JUDGMENT : 1. The Rameshwar Jute Mills Limited. the plaintiff-respondent in this Second Appeal, entered into two contracts of sale with the Vishnu Sugar Mills Limited, defendant appellant, through different brokers, for supply of 60,000 gunny bags. The first contract which is Ext. 1/a was entered into on 13.8.57. It was for supply of 30,000 bags, 10,000 to be supplied and paid for in each of the three months-October, November and December, 1957. The other contract (Ext.1) was entered into on 28.8.57. It was also for supply of 30,000 bags, 10,000 to be supplied and paid for in each of the months-October, November, and December, 1957. The rate in both the contracts was Rs.139 per 100 bags. The appellant accepted the contract through, its letters (Exts. 2 and 2/a) and thereafter sent despatch instructions to the respondent in its letter dated 22.8.57 (Ext. 2/b) and letter dated 2.9.57 (Exc.2/c). In pursuance of the despatch instructions the respondent despatched on 5.10.57, 20,000 bags and sent the despatch advice in its letter dated 9.10.57 (Ext. 2/1). The consignment of 20,000 bags was taken delivery of and as the railway receipt had been sent through bank, the payment had also been made by the appellant. A dispute was, however, raised by the appellant in regard to the quality of the bags supplied by the respondent. There was correspondence between the parties and ultimately the appellant refused to accept any supply for the balance of the quantity of bags contracted to be sold by the respondent, i.e. 40,000 bags. The respondent, thereupon, after giving a formal notice to the appellant instituted the present suit giving rise to this Second Appeal on the 11th of October, 1958 for realisation of Rs 3,100/- as damages for breach of contract on the basis that the market rate of gunny bags had gone down to Rs.134.50 in November, 1957 and Rs.128/- in December, 1957. In other words, a sum of Rs. 900/- by way of damages was claimed at the rate of Rs 4.50 per 100 bags for the instalment of 20,000 bags, which was to be supplied in November and at the rate of Rs.11 per 100 for the last instalment of 20,000 bags, which was to be supplied in December, 1957. In other words, a sum of Rs. 900/- by way of damages was claimed at the rate of Rs 4.50 per 100 bags for the instalment of 20,000 bags, which was to be supplied in November and at the rate of Rs.11 per 100 for the last instalment of 20,000 bags, which was to be supplied in December, 1957. The respondent also claimed a sum of Rs.86.81 by way of interest at 12 per cent per annum on the said amount of Rs 3,100 from 4.7.58 to 28.9.58; it also claimed interest pendente lite and future. 2. The learned Munsif who tried the suit held that the appellant had committed breach of the contract and was liable for damages. It decreed the suit of the respondent for the total amount of Rs 3,186.81. No interest pendene lite or future, however, was either allowed or disallowed by the learned Munsif in express terms. The result was that it must be deemed to have been disallowed. The defendant went up in appeal. The plaintiff did not file any cross-objection for claiming any amount of interest pendentelite or future. The lower appellate court has upheld the decision of the learned Munsif and hence the defendants has preferred this Second Appeal. 3. In ORDER :to appreciate and decide the point which has been raised in this appeal, it is necessary to refer to some salient features and facts of the case from the admitted correspondence between the parties. Before I do so, I may dispose of the point of jurisdiction, which had been raised by the appellant in the trial court in that the Samastipur Court had no jurisdiction to try the suit. The trial court held against the appellant; so did the lower appellate court in this regard. The point was mentioned in this Second Appeal but could not be pressed not only because on merits it had no substance but also because it was difficult for the appellant to show any prejudice as it was necessary to be shown under Section 21 of the Code of Civil Procedure. 4. From the contracts (Exts 1/a and 1) which are in identical terms it is necessary only to refer to the description of the goods agreed to be supplied so far as it relates to weight. 