P L D 1957 (W (PLP)

QADEERUDDIN, J.

This is a First Appeal from the judgment and decree passed by Lari. J., in suit No. 356 of 1951. It was a suit for the recovery of Rs.2,687-8-0 as damages after deducting the amount of Rs. 2,000 which was deposited with the plaintiffs/appellants by the defendants/ respondents. The parties had entered into written contract dated the 26th of February 1951. The important parts of the contract are as follows :- " Please book and despatch at your earliest convenience by goods train the undermentioned goods subject to the terms and conditions specified overleaf and send documents through V. P. P." In the column which bears the heading " Description" the following terms appear: " ..Mill delivers. Bags to be supplied by the purchasers, April. Seller option. Seller option after 15-4 1951." It is admitted by the parties that the price of the contracted goods fell before the performance of the contract, and that the goods have not been delivered to the buyers. The main contentions which have been raised on behalf of the appellants by their learned counsel Mr. A. Aziz are that (1) the case set up during the evidence was at variance with the case which is found in the pleadings ; (2) the defendants/respondents should be taken under Order VIII, rule 5, Civil P. C., to have admitted that they did not apply for the delivery of the goods and that issue No. 1 (b) was framed on this basis for the investigation of the consequence only of their failure to apply ; (3) the defendants/ respondents had to send Bardana according to the terms of the contract to the plaintiffs/ appellants but they did not do so and therefore they committed a breach of the contract ; (4) the defendants/respondents were under a statutory obligation under section 35 of the Pakistan Sale of Goods Act to apply for delivery of goods and since they failed to make such an application, the breach of the contract was on their part ; (5) even if it is held that the defendants/respondents applied for delivery of the goods their application was not proper and adequate ; and (6) the learned trial Court has been erroneously influenced by the non-production of stock books by the plaintiffs/appellants which in the present case was neither material nor necessary. The most important parts of the pleadings are para. 2 of the plaint and para. 2 of the written statement. Mr. Aziz has argued that it was necessary for the respondents to specifically deny each allegation made in para. 2 of the plaint and to the extent to which such denial has not been made it should not be open to the respondents to re-open their defence and to go behind their pleas. These two paras. are important for the consideration of other objections also, therefore it is proper to reproduce them here. Para. 2 of the plaint is :- " In April market price of the contract goods suffered a fall and the defendants therefore did not apply for delivery ; but in spite of that, the plaintiffs offered delivery through their own representative and also through the brokers ; but to no avail, the defendants failed to take delivery and thus committed breach of the contract. The plaintiffs even offered delivery by their final letter dated 9th May 1951 ; but the defendants yet failed and hence have committed breach of the contract." Para. 2 of the written statement is :- " That para. 2 of the plaint is not admitted. On the other hand it is submitted that though the price of the goods was ex-mill yet under the contract the plaintiffs were to send the goods to the defendants and to debit the defendants for Bardana (bags) and cartage, etc., by the 30th April 1951. But the plaintiffs failed to supply the goods within time, nor even intimated the defendants of their willingness to deliver the goods within time. The defendants were informed that the goods were not ready for despatch for delivery by the 30th April 1951-the last date of delivery. The defendants did not receive from the plaintiff any letter dated 9th May 1951, nor any other letter except one dated 8th May 1951, to which a prompt reply was sent to, the plaintiffs. It is categorically denied that the defendants committed any breach of contract, but the plaintiffs did, by not supplying the goods by 30th April 1951, after which date the defendants were not bound to take delivery of goods and hence the contract stood cancelled just after 30th April 1951." It was argued on behalf of the appellants that the respondents did not apply for delivery of the goods and, though they did not admit para. 2 of the plaint as a whole, they have not in cleat terms denied the allegation of their failure to make such an application. It is true that Order VIII, Rule 5, Civil P. C., requires that every allegation of fact made in the plaint should be clearly dealt with by the defendant but the only form of denying a fact is not that it should be said specifically that it is denied, because a statement from which it is necessarily implied that a fact is not admitted is also an effective denial. It is not, therefore, sufficient to argue that the respondents have not denied the allegation of their failure to apply, but it is also necessary to show that such a denial is not necessarily implied in the-contents of para. 2 of the written statement. The respondents have stated that they were informed that " the goods were not ready for despatch for delivery by the 30th April 1951--the last date of the delivery". The learned trial Court has concluded from this that the respondents clearly implied that they wanted to controvert the allegation of their failure to apply. I find that the appellants understood from the pleadings that the allegation of the failure to offer had to be proved by them. The first witness of the appellants/ plaintiffs was S. B. Qadir, and he was made to state in examination-in-chief. "They did send a messenger to take delivery". Sending a man for taking delivery is a form of application. There was no needy to ask any question regarding the application of the res pondents/defendants for taking delivery if it was understood that the failure to apply had to be taken for granted. Moreover, issue No. 3 is a general issue in addition to issue No. 1 (b). The two issues are as follows ;- 1 (b) Did the defendants commit a breach of contract by not applying for delivery of goods.

