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2007 DIGILAW 396 (BOM)

Basantlal Banarasilal Cotton Oil & Oil Cake Merchants & Commission Agents v. Western India Vegetables Products Ltd.

2007-03-16

V.R.KINGAONKAR

body2007
JUDGMENT This appeal arises out of judgment and decree rendered by Civil Judge (S.D.), Amalner, in Special Civil Suit No.47/1989. By the impugned judgment, the suit for recovery of damages on account of breach of contract came to be decreed. The trial Court granted decree for Rs. 2,85,849=90 along with interest at the rate of Rs. 10% p.a. from the date of the suit till realisation of the amount. Being dissatisfied, the original defendants have preferred appeal. 2. Undisputedly there were 13 agreements between the parties between March, 1972 till April, 1973. The plaintiff is a company registered under the Companies Act, having its registered office at Bombay and manufacturing unit at Amalner. It deals in processing and manufacturing of artificial ghee (Vanaspati), refined oil, expeller cakes, soaps, etc. The plaintiff Company regularly needed supply of oil cakes. The defendants/appellants having business transactions with the plaintiff since few years before the dispute arose. The appellants used to supply groundnut oil cakes to the plaintiff in bulk quantity as per the agreed terms. There is no dispute about the fact that the defendant had agreed to supply groundnut oil cakes under the 13 agreements covered by the above-referred period. It was agreed from time to time, as per the rates settled at the time of each agreement that the demanded groundnut oil cakes would be supplied by the appellants to the respondent within a reasonable time. The goods were to be supplied by railway wagons. It was bilty cut and ready delivery contract. 3. The plaintiff's case is that the defendants (appellants) are pacca Adatia. The defendants agreed to supply the groundnut oil cakes at Amalner. The price of the goods was to be paid at Amalner on furnishing Hundis, which were to be drawn at S.B.I. Branch, Amalner. Though the defendants agreed to supply 34 wagons of the groundnut oil cakes yet, they supplied only 17 wagons each wagon containing 300 bags. In spite of repeated demands, the defendants failed to supply the goods as agreed. The plaintiff suffered loss of business due to the short supply and on account of rise in the prices of the goods. Consequently, a demand notice was issued to the defendants and amount of Rs. 2,85,849=90 was demanded as enumerated in the notice. The defendants did not comply with the demand and denied the liability by giving a false reply to the notice. Consequently, a demand notice was issued to the defendants and amount of Rs. 2,85,849=90 was demanded as enumerated in the notice. The defendants did not comply with the demand and denied the liability by giving a false reply to the notice. Hence, the suit for recovery of damages was laid. 4. By filing written statement (Exh.21) the defendants resisted the suit. Assertion of the defendants is that they acted only as Commission agent (Cutcha Adatia). They carried out the work of purchases under instructions of the plaintiff. There was no probity of contract between them and the plaintiff. They do not deal in the sale of groundnut oil cakes and had not agreed to reach the goods at their risk to Amalner. They did not commit any breach of the contract. There was practical difficulty in performance of the contract due to non-availability of railway wagons. The railway department closed the wagon loading at the relevant stations for Amalner. They expressed willingness, however, to send the goods by railway wagons upto Jalgaon and requested the plaintiff to arrange for transportation of the goods from Jalgaon, which is nearest station from Amalner on the main railway route, by any suitable mode of transportation. The plaintiffs attitude was of non-cooperation. The shortage of delivery of goods had occasioned due to the non-mercantile attitude of the plaintiff. The jurisdiction of the Civil Court at Amalner was also disputed alleging that no cause of action took place within its jurisdiction. The defendants, therefore, submitted that they are not liable to indemnify the plaintiff. They also disputed the quantum of damages as claimed by the plaintiff on the ground that the claim is exorbitant and imaginary. They denied truth into all the material averments made by the plaintiffs and urged for dismissal of the suit. 5. The parties went to trial over certain issues framed at Exh.22. A number of issues were framed. The trial Court decided the same in groups. The issues were inter linked and some of them were overlapping. The trial Court held that the defendants are pacca Adatia and had undertaken contractual liability to supply the groundnut oil cakes of 34 wagons but failed to supply 17 wagons. A number of issues were framed. The trial Court decided the same in groups. The issues were inter linked and some of them were overlapping. The trial Court held that the defendants are pacca Adatia and had undertaken contractual liability to supply the groundnut oil cakes of 34 wagons but failed to supply 17 wagons. The trial Court came to the conclusion that the failure to supply 17 wagons of goods, in fact, caused wrongful loss to the plaintiff due to increase in the market rate of the goods. The trial Court held that there was bilty cut contract and, therefore, the defendants were under obligation to supply the goods upto Amalner. The trial Court held that it has jurisdiction to decide the suit. The trial Court accepted the plaintiffs case in entirety and decreed the suit. 6. Mr. Raghuwanshi R.B., learned counsel for the appellants, strenuously argued that the documentary evidence on record clearly indicate that position of the defendants was that of agent. He would submit that the defendants acted under instructions of the plaintiff. He invited my attention to various documents, which purport to show that the goods were dispatched from various stations in