JUDGMENT

1. This is an action for damages for breach of a contract for the sale of molasses.

2. The contract was made on 8th February 1943 and is evidenced by a confirmation note in the following terms:

“From,

North Bengal Sugar Mills Co. Ltd.

61, Harrison Road,

Messrs Benoy Bhusan Saha & Brothers,

32/1, Mahim Haldar Street,

Kalighat, Calcutta.

Calcutta, 8/2/1943.

Dear Sirs,

We confirm having sold to you on 5th February 1943 (through broker) 10,000 maunds (Ten thousand maunds) f.o.r Gopalpur unboiled molasses of new Reason Rs. 2/13 (Rupees Two annas thirteen only) per bazar maunds Average Mds. Srs. Chh. Delivery ready. As per terms of out usual contract, which will be sent to you in due course.

Yours faithfully,

NORTH BENGAL SUGAR MILLS Co. LTD.

Sd. Soorajmull Nagarmull,

Managing Agents.”

3. It is not now disputed that there was at the same time a contract in similar terms for the sale of 6000 maunds old season molasses. Delivery of molasses is made either by tank wagons into which the molasses is pumped by the factory at their siding or else in this or similar containers. Between 8th April 1943 and 13th June 1943 the defendant company, which I shall now refer to as “the mills”, delivered to the plaintiffs 5 tank wagon of old molasses totalling 3734 maunds 30 seers. Two tank wagons of old molasses of a total quantity of 1134 maunda were delivered on 18th and 29th June 1943.

4. The mills are situated in Gopalpur, Their head office is in Caloutta.

5. On 15th June 1943 the mills, through their managing agents, Surajmull Nagarmull in Calcutta, wrote to the plaintiffs complaining that they had only taken delivery of 2734 maunda of molasses out of the 10,000 maunds sold to them, although 4 months bad elapsed since the date of the sale. They write:

“Even the sale being as ‘ready delivery’ we gave you more than sufficient extension of time to take delivery but we find that you have not been able to complete the delivery even within this extended period. However we give you a further extension of a fortnight's time from today to take delivery of the balance quantity. We shall be under the painful necessity of treating the balance quantity as cancelled and shall not be held liable for delivery of the quantity of molasses that may remain outstanding after the expiry of 29th June 1943, which please note and oblige.”

6. The plaintiffs on 29th June 1943 through their solicitors A.P Roy & Co. wrote as follows:

“Messrs North Bengal Sugar Mills Ltd.

C/o Messrs Soorajmul Nagarmull,

61, Harrison Road, Calcutta.

The 29th June 1943.

Dear Sirs,

Ra: Sale of Molasses

We are instructed by Messrs Benoy Bhusan Saha Brothers of No. 32/1, Mahim Haidar Street, Calcutta, that on 8th February last, you entered into a contract with them at 61, Harrison Road, Calcutta agreeing to sell to them 10,000 maunds of molasses of the new season and 5,000 maunds of the old season at Rs. 2/13 per maund ready delivery f.o.r Gopalpur in tank wagons, payment against Railway Receipts, and you received from our clients a sum of Rs. 1000 as earnest money.

It appears that in terms of such contract you have supplied to our clients, at intervals, only seven tank wagons of old and new molasses in spite of their repeated requests and despatching instructions for supply of the balance. As the market has considerably gone up in the meantime, our clients are informed that you are supplying goods to subsequent purchasers at higher rates at preference to our clients.

Tout Setter No. CGL/10/587 dated the 15th instant addressed to our clients threatening to cancel the balance of the contract on their failure to take delivery of the balance within a fortnight is merely a counterblast to cover your own default.

Our clients can have no reason for refusing delivery as the present market rate is Rs. 6 par maund. They have already deposited with you Rs. 1000 as further guarantee of their willingness.

They hereby call upon you to deliver the balance of 23 Tank Wagons within a week from date and receive payment against the relative Bailway Receipts, in default of which they will either purchase the goods on your risk and account or claim damages on the basis of the market rate.

They believe however that they will have no occasion to take proceedings against a mill of your reputation.

Yours faithfully,

Sd. A.P Boy & Co.”

