# ··?Y ) • JUGGILAL KAMLAPAT v. PRATAPMAL RAMESHWAR

- **Citation:** [1978] 2 S.C.R. 219
- **Court:** Supreme Court of India
- **Decided:** 1977-11-24
- **Bench:** M. H. Beg, A. C. GUPTA iAND P. S. KAILASAM, Jj.J
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/y-juggilal-kamlapat-v-pratapmal-rameshwar-7370
- **Pages:** 30

## Headnote

Sale of Goods Act 1930--Sec. 2(4). 18 and 23.
Meaning of document of title to g?Ods-Tf pucca delivery order passes the
title-If custoni can prevail over law or express contract.
Evidence Act 1872 Sec. 92 whether custoni can be pleaded to vnry a. written
contract.
Civil Procedure Code 1908 Order VIII rule 2 and 3-Whether all grourid!
of defence must be raised-Effect of not raising all defence.
The appellant~plaintiff entered into a contract with respondents to sell diverse
quantities of B. Twill.
By another contract the appellant agreed to sell to the
resPondents certain quantity of Hessian goods.
All contracts '7.·ere in the standard
forms of the Indian Jute Mills Association. All contracts contained the follow~
ing clause for payment :
"Payment to be made in cash in exchange for Delivery Orders on Sellers,
or for Railway Receipts or for Dock's Receipts or for Mate's Receipts
(Which Dock's or Mate's Receipts are to be handed by a Dock or Ship's
Officer to the Seller's representatives."
The appellant tendered to the respond~ts "Pucca Delivery Orders" on dif~
ferent mills. These pucca deliverv orders contained a stipulation thaJ the mills
A
B
c
D
were not bound to recognise any transferee except the original buyer and1 further
E
requires the transferee to give an undettaking to the mills tha1 he will take
delivery of the goods in terms of the cootract ·.between the mills and the original
buyer. The appellant was not the original buyer of these pacca delivery orderS.
The respondents refused to accept the pucca delivery orders tendered by the
appellant or pay for the same.
Tue· appellant, therefore, instituted the present
suit In para 19A of the plaint it was contended that the delivery orders were
\'alid by virtue of trade, custom and usage of the jute trade in Calcutta. 1be
respondents in their written statement contended that the documents described
as puce.'\ delivery orders are not delivery orders at all, and, therefore, the tenders
F
were invalid. The respondents also denied the existence of ttade custom or usage
as alleged.
The learned Trial Judge of the High Court held that the pucca delivery
orders tendered by the appellant to the resPondents were not in conformity with
the contiracts between the parties. 'He also held that the custom wa5 not
proved; that tohe custom alleged! was contrary to sections 18 and 23 of the Sale of
Goods Act, 1930 a.nd also to the terms of the written contracts.
Jn an appeal filed by ;he appellant the Division Bench of the High Comt
confirmed the decision of the Single Judge.
Jn an appeal by certificate Beg. CJ. (concurring with Gupta J.)
HELD :
1. The crux of the whole matter was whether the plaintiff had
carried out what it had undertaken and tendered1 the delivery notes in respect
G
of the contracts. The respondent did not bargain for delivery orders containH
ing reservations or conditions entitling the mills or suppliers to refuse delivery
to the holder of the delivery order, unless the defendants complied with such
other and additional terms or conditions as the suppliers imposed. It is difficult to see how any alleged custom, could modifv the requirement of law as
I
A
B
c
D
E
F
G
220
SUPREME COURT REPORTS
(1978) 2 S.C.R.
to what ':1 document of titl~ is or what a particular contiract is or what a particul~r deh~ery order means. The plea of custom set up by the plaintiff was not
available In the face of express statutory provisions as well as specific terms of
the con•r~ct between the parties. Alleged custom, amounting to ignoring or
contravening the express terms of agreements or the operation of statutory provisions would obviously be invalid. A custom could not be pleaded as an answer
to the provisions of section 92 of the Evidence Act \Vhich bar oral evidence to
contradict, vary add to, or substract from the terms of an agreement. Moreover, it has been found by both the learned Trial Judge as well as the Division
Bench of the High Court that there is no such uniformity of practice or u

## Text

_Characters 0–39,725 of 97,783. This is a partial read: ask again with offset=39725 for what follows._

,
··?Y )
•
JUGGILAL KAMLAPAT
v.
PRATAPMAL RAMESHWAR
November 24, 1977
219
[M. H. BEG, C.J., A. C. GUPTA iAND P. S. KAILASAM, JJ.J .
Sale of Goods Act 1930--Sec. 2(4). 18 and 23.
Meaning of document of title to g?Ods-Tf pucca delivery order passes the
title-If custoni can prevail over law or express contract.
Evidence Act 1872 Sec. 92 whether custoni can be pleaded to vnry a. written
contract.
Civil Procedure Code 1908 Order VIII rule 2 and 3-Whether all grourid!
of defence must be raised-Effect of not raising all defence.
