w w w . L a w y e r S e r v i c e s . i n



The Cotton Corporation of India Ltd. v/s Bangodaya Cotton Mills Ltd.


Company & Directors' Information:- P A S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111TN2005PTC058104

Company & Directors' Information:- V R A COTTON MILLS PRIVATE LIMITED [Active] CIN = U15311PB1997PTC020061

Company & Directors' Information:- C A V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1987PTC002014

Company & Directors' Information:- V K S M COTTON MILLS LIMITED [Active] CIN = U17111TZ1998PLC008682

Company & Directors' Information:- P K COTTON MILLS PRIVATE LIMITED [Active] CIN = U17111DL2004PTC130281

Company & Directors' Information:- K P G COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1993PTC004509

Company & Directors' Information:- D B V COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1982PTC001145

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- S S COTTON MILLS PRIVATE LIMITED [Active] CIN = U17115PB1997PTC019918

Company & Directors' Information:- BANGODAYA COTTON MILLS LTD [Active] CIN = U17111WB1931PLC007098

Company & Directors' Information:- J R COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TN1996PTC034302

Company & Directors' Information:- D C H COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1997PTC008130

Company & Directors' Information:- L D COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17291MH2014PTC256832

Company & Directors' Information:- A D COTTON MILLS PVT LTD [Active] CIN = U99999MH1970PTC014837

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- V P K COTTON MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ2000PTC009530

    Suit No.1506 of 1980

    Decided On, 01 October 2009

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE S.C. DHARMADHIKARI

    For the Plaintiffs: Shrinivas Deshmukh i/b. Bhaishankar Kanga & Girdharilal, Advocates. For the Defendant: Pankaj Sawant a/w. Murlidharan i/b. Joy Legal Consultants, Advocates.



Judgment Text

Oral Judgment:


This is a Suit by the Cotton Corporation of India to recover from the Defendants a sum of Rs.5,24,702.14 as and by way of damages for breach of a contract.


2. The Plaintiff ? Cotton Corporation of India Limited is a Company incorporated under the provisions of the Indian Companies Act, 1956. It is a Government of India undertaking acting as a Canalising Agent for the import of foreign cotton required by the Trade and Industry in India.


3. The Defendant is a Public Limited Company incorporated and registered under the same Companies Act, having its registered office in the State of West Bengal. It is carrying on business of weaving and spinning textile at their mills.


4. In the plaint it is set out that for the purposes of acting as a Canalising Agent, the Plaintiffs are advised by a Advisory Committee constituted by the Government of India. The Advisory Committee gives advice with regard to the import of cotton after the requisite formalities are completed. The Plaintiffs issued circulars from time to time to trade and industry inviting them to submit indents for the requirement of foreign cotton specifying inter-alia the quantity and quality of the cotton required. The circulars specified the rates and the procedure is that persons working in the trade and industry thereafter submit indent setting out the requirements. On receipt of the indents, the Plaintiffs apply for import licence in order to enable them to import cotton. The further procedure is set out in paragraphs 2 to 4 of the plaint. Thereafter, it is contended that in or about February 1977, the Plaintiffs issued certain circulars and called upon the members of the trade and industry to submit their indents for requirement of global cotton. In pursuance thereof, the Defendants? Authorized Agents, by their letter dated 23rd February 1977, registered their requirements and applied for allotment of interalia, 300 bales of Nicaragua cotton and 200 bales of Gautemala cotton. By a further letter dated 7th March 1977, another authorized Agent of the Defendants registered the demand and applied for allotment of 600 bales of Central South American or Brazilian Cotton. The indents were processed by the Textile Commissioner, who by his letter dated 18th March 1977 intimated the Defendants for allotment of the global cotton of quality and quantity therein. Copy of the letter was endorsed to the Plaintiffs and concerned Authorities.


5. In paragraphs 7 and 8 of the plaint, the Plaintiffs state thus:-


?7. By the said letter of allotment, Exhibit ?C? hereto, the Textile Commissioner allotted to the Defendants cotton, the quality, quantity and value thereof is mentioned hereunder:-


Quality No. of Bales Value in Rs.


