admitted position in this case that the consignments were made by the plaintiff and the railway receipts were mr-de out in the names of the two consignees, namely, the Secretary of Jalpaiguri Multi-purpose Co-operative Society and Janaklal Choudhury of Jalpaiguri. As soon as the coal was put on board the train and as soon as the railway receipts were made out in the names of the two consignees, the title of the coal passed to the respective consignees and there was performance of the contract by the plaintiff. It follows, therefore, that the plaintiff is entitled to the full price of the coal supplied in the four wagons from the defendants who expressly undertook the liability to pay the price by the two contracts, Exs. 2 and 2 (a). We, therefore, reject the argument of learned counsel for the appellant on this point. 6. We are, however, of opinion that the plaintiff is not entitled to the interest of Rs. 411-15-6 which he claimed in the plaint, because there was no contract between the parties for payment of interest on the amount of damages for breach of contract. In our opinion the plaintiff is entitled tp a decree for Rs. 1328-10-6, which represents the unpaid balance of the price for the four wagons of coal supplied by the plaintiff. The plaintiff is also entitled to proportionate costs throughout. We grant interest on the amount so decreed at the rate of 6 p.c. per annum from today. In our opinion the plaintiff is entitled tp a decree for Rs. 1328-10-6, which represents the unpaid balance of the price for the four wagons of coal supplied by the plaintiff. The plaintiff is also entitled to proportionate costs throughout. We grant interest on the amount so decreed at the rate of 6 p.c. per annum from today. Subject to this modification we dismiss this appeal.