Uttar Pradesh. He also pointed out that various parties had sent the goods to the plaintiff in accordance with the terms of the agreements. According to Mr. Raghuwanshi, the plaintiff as principal used to give orders to the defendants as agents to purchase the goods. He would submit that defendants cannot be regarded as vendors of the goods and cannot be made liable to indemnify the plaintiff. He contended that there is no substantial evidence to reach conclusion that the defendants were acting as Pacca Adatias, except their mistaken statement in the reply given to the demand notice, which is clarified in their pleadings. He submitted that the version of D. W. Chandrakishor Awasthi, ought to have been relied upon by the trial Court because it has remained unchallenged. He also contended that there was no jurisdiction available to the Civil Court at Amalner when the bills sent to Oil Cake Merchants & Commission Agents Vs. 321 Vegetables Products Ltd. the plaintiff clearly show that disputes about the transactions were subject to the jurisdiction of Lucknow Court. He further contended that there is no rational basis to the finding as regards quantum of damages awarded by the trial Court. 321 Vegetables Products Ltd. the plaintiff clearly show that disputes about the transactions were subject to the jurisdiction of Lucknow Court. He further contended that there is no rational basis to the finding as regards quantum of damages awarded by the trial Court. He would submit that excessive and imaginary quantum of damages is arrived at by the plaintiff without proof of actual loss sustained due to the non-supply of the goods. Consequently, he urged to set aside the impugned judgment and decree by allowing the appeal. 7. As against this, Mr. P. M. Shah, learned Sr. Counsel appearing for the Respondents/plaintiffs supported impugned judgment and decree. He would submit that the objection regarding jurisdiction of the Court is untenable in view of Section 21 of the C.P.C. He contended that major part of the cause of action arose within jurisdiction of Amalner Court and as such there is no jurisdictional error committed by the trial Court. He argued that the defendants agreed to supply the goods as per the terms of the contracts. He pointed out that each of the contract was only between the plaintiff and the defendants. He would submit that the defendants are suppliers of the goods being Pacca Adatia and would be responsible to indemnify the plaintiffs for breach of the contracts. He would submit that the non-availability of railway wagons was a flimsy reason and that too existed for a very short period. He contended that the failure of the defendants to examine the vendors of the goods from other stations is also one, of the circumstance to prove that they were dealing as Pacca Adatias. He pointed out from the reply letter to the notice (Exh.98) that at the first impulse the defendants gave admission that they are Pacca Adatias. According to Mr. Shah, the defendants failed to supply the goods due to rise of prices. He would submit that the difference in the prices is the proper yardstick for claiming of damages and accordingly the plaintiffs proved their case. Hence, he sought dismissal of the appeal. 8. The points involved in this appeal may be set out as below: “(i) Whether in the facts and circumstances of the present case, the trial Court was right in holding that the defendants agreed to supply the 34 wagons of groundnut oil cakes as Pacca Adatias? Hence, he sought dismissal of the appeal. 8. The points involved in this appeal may be set out as below: “(i) Whether in the facts and circumstances of the present case, the trial Court was right in holding that the defendants agreed to supply the 34 wagons of groundnut oil cakes as Pacca Adatias? (ii) Whether in the facts and circumstances of the present case, the trial Court was right in reaching conclusion that the defendants committed breach of the contracts? (iii) Whether in the facts and circumstances of the present case, the quantum of damages awarded by the trial Court is proper, legal and valid? (iv) Whether the objection regarding territorial jurisdiction of the trial Court is sustainable?” 9. The main controversy relates to nature of relationship between the parties. The plaintiffs case is that the defendants were dealing with them as Pacca Adatias, whereas the defendants say that they were appointed as agents and were working only as Adatia on commission basis. The distinction between pacca Adatias and Cutcha Adatias is that the latter are commission agent whereas pacca Adatia is somewhat akin to del credere agent. A pacca Adatia is more than a commission agent. He receives orders from constituents and places them in the open market; but he can allocate his principal's contracts to himself when it suits him to do so. He can even substitute his own goods towards the contract made for the principal, and buy the principal's goods on his own account, though he is not under obligation to do so. He makes himself liable upon the contract not only to the third party, but also to his constituent, as he is under no obligation to inform his constituent the name of the person with whom he has entered into contract on his behalf. A pacca Adatia is a speculative transaction and it is a legitimate mode of conducting commercial business. Although, the pacca Adatia may, in some respects, be taken to be a principal, yet he is under obligation like a agent to execute the orders of the principal. Thus, the rights and obligations of an agent towards his principal do apply to him with full force. The subtle distinction between pacca Adatia and a broker is clarified in “Manilal Raghunath Vs. Radhakisson Ramjiwan” (AIR 1921 Bombay 238). Thus, the rights and obligations of an agent towards his principal do apply to him with full force. The subtle distinction between pacca Adatia and a broker is clarified in “Manilal Raghunath Vs. Radhakisson Ramjiwan” (AIR 1921 Bombay 238). It is held that the only distinction between Pacca Adatia and a broker is that the former would not contract as agent but as principal but the latter cannot work as principal in relation to his constituents on both sides. In other words, a pacca Adatia may work like a agent and is agent for all the purposes to his principal who seeks to buy certain goods through him. Still, however, he is principal in relation to the person from whom he buys the goods. Needless to say there is privity of contract between the Pacca Adatia and his constituents, whereas there is absence of privity of contract between the constituents and the middle agent. 