1. Gautemala 40 1,28,000


2. Nicaragua 300 9,60,000


3. Brazilian 300 9,60,000


For the purpose of clarification, it was stated in the said letter of allotment that the quantity given therein was approximate and the value stated therein will be the sole criterion. The said letter of allotment also provided that the cotton allotted to the Defendants was for bonafide consumption in their mills and that no sale, loan or other type of transfer was permitted except in accordance with the authorisation of the Textile Commissioner.


8. The Plaintiffs applied for and obtained licences for import of different qualities and quantities of cotton including the cotton allotted to the Defendants as per letter of allotment, Exhibit ?C? hereto. The Plaintiffs also placed orders with their foreign suppliers for the purchase of cotton of the quantity and quality including the cotton allotted to the Defendants as aforesaid. The Plaintiffs arranged for shipment of the said cotton.?


6. The Plaintiffs then allege that they dispatched to the Defendants a contract in their cyclostyled standard form in respect of the aforementioned quantity and quality of cotton allotted to the Defendants as per the letter of allotment. The number of the Contract is G/406 dated 17th March 1977. It is the case of the Plaintiffs that the Defendants received and retained the said Contract. The Plaintiffs further state that by reason of the letter of allotment, they were bound to deliver the Defendants and the Defendants were bound to take delivery of the cotton allotted to them. In any event, by the Plaintiffs despatching to the Defendants the Contract, a concluded contract was arrived at between the Plaintiffs and the Defendants. In these circumstances, the Plaintiffs by a shipment advice dated 8th June 1977 informed the Defendants about the shipment of 252 Bales of Nicaragua cotton. By a further shipment advice dated 30th June 1977, the Plaintiffs informed the Defendants of the shipment of 33 Bales of Gautemala cotton and by a further shipment advice dated 20th August 1977, the Plaintiffs informed the Defendants of the shipment of 280 Bales of Brazilian cotton.


7. However, it is alleged by the Plaintiffs that the Defendants, by their letter dated 5th July 1977 raised a false contention that they had not made any contract with the Plaintiffs for 252 bales of imported cotton. They contended that they have not signed the Contract No.G/406 and therefore, they cannot clear the goods. It is the case of the Plaintiffs that by forwarding this letter, the defendants committed a breach of the said contract and that is how the Plaintiffs can recover damages or compensation for loss suffered by the Plaintiffs. The response to the further shipment advice was identical and reference is made to the letter of 26th August 1977, addressed by the Defendants to the Plaintiffs.


8. Thereafter, the Plaintiffs? Advocates letter is referred to and it is stated that by this letter, a last opportunity was given to the Defendants to take delivery of the said cotton. However, despite receipt of this letter, the Defendants, by their Advocates letter repeated their false contention that there was no contract arrived at between parties.


9. As far as 252 bales of Nicaragua cotton is concerned, the Plaintiffs themselves concede that it was received in a damaged condition. The matter was taken up with the insurer and the Plaintiffs have recovered the price thereof from the insurer. In this case, therefore, no claim is made on the basis of 252 bales of Nicaragua cotton. As far as Guatemala cotton is concerned, it is stated that out of 33 Bales only 23 Bales were delivered to the Plaintiffs which too were found damaged. The Plaintiffs claimed price of 10 Bales shorlanded from the insurers and also claimed the loss on account of damage to 23 bales. It is stated that the Plaintiffs incurred a loss of Rs.5,995.80 as far as 33 bales of Guatemala cotton is concerned. As far as the Brazilian cotton is concerned, since the Defendants did not take the delivery of the same, the bales had to be stored and later on disposed off. The Plaintiffs incurred expenses as well as suffered loss in resale amounting to Rs.3,69,861.32. It is this sum together with the shortfall/loss with regard to Guatemala cotton which is claimed from the Defendants together with interest and that is how the present Suit.