4. From the contracts (Exts 1/a and 1) which are in identical terms it is necessary only to refer to the description of the goods agreed to be supplied so far as it relates to weight. Apart from other descriptions in the contract, the weight mentioned of the bags was 2 pounds 10 ounces or 2 5/8 pounds which is identical. In regard to the delivery, as already stated, a specific stipulation was there in both the contracts that 10,000 bags were to be supplied in October, 10,000 in November and 10,000 in December, 1957. There was another term provided in the contract in bold letters which ran as follows: "Each month's delivery to be considered as a distinct and separate contract." The first letter to which I would now make reference is Ext. 2/g, a letter dated 12.10.57 written by the appellant to the respondent. This letter was written in reply to the respondent's letter dated 9-10-57 (Ext. 2/f) and it appears that Ext. 2/g was written even before the arrival of the goods. Without stating any rhyme or reason the appellant asked the respondent to wait for further instructions regarding the despatch of the bags contracted to be supplied, and it stated further that the previous despatch instructions were to be treated as cancelled. To start with, the letter (Ext. 2/g) by itself makes the conduct of the appellant appear somewhat unfair and suspicious as there is nothing in the record of this case to show as to why it cancelled the despatch instructions which it had given earlier without any rhyme or reason. The respondent gave a reply to Ext. 2/8 by its letter dated 17-10-57 (Ext. 2/h) and wanted fresh instruction for November portion of goods before the commencement of the delivery period so that despatches may be made conveniently during the month. 5. It is not known from the materials in the records of this case as to why exactly the consignment of 20,000 bags arrived at Harkhua. The goods were despatched from Muktapur, as stated above, on 5-10-57. Both the railway stations are on the lines of the North Eastern Railway. It may be presumed therefore, that in ordinary course the consignment must have arrived sometime in October, 1957. On receipt of the consignment the appellant sent telegram (Ext. The goods were despatched from Muktapur, as stated above, on 5-10-57. Both the railway stations are on the lines of the North Eastern Railway. It may be presumed therefore, that in ordinary course the consignment must have arrived sometime in October, 1957. On receipt of the consignment the appellant sent telegram (Ext. 3) on the 2nd of November, 1957 reading as follows: "Gunnies very inferior quality weighing- 17 chhataks containing heavy moisture, unsuitable for sugar packing. Please settle before further despatch". The appellant sent a confirmatory letter of the telegram, which is dated 6-11-57 and is Ext. 2/u. The respondent however, had sent a letter to the appellant on 5-11-57 (Ext. 2/l) in reply to the telegram (Ext. 3) intimating that it was arranging to send its representative to inspect the bags, and as regards further despatch a suggestion was given by the respondent that the appellant Company should send its man to inspect the bags in the godowns and mark the bags for being despatched to it, so that the quality may be inspected before despatch and further troubles may be avoided. In pursuance of the letter (Ext. 2/i) the respondent informed the appellant by another letter dated 11-11-57 (Ext. 2/j) that it was sending its representative Shri D.N. Choudhry to inspect the bags already supplied, regarding which a complaint had been made by the appellant. After an inspection report followed the letter (Ext. 2/k) dated 20-11-57 from the respondent to the appellant stating therein that the former's representative had been to the latter to verify the quality of bags and had reported that the bags were found 0.8 per cent light in weight at an average, which was a negligible percentage. It also informed the appellant that the quality of the bags had been subsequently improved and requested it to permit the respondent to book further consignments; if still it had any doubt, it may send its representative to inspect the bags before they were despatched. In reply to Ext. 2/k the appellant wrote a letter to the respondent on 23-11-57 which is Ext.2/y. In this letter it did not dispute the correctness of the report of Shri D.N. Choudhry in regard to the difference in the weight of the bags. In reply to Ext. 2/k the appellant wrote a letter to the respondent on 23-11-57 which is Ext.2/y. In this letter it did not dispute the correctness of the report of Shri D.N. Choudhry in regard to the difference in the weight of the bags. It merely intimated that the bags were lying at mill site and were not suitable for sugar bagging and were hence rejected; a refund of the price of 20,000 bags was asked for. The appellant also intimated by this letter that it was not inclined to give any further despatch instructions for the balance of the quantity. In reply to Ext. 2/y, a letter dated 3-12-57 (Ext. A/5) was written by the respondent Company to the appellant Company. It offered to give proportionate rebate for the slightly defective quality of the 20,000 bags supplied and reiterated its suggestion for further supply that it should be made after the representative of the appellant had inspected the bags before despatch. The appellant gave a reply to Ext. A/5 on 5-12-57, which letter is Ext. A/6. It made an enquiry from the respondent as to what amount it offered by way of rebate for the defective 20,000 bags supplied, but it added that it was not in a position to send any responsible representative to the respondent's mill to inspect further