Arjunsa Raghusa And Others Applts. v. Mohanlal Harakchand .

1. This is a defendants' appeal in a suit claiming damages for breach of contract. The damages claimed are Rs. 17,087-8-0 with interest 1 per cent, per month from the date of suit until realization, with costs. The decree is for Rs. 12,821-7.3 with interest at six per cent, per annum from the date of decree to date of realization, with costs. The claim is mainly concerned with the defendant's refusal to take delivery under an alleged contract for the sale of cotton seeds. That accounts for Rs. 10,462-8-0 of the damages claimed. The minor item of damage is claimed because the defendants failed to take delivery under a mandi contract wherein the plaintiff exercised his option, but the defendants failed to take delivery. For that, the sum of Rs. 2,125 is claimed as damages. The difference between the sum of those two figures, viz. Rs. 10,462-8-0 plus Rs. 2,125 that is Rs. 12,587.8-0 and the claim of Rs. 17,087-8-0 is made up of interest claimed at 1 per cent, per month from 25th January 1930, the date of the breach, to 17th January 1933, the approximate date of the plaint (which is 19th January 1933) amounting to Rs. 4,500.

2. This is another case in which a good deal of trouble in the appellate stage has been caused by the regrettable state of the pleadings. The paper-book contains no fewer than 26 type-written pages of pleadings or alleged pleadings. There is the plaint which covers 4 pages, the written statement of defendant 2 which covers just 4½ pages, the written statement of defendants 1 to 3, 1½ pages, the so-called reply of the plaintiff to the written statement of defendants 1 and 3, 1 page, the plaintiff's reply to the second defendant's written statement 2½ pages, oral pleadings, then an additional written statement of defendant 2, 1 page and odd, plaintiff's reply to the additional written statement 4 pages, then some oral statements, then the so-called plaintiff's rejoinder 2 pages, then some more oral pleadings and yet further oral pleadings, until at last we come to the 25 separate issues that have been settled. Despite all those efforts to state the case, it has been possible for counsel to address us with a view to showing that a vital averment has been omitted. This kind of action is a perfectly simple kind of action, so far as pleadings are concerned, and all the pleadings could have been reduced to 5 pages. The essential averment which it is argued is omitted, is the averment as to readiness and willingness, and AIR 1936 PC 236 AIR 1936 PC 236 , 163 IC 417 (PC) in conjunction with AIR 1925 Mad 971 AIR 1925 Mad 971 , 86 IC 299 , 49 MLJ 300 and AIR 1926 Mad 1109 AIR 1926 Mad 1109 , 97 IC 986 is relied on. The case before their Lordships' Judicial Committee was from Johore State, and it is not known to us whether the Procedure Code applicable in that State contains any provision similar to O. 6, R. 6 of Sch. 1, Code of Civil Procedure, 1908. The action there was for damages for breach of a contract to grant a lease. The grant in question was conditional upon the payment of a premium and first year's rent and certain fees. The premium and the survey fees were paid; the rent was in fact not deposited. It was held that the plaintiff was not entitled to damages owing to his default in the payment of rent. Lord Boche on behalf of the Judicial Committee observes as follows:

No plaintiff can maintain such an action unless he can aver and prove that he has performed or has at all times been ready to perform his part of the contract. This the appellant, owing to his serious default in payments of rent, was incapable of doing. In these circumstances their Lordships are of opinion that the appellant was not entitled to succeed in his action and that the Court of Appeal was correct in ordering that the claim should be dismissed.