10. So far as present case is concerned, let it be noted that there is voluminous record produced by the plaintiffs, consisting of a large number of telegrams, letter correspondence, Hundis and bills etc. The foremost and significant aspect of the matter is that before filing of the suit a demand notice dated 26-2-2004 was issued by the plaintiffs to the defendant No.1. In the demand notice it is clearly averred that the defendant No.1 had agreed to supply and sell qua pacca Adatia 31 wagons of groundnut cakes. It was further averred that the defendant No.1 was supposed to effect deliveries of the goods to the plaintiffs within reasonable time. The response of the defendant No.1 to this notice is most material. The defendant No.1 sent reply (Exh.37/21) to the demand notice. The defendant No.1 unequivocally stated in the reply to the notice that the position of the defendants is that of pacca Adatia. The defendants stated: “That the position of my clients in that Pacca Adatia .... ..... The fact is that my client used to draw Hundis for full value of the price of the goods supplied to your client or of such value as may be agreed upon by my client: with their sellers. On receipt of the final weight and analysis of the goods suppliec from your clients, my client used to make necessary adjustments.....” Thus, the defendants clearly admitted their status as “pacca Adatia” at the first blush. On receipt of the final weight and analysis of the goods suppliec from your clients, my client used to make necessary adjustments.....” Thus, the defendants clearly admitted their status as “pacca Adatia” at the first blush. This reply given to the demand notice would indicate that the defendants were responsible to supply the goods and they used to draw Hundis for full value of the price of the goods. In other words they used to receive the total price of the goods immediately after reaching of the goods at Amalner. 11. The pleadings of the plaintiffs also clearly set out the fact that the defendants were working as Pacca Adatia in respect of the transactions of which details were enumerated in Schedule A appended to the plaint. There is simple denial to such pleadings in the written statement. The defendants failed to explain the clear admission appearing in the reply notice. There is a vague statement in the pleadings of the defendants (para 24 of W.S.) to the effect that the person who gave instructions on behalf of the defendants to their Advocate Shri. Babulal Mishra was not fully conversant with the facts of the case and their implications and therefore, some misnomer and mistaken statement appeared therein. If that is so, the defendants ought to have explained as to who gave such incorrect instructions to their advocate Shri. Babulal Mishra. The defendants have examined D.W.l Chandrakishor Awasthi, in support of b their defence. His version does not clarify who gave such kind of instructions to the advocate - Shri. Babulal Mishra. D.W. Awasthi failed to explain so-called mistake appearing in the reply aj given to the demand notice. Consequently, it If, will have to be said that the admission of the defendants is quite acceptable. It is trite that of admission of fact is sufficient to dispense with the requirement of proof. 12. Keeping aside the above referred of admission of fact, there is also other evidence to reach conclusion that the defendants were pacca Adatia qua the plaintiffs. Mr. Raghuwanshi, leamed Counsel appearing for the defendants, took me through the telegrams and the letter correspondence. He invited my attention to various statements made in the letter correspondence to show that the defendants were required to make purchases as per instructions of the plaintiffs. Mr. Raghuwanshi, leamed Counsel appearing for the defendants, took me through the telegrams and the letter correspondence. He invited my attention to various statements made in the letter correspondence to show that the defendants were required to make purchases as per instructions of the plaintiffs. He also pointed out that the telegrams confirmed the contracts and directions were to make “purchase of the goods” on usual condition. He strenuously argued that the defendants were under obligation to perform the directions of the plaintiffs to make purchases from third parties and, therefore, the goods were dispatched from various stations and not only from Lucknow i.e. the place of the defendants' business office. He invited my attention to the copy of statement (Exh.237) which purport to show that the purchases from third parties were made from various stations. There cannot be two opinion about the fact that the plaintiffs used to place orders with the defendants for making purchases of the groundnut oil cakes. 