10. The defence of the Defendants is firstly that the claim is barred by law of limitation. Secondly, they contended that no contract has been arrived at or concluded as alleged in the plaint or otherwise between the Plaintiffs and the Defendants. The Defendants? case is that unless a copy of the standard cyclostyled contract is duly signed by the indentor and returned to the Plaintiffs, no concluded contract is arrived at between the parties. The Defendants further case is that in several instances, the Plaintiffs have made alteration in the standard cyclostyled contract before they are despatched to the indentors. After a reference is made to several clauses of the contract, ultimately, in paragraph 11 of the Written Statement, it is contended that Clause 33 of the alleged Contract dated 17th March 1977 was deleted in ink by the Plaintiffs on both copies of the contract received by the Defendants. Further, there are several pre-conditions which are required to be fulfilled before the Contract is concluded. These pre-conditions have not been fulfilled. It is, in these circumstances, and denying that there was any contract that the Defendants urged that they are not liable to pay any sum much less as demanded by the Plaintiffs.


11. In the light of these pleadings, this Court framed the following Issues:-


1. Whether the Suit is within limitation?


2. Whether the Plaintiffs prove that a concluded contract was arrived at between the Plaintiffs and the Defendants to import and sell the cotton mentioned in the allotment letter dated 18.03.1977 (Exhibit-C to the Plaint)?


3. Whether the Plaintiffs prove that they had obtained licence for import of the cotton as mentioned in the allotment letter dated 18.03.1977 (Exhibit ? C to the plaint)?


4. Whether the Plaintiffs prove that they had placed order with foreign suppliers for import of the cotton as mentioned in the allotment letter dated 18.03.1977 (Exhibit ? C to the plaint)?


5. Whether the Plaintiffs prove that the Defendants were bound to take delivery of the cotton mentioned in the allotment letter dated 18.03.1977 (Exhibit ? C to the plaint)?


6. Whether the Plaintiffs prove that the Defendants committed breach of the contract by not taking delivery of the cotton mentioned in the allotment letter dated 18.03.1977 (Exhibit ? C to the plaint)?


7. Whether the Defendants prove that in view of the Defendants? letter dated 5.07.1977, the Plaintiffs ought not to have allowed shipment of 280 bales of cotton as stated in para 14 of the written statement?


8. Whether the Plaintiffs prove that they suffered a loss of Rs.5,24,702.14 due to the Defendants refusal to take delivery of the cotton imported?


9. Whether the Defendants prove that the Plaintiffs were not ready and willing to perform the contract and therefore are not entitled to recover damages?


10. Whether the Plaintiffs prove that the Defendants are liable to pay a sum of Rs.5,24,702.14 to the Plaintiffs as and by way of damages for breach of the contract?


11. What order?


12. As far as Issue No.1 is concerned, it is conceded that the Suit claim is within limitation and not barred. In any event, what I find from the averments in the plaint which are not controverted, that the Suit has been instituted within the period of limitation prescribed by law. The Suit, therefore, cannot be dismissed on the ground of limitation.


13. The crucial issue for determination are Issue Nos.2 and 5.


14. As far as this Issue is concerned, the Plaintiffs led evidence of V. Munikrishnan, who was at the relevant time working as Deputy Manager (Imports) of the Plaintiffs. He stated that he is personally aware of the facts and circumstances relating to the Suit transaction. After reiterating the plaint averments, he has, in paragraph 9 of his deposition in chief, referred to the Circular dated 21st May 1977 and produced a photocopy of the cyclostyled copy of the circular dated 21st February 1977 and stated that the contents of the circular are correct. In paragraph 10 he has referred to the letter dated 21st February 1977 of the Defendants Agents M/s. Kotkar and Company. He produced the original letter dated 23rd February 1977. He has referred to the Defendants? Agents letter dated 2nd March 1977 in paragraph 11 and produced the letter in original. Thereafter, the Plaintiffs? witness referred to the letter of the Textile Commissioner allotting the quota and produced the original letter dated 18th March 1977.


15. In the subsequent paragraphs, PW-1 has produced the Contract No.G/406. He states that the originals have been despatched to the Defendants and therefore, the office copy from the records and files of the Plaintiffs, is being produced. The witness has stated that the office copy is the copy of the original contract which was forwarded to the Defendants. He has stated that the original contract was duly signed by him and sent to the Defendants in duplicate. He states that the contract was prepared in the Plaintiffs? standard form. In these circumstances, the witness states that the contents of the copy are correct. Since he has prepared the original and forwarded to the Defendants, he states that he is aware of and can speak about the contents personally.