3. Did the defendants commit a breach of contract." The counsel for the respondents had pointed out that issue No. 1 (b) was framed in order only to emphasise the legal effect of the failure to apply for delivery of the goods, but the intention was not to exclude the enquiry regarding the fact of making of the application, and therefore, another all embracing issue, namely, issue No. 3 was framed. The general issue included within its scope the consideration as to whether the respondents/defendants had made an application to the appellants /plaintiffs or not. The learned trial Judge has given further reasons in support of his conclusion that the factum of the application was a subject matter of the trial. His observations are as follows :- "When oral evidence was gone into, the defendants cross-examined plaintiff's witnesses to establish that the defendants had applied for delivery of goods and no objection was raised on behalf of the plaintiffs. Again when the defendant's witnesses appeared in witness box they 'definitely stated to the effect that plaintiffs were approached for delivering the goods to the defendants and. this again without any objection on the part of the' plaintiffs. As a result of the perusal of para. 2 of the written statement and taking into consideration the consent issues put in the case and conduct of the plaintiffs at the time of recording of evidence, I am of opinion that they question whether defendants applied for delivery of goods or not was ever at issue between the parties and this Court cannot proceed on the basis of assumption that the defendants did not apply for delivery of the goods." I fully agree with these observations and add that the' appellants/plaintiffs were not misled by the contents of para. 2 of the written statement and the issues ; nor were they in any manner taken by surprise in the trial of the case. Mr. A. Aziz has questioned the correctness of the following observation of the learned trial judge :- " To my mind the question of applying for delivery would not arise in the case of seller's option unless the seller intimates to the buyer that the goods are ready for delivery." He has relied on the case of Nune Sivayya and another v. Maddu Ranganayakulu and another (A I R (1935) P C 67), and contended that the option only postponed the time for making an application for delivery of the goods but did not relieve the buyer from the obligation to apply for delivery. In the present case the opinion of the seller to deliver the goods extended upto the last point of time within which the contract could be performed. A question therefore arises as to whether or not it was possible for the buyer in terms of the contract to apply for delivery when the whole of the latter period of the time of the contract was controlled by the option of the sellers. The Privy Council's judgment does not seem to cover such a case as this. According to it, even if there is an obligation on the seller to inform the buyer when the goods are in a deliverable state, the buyer is to apply on the lapse of reasonable time. There is a difference between the obligation of the sellers to inform the buyer when the goods are in a deliverable state and the option of the sellers of such a nature as to covet the entire latter period of time. The option of the sellers in this case means that the sellers had the right to dictate, of course, reasonably, the time or' date of delivery. The obligation of the buyer under section 35 of the Sale of Goods Act means that he is to apply for delivery with necessary arrangements to take delivery. If he only says : give me delivery ; and be is not ready with necessary arrangements to take delivery, then the mere word of his request is a farce and not an application because pit is not an effective application. An application as argued by Mr. A. Aziz, on the basis of the case of Mohanlal anti another v. Gyaniram Agarwal (A I R 1935 Nag. 111), must be an effective application. An application to be genuinely effective should be effective at the time at which the contract is to be performed and not before or after it.' If these propositions are applied to the facts of the present case, the situation is that. if the buyers had applied before the period of the option then the sellers could contend that the time of their option, of which they could not be deprived, had not yet arrived and therefore the application could not be an effective one. The same would have been true if they, applied during the period of the option. Mr. A. Aziz has argued that the buyers ought to have applied on the last day of the period of contract. This argument has been advanced by him with a view to take a position consistent with the Privy Council's observations found in Tune Sivayya's case and in the case of dagannath Sagarmal v. J. J. Aaron & Co. (A I R 1940 Rang. 284). According to the Privy Council, when there is an obligation on the seller to inform the buyer that the goods are in a deliverable state, the obligation on the buyer to apply for delivery may be postponed for a reasonable time. According to the Rangoon High Court, when the seller has an option which covers the time of the performance of the contract upto the last moment, and the seller does not exercise his option upto the last day, then the buyer must be ready to take delivery on the last day. The relevant observations on page 285 are as follows :- " It has been urged on behalf of the appellant that as delivery of the shares was under the contract to be at the seller's option there must be implied an additional term to the contract that the seller shall give to the buyer