13. At this juncture, it is worthwhile to mention that the pacca Adatia is also an agent and is under obligation to execute the orders of his principal like an agent. That does not make him an ordinary commission agent. His duty is not only to bring two parties together and work as catalyst agent on commission. An ordinary agent would bring about contract between the two parties and is entitled to receive commission but is not under obligation to fulfill the contract. Generally speaking, in terms of business transactions, the middle agent instructs the seller to send the goods to the buyer as per the agreement, which is settled through his agency. In such case he may get commission from one of the party or may get commission from both of them. If he is involved as a middle agent then in most of such cases a tripartite agreement is entered into between the purchaser, agent and the seller. This is peculiarity of such kind )f transaction when the contract is brought about between the parties through an agency. In the present case, however, there is not a single document to show that there was tripartite agreement between the plaintiffs, defendants and the sellers. There is also no documentary evidence to show that the plaintiffs entered into the purchase agreement with the sellers. 14. In the present case, however, there is not a single document to show that there was tripartite agreement between the plaintiffs, defendants and the sellers. There is also no documentary evidence to show that the plaintiffs entered into the purchase agreement with the sellers. 14. Though, there are various instances to get available clues from the record yet, a few of them can be seen in order to verify the nature of the dealings between the parties. First, all the Hundis were sent along with the goods by the defendants and the price amount was paid to the defendants in accordance with the bilty cut contracts. There are large number of bank Vouchers (Exhs.267 to 377) duly proved. The evidence of P.W.4 Krishna, goes to prove the intrinsic evidence appearing from the bank vouchers and purchase documents. He corroborated the entries in the bank's record from the original documents, which are maintained in the course of the day today transactions. There is presumption available regarding correctness of the official record of the bank. P.W.4 Krishna was working as a clerk in the State Bank of India, Amalner Branch at the relevant time. The vouchers (Exhs.267 to 377) clearly show name of the defendant No.1 in the column of “seller.” Needless to say position of the defendants was regarded to be that of the sellers qua the plaintiffs. The plaintiffs never paid any amount of price directly to the third parties. The payments were made to the defendants as per the Hundis. The instructions to make purchases were always given to the defendants. Considered together, the circumstances on record unmistakably show that the defendants were dealing with the plaintiffs as pacca Adatias. It is not necessary to elaborately set out the text of each letter and the telegram in the context of the issue regarding status of the defendants qua the plaintiffs. Though the orders were issued to the defendants to make purchases yet, that would not it self be decisive to reach conclusion that it was only due to the position of the defendants as agents that such directions were being issued. The contents of a letter dated 26-7-1971 (Exh.80) purport to show that the defendants expressed displeasure regarding deduction of certain amounts by the plaintiffs in respect of short delivery. The contents of a letter dated 26-7-1971 (Exh.80) purport to show that the defendants expressed displeasure regarding deduction of certain amounts by the plaintiffs in respect of short delivery. The defendants expressed grouse that immediately they should have been informed about it, so that they could write to the "seller" and such kind of deduction is not agreed to by the traders. Here, it is important to note that the defendants did not ask the plaintiffs to directly communicate to the seller about the deducted amount. Secondly, recitals of the letter dated 20-9-1972 (Exh.85) purport to show that the plaintiffs deputed their employee by name Shri. Desai, to visit Kanpur, in order to familiarize himself with the organisation of purchase of groundnut expeller cakes from Uttar Pradesh center at end of the defendants. This letter describes the defendants as organisation of purchase of groundnut cakes. That was never refuted by the defendants. In the letter dated 5th October, 1972 (Exh.89) the plaintiffs again reiterated that visit of Shri. Desai to the office of the defendants was in connection with the purchase of groundnut oil cakes through the defendants. Thereafter, purchase procedure was modified by the plaintiffs. This letter purports to show that the defendants were directed to draw Hundis for 95% value of the goods. The defendants were further informed that analysis of the goods would be expedited and copies of the analysis report in triplicate would be sent, one for use of the defendants, another for the use of the miller i.e. seller. Again, the defendants were termed as “purchase organisation” of the plaintiffs. This indicates intention of the parties. They intended that the defendants shall work as purchasing organisation, independently, and not merely as agent. If the defendants were not involved in the transaction and had no obligation regarding performance of the contracts then there was no necessity for the plaintiffs to send copies of the analysis report to them. 15. It has come on the record that the transactions were of “ready delivery” because the delivery was required to be affected within a reasonable period and as far as possible within 10 days. The reason is not far to seek. The groundnut oil cakes contain percentage of groundnut oil, albuminoid and sand. 15. It has come on the record that the transactions were of “ready delivery” because the delivery was required to be affected within a reasonable period and as far as possible within 10 days. The reason is not far to seek. The groundnut oil cakes contain percentage of groundnut oil, albuminoid and sand. The usual standard is that the albuminoid and oil contents together shall not be less than 52% and the sand contents shall not more than 2.5%. The standard of groundnut oil cakes would diminish after 10/15 days and the percentage of albuminoid and oil is likely to be less than required. It is for such reason that the delivery of goods is required to be effected with a reasonable time so as to maintain the standard of the goods and avoid any decay. The term "usual conditions" as mentioned in the telegrams sent by the plaintiffs is in the context of the standard and the time of delivery. 