The appellant~plaintiff entered into a contract with respondents to sell diverse
quantities of B. Twill.
By another contract the appellant agreed to sell to the
resPondents certain quantity of Hessian goods.
All contracts '7.·ere in the standard
forms of the Indian Jute Mills Association. All contracts contained the follow~
ing clause for payment :
"Payment to be made in cash in exchange for Delivery Orders on Sellers,
or for Railway Receipts or for Dock's Receipts or for Mate's Receipts
(Which Dock's or Mate's Receipts are to be handed by a Dock or Ship's
Officer to the Seller's representatives."
The appellant tendered to the respond~ts "Pucca Delivery Orders" on dif~
ferent mills. These pucca deliverv orders contained a stipulation thaJ the mills
A
B
c
D
were not bound to recognise any transferee except the original buyer and1 further
E
requires the transferee to give an undettaking to the mills tha1 he will take
delivery of the goods in terms of the cootract ·.between the mills and the original
buyer. The appellant was not the original buyer of these pacca delivery orderS.
The respondents refused to accept the pucca delivery orders tendered by the
appellant or pay for the same.
Tue· appellant, therefore, instituted the present
suit In para 19A of the plaint it was contended that the delivery orders were
\'alid by virtue of trade, custom and usage of the jute trade in Calcutta. 1be
respondents in their written statement contended that the documents described
as puce.'\ delivery orders are not delivery orders at all, and, therefore, the tenders
F
were invalid. The respondents also denied the existence of ttade custom or usage
as alleged.
The learned Trial Judge of the High Court held that the pucca delivery
orders tendered by the appellant to the resPondents were not in conformity with
the contiracts between the parties. 'He also held that the custom wa5 not
proved; that tohe custom alleged! was contrary to sections 18 and 23 of the Sale of
Goods Act, 1930 a.nd also to the terms of the written contracts.
Jn an appeal filed by ;he appellant the Division Bench of the High Comt
confirmed the decision of the Single Judge.
Jn an appeal by certificate Beg. CJ. (concurring with Gupta J.)
HELD :
1. The crux of the whole matter was whether the plaintiff had
carried out what it had undertaken and tendered1 the delivery notes in respect
G
of the contracts. The respondent did not bargain for delivery orders containH
ing reservations or conditions entitling the mills or suppliers to refuse delivery
to the holder of the delivery order, unless the defendants complied with such
other and additional terms or conditions as the suppliers imposed. It is difficult to see how any alleged custom, could modifv the requirement of law as
I
A
B
c
D
E
F
G
220
SUPREME COURT REPORTS
(1978) 2 S.C.R.
to what ':1 document of titl~ is or what a particular contiract is or what a particul~r deh~ery order means. The plea of custom set up by the plaintiff was not
available In the face of express statutory provisions as well as specific terms of
the con•r~ct between the parties. Alleged custom, amounting to ignoring or
contravening the express terms of agreements or the operation of statutory provisions would obviously be invalid. A custom could not be pleaded as an answer
to the provisions of section 92 of the Evidence Act \Vhich bar oral evidence to
contradict, vary add to, or substract from the terms of an agreement. Moreover, it has been found by both the learned Trial Judge as well as the Division
Bench of the High Court that there is no such uniformity of practice or usage
about the forms of either contracts or delivery orders or their implicaitions as
ro annex obligations contained in a particular type of delivery order to transactions in general. The defendants had to enter into direct separate contracts with
the mills before he could demand deliveries.
Such conditional delivery orders
are certainly not documents of title as defined by section 2(4) of the Sale of
Goods Act. f22JC. D-2260, E-G, 227A, B, DJ
Anglo-lndia lute Mills Co. v. Omademu//, 38 Cal. I.L.R. 127, Duni Chand
Rataria v. Bhuwalka Brothers Ltd., [1955] SCR 1071, Jute & Gunny Brokers
Ltd. and Anr. v. The Union of lndia & Anr., [1961] (3) SCR 820 and The Morvi
Mercantile Bank Lld., & Anr. v. Union of lndia, [1965] (3) SCR 254 erferred to ..
2. The defendants cannot be compelled to pay damages for alleged breach
of contract when the delivery order was not what they contracted for.
In view of the above conclusion it is not necessary to deal with the further
question whetiher, the. delivery orders, if they authorised the defendants to
demand delivery unconditionally, would still not CO'llstitute a due performance
of the contract between the parties until the goods had been ascertained. [227H,
228A. Rl
GUPTA J.
A delivery order is a document of ti~le to the goolls according
to section 2(4) of the Sale of Goods Act. A delivery order is an order by
the owner of goods directing the person who holds them on his behalf to
deliver them to the person named in the order. If the pucca delivery orders
were documents of ti~le the defendant should have been able to get delivery
only by lodging them with the' mills concerned but the delivery orders issued
by the mills contain a term that the mills would not be bound to recognise a
transferee. The transferees ha.ve to register their names \Vith the miils as buyers
and the mills insist OIJl an application being made for that purpose. Thus, the
mills insist on a new and separate contract that the holder of a pucca delivery
order accept the obligations of the original buyer, which are not necessarily
identical with the obligations of the buyers under the contracts concerned in
this case. The new contract insists on and includes terms regarding insurance and
godown charges which are not mentioned in the contracts between the parties'.