sufficient notice of his intention to make delivery and a reasonable time in which to arrange for funds with which to pay for the shares. With this proposition I am in entire agreement in relation to a delivery of the shares made during the currency of the option. But it has been further argued that when the appellant did not, at some reasonable time prior to the last day for delivery, i.e., 31st January, receive notice of the respondent's intention to deliver the shares on 31st January, he was entitled to assume that the respondents did not intend to carry out his part of the contract and therefore it was not incumbent on him to make any preparation for payment for the shares. With this further proposition I am unable to agree. When the seller had failed to exercise his option to deliver the shares on or before 30th January, the contract plainly became a contract to sell and deliver the shares on 31st January and the appellant had to be ready and willing to take delivery of the shares and pay for them on that date. No notice to the buyer of intention to delivery on 30th January was necessary." It may be mentioned that in Rangoon case the question of application by the buyer was not discussed. The objection against the buyer was that he was financially not able to perform the contract and it was held, after the examination of his financial position, that he ought to have been ready at least on the last day with financial arrangements to pay for the contracted goods. The relevant observations on this question, on page 286, are as follows :- " In my opinion, it has been proved that the appellant was in a state of actual financial embarrassment on 31st January, and could not have paid for the shares bought if the respondent had delivered them to him. The appellant was not ready and willing to carry out his part of the contract, and therefore the respondent was absolved from his liability under the contract." The approach to the problem was, therefore, not 'as the question raised in the present case requires. I am not able to see, for the purposes of the present case, as to on what principal the application, by the buyers under section 35 of the Sale of. Gods Act can be deemed to be postponed upto the last and not inclusive of the last day of the priod of contract. The demarcation would be entirely arbitrary. The Privy Council did lay down in Nune Sivayya's case that the postponement of the obligation for making an application under section 93 of the Contract Act or section 35 of the Sale of Goods Act could be for a reasonable time, but it was not a case of the sellers option. There is nothing in it against excluding the entire period of the seller's option. It was assumed in that case, on the suggestion of the High Court, that the seller was 'under an obligation to give notice to the buyer when the goods were in a deliverable state. This presumably meant notice within a reasonable time and therefore the obligation of the buyer to apply was deemed to be postponed for a reasonable time. In the present case the sellers have an option from the 15th of April onwards until the last moment of the period of the contract. In these circumstances the obligation of the buyer should be taken to be postponed upto the last moment. If the seller did not exercise his option at all and allowed the entire period of the contract to elapse, then the responsibility was his and he should be made responsible for it. In my view the option enjoyed by the sellers in the present case, is an 'express contract' which excludes the application of the main provision of section 35 of the Sale of Goods Act. The Privy Council held in Nune Sivayya's case that special stipulation" mentioned in section 93 of the Contract Act, which is equal to the expression "express contract" in section 35 of the Sale of Goods Act, indicated in "express stipulation as to delivery" and that such stipula tion could relieve the buyer of the obligation , to apply. In my view, in the present case, the opinion of the sellers was to name the date of delivery. It was therefore an express stipulation contemplated by section 35 of the Sale of Goods Act. No ruling has come to my notice which is precisely applicable to a question as has been raised in the present case. I have therefore referred to the treaties on Sales by the famous American Author Williston. His statement of the law regarding the performance of contract and the obligation for giving notice of a party which has an option ire a contract of sale is: " The general requirement, to which allusion has already. been made that where delivery and acceptance are concurrent conditions it is essential that either party, in order to obtain a right of action against the other, shall make demand and accompany his demand with an offer to perform, is an illustration of the same principle. For since neither party is bound to perform before the other, in the nature of the case notice by one party to the other of his readiness to perform is essential. And in any case where the obligation to perform by either party depends upon some option to be exercised by the other, notice must be given by the latter of his intent to exercise the option." (Williston on Sales Vol. II, p. 716). Turning to the facts, it is to be noted that Kodumal who appeared as a witness of the sellers and who was the broker in the transaction has stated in his deposition as follows: " I went to the defendants' firm some time about 25th April 1951. I told him that the plaintiff telephoned to me about the defendants taking delivery repeatedly and I asked the defendant either to take delivery or to settle the matter. The