16. The exchange of correspondence between the parties (Exhs.92 to 95) purport to show that the sellers of the groundnut oil cakes were demanding amounts from the defendants. They were not asking for payments by the plaintiffs. The defendants informed the plaintiff that the analysis report was received late and, therefore, the plaintiff should explain as to what reply shall be given to the sellers which they (defendants) would give. Thereupon, the plaintiffs sent the detailed reply and informed that the defendants may give necessary detailed to the seller from Mainpuri. It appears that the defendants had purchased the goods from one Chatrubhus Hemraj of Mainpuri. There was a dispute raised by the said firm – M/s. Chatrubhus Hemraj - in regard to the report of analysis. This exchange of letters give ample clue to infer that the defendants were under obligation to make payment to the sellers and, therefore, had requested the plaintiffs to offer a reasonable explanation in this behalf. 17. A bare perusal of the statement showing the details of the goods delivered (Exhs.234 and 235) would show that name of the defendant No.1 is shown as seller in Column No.2 of the relevant record maintained by the plaintiffs. 17. A bare perusal of the statement showing the details of the goods delivered (Exhs.234 and 235) would show that name of the defendant No.1 is shown as seller in Column No.2 of the relevant record maintained by the plaintiffs. This entry in column No.2 of the said statements would furnish further support to the case of plaintiffs that position of the defendants was that of a pacca Adatia and hence, the word “seller” was used in the relevant column. 18. The oral evidence of the plaintiffs comprise of four testimonies. P.W. Subhashchandra was working as Assistant Purchase Manager at the relevant time and Jethalal Shah was Purchase Manager. It appears that the correspondence was mostly between Jethalal Shah for the plaintiffs and Chandrabhan Pan de for the defendants. It appears from the version of Subhashchandra, that Jethalal Shah retired from service in 1986. The evidence of P.W. Subhashchandra, purports to show that there were various transactions entered into between the parties. The plaintiffs telegraphic address was "OTTOROSE" and that of the defendants was “SEKHSARIA.” He gave details of the undelivered goods. According to him, out of 34 wagons ordered under the contracts, only 17 wagons were supplied. He explained that there was short, delivery of 17 wagons. The version of P.W. Subhashchandra reveals that the entries in the Sauda book were made as and when the transactions had taken place. He corroborated the bills (Exhs.137 to 188). His version purports to show that the goods were being sent by railway wagons to reach the same at Amalner within reasonable period. The period of delivery was extended from time to time from one month to five months. His, version purports to show that after the last stipulated period of delivery, the awaited up to about six months and asked the defendants to send the remaining goods. His version purports to show that on 3-2-1973 groundnut oil cakes were agreed to be purchased at the rate of 52.50 per Bengali mound equal to Rs. l,400/- per metric ton. He deposed that on 4-8-1973 the rate of groundnut oil cakes had increased to the tune of Rs. l,600/- per metric ton and on 10-8-1973 there was further increase to Rs. l,650/- per M.T. The details of each transaction were given by P.W. Subhashchandra on the basis of the record of the plaintiffs. 19. A very lengthy cross-examination was directed against P.W. Subhashchandra. l,600/- per metric ton and on 10-8-1973 there was further increase to Rs. l,650/- per M.T. The details of each transaction were given by P.W. Subhashchandra on the basis of the record of the plaintiffs. 19. A very lengthy cross-examination was directed against P.W. Subhashchandra. An attempt was made to show that he was not conversant with the transactions in question. He admitted that certain entries indicated in Book No.1 are not shown in the extract of the Register. It is argued that the relevant books are not maintained in regular course of business of the plaintiff. In spite of a very searching and elaborate cross-examination, nothing of much significance could come out. It is difficult to discard his version. The version of P.W. Subhashchandra reveals that he is unable to explain as to why the expression “organisation of purchases” is used in the letter Exh.85. It appears that the said letter is written by Mr. Azim H. Premji, who was then Director of the Plaintiffs. Obviously, he would better know why such expression is used in that letter (Exh.85). In any case, the said letter does not refer to the defendants as agents. 20. It is admitted by P.W. Subhashchandra that the commissions were paid to the defendants for each and every bill which was charged by him. In some of the bills sent by the defendants, there is reference to payment of commission i.e. “Adat.” It appears, however, that the defendants were charged such commission by the sellers from whom the goods were purchased by them. In their turn the defendants charged such commission in the bills, which the plaintiffs were required to pay. The plaintiffs were unconcerned directly with the sellers of the goods in respect of the purchase transactions. All the purchases were being made by the defendants for and on behalf of the plaintiffs and thereafter the defendants used to send the goods to the plaintiffs. 