Thus the pucca delivery orders were not documents of the. title under the Sale of
Goods Act and were not in conformity with what the parties had contracted
for. [230 F. G. 231A. Fl
-
'
2. The delivery orders did not relate to any specific lot of goods. It is well
established that tiitle cannot pass until the goods are oocertained in view of
~-
section 18 of the Sale of Goods Act.
[231F]
Jute and Gunny Brokers Ltd. and Anr. v. Union of Tndia and Ors., [19611
3 SCR 820; followed.
3. The forn:is of the Indian Jute Manufacturers Association are not uniform.
They differ in several particulars. The High Court has found that no such
custom or usage has been proved on evidence. [232C]
Les Affre.!eure Raunis Societe Anonyme v. Leopold Walford (London) Ltd.,
1919 AC 801 (807) referred to.
,.
H
Ang[0 ./ndia Jute Mills Co. v. Omadenuill, ILR 38 Calcutta 127, distinguish·
ed.
Gunny Brokers Ltd. v. Union of India, [1961] 3 SCR 820, referred to.
•
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J
JUGGILAL v. PRATAPMAL
221
Duni Chand Rataria .v. Bhuwalka Brothers Ltd., [1955] 1 S.C.R. 1071, dis-
•tinguished.
Bayyana Bhimayya v. The Government of Andhra Pradesh, [1961] 3 SCR 267
and State of Andhra Pradesh v. Ko/la Sreera1na Murthy, [1961] 1 SCR 184; dts·
tinguished .
A
4. The contention of 'he plaintiff that the defendant not having raised the.
B
plea in their correspondence with the plaintiff that the delivery orders tendered
·were defective, were estopped from justifyilfig their repudiation of the contracts
on that ground is negatived. The plaintiff did not plead the case of estoppel and
·was, therefore, debarred from raising the contention. Even otherwise the law
permits a defendant to justify the repudiation on :w.y ground which exists at
the time of repudiation whether or not the ground was stated in the correspondence.
[233A. 234A-Bl
Nune Sivayya v. Maddu Ranganayakulu, 62 I.A. 89 (98) approved.
KAH.ASAM J. (Dissenting),
c
1. In the original written statement the defendant contended that the bought
. and sold chits a1ad cootracts are invalid and void as hit by the provision of West
Bengal Jute Goods Act, 195(},
Therefore, on the original pleadings the question as to whether the delivery order was according to the contract was not in
D
dispute. Four years after the original plaint was filed the appellan• sought
amendment of the plaint.
By this amendment, the aippellant reiterated that the
tenders made by the appellant of the mills pucca delivery orders were duly
made in terms of the contract between the parties
An Additional Written
Statement was filed by the defendant contending that the mills pucca delivery
orders were not delivery orders at aill and, in any event, the appellant had no
·title to any of them. The definition of document of ~tie to gopds under section
2( 4) is an inclusive definition. A document which is used in the ordinary
course of business as proof of possession would satisfy the definition as also
E
a document which would enable the possessor to receive the goods thereby
represented. The lransfer of title is therefore, not relevant. The document of
title to goods need not be confined to specific goods for it may relate to goods
which are not specified. The property in the goods is not transferred to the
'buyer unless and until the goods are ascerta.ined but the contention that t1nless
'by the document the pr0perty in the goods passes there could be no docume!lt of
title cannot be accepted.
[237B-C. D, 239A, B. E, 243A]
Anglo India lute Mills Co. v. Omademull, I.LR. 38 Cal. 127, referred to.
Duni Chand Ratana v. Bhuwalka Brothers Ltd., [1955] 1 SCR 1071 applied.
.
Bayyana Bhimayya v. The Government of Andlzra Pradesh [1961] (3) SCR
. 267 referred to.
'
Jute and Gunny Brokers Ltd .. and Anr.
v.
[1961] (3) SCR 820, applied.
The Union of India and Ors.,
1
Stat~ of Andh,ra Pradesh v. Kalla Sreerama Murthy, [1963] (I) SCR 184
d
:J11neraorth v. Ku1gslvay Motors Ltd., [19541 2 All E.R. 694 referred to.
an
F
G
.
2. The plea of the appellant th&t the delivery orders toodered in
f
.'~e contracts are proJ?er tenders ~ould have to be accepted since the ~=~:i~n
· f the documents entitles to receive the goods thereby represented. [243-B]
H
Bhimayya V. The Government of Andhra Pradesh, [1961] (3) SCR 267 at
-270 applied,
222
SUPREME COURT REPORTS
[1978) 2 S.C.R"
A
3. The plea of the appellant is that the delivery order is in accord.ance witb1
B
c
the contract and that the respondent knew that the delivery order
was
in
accordance with the contract and that he wanted to avoid the contract without
justification as the prices had fallen. [244A·B[
4. In the original written statement there was no challenge to the validity
of the delivery orders. The parties to the suit are bound by the procedure
prescribed in the Code of Civil Procedure.