3. AIR 1925 Mad 971 AIR 1925 Mad 971 , 86 IC 299 , 49 MLJ 300 was a case of sale of goods. The plaintiffs were the buyers. It was held that in such a case where the respective promises are for simultaneous performance, such an action does not lie at the instance of either party unless he alleges and proves that he was, at the critical date, ready and willing to perform his part of the contract. AIR 1926 Mad 1109 AIR 1926 Mad 1109 , 97 IC 986 was another case of a buyer's action for breach of a contract for sale of goods not delivered. It was held that in a suit for damages for breach of contract of sale, the seller must show that he was able and willing to perform his part of the contract, and the buyer must show that he was ready and willing to pay the price. In 60 Cal 733 AIR 1933 Cal 632 , 146 IC 671 , 60 Cal 733 , 37 CWN 504 the action was by a landlord to get a decree for cess on the basis of a revaluation against the tenants. For that it is necessary to give notice under Section 54 of the Cess Act, and to prove that notice has been duly served. In that case it was regarded that was a condition precedent to the right claimed. It was urged that O. 6, R. 6 may imply the performance of that condition precedent, which accordingly the plaintiff was not required to allege or prove. A distinction appears to have been drawn between the need to plead and the need to prove; that is to say although O. 6, R. 6 raises an implied averment, that does not absolve the person who is regarded as so alleging from proving the allegation. In 9 Lah 148 AIR 1928 Lah 20 , 111 IC 498 , 9 Lah 148 , 29 PLR 554 at pp. 163 to 165 will be found a reference to a number of cases where the phrase ‘ready and willing’ has been from time to time considered in Courts in India. This kind of case is one of concurrent conditions. The respective obligations imposed on parties to a contract where there are concurrent conditions, are, if we may say so, admirably expressed by the learned authors of Edn. 17 of Anson's Law of Contract, at page 349 as follows:

If A and X agree that the performance of their respective promises shall be simultaneous, or at least that each shall be ready and willing to perform his promise at the same time, then the performance of each promise is conditional on this concurrence of readiness and willingness to perform; the conditions are concurrent. Thus in a sale of goods where no time is fixed for payment, the buyer must be ready to pay and the seller ready to deliver at one and the same time. The promises are interdependent and conditional upon each other, so that if A fails to deliver, X may not only sue for damages but may also refuse to pay.

4. So far as India is concerned, the mutual obligation, where there are reciprocal promises, is expressed in Section 51 of the Contract Act:

When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise.

5. In 30 Cal 865, (1903) 30 Cal 865 , 8 CWN 25 (PC) in an action for breach of contract by the seller brought by the buyer, their Lordships of the Privy Council held that the plaintiff could recover even when no tender of the purchase price was made where it appeared that the purchaser was ready and willing to carry out the bargain which could be inferred from the fact that the market was rising and where he proved that he had made preparations with the object of having the money ready in hand. It may be observed that case was a Berar case, and one of the defences was, as here, that the transaction was a mere gambling transaction. The allegation, their Lordships of the Privy Council observed, was not proved. There, the buyers were the plaintiffs and it was urged that the buyer could not recover damages unless he had actually tendered the price; but their Lordships observed that they were ready and willing and had made preparations with the object of having the money ready in hand, and more than this they were not required to do by Section 51 of the Contract Act.

6. AIR 1925 Mad 971, AIR 1925 Mad 971 , 86 IC 299 , 49 MLJ 300 which follows on this point the old English decision in (1797) 7 TR 125, (1797) 1 TR 125 , 4 RR 395 decided that the plaintiff in such a case must allege and prove that he was ready and willing to pay for the goods. It should be borne in mind that the English case was long before the change in pleading effected by the Common Law Procedure Act of 1852 before which it was common for the plaintiff to insert in his declaration a general allegation to the effect that all conditions were performed. Such old cases on pleading points, we feel, must be used with great caution; not only has the law been entirely changed in England, but the law in India is also different from that in England. On this particular point however there is to be found no difference between O. 19, R. 14, English Rules of the Supreme Court and O. 6, R. 6 of the CPC. They both read as follows:

Any condition precedent, the performance or occurrence of which is intended to be contested, shall be distinctly specified in his pleading by the plaintiff or defendant, as the case may be and, subject thereto, an averment of the performance or occurrence of all conditions precedent necessary for the case of the plaintiff or defendant shall be implied in his pleading.