16. In subsequent paragraphs, the witness produced the shipment advice and the letters exchanged between parties. The witness has stated that the clearance of cotton has been done by clearing agents M/s. G. Ranganath, at Kolkata. The witness produced the relevant documents including the receipt of the amount paid to the Clearing Agent. The witness has also deposed about receipt of the sum from the insurer and the tender notice issued for sale of the cotton which were lying with the Plaintiffs. The original invoices are also produced by him. The entities to which the cotton was sold, the amount recovered and the difference are the other details provided by the witness.


17. At various stages, the documents from the compilation tendered by the Plaintiffs have been marked as exhibits by consent of parties.


18. This witness was cross examined by the Defendants and in his cross-examination, he has admitted that the reference to Clause 33 in the letter dated 3rd July 1978 is a mistake as that Clause was cancelled from the Contract by the Plaintiffs. The witness once again stated that on the basis of shipment advice 252 bales of Nicaragua cotton, 33 bales of Gautemala cotton and 280 of Brazilian cotton were shipped as per the shipment advice referred to by the Plaintiffs. The stand of the Plaintiffs has been confirmed by the witness and he stated that once the shipment advice was issued, the shipment cannot be stopped. The witness has fairly stated that as far as the claim under the head Clearing and Demurrage Charges, except consignment of 280 bales of Brazilian cotton, there are no documents to support the Plaintiffs? claim. There is no document on record to support the claim of carrying charges which form part of the Plaintiffs? claims in this Suit. To the suggestion that there is no contract between the Plaintiffs and the Defendants, the same is denied by the witness and he reiterates that there is a breach of contract by the Defendants.


19. The documents produced by the Plaintiffs were marked as Exhibits by consent. There is no other witness examined by the Plaintiffs. The Defendants did not lead any oral evidence. Consequently, the matter was placed for arguments. The crucial issue going to the root of the case is Issue No.2. The arguments cover this Issue only. Although, Issue Nos. 1 and 3 can be answered in the affirmative. Yet Answer to other Issues necessarily depends upon the existence of a contract. In other words, if there is no concluded contract, then, there is no obligation to take delivery and make payment.


20. Mr. Deshmukh, learned Counsel appearing on behalf of the Plaintiffs contended that a concluded contract was arrived at between parties. He submits that the concluded contract is evidenced by the fact that the circular letter dated 21st February 1977 has been duly received by the Defendants. If the same was not received, then, the Defendants would not have responded to the same. That they so responded is clear from their Agent?s letter dated 23rd February 1977. The Agent confirmed that the Defendants are interested in purchasing Foreign cotton as indicated in the letter (Exhibit P-27). Mr. Deshmukh also relied upon Exhibit P-28 and urged that the Defendants accepted the circular and placed an order/booked the material which is Brazilian cotton 600 bales. Mr. Deshmukh submits that the contents of the letter are that necessary formalities will be completed soon. However, that cannot be of any assistance. He submits that Exhibit P-29 is the allotment letter dated 18th March 1977 allotting Gautemala cotton, Nicaragua Cotton and Brazilian cotton. Mr. Deshmukh submits that this allotment letter received from the Textile Commissioner is addressed to the Defendants and Clause 9 thereof is clear. Further, the Contract (Exhibit P-3) has been forwarded and it has been stipulated therein that the Contract or Agreement entered into by the Plaintiffs with the foreign suppliers shall form an integral part of this agreement. Further, there are clear stipulations with regard to the price, taking delivery, the foreign suppliers making a claim against the Plaintiffs, etc. He submits that the Clause pertaining to shipment in the contract is also clear.


21. In such circumstances, mere deletion of Clause 33 can, by no stretch of imagination be construed as ?no? contract having come into existence between parties. Further, Clause 34 which is speaking of a Bank Guarantee is nothing but an option given to the Plaintiffs. They can proceed to cancel the contract if the Bank Guarantee is not submitted/ furnished. This cannot have any bearing on the issue of a contract coming into existence. For all these reasons and the invoices being admitted and the liability thereunder being proved, this is a fit case where the Suit should be decreed as prayed. In any event, this Court can mould the reliefs and merely because there is no proof with regard to some of the claims does not mean that no decree can be passed in favour of the Plaintiffs.


