Dismissed

Union of India v. Sita Ram Jaiswal

Supreme Court28 Oct 19761976 INSC 266 · [1977] 1 S.C.R. 9791976 INSC 266

Case brief

AI extract

What is this about?

Supreme Court appeal over a claim for the price of goods wrongfully rejected after supply, invoking section 70 of the Contract Act. The Court set out the three pleading ingredients required for a section 70 claim and ruled that restoration means intimation to take back goods, not actual delivery. The appeal was dismissed, upholding the High Court decree for Rs. 69,069-1-0.

What did the court decide?

Appeal dismissed; High Court decree of Rs. 69,069-1-0 for the respondent upheld, parties to bear own costs in this appeal.

Union of India versus Sita Ram Jaiswal — Contract and Commercial Disputes | Supreme Court (1977)

979

UNION OF INDIA

SITA RAM JAISWAL

October 28, 1976

[A. N. RAY, c. J., M. H. BEG AND P. N. SHINGHAL, JJ.]

¶8

Pleadings under-section 70 of the Contract Act (Act 9) 1872,--lngredients 111ecessary to be pleaded.

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P1"'ctice-No11-s11iting for want of uroper pleadings at the appellate swge by the Suprcn1e Court when parties went to trial and issues were raised and the .litigation went through the course of trial and appeal is not desirable.

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CiviltProcedure Code (Act 5 of 1908) Order Vf r/w Order XIV, rnle 1(5) -Courts should not allow parties to go to trial i11 rhe absence of proper plead.ings.

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Words and phrases-"Restoration .. in Section 70 of the Contract Act, mean.ing of.

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In a suit for the recovery of price of "Mac Tntyre Sleeves, "supplied to the .appellant, but alleged fo have been wrongfully rejected a[t.;r a considerable time, ·the respondent/plaintiff sought- to make the appellant/defendnnt lial'k to com·pensate by reasons of provisions containing in Section 70 of the Imlian Con·tract Act. The trial Court found that the goods were accepted and it dismissed the suit on the reasoning that the appellant offered to restore the goods. But •On appeal, the Division Bench decreed the suit, not on the rrinciples of Section 10 of the Contract Act, but treating the case of the respondent to be "a claim for damages for wrongful rejection and for non-acceptance of goods on the ·footing of uninforceable contract for sale of goods".

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Dismissing the appeal by certificate the, Court,

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HELD : ( 1) The three ingredients to support the cause of action under· section 70 of the Indian Contract Act are : First, the goods are to be delivered ·1awfu!ly or anything has to be done for another person lawfully. Second, the thing done orj the· goods delivered is so done or delivered "not intending to do ·so gratuitously". Third, the person to whom the goods are delivered "enjuys ·the benefit thereof". It is only when the three ingredients are pleaded in the ·plaint that a cause of action is constituted under section 70 of the 1 nclia Contract Act. If any plaintiff pleads three ingredients and proves the three features ·the defendant is then bound to[ make compensation in respect of or ta restore ·the things so done or delivered. [980 G-H, 981 A] (2) Courts should not allow the Jlarties to gel to trial in the absence of proper pleadings. In the instant case, the Court should not have allowed the res·pondem to go to trial with a claim under-section 70 of the Indian Contract Act. [981 B-C] . ·,

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(3) When parties went ·, to trial and issues were raised on claims and the G 'litigation also w~nt through the course of trial and appeal, non-suiting for want ·of proper pleadmgs at the appellate stage, by the Supreme Court is not desirable. [981 C]

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( 4) Restoration under-section 70 of the l ndian Contrnct Act does not mean Testoration of "goods by actual delivery". Intimation to take back the goods - rejected evinces intention of restoration. [982 B-C]

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1762 of 68. H

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(Appeal from the Judgment and Decree dated 18-5·-1967 of the <Calcutta High Court in Appeal from Original Decree No. 183/56).

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980

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[1977] 1 S.C.R.

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SUPREME COURT REPORTS

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G. L. Sanghi and Girish Chandra, for the Appellant.

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Purushottam Chatterjee and Sukumar Ghose, for the respondent.

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The Judgment of the Court was delivered by

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B RAY, C.J.-This appeal by certificate is from the judgment dated l l April 1968 of the High Court at Calcutta.

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The respondent filed this suit again'st the appellant in the High ~ourt at Calcutta and claimed Rs. 76,691-2-0 with interest or in the alternative Rs. 78,204-8-4. The respondent's case in short is that the respondent delivered to the defendant appellant pursuant to severat orders C from time to time goods described as Mac lntyre Sleeves and other good's. The respondent alleged in the plaint that the appellant "wrongfully purported to reject the Mac lntyre Sleeves" supplied by the respondent. The respondent further alleged that the rejection was unlawful inasmuch as the rejection was after lapse of reasonable time. The respondent claimed the sum mentioned in the plaint as reasonable price of the goods. The alternative case of the respondent is that the plainD tiff respondent wa·s entitled to the sum for supply of Mac lntyre Sleeves because the same were not supplied gratuitously.

¶34

The appellant denied in the written stafument that there was any enforceable contract, and, therefore, the respondent was not entitled to sue for price of the goods delivered. The appellant took the plea in bar of the suit that there was no contract in compliance with section E 175 of th_e Government of India Act, 1935. The appellant pleaded fo the alternative case of the respondent by alleging that the goods were lawfully rejected because the goods were found not to be of the correct description and quality. The appellant further denied that the rejected goods were retained after lapse of reasonable time without intimating the rejection.