7. It was strenuously urged that in AIR 1936 PC 236 AIR 1936 PC 236 , 163 IC 417 (PC) the Privy Council had observed that it was necessary to aver and prove payment of the rent in advance before the suit for damages for breach of the agreement to grant lease could be successfully prosecuted, and that, therefore, by “condition precedent” was meant something different from an allegation necessary to be established as part of the cause of action. It is however to be observed that, quite apart from the question as to whether anything similar to O. 6, R. 6 is to be found in the Procedure Code of Johore, what their Lordships there actually decided was that, as the plaintiff had failed to prove payment, and as it has on the contrary been established that plaintiff had not paid the rent in advance which rent was a condition precedent, for that reason the plaintiff could not recover. We do not understand their Lordships as deciding, that case on a pure point of pleading, viz. that the plaintiff having failed to aver, his evidence adduced to prove an absent allegation could not be listened to, and therefore he had not proved readiness and willingness. Here, it is true there is no allegation of readiness and willingness but there are allegations to show that the plaintiff asked the defendant to take delivery and offered delivery from particular goods at particular places up to—and we think we should infer by that is meant including — 25th January 1930. There is evidence to show that arrangements had been made and contracts entered into by the plaintiff which gave him the right to call for delivery of goods from the persons in whose possession, as the plaintiff had indicated to the defendants, the goods were from which the defendants could, on demand, have obtained delivery. There is on the part of defendant 2 (written statement, para. 10) an allegation that the plaintiff had not the means and did not possess the commodity to enable him to give delivery. There is in para. 8 of the plaintiff's reply to the second defendant's written statement, the allegation that the plaintiff had the means to give delivery and he actually offered the same. On the mandi contract there is an allegation in the plaintiff's reply to the additional statement of defendant 2, para. 3, the allegation that the plaintiff first informed of the option on 20th January 1930 orally and then offered delivery. When he found that the defendants were evading, he gave notice by telegram as alleged in para. 3 of the plaint. Para. 3 of the plaint relates to the main contract and the telegram there is specified as a telegram of 23rd January 1930. That telegram is in the following words:

Already particulars delivery offered you still not weighed ready and willing to give delivery of cotton-seed khandis 1650 as contracted: your failure to take delivery up to 25th instant will result in legal action for damages and loss now rate 18-8-0 market decreasing note.

8. On 26th October 1933 the second defendant made an application inter alia as follows:

The issue (No. 24 which is in the following form: Whether the parties had or had not the commodities to offer?) refers merely to the commodity and not to the means. That as a matter of fact the plaintiff in his replication tacitly admits the contention of the defendant that the parties had not the commodity to deliver. No issue therefore really arose on the question of possession of commodity. But it is humbly submitted that an issue does arise as to whether the parties had the means meaning money to enable them to make and take delivery.

9. So far as we can see, nothing happened so far as that application is concerned. It does appear, however, that the parties were under no misapprehension as to what it was that the other side was saying on this point. The defendant was saying that this was a wagering contract: “nobody intended that there should be any delivery; you, plaintiff, neither intended delivery, nor had you the power to deliver.” The plaintiff, on the other hand, was saying these were not wagering contracts: “I had the power to deliver; it was undoubtedly in contemplation that we should settle differences, but if there was no settlement of differences, then the party entitled could demand that the other should carry out his contract; arrangements were accordingly made by me and communicated to the other side as to from what source these goods could be got.” In the famous case in (1851) 17 QB 127 (1851) 17 QB 127 , 20 LJ QB 460 , 15 Jur 877, Lord Campbell, on the question of readiness and willingness, observed as follows:

In commonsense the meaning of such an averment of readiness and willingness must be that the non-completion of the contract was not the fault of the plaintiffs and that they were disposed and able to complete it if it had not been renounced by the defendants.