22. In support of his submissions, Mr. Deshmukh has relied upon the decision of the Supreme Court reported in AIR 1973 S.C. 559 (Dr. Jiwan Lal and Ors. V/s. Brij Mohan Mehra & Anr.) and a decision of a learned Single Judge of this Court reported in AIR 2001 Bombay 429 (The Cotton Corporation of India Ltd. V/s. M/s. Alagappa Cotton Mills). Mr. Deshmukh submits that the decision of the Single Judge is in case of the Plaintiffs themselves and in identical circumstances. The learned Judge has concluded that deletion of Clause 33 would not mean that no Contract has come into existence.


23. On the other hand, Mr. Sawant, learned Counsel appearing on behalf of the Defendants submitted that Issue No.2 has not been proved at all. He submits that the witness has admitted that deletion of Clause 33 would have some bearing on the matter. Clause 33 having been deleted, the Plaintiffs cannot rely upon any prior correspondence including that of the Agents. In any event, the letters of the Agents ought to be read completely. So read, it is apparent that the Plaintiffs were informed that the Defendants require specified number of bales of the quality of cotton offered. The quality as well as quantity is mentioned clearly in this letter. However, by Exhibit P-29, the Plaintiffs made a counter offer and the quantity indicated (number of bales) has undergone a drastic change. In such circumstances, it cannot be urged that these documents evidence a concluded contract. Mr. Sawant submits that if these documents were enough to hold that a concluded contract has been arrived at, then, there was no occasion for the Plaintiffs to have forwarded Contract No.G/406 (Exhibit P-3) for confirmation and signature. That having been forwarded and the Defendants being called upon to sign the same by itself means that a concluded contract could be arrived at only upon due compliance with this requirements. Deletion of Clause 33 inasmuch and the duplicate copy not being signed by the Defendants, then there is no question of deemed acceptance as contemplated by this clause. Once there is no deemed acceptance as envisaged by Clause 33, then, there is no concluded contract. Further, the Defendants had not forwarded any Bank Guarantee which was also a necessary condition for the contract to come into existence. In these circumstances, reliance placed upon shipment advice is of no consequence. In any event, the response of the Defendants to the letter intimating shipment is also the same and at no stage did the Defendants accept that a concluded contract had been arrived at between parties. For all these reasons and when there is no concluded contract, the Suit must be dismissed.


24. Mr. Sawant submits that the controversy in the instant Suit is concluded by a decision of a learned Single Judge of this Court reported in 2006 (5) Bombay Case Reporter 105 (Cotton Corporation of India Limited V/s. Bombay Dyeing & Manufacturing Company Limited). He submits that this decision is also rendered in the case of the Plaintiffs themselves and in identical facts and circumstances.


25. For properly appreciating the rival contentions, it would be necessary to refer to the plaint averments. The Plaintiffs refer to the circular, letter from the Agent of the Defendant and urge that they despatched to the Defendants a contract in their cyclostyled standard format in respect of the quantity and quality cotton allotted to the Defendants as per the letter of allotment and it is urged that pursuant to the letter of allotment, a concluded contract had been arrived at. The pleading is that in any event by dispatch of the contract bearing G/406 dated 17th March 1977, a concluded contract was arrived at between parties. There is no dispute that Clause 33 of the terms and conditions of the contract has been deleted. Clause 33 reads as under:-


?33. If the duplicate copy of this agreement is not returned by the Mills duly signed within seven days from the receipt of this agreement, it will be deemed to have been accepted by the mill.?


26. A bare perusal of the same would indicate that the same contemplates forwarding of a duplicate copy of the agreement, it being returned duly signed within seven days of its receipt and in default, the deemed acceptance. The deemed acceptance is when the duplicate copy is not returned duly signed within seven (7) days from the date of the receipt of the agreement. It is urged by Mr. Deshmukh that despite deletion of this clause, in a identical case this Court concluded that there was a contract between parties. In other words, deletion of Clause 33 has no bearing on this Issue and a conclusion can still be arrived at that the parties have entered into a contract for import of cotton.