Order VIII of the C.P.C. provides
what a '\Vritten statement should contain. Order VIII rule 2 requires that a
defendam1. must raise by his pleading all matters which show the suit not to be
maintainable or that the transaction is either void or voidable in point of law
and all such grounds of defence as, if not raised, would be likely to iake the
opposite party by surprise. Rule 3 requires that it shall not be sufficient for ea
defendant in his written statement to deny generally the grounds alleged by the
plaintiff but the defendant must deal specifically with each allegation of fact of
which he does not admit the truth except damages. The failure to question the
validity of the' delivery order on the ground that it required registration with the
mill or that the possessor was bound to give an undertaking, would be failure
to comply with the requirements of Order VIII. The pleadings of lhe original
side of the High Court must be strictly construed. [245B, G-246A"B]
Badal & ·co. v. West llldia Trading Co., A.LR 1964 S.C. 538 followed.
5. Th~ respondent had ample opportunity to put forward his objections to
the deJive:ry order in the correspcndence that was exchanged between the partiesor in· the written statemen• as originally filed.
On the pleadings itself it appears
D
that the defence is without substance and belated and put forward for the purpose
of escaping the liability. [246"D"E]
6. The defendant not receiving the delivery orders and not raising the plea
specifically is more in accordance with his having been satisfied with the deli·
very orders being according to contract and his refusal to accept the delivery
orders was to avoid the loss due to fall in price. The fact that 3 contracts
relating to 2 deliveries have been accepted shows that the respondent was following the practice prevalent in Calcutta by the Juti: Mills Association. [246F,
E
Gl
7. Taking into account the fact that the appellant as well as the respondent
were engaging themselves in the jute Jrade in Calcutta and were following generally the practice of the jute mills Association and had entered into various
contracts and haiving business relationship, the conclusion. is irresistible that the
respondent! was familiar with the delivery order with the conditions and accepted
it as being in use in the ordinary course of business. It is difficult to accept
the plea that the delivery order was not negotiable or that it was not in terms
F
of the conMact and that it wouldl not ha.ve enabled him to take possession of
the goods. The delivery orders were according to the terms of the contract
and the respondent was aware of them. The question is not one of estoppel
bu• the inference to be· drawn from the conduct of the respondent. The pleadings
as well as the conduct lead one to the conclusion that the delivery orders were
in accordance with the contract which the respondent accepted as mills pucca
delivery mders. [247H"248A"B, GJ
G
H
Jn view of the majority judgmcn• the appeal is dismissed with costs.
CIVH. APPELLATE JURISDICTION : Civil Appeal No. 2166 of 1968.
From the Judgment and Decree dated 26-4-1966 of the Calcutta
High Court in Appea~ No. 263 of 1959.
Y. S. Chitale, Leila Sethi (Mrs.), Praveen Kumar, Mukul Mudgal,.
B. P. Maheswari and Suresh Sethi for the Appellant.
S. K. Gupta, S. M. Jain and B. K. Jain for the Respondent.
Thi> following opinions of the Court were delivered
•
,.
"
•
•
f
"
~-
J
~
JUGGILAL Y. PRATAPMAL (Beg, C.J.)
223
BEG, C.J .-I have gone through the differing judgments of my
A
learned brethren Gupta and Kailasam.
The difference arises, I find,
primarily from divergent interpretations of what was pleaded by the
parties.
What Kailasam J.
considers as having been admitted in
tl1e pleadings, by implication, was assumed by Gupta J.
to be the
matter put in issue by pleadings of the two sides which had to be decided .
After having considered the pleadings of the parties, I am unable
B
to agree, with great respect, with my learned brother Kailasam that
this case can be decided in favour of the plaintiff on the pleadings of
the parties.
It is true that the defendant admits the contract under
which goods were to be delivered to the defendant under delivery notes
to be supplied by the plaintiff for which payments were to be made by
the defendant.
But, that did not mean that the defendant accepted
what the plaintiff alleges to be the contract between the parties with
all its alleged implications.
The crux of the whole matter was whether
the plaintiff had carried out what it had undertaken and tendered
c
ddivery notes in respect of the contracts still left for us to consider so
as to comply with the conditions of the contract really admitted by the
defendant. Jn other words, there is a dispute on what the pa11ies
understood the contract to provide or mean.
While the defendant accepts that there was a contract, he does not accept the plaintiff's version
D
about its dne compliance by the plaintiff and a breach of it by the
defendant. If this had not been so there could be no dispute.
The
whole dispute revolved round the question : Was tender of delivery
orders containing certain additional conditions according to or
at
variance with the contract between the parties ?
The plaintiff realized fully that the difficulty in the way of
an
E
acceptance of its case was caused by the additional conditions sought
to be attached to actual delivery by the delivery orders tendered by
it.