¶35

F At the trial the respondent found that the claim for the sum of money as price of goods could not be sus!fuined because of lack of enforceability of contract. The respondent therefore sought to make the appellant liable to compensate the respondent by reason of provisions contained in section 70 of the Indian Contract Act.

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Counsel for the appellant raised the plea at tfle trial that there G was no foundation in the plaint for any case under section 70 of the Indian Contract Act.

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The three ingredients to support the cause of action under section 70 of the Indian Contract Act are these : First, the goods are to be delivered lawfully or anything has to be done for another person lawfully. Second, the thing done or the goods delivered is so done· or delivered "not intending to do so gratuitously". Third, the person H to whom the goods are delivered "enjoys the benefit thereof". It is only when the three ingredients ar~ pleaded in the P.laint that a cause· of action is constituted under section 70 of the Indian Contract Act.

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UNION V. SITA RAM JAISWAL (Ray, C. J.)

981

•, I

If any plaintiff pleads the three ingredients and proves the three features the defendant is then bound to make compensation in respect of or to restore the things so done or delivered.

¶44

The allegation in the plaint in the present case was as follows. "In any event the plaintiff is entitled to the said sum of Rs. 26,248-7-0, and Rs. 50,442-11-0 with interest for the said Mac Intyre Sleeves, Copper Strips and Stay Shackles for the same were not supplied gratuitiously''. The plaint lacked the two other essential feature's to constitute a cause of action under section 70 of the Indian Contract Act. These were that the respondent delivered the goods lawfully to· tM appellant and that the appellant enjoyed the benefits thereof. · The Court should not have allowed ti)~ respondent to go to trial in the pre~nt case with a Claim under section 70 of the Indian Contract Act in the absence of proper pleadings.

In view of the fact that parties went to trial and issues were raised on claims under section 70 of the Indian Contract Act and the litigation went through the course of trial and appeal we do not desire to non-suit the respondent at this stage.

¶49

The trial court held that the goods were not properly rejected. But the trial court also held that the wordings of the rejection memos negtived any case of enjoyment of benefit. The trial court said that the documents show that the goods were not utilised or u'sed by the appellant and the appellant disclaimed interest in the. goods. The trial court also found that the respondent accepted the goods. The findings are inconsistent. The trial court held that the appellant offered to restore the goods to the respondent but the respondent refused to take them back. The trial court dismi'ssed the suit. When the trial court found that the goods were accepted there could be no question of restoraJion. The trial court should have decreed the suit. The Division Bench on appeal held that the goods were accepted by the appellant. The Division Bench held that title to the goods passed and if title passed then the whole context of section 70 of the Indian Contract Act would be irrelevant. The judgment of the Division Bench is confused. The Division Bench treated the case of the respondent to be "a claim for damages for wrongful rejection". Under the Sale of Goods Act when there is any enforceable contract the seller may claim for price of goods sold or damages for non acceptance. The present cas.e .coul not be supported on the footing of any enforceable confnkt g1vmg nse to damages for non-acceptance or wrongful rejection. The reasoning of the Division Bench in allowing the claim is erroneou·s.

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T~e evidence in the ~resent case as found by the trial court is that the signatures of Rodencks and Francis on the challans indicate acceptance of the goods, and, .therefore, the rejection is wrongful. The finding of the trial court that tpere was acceptance of the goods obviously repels any plea of rejection of the goods.

])

F·

1£

The error of t~e ~rial court. was that it found the goods were accepted and yet d1sm1ssed the smt on the reasoning that the appellant

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[1977] 1 S.C.R.

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982

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SUPREME COURT REPORTS

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offered to restore the goods. The error of the Division Bench was in decreasing the suit not _gn the principles of section 70 of the Indian Contract Act but d'n damages for non acceptance of goods on the footing of unenforceable contract for sale of goods.

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In view of the fact that there was acceptance of the goods no question of restoration arises. Counsel for respondent argued that B restoration under section 70 of the Indian Contract Act meant that the defendant would have to restore the goods to the plaintiff by delivering the sam~e to the plaintiff. This contention of the plaintiff respondent is utterly unsound. As long as there is intimation by the defendant to the plaintiff that the plaintiff can take back the gooas the deferldant evinces intention of restoration. In the present case no question of restoration arises because of the acceptance Qf the .goods.

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The respondent in view of the trial court and the Division Bench of the High Court allowing the respondent to go on with the claim under section 70 of the Indian Contract Act became entitled to compensation for .the goods accepted. The High Court found that the respondent had received a sum of Rs. 7,602-0-0 out of the claim of the claim under section 70 of the Indian contract Act and the responD dent has been given a decree for Rs. 69,069-1-0 we order that the parties will pay and bear their own costs in this appeal. We ~pci:ify the period of two months for payment of the aforesaid sums o( money Rs. 76,671-1-0. The High Court gave a decree for the sum of Rs. 69,069-1-0.

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For the foregoing rea·sons there will be a decree for E Rs. 69.069-1-0. ' The High Court awarded half costs of the trial and full costs of the appeal. We do not wish to disturb those two orders for costs. In view of the fact that there was no proper ca>e pleaded to support

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:S.R.

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Appeal dismissed.

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•

Union of India v. Sita Ram Jaiswal

Case brief

What is this about?

What did the court decide?

Union of India v. Sita Ram Jaiswal

Case brief

What is this about?

What did the court decide?

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