27. In C.C.I. V/s. Alagappa Cotton Mills (Supra), the learned Single Judge (His Lordship J.A. Patil, as he then was) referred to the facts in paragraph 2 and the contents of the Written Statement in paragraph 4. Thereafter, on the basis of the oral and documentary evidence, in paragraph 10, the learned Judge concluded thus:-


?10. Admittedly the Defendants did not return the standard form of contract duly signed by them to the Plaintiffs. The question which, therefore, arises is whether there was concluded contract between the parties. The Defendants have contended that the Plaintiffs did not confirm the acceptance of the offer given by the Defendants. Besides, the Defendants did not sign and return the standard form of contract and therefore, there was no valid contract with the Plaintiffs for purchasing 500 bales of Brazillian cotton. Shri R.C. Shah, the learned Advocate for the Plaintiffs further pointed out that the Defendants have not disputed that standard form of contract was sent to them by the Plaintiffs for their signature. Although the Defendants did not return the same duly signed, still according to Shri Shah, the contents of the said form clearly indicate that the Plaintiffs had confirmed the acceptance of offer given by the Defendants. This is evident from the contents of the standard form Exh.P-4, which states that the Plaintiffs shall import and the Defendants shall buy 500 bales of Brazilian cotton at the rate of Rs.4,975/- per candy for June/July Shipment. There appears to be much substance in this submission of Shri Shah, because the Defendants have not disputed the receipt of the standard form which clearly indicated that the Plaintiffs had confirmed the acceptance of offer given by the Defendants. It may be noted that the standard form of contract contained certain terms and conditions and Clause No.33 therein is to the effect that if the duplicate copy of the agreement is not returned duly signed within 7 days from the receipt of the agreement, it will be deemed to have been accepted by the mill. Admittedly, this clause in the standard form sent to the Defendants was struck out. The Defendants have, therefore, contended that they cannot be deemed to have accepted the offer since they did not return back the standard form of contract duly signed within 7 days. It was, however, submitted on behalf of the Plaintiffs that since the Defendants had already accepted the Plaintiffs? offer to purchase the Brazilian cotton, by sending a telex message Exh.P-2 and letter dated 26.2.1977 Exh. P-3, all that the Plaintiffs did, by sending the standard form of contract to the Defendants, was to confirm the contract. It is material to note that the Defendants after the receipt of the standard form of contract did not inform the Plaintiffs that they were withdrawing their earlier acceptance of the offer given by the Plaintiffs and that they did not want to purchase the cotton. Therefore, merely because the contract form was not returned duly signed by the Defendants, it cannot be said that there was no concluded contract between the Plaintiffs. Hence, my findings on Issue No.3 is in the affirmative.?


28. Thus, Issue No.3 was answered in the affirmative. Not only on the basis that deletion of Clause 33 will have no bearing but the Defendants had already accepted the Plaintiffs offer to purchase the Brazilian cotton by sending a telex message and letter dated 26th February 1977, therefore, all that the Plaintiffs did by sending the standard form of contract to the Defendants was to confirm the contract. The learned Judge then referred to the fact that after receipt of the standard form of contract, the Defendants did not inform the Plaintiffs that they were withdrawing their earlier acceptance of the offer and that they did not want to purchase the cotton. Thus, the deletion of Clause 33, it was held, has no bearing because of the peculiar factual position emerging from the record. In that Suit, there was no contention raised that the Plaintiffs received the Defendants? Agents letter confirming acceptance of the contract of a particular quantity. There was no plea raised that despite confirmation of the contract and forwarding details of the quality and quantity, the Plaintiffs on their own subsequently forwarded the letter of allotment and the agreement in the cyclostyled form containing Clause 33. To my mind, the Plaintiffs cannot derive any assistance from this decision in the present case.