It, therefore, amended the plaint by adding as follows :
"19A. The tenders made by the plaintiff of the Mills
Pucca Delivery Orders as mentioned in paragraphs 9 14 and
18 of the Plaint were duly made in terms of the Cont~acts betF
ween ~e parties.
In any event the Delivery Orders tendered m respect of the Contracts mentioned in the
Plaint
were and are proper tenders by virtue of trade customs and
usage of the Jute Trade in Calcutta.
Particulars of such
customs and/or usages are set out hereunder.
(i) In the Ca!cutta Jute mai:ket there is an usage that
upon t~e ISsue by the. Mills to the buyers of Deliery
G
orders m respect of 1ute goods purchased, the purchas".rs are regarded as the owners of the goods with
the nght to transfer these goods by endorsing the
delivery Orders and that the Delivery Orders are
regarded as documents of title to the Qoods covered
by them.
'
(ii) At no time till actual delivery is given, is there any
H
appropriation of the goods either to the Contracts or
Delivery Orders, but notwithstanding the absence of
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E
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224
SUPREME COURT REPORTS
(1978] 2 S.C.R.
the appropriation, the holders of the Mills Delivery
Orders (known in the market as Pucca
Delivery
Orders) are regarded by the trade as the owners of
the relevant goods.
(iii) That the Pucca Delivery Orders as representing the
goods, pass from hand to hand by endorsement being
received by the successive buyers against cash payment and are used in the ordinary course of business
authorising the holder thereof to receive the goods
which they represent irrespective of the forms in which
the Mills Pucca Delivery Orders are couched.
(iv) That the tender of Mills Delivery Orders on due date
to the buyer, irrespective of the form in which they
may be couched, in exchange for cash was and is a fair
and valid tender under the Standard India Jute Mills
Association Contract Forms, and were and are treated
as such.
19B.
The defendant, was at all material times fully aware
of the aforesaid trade customs and usages and dealt with
the plaintiff on the basis thereof."
The defemlant in his additional written statement set out in extenso
as follows :
"2. With regard to paragraph 19A of the amended Plaint,
the defendant denies that the alleged tenders or any of them
or the alleged delivery orders or any of them were in terms
of the contracts between the parties.
Further, the docnme'lts
described therein as Mills' Pucca Delivery Orders, are not
Delivery Orders at all.
The plaintiff in any event had no
title to any of them.
The documents described as Delivery
Orders on the face of them relate to goods deliverable under
contracts
between third
parties
mentioned
in the
said alleged Delivery Order$. In any event, the goods mentioned in the alleged Delivery Orders are not goods of the
description mentioned in the contracts between the parties
herein.
Further, the defendant called for the tender of inspection orders in terms of the said contracts, bnt the plaintiff
wrongfully and in breach of contract failed and neglected to
tender any inspection order even with the purported tender
of the Documents described as delivery orders or otherw.ise.
The alleged tenders were each and all invalid.
3. With further reference to the said paragraph 19 A, the
·defendant denies that the aMeged tenders of alleged Delivery
Orders or any such alleged tender were or are proper tenders
by virtue of any alle&ed tr';'de custom o~ usage of the jute
trade in Calcutta.
It 1s demed that there is any trade custom
JUGG!LAL v. PRATAPMAL (Beg, C.J.)
225
or usage as alleged.
The correctness of the alleged particulars
of
the
alleged
custom
or usage
is
disputed
and
denied.
4. The allegations contained in sub-paragraph
(i) of
A
paragraph 19A are denied.
The documents described
as
alleged delivery orders in the said paragraph 19A are eot
transferable by endorsement.
.
.
B
5. Save that there is no appropriation of the goods either
to any particnlar contract or to any delivery order, the allegations contained in sub-paragraph (ii) of the said
paragraph 19 A are denied.
6. The allegations contained in sub-paragraph (iii) of the
c
said paragraph 19A are denied.
7. The defendant denies each and every allegation contained in sub-paragraph (iv) of the said paragraph l9A.
8. With regard to paragraph !9B of the said amended
plahit, it is denied that there was or is any trade custom '.)r
usage as alleged or .that the defendant was at any time aware
of any such alleged custom or usage or that the Jefendant
dealt with the plaintiff on the basis of any such alleged custom or usage.
The alleged usage or custom (the existence
of which is denied) is in any event inconsistent with the terms
of the said written contracts between the parties and as such
evidence of such alleged usage or custom is inadmissible."
As a result of the explicit assertions by the plaintiff and the denials
D
E
•
by the defendant, the real dispute between the parties clearly emerged.
It was : Did the particular delivery orders, indorsed on behalf of the
plaintiff in favour of the defendant, amount to valid tenders as contemplated by the contract between the parties ?
Hence, Mr.
Justice
Bachawat of the Calcutta High Court, who dealt with the case ;n its
J
earlier stages, framed the following among other issues :
F
"3.(a) Did the plaintiff tender the delivery orders in respect
of June portion of the goods in terms of the contracts
mentioned in paragraphs 3 of the plaint as alleged in
paragraph 9 of the plaint '?