10. Again, however, here a little caution is necessary. This, as we understand it, is not a case of suing for damages for anticipatory breach of contract as was the case in the group commencing with (1854) 2 E & B 678. (1854) 2 E & B 678 , 22 LJ QB 455 , 17 Jur 972 , 1 WR 469 This is a case where one party to a contract for sale, the due date for delivery having passed, who has called upon his buyer to come and take delivery in a specified way, is suing that buyer not for the price (for the goods have not been allocated to the contract) but for damages for failure to take delivery. Such an action would originally have required the plaintiff to prove tender. But that tender he is now absolved from having to prove when he establishes that his opponent had broken the concurrent condition. But although he is so absolved from having to prove tender, he is required to show readiness and willingness: Cort's case (1851) 17 QB 127 , 20 LJ QB 460 , 15 Jur 877 supra; see also the observations of McCardie, J. in (1922) 1 KB 688 (1922) 1 KB 688 , 91 LJ KB 551 , 127 LT 298 , 38 TLR 447 at p. 692. He proves readiness and willingness when he establishes that the contract was not completed not because of his fault, but because of the fault of his opponent. That, as we understand, is the meaning of Lord Campbell's observations.

11. The distinction between the position of a person who relies on an anticipatory breach and one who maintains the contract cannot be better expressed, in our respectful opinion, than in the words used by Cockburn, C.J, in (1872) 7 Ex 111 (1872) 7 Ex 111 , 41 LJ Ex 78 , 26 LT 77 , 20 WR 471; and see (1921) 2 KB 369. (1921) 2 KB 369 , 90 LJ KB 671 , 125 LT 51 , 37 TLR 411 , 66 SJ 356 Bearing in mind that the Privy Council has said on many occasions that some latitude should be given in the case of mufassil pleadings, bearing in mind O. 6, R. 6 and the actual allegations made here, we are of the opinion that this claim does not fail for failure to comply with technical rules of pleading. That leads to the consideration of the question: Has the plaintiff failed to prove (as distinct from aver) readiness and willingness? It was conceded in argument that plaintiff proves readiness and willingness if he can show that he was able to deliver, and the question then turns on whether the plaintiff has established that he was able to deliver. The facts must be shortly stated.

12. The second defendant is the individual who entered into, with the plaintiff, a series of transactions, undoubtedly of a speculative nature. He was a member of a joint Hindu family, and defendants 1 and 3 are the other members of that family. Their defence was, in addition to the second defendant's, that these transactions were not binding on them, as they were no part of the joint family business. Nothing has been said as to that in this appeal. The nature of these contracts varied. Some were for future delivery and the plaintiff was at one time a seller and at another time a buyer. In respect of this transaction he was seller to the extent of 2700 khandis of cotton seed, and he was a buyer to the extent of 1050 khandis. It will be remembered that the telegram offered delivery of 1650, the reason for that limited offer being, as the plaintiff says, that it was idle his delivering 2700 and then bringing 1050 back. In other words, he offered to deliver the difference between what he had sold and what he had bought. Nevertheless in this action he is seeking damages and has received damages on the basis of 2700, which claim can be supported on the ground that, although it may be that (say) on the 1st November the plaintiff is a seller and on the 1st December a buyer, the two contracts are entirely distinct. It is consequently not necessary, if one of those contracts be broken, for the party complaining of the breach to take into account what has happened to another contract. If that other contract has, in turn, been broken by him, it is for the party complaining to pursue his proper remedy, and although in the telegram in question the plaintiff offered to treat the two contracts in such a way that he only called upon the defendants to take delivery of the difference, he was not bound to do so and if the defendants instead of taking advantage of that attitude, took up the point that both the contracts were wagering contracts, the plaintiff is entitled to test that question and to sue for breach of his contract leaving the defendants in the difficult position of having to maintain an action for breach of a contract which they had already declared to be a wagering contract. The above remarks relate to one of the three classes of transactions.