29. In the case before me, it is apparent that the Plaintiffs plea of concluded contract is based not only on the circular and the Agent?s letter but on Exhibit P-29 and Exhibit P-3. Further, the Plaintiffs on their own have urged that the Defendants committed a breach of the contract by wrongfully refusing to take delivery of the contracted goods. The Plaintiffs have in the plaint itself referred to certain bales of cotton being damaged. They have also referred to the shortlanding of the consignment. The Defendants, on the other hand have been consistently stating that there is no concluded contract. In the present case, the Plaintiffs proceed to urge that they applied for and obtained licence for import of different quality and quantity of cotton. They placed orders with foreign suppliers for the purchase of cotton of the quantity and quality including the cotton allotted to the Defendants. They referred in paragraph 9 the despatch of the contract in cyclostyled standard form. These averments are made in the plaint as the Plaintiffs were aware of deletion of Clause 33. In the correspondence between parties, it is apparent that in Exhibit P-10 (letter dated 7th July 1978), the Plaintiffs referred to Clause 33 and stated that failure on the part of the Defendants to return copy of the contract duly signed within the period specified, there is deemed acceptance. However, the Defendants, by their letter dated 20th July 1978 (Exhibit P-16) invited the attention of the Plaintiffs to the deletion of Clause 33, the Defendants? witness has admitted that the reference to Clause 33 is a mistake. Thus, the Plaintiff?s themselves rely on Clause 33 and deemed acceptance in this case. That is evident from a reading of paragraph 3 of the plaint and Exhibit P-10. Thus, there case of concluded contract coming into existence is based on Clause 33 and deemed acceptance as envisaged by the same.


30. It is in these circumstances, what I find is that the reliance placed by Mr. Sawant on the later decision of Single Judge is appropriate. In C.C.I. V/s. Bombay Dying (Supra), the learned Single Judge in somewhat identical facts referred to Clause 33 and observed thus:-


?9. It has been argued on behalf of the Plaintiff that although there may be no written contract, the correspondence which ensued between the parties and the conduct of the parties would leave no room for doubt to infer that there was a concluded contract between the parties which the Defendants had sought to repudiate. To test this argument it would be necessary to examine the circumstances relied on by the Plaintiff to submit that there is a concluded contract. Once such pointer relied on by the Plaintiff is the letter of 20.5.1977 of the Defendants which is at Exhibit P4. This letter extends the period within which the signed document was to be returned to 4.6.1977. However, it would be necessary to ascertain whether the mere failure on the part of the Defendants to return the duplicate copy of the agreement duly signed would amount to the contract being concluded. If one is to accept the submission made on behalf of the Plaintiff that there was a concluded contract which came into effect on either 7 days after 12.5.1977 or at least on 4.6.1977, the quota letter issued by the Textile Commissioner?s office on 21.5.1977 which is at Exhibit P5 would be meaningless. This letter which is the allotment letter, categorically stipulates, under clause 9, that acceptance or otherwise of the quota should be intimated to the Corporation i.e., the Plaintiff and to the Textile Commissioner?s office within 15 days of the issuance of the quota letter. By the letter of 26.5.1977, the Defendants had informed the Plaintiff that they would indicate their acceptance or otherwise of the quota by 4.6.1977. There is no material on record to show that the Plaintiff had been intimated about the acceptance or otherwise of the quota by the Defendants.


10. As aforesaid, the letter dated 2.7.1977 at Exhibit P-7 bears the following endorsement:


?Shri Vakil saw me today and requested for cancellation of the contract. I told him that in view of the previous correspondence and as the goods have already been shipped, it is not possible to cancel the contract. However, he said he would write to us.?


11. According to the learned Counsel appearing for the Plaintiff, this endorsement suggests that the Defendants had accepted the agreement and were aware that there was a concluded contract between the parties which had been concluded on 4.6.1977. This submission cannot be accepted. Assuming for the moment that the agreement of 12.5.1977 was deemed to have been accepted in view of Clause 33 of that agreement, the quota letter must also be considered. Both these documents at Exhibits P-3 and P-5 must be read together in order to ascertain whether there is a concluded contract between the parties. The documents cannot be read in isolation. The quota letter at Exhibit P-5 does not contain any clause similar to Clause 33 of the agreement at Exhibit P-3. There is no deeming provision in the quota letter. On the other hand, the mill is called upon to inform the Textile Commissioner?s office as well as the Plaintiff as to whether it requires cotton. Reading the two documents together it is obvious that if a signed copy of the agreement was not returned to the Plaintiff, it could not lead to the inference that the mill required the cotton. However, the contract between the parties would stand concluded only if the mill had accepted the quota which was offered by the Textile Commissioner and informed the Plaintiff accordingly. Undisputedly, the Defendants have not indicated their acceptance but have instead by their letter of 26th May 1977 stated that by 4.6.1977 they would inform the Plaintiff their acceptance or otherwise. Therefore, in my view it cannot be presumed that the Defendants had accepted the offer made in the quota letter. Therefore, in my view, there is no concluded contract at all.?