supply of goods before their despatch, as its crushing season had already commenced. The respondent gave a reply to Ext. A/6 by its letter dated 10-12-57 (Ext.2/n) offering a rebate of Rs. 222 for 20,000 bags on the ground that the shortage in weight worked up in terms of price at Re. 1.11 per 100 bags. The appellant did not accept this offer and for the first time disputed the quantum of defect in the bags supplied in its letter dated 25-1-58 (Ext. 2/1). Thereafter further correspondence followed between the parties, which has been referred to by the learned Munsif in its JUDGMENT : elaborately and briefly by the learned Subordinate Judge in his JUDGMENT :. It's not necessary for me to refer to it. I may only state that the respondent Company insisted for the remaining supply to be made and completed. The appellant Company ultimately cancelled the contracts in express terms. At one stage, the respondent Company had accepted to take back the allegedly defective bags supplied but even they were not returned. It's not necessary for me to refer to it. I may only state that the respondent Company insisted for the remaining supply to be made and completed. The appellant Company ultimately cancelled the contracts in express terms. At one stage, the respondent Company had accepted to take back the allegedly defective bags supplied but even they were not returned. Eventually, as stated above, the suit was filed for recovery of the amount of damages to the tune of Rs. 3,100/- besides interest. 6. The courts below have held on the facts and in the circumstances of this case that in the first instance there was no breach of contract committed by the respondent as the defect in the quality of the 20,000 bags was not substantial. The appellant, on the other hand, committed a breach of the contract in refusing to accept delivery of the remaining quantity of the bags. In the alternative, they have taken the view with reference to Section 38 of the Sale of Goods Act, 1930 (hereinafter to be called the Act) that in the view of the express term in the contracts each month's delivery was to be considered as a separate contract and therefore, the appellant could not refuse to accept delivery in regard to the other two instalments of November and December, 1957. 7. Learned counsel for the appellant submitted on the authority of (1) Robert A. Munro and Company Limited V. Meyer [(1930) 2. K.B. 312] that the view taken by the courts below on the basis of the specific term in the contracts referred to above is erroneous. He seems to be right to this extent. Wright, J. as he then was, has said at page 332 with reference to the identical provision of Section 31 of the English Sale of Goods Act, 1893 that such a clause "cannot be construed so as to defeat the rights of the buyer under Section 31 of the Sale of Goods Act". Section 38 of the Act reads as follows;- “(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments. Section 38 of the Act reads as follows;- “(1) Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalments. (2) Where there is a contract for the sale of goods to be delivered by stated instalments which are to be separately paid for; and the seller makes no delivery or defective delivery in respect of one or more instalments, or the buyer neglects or refuses to take delivery of or pay for one or more instalments, it is a question in each case depending on the terms of the contract and the circumstances of the case, whether the breach of contract is a repudiation of the whole contract, or whether it is a severable breach giving rise to a claim for compensation, but not to a right to treat the whole contract as repudiated." If the transaction is one which is covered by Sub-section (1) of Section 38 of the Act, principle of law engrafted in Section 39 of the Contract Act 1872 comes into play. In such a situation "when a party to a contract has refused to perform, or disabled himself from performing his promise in its entirety, the promisee may put an end to the contract, unless he has signified by words or conduct, his acquiescence in its continuance". But here in specific terms the delivery by instalment was provided namely, under both the contracts 10,000 bags each month. That being so, even though the specific terms in the contract was there, namely, each month's delivery to be considered as a separate contract, it cannot have the effect of making one contract three contracts for all purposes. Undoubtedly, however, it will have the effect of bringing the case under second Sub-section of Section 38 of the Act. 8. I also do not propose to discuss or affirm the findings of the courts below that the respondent had not committed any breach when it supplied slightly defective bags, as admitted by it, in the first instalment of 20,000 bags. 8. I also do not propose to discuss or affirm the findings of the courts below that the respondent had not committed any breach when it supplied slightly defective bags, as admitted by