13. The other two are what are known as mandi and teji contracts. These are in the nature of option contracts to sell or buy. Both kinds of contracts were entered into, but so far as teji contracts are concerned, the plaintiff did not exercise his option, and no claim is made in this suit. As regards the mandi contract, the agreement was to the following effect as alleged: The plaintiff was to inform the defendant on 20th January 1930 whether he (the plaintiff) would deliver 500 khandis of cotton seed at Rs. 22.12.0 per khandi up to 25th January 1930 or whether he (the plaintiff) would pay damages at the rate of 4 annas per khandi. He thus had the option either to deliver or not to deliver; but if he did not offer delivery, then he had to pay damages at a liquidated rate. In point of fact, the plaintiff exercised the right to deliver, informed the defendants on 20th January 1930 that he would deliver, offered delivery on 23rd January 1930 for 25th January 1930, and the defendants failed to take delivery. The defendants take up the position that all transactions—sale, teji and mandi—these were gaming and wagering transactions. The learned trial Judge has come to the conclusion that they were not the question is one not without difficulty, and as this kind of business appears to be not infrequent in Berar, we consider it desirable to state at some little length what we have deemed to be the law as regards wagering contracts on the one hand and speculative contracts on the other. The difficulty is to distinguish between speculation and gaming. There is nothing illegal in speculating. It is a common place of the Stock Exchange. The law on the other hand strikes at gaming. The difference between the two is fine. It is, in our opinion, well expressed in the ‘Laws of the Stock Exchange’ by the late Sir Walter Schwabe and the present Branson, J. at p. 245:

A very large number of dealings on the Stock Exchange are of a speculative nature; persons buy and sell shares for a future date, with the hope of making a profit by the rise or fall in price, and often without the least intention, or even ability, either to pay for the securities, or to deliver them, but meaning to resell or repurchase before the time for delivery arrives. This method of doing business is by no means confined to stocks and shares, but is every day occurrence in almost all commodities: and as far as the distinction between speculation and gaming is concerned, it makes but little difference whether the commodities are actually paid for and held with a view of selling again at a profit, or whether the matter is arranged by a resale before the time for delivery. Such dealings are perfectly legitimate: (1895) AC 318 (1895) AC 318 , 64 LJPC 62 , 11 R 474 , 72 LT 399 , 43 WR 590, per Lord Herschell. Gaming and wagering contracts, on the other hand, are not real dealings at all; they may take the form of purchases and sales, but they are, in fact, mere bets on the market price of commodities at a future date for a contract to be a gaming and wagering contract, there must not only be no intention on the part of either party to deliver or take delivery of the commodities, but also no obligation on either to do so; there must be an agreement or understanding that all the buyer has to do is to receive from, or pay to the seller the difference between the price of the bargain and the price at some future date. Further, the essence of gaming and wagering is that one party is to win and the other to lose upon a future event, which at the time of the contract is of an uncertain nature: (1877) 4 QBD 685 (1877) 4 QBD 685 , 48 LJ QB 289 , 39 LT 595 , 27 WR 158, per Cotton, L.J at p. 695.

14. Thus, the difference between the two is to be found in seeing whether the transaction in question is a real transaction or whether it is merely a peg to hang a but upon Whether it is a real transaction depends in our opinion upon whether in law the parties could be compelled to carry out the contract of sale, assuming we are dealing with a speculative transaction similar in nature to the present as is pointed out in Pollock and Mulla, Indian Contract Act, Edn 6, p. 234, citing 22 Bom 899 (1898) 22 Bom 899 at p. 903; (1896) AC 166; (1896) AC 166 , 66 LJ QB 429 , 74 LT 468 , 44 WR 497 , 60 JP 468 18 Mad 306 (1895) 18 Mad 306 (FB) and AIR 1928 PC 30 AIR 1928 PC 30 , 107 IC 29 , 55 IA 32 , 51 Mad 96 (PC):

In order to constitute a wagering contract, neither party should intend to perform the contract itself, but only to pay the differences.