31. In my view, having regard to the oral and documentary evidence on record and considering the rival contentions, it is apparent that the Plaintiffs relied upon Clause 33 and the deemed acceptance contemplated therein. Deletion of Clause 33 in the present case cannot be ignored and brushed aside. The Plaintiffs were aware that despite the quota being sanctioned and allotted and an intimation given to the Defendants so also their Agents confirming the booking, the contract had not come into existence merely by issuance and receipt of these documents. There was no confirmation of the quota allotted by the Textile Commissioner in this case as well. There was no occasion for the Plaintiffs to have relied upon the further letter including the agreement in the standard form containing Clause 33. The fact that the Plaintiffs themselves have relied upon the standard agreement is clear from the plaint ave

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rments. This would indicate that they were aware that a concluded contract can come into existence only after the agreement is returned duly signed by the Defendants. In the instant case, the admitted position is that the agreement has not been returned duly signed. In such circumstances, the Plaintiffs reliance upon this Clause despite the deletion thereof far from assisting them would militate against their stand that a concluded contract has been arrived at de-hors the standard agreement. In the present case, when reliance is being placed upon the contract although there were letters addressed by the Defendants? Agents making certain bookings would show that the Plaintiffs? own case is that the concluded contract can come into existence in this case only after the Defendants returned the agreement duly signed. It is admitted that the Defendants did not return the agreement duly signed. It is clear that the Agents booked the cotton of a particular quality and quantity. The offer forwarded by the Agent has not been accepted. On the other hand, the Plaintiffs informed the Defendants that they can offer the quantity and quality of cotton mentioned in the letter dated 18th March 1977 (Exhibit P-29) and called upon the Defendants to confirm acceptance therefor by the Contract No.G/406 (Exhibit P-3). Once these documents are placed before the Court to support the plea of concluded contract by the Plaintiffs themselves, then, reliance upon the earlier letters of the Agents is misplaced. Therefore, I am unable to accept the contention of Mr. Deshmukh that the instant case is covered by the decision of His Lordship Justice J.A. Patil, in Alagappa Cotton (Supra). 32. On the other hand, in this case, deletion of Clause 33 has a definite bearing and a concluded contract has not been arrived at between parties for the reasons enumerated above. Although, in the decision relied upon by Mr. Sawant (Bombay Dyeing?s Case), reference is made to Clause 34 by the learned Single Judge, I do not deem it necessary to decide any larger or wider controversy. To my mind in the facts of this case, it is not necessary to refer to Clause 34 of the contract and whether that gives an option to the Plaintiffs to cancel the contract or is a condition precedent for the contract coming into existence or not is an aspect which need not be gone in the facts of this case. For these reasons, I do not deem it necessary to refer to the decision of the Hon?ble Supreme Court reported in AIR 1973 SC 559 (Dr. Jiwan Lal and Others V/s. Brij Mohan Mehra and Anr.). Mr. Deshmukh contends that the attention of Hon?ble Smt. Justice Nishita Mhatre was not invited to the decision of the Supreme Court and her conclusion based on interpretation of Clause 34 therefore, is erroneous. I do not see it necessary to go into this issue as well. It can be decided in an appropriate case. 33. Finding that the Plaintiffs have failed to prove that a concluded contract was arrived at between parties, there is no alternative but to dismiss the Suit. 34. Accordingly, I answer the Issues as under:- Issue No.1 - In the Affirmative. Issue No.2 - In the Negative. Issue No.3 - In the Affirmative. Issue No.4 - In the Affirmative. Issue No.5 - In the Negative. Issue No.6 - In the Negative. Issue No.7 - Does not arise. Issue No.8 - In the Negative. Issue No.9 - Does not arise. 35. As a result of the above, the Suit fails and is accordingly dismissed but without any order as to costs.
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