21. The defendants examined D.W. Chandrakishor Awasthi, in order to prove that the defendant No.1 firm used to get 0.75% commission on purchases. His version purports to show that the defendant No.1 was working only as purchasing agent. He explained that though, the sellers were ready to deliver the goods to the plaintiffs yet, due to non-availability of wagons, the goods were not dispatched. His version purports to show that the defendant No.1 was working only as purchasing agent. He explained that though, the sellers were ready to deliver the goods to the plaintiffs yet, due to non-availability of wagons, the goods were not dispatched. He states that the plaintiffs were requested to accept the delivery at Jalgaon but the said proposal was not approved. According to him, the correspondence was going on for 4/5 months in respect of such proposal and therefore, quality of the goods had deteriorated. Hence, the plaintiffs did not take the delivery. Thereafter, the defendants informed the seller that the plaintiffs did not want to take the delivery. There is no documentary evidence in support of such correspondence between the defendants and the sellers (millers). 22. The defendants did not produce their account books in order to show that they had received amounts only as commission agents of the plaintiffs. Had they produced the account books, the nature of transactions would have been made more clear. The plaintiffs filed an application (Exh.25) on 8-6-1977 seeking discovery of the documents referred to in Schedule “A” annexed to the same. The trial Court ordered the defendants to give inspection of accounts and documents. One of the item of the demand at serial No.4 was regarding correspondence between the defendants and the sellers of 34 wagons. The defendants did not produce any record in this behalf. The defendants did not produce any record in respect of their contracts with the sellers in respect of 13 contracts for the delivery of 34 wagons groundnut oil cakes. It is pertinent to note that the defendants stated in their application dated 23-4-1986 (Exh.383) that the witnesses were not in the service of the defendants and hence, could not be examined. Though several opportunities were given yet, the defendants had not produced the evidence and, therefore, the Court directed the defendants to submit a specific purshis as to whether they want to lead any oral evidence or not. The defendants gave a purshis on the same day. This purshis Exh.385 reveals that the defendants desired to examine two witnesses, namely Chandrabhan Pande and Chandrakishor Awasthi, who were no longer in the ployment and had not been within their control. It was also stated that they had expressed their inability to appear as witnesses and that they were very old people. This purshis Exh.385 reveals that the defendants desired to examine two witnesses, namely Chandrabhan Pande and Chandrakishor Awasthi, who were no longer in the ployment and had not been within their control. It was also stated that they had expressed their inability to appear as witnesses and that they were very old people. D.W. Chandrabhan was examined on commission and then he was aged about 56 years. Neither he was very old nor he was out of the defendants service. For, he stated that he was in service within the firm of the defendants at the relevant time. The defendants gave another purshis (Exh.386) indicating that the witnesses had already retired since long. The conduct of the defendants would show that incorrect statements were made in this behalf. The oral evidence of D.W. Chandrabhan is not worth the name. As stated before, he did not produce the account books and the relevant documents such as Saudanand book. It is difficult to reply upon his uncorroborated version and to hold that the defendants were working only as commission agents without any liability regarding performance of the contracts. On a comparative examination of the evidence adduced by the parties and having regard to attending circumstances; it is manifest that the defendants were "Pacca Adatias" qua the plaintiffs. 23. The admitted factual position is that the defendants did not supply 17 wagons of groundnut oil cakes tot he plaintiffs as per the terms of the contracts. They pleaded excuse on the ground that the loading of wagons was closed for certain period. It is argued by learned counsel Mr. Raghuwanshi, that the reasons were beyond control of the defendants and hence, they cannot be made liable. He pointed out from the letter (Exh.69) dated 20-6-1972 that the defendants informed the plaintiffs that railway booking was stopped and, therefore, the delivery was obstructed. The plaintiffs sent letter to the Chief Operating Superintendent, Northern Railway, New Delhi, as per the request of the defendants. The said letter (Exhs.70 and 71) are much relied upon by the learned counsel Mr. Raghuwanshi, in support of his argument that the plaintiffs very well knew that the deliveries could not be made due to the reasons which were beyond control of the defendants. The said letter (Exhs.70 and 71) are much relied upon by the learned counsel Mr. Raghuwanshi, in support of his argument that the plaintiffs very well knew that the deliveries could not be made due to the reasons which were beyond control of the defendants. The letter (Exh.70) dated 26-6-1972 purports to show that the defendants were directed to inform the sellers to approach the Station Masters of dispatching Stations in order to pursue the pending indents for dispatch of the goods. The letter (Exh.71) was not written by the plaintiffs on their own but it was as per request of the defendants and with a view to get the delivery of the goods at the earliest. It appears that the non-availability of the railway wagons was for a short duration and again within a month or so, the railway wagons were made available. That is why out of three wagons, two wagons of groundnut oil cakes were dispatched in respect of Sauda dated 11-8-1972. Moreover, it is not that the short deliveries were only in respect of the agreements pertaining to the months of May to July, 1972. There was short delivery in respect of two wagons out of the agreement dated 22-3-1972, short delivery of two wagons out of the contract dated 25-3-1972, one wagon of contract dated 27-3-1972. Short delivery out of the contract dt.5-4-1972 and short delivery of two wagons out of