7. The mill replied on 6th July 1943:

“NORTH BENGAL SUGAR MILLS CO. LTD.

Calcutta, 6th July, 1943.

Ref. No. CGL/10/648.

“Per Registered Post with A/D”.

Messrs A.P Boy & Co.

Solicitors,

5, Hastings Street,

Calcutta.

Dear Sirs,

Re: Molasses:

We are in receipt of your “No. Nil dated June 29, 1943 and in reply we would state as follows:

In our Sale Confirmation No. 302, dated 8th February 1943, with respect to the sale of molasses under reference, a clear mention of the word “Beady” will be noticed after the word delivery. So far as commercial transactions are concerned “ready delivery” must be taken to mean complete delivery within a very short time. We ace therefore perfectly within our rights to cancel the contract when your clients failed to take complete delivery of the total quantity of molasses under contract even though the matter of delivery was allowed to hang on for nearly five months.

We never came to any such understanding with your clients that we shall neither sell nor supply molasses to any other party so long as are contract with your clients continued and as such we are unable to appreciate how your clients could stop us from making such sale of supply or supply. It is not a fact that we supplied molasses to any other party in preference to your clients in view of any rise of price of molasses. We accommodate all our customers equally.

Considering the contract from the view point of supply of tank wagons by the Bailway Company, we would point out that we made our best efforts to secure enquisite numbars of tank wagons for you and on your behalf. But unfortunately sufficient number of tank wagons were not forihcoming. We must make it clear at the same time that although we sometime try to secure these tank wagons on behalf of our customers, we never take any responsibility in the matter. Nor in the present case was there any special stipulation that we would take any responsibility in the matter of securing tank wagons for your clients. Whatever efforts we made in this direction were simply to accommodate your client and not by way of discharge of any obligation imposed upon us. As a proof of our willingness to supply your clients with the quantity of molasses under contract we may point out that whatever quantity could possibly be supplied to your clients was supplied in tank wagons secured fly our own efforts. In this matter we got no help whatsoever from your clients.

As the prospect of supply of further tank wagona became gradually very gloomy, and further as we could not afford to let the matter hang on any longer there was no other course open to us than to treat our contract with your clients as cancelled, after due notice.

In these circumstances, we are not liable to pay any damage nor do we believe that your clients are legally entitled to purchase the goods on our risk and if in spite of this letter your clients choose to take any step as aforesaid they do it at their risk and responsibility which please note.

As regards the amount of Rs. 1,000/- kept in deposit by your clients with us please find herewith our cheque for Rs. 1,000/- (Rupees One thousand only) which is being sent as refund to your clients Messrs Benoy Bhusan Saha & Co. Please forward the cheque to them.

Thanking you.

Tours faithfully,

For NOBTH BENGAL SUGAR MILLS CO. LTD.

Sd/- Illegible,

Managing Agents.

Enclo: Cheque for Rs. 1,000/-

Copy forwarded to Messrs Benoy Bhusan Saha Brothers with Messrs A.P Boy & Co.'s compliments.

Sd/- A.P Roy & Co.

10-7-43.

8. Messrs A.P Roy & Co. on 23rd July 1943 admit that the contract was for “ready delivery” and urge that there was a duty on the mills to procure wagons and that they alone could do on. They write:

“It is common ground that the contract was for Beady Delivery. It was therefore your duty to supply the goods, as quickly after the contract as possible, and you were in default in not securing the necessary tank wagons and giving delivery in terms of our clients' instructions. It is well known that tank wagons are supplied according to the Indents, from the mills, and your contrast accordingly included the securing of necessary tank wagons by you and delivery of the goods in them. It was no part of our clients contract to secure tank, wagons nor was it possible for them to do so, nor did they in fact do so, in respect of the 7 tank wagons supplied by you.

Tour admission that you had been supplying tank wagons to subsequent purchasers, shows that such wagons were available, and that instead of utilising them for supply, under our clients earlier contract, you used them for supplying goods under subsequent but more profitable contracts.

In these circumstances the cancellation of the balance or the contract by you was wholly without justification. There has been no breach by our clients on their part of the contract.