defendant replied that they would not settle but would take delivery. The defendants further asked me, not to meddle in the matter and leave the parties to deal with the matter." This statement, which should be believed and the truth of which has not been questioned before us, shows that the buyers had sent word through the broker to take delivery of the goods. Mr. A. Aziz has therefore contended that this was not an adequate application for delivery of goods, because the buyers ought to have sent somebody to take delivery of the goods and sent along with it the price of the goods as well as Bardana. This argument loses its force in view of my conclusion that the buyers were relieved of the obligation to apply for delivery, but it is connected with the question as to whether the sellers committed a breach of the contract or not. The learned trial judge has come to the conclusion that the buyers were not bound to send Bardana and that the sellers were not ready upto the last moment to deliver the goods. Mr. A. Aziz gave up his contention that it was necessary for the buyers to send Bardana but argued that the conclusion of the learned trial Judge that the plaintiffs/ appellants were not ready to supply the goods is not correct and has contended that the learned trial Judge was influenced by the non-production of stock books in arriving at this conclusion. He has contended that it was not necessary for the sellers to prove that they had ready goods in their possession. In support of this proposition he has relied on the case of Firm Kanwar Bhan-Sukha Nand v. Firm Ganpat Rai-Ram Jivan (A I R 1926 Lah. 316), and has invited attention to the follow ing observations:-- " It is quite clear from this that in the pleadings of the plaintiffs, as contained in the plaint, an averment of the performance of the conditions precedent, that is to say, readiness and willingness of the plaintiffs to perform, their part of the contract, must be implied and it was for the defendants if they contested that fact to raise the matter expressly in their pleadings. It would then have been necessary for the plaintiffs to prove affirmatively that they were ready and willing to perform their part of the contract. The expression "readiness and willingness" as used in section 51 of the Contract Act has been the subject of discussion in a large number of rulings. We will, however, mention only two of them, here, I L R 1 Cal. 264 and 1 L R 47 Cal.

458. It appears from these that it is not necessary for the plaintiff to prove that on the due date he had the goods actually in his possession. It is quite sufficient if he is able to prove that he had control of the requisite goods or that he had the capacity to deliver them to the purchaser when called upon to do so, in other words, that he was in a position to fulfil his part of the contract on the due date an a demand being made by the purchaser." The plaint does not contain an express averment that the plaintiffs/appellants were ready and willing to perform their part of the contract. All that they stated was that they offered delivery through their own representative and also through the brokers. If an averment of readiness and willing ness is to be implied from these allegations, then it is to be noted that the learned trial Judge has not believed them to be true and has gone to the extent of holding that the two letters (Exh. 7 and Exh. 8) alleged to have been sent to the defendants/respondents asking them to take delivery are 'faked' ones. It appears from the statement of Kodumal that while he informed the defendants/respondents that the plaintiffs /appellants wanted them to take delivery he also suggested to them to settle the matter. They refused to settle it and the appellants/ plaintiffs were apparently informed of this stand of the respondents/defendants. If the appellants/plaintiffs were in a position to deliver the goods they would have, in exercise of their option, fixed a reasonable time or date for delivery. Mr. A. Aziz has contended that the price had fallen and therefore there could be no difficulty for the sellers in buying the goods locally and supplying them. He has contended that if the contract was performed the purchasers would have suffered a loss because the contract price was higher than the prevailing market price and therefore the circumstances should be so interpreted as to fit into this aspect of the matter-he who is likely to suffer from the performance of the contract should be presumed to have tried to wriggle out of it. There is no doubt that this contention has force ordinarily but in this case it is surprisingly true that when the broker suggested to the buyers to settle the matter the buyers insisted on taking delivery and rebuffed him by telling him not to meddle in the matter'. Why they were insisting on taking delivery under these circumstances is a matter for speculation. May be that they were certain for some reason or the other that the sellers would not be able to supply the goods, or that if the goods were supplied they would not suffer loss on account of it by reason for instance, of forward commitment of sale to others. It is not for the Court to speculate on the facts and circumstances which have not been explained to it and the details of which are not on the record. As the record stands it cannot be doubted that the reply of the purchasers to the messenger of the sellers was that they wanted to make the goods. It is not possible to act on speculations in disregard of proved facts. The result is that the appeal fails and is dismissed with costs. CONSTANTINE, J.

I agree. A.H. Appeal dismissed.