contract dated 6-4-1972, so on and so forth. It appears that there was increase in the prices of the groundnut oil cakes. The defendants did not therefore comply with the terms of the contract. The contention of the defendants is that the plaintiffs refused to accept the delivery of Jalgaon, appears to be true. Still, however, there was justification to the stand taken by the plaintiffs because the defendants did not express willingness to pay the difference of transportation charges as would be required for the purpose of delivery of goods from Jalgaon to Amalner by road. I mean to say the defendants did not show willingness to pay the difference of transportation charges for transportation through railway wagons and for transportation from Jalgaon to Amalner through goods vehicles. Obviously, the plaintiffs were not ready to share the additional burden of the transportation charges. I mean to say the defendants did not show willingness to pay the difference of transportation charges for transportation through railway wagons and for transportation from Jalgaon to Amalner through goods vehicles. Obviously, the plaintiffs were not ready to share the additional burden of the transportation charges. In these circumstances, it will have to be said that the defendants committed breach of the terms of the contract is as to whether the amount of damages awarded by the trial Court is legal and proper. As far as quanta of damages are concerned, it may be mentioned that the plaintiffs adduced evidence of P.W.2 Bharatdas and P.W.3 Navinchandra, so as to prove the prevailing market rates. P.W. Bharatdas was working as Deputy Secretary of Solvant Extractors Association of India, and P.W. Navinchandra, was clerk in Bombay Oil Seeds and Oil Exchange Ltd., Bombay, at the relevant time. P.W. Bharatdas states that the rates of oil cakes prevailing in Bombay market used to be recorded by the office of Solvant Extractors Association of India. He deposed that in February, 1973 rate of groundnut oil cakes were fixed at Rs. 1,475/- per M.T. His version reveals that on 10-8-1973 rate of groundnut oil cakes was Rs. 1,670/- per M.T. He relied upon entries recorded in the concerned register of the said association. He admits that there are different qualities of groundnut oil cakes and the rates vary according to the quality. He further admits that quality of the groundnut oil cakes would depend upon percentage of oil and albuminoid. He admits that the expression "usual condition" means the usual quality prevailing in Bombay market containing 54% of oil and albuminoid and percentage of sand not being more than 2.5%. He admitted that if the groundnut oil cakes are not processed immediately, the quality of the oil deteriorates. Similar is the version of P.W. Navinchandra. His version reveals that the rate of groundnut oil cakes expeller on 10-8-1973 was Rs. 1,665/ - per M.T. 25. The evidence of aforesaid witnesses go to establish the fact that there was rise in the market rates of the groundnut oil cakes during the relevant period. The plaintiffs have duly proved the relevant prices prevailing in the market at the time of the breach of the contracts. 1,665/ - per M.T. 25. The evidence of aforesaid witnesses go to establish the fact that there was rise in the market rates of the groundnut oil cakes during the relevant period. The plaintiffs have duly proved the relevant prices prevailing in the market at the time of the breach of the contracts. The agreed rates are shown in Column Nos.3 and 4 of Schedule “D” along with the prevailing rate at the time of breach of the contracts. The breach of contract took place in the month of August, 1973 when the defendants failed to send the remaining goods as per the agreed terms. The defendants were under obligation to supply the goods as per the terms of the contracts, notwithstanding hike in the prices. The plaintiffs have proved that the prevailing market rate was around Rs.l.4001per M.T. in the month of April, 1973 and was of Rs.l,650/- per M.T. on 10-8-1973. The difference between the agreed rates and the prevailing market rate as shown in the Column No.6 of Schedule "D" appears to be quite reasonable. 26. The quantum of damages would depend upon the buying price at which the buyer can obtain the equivalent goods of like quality at the time and place where they should have been delivered, If the seller fails to deliver the buyer can obtain identical goods prevailing in the market and can claim the difference in the price. The damages would be the amount by which the market price exceeds the contract price at the time of the breach of the contract. The rise or fall in the market price since the date of the contract is not the criteria. The damages will have to be calculated as per illustration (a) set out u/s.73 of the Contract Act. The Apex Court in “M/s. Murlidhar Chiranjilal Vs. M/s. Harishchandra Dwarkadas and another” (AIR 1962 Supreme Court 366) held that there are two principles on which the damages are calculated in the case of breach of the contract of sale of goods. The damages will have to be calculated as per illustration (a) set out u/s.73 of the Contract Act. The Apex Court in “M/s. Murlidhar Chiranjilal Vs. M/s. Harishchandra Dwarkadas and another” (AIR 1962 Supreme Court 366) held that there are two principles on which the damages are calculated in the case of breach of the contract of sale of goods. It was stated: “The first is that he who has proved a breach of a bargain to supply what he has contracted to get, is to be placed so far as money can do it in as good a situation as if the contract has been performed; but this principle is qualified by a second which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps. These two principles also follow from the law as laid down in Section 73 read with the Explanation thereof.” 