By your wrongful cancellation of the contract Tour clients have suffered damages at the rate of Rs. 3-3-0 per maund (on the basis of the market rate on 6th July last), which amount to Rupees 35,974-2-0, on the quantity undelivered (viz. 11,286 maunds).

In default of your payment of the said sum of Rupees 35, 974-2-0 to our clients or to us as their attorneys within a week from date, our clients will file a suit against you for recovery thereof without further reference.

As you have repudiated the contract unlawfully and have returned the deposit money, our clients have received same without prejudice to their rights to claim all loss and damages from you.

Tour faithfully,

Sd/- A.P Boy & Co.”

9. The mills handed this letter to their solicitors who wrote on 30th July 1943:—

“Messrs A.P Boy & Co.

30th July, 1943.

Dear Sirs.

Re: Molasses:

Year latter of the 23rd instant to the address of our clients Messra North Bengal Sugar Mills Ltd., written at the instance of your client? Messrs Benoy Bhusan Saha Bros. has been banded over to us with instructions to deal with same.

The contract was for ready delivery F.O.R Gopalpur. Our clients did not undertake any responsibility for the supply of tank wagon neither were they bound to do so. Consequently there has been no default on the part of our clients for their inability to secure tank wagons for the necessary supply.

Our clients deny that the contract included the securing of tank wagons by our clients; on the other hand it was made clear to your clients at the time the contract was entered into that in view of the a cate shortage of tank wagons due to war efforts our clients could not and would not take any responsibility therefor. Our clients fail to appreciate how it was impossible for your clients to secure some tank wagons at least if they had seriously tried to do so. As has been pointed out in our clients' letter of the 6th instant, whatever effort our clients made in that direction, was only to accommodate your clients and not by way of discharging any obligation imposed upon our client.

As has been pointed out in our clients' previous letter, they never contracted that they would not sell molasses to any party other than your clients, so long as the supply of your clients' quota was not complete.

As your clients did not purchase the whole stock of mclasaes available our clients were perfectly within their rights to entertain proposals for the purchase of molasses from other parties. Molasses sold to other parties were delivered to them just as delivery was effected to your clients in proportion and by rotation as opportunity occurred. Our clients have not made any preferential treatment to any party with any ulterior motive. Our clients take strong exception to the insinuations made by you in this connection in your Tetter, under reply.

The goods were for ready delivery and your clients cannot keep the matter pending indefinitely and our clients were perfectly entitled to cancel the balance of the contract after they had allowed sufficient extension to your clients and upon due notice to them. There has not been anything wrongful on the part of our clients. They were psrfectly jastified in cancelling the contract and it was within their rights to do so.

In the circumstances our clients fail to appreciate how they can be held liable for alleged damages and they are unable to entertain any claim in respect thereof.

If in spite of this your clients are ill advised to rush to Court they will do so at their own risk and peril and our clients will hold them liable for all costs and expenses that our clients may have to incur in defending such proceedings.

Yours truly,

Sd/- Charu Chundra Bose”.

10. Prom this correspondence it will be seen that the disputes arose owing to the shortage of wagons which would be supplied by the railway. There is no suggestion that the mills were short of stocks, nor that the plaintiffs were unwilling to take and pay for the goods. The market was rising and admittedly the market rate on 15th June 1918 was Rs. 6/- i.e Rs. 3-3 higher than, the contract rate of Rs. 2-13.

11. The suit was brought on 23rd November 1943. The plaint sets out the contract and in para 1 it is stated:

“Parties intended and/or it was impliedly agreed that in accordance with the custom or usage the defendant would arrange for the necessary tank wagons for effecting delivery of the goods.”

12. The claim is for Rs. 35,974-2.0 damages at Rs. 3-3 per maund in respect of 11,286 maunds short delivery.

13. In their written statement the mills denied the contract for 5000 maunds old molasses. In this connection it appears that about 28,000 maunds of old molasses had been sold to the Howrah Trading Co., and was being resold by the mills on their account, and did not appear in the managing agents' books. Later the contract for 5000 maunds in favour of the plaintiffs was verified and at the hearing it was admitted that the total sales to the plaintiffs were for 15,000 maunds.