15. And again citing 16 Bom 441 (1892) 16 Bom 441 at pp. 445 and 446; 25 All 38 (1902) 25 All 38 , 1902 AWN 178; 28 Bom 616 (1904) 28 Bom 616 , 6 Bom LR 521; 30 Bom 83 (1906) 30 Bom 83 , 7 Bom LR 385; 9 Bom LR 125 (1907) 9 Bom LR 125; 1 Bom LR 263 (1899) 1 Bom LR 263 and 12 Bom LR 1062 (1910) 12 Bom LR 1062 , 8 IC 1051:

Contracts are not wagering contracts unless it be the intention of both contracting parties at the time of entering into the contracts under no circumstances to call for or give delivery from or to each other.

16. The difficulty comes in considering whether the transaction is of the nature disclosed by the written contracts or whether underlying them and behind them is some collateral contract or the existence of some overriding circumstance which shows that it was never the intention of either side to deliver or require delivery, but that, on the contrary, the documents expressing such an obligation were a mere guise to clothe in legal form a transaction which was inherently unlawful. As to the law on this branch, the leading case is the decision of the Judicial Committee in 51 Mad 96, AIR 1928 PC 30 , 107 IC 29 , 55 IA 32 , 51 Mad 96 (PC) where it was held that the contract there under discussion was not a wagering contract, because it had not been proved that it was entered into upon the terms that only differences should be paid. The same conclusion was arrived at by the High Court of Bombay in 47 Bom 263 AIR 1922 Bom 408 , 68 IC 481 , 47 Bom 263 , 24 Bom LR 812 where they were concerned with teji mandi contracts, and it was held that such contracts cannot be held to be wagers on account of their apparent nature and characteristics alone without proof, of the fact of the common intention of the contracting parties whether to deal only in differences and in no circumstances to call for or to give delivery. So also in 7 Lah 442, AIR 1926 Lah 318 , 94 IC 304 , 7 Lah 442 where the burden of proof was also placed on the defendants, it being held that the ordinary presumption is in favour of the legality of the contract, and it is for those who assert that performance was not intended, to prove their assertion. The same view as to the need to prove a common intention to deal only in differences was taken by Jackson, A.J.C in 26 NLR 125. AIR 1930 Nag 111 , 120 IC 406 , 26 NLR 125 Lastly, and very recently, the matter has been expressed in the language of the Privy Council above referred to in 14 Rang 347. Ltd., AIR 1936 Rang 319 , 164 IC 654 , 14 Rang 347

17. Here the defendants have alleged that it was part of the understanding between the parties that there should be no delivery, but that they should only settle differences. The question therefore arises: Have they established that allegation? If they have, then the contract is a wagering contract. If they have not, the contract is not a wagering contract. The proper inference will depend upon the circumstances proved. As their Lordships of the Judicial Committee observe in 29 Cal 461 (1902) 29 Cal 461 , 28 IA 239 , 5 CWN 714 , 8 Sar 101 (PC):

If the circumstances are such as to warrant the legal inference that they never intended any actual transfer of goods at all, but only to pay or receive money between one another according as the market price of the goods should vary from the contract price at the given time, that is not a commercial transaction, but a wager on the rise or fall of the market.