If so, was the fonder
valid ?
(b) Was there any wrongful failure or neglect by
the
defendant to accept and/ or pay for the same ?
( c) Did the defendant fail and neglect to pay for and take
delivery of the said June portion of the goods ?
•
*
•
•
•
4. (a) Did the defendant fail and neglect to pay for and
take delivery of the Pucca Delivery Orders for May
& June 1952 portions of the goods in respect of the
G
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A
B
c
D
E
F
G
II
SUPREME COURT REPORTS
[1978] 2 S.C.R.
contracts mentioned in paragraph 13 of the plaint as
alleged in paragraph 14 thereof ?
5. (a) Did the plaintiff duly tender the delivery order in
respect of June I 952 portion of the contract mentioned in paragraph 17 of the plaint 7
If so, was the
tender valid ?
(b) Was there any wrongful failure or neglect by the defendant to accept and/or pay for the same ?
( c) Did the defendant fail and neglect to pay for and take
delivery of the said June 1952 portion of the goods?
"
...................................
The Trial Judge at the final stage, Mr. Jnstice A. N. Ray (as he then
was), of the Calcutta High Court, then considered the whole of the
law and evidence on these issues at considerable length and held that
the plaintiff did not tender the delivery orders in accordance
with
the terms of the contract between the parties.
The defendant did
not bargain for delivery orders containing reservations or conditions
entitling the mills or·suppliers to refuse delivery to the holder of the
delivery order unless the defendant complied with such other
and
additional terms or conditions as the suppliers impose.
This,
according to the defendant, was "no delivery order''. It was only an
offer to deliver if certain conditions are fulfilled and new liabilities
undertaken.
The contract between the parties was for delivery without such additional terms and liabilities.
This was the short and
simple question decided upon documentary evidence before the Court.
It is difficult to see how any alleged custom could modify the requirements of law as to what a "document of tit:e" is or what a particular contract is or what a particular delivery order means.
It could
not help a legally defective document to overcome the basic
legal
defect due to its terms.
It could not override the specific terms of
the actual contract between the parties. It could not validato delivery orders containing reservations derogating from the legal requirements of a document of title. The plea of custom set up by the plaintiff,
in desperation, was obviously not available in the face of the express
statutory provisions as well as the specific terms of the contract
between the parties.
An alleged custom, amounting to ignoring
or
contravening the express terms of agreements or the operation of statutory provisions would, obviously, be invalid.
Surely, a custom could
not be pleaded as an answer to the provisions of section 92 of the
Evidence Act which bar oral evidence to contradict, vary, add to
or
subtract from the terms of an agreement, although proviso (5) of section 92 a.Jlows "any usage or custom by which incidents not expressly
montioned in a'ny contract are usually annexed to contracts of that description"
to be proved.
Annexing usage or custom to the express
terms of the contract is very different from demolishing the original
contract by substituting new terms which enable a party to a contract
to get over its obligations under the contract itself.
Moreover, it has
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JUGGILAL V. PRATAPMAL (Beg, C.J.)
227
been found, by the learned trial Judge as well as the Division Bench
A
of the Calcutta High Court, that there is no such uniformity of practice
or usage about the forms of either contracts or delivery orders or their
implications as to annex obligations contained in a particular type of
delivery order to transactions in general according to various forms of
contracts for purchase of jute.
It has been cleariy found by Ray J., and the Division Bench, consisB
ting of Sinlta CJ.
and Sen J., that the contracts now before us (we
are not concerned with other contracts for which decrees may or may
not have been granted) are for "delivery orders" which are documents
of title and not for orders with conditions annexed to them which prevent them from so operating.
On the express terms of these delivery
orders, the suppliers of jute were not bound to recognise the rights
of the holder by mere endorsement of the order. It is only after the c
holder had applied for registration and undertaken payment of storage
r,harges, and acknowledged the lien of the supplying mills on the goods,
for payment of storage and other charges such as insurance of the
goods, that the holder could acquire the right to delivery.
In other
words, he had to enter into direct separate contracts with the
mills
before he could demand deliwries.
Such conditional delivery orders
are certainly not documents of title as defined by section 2(4) of the
D
Sale of Goods Act, which lays down :
" ( 4) "document of title to goods" includes a bill of lading, dock-warrant, warehouse keeper's certificate, wharfingers'
certificate, railway receipt, warrant or order for the delivery
of goods and any other document used in the ordinary course
of business as proof of the possession or control of goods, oc
authorising or purporting to authorise, either by endorsement
or by delivery, the possessor of the document to transfer or
receive goods thereby represented."
We have examined a number of cases cited before us, including :
Anglo-fl!dia Jute Mills Co. v. Omademull, (') Duni Chand Kataria v.