14. The plaintiffs carry on business at Khulna and both parties knew that wagons available for Khulna were required but it is admitted that the mills were to deliver f.o.r Gopalpur.

15. The mills in their written statement plead that they were under no obligation to indent for wagons and that owing to the prevailing war conditions they were under no obligation to deliver if wagons were not obtainable and that they extended the time for delivery and after giving the plaintiffs notice they cancelled the contract owing to the plaintiffs' failure to supply wagons.

16. The following issues were framed:

(1) Was there any custom or usage as alleged in para 1 of the plaint?

If so, is evidence of such custom admissible?

(2) Was there any agreement in accordance with such custom?

(3) Were the wagons which were obtained by the defendant company rateably distributed among its buyers?

17. The main question and the greater portion of the evidence is directed to the existence of the custom or usage that the mills as sellers must arrange for suitable wagons for delivery of the goods.

18. The only stipulation regarding delivery which appears on the confirmation note is “f.o.r Gopalpur”.

19. No case has been cited to me in which the duties of the parties in an f.o.r.contract have been laid down but I have been referred to the remarks of the learned author in S. SOS of Vol. XXIX of Halsbury's Laws of England. He writes:

“Under a ‘Free on rail’ contract (f.o.r) the seller undertakes to deliver the goods into railway wagons os At the station (depending on the practice of the particular railway) at his own expense. These contracts differ from the ordinary inland contract of sale only in respect of the place at which delivery in to be made, which pats on the seller an item of cost over and above that of the good a themselves, and also prima facie fixes the point at which the property passes, and the risk falls upon the buyer and the price becomes payable”.

20. The mills under this f.o.r contract would thus be liable for delivering the molasses either in wagons or at the station at Gopalpur and all costs incurred prior to such delivery would be theirs. It is in evidence that sugar mills have their own sidings and if tank wagons are available, that they pump the liquid molasses by means of their own pump from the factory into the tank wagons at their siding, f.o.r in this case would imply delivery at the mills siding but in the contract there is no stipulation as to the person responsible for producing the wagons at the siding.

21. It; is urged by Mr. Ohaudhuri for the mills that the buyers must pay the freight and that the natural inference to be drawn from this fact is that the person responsible for the freight would be the person to negotiate with the Railway company for the wagons that would earn the freight. This proposition is by no means conclusive and I have no doubt that evidence is admissible to prove the usage of the trade in such circumstances:

“It has long been settled that in commercial transactions extrinsic evidence of custom and usage is admissible to annex incidents to written contracts in matters with respect to which they are silent………and this has been done upon the principle of presumption that in such transactions the parties did not mean to express in writing the whole of the contract by which they intended to be bound but a contract with reference to those known usages.” (per Parke B. in Hutton v. Warran, (1836) 1 M. & W. 466, at p. 475 : (5 L.J (NS) Ex. 234).

22. It is suggested that such evidence cannot the accepted here because in a f.o.r contract the seller's obligation is only to bring the goods to the Bailway premises, and the usage alleged is repugnant to or inconsistent with the express terms of the contract in that it casts on the mills the additional obligation of finding wagons.

23. To this argument the words of Lord Campbell, C.J in Humfrey v. Dale are a complete answer: (1857) 7 E1. & B1. 266 at pp. 274-275 : (26 L.J.Q.B 137).

“In a certain sense every material incident which is added to a written contract varies it, make a it different from what it appeared to be, and so fat is inconsistent with it. If, by the side of the written contract without, you write the same contract with the added incident the two would seem to import different obligations, and be different contracts. To take a familiar instance by way of illustration: on the face of a bill of exchange at three months after date the acceptor would be taken to and himself to the payment precisely at the end of the three months; but, by the custom, he is only be and to do so at the end of the days of grace, which vary, according to the country in which the bill is made payable, from three up to fifteen. The truth is that the principle on which the evidence is admissible in that the parties have not set down on paper the whole of their contract in all its terms, but those only which were necessary to be determined in the particular case by specific agreement, and which of course might vary infinitely, leaving to implication and tacit understanding all those general and unvarying incident a which a uniform usage would annex, and according to which they must in reason be understood to contract unless they expressly exclude them. To fall within the exception, therefore, of repugnancy, the incident must be such a if expressed in the written contract would make it insensible or inconsistent.”