it, in the first instalment of 20,000 bags. A question in that connection, which could have arisen but has not been canvassed in the courts below, was as to whether the defect noticed in the 20,000 bags was a breach of the condition or a warranty within the meaning of the 12th Section and the sections following that occurring in the Act, which entitled the buyer to put an end to the contract or to claim damages only. That question would have been relevant if the contract would have been one and whole and not a contract for supply of the bags in instalments. I shall assume in favour of the appellant that the respondent had supplied defective goods and had, thereby, committed a breach of the contract, entitling the former to claim damages from the latter in respect of the first instalment. 9. The question, however, which falls for determination in this appeal is whether the breach of contract on the part of the respondent was a repudiation of the whole contract or whether it was a severable breach giving rise to a claim for compensation only but not to right to a buyer, namely, the appellant to treat the whole contract as repudiated in accordance with Section 38(3) of the Act. No hard and fast rule has been laid down and can be laid down in this regard as the section itself provides. “.......it is a question in each case depending on the terms of the contract and the circumstances of the case......" But there are certain guiding principles which can be found in some of the cases and some of the standard text books to which I shall presently make a reference. 10. In Halsbury's Laws of England, Third Edition, Volume 34, with reference to a case of (2) Maple Flock Co. 10. In Halsbury's Laws of England, Third Edition, Volume 34, with reference to a case of (2) Maple Flock Co. Ltd. V. Universal Furniture Products (Wembley) Ltd., [(1934) 1 King's Bench 148] it has been stated in footnote (k) at page 105 that "the main tests" for determining as to whether a breach is vital where it renders the performance of the rest of the contract something substantially different from what the party not in fault contracted for “are (1) the quantitative ratio of the faulty instalments to the whole contract, and (2) the degree of probability of a repetition of the breach". It will be advantageous to quote a passage which occurs at page 106. It reads as follows : "In contracts for the sale of goods where delivery is to be made by instalments to be separately paid for, the consideration is not entire; it has been divided, and consequently a breach as regards one or more instalments of the goods is not necessarily the breach of a condition precedent to the liability of the other party to accept or deliver the remainder. In such a case each delivery is really like a delivery under a separate contract, to be paid for separately, and in respect of the non-delivery of which the parties may well be assumed to have contemplated a payment in damages rather than a rescission of the whole contract. The party therefore who commits a breach which is merely partial is allowed by law to aver that he is ready and willing to perform the rest of the contract, subject to compensation the other party for the partial breach". In the Sale of Goods Act by Pollock and Mulla, Third Edition, with reference to the case of (3) Millar's Karri and Jarrah Co. V. Wed del & Co. [(1908) 100 Law Times 128)] the law has been stated thus at page 159 - "But a breach in respect of one delivery may be evidence from which it can be properly inferred that similar breaches will be committed in relation to subsequent deliveries, so that the contract may be rescinded by the other party". V. Wed del & Co. [(1908) 100 Law Times 128)] the law has been stated thus at page 159 - "But a breach in respect of one delivery may be evidence from which it can be properly inferred that similar breaches will be committed in relation to subsequent deliveries, so that the contract may be rescinded by the other party". Even in the case relied on by the appellant (1) (1930) 2 King's Bench 312 - on the facts, Wright, J., at page 331 had said - “My conclusion is that in such circumstances the intention of the seller must be judged from his acts and from the deliveries which he in fact makes, and that being so, where the breach is substantial and so serious as the breach in this case and has continued so persistently, the buyer is entitled to say that he has the right to treat the whole contract as repudiated". 