Bhuwalka Brothers Ltd.,( 2 ) lute & Gunny Brokers Ltd. & Anr. v. The
Union of lndia & Anr.,(•) and The Morvi Mercantile Bank Ltd. &
Anr. v .. Union of bulia.(•) We were not referred to any case which
has laid down that a document purporting to be a delivery order hedged round with conditions showing that the supplier of
goods
had
reserved the option to deliver or not to deliver unless further conditions are complied with could possibly be a "document of title" as
contempffited by section 2(4) of the Sale of Goods Act set out above.
It could not authorise or purport to authorise the holder. of the document to transfer the goods mentioned in it until another agreement took
place. The holder might put up an equitable claim if he had actually
paid some money.
Bnt, he could not be compelled to pay dama~es
far an alleged breach of contract when the delivery order was not what
(l) 38 C&I. I.LR. 127.
(2) [1955] SCR 1071.
(3) [1961] l S.C.R. 820.
(4) [1965] 3 SCR 25~.
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SUPREME COURT REPORTS
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he had contracted for.
It is a simple case in which what the defendant contracts for has not been received by him on patent facts pleaded
and established. Therefore with due respect, I disagree with Kailasam
J. and coucur with the view of my learned brother Gupta.
l do not think it is necessary, on the conclusion reached above by
me, to deal with the further question whether the delivery orders,
if
they had authorised the defendant to demand delivery unconditionally,
would still not constitute a due performance of the contract between
the parties until goods had been ascertained and title actually pasied.
If, according to the contract, payment was only to be made when property-in goods had passed, Section 18 of the Sale of Goo<ls Act would
have also constituted a good defence.
But, as I have said, I need
not go into this further question as it is enough, for the purposes of the
case before us, to conclude, as I do, in agreement with the learned
Judges of the Calcutta High Court and my learned brother Gupta,, that
the so-called delivery orders did not fulfil the terms of the contract between the parties.
The result is that this appeal must be dismissed with costs.
GUPTA, J.-This appeal on certificate of fitness granted by
the
Calcutta High Court is at the instance of the plaintiff in a suit
for
recovery of damages for breach of contract.
The appeal turns .m the
question whether certain documents described as 'pucca delivery orders'
are really delivery orders as known in law.
The question arist!ll on the following facts.
The plaintiff and the
defendant are both firms registered under the Indian Partnership Act,
dealing in the sale and purchase of jute goods.
By four different contracts entered into by and between the plaintiff and the defendant, the
latter agreed to buy from the plaintiff diverse quantities cA. B twill deliverable in the mouths of April, May and June, 1952.
By another contract, the defendant agreed to buy from the plaintiff a certain quantity
of hessiau goods, also deliverable in April, May and June, 1952. The
appeal before us concerns only the June quota of B twill and the May
and June instalments of hessiau.
The April and May itutalmen!i of
B twill and the April quota of hessiau do not form the subject-matter
of this appeal.
It is not disputed that all the contracts were in the .t:andard forms
of the Indian Jute Mills Association.
In all these contracts
there
is a clause for payment which is in the following terms :
"Payment to be made in cash in exchange for Delivery
Orders on Sellers, or for Railway .Receipts or for Dock's Receipts or for Mate's Receipts (which Dock'11 or Mate's Receipts are to be handed by a Dock or Ship's officer to the Seller's representatives)!'
In respect of the June quota of B twill and the May and June instalments of hessian, the plaintiff tendered to the defendant 'pucca
delivery orders' on mills like Fort Gloster, Fort William or Auckland
ger.erally described as 'European Mills'.
These pucca delivery orders
which were issued by European Mills passed through several
hands
JUGGILAL v. PRATAPMAL (Gupta, !.)
229
before they came into appellant's possession.
They contain a stipulation that the Mms were not bound to recognise any transferee .except
the original buyer and require the transferees to give an undertaking to
the Mills that they would take delivery of the goods in terms of the
contract between the Mills and the original buyer.
The appellant,
as already stated, was not the original buyer of these pucca delivery
orders.
The respondent having refused to accept the pucca delivery
orders tendered by the appellant or pay for the same, the appellant
instituted the suit out of which the appeaJ arises.
It is alleged in the plaint that the tenders made were in
termG of
the contracts between the parties and that the defendant committed a
breach of the contract by refusing to accept them. In paragraph 19A
of the plaint it is claimed that the tender of such delivery orders
was
valid by virtue of trade custom and usage of the Jute trado in Calcutta.
Particulars of such custom or usage as set out in the plaint are
as
follows :-
"(i) Jn the.Calcutta Jute market there is a usage that upon
the issue by the Mills to the buyers of Delivery orders in respect of jute goods purchased, the purchasers are regarded as
the owners of the goods with the right to transfer these goods
by endorsing the Delivery Orders and that the Delivery Orders
are regarded as document• of title to the goods covered by
them.
(ii) At no time till actual delivery is given, is there any
appropriation of the goods either to the Contracts or Delivery Orders, but notwithstanding the absence of this appropriation, the holders of the Mills Delivery Orders (known in
the market as Pucca Delivery Orders) are regarded by the
trade as the owners of the relevant goodG.