24. Here there would in my view be no inconsistency in adding to the clause that the sale is f.o.r the trade usage, if it exists, that the mills should procure the rail wagons into which they are to load the goods. Moreover even apart from such evidence it appears to me that the obligation to deliver “free on rail” must primarily mean to deliver to the railway in a condition in which the railway can convey it to the purchaser. Until that is done both the risk and the not is on the seller and the natural conclusion to my mind would be that if delivery has to be made in tank wagons then the seller should arrange with the railway company to supply the necessary wagons. This however is an assumption which depends on the actual usage in such contracts.

25. Both the parties have called evidence as to usage and the onus of proving the usage he affirms must be on the defendant.

26. The nature of the onus was explained by Sir John Coleridge in delivering the judgment of the Judicial Committee in Jugmohan Ghosh v. Manichchand, 7 M.I.A 263 at p. 282 : (1 Sar 681):

“It remains now to consider the other ground on which the plaintiff relied; the evidence of marcantile usage. To support such a ground, there needs not either the antiquity, the uniformity, or the notoriety of custom, which in respect of all these becomes a local law. The usage may be still in course of growth: it may require evidence for its support in each case; but in the result it is enough if it appear to be so well known and acquiesced in, that it may be reasonably presumed to have been an ingredient tacitly imported by the parties into their contract.”

27. The evidence establishes that delivery of molasses is made either in tank wagons or in tins. If delivery is in this the evidence is that the tins would be provided by the buyers, but after the tins are supplied they must still be conveyed in wagons, and the question remains on whom does the duty fall to obtain the wagons; on the buyer or on the seller?

28. It is not clear from the pleading and particulars the exact nature of the usage alleged, but from the evidence adduced I have no doubt that the plaintiffs are setting up, not a particular usage confined to the defendant company but a general usage among mill's selling molasses or other liquid articles that the mills will arrange for wagons.

29. From the pleadings we find that it is admitted that the usual course of business is for the sellers to apply for and load the molasses on wagons and in fact they did so in the present instance.

30. Para. 4 of the written statement reads:

“The defendant repeats that it was under no obligation to indent for wagons. The usual course of business for sale of molasses is that the buyers should in sufficient time inform the sellers of their requirements and where the wagons are to be despatched and that the sellers should apply for wagons and do their best to obtain such wagons, although not under any obligation so to do, and also the sellers should, on receipt of wagons, load the molasses in such wagons and despatch and consign such goods to such destinations as the buyers should inform the sellers and that the goods should be sent unpaid and railway receipts obtained and given to the buyers against payment. It was also a part of such course of business that indents should be made for wagons to enable deliveries to be effected to all buyers of the defendant and that wagons obtained should be rateably distributed amongst the buyers of the defendant.”

31. Paragraph 6 reads:

“The defendant states that the above terms were implied in the said agreement or alternatively the usual course of business or trade was known to the plaintiffs and to all buyers and the contract was entered into upon the said basis.”

32. In para. 7 the mills say that they from time to time applied for wagons although under no obligation to do so, and that in spite of their efforts they were unable to obtain further wagons, and in para. 10 they plead:

“The defendant repeats that it was under no obligation to provide wagons. It did its best to accommodate the plaintiffs and tried to obtain wagons and allotted such wagons as it could obtain rateably among its buyers and was in the premises discharged from all liability.”

33. It is certainly strange that the mills should go out of their way to indent for wagons, if in fact the obligation to provide them rested with the buyers. (His Lordship considered the evidence of the witness on both sides, on the question of usage and continued:)

34. On the evidence considered as a whole, I am of opinion that the alleged usage has not been established. Mr. Harvey and Mr. Lovering both speak from the point of view of companies which have a peculiar and preferential position and their opinions as to the usage are contrary. The nature and quality of the remaining evidence is far from reliable.