18. We are respectfully of the opinion that what Sir Lawrence Jenkins stated in 24 Bom 227 (1900) 24 Bom 227 , 1 Bom LR 786 as to the need in such matters to look beyond the formal contract to the understanding behind is in many cases necessary, but in so doing, one must always bear in mind the fact that there is nothing wrong in difference contracts so long as the parties are not absolved in any event from delivering the commodity or paying if the other party calls for delivery or payment. Here we find the plaintiff and the defendants entering into a very considerable number of these contracts not only with each other, but with different third parties. We find as a rule the deal being settled by differences. We find howover on occasions that delivery is called for and delivery is made or acceptance is required and the goods received. These exceptional cases, it is true, form a very small proportion of total value of the business done. But we are unable to disagree with the conclusion of the learned trial Judge that taking the circumstances all round, bearing in mind that in Amraoti there is a very considerable market in cotton seeds, that here the plaintiff has satisfied the trial Judge that he intimated to the defendants where they could go and collect the goods, bearing in mind that both plaintiff and defendants in respect of similar contracts at or about the same time during the same January period have, in fact, delivered or received goods under such contracts, there was here no ancillary agreement to the effect that in no event should delivery be made or acceptance required. In our opinion, it follows that these speculative contracts were not gaming contracts. The plaintiff is therefore not precluded from suing. We also see no reason to differ from the learned Judge on the question of readiness and willingness. The question remains as to the damages. The rule is laid down by Tindal, C.J in (1846) 8 QB 604 (1846) 8 QB 604 , 115 ER 1004 at p. 609 as follows:

When a contract to deliver goods is broken, the proper measure of damages in general is the difference between the contract price and the market price of such goods at the time when the contract is broken, because the purchaser having the money in his hands may go into the market and buy. So, if a contract to accept and pay for goods is broken, the same rule may be properly applied, for the seller may take his goods into the market and obtain the current price for them.

19. The same opinion was expressed in 1 Cal 264 (1875) 1 Cal 264 , 25 WR 273 and in 13 Lah 766. AIR 1932 Lah 356 , 138 IC 241 , 13 Lah 766 , 33 PLR 450 It is therefore necessary to prove difference between contract price and market price. If that is not done, nominal damages; if that is done, that is the measure of damages prima facie. That has been done in this case. But it is said here the plaintiff had no goods and upon that arises a very interesting position on the facts here present. Those facts are as follows:

The plaintiff's ability to deliver these goods is founded on the fact that he had contracted with a number of people for goods for delivery on the same date with in the same period as this contract required him to deliver; but although the plaintiff had got those contracts with those persons whereby those persons were required to deliver to him goods, those persons had also got contracts with him requiring him to deliver goods to them, and on balance, there was practically no difference between their obligations to deliver to him and his obligations to deliver to them. Now it is in our opinion true that in considering his ability you have to consider his power to require the carrying out of a contract, and in our opinion, if A contracts to deliver to B a thousand bags of rice and B contracts to deliver to A at the same time a thousand bags of rice, these two contracts, if made at different dates, are separate contracts, and A could call upon B to deliver to him, A, a thousand bags of rice.

20. Does this make any difference? Assuming as here that the market was falling, the position can be stated as follows: A sells to B a thousand khandis at x rupees which is greater than Rs. m, the market price. B sells to A a thousand khandis at Rs. y which is greater than Rs. n. A sells to C (the present defendant) 1000 khandis at Rs. z, also greater than n. Now if C refuses to accept, A loses his bargain which in rupees is represented by z—n. If C accepts, A gets Rs. z and has to buy in order to deliver to B 1000 khandis at the market price, i.e Rs. n. So he gets Rs. z and pays out Rs. n so that he gets Rs. z—n. The result is thus seen to be the same, that is to say, if the defendant carries out his contract, the plaintiff gains the difference between the sale price and the market price, and if he refuses to carry out his contract, the plaintiff loses the difference between the contract price and the market price, even though, in order to carry out the contract, delivery has to be made from stocks held by B. But if delivery is made from stocks held by B, A has to pay B Rs. y for goods which he could buy in the market at Rs. n, and so he loses Rs. y—n. If C declines to carry out his contract, it is not necessary for A to take delivery from B and thereby expend Rs. y. He can settle his difference with B which will be the difference between x and y. But if A has to take delivery from B, he would also require B to take delivery from him, and would accordingly get Rs. x from B. So he gets Rs. x from B; he pays Rs. y to B. He gets Rs. z from G and in order to carry out his contract with B, he buys 1000 khandis which is Rs. n out of his pocket. So he gets x + z and pays y + n. If on the other hand C settles differences with B, he receives, if the difference is in his favour, Rs. x—y. The difference, therefore, is (x + z) − (y + n) − (x—y). The answer to that is z—n which is the same as before, so that this added factor that he had to carry out his contracts with third parties and settle certain differences with them makes no difference in the result.