11. Keeping these principles in view, let us see whether on the facts of the present case it is possible to take a view in favour of the appellant that the breach of the contract in regard to the first instalment was tantamount to a repudiation of the whole contract on the part of the seller and entitled the buyer to treat the whole contract as repudiated. The complaint in the telegram (Ext. 3) was that the gunny bags forming part of the consignment of 20,000 bags weighed 17 chhataks as against the contract weight of 2 pounds 10 ounces which would roughly correspond to 1 seer 4½ chhataks. The next complaint was that the bags contained heavy moisture making them unsuitable for sugar packing. As against such a serious complaint, the only defect found was that the shortage in weight of the bags was 0.8 per cent, which would be, roughly speaking, one-sixth of a chhatak only. No moisture content was found by Shri D.N. Choudhary. His report, as I have stated above, was not disputed in the earlier correspondence and was, for the first time, disputed in January 1958. But the only witness examined on behalf of the appellant admitted in court that the report of Shri D.N. Choudhary as to the defect in the bags supplied was correct. The courts below have, therefore, proceeded upon the basis that the defect in the bags was slight and negligible. But the only witness examined on behalf of the appellant admitted in court that the report of Shri D.N. Choudhary as to the defect in the bags supplied was correct. The courts below have, therefore, proceeded upon the basis that the defect in the bags was slight and negligible. As against the contract weight of 1 seer 4½ chhataks, the bags weighed on average 1 seer 4½ chhataks each. The complaint of shortage in weight was that it was less by 3½ chhataks. As against it, the shortage found was one-sixth of a chhatak only. If the bags contained heavy moisture, undoubtedly they were unsuitable for sugar packing. But no moisture content was found. This shows that the conduct of the appellant Company or its officers or employees was not business like in making a case of such serious defect in quality while actually the defect was slight. The reason is not far to seek. As found by the courts below, the market rate of the gunny bags had fallen in November and December 1957, and that seems to be the reason that the appellant Company wanted to wriggle out of the contract in regard to the supply of the next two instalments on the plea of a serious defect in quality of the bags supplied, which fact was not correct, Furthermore, the, respondent Company showed its willingness to despatch the further consignments after the bags had been inspected by a representative of the appellant Company. The respondent, by its conduct, did not leave any scope for the assumption in the mind of the appellant Company's representatives that similar breaches would be committed in relation to subsequent deliveries so that it could rescind the whole contract. On an excuse of the crushing season, the appellant Company refused to send its representative to see the quality of the bags before their despatch. It seems to me that the appellant did so because the market rate of bags was falling at the relevant time as it had fallen by Rs.4.50 per 100 bags in November and to the extent of Rs.11 per 100 bags in December, 1957. It seems to me that the appellant did so because the market rate of bags was falling at the relevant time as it had fallen by Rs.4.50 per 100 bags in November and to the extent of Rs.11 per 100 bags in December, 1957. On the facts and in the circumstances of this case, therefore, I have unhesitatingly come to the conclusion that the breach of contract on the part of the respondent Company, assuming it was a breach as I have assumed above in regard to the supply of the 20,000 bags, was not a repudiation of the whole contract; it was a severable breach which could have given rise to a claim for compensation only but did not give rise to a right to treat the whole contract as repudiated within the meaning of Section 38(2) of the Act. That being so, the courts below, in my opinion, have rightly held that the appellant did commit breach of contract in respect of the balance of 40,000 bags which were to be supplied in November and December, 1957. The suit for damages to the tune of Rs. 3,100 has rightly been decreed by the courts below. No counter claim on any account has been made by the appellant in regard to the severable breach in relation to the supply of 20,000 bags in the first instalment. 12. On the question of interest up to the date of suit on damages, it is well settled that no interest can be awarded [vide (4) Bengal Nagpur Railway Co. Ltd. V. Ruttanji Ramji (A.I.R. 1938 Privy Council 67) and (5) Union of India V. A.L. Rallia Ram (A.I.R. 1963 Supreme Court 1685). There will be, therefore, a slight modification in the decree passed by the courts below; the respondent will be entitled to recover a sum of Rs. 3,100 only by way of damages from the appellant and not any amount of interest either up to the date of the suit or interest pendente lite or future in regard to which a reason has already been stated in this JUDGMENT :. 13. In the result, the appeal is partly allowed to the extent indicated above, but the respondent must have its costs of this appeal on the amount of Rs. 3,100/- as in regard to the substantial and main amount the appeal has failed. Appeal allowed in part