(iii) That the Pucca Delivery Or~ers as representing the
goods, pass from hand to hand by endorsement being received by the successive buyers against cash payment and are
used in the ordinary course of business authorising the holder
thereof to receive the goods which they represent irrespective
of the forms in which the Mills Pucca Delivery OrderG are
couched.
(iv) That the tender of Mills Delivery Orders on due
date to the buyer, irrespective of the form in which they may
be couched, in exchange for cash was and i! a fair and valid
tender under the Standard India Jute Mills A~~ociation Contract Forms, and were and are treated as such."
In the written statement tbe defendant aS8erts that the documen!G described as pucca delivery orders "are not delivery orders at
all" and therefore all the tenders were invalid.
The existence of any
such trade custom or usage as alleged is also deoied.
It is further
stated that the alleged usage or custom would in any event bo incoRsist!Ilt with the terms O!I' tho written contrac~ bolween the parties.
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SUPREME COURT REPORTS
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The learned Judge of the High Court who heard the suit held that
the tenders of pucca delivery orders made by the plaintif[ were not inconformity with the contracts between the parties.
He further found
that on the evidence adduced the custom pleaded was not proved, that
the custom alleged was contrary to sections 18 and 23 of the Safo
of Goods Act, 1930, and also to the terms of the written contracts. The
learned Judges composing the Division Bench that heard the appeal
from his Judgment, by two separate but concurring Judgments affirmed the decision of the single Judge.
It has been mentioned already
that the scope of the appeal before us is not co-extensive with the reliefs claimed in the swt but narrower.
We have not therefore referred to the other issnes in the suit or the other things recorded by
the High Court which are not relevant for the present purpose.
Were the pucca delivery orders tendered by the plaintiff in
confonnity with what the parties contracted for ?
If not, the defendant
committed no breach by refusing to accept them.
These pu,f:ca delivery orders, as already mentioned, had been issued by the mills. The
payment clause in the contracts provides for payment in exchange for
delivery orders on sellers.
Here, the sellers were the plaintiff and
not the mills.
A contention rejected by the High Court and repeated
in this Court h that where the contracts speak of "delivery onlecs on
sellers", the reference is to the original sellers, namely, the mills. In
a contract for sale of goods, the word seller must obviously refer to
the party selting under the contract unloos there is anything in the context suggesting otherwise. There is nothing in the clause requiring
one to read the word sellers to mean the original sellers and not the
sellers under the contracts, and this is one of the reasons why the High
Court held, in our opinion rightly, that the pucca delivery · orders
which were offered were not in compliance with the contracts between
the parties.
More important is the question, did these pucca delivery
erders enable the defendant to obtain delivery of the goods from the
mills in terms of the contracts . ?
A delivery order is a document
of
title according to the definition of "document of title to goods"
in
section 2(4) of the Sa1e of Goods Act, 1930.
A delivery order is an
order by the owner of goods directing the person who holds tl1em
on
his behalf to deliver them to the person named in the order.
If the
pucca delivery orders were documents of title, the defendant
should
have been able to get delivery only by lodging them with the
mills
concerned.
But these delivery orders issued by the mills contain
a
term tlrnt the mills would not be bound to recognise a transferee. It
uppcars from the evidence that transferees have to register their names
with the mills as buyers, and for this purpose the mills insist O(I
an
application being made in the following form (Ext. DDD) :
"Dear Sirs,
In requesting you to register us as the Holders
of the
above Delivery Order{s), we agree that all contract terms
covering it are to be applicable and to have been signed by
us that we accept all obligations of the original Buyers."
JUGGILAL v. PRATA.PMAL (Gupta, 1.)
231
Thus the mills insist on a new and separate contract, with the holA
der of a pucca delivery order accepting the obligations of the original
buyer which are not necessarily
identical with the
obligations of
the buyer under the contracts concerned in this case.
The new contract insisted on includes terms regarding insurance and
godown
charges which are not mentioned in the contracts between the parties.
As an illustration, the High Court has referred to one such delivery
order (Ext. I) issued by the Fort Gloster Jute Mill which
contains
B
these terms :
"(i) That the company shall not be bound to recognise
any transfer thereof.
(ii) That the goods are held covered under the company's Insurance policies against risk of fire while at the Mill
until 1st October, 1952, after which date a charge of eight
annas per bale per month will be levied by the company fur
this purpose until removal.
(iii) That on and after the 1st October, 1952, the company will charge a godown rent of eight annas per bale
per
month for the purpose until removal.
(iv) That the company has a lien on the goods for
the
above charges."
It tlrul; appears that the pucca delivery orders did not, as the High
Court has found, entitle the defendaht to obtain delivery from
the
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The
term 'delivery order' in its natural sense would not include delivery
E
orders of the kind tendered by the plaintiff, and there is nothing
to
suggest that the parties while agreeing ou payment in exchange for
'delivery orders' used the term in any other sense.
It must therefore
be belt! that the pucca delivery orders were not documents of title under
the Sale of Goods Act and were not in conformity with what the parties had contracted for.