35. Two written contracts have been disclosed between Kaviraj & Co. and the defendant mills in which the obligation was placed on the buyers to provide wagons, and it is in evidence that at least one of the plaintiffs, Bejoy Kr. Saha, was a partner in Kaviraj and Co. The confirmation note in the present contract provides that the sale was “as per terms of our usual contract”. I accept the defendant's evidence that Bejoy Kr. Saba negotiated this contract with Mr. Jalan of Surajmull Nagarmull, in Matadin Sarma's presence, and it is a matter for comment that neither of these persons has given evidence though available. Matadin impressed me as a witness who was frank and anxious to give his evidence accurately, though somewhat hampered by the difficulty of expressing himself adequately in English. I did not form an equally favour, able impression of Dhirendra Nath Saha to whose evidence I will refer later.

36. I accept Matadin's evidence that he offered to send B.K Saha a written contract and that B.K Saha said that course was unnecessary as he knew the terms from previous dealings. The evidence establishes that these contracts are-more often verbal than in writing. The written contracts with Kaviraj & Co. provide that the buyer must arrange for wagons. Matadin has no recollection whether any such stipulation was made in this case, and it appears to me improbable.

37. The plaintiff contends further that even it the custom or usage alleged is not established, there is an implied warranty that the seller will provide wagons and that otherwise business would be impossible. This contention is opposed to the evidence that in many transactions the buyer has in fact arranged for wagons and I am satisfied that this can be done and is done frequently.

38. Finally it is contended that there was an implied term in the contract that wagons would be rateably distributed among buyers and that the mills are in any event liable for failure to deliver among their buyers in proportion to their purchases.

39. The plaintiffs have all along protested against preferential treatment being accorded, as they alleged, to purchasers at higher rates. This charge has been indignantly denied by the defendant company in the correspondence and in their written statement para they plead that it was a part of the course of business that wagons should be rateably distributed amongst their buyers. In para. 6 it is pleaded that the course of business was known to all buyers and that the contract was entered into upon the said basis. It is urged however on behalf of the mills that the plaint does not allude to any failure to distribute rateably and that the plaintiff cannot succeed on a plea that has only been taken in defence.

40. It is true that the plaint claims damages only for the entire quantity undelivered but the plaintiffs have raised this question prior to suit and when the defendant company has pleaded that it in an implied term in the contract, and that they have observed it strictly, they can have no cause for complaint when, after an issue has been framed and evidence received, the rights of the parties on that issue are decided. The suit is framed in damages for breach of contract. The defence is confession and avoidance and on that the issue was raised. If the plaintiffs are successful on that issue they are entitled to appropriate damages. (His Lordship further considered the evidence and concluded that the defendant company did not allocate the wagons which they received rateably amongst the buyers with whom they had contracts).

41. Mr. Bafna the Secretary to the mills had to admit that there was no rateable distribution but said that they tried to allot the wagons in “rotation”, but that they might succumb in the importunities of a particularly persistent buyer who remained on the spot at Gopalpur. Apart from such an exceptional case, it is in evidence that the plaintiff had bought at a lower rate than his competitors and whereas the plaintiff only received one quarter of his goods. Bhowmick who had bought at a slightly higher rate received the entire quantity. Mr. Bafna could give no explanation other than the rate for the preferential treatment. Again, we find that both Bhowmick and Robindra Shaha were allotted wagons in July although in their letter explaining their reasons for cancellation the mills suggest that wagons were not available. The plaintiffs stress the fact that Rabindro's contract was dated 16th Jane, the rate was Rs. 5-15 and he was given 3 wagons in the first half of July. It appears that the total amount of molasses sold by the mills between the contract date and the date of cancellation was sufficient to fill 74 tank wagons. Delivery was given in 29 tank wagons and the plaintiffs' rateable share would be 10½ wagons.

42. In maunds the plaintiff would have been entitled on a rateable distribution to a further quantity of 1925 maunds. The contract rate was Rs. 2/13 and the market rate at the date of breach is admitted to be Rs. 6, a difference of Rs. 3/3-1925 maunds at Rs. 3/3 = Rs. 6135 and I hold that the plaintiff is entitled to a decree for that sum.

43. The plaintiffs are to this extent successful but most of the evidence has been directed to the issue of a trade usage which they have failed to establish and I consider that the interest of justice will best be served by directing that the defendant company do pay to the plaintiffs one half of their costs.

R.G.D

44. Decree accordingly.