21. The next question is, seeing that in the telegram the plaintiff only stated that he was ready and willing to give delivery of 1650 khands, is he precluded from claiming on the basis of 2700 khandis? The reason for that figure in the telegram has been explained as follows: There were here cross-contracts made at different dates whereby the plaintiff had to deliver to the defendants 2700 khandis, and the defendants had to deliver to the plaintiff 1050. The defendants and the plaintiff had to take delivery at the same time. The plaintiff was prepared to carry out his contract. He, therefore, was in this position: He could call upon the defendants to come and take delivery of 2700, but the plaintiff would have had to go to the defendants and take delivery of 1050. To avoid that farce, he had offered the difference between the two.

22. It is said that is not a sufficient offer to show readiness and willingness to deliver 2700. In our opinion, however, on balance, all that remained for delivery was 1650, and the plaintiff was entitled to carry out his contract and thereby absolve the defendants from taking more than 1650. But in our opinion, having taken up that position, he was treating the defendants as having tendered 1050 which he, the plaintiff, had in turn accepted, and if that be so, he can only now claim damages in respect of the 1650 khandis. It is true that the contracts were separate, and the plaintiff is entitled to sue on his contract and leave the defendants to sue on their contract. But viewing the case as a whole, we are of the opinion that the plaintiff's attitude is consistent only with the view that there has been notional acceptance by the defendants of 1050 and a delivery of the same 1050 notion ally to the plaintiff. Were it otherwise, in our opinion the offer of 1650 would not be sufficient to show a readiness and willingness on the part of the plaintiff to carry out his contract, that is to deliver 2700. The decree will be modified accordingly. There remains the cross-objection. This raises the question of whether the learned trial Judge was, in the circumstances here present, entitled to disallow the claim for interest: The contracts, examples of which are to be found in Ex. D-1, D-2, D-4, D-5, etc., do not provide for payment of interest. It can be given either by way of damages or under some statute, or because it is a matter of contract. It is not a matter of contract here. The right is not given under statute, and in our opinion it is wrong to give damages upon damages. The measure of damages is as we have stated above. This is the view taken by the Full Bench in Madras in 50 Mad 94, AIR 1927 Mad 99 , 99 IC 609 , 50 Mad 94 , 51 MLJ 765 (FB) and by the Judicial Commissioner's Court, Nagpur, in 17 NLR 1 AIR 1921 Nag 42 , 57 IC 686 , 17 NLR 1 at p. 7, cases relied upon by the learned Additional District Judge.

23. It is our pleasant duty to observe that Mr. Dashottar, the third Additional District Judge, Amraoti, at the time, who disposed of this matter, has shown the greatest care, in our opinion, in his judgment, and has very fully considered the law; and though we have differed from him on a point which makes a substantial difference in the amount of damages awarded, it is because we take a some, what different view as to the legal inference to be drawn from the wording of the telegram. Para. 27 of his judgment took the view that the defendants, before the date for delivery and after the telegram was sent, orally stated that they would not take delivery, but only settle differences, so that the learned Judge treated this as a case of anticipatory breach, whereas as the matter was argued before us, the case was put as though this were as a case in which a seller ready and willing to deliver was entitled to sue for the difference between the market price and the sale price in respect of the goods which he had expressed himself ready and willing to deliver. On the construction of that telegram, a link to his evidence, we have regarded the readiness and willingness as properly limited to 1650 khandis, and the defendants are absolved from tendering delivery of their 1050 khandis. On this view, the damages are in our opinion as stated herein. On the view expressed by the learned trial Judge, the damages were correctly assessed by him.

B.D/R.K

24. Decree modified.