27. Mr. Shah, learned Sr. Counsel for the defendants invited my attention to certain observations in “Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd.” [(2003)5 Supreme Court Cases 705]. The Apex Court in the given case held that Section 74 is to be read with Section 73 of the Contract Act and, therefore, in every case of breach of contract, a person aggrieved is not required to prove actual loss or damages suffered by him before he can claim a decree. It is held that the Court is competent to award damages even if no actual damage is proved to have been suffered in consequence of the breach of the contract. He also seeks to rely on “Mohd. Salamatullah and Ors. Vs. Government of Andhra Pradesh” [(1977)3 Supreme Court Cases 590]. It is held by the Apex Court in the given case that generally finding on quantum of damages should not be disturbed by the appellate Court. 28. The net result of the foregoing discussion is that the quantum of damages awarded by the trial Court cannot be regarded as arbitrary or totally unreasonable. It is held by the Apex Court in the given case that generally finding on quantum of damages should not be disturbed by the appellate Court. 28. The net result of the foregoing discussion is that the quantum of damages awarded by the trial Court cannot be regarded as arbitrary or totally unreasonable. The plaintiffs have claimed the amount of damages on the assumption that if the goods would have been purchased as per the prevailing market price at the time of the breach of the contract in August, 1973, then the extra amount incurred by them had to be claimed so as to restore their position as buyer. Needless to say, no interference in the finding of the trial Court regarding quantum of damages is called for. 29. Though issue of jurisdictional error was raised in this appeal yet, there appears no sufficient substratum to infer ouster of jurisdiction of the Civil Court at Amalner. Mr. Raghuwanshi, learned counsel, appearing for the appellants, would point out that the bills sent by the defendants bear printed term that all the disputes shall be subject to the jurisdiction of Civil Court at Lucknow. He further submitted that the contracts were settled telephonically and therefore, the place of acceptance will have be decisive as held in case of “Bhagwandas Goverdhandas Kedia Vs. M/s. Girdharlal Parshottamdas and Co. and Ors.” (AIR 1966 Supreme Court 543). It is difficult to continence such argument of Mr. Raghuwashi. Mere printing of such matter on the bills issued by the defendants is not enough to reach conclusion that the parties agreed to subject themselves to the jurisdiction of the Court at Lucknow. That was one sided communication. There is absolutely nothing on record to show that the plaintiffs agreed to such a term regarding settlement of the disputes subject to jurisdiction of Luck now Court. There is also absolutely no evidence adduced by the defendants to show that the acceptance was communicated at Lucknow. In so far as the telephonic contracts are concerned, it is very essential to prove as to who accepted the terms and where such acceptance was communicated. The parties nationally interface during the telephonic communication and as such the place of acceptance is where the acceptance is received. It is converse to the place of acceptance by post or telegram. The defendants did not adduce any evidence in this behalf. 30. The parties nationally interface during the telephonic communication and as such the place of acceptance is where the acceptance is received. It is converse to the place of acceptance by post or telegram. The defendants did not adduce any evidence in this behalf. 30. It is held in "Pathumma (d/o. Koopilan Uneen) and Ors. Vs. Kuntalan Kutty (s/o. Koopilan Uneen) dead by L.Rs. & Ors.” [(1981)3 Supreme Court Cases 589], that an objection to place of suing may not be entertained by an appellate or revisional Court unless three conditions are satisfied as enumerated in Section 21(1) of the C.P.C. One of the important conditions is that it must be shown that there has been a consequent failure of justice Same view is reiterated by the Apex Court in "R.S.D.V. Finance Co. Pvt. Ltd. Vs. Shree Vallabh Glass Works Ltd. [(1993)2 Supreme Court Cases 130]. In the present case, the defendants have not been able to prove that there is consequent failure of justice as a result of wrong place of suing. No prejudice was caused to them. The objection as regards jurisdiction of the Civil Court at Amalner, is, therefore, unsustainable. 31. Besides the above reasons, it may be gathered from the record that a substantial part of the cause of action arose within the jurisdiction of the Civil Court at Amalner. First, the goods were to be reached at Amalner. The orders were placed by the plaintiffs from Amalner. The payment was to be made through Bank Hundis at Amalner. All the payments were received by the defendants, in respect of the delivered goods, only at Amalner. The breach of the contract occurred when the plaintiffs did not receive the goods at Amalner in spite of repeated demands. Major part of the cause of action, therefore, arose within the jurisdiction of Amalner Court and hence, there is no jurisdictional error committed by the trial Court. 32. In the result, I hold that the plaintiffs proved that the defendants were pacca Adatias qua them. It is also proved that the defendants committed breach of the contract. It is further proved that the plaintiffs had to purchase the goods at higher rates and would be entitled, therefore, to the difference of the agreed price and the prevailing market price. There is no jurisdictional error committed by the trial Court. The impugned judgment and decree need not be interfered with. It is further proved that the plaintiffs had to purchase the goods at higher rates and would be entitled, therefore, to the difference of the agreed price and the prevailing market price. There is no jurisdictional error committed by the trial Court. The impugned judgment and decree need not be interfered with. The appeal is, therefore, without substance and liable to be dismissed. Hence, the appeal